Business Context and Reporting Period
This Form 8-K, dated November 6, 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 nine months ended September 30, 2018, via a press release furnished 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. It references a press release (Exhibit 99.1) containing these details but does not include the data within the body of this 8-K.
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 contain specific data regarding material changes versus prior comparable periods. It notes that the press release incorporated by reference contains the results of operations for the periods ended September 30, 2018.
Guidance, Outlook, and Risks
Guidance and Outlook: The Company provides "ongoing earnings guidance" to reflect management's expectations of ongoing financial performance. This is a non-GAAP measure. Management states it is generally unable to estimate the impact of reconciling items between forecasted GAAP earnings and ongoing earnings guidance, nor can it provide a corresponding GAAP equivalent for the forecast.
Risks and Contingencies: The filing highlights that future differences between GAAP and ongoing earnings are frequently outside the Company's control. Reconciling items may include revenues and expenses from transactions not occurring in the normal course of business.
Unusual Items: The Company explicitly excludes the impact of net unrealized mark-to-market gains/losses on economic hedges and pension expenses from disposed businesses from its ongoing earnings metrics.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated November 6, 2018) for specific revenue, earnings, and cash flow figures for the three and nine months ended September 30, 2018.
- Verify the reconciliation between GAAP net earnings and the non-GAAP "ongoing earnings" metrics presented in the press release.
- Assess the magnitude of excluded items, specifically unrealized mark-to-market gains/losses on economic hedges and pension expenses related to disposed businesses.
- Confirm the Company's ability to provide GAAP equivalents for its ongoing earnings guidance, noting the filing states this is generally not possible.