Business Context and Reporting Period
This Form 8-K, dated February 28, 2017, 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, 2016, 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 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 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 that management is generally unable to estimate the impact of reconciling items between forecasted ongoing earnings and GAAP earnings. Consequently, a corresponding GAAP equivalent for the guidance is not provided. Reconciling items may include transactions outside normal business operations and mark-to-market adjustments.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release) for specific GAAP and non-GAAP financial results for the three months and year ended December 31, 2016.
- Verify the reconciliation between GAAP net earnings and the reported "ongoing earnings" to understand the impact of excluded items.
- Assess the magnitude of unrealized mark-to-market gains/losses on economic hedges and impairments on available-for-sale securities.
- Confirm the specific components of the "ongoing earnings guidance" provided in the press release, noting the absence of a GAAP equivalent forecast.