UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
FORM 8-K |
CURRENT REPORT |
PURSUANT TO SECTION 13 OR 15(d) OF THE |
SECURITIES EXCHANGE ACT OF 1934 |
Date of Report (Date of earliest event reported) | May 7, 2019 | |
(May 7, 2019) |
Commission | Name of Registrants, State of Incorporation, | I.R.S. Employer | ||
File Number | Address Of Principal Executive Offices and Telephone Number | Identification No. | ||
001-32462 | PNM Resources, Inc. | 85-0468296 | ||
(A New Mexico Corporation) | ||||
414 Silver Ave. SW | ||||
Albuquerque, New Mexico 87102-3289 | ||||
(505) 241-2700 | ||||
001-06986 | Public Service Company of New Mexico | 85-0019030 | ||
(A New Mexico Corporation) | ||||
414 Silver Ave. SW | ||||
Albuquerque, New Mexico 87102-3289 | ||||
(505) 241-2700 | ||||
002-97230 | Texas-New Mexico Power Company | 75-0204070 | ||
(A Texas Corporation) | ||||
577 N. Garden Ridge Blvd. | ||||
Lewisville, Texas 75067 | ||||
(972) 420-4189 |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 40.14d-2(b)) | ||
o | Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 40.13e-4(c)) |
Registrant | Title of each class | Trading Symbol(s) | Name of exchange on which registered |
PNM Resources, Inc. | Common Stock, no par value | PNM | New York Stock Exchange |
PNM RESOURCES, INC. | |
PUBLIC SERVICE COMPANY OF NEW MEXICO | |
TEXAS-NEW MEXICO POWER COMPANY | |
(Registrants) | |
Date: May 7, 2019 | /s/ Joseph D. Tarry |
Joseph D. Tarry | |
Vice President, Controller and Treasurer | |
(Officer duly authorized to sign this report) |
Q1 2019 | Q1 2018 | |
GAAP net earnings attributable to PNM Resources | $18.7 | $15.0 |
GAAP diluted EPS | $0.23 | $0.19 |
Ongoing net earnings | $10.8 | $16.5 |
Ongoing diluted EPS | $0.13 | $0.21 |
Q1 2019 | Q1 2018 | |
GAAP net earnings attributable to PNM Resources | $19.0 | $7.7 |
GAAP diluted EPS | $0.24 | $0.10 |
Ongoing net earnings | $11.1 | $9.1 |
Ongoing diluted EPS | $0.14 | $0.12 |
• | GAAP earnings were $14.0 million higher in the first quarter of 2019 due to net changes in unrealized gains and losses on investment securities. |
• | An increase in weather-normalized load reflects continued growth in the PNM service territory and has resulted in an increase to the upper end of earnings guidance for 2019. |
• | Earnings were also impacted in the first quarter of 2019 by increased usage from colder temperatures, the refinancing of debt in 2018 at lower interest rates, the second phase of revised retail rates that were phased-in beginning February 2018 and lower outage costs, as planned outages in the first quarter of 2019 were delayed until the second quarter. These increases were partially offset by a planned increase in operational and maintenance spending, additional depreciation and property tax expenses related to new capital investments and lower earnings related to AFUDC. |
Q1 2019 | Q1 2018 | |
GAAP net earnings attributable to PNM Resources | $4.1 | $9.4 |
GAAP diluted EPS | $0.05 | $0.12 |
Ongoing net earnings | $4.1 | $9.4 |
Ongoing diluted EPS | $0.05 | $0.12 |
• | TNMP’s GAAP and ongoing earnings were lower in the first quarter of 2019 as the implementation of new base rates approved in December 2018 reflects an increase to rate base recovery that is more than offset by a reduction in the allowed return on equity to 9.65% from 10.125%, higher depreciation rates and the return of excess deferred income taxes to customers. |
• | Earnings were also lower due to increased depreciation and property tax expenses resulting from additional capital investments and lower customer usage from milder temperatures. |
Q1 2019 | Q1 2018 | |
GAAP net earnings (loss) attributable to PNM Resources | ($4.4) | ($2.1) |
GAAP diluted EPS | ($0.06) | ($0.03) |
Ongoing net earnings (loss) | ($4.4) | ($2.0) |
Ongoing diluted EPS | ($0.06) | ($0.03) |
• | Corporate and Other's GAAP and ongoing earnings were lower in the first quarter of 2019 due to higher fixed interest rates under the $300.0 million of 3.25% senior unsecured notes issued in March 2018. Lower net interest income due to the May 2018 repayment of loan agreements associated with Westmoreland Coal Company also reduced earnings. |
PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended March 31, 2019 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 19,012 | $ | 4,098 | $ | (4,410 | ) | $ | 18,700 | |||||||
Adjusting items before income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges2a | (28 | ) | — | — | (28 | ) | ||||||||||
Net change in unrealized gains on investment securities2b | (12,994 | ) | — | — | (12,994 | ) | ||||||||||
Regulatory disallowances and restructuring costs2c | 1,345 | — | — | 1,345 | ||||||||||||
Pension expense related to previously disposed of gas distribution business2d | 1,045 | — | — | 1,045 | ||||||||||||
Total adjustments before income tax effects | (10,632 | ) | — | — | (10,632 | ) | ||||||||||
Income tax impact of above adjustments1,2e | 2,701 | — | — | 2,701 | ||||||||||||
Adjusting items, net of income taxes | (7,931 | ) | — | — | (7,931 | ) | ||||||||||
Ongoing Earnings (Loss) | $ | 11,081 | $ | 4,098 | $ | (4,410 | ) | $ | 10,769 | |||||||
Three Months Ended March 31, 2018 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 7,705 | $ | 9,413 | $ | (2,128 | ) | $ | 14,990 | |||||||
Adjusting items before income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges2a | (28 | ) | — | — | (28 | ) | ||||||||||
Net change in unrealized gains on investment securities2b | 1,056 | — | — | 1,056 | ||||||||||||
Pension expense related to previously disposed of gas distribution business2d | 832 | — | — | 832 | ||||||||||||
Total adjustments before income tax effects | 1,860 | — | — | 1,860 | ||||||||||||
Income tax impact of above adjustments1 | (472 | ) | — | — | (472 | ) | ||||||||||
Impairment of state tax credits | — | — | 123 | 123 | ||||||||||||
Total income tax impacts2e | (472 | ) | — | 123 | (349 | ) | ||||||||||
Adjusting items, net of income taxes | 1,388 | — | 123 | 1,511 | ||||||||||||
Ongoing Earnings (Loss) | $ | 9,093 | $ | 9,413 | $ | (2,005 | ) | $ | 16,501 | |||||||
1 2019 and 2018 income tax effects calculated using a tax rate of 25.40% | ||||||||||||||||
2 The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statements of Earnings as follows: | ||||||||||||||||
a(Reductions) in "Electric Operating Revenues" and "Cost of energy" of $245 and $273 in the three months ended March 31, 2019 and (reductions) in "Electric Operating Revenues" and "Cost of energy" of $281 and $309 in the three months ended March 31, 2018 | ||||||||||||||||
b(Increases) decreases in "Gains on investment securities" | ||||||||||||||||
cIncreases in "Regulatory disallowances and restructuring costs" | ||||||||||||||||
dIncreases in "Other (deductions)" | ||||||||||||||||
eIncome tax impacts reflected in "Income Taxes" |
PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||
(per diluted share) | ||||||||||||||||
Three Months Ended March 31, 2019 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 0.24 | $ | 0.05 | $ | (0.06 | ) | $ | 0.23 | |||||||
Adjusting items, net of income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges | — | — | — | — | ||||||||||||
Net change in unrealized gains on investment securities | (0.12 | ) | — | — | (0.12 | ) | ||||||||||
Regulatory disallowances and restructuring costs | 0.01 | — | — | 0.01 | ||||||||||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||||||||||
Total Adjustments | (0.10 | ) | — | — | (0.10 | ) | ||||||||||
Ongoing Earnings (Loss) | $ | 0.14 | $ | 0.05 | $ | (0.06 | ) | $ | 0.13 | |||||||
Average Diluted Shares Outstanding: 79,970,966 | ||||||||||||||||
Three Months Ended March 31, 2018 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 0.10 | $ | 0.12 | $ | (0.03 | ) | $ | 0.19 | |||||||
Adjusting items, net of income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges | — | — | — | — | ||||||||||||
Net change in unrealized gains on investment securities | 0.01 | — | — | 0.01 | ||||||||||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||||||||||
Impairment of state tax credits | — | — | — | — | ||||||||||||
Total Adjustments | 0.02 | — | — | 0.02 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.12 | $ | 0.12 | $ | (0.03 | ) | $ | 0.21 | |||||||
Average Diluted Shares Outstanding: 80,013,247 |
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
(In thousands, except per share amounts) | |||||||
Electric Operating Revenues: | |||||||
Contracts with customers | $ | 315,698 | $ | 303,351 | |||
Alternative revenue programs | 636 | $ | 924 | ||||
Other electric operating revenue | 33,311 | $ | 13,603 | ||||
Total electric operating revenues | $ | 349,645 | $ | 317,878 | |||
Operating Expenses: | |||||||
Cost of energy | 121,626 | 92,556 | |||||
Administrative and general | 52,336 | 48,283 | |||||
Energy production costs | 35,072 | 35,350 | |||||
Regulatory disallowances and restructuring costs | 1,345 | — | |||||
Depreciation and amortization | 65,356 | 58,722 | |||||
Transmission and distribution costs | 16,678 | 16,955 | |||||
Taxes other than income taxes | 20,509 | 19,880 | |||||
Total operating expenses | 312,922 | 271,746 | |||||
Operating income | 36,723 | 46,132 | |||||
Other Income and Deductions: | |||||||
Interest income | 3,619 | 4,124 | |||||
Gains on investment securities | 14,014 | 288 | |||||
Other income | 3,415 | 3,469 | |||||
Other (deductions) | (3,252 | ) | (1,376 | ) | |||
Net other income and deductions | 17,796 | 6,505 | |||||
Interest Charges | 31,634 | 33,055 | |||||
Earnings before Income Taxes | 22,885 | 19,582 | |||||
Income Taxes | 1,223 | 783 | |||||
Net Earnings | 21,662 | 18,799 | |||||
(Earnings) Attributable to Valencia Non-controlling Interest | (2,830 | ) | (3,677 | ) | |||
Preferred Stock Dividend Requirements of Subsidiary | (132 | ) | (132 | ) | |||
Net Earnings Attributable to PNMR | $ | 18,700 | $ | 14,990 | |||
Net Earnings Attributable to PNMR per Common Share: | |||||||
Basic | $ | 0.23 | $ | 0.19 | |||
Diluted | $ | 0.23 | $ | 0.19 | |||
Dividends Declared per Common Share | $ | 0.290 | $ | 0.265 |