Business Context and Reporting Period
This Form 8-K, filed on July 28, 2017, covers 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, 2017, 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.
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 impairments on available-for-sale securities.
- Certain non-recurring, infrequent, and other items.
Management asserts these measures remove variances not indicative of fundamental earnings capacity changes, though they should not substitute for GAAP measures.
Guidance, Outlook, and Risks
The Company provides "ongoing earnings guidance" to reflect management's expectations of financial performance. However, the filing explicitly states:
- Ongoing earnings guidance is not a GAAP measure and does not represent an expectation of GAAP net earnings.
- Management generally cannot estimate the impact of reconciling items (such as unrealized hedge gains/losses) on future GAAP earnings.
- Consequently, the Company does not provide a corresponding GAAP equivalent for its forecasted ongoing earnings guidance.
Limitations on incorporation by reference apply; the information in this report is furnished and not deemed "filed" for liability purposes under Section 18 of the Exchange Act.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated July 28, 2017) for specific GAAP and non-GAAP financial results for the three and six months ended June 30, 2017.
- Verify the reconciliation between GAAP net earnings and the reported "ongoing earnings" to understand the impact of excluded items.
- Assess the volatility of unrealized mark-to-market gains/losses on economic hedges, as these are excluded from the Company's primary performance metrics.
- Note that forward-looking guidance provided is based on non-GAAP ongoing earnings and lacks a direct GAAP equivalent forecast.