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) | February 28, 2017 | |
(February 28, 2017) |
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: February 28, 2017 | /s/ Joseph D. Tarry |
Joseph D. Tarry | |
Vice President, Finance and Controller | |
(Officer duly authorized to sign this report) |
Q4 2016 | Q4 2015 | YE 2016 | YE 2015 | ||
GAAP net earnings (loss) | $24.8 | ($91.4) | $116.8 | $15.6 | |
GAAP diluted EPS | $0.31 | ($1.15) | $1.46 | $0.20 | |
Ongoing net earnings | $27.4 | $18.7 | $132.4 | $131.5 | |
Ongoing diluted EPS | $0.34 | $0.23 | $1.65 | $1.64 |
Q4 2016 | Q4 2015 | YE 2016 | YE 2015 | ||
GAAP net earnings (loss) | $16.0 | ($96.4) | $76.9 | ($15.8) | |
GAAP diluted EPS | $0.20 | ($1.21) | $0.96 | ($0.20) | |
Ongoing net earnings | $18.4 | $10.5 | $91.4 | $94.7 | |
Ongoing diluted EPS | $0.23 | $0.13 | $1.14 | $1.18 |
• | In the fourth quarter, PNM’s 2016 GAAP and ongoing earnings included the implementation of new retail rates, lower outage costs, lower operations and maintenance costs and the elimination of Palo Verde Unit 2 lease costs resulting from the January 2016 purchase of 64 MW’s of previously leased capacity. These were offset by lower AFUDC, milder weather, increased depreciation expense and property tax from new investments and lower market prices on Palo Verde Unit 3 sales. |
• | In the fourth quarter of 2015, GAAP earnings reflect the New Mexico Public Regulation Commission’s December approval of an agreement to retire San Juan Units 2 and 3, which resulted in a $165.7 million pre-tax write-down for the estimated unrecovered investment in these units and certain other items related to San Juan. This also resulted in a $1.8 million reversal of associated deferred tax items. |
Q4 2016 | Q4 2015 | YE 2016 | YE 2015 | ||
GAAP net earnings | $9.9 | $8.7 | $41.7 | $42.0 | |
GAAP diluted EPS | $0.12 | $0.11 | $0.52 | $0.52 | |
Ongoing net earnings | $10.0 | $8.7 | $42.5 | $41.9 | |
Ongoing diluted EPS | $0.12 | $0.11 | $0.53 | $0.52 |
• | In the fourth quarter, TNMP’s 2016 GAAP and ongoing earnings benefited from load growth, stronger weather impacts and transmission rate relief, partially offset by higher depreciation and property tax expenses resulting from additional capital investments. |
Q4 2016 | Q4 2015 | YE 2016 | YE 2015 | |
GAAP net earnings (loss) | ($1.0) | ($3.8) | ($1.7) | ($10.6) |
GAAP diluted EPS | ($0.01) | ($0.05) | ($0.02) | ($0.12) |
Ongoing net earnings (loss) | ($1.0) | ($0.5) | ($1.4) | ($5.1) |
Ongoing diluted EPS | ($0.01) | ($0.01) | ($0.02) | ($0.06) |
• | In the fourth quarter, Corporate and Other’s 2016 GAAP and ongoing earnings benefited from net interest earned on the loan provided to Westmoreland Coal Company to finance Westmoreland’s purchase of San Juan Coal Company, offset by interest on higher short-term debt balances. |
• | In the fourth quarter of 2015, GAAP earnings also reflect a $5.2 million tax write-down related to federal and state tax credit, net operating loss and charitable contribution impairments. |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(in thousands) | ||||||||||||||||
Quarter Ended December 31, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 15,982 | $ | 9,855 | $ | (1,028 | ) | $ | 24,809 | |||||||
Adjusting items before income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | (616 | ) | — | — | (616 | ) | ||||||||||
Net change in unrealized impairments of available-for-sale securities2 | 2,190 | — | — | 2,190 | ||||||||||||
Regulatory disallowances and restructuring costs3 | (2,214 | ) | — | — | (2,214 | ) | ||||||||||
Pension expense related to previously disposed of gas distribution business4 | 925 | — | — | 925 | ||||||||||||
Process improvement initiatives5 | 3,743 | 237 | — | 3,980 | ||||||||||||
Total adjustments before income tax effects | 4,028 | 237 | — | 4,265 | ||||||||||||
Income (taxes) on above adjustments* | (1,572 | ) | (82 | ) | — | (1,654 | ) | |||||||||
Adjusting items, net of income taxes | 2,456 | 155 | — | 2,611 | ||||||||||||
Ongoing Earnings (Loss) | $ | 18,438 | $ | 10,010 | $ | (1,028 | ) | $ | 27,420 | |||||||
Year Ended December 31, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 76,891 | $ | 41,672 | $ | (1,714 | ) | $ | 116,849 | |||||||
Adjusting items before income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | 1,577 | — | — | 1,577 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2 | 1,169 | — | — | 1,169 | ||||||||||||
Regulatory disallowances and restructuring costs3 | 15,010 | — | 586 | 15,596 | ||||||||||||
Pension expense related to previously disposed of gas distribution business4 | 3,702 | — | — | 3,702 | ||||||||||||
Process improvement initiatives5 | 3,743 | 237 | — | 3,980 | ||||||||||||
Building consolidation4 | 737 | 996 | — | 1,733 | ||||||||||||
Total adjustments before income tax effects | 25,938 | 1,233 | 586 | 27,757 | ||||||||||||
Income (taxes) on above adjustments* | (10,122 | ) | (431 | ) | (229 | ) | (10,782 | ) | ||||||||
New Mexico corporate income tax rate change | 804 | — | (92 | ) | 712 | |||||||||||
Recovery of prior tax impairments in New Mexico general rate case | (2,145 | ) | — | — | (2,145 | ) | ||||||||||
Total income tax impacts | (11,463 | ) | (431 | ) | (321 | ) | (12,215 | ) | ||||||||
Adjusting items, net of income taxes | 14,475 | 802 | 265 | 15,542 | ||||||||||||
Ongoing Earnings (Loss) | $ | 91,366 | $ | 42,474 | $ | (1,449 | ) | $ | 132,391 | |||||||
* 2016 income taxes calculated using rates of 35.00% for TNMP and 39.02% for other segments. | ||||||||||||||||
The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Consolidated Statement of Earnings as follows: | ||||||||||||||||
1 Increases in "Electric Operating Revenues" and "Cost of energy" of $5,247 and $4,631 in the three months ended December 31, 2016 and $3,182 and $4,759 in the year ended December 31, 2016 | ||||||||||||||||
2 Reductions in "Gains on available-for-sale securities" | ||||||||||||||||
3 Reduction in "Regulatory disallowances and restructuring costs" (PNM) in the three months ended December 31, 2016 and increases in "Regulatory disallowances and restructuring costs" (PNM) and "Other (deductions)" (Corporate and Other) in the year ended December 31, 2016 | ||||||||||||||||
4 Increases in "Administrative and general" | ||||||||||||||||
5 Increases in "Administrative and general" and "Taxes other than income taxes" of $3,960 ($3,723 PNM and $237 TNMP) and $20 (PNM) in the three months and year ended December 31, 2016 |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(in thousands) | ||||||||||||||||
Quarter Ended December 31, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (96,380 | ) | $ | 8,715 | $ | (3,753 | ) | $ | (91,418 | ) | |||||
Adjusting items before income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | 3,937 | — | — | 3,937 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2 | 1,130 | — | — | 1,130 | ||||||||||||
Regulatory disallowances and restructuring costs3 | 165,727 | — | (3,133 | ) | 162,594 | |||||||||||
Building consolidation4 | (297 | ) | (81 | ) | — | (378 | ) | |||||||||
Settlement of regulatory proceeding5 | (1,631 | ) | — | — | (1,631 | ) | ||||||||||
Total adjustments before income tax effects | 168,866 | (81 | ) | (3,133 | ) | 165,652 | ||||||||||
Income (taxes) on above adjustments* | (66,179 | ) | 29 | 1,228 | (64,922 | ) | ||||||||||
Reversal of deferred tax items due to BART decision for SJGS | 1,826 | — | — | 1,826 | ||||||||||||
Federal and state tax credit, NOL, and charitable contribution impairments | 2,407 | — | 5,157 | 7,564 | ||||||||||||
Total income tax impacts | (61,946 | ) | 29 | 6,385 | (55,532 | ) | ||||||||||
Adjusting items, net of income taxes | 106,920 | (52 | ) | 3,252 | 110,120 | |||||||||||
Ongoing Earnings (Loss) | $ | 10,540 | $ | 8,663 | $ | (501 | ) | $ | 18,702 | |||||||
Year Ended December 31, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (15,762 | ) | $ | 41,963 | $ | (10,561 | ) | $ | 15,640 | ||||||
Adjusting items before income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges1 | 5,188 | — | — | 5,188 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2 | 4,344 | — | — | 4,344 | ||||||||||||
Regulatory disallowances and restructuring costs3 | 167,471 | — | (3,133 | ) | 164,338 | |||||||||||
Building consolidation4 | (297 | ) | (81 | ) | — | (378 | ) | |||||||||
Settlement of regulatory proceeding5 | (1,631 | ) | — | — | (1,631 | ) | ||||||||||
(Gain) loss related to previously disposed of activities6 | (1,086 | ) | — | 1,488 | 402 | |||||||||||
Total adjustments before income tax effects | 173,989 | (81 | ) | (1,645 | ) | 172,263 | ||||||||||
Income (taxes) on above adjustments* | (68,186 | ) | 29 | 645 | (67,512 | ) |
Reversal of deferred tax items due to BART decision for SJGS | 1,826 | — | — | 1,826 | ||||||||||||
Federal and state tax credit, NOL, and charitable contribution impairments | 3,297 | — | 6,643 | 9,940 | ||||||||||||
New Mexico corporate income tax rate change | (470 | ) | — | (203 | ) | (673 | ) | |||||||||
Total income tax impacts | (63,533 | ) | 29 | 7,085 | (56,419 | ) | ||||||||||
Adjusting items, net of income tax | 110,456 | (52 | ) | 5,440 | 115,844 | |||||||||||
Ongoing Earnings (Loss) | $ | 94,694 | $ | 41,911 | $ | (5,121 | ) | $ | 131,484 | |||||||
* 2015 income taxes calculated using rates of 35.00% for TNMP and 39.19% for other segments. | ||||||||||||||||
The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Consolidated Statement of Earnings as follows: | ||||||||||||||||
1 Reductions in "Electric Operating Revenues" and "Cost of energy" of $3,971 and $34 in the three months ended December 31, 2015 and $5,270 and $83 in the year ended December 31, 2015 | ||||||||||||||||
2 Reductions in "Gains on available-for-sale securities" | ||||||||||||||||
3 Increases "Regulatory disallowances and restructuring costs" (PNM) and "Other income" (Corporate and Other) | ||||||||||||||||
4 Increases in "Administrative and general" | ||||||||||||||||
5 Reduction in "Cost of energy" of $1,339 and increase in "Interest income" of $292 | ||||||||||||||||
6 Increases in "Other income" (PNM) of $1,086, "Taxes other than income" (Corporate and Other) of $292, "Interest charges" (Corporate and Other) of $74, and "Other deductions" (Corporate and Other ) of $1,122 |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(per diluted share) | ||||||||||||||||
Quarter Ended December 31, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.20 | $ | 0.12 | $ | (0.01 | ) | $ | 0.31 | |||||||
Adjusting items, net of income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges | (0.01 | ) | — | — | (0.01 | ) | ||||||||||
Net change in unrealized impairments of available-for-sale securities | 0.02 | — | — | 0.02 | ||||||||||||
Regulatory disallowances and restructuring costs | (0.02 | ) | — | — | (0.02 | ) | ||||||||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||||||||||
Process improvement initiatives | 0.03 | — | — | 0.03 | ||||||||||||
Total Adjustments | 0.03 | — | — | 0.03 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.23 | $ | 0.12 | $ | (0.01 | ) | $ | 0.34 | |||||||
Average Diluted Shares Outstanding: 80,137,352 | ||||||||||||||||
Year Ended December 31, 2016 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.96 | $ | 0.52 | $ | (0.02 | ) | $ | 1.46 | |||||||
Adjusting items, net of income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges | 0.01 | — | — | 0.01 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities | 0.01 | — | — | 0.01 | ||||||||||||
Regulatory disallowances and restructuring costs1 | 0.09 | — | — | 0.09 | ||||||||||||
Pension expense related to previously disposed of gas distribution business | 0.03 | — | — | 0.03 | ||||||||||||
Process improvement initiatives | 0.03 | — | — | 0.03 | ||||||||||||
Building consolidation | — | 0.01 | — | 0.01 | ||||||||||||
New Mexico corporate income tax rate change | 0.01 | — | — | 0.01 | ||||||||||||
Total Adjustments | 0.18 | 0.01 | — | 0.19 | ||||||||||||
Ongoing Earnings (Loss) | $ | 1.14 | $ | 0.53 | $ | (0.02 | ) | $ | 1.65 | |||||||
Average Diluted Shares Outstanding: 80,131,541 | ||||||||||||||||
1 Includes earnings per share impact of "Recovery of prior tax impairments in New Mexico general rate case" |
PNM | TNMP | Corporate and Other | Consolidated | |||||||||||||
(per diluted share) | ||||||||||||||||
Quarter Ended December 31, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (1.21 | ) | $ | 0.11 | $ | (0.05 | ) | $ | (1.15 | ) | |||||
Adjusting items, net of income tax effects | ||||||||||||||||
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 and restructuring costs1 | 1.29 | — | (0.03 | ) | 1.26 | |||||||||||
Building consolidation | — | — | — | — | ||||||||||||
Settlement of regulatory proceeding | (0.01 | ) | — | — | (0.01 | ) | ||||||||||
Federal and state tax credit, NOL, and charitable contribution impairments | 0.02 | — | 0.07 | 0.09 | ||||||||||||
Total Adjustments | 1.34 | — | 0.04 | 1.38 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.13 | $ | 0.11 | $ | (0.01 | ) | $ | 0.23 | |||||||
Average Basic and Diluted Shares Outstanding: 79,758,944 | ||||||||||||||||
Year Ended December 31, 2015 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | (0.20 | ) | $ | 0.52 | $ | (0.12 | ) | $ | 0.20 | ||||||
Adjusting items, net of income tax effects | ||||||||||||||||
Mark-to-market impact of economic hedges | 0.04 | — | — | 0.04 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities | 0.03 | — | — | 0.03 | ||||||||||||
Regulatory disallowances and restructuring costs1 | 1.29 | — | (0.03 | ) | 1.26 | |||||||||||
Building consolidation | — | — | — | — | ||||||||||||
Settlement of regulatory proceeding | (0.01 | ) | — | — | (0.01 | ) | ||||||||||
(Gain) loss related to previously disposed of activities | (0.01 | ) | — | 0.01 | — | |||||||||||
Federal and state tax credit, NOL, and charitable contribution impairments | 0.04 | — | 0.08 | 0.12 | ||||||||||||
New Mexico corporate income tax rate change | — | — | — | — | ||||||||||||
Total Adjustments | 1.38 | — | 0.06 | 1.44 | ||||||||||||
Ongoing Earnings (Loss) | $ | 1.18 | $ | 0.52 | $ | (0.06 | ) | $ | 1.64 | |||||||
Average Diluted Shares Outstanding: 80,139,052 | ||||||||||||||||
1 Includes earnings per share impacts of "Reversal of deferred tax items due to BART decision for SJGS" (PNM) |
Year Ended December 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(In thousands, except per share amounts) | |||||||||||
Electric Operating Revenues | $ | 1,362,951 | $ | 1,439,082 | $ | 1,435,853 | |||||
Operating Expenses: | |||||||||||
Cost of energy | 380,596 | 464,649 | 471,556 | ||||||||
Administrative and general | 191,514 | 179,100 | 171,111 | ||||||||
Energy production costs | 146,187 | 176,752 | 185,638 | ||||||||
Regulatory disallowances and restructuring costs | 15,011 | 167,471 | 1,062 | ||||||||
Depreciation and amortization | 209,110 | 185,919 | 172,634 | ||||||||
Transmission and distribution costs | 66,227 | 69,157 | 66,571 | ||||||||
Taxes other than income taxes | 76,321 | 71,684 | 67,584 | ||||||||
Total operating expenses | 1,084,966 | 1,314,732 | 1,136,156 | ||||||||
Operating income | 277,985 | 124,350 | 299,697 | ||||||||
Other Income and Deductions: | |||||||||||
Interest income | 22,293 | 6,498 | 8,483 | ||||||||
Gains on available-for-sale securities | 19,517 | 16,060 | 10,527 | ||||||||
Other income | 17,796 | 26,833 | 12,048 | ||||||||
Other (deductions) | (13,784 | ) | (12,728 | ) | (10,481 | ) | |||||
Net other income and deductions | 45,822 | 36,663 | 20,577 | ||||||||
Interest Charges | 128,633 | 114,860 | 119,627 | ||||||||
Earnings before Income Taxes | 195,174 | 46,153 | 200,647 | ||||||||
Income Taxes | 63,278 | 15,075 | 69,738 | ||||||||
Net Earnings | 131,896 | 31,078 | 130,909 | ||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | (14,519 | ) | (14,910 | ) | (14,127 | ) | |||||
Preferred Stock Dividend Requirements of Subsidiary | (528 | ) | (528 | ) | (528 | ) | |||||
Net Earnings Attributable to PNMR | $ | 116,849 | $ | 15,640 | $ | 116,254 | |||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||
Basic | $ | 1.47 | $ | 0.20 | $ | 1.46 | |||||
Diluted | $ | 1.46 | $ | 0.20 | $ | 1.45 |