Business Context and Reporting Period
This Form 8-K, dated February 6, 2009, reports the unaudited results of operations for PNM Resources, Inc. and its subsidiaries (Public Service Company of New Mexico and Texas-New Mexico Power Company) for the three and twelve months ended December 31, 2008. The filing incorporates a press release (Exhibit 99.1) detailing these results.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. It references the existence of unaudited condensed consolidated statements of earnings in Exhibit 99.1 but does not reproduce the figures within the body of this report.
The Company utilizes several non-GAAP financial measures to evaluate performance, including:
- Ongoing earnings (loss) and ongoing earnings (loss) per diluted share.
- Ongoing EBITDA and EBITDA.
These measures exclude non-recurring items, net unrealized mark-to-market gains/losses on economic hedges, impairments of intangible assets, unrealized impairments on nuclear decommissioning trusts, and speculative trading results.
Material Changes and Discontinued Operations
A significant material change occurred on January 30, 2009, when PNM Resources successfully completed the sale of its natural gas operations to New Mexico Gas Company, Inc. These operations are classified as discontinued operations under GAAP.
Management includes discontinued operations in its "ongoing earnings" non-GAAP measure to reflect obligations fulfilled until closing. Additionally, while GAAP does not record depreciation on assets in discontinued operations, the Company reflects this depreciation in its ongoing earnings calculation.
Guidance, Outlook, and Risks
The filing does not contain specific forward-looking guidance, outlook figures, or management commentary regarding future performance beyond the definition of non-GAAP measures. The text notes that non-GAAP measures are used to remove variances not indicative of fundamental changes in earnings capacity and to facilitate comparison with prior periods.
Standard limitations apply: non-GAAP measures should not be considered in isolation or as a substitute for GAAP measures. The information in this report is furnished pursuant to Item 2.02 and is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific numerical values regarding revenue, net earnings, and EPS for the periods ended December 31, 2008, and 2007.
- Verify the reconciliation between GAAP net earnings and the non-GAAP "ongoing earnings" figures, specifically regarding the treatment of the sold natural gas operations.
- Confirm the impact of the January 30, 2009, sale of natural gas operations on the Company's future cash flow and asset base.
- Examine the specific adjustments made for unrealized mark-to-market gains/losses and asset impairments to understand the divergence between GAAP and non-GAAP results.