Business Context and Reporting Period
This Form 8-K, dated October 31, 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 and nine months ended September 30, 2014, 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 explicitly stated in the body of this 8-K document.
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. 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 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 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 between ongoing earnings guidance and forecasted GAAP earnings.
- Consequently, a corresponding GAAP equivalent for earnings guidance is generally not provided.
Reconciling items may include revenues and expenses from transactions outside normal business operations, as well as the hedging and impairment items noted above.
Investor Verification Checklist
- Review Exhibit 99.1 (Press Release dated October 31, 2014) for specific GAAP and non-GAAP financial results for the three and nine months ended September 30, 2014.
- Verify the reconciliation between reported GAAP earnings and the Company's "ongoing earnings" guidance.
- Assess the magnitude of unrealized mark-to-market gains/losses on economic hedges and impairments on available-for-sale securities excluded from non-GAAP measures.
- Confirm that the filing is furnished pursuant to Item 2.02 and is not deemed "filed" under Section 18 of the Securities Exchange Act of 1934.