Fair Value of Derivative and Other Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value of Derivative and Other Financial Instruments [Abstract]

Summary of Derivatives

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

	Economic Hedges
	March 31, 2019			December 31, 2018
	(In thousands)
Current assets	$	1,086		$	1,083
Deferred charges	2,265			2,511
	3,351			3,594
Current liabilities	(1,150		)	(1,177		)
Long-term liabilities	(2,265		)	(2,511		)
	(3,415		)	(3,688		)
Net	$	(64	)	$	(94	)

Effect of Mark-to-Market on Earnings, Excluding Tax Effects

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

	Economic Hedges
	Three Months Ended
	March 31,
	2019			2018
	(In thousands)
Electric operating revenues	$	28		$	(10	)
Cost of energy	(28		)	12
Total gain	$	—		$	2

Schedule of Net Buy (Sell) Volume Positions

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

	Economic Hedges
	MMBTU	MWh
March 31, 2019	100,000	(400	)
December 31, 2018	100,000	—

Schedule of Gross Realized Gains and Losses

Gains and losses recognized on the Condensed Consolidated Statements of Earnings related to investment securities in the NDT and reclamation trusts are presented in the following table.

	Three Months Ended March 31,
	2019		2018
	(In thousands)
Equity securities:
Net gains from equity securities sold	$	1,387	$	2,828
Net gains from equity securities still held	9,602		136
Total net gains on equity securities	10,989		2,964
Available-for-sale debt securities:
Net gains (losses) on debt securities	3,025		(2,676		)
Net gains on investment securities	$	14,014	$	288

The proceeds and gross realized gains and losses on the disposition of securities held in the NDT and coal mine reclamation trusts are shown in the following table. Realized gains and losses are determined by specific identification of costs of securities sold. Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $3.4 million and $(1.2) million for the three months ended March 31, 2019 and 2018.

	Three Months Ended
	March 31,
	2019			2018
	(In thousands)
Proceeds from sales	$	74,460		$	626,729
Gross realized gains	$	4,189		$	6,021
Gross realized (losses)	$	(3,170	)	$	(4,677	)

Investments Classified by Contractual Maturity Date

At March 31, 2019, the available-for-sale debt securities held by PNM, had the following final maturities:

	Fair Value
	(In thousands)
Within 1 year	$	13,996
After 1 year through 5 years	68,108
After 5 years through 10 years	68,904
After 10 years through 15 years	9,485
After 15 years through 20 years	12,174
After 20 years	45,695
	$	218,362

Schedule of Investments

Items recorded at fair value by PNM on the Condensed Consolidated Balance Sheets are presented below by level of the fair value hierarchy along with gross unrealized gains on investments in available-for-sale debt securities.

				GAAP Fair Value Hierarchy
	Total			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Unrealized Gains
	(In thousands)
March 31, 2019
Cash and cash equivalents	$	10,339		$	10,339	$	—		$	—
Equity securities:
Corporate stocks, common	36,025			36,025		—			—
Corporate stocks, preferred	8,138			1,854		6,284			—
Mutual funds and other	78,699			78,688		11			—
Available-for-sale debt securities:
U.S. Government	36,153			25,074		11,079			—		$	1,489
International Government	11,577			46		11,531			—		345
Municipals	49,160			—		49,160			—		1,337
Corporate and other	121,472			842		118,543			2,087		5,831
	$	351,563		$	152,868	$	196,608		$	2,087	$	9,002
Commodity derivative assets	$	3,351		$	—	$	3,351		$	—
Commodity derivative liabilities	(3,415		)	—		(3,415		)	—
Net	$	(64	)	$	—	$	(64	)	$	—
December 31, 2018
Cash and cash equivalents	$	11,472		$	11,472	$	—		$	—
Equity securities:
Corporate stocks, common	32,997			32,997		—			—
Corporate stocks, preferred	7,258			1,654		5,604			—
Mutual funds and other	70,777			70,777		—			—
Available-for-sale debt securities:
U.S. Government	29,503			18,662		10,841			—		$	1,098
International Government	8,435			—		8,435			—		90
Municipals	53,642			—		53,642			—		489
Corporate and other	114,158			588		111,414			2,156		923
	$	328,242		$	136,150	$	189,936		$	2,156	$	2,600
Commodity derivative assets	$	3,594		$	—	$	3,594		$	—
Commodity derivative liabilities	(3,688		)	—		(3,688		)	—
Net	$	(94	)	$	—	$	(94	)	$	—

Summary of Level 3 Measurements

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

	Corporate Debt
	(In thousands)
Balance at December 31, 2018	$	2,156
Actual return on assets sold during the period	(49		)
Actual return on assets still held at period end	54
Purchases	414
Sales	(488		)
Balance at March 31, 2019	$	2,087
Balance at December 31, 2017	$	—
Actual return on assets sold during the period	(3		)
Actual return on assets still held at period end	(11		)
Purchases	2,724
Sales	(359		)
Balance at March 31, 2018	$	2,351

Schedule of Carrying Amount and Fair Value of Items Not Recorded at Fair Value

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

					GAAP Fair Value Hierarchy
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
March 31, 2019	(In thousands)
PNMR
Long-term debt	$	2,944,241	$	3,023,159	$	—	$	3,023,159	$	—
Other investments	$	299	$	299	$	299	$	—	$	—
PNM
Long-term debt	$	1,706,873	$	1,744,864	$	—	$	1,744,864	$	—
Other investments	$	93	$	93	$	93	$	—	$	—
TNMP
Long-term debt	$	798,941	$	838,705	$	—	$	838,705	$	—
Other investments	$	206	$	206	$	206	$	—	$	—
December 31, 2018
PNMR
Long-term debt	$	2,670,111	$	2,703,810	$	—	$	2,703,810	$	—
Other investments	$	297	$	297	$	297	$	—	$	—
PNM
Long-term debt	$	1,656,490	$	1,668,736	$	—	$	1,668,736	$	—
Other investments	$	91	$	91	$	91	$	—	$	—
TNMP
Long-term debt	$	575,398	$	597,236	$	—	$	597,236	$	—
Other investments	$	206	$	206	$	206	$	—	$	—