Business Context and Reporting Period
This Form 8-K was filed on February 27, 2019, by PNM Resources, Inc., Public Service Company of New Mexico, and Texas-New Mexico Power Company (collectively, the "Company"). The filing serves to announce the results of operations for the three months and the full year ended December 31, 2018. The detailed financial data is contained in a press release furnished as Exhibit 99.1 and incorporated by reference.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These metrics are referenced as being detailed in the attached press release (Exhibit 99.1) but are not explicitly stated within the body of this 8-K document.
Material Changes and Non-GAAP Measures
The Company utilizes non-GAAP financial measures, specifically "ongoing earnings" and "ongoing diluted earnings per share," to evaluate operations and set management goals. These measures exclude:
- Net unrealized mark-to-market gains and losses on economic hedges.
- Net changes in unrealized gains and losses on investment securities.
- Pension expenses related to previously disposed of gas distribution businesses.
- Certain non-recurring, infrequent, and other items.
Management asserts that these non-GAAP measures remove variances not indicative of fundamental changes in earnings capacity, though they should not be considered a substitute for GAAP measures.
Guidance, Outlook, and Risks
The Company provides "ongoing earnings guidance" to reflect management's expectations of future financial performance. However, the filing explicitly states that management is generally unable to provide a corresponding GAAP equivalent for this forecasted guidance without unreasonable effort. This limitation arises because future differences between GAAP and ongoing earnings often involve items outside the Company's control, such as unrealized mark-to-market adjustments and pension expenses related to divested businesses.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated February 27, 2019) for specific GAAP and non-GAAP financial figures for the three months and year ended December 31, 2018.
- Verify the reconciliation between GAAP net earnings and the reported "ongoing earnings" to understand the magnitude of excluded items.
- Assess the impact of unrealized mark-to-market gains/losses on economic hedges and investment securities on reported volatility.
- Confirm the specific components of pension expenses related to previously disposed gas distribution businesses.