Business Context and Reporting Period
This Form 8-K, dated November 1, 2019, 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, 2019, 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.
The Company utilizes non-GAAP financial measures, including "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 explicitly detail material changes versus prior periods. It notes that the Company uses non-GAAP measures to remove variances in GAAP results that are not indicative of fundamental changes in earnings capacity, allowing for comparison with prior periods.
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 net earnings as defined by GAAP.
- Management is generally unable to estimate the impact of reconciling items (such as unrealized gains/losses on hedges or investment securities) on forecasted GAAP earnings without unreasonable effort.
- Consequently, the Company does not provide a corresponding GAAP equivalent for its forecasted ongoing earnings guidance.
The filing includes a limitation on incorporation by reference, stating that the information 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 dated November 1, 2019) for specific GAAP and non-GAAP financial figures for the three and nine months ended September 30, 2019.
- Verify the reconciliation between GAAP and non-GAAP measures to understand the impact of excluded items like mark-to-market adjustments and pension expenses.
- Assess the limitations of the provided "ongoing earnings guidance" regarding its inability to predict GAAP net earnings.
- Confirm the status of the Company's economic hedges and investment securities, as these are primary drivers of the variance between GAAP and non-GAAP results.