Business Context and Reporting Period
This Form 8-K, dated February 28, 2014, 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 months and the full year ended December 31, 2013, 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. These figures are contained within the referenced press release (Exhibit 99.1) and are not explicitly 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 assets held in trusts for nuclear decommissioning.
- Certain other non-recurring or infrequent items.
Management asserts these measures remove variances not indicative of fundamental changes in earnings capacity, though they should not be considered a 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 is generally unable to estimate the impact of reconciling items between ongoing earnings guidance and forecasted GAAP earnings.
- Consequently, the Company cannot provide a corresponding GAAP equivalent for its earnings guidance.
Reconciling items may include revenues and expenses from transactions outside normal business operations, as well as the hedge and impairment items noted above.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated February 28, 2014) for specific GAAP and non-GAAP financial figures for the three months and year ended December 31, 2013.
- Verify the reconciliation between reported GAAP earnings and the Company's "ongoing earnings" to understand the impact of excluded items.
- Assess the magnitude of unrealized mark-to-market gains/losses on economic hedges and nuclear decommissioning trust impairments.
- Confirm that the "ongoing earnings guidance" provided by management is not being misinterpreted as a GAAP earnings forecast.