Fair Value of Derivative and Other Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value of Derivative and Other Financial Instruments [Abstract]

Commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges, are summarized as follows:



	Economic Hedges
	December 31,
	2015			2014
	(In thousands)
PNM and PNMR
Current assets	$	3,813		$	11,232
Deferred charges	2,622			—
	6,435			11,232
Current liabilities	(1,859		)	(1,209		)
Long-term liabilities	—			(477		)
	(1,859		)	(1,686		)
Net	$	4,576		$	9,546

Summary of the Effect of Mark-to-Market Commodity Derivative Instruments on Earnings

The following table presents the effect of mark-to-market commodity derivative instruments on earnings, excluding income tax effects. Commodity derivatives had no impact on OCI for the periods presented.



	Economic Hedges
	Year Ended December 31,
	2015			2014		2013
	(In thousands)
PNMR and PNM
Electric operating revenues	$	7,156		$	4,491	$	1,727
Cost of energy	(293		)	593		1,109
Total gain	$	6,863		$	5,084	$	2,836

Schedule of Net Buy (Sell) Volume Positions

The table below presents PNMR’s and PNM’s net buy (sell) volume positions:



	Economic Hedges
	MMBTU	MWh
December 31, 2015
PNMR and PNM	577,481	(3,405,843	)
December 31, 2014
PNMR and PNM	650,000	(1,919,000	)

Schedule of Collateral Related to Derivative

The table below presents information about the Company’s contingent requirements to provide collateral under commodity contracts having an objectively determinable collateral provision that are in net liability positions and are not fully collateralized with cash. Contractual liability represents commodity derivative contracts recorded at fair value on the balance sheet, determined on an individual contract basis without offsetting amounts for individual contracts that are in an asset position and could be offset under master netting agreements with the same counterparty. The table only reflects cash collateral that has been posted under the existing contracts and does not reflect letters of credit under the Company’s revolving credit facilities that have been issued as collateral. Net exposure is the net contractual liability for all contracts, including those designated as normal purchases and normal sales, offset by existing cash collateral and by any offsets available under master netting agreements, including both asset and liability positions.



Contingent Feature – Credit Rating Downgrade	Contractual Liability		Existing Cash Collateral		Net Exposure
	(In thousands)
December 31, 2015
PNMR and PNM	$	839	$	—	$	839
December 31, 2014
PNMR and PNM	$	1,686	$	—	$	167

Schedule of Fair Value and Unrealized Gains of Available-for-sale Securities

The fair value and gross unrealized gains of investments in available-for-sale securities are presented in the following table.



	December 31, 2015				December 31, 2014
	Unrealized Gains		Fair Value		Unrealized Gains		Fair Value
PNMR and PNM			(In thousands)
Cash and cash equivalents	$	—	$	10,700	$	—	$	8,276
Equity securities:
Domestic value	11,610		44,505		17,418		45,340
Domestic growth	11,163		61,078		21,354		74,053
International and other	1,569		27,961		156		16,599
Fixed income securities:
U.S. Government	178		27,880		903		22,563
Municipals	3,672		58,576		5,851		68,973
Corporate and other	628		28,342		666		14,341
	$	28,820	$	259,042	$	46,348	$	250,145

Schedule of Realized Gain (Loss)

Gross realized losses shown below exclude the change in realized impairment losses of $(4.3) million, $(0.7) million, and $0.6 million for the years ended December 31, 2015, 2014 and 2013.



	Year Ended December 31,
	2015			2014			2013
	(In thousands)
Proceeds from sales	$	252,174		$	117,989		$	271,140
Gross realized gains	$	29,663		$	15,162		$	14,308
Gross realized (losses)	$	(9,259	)	$	(3,964	)	$	(4,298	)

Investments Classified by Contractual Maturity Date

At December 31, 2015, the available-for-sale and held-to-maturity debt securities had the following final maturities:



	Fair Value
	Available-for-Sale		Held-to-Maturity
	PNMR and PNM		PNMR		PNM
	(In thousands)
Within 1 year	$	3,858	$	8,947	$	8,947
After 1 year through 5 years	24,136		665		—
After 5 years through 10 years	26,401		—		—
After 10 years through 15 years	10,843		—		—
After 15 years through 20 years	10,815		—		—
After 20 years	38,745		—		—
	$	114,798	$	9,612	$	8,947

Schedule of Instruments Presented by Level of Hierarchy

Items recorded at fair value on the Consolidated Balance Sheets are presented below by level of the fair value hierarchy. There were no Level 3 fair value measurements at December 31, 2015 and 2014 for items recorded at fair value.



				GAAP Fair Value Hierarchy
	Total			Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2015				(In thousands)
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	10,700		$	10,700	$	—
Equity securities:
Domestic value	44,505			44,505		—
Domestic growth	61,078			61,078		—
International and other	27,961			27,961		—
Fixed income securities:
U.S. Government	27,880			26,608		1,272
Municipals	58,576			—		58,576
Corporate and other	28,342			6,500		21,842
	$	259,042		$	177,352	$	81,690

Commodity derivative assets	$	6,435		$	—	$	6,435
Commodity derivative liabilities	(1,859		)	—		(1,859		)
Net	$	4,576		$	—	$	4,576



				GAAP Fair Value Hierarchy
	Total			Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2014				(In thousands)
PNMR and PNM
Available-for-sale securities
Cash and cash equivalents	$	8,276		$	8,276	$	—
Equity securities:
Domestic value	45,340			45,340		—
Domestic growth	74,053			74,053		—
International and other	16,599			16,599		—
Fixed income securities:
U.S. Government	22,563			20,808		1,755
Municipals	68,973			—		68,973
Corporate and other	14,341			4,843		9,498
	$	250,145		$	169,919	$	80,226

Commodity derivative assets	$	11,232		$	—	$	11,232
Commodity derivative liabilities	(1,686		)	—		(1,686		)
Net	$	9,546		$	—	$	9,546

Summary of Carrying Amounts and Fair Value of Instruments

The carrying amounts and fair values of investments in PVNGS lessor notes, other investments, and long-term debt, which are not recorded at fair value on the Consolidated Balance Sheets, are presented below:



						GAAP Fair Value Hierarchy
	Carrying Amount			Fair Value		Level 1		Level 2		Level 3
December 31, 2015	(In thousands)
PNMR
Long-term debt	$	2,091,948		$	2,264,869	$	—	$	2,264,869	$	—
Investment in PVNGS lessor notes	$	8,587		$	8,947	$	—	$	—	$	8,947
Other investments	$	604		$	1,269	$	604	$	—	$	665
PNM
Long-term debt	$	1,580,677		$	1,703,209	$	—	$	1,703,209	$	—
Investment in PVNGS lessor notes	$	8,587		$	8,947	$	—	$	—	$	8,947
Other investments	$	366		$	366	$	366	$	—	$	—
TNMP
Long-term debt	$	361,411		$	411,661	$	—	$	411,661	$	—
Other investments	$	238		$	238	$	238	$	—	$	—

December 31, 2014
PNMR
Long-term debt	$	1,962,385	⁽¹⁾	$	2,173,117	$	—	$	2,173,117	$	—
Investment in PVNGS lessor notes	$	31,232		$	32,836	$	—	$	—	$	32,836
Other investments	$	1,762		$	2,375	$	639	$	—	$	1,736
PNM
Long-term debt	$	1,482,537	⁽¹⁾	$	1,624,222	$	—	$	1,624,222	$	—
Investment in PVNGS lessor notes	$	31,232		$	32,836	$	—	$	—	$	32,836
Other investments	$	397		$	397	$	397	$	—	$	—
TNMP
Long-term debt	$	361,241	⁽¹⁾	$	427,356	$	—	$	427,356	$	—
Other investments	$	242		$	242	$	242	$	—	$	—

Schedule of Investments Held by the Employee Benefit Plans

The fair values of investments held by the employee benefit plans are as follows:



			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2015			(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	479,858	$	111,441	$	367,698	$	719
Uncategorized investments	78,461
Total Master Trust Investments	$	558,319

TNMP Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	52,163	$	12,199	$	39,886	$	78
Uncategorized investments	9,968
Total Master Trust Investments	$	62,131

PNM OPEB Plan
Cash and cash equivalents	$	1,512	$	1,512	$	—	$	—
Equity securities:
International funds	10,604		—		10,604		—
Domestic value	9,367		9,367		—		—
Domestic growth	5,894		5,894		—		—
Other funds	28,419		—		28,419		—
Fixed income securities:
Mutual funds	18,343		18,343		—		—
	$	74,139	$	35,116	$	39,023	$	—
TNMP OPEB Plan
Cash and cash equivalents	$	128	$	128	$	—	$	—
Equity securities:
International funds	1,310		—		1,310		—
Domestic value	367		367		—		—
Domestic growth	1,013		1,013		—		—
Other funds	3,397		—		3,397		—
Fixed income securities:
Mutual funds	3,075		3,075		—		—
	$	9,290	$	4,583	$	4,707	$	—



			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2014	(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	523,142	$	123,668	$	398,819	$	655
Uncategorized investments	64,970
Total Master Trust Investments	$	588,112

TNMP Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	59,320	$	14,823	$	44,425	$	72
Uncategorized investments	9,887
Total Master Trust Investments	$	69,207

PNM OPEB Plan
Cash and cash equivalents	$	1,242	$	1,242	$	—	$	—
Equity securities:
International funds	10,332		—		10,332		—
Domestic value	8,365		8,365		—		—
Domestic growth	5,960		5,960		—		—
Other funds	30,997		—		30,997		—
Fixed income securities:
Mutual funds	22,122		22,122		—		—
	$	79,018	$	37,689	$	41,329	$	—
TNMP OPEB Plan
Cash and cash equivalents	$	168	$	168	$	—	$	—
Equity securities:
International funds	1,277		—		1,277		—
Domestic value	403		403		—		—
Domestic growth	1,024		1,024		—		—
Other funds	3,790		—		3,790		—
Fixed income securities:
Mutual funds	3,549		3,549		—		—
	$	10,211	$	5,144	$	5,067	$	—

The fair values of investments in the PNMR Master Trust are as follows:



			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
December 31, 2015	(In thousands)
PNMR Master Trust
Cash and cash equivalents	$	14,525	$	14,525	$	—	$	—
Equity securities:
International	36,675		—		36,675		—
Domestic value	34,769		34,769		—		—
Domestic growth	25,407		25,407		—		—
Other funds	30,531		—		30,531		—
Fixed income securities:
Corporate	214,218		—		213,421		797
U.S. Government	98,138		48,936		49,202		—
Municipals	16,647		—		16,647		—
Other funds	61,111		3		61,108		—
Total investments categorized within fair value hierarchy	532,021		$	123,640	$	407,584	$	797
Uncategorized investments:
Private equity funds	32,333
Hedge funds	40,731
Real estate funds	15,365
	$	620,450
December 31, 2014
PNMR Master Trust
Cash and cash equivalents	$	15,645	$	15,645	$	—	$	—
Equity securities:
International	23,282		—		23,282		—
Domestic value	41,778		41,778		—		—
Domestic growth	28,370		28,370		—		—
Other funds	29,719		—		29,719		—
Fixed income securities:
Corporate	242,742		—		242,015		727
U.S. Government	106,634		52,537		54,097		—
Municipals	20,156		—		20,156		—
Other funds	74,136		161		73,975		—
Total investments categorized within fair value hierarchy	582,462		$	138,491	$	443,244	$	727
Uncategorized investments:
Private equity funds	37,220
Hedge funds	23,876
Real estate funds	13,761
	$	657,319

Summary of Level 3 Measurements

A reconciliation of the changes in Level 3 fair value measurements is as follows:



	Fixed Income - Corporate
PNMR Master Trust	PNM Pension			TNMP Pension			Total Master Trust
	(In thousands)
Balance at December 31, 2013	$	160		$	16		$	176
Actual return on assets sold during the period	—			—			—
Actual return on assets still held at period end	(18		)	(2		)	(20		)
Purchases	546			62			608
Sales	(33		)	(4		)	(37		)
Balance at December 31, 2014	655			72			727
Actual return on assets sold during the period	—			—			—
Actual return on assets still held at period end	(1		)	—			(1		)
Purchases	177			17			194
Sales	(112		)	(11		)	(123		)
Balance at December 31, 2015	$	719		$	78		$	797