Business Context and Reporting Period
This Form 8-K, dated July 31, 2018, is filed 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 and six months ended June 30, 2018, via a press release incorporated by reference as Exhibit 99.1.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are contained within the referenced press release (Exhibit 99.1) and are not detailed in the body of this 8-K document.
The Company utilizes non-GAAP financial measures, specifically "ongoing earnings" and "ongoing diluted earnings per share," to evaluate operations. These measures exclude:
- Net unrealized mark-to-market gains and losses on economic hedges.
- Net change in unrealized gains and losses on investment securities.
- Pension expense related to previously disposed of gas distribution business.
- Certain non-recurring, infrequent, and other items.
Material Changes
The filing does not explicitly detail material changes versus prior periods within the text provided. It notes that the press release contains the results of operations for the periods ended June 30, 2018, but specific comparative data is absent from this summary document.
Guidance, Outlook, and Risks
Guidance and Outlook: The Company provides "ongoing earnings guidance" to reflect management's expectations of financial performance. This guidance is a non-GAAP measure and does not represent an expectation of net earnings as defined by GAAP. Management states it is generally unable to estimate the impact of reconciling items (such as mark-to-market adjustments) on forecasted GAAP earnings, and therefore cannot provide a corresponding GAAP equivalent for the guidance.
Risks and Contingencies: The filing highlights that non-GAAP measures should not be considered in isolation from GAAP measures. It notes that future differences between GAAP and ongoing earnings are frequently outside the Company's control.
Unusual Items: The Company identifies specific items excluded from ongoing earnings, including unrealized gains/losses on hedges and investment securities, and pension expenses from disposed businesses.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated July 31, 2018) for specific revenue, earnings, and cash flow figures for the three and six months ended June 30, 2018.
- Verify the reconciliation between GAAP net earnings and the non-GAAP "ongoing earnings" figures provided in the press release.
- Assess the magnitude of excluded items (mark-to-market adjustments, pension expenses) to understand the variance between reported GAAP results and management's ongoing earnings guidance.
- Confirm that the "ongoing earnings guidance" provided by management is not a substitute for GAAP net earnings expectations.