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Fair Value of Derivative and Other Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2022

PNM’s commodity derivative instruments that are recorded at fair value, all of which are accounted for as economic hedges and considered Level 2 fair value measurements, are presented in the following line items on the Consolidated Balance Sheets:


	Economic Hedges
	December 31,
	2022		2021
	(In thousands)
Other current assets	$	9,780	$	684
Other deferred charges	—		—
	9,780		684
Other current liabilities	(19,209)		(2,275)
Other deferred credits	—		—
	(19,209)		(2,275)
Net	$	(9,429)	$	(1,591)

Schedule of Realized Gain (Loss)

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


	Year ended December 31,
	2022		2021		2020
	(In thousands)
Equity securities:
Net gains (losses) from equity securities sold	$	(6,940)	$	8,738	$	5,861
Net gains (losses) from equity securities still held	(38,025)		(442)		17,707
Total net gains (losses) on equity securities	(44,965)		8,296		23,568
Available-for-sale debt securities:


Net gains (losses) on debt securities	(33,392)		8,554		(1,969)
Net gains (losses) on investment securities	$	(78,357)	$	16,850	$	21,599

Gross realized losses shown below exclude the (increase)/decrease in realized impairment losses of $(25.8) million, $0.7 million, and $(3.2) million for the years ended December 31, 2022, 2021 and 2020.


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
Proceeds from sales	$	526,448	$	459,867	$	590,998
Gross realized gains	$	22,071	$	39,408	$	35,904
Gross realized (losses)	$	(36,623)	$	(22,815)	$	(28,817)

Investments Classified by Contractual Maturity Date

At December 31, 2022, the available-for-sale debt securities held by PNM, had the following final maturities:


	Fair Value
	(In thousands)
Within 1 year	$	40,339
After 1 year through 5 years	67,426
After 5 years through 10 years	70,608
After 10 years through 15 years	15,571
After 15 years through 20 years	12,825
After 20 years	32,211
	$	238,980

Schedule of Instruments Presented by Level of Hierarchy

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


			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unrealized Gains
	(In thousands)
December 31, 2022
Cash and cash equivalents	$	66,843	$	66,843	$	—
Equity securities:
Corporate stocks, common	40,103		40,103		—
Corporate stocks, preferred	5,191		790		4,401
Mutual funds and other	66,359		66,359		—
Available-for-sale debt securities:
U.S. government	45,905		45,645		260		$	1,334
International government	9,762		—		9,762		1,117
Municipals	43,136		—		43,136		1,062
Corporate and other	140,177		—		140,177		6,473
	$	417,476	$	219,740	$	197,736	$	9,986




December 31, 2021

Cash and cash equivalents	$	7,895	$	7,895	$	—
Equity securities:
Corporate stocks, common	97,626		97,626		—
Corporate stocks, preferred	9,114		3,775		5,339
Mutual funds and other	75,285		75,241		44
Available-for-sale debt securities:
U.S. government	43,128		13,204		29,924		$	214
International government	16,001		—		16,001		1,508
Municipals	47,050		—		47,050		1,807
Corporate and other	167,027		—		167,027		12,212
	$	463,126	$	197,741	$	265,385	$	15,741

Summary of Carrying Amounts and Fair Value of Instruments

The carrying amounts and fair values of long-term debt, all of which are considered Level 2 fair value measurements and are not recorded at fair value on the Consolidated Balance Sheets are presented below:


	Carrying Amount		Fair Value
December 31, 2022	(In thousands)
PNMR	$	4,077,387	$	3,726,195
PNM	$	2,000,900	$	1,789,186
TNMP	$	1,076,875	$	937,009

December 31, 2021
PNMR	$	3,698,919	$	3,915,010
PNM	$	1,881,110	$	1,975,987
TNMP	$	918,050	$	1,039,023

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 Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2022	(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	342,183	$	143,911	$	198,272
Uncategorized investments	67,787
Total Master Trust Investments	$	409,970
TNMP Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	38,617	$	13,556	$	25,061
Uncategorized investments	5,433
Total Master Trust Investments	$	44,050
PNM OPEB Plan
Cash and cash equivalents	$	1,703	$	1,703	$	—
Equity securities:
Mutual funds	69,001		42,068		26,933
	$	70,704	$	43,771	$	26,933
TNMP OPEB Plan
Cash and cash equivalents	$	149	$	149	$	—
Equity securities:
Mutual funds	8,573		8,018		555
	$	8,722	$	8,167	$	555


			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2021	(In thousands)
PNM Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	527,873	$	235,605	$	292,268
Uncategorized investments	49,432
Total Master Trust Investments	$	577,305

TNMP Pension Plan
Participation in PNMR Master Trust Investments:
Investments categorized within fair value hierarchy	$	58,623	$	21,390	$	37,233
Uncategorized investments	3,962
Total Master Trust Investments	$	62,585

PNM OPEB Plan
Cash and cash equivalents	$	1,578	$	1,578	$	—
Equity securities:





Mutual funds	94,549		58,383		36,166
	$	96,127	$	59,961	$	36,166
TNMP OPEB Plan
Cash and cash equivalents	$	381	$	381	$	—
Equity securities:





Mutual funds	12,249		11,575		674
	$	12,630	$	11,956	$	674

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


			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2022	(In thousands)
PNMR Master Trust
Cash and cash equivalents	$	17,106	$	17,106	$	—
Equity securities:
Corporate stocks, common	53,661		53,661		—
Corporate stocks, preferred	639		639		—
Mutual funds and other	135,200		27,412		107,788
Fixed income securities:
U.S. government	62,637		58,649		3,988
International government	3,318		—		3,318
Municipals	4,922		—		4,922
Corporate and other	103,317		—		103,317
Total investments categorized within fair value hierarchy	380,800		$	157,467	$	223,333
Uncategorized investments:
Private equity funds	6,691
Hedge funds	33,258
Real estate funds	33,271
	$	454,020


			GAAP Fair Value Hierarchy
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
December 31, 2021	(In thousands)
PNMR Master Trust
Cash and cash equivalents	$	18,924	$	18,924	$	—
Equity securities:
Corporate stocks, common	92,484		92,484		—
Corporate stocks, preferred	806		—		806
Mutual funds and other	222,106		59,203		162,903
Fixed income securities:
U.S. government	95,429		86,384		9,045
International government	5,977		—		5,977
Municipals	6,143		—		6,143
Corporate and other	144,627		—		144,627
Total investments categorized within fair value hierarchy	586,496		$	256,995	$	329,501
Uncategorized investments:
Private equity funds	10,479
Hedge funds	8,913
Real estate funds	34,002
	$	639,890

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details