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) | August 8, 2016 | |
(August 8, 2016) |
Commission | Name of Registrants, State of Incorporation, | I.R.S. Employer | ||
File Number | Address 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 | ||||
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)) |
PNM RESOURCES, INC. | |
PUBLIC SERVICE COMPANY OF NEW MEXICO | |
TEXAS-NEW MEXICO POWER COMPANY | |
(Registrants) | |
Date: August 8, 2016 | /s/ Joseph D. Tarry |
Joseph D. Tarry | |
Vice President, Corporate Controller, and Chief Information Officer | |
(Officer duly authorized to sign this report) |
Q2 2016 | Q2 2015 | YTD 2016 | YTD 2015 | |
GAAP net earnings | $27.1 | $31.7 | $37.6 | $46.0 |
GAAP diluted EPS | $0.34 | $0.40 | $0.47 | $0.57 |
Ongoing net earnings | $32.1 | $35.4 | $42.9 | $51.8 |
Ongoing diluted EPS | $0.40 | $0.44 | $0.53 | $0.65 |
Q2 2016 | Q2 2015 | YTD 2016 | YTD 2015 | |
GAAP net earnings | $15.9 | $21.4 | $20.1 | $31.4 |
GAAP diluted EPS | $0.20 | $0.27 | $0.25 | $0.39 |
Ongoing net earnings | $20.9 | $25.1 | $25.0 | $36.2 |
Ongoing diluted EPS | $0.26 | $0.31 | $0.31 | $0.46 |
• | In the second quarter, PNM’s GAAP and ongoing earnings benefitted from the elimination of Palo Verde Unit 2 lease costs following the purchase of 64 MW’s of leases in January 2016, hotter temperatures, and interest income received from the IRS. These were more than offset by the absence of the El Paso Natural Gas FERC tariff refund received in 2015, increased depreciation expense and property tax from new investments, lower market sales prices on settled transactions related to Palo Verde Unit 3 and higher interest expense from the issuance of new long-term debt. |
Q2 2016 | Q2 2015 | YTD 2016 | YTD 2015 | |
GAAP net earnings | $10.5 | $11.9 | $18.0 | $19.6 |
GAAP diluted EPS | $0.13 | $0.15 | $0.22 | $0.24 |
Ongoing net earnings | $10.5 | $11.9 | $18.0 | $19.6 |
Ongoing diluted EPS | $0.13 | $0.15 | $0.22 | $0.24 |
• | In the second quarter, TNMP’s GAAP and ongoing earnings benefitted from load growth and transmission rate relief. These were more than offset by increased operations and maintenance costs, milder temperatures and higher depreciation and property tax expenses resulting from additional capital investments. |
Q2 2016 | Q2 2015 | YTD 2016 | YTD 2015 | |
GAAP net earnings (loss) | $0.7 | ($1.6) | ($0.4) | ($4.9) |
GAAP diluted EPS | $0.01 | ($0.02) | $0.00 | ($0.06) |
Ongoing net earnings (loss) | $0.7 | ($1.6) | ($0.1) | ($3.9) |
Ongoing diluted EPS | $0.01 | ($0.02) | $0.00 | ($0.05) |
• | Corporate and Other’s GAAP and ongoing earnings benefitted from net interest earned on the loan provided to Westmoreland Coal Company to finance Westmoreland’s purchase of San Juan Coal Company and a net improvement in interest expense related to the repayment of long-term debt in May 2015. |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 15,917 | $ | 10,508 | $ | 651 | $ | 27,076 | ||||||||
Adjusting items, net of income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | 4,023 | — | — | 4,023 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2 | 406 | — | — | 406 | ||||||||||||
Pension expense related to previously disposed of gas distribution business3 | 564 | — | 564 | |||||||||||||
Total Adjustments | 4,993 | — | — | 4,993 | ||||||||||||
Ongoing Earnings (Loss) | $ | 20,910 | $ | 10,508 | $ | 651 | $ | 32,069 | ||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 20,057 | $ | 17,965 | $ | (400 | ) | $ | 37,622 | |||||||
Adjusting items, net of income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | 3,148 | — | — | 3,148 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2 | (580 | ) | — | — | (580 | ) | ||||||||||
New Mexico corporate income tax rate change5 | 804 | — | (92 | ) | 712 | |||||||||||
Regulatory disallowances and restructuring costs4 | 472 | — | 357 | 829 | ||||||||||||
Pension expense related to previously disposed of gas distribution business3 | 1,129 | — | — | 1,129 | ||||||||||||
Total Adjustments | 4,973 | — | 265 | 5,238 | ||||||||||||
Ongoing Earnings (Loss) | $ | 25,030 | $ | 17,965 | $ | (135 | ) | $ | 42,860 | |||||||
2016 income tax effects calculated using tax rates of 35.00% for TNMP and 39.02% for other segments. | ||||||||||||||||
The impacts of adjusting items are reflected on the GAAP Condensed Consolidated Statement of Earnings as follows: | ||||||||||||||||
1Pre-tax5 impacts reflected as $6,079 thousand reduction in "Electric Operating Revenues" and $519 thousand increase in "Cost of energy" in the three months ended June 30, 2016 and $4,715 thousand reduction in "Electric Operating Revenues" and $448 thousand increase in "Cost of energy" in the six months ended June 30, 2016 | ||||||||||||||||
2Pre-tax5 impacts reflected as $666 thousand reduction in "Gains on available-for-sale securities" in the three months ended June 30, 2016 and $951 thousand increase in "Gains on available-for-sale securities" in the six months ended June 30, 2016 | ||||||||||||||||
3Pre-tax5 impacts reflected as increases in "Administrative and general" of $925 thousand in the three months ended June 30, 2016 and $1,851 thousand in the six months ended June 30, 2016 | ||||||||||||||||
4Pre-tax5 impacts reflected as increases of $774 thousand (PNM) in "Regulatory disallowances and restructuring costs" and $586 thousand (Corporate and Other) in "Other (deductions)" in the six months ended June 30, 2016 | ||||||||||||||||
5Tax impacts reflected as reductions in "Income Taxes" of $3,196 thousand in the three months ended June 30, 2016 and $2,185 thousand ($1,864 thousand PNM and $321 thousand Corporate and Other) in the six months ended June 30, 2016 |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 21,381 | $ | 11,865 | $ | (1,573 | ) | $ | 31,673 | |||||||
Adjusting items, net of income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | 2,680 | — | — | 2,680 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2 | 727 | — | — | 727 | ||||||||||||
Regulatory disallowances3 | 930 | 930 | ||||||||||||||
(Gain) loss related to previously disposed of activities4 | (660 | ) | 3 | (657 | ) | |||||||||||
Total Adjustments | 3,677 | — | 3 | 3,680 | ||||||||||||
Ongoing Earnings (Loss) | $ | 25,058 | $ | 11,865 | $ | (1,570 | ) | $ | 35,353 | |||||||
Six Months Ended June 30, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 31,371 | $ | 19,559 | $ | (4,917 | ) | $ | 46,013 | |||||||
Adjusting items, net of income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | 3,726 | — | — | 3,726 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2 | 466 | — | — | 466 | ||||||||||||
New Mexico corporate income tax rate change5 | (470 | ) | — | (203 | ) | (673 | ) | |||||||||
Regulatory disallowances3 | 1,061 | — | — | 1,061 | ||||||||||||
State tax credit and NOL impairment5 | 658 | — | 342 | 1,000 | ||||||||||||
(Gain) loss related to previously disposed of activities4 | (660 | ) | 905 | 245 | ||||||||||||
Total Adjustments | 4,781 | — | 1,044 | 5,825 | ||||||||||||
Ongoing Earnings (Loss) | $ | 36,152 | $ | 19,559 | $ | (3,873 | ) | $ | 51,838 | |||||||
2015 income tax effects calculated using tax rates of 35.00% for TNMP and 39.19% for other segments. | ||||||||||||||||
The impacts of adjusting items are reflected on the GAAP Condensed Consolidated Statement of Earnings as follows: | ||||||||||||||||
1Pre-tax5 impacts reflected as $4,370 thousand reduction in "Electric Operating Revenues" and $38 thousand increase in "Cost of energy" in the three months ended June 30, 2015 and $6,018 thousand reduction in "Electric Operating Revenues" and $109 thousand increase in "Cost of energy" in the six months ended June 30, 2016 | ||||||||||||||||
2Pre-tax5 impacts reflected as decreases in "Gains on available-for-sale securities" of $1,196 thousand in the three months ended June 30, 2015 and $766 thousand in the six months ended June 30, 205 | ||||||||||||||||
3Pre-tax5 impacts reflected as increases in "Regulatory disallowances and restructuring costs" of $1,529 thousand in the three months ended June 30, 2015 and $1,744 thousand in six months ended June 30, 2015 | ||||||||||||||||
4Pre-tax5 impacts reflected as increases of $1,086 thousand (PNM) in "Other income" and $5 thousand (Corporate and Other) in "Interest charges" in the three months ended June 30, 2015 and $1,086 thousand (PNM) in "Other income", $291 thousand (Corporate and Other) in "Taxes other than incomes taxes", $74 thousand (Corporate and Other) in "Interest charges", and $1,122 thousand (Corporate and Other) in "Other deductions" in the six months ended June 30, 2015 | ||||||||||||||||
5Tax impacts reflected as reductions in "Income Taxes" of $2,372 thousand ($2,370 thousand PNM and $2 thousand Corporate and Other) in the three months ended June 30, 2016 and $3,213 thousand ($2,770 thousand PNM and $443 thousand Corporate and Other) in the six months ended June 30, 2015 |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(per diluted share) | ||||||||||||||||
Three Months Ended June 30, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 0.20 | $ | 0.13 | $ | 0.01 | $ | 0.34 | ||||||||
Adjusting items | ||||||||||||||||
Mark-to-market impact of economic hedges | 0.05 | — | — | 0.05 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities | — | — | — | — | ||||||||||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||||||||||
Total Adjustments | 0.06 | — | — | 0.06 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.26 | $ | 0.13 | $ | 0.01 | $ | 0.40 | ||||||||
Average Diluted Shares Outstanding: 80,107,844 | ||||||||||||||||
Six Months Ended June 30, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 0.25 | $ | 0.22 | $ | — | $ | 0.47 | ||||||||
Adjusting items | ||||||||||||||||
Mark-to-market impact of economic hedges | 0.04 | — | — | 0.04 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities | (0.01 | ) | — | — | (0.01 | ) | ||||||||||
New Mexico corporate income tax rate change | 0.01 | — | — | 0.01 | ||||||||||||
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 | 0.06 | — | — | 0.06 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.31 | $ | 0.22 | $ | — | $ | 0.53 | ||||||||
Average Diluted Shares Outstanding: 80,135,790 | ||||||||||||||||
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(per diluted share) | ||||||||||||||||
Three Months Ended June 30, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.27 | $ | 0.15 | $ | (0.02 | ) | $ | 0.40 | |||||||
Adjusting items | ||||||||||||||||
Mark-to-market impact of economic hedges | 0.03 | — | — | 0.03 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities | 0.01 | — | — | 0.01 | ||||||||||||
Regulatory disallowances | 0.01 | — | — | 0.01 | ||||||||||||
(Gain) loss related to previously disposed of activities | (0.01 | ) | — | — | (0.01 | ) | ||||||||||
Total Adjustments | 0.04 | — | — | 0.04 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.31 | $ | 0.15 | $ | (0.02 | ) | $ | 0.44 | |||||||
Average Diluted Shares Outstanding: 80,133,154 | ||||||||||||||||
Six Months Ended June 30, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.39 | $ | 0.24 | $ | (0.06 | ) | $ | 0.57 | |||||||
Adjusting items | ||||||||||||||||
Mark-to-market impact of economic hedges | 0.05 | — | — | 0.05 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities | 0.01 | — | — | 0.01 | ||||||||||||
New Mexico corporate income tax rate change | — | — | — | — | ||||||||||||
Regulatory disallowances | 0.01 | — | — | 0.01 | ||||||||||||
State tax credit and NOL impairment | 0.01 | — | — | 0.01 | ||||||||||||
(Gain) loss related to previously disposed of activities | (0.01 | ) | — | 0.01 | — | |||||||||||
Total Adjustments | 0.07 | — | 0.01 | 0.08 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.46 | $ | 0.24 | $ | (0.05 | ) | $ | 0.65 | |||||||
Average Diluted Shares Outstanding: 80,143,056 | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Electric Operating Revenues | $ | 315,391 | $ | 352,887 | $ | 626,352 | $ | 685,755 | |||||||
Operating Expenses: | |||||||||||||||
Cost of energy | 81,363 | 114,038 | 173,732 | 229,683 | |||||||||||
Administrative and general | 45,160 | 39,928 | 92,270 | 83,787 | |||||||||||
Energy production costs | 37,881 | 44,790 | 80,567 | 87,459 | |||||||||||
Regulatory disallowances and restructuring costs | — | 1,529 | 774 | 1,744 | |||||||||||
Depreciation and amortization | 50,955 | 46,049 | 100,784 | 91,510 | |||||||||||
Transmission and distribution costs | 17,315 | 16,868 | 33,909 | 33,354 | |||||||||||
Taxes other than income taxes | 17,895 | 17,271 | 37,987 | 36,234 | |||||||||||
Total operating expenses | 250,569 | 280,473 | 520,023 | 563,771 | |||||||||||
Operating income | 64,822 | 72,414 | 106,329 | 121,984 | |||||||||||
Other Income and Deductions: | |||||||||||||||
Interest income | 10,194 | 1,941 | 13,815 | 3,691 | |||||||||||
Gains on available-for-sale securities | 4,631 | 5,556 | 10,849 | 9,580 | |||||||||||
Other income | 4,265 | 5,717 | 8,530 | 10,679 | |||||||||||
Other (deductions) | (4,105 | ) | (3,707 | ) | (7,104 | ) | (7,370 | ) | |||||||
Net other income and deductions | 14,985 | 9,507 | 26,090 | 16,580 | |||||||||||
Interest Charges | 33,221 | 28,913 | 64,712 | 59,186 | |||||||||||
Earnings before Income Taxes | 46,586 | 53,008 | 67,707 | 79,378 | |||||||||||
Income Taxes | 15,634 | 17,353 | 22,790 | 25,870 | |||||||||||
Net Earnings | 30,952 | 35,655 | 44,917 | 53,508 | |||||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | (3,744 | ) | (3,850 | ) | (7,031 | ) | (7,231 | ) | |||||||
Preferred Stock Dividend Requirements of Subsidiary | (132 | ) | (132 | ) | (264 | ) | (264 | ) | |||||||
Net Earnings Attributable to PNMR | $ | 27,076 | $ | 31,673 | $ | 37,622 | $ | 46,013 | |||||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||||
Basic | $ | 0.34 | $ | 0.40 | $ | 0.47 | $ | 0.58 | |||||||
Diluted | $ | 0.34 | $ | 0.40 | $ | 0.47 | $ | 0.57 | |||||||
Dividends Declared per Common Share | $ | 0.22 | $ | 0.20 | $ | 0.44 | $ | 0.40 |