Q2 2018 | Q2 2017 | YTD 2018 | YTD 2017 | |
GAAP net earnings attributable to PNM Resources | $38.2 | $37.6 | $53.2 | $60.4 |
GAAP diluted EPS | $0.48 | $0.47 | $0.67 | $0.75 |
Ongoing net earnings | $42.3 | $39.6 | $58.8 | $61.6 |
Ongoing diluted EPS | $0.53 | $0.49 | $0.73 | $0.77 |
Q2 2018 | Q2 2017 | YTD 2018 | YTD 2017 | |
GAAP net earnings attributable to PNM Resources | $26.5 | $26.8 | $34.2 | $43.3 |
GAAP diluted EPS | $0.33 | $0.34 | $0.43 | $0.54 |
Ongoing net earnings | $30.8 | $28.8 | $39.9 | $44.5 |
Ongoing diluted EPS | $0.38 | $0.36 | $0.49 | $0.56 |
• | In the second quarter of 2018, PNM’s GAAP and ongoing earnings reflect the retail generation portfolio changes approved in the BART settlement and lower tax expense as a result of the Tax Cuts and Jobs Act of 2017 (TCJA), both of which were incorporated into the revised retail rates phased-in beginning February 2018. |
• | Earnings were also impacted in the second quarter of 2018 due to the addition of new third-party transmission contracts, increased customer usage caused by higher temperatures and load growth. These increases were offset by higher costs associated with the planned outage to install SCR equipment at the Four Corners Power Plant and moving a planned outage at the San Juan Generating Station from the fourth quarter to the second quarter, depreciation and property tax expenses from new capital investments and lower gains from the decommissioning and reclamation trusts. |
Q2 2018 | Q2 2017 | YTD 2018 | YTD 2017 | |
GAAP net earnings attributable to PNM Resources | $15.4 | $12.2 | $24.8 | $19.8 |
GAAP diluted EPS | $0.19 | $0.15 | $0.31 | $0.24 |
Ongoing net earnings | $15.4 | $12.2 | $24.8 | $19.8 |
Ongoing diluted EPS | $0.19 | $0.15 | $0.31 | $0.24 |
• | Earnings were increased by transmission rate relief, load growth and higher temperatures. This was partially offset by increased depreciation and property tax expenses resulting from additional capital investments. |
Q2 2018 | Q2 2017 | YTD 2018 | YTD 2017 | |
GAAP net earnings (loss) attributable to PNM Resources | ($3.7) | ($1.4) | ($5.8) | ($2.7) |
GAAP diluted EPS | ($0.04) | ($0.02) | ($0.07) | ($0.03) |
Ongoing net earnings (loss) | ($3.9) | ($1.4) | ($5.9) | ($2.6) |
Ongoing diluted EPS | ($0.04) | ($0.02) | ($0.07) | ($0.03) |
• | Corporate and Other’s GAAP and ongoing earnings were lower in the second quarter of 2018 due to higher interest rates and the issuance of $300.0 million of 3.25% senior unsecured notes in March 2018 that reduced variable rate debt exposure. Earnings were also lower due to the early repayment of loan agreements associated with Westmoreland Coal Company, resulting in lower net interest income. |
PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 26,540 | $ | 15,367 | $ | (3,699 | ) | $ | 38,208 | |||||||
Adjusting items before income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges2a | (28 | ) | — | — | (28 | ) | ||||||||||
Net change in unrealized gains and losses on investment securities2b | 3,027 | — | — | 3,027 | ||||||||||||
Regulatory disallowances and restructuring costs2c | 1,794 | — | — | 1,794 | ||||||||||||
Pension expense related to previously disposed of gas distribution business2d | 869 | — | — | 869 | ||||||||||||
(Gain) related to previously disposed of activities2e | — | — | (216 | ) | (216 | ) | ||||||||||
Total adjustments before income tax effects | 5,662 | — | (216 | ) | 5,446 | |||||||||||
Income tax impact of above adjustments1,2f | (1,438 | ) | — | 55 | (1,383 | ) | ||||||||||
Adjusting items, net of income taxes | 4,224 | — | (161 | ) | 4,063 | |||||||||||
Ongoing Earnings (Loss) | $ | 30,764 | $ | 15,367 | $ | (3,860 | ) | $ | 42,271 | |||||||
Six Months Ended June 30, 2018 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 34,246 | $ | 24,779 | $ | (5,827 | ) | $ | 53,198 | |||||||
Adjusting items before income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges2a | (56 | ) | — | — | (56 | ) | ||||||||||
Net change in unrealized gains and losses on investment securities2b | 4,083 | — | — | 4,083 | ||||||||||||
Regulatory disallowances and restructuring costs2c | 1,794 | — | — | 1,794 | ||||||||||||
Pension expense related to previously disposed of gas distribution business2d | 1,701 | — | — | 1,701 | ||||||||||||
(Gain) related to previously disposed of activities2e | — | — | (216 | ) | (216 | ) | ||||||||||
Total adjustments before income tax effects | 7,522 | — | (216 | ) | 7,306 | |||||||||||
Income tax impact of above adjustments1 | (1,911 | ) | — | 55 | (1,856 | ) | ||||||||||
Impairment of state tax credits | — | — | 123 | 123 | ||||||||||||
Total income tax impacts2f | (1,911 | ) | — | 178 | (1,733 | ) | ||||||||||
Adjusting items, net of income taxes | 5,611 | — | (38 | ) | 5,573 | |||||||||||
Ongoing Earnings (Loss) | $ | 39,857 | $ | 24,779 | $ | (5,865 | ) | $ | 58,771 | |||||||
1 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 Statement of Earnings as follows: | ||||||||||||||||
aReductions in "Electric Operating Revenues" and "Cost of energy" of $264 and $292 in the three months ended June 30, 2018 and $545 and $601 in the six months ended June 30, 2018 | ||||||||||||||||
bReductions in "Gains on investment securities" | ||||||||||||||||
cIncreases in "Regulatory allowances and restructuring costs" | ||||||||||||||||
dIncreases in "Other (deductions)" | ||||||||||||||||
eIncreases in "Other income" | ||||||||||||||||
fIncome tax impacts reflected in "Income Taxes" |
PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended June 30, 2017 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 26,800 | $ | 12,204 | $ | (1,449 | ) | $ | 37,555 | |||||||
Adjusting items before income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges2a | 2,284 | — | — | 2,284 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2b | 73 | — | — | 73 | ||||||||||||
Pension expense related to previously disposed of gas distribution business2c | 961 | — | — | 961 | ||||||||||||
Total adjustments before income tax effects | 3,318 | — | — | 3,318 | ||||||||||||
Income tax impact of above adjustments1,2d | (1,287 | ) | — | — | (1,287 | ) | ||||||||||
Adjusting items, net of income taxes | 2,031 | — | — | 2,031 | ||||||||||||
Ongoing Earnings (Loss) | $ | 28,831 | $ | 12,204 | $ | (1,449 | ) | $ | 39,586 | |||||||
Six Months Ended June 30, 2017 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 43,327 | $ | 19,808 | $ | (2,718 | ) | $ | 60,417 | |||||||
Adjusting items before income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges2a | 939 | — | — | 939 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities2b | (1,028 | ) | — | — | (1,028 | ) | ||||||||||
Pension expense related to previously disposed of gas distribution business2c | 1,922 | — | — | 1,922 | ||||||||||||
Total adjustments before income tax effects | 1,833 | — | — | 1,833 | ||||||||||||
Income tax impact of above adjustments1 | (711 | ) | — | — | (711 | ) | ||||||||||
New Mexico corporate income tax rate change | 22 | — | 83 | 105 | ||||||||||||
Total income tax impacts2d | (689 | ) | — | 83 | (606 | ) | ||||||||||
Adjusting items, net of income taxes | 1,144 | — | 83 | 1,227 | ||||||||||||
Ongoing Earnings (Loss) | $ | 44,471 | $ | 19,808 | $ | (2,635 | ) | $ | 61,644 | |||||||
12017 income tax effects calculated using a tax rate of 38.80% | ||||||||||||||||
2The pre-tax impacts (in thousands) of adjusting items are reflected on the GAAP Condensed Consolidated Statement of Earnings as follows: | ||||||||||||||||
aIncreases in "Electric Operating Revenues" and "Cost of energy" of $7,977 and $10,261 in the three months ended June 30, 2017 and $9,026 and $9,965 in the six months ended June 30, 2017 | ||||||||||||||||
b(Increase) decrease in "Gains on investment securities" | ||||||||||||||||
cIncreases in "Other (deductions)" | ||||||||||||||||
dIncome tax impacts reflected in "Income Taxes" |
PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||
(per diluted share) | ||||||||||||||||
Three Months Ended June 30, 2018 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 0.33 | $ | 0.19 | $ | (0.04 | ) | $ | 0.48 | |||||||
Adjusting items, net of income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges | — | — | — | — | ||||||||||||
Net change in unrealized gains and losses on investment securities | 0.03 | — | — | 0.03 | ||||||||||||
Regulatory disallowances and restructuring costs | 0.02 | — | — | 0.02 | ||||||||||||
Pension expense related to previously disposed of gas distribution business | — | — | — | — | ||||||||||||
(Gain) related to previously disposed of activities | — | — | — | — | ||||||||||||
Total Adjustments | 0.05 | — | — | 0.05 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.38 | $ | 0.19 | $ | (0.04 | ) | $ | 0.53 | |||||||
Average Diluted Shares Outstanding: 79,978,605 | ||||||||||||||||
Six Months Ended June 30, 2018 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 0.43 | $ | 0.31 | $ | (0.07 | ) | $ | 0.67 | |||||||
Adjusting items, net of income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges | — | — | — | — | ||||||||||||
Net change in unrealized gains and losses on investment securities | 0.03 | — | — | 0.03 | ||||||||||||
Regulatory disallowances and restructuring costs | 0.02 | — | — | 0.02 | ||||||||||||
Pension expense related to previously disposed of gas distribution business | 0.01 | — | — | 0.01 | ||||||||||||
(Gain) related to previously disposed of activities | — | — | — | — | ||||||||||||
Impairment of state tax credits | — | — | — | — | ||||||||||||
Total Adjustments | 0.06 | — | — | 0.06 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.49 | $ | 0.31 | $ | (0.07 | ) | $ | 0.73 | |||||||
Average Diluted Shares Outstanding: 79,995,926 |
PNM | TNMP | Corporate and Other | PNMR Consolidated | |||||||||||||
(per diluted share) | ||||||||||||||||
Three Months Ended June 30, 2017 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR | $ | 0.34 | $ | 0.15 | $ | (0.02 | ) | $ | 0.47 | |||||||
Adjusting items, net of income tax effects: | ||||||||||||||||
Mark-to-market impact of economic hedges | 0.02 | — | — | 0.02 | ||||||||||||
Net change in unrealized impairments of available-for-sale securities | — | — | — | — | ||||||||||||
Pension expense related to previously disposed of gas distribution business | — | — | — | — | ||||||||||||
Total Adjustments | 0.02 | — | — | 0.02 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.36 | $ | 0.15 | $ | (0.02 | ) | $ | 0.49 | |||||||
Average Diluted Shares Outstanding: 80,130,904 | ||||||||||||||||
Six Months Ended June 30, 2017 | ||||||||||||||||
GAAP Net Earnings (Loss) Attributable to PNMR: | $ | 0.54 | $ | 0.24 | $ | (0.03 | ) | $ | 0.75 | |||||||
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 | ) | ||||||||||
Pension expense related to previously disposed of gas distribution business | 0.02 | — | — | 0.02 | ||||||||||||
New Mexico corporate income tax rate change | — | — | — | — | ||||||||||||
Total Adjustments | 0.02 | — | — | 0.02 | ||||||||||||
Ongoing Earnings (Loss) | $ | 0.56 | $ | 0.24 | $ | (0.03 | ) | $ | 0.77 | |||||||
Average Diluted Shares Outstanding: 80,121,449 | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(In thousands, except per share amounts) | |||||||||||||||
Electric Operating Revenues: | |||||||||||||||
Contracts with customers | $ | 338,659 | $ | 326,586 | $ | 642,010 | $ | 623,777 | |||||||
Alternative revenue programs | 5,660 | $ | 8,920 | 6,584 | 13,499 | ||||||||||
Other electric operating revenue | 7,994 | $ | 26,814 | 21,597 | 55,222 | ||||||||||
Total electric operating revenues | $ | 352,313 | $ | 362,320 | 670,191 | 692,498 | |||||||||
Operating Expenses: | |||||||||||||||
Cost of energy | 87,711 | 104,267 | 180,267 | 207,070 | |||||||||||
Administrative and general | 43,355 | 42,984 | 91,638 | 88,379 | |||||||||||
Energy production costs | 41,888 | 34,393 | 77,238 | 66,180 | |||||||||||
Regulatory disallowances and restructuring costs | 1,794 | — | 1,794 | — | |||||||||||
Depreciation and amortization | 60,063 | 57,625 | 118,785 | 114,008 | |||||||||||
Transmission and distribution costs | 18,450 | 17,031 | 35,406 | 33,508 | |||||||||||
Taxes other than income taxes | 19,723 | 18,777 | 39,602 | 38,012 | |||||||||||
Total operating expenses | 272,984 | 275,077 | 544,730 | 547,157 | |||||||||||
Operating income | 79,329 | 87,243 | 125,461 | 145,341 | |||||||||||
Other Income and Deductions: | |||||||||||||||
Interest income | 4,339 | 3,885 | 8,462 | 8,766 | |||||||||||
Gains (losses) on investment securities | (1,670 | ) | 5,663 | (1,382 | ) | 12,324 | |||||||||
Other income | 4,796 | 3,450 | 8,265 | 8,351 | |||||||||||
Other (deductions) | (5,868 | ) | (5,042 | ) | (7,243 | ) | (10,663 | ) | |||||||
Net other income and deductions | 1,597 | 7,956 | 8,102 | 18,778 | |||||||||||
Interest Charges | 33,321 | 32,332 | 66,376 | 64,031 | |||||||||||
Earnings before Income Taxes | 47,605 | 62,867 | 67,187 | 100,088 | |||||||||||
Income Taxes | 5,156 | 21,636 | 5,939 | 32,411 | |||||||||||
Net Earnings | 42,449 | 41,231 | 61,248 | 67,677 | |||||||||||
(Earnings) Attributable to Valencia Non-controlling Interest | (4,109 | ) | (3,544 | ) | (7,786 | ) | (6,996 | ) | |||||||
Preferred Stock Dividend Requirements of Subsidiary | (132 | ) | (132 | ) | (264 | ) | (264 | ) | |||||||
Net Earnings Attributable to PNMR | $ | 38,208 | $ | 37,555 | $ | 53,198 | $ | 60,417 | |||||||
Net Earnings Attributable to PNMR per Common Share: | |||||||||||||||
Basic | $ | 0.48 | $ | 0.47 | $ | 0.67 | $ | 0.76 | |||||||
Diluted | $ | 0.48 | $ | 0.47 | $ | 0.67 | $ | 0.75 | |||||||
Dividends Declared per Common Share | $ | 0.2650 | $ | 0.2425 | $ | 0.5300 | $ | 0.4850 |