Business Context and Reporting Period
This Form 8-K, filed on February 27, 2018, 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 months and the full year ended December 31, 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 report.
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 changes in earnings capacity, though they should not be viewed as 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:
- Ongoing earnings guidance is not a GAAP measure and does not represent an expectation of GAAP net earnings.
- Management is generally unable to estimate the impact of reconciling items (such as unrealized hedge gains/losses) on future GAAP earnings.
- Consequently, the Company cannot provide a corresponding GAAP equivalent for its forecasted ongoing earnings guidance.
The filing includes a limitation stating that the information furnished is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 and is not subject to the liability of that section.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated February 27, 2018) for specific GAAP and non-GAAP financial results for the year ended December 31, 2017.
- Verify the reconciliation between GAAP net earnings and the Company's "ongoing earnings" to understand the impact of excluded items like economic hedges.
- Assess the Company's ability to forecast GAAP earnings given the stated inability to estimate future reconciling items.
- Confirm the specific operational results for the three-month period ended December 31, 2017, as referenced in the press release.