Thursday, May 29, 2008

PNM Annual Meeting: Vigorous, civil discussion. Rate increase request planned.

Yesterday’s annual meeting of PNM Resources Inc. was quieter than some expected. The questioning of Jeffry Sterba, CEO, chairman and president, was vigorous, but civil, and took around a half hour.
About 125 including PNM staff attended the meeting at Albuquerque's South Broadway Cultural Center. The scripted official business took maybe ten minutes to elect directors, amend the stock purchase plan and continue Deloitte and Touche LLP as the public accountants.. The rest of the 64-minute gathering was devoted to Sterba’s address and questions and answers.
The civility was a little surprising because PNM had a bad year in 2007, or, as Sterba said, a bad eight months in 2007 that started in May. About half of PNM’s shareholder value has disappeared since the stock price hit $30.63 on May 18, 2007. As I write, PNM stock is at $14.63. (Full Disclosure: I own about 175 shares of PNM.)
The major factors hitting PNM in 2007 were:
1. The previous multi-year rate reduction deal lasting, “in hindsight,” a year too long. “I take the sole responsibility for that,” Sterba said. (All following quotes are from Sterba.)
2. Some “circumstances over which we had no control.” These include the projected 2011 power demand appearing in 2006. The demand growth came both from population growth and “all the things we are doing in our homes” that use power. Big price increases for key commodity factors (“building blocks”) in the power business are the second factor. Copper is up 500% and cement 40%.
3. The credit crunch.
4. Unexpected maintenance on PNM’s generating facilities, forcing the company to buy power at high open market rates to replace capacity lost while performing the maintenance.
5. Botching the rate increase request that Sterba announced at the 2007 meeting. Sterba didn’t quite say PNM blew it, but he did say everyone involved was “rusty,” including PNM, the Public Regulation Commission and the third-party participants called intervenors. He also said PNM should file a rate case every couple of years because, otherwise, “you get out of practice.”
For 2008, the plan to regain the financial health pf PNM Resources is:
1. File a new rate care. The rates just approved are based on costs more than two years old. Also, “the fuel adjustment clause (granted PNM last week) is really not a fuel adjustment clause.” There is also the need for practice.
2. Reduce costs.
3. “Simply our business model within PNM” which is a confused legacy of New Mexico not quite deregulating its utility businesses some years back. Sterba didn’t provide details.
4. Complete the sale of the gas business to narrow the focus of the regulated businesses to just electricity.
One questioner asked about the status of PNM’s dividend. Sterba said the board was going to discuss the dividend at a meeting following the annual meeting. As of now, 10:55 a.m., PNM’s Web site has no news of any dividend action.
To close the meeting, Sterba said, “We will get your value back.”

Wednesday, May 28, 2008

Interview: Sen. Tim Jennings

I met with Sen. Tim Jennings in mid-March in a small hearing room on the third floor of the Capitol. The interview was summarized in my column that is syndicated by New Mexico News Services to seven newspapers around the state. The column will run this week and next week. Most of the interview was recorded. The transcript follows. It is slightly edited. Most of the editing deals with those pauses that are in every conversation. Also, a couple of digressions do not appear. Mark Bralley, photographer for Capitol Report New Mexico photographer, took the photograph of Sen. Jennings.

A Democrat and leader of the Senate, Jennings’ district includes Artesia, central Roswell and sprawls across Chaves, Eddy, Lincoln, and Otero counties. The title of his Senate job is President Pro Tempore, placing him third in succession to the governor. His day job is sheep rancher. The day of our visit was the second gathering of the health group. It has met several times since March.

HM: How did your group, the working group, that’s in the other room (begin)? It’s not official, is that a correct impression?

TJ: We’ve got task forces and domestic czars for everything on God’s green earth under this administration. I don’t want to call something another task force again. The governor called us together. He didn’t ask us to just pass the House bill. He came up and asked us if we could find some areas to help him, to see what areas we could find where there might be agreement on some of the health care issues.

We had already had a couple of health care groups and committees that had looked at it, the health care group and some of our senate committees, there was probably a feeling among the leadership that we weren’t to the point yet of being able to afford the package that was going to afford the package that was going to come out of that group. We thought we’d better get the people together…

HM: That was the Senate’s feeling?

TJ: He didn’t seem to express a lot of desire in the house plan that took 27 days to craft either because he gave us a list of things, which was mostly what we started with. We felt that we should get a group of more… (thinks of word).. financially… (HM: financially careful).. Financially careful would be a good way. We went to a group of people that were dealing with the long term issues on the state’s budget, with health care issues who were probably not part of the other group (that developed the plan to start).

We wanted to weigh were we could go and what we could sell that was par4t of the governor’s package. Some thing would move his agenda along. That’s how we came up with this group. (Lists what each member brings.) Sen. Beffort, a long term health care person on the Republican side. Rawson (very astute on the finance committee and very attuned to details). Komadina a doctor. Sen. Ingle was their leader. Michael Sanchez who was our leader and a pretty strong proponent of doing something with health care. Smith, long term watcher of the dollars. Linda Lopez…she’s had some experience in health care, not only employment by health care groups, but she’s in tune a lot with the medicaid issues. Jerry Ortiz y Pino… was somebody different who was actually a single payer advocate. There’s a large number of people who are single payer advocates in the bodies. They had a large constituency there. He’s a lot more liberal that a lot of us. You know what. It’s not a deal about picking the health care. It about where we can go, what levels can we go to. To pass all of this, you’re going to have to have a lot of buy-in.

Then of course, you have the “old grump,” me. That’s how this group came about. It doesn’t mean this group might be the final group on making the decisions. This is a group to see if there are areas where we can find some of the financial resources in areas that the governor had laid out… (things) that he had asked us to do.”

Then we had our first meeting and one day (chuckles) and that evening all the vetoes came out. That was kind of interesting. It was real strange. He called us to ask us to do that and to my colleagues’ credit, they came to this meeting. A lot of people might have said, screw that. Obviously there was a method in something in there. Either he either wanted us to crater his health care plan so he could blame it on somebody. I don’t know why he would do that. To ask us on one week, so we responded, and he turned around and vetoed us. Most of us think it was silly.

Like he was trying to have a failure so he could blame it on somebody. He was trying to construct a failure to blame the failure of his health care plan on somebody.
That’s the only thing I can come up with. That’s strictly my opinion. It certainly wasn’t written. I would hate to get anybody else’s projects vetoed because of my opinion. The health care plan…we can’t do everything that everybody wants. When you look at the health care plan and look at adding (new spending) which could be up.. One report was that 335 or 350 million a year. All of a sudden that changed down to 30 million.

From our people, most of us believe it’s going to cost about a billion dollars over three or four years. We had a public school funding task thing out there for $300 million. We have highways that needed at least $300, just for maintenance, because they spent all the money on the Railrunner, the maintenance budget.

We have a problem with educational retirement, that is probably in the neighborhood of a couple of billion dollars in shortfalls there that we have to figure out. You have a least $200 million of money into the retiree healthcare plan right away.

So right off we have a few issues out there that we need to watch our spending on. We’ve spent an awful lot of money lately. We’ve hired a lot of people. We added a lot of costs to the state.

The retiree health care, right away we need an infusion of a couple of hundred million dollars to get that back on a financially sound basis. The highway spending, just for maintenance, not bridges, is at least 50 or 60 million for each district.

When we went into the session, we had about 300 million dollars to spend. It started out and kept falling. Then we sitting here with our country, which it appears to everybody but the president, that we’re going into a pretty good recession, probably one of the biggest recessions our country has been in since the big one.

We have some concerns there that we have to really watch and see where we are.

H: These issues are the menu for now and 2009?

TJ: Probably for the next five years. There’s a lot of concerns in there. Do you raise the taxes to increase the highway funding and have it go back to the same highway commissioners that spent the last set of money? I mean I don’t know. These are just questions that people ask me.

I don’t want to vote for a tax increase if the same guys are going to take the money that we put in there and authorize more projects that commit the funding to other projects like the Railrunner. And the Railrunner’s fine, just that people didn’t up to what they said they would do. It’s been all the way to this thing on the highway thing…

We all know that the cabinet secretaries are pretty well directed on what to do. People are directed how to respond to health insurance, what they can talk about, whether they can oppose it or not. I doubt very seriously that (Transportation Secretary) Rhonda Faught dreamed this whole idea up about all that stuff in her head. That came from somewhere else. (Faught has) grown up in the highway administration for those of us who have been here. A lot of people have a great deal of respect for her. I like some of her programs. It doesn’t mean she’s a bad person. We just have a difference of opinion.

In speaking of that, there’s one thing that the Senate knows and understands. It’s OK. We have learned how to tolerate differences among each other and differences of opinions without retribution. I think the executive branch and I think the house should take a lesson from the senate. We are together and functioning better together as a unit. It doesn’t that we still don’t have ideological differences between the Republicans and the Democrats and there are more Democrats there, so they tend to win more issues. That’s true. But people are free to express their opinions without fear of retribution

I don’t agree with him. It’s all right. It’s nice to know how he believes. That’s OK. That’s what a democracy is about is the freedom to express your views. That’s what’s most important. That what makes us different from other countries that aren’t free.

HM: Asks if Jennings thinks SF is weird.

TJ: Santa Fe is a very unique place, not only in our state but in our country. It’s more liberal than we are (in Chaves County). It’s OK. I like coming here. But I enjoy coming here. But I like going home. It’s a nice place to come for a visit.

HM: Shifting a little if I may… You have brothers who have been mayors.

TJ: Funny thing about our family. Our parents, I think, were both Democrats. Our family is divided with six children. We’re three and three. Three wayward children. (Former Rio Rancho mayor John Jennings is one of the wayward) That’s all right. It’s diversity. It’s OK. In our family, we have a great deal of respect for other people. We have always been expected to speak our minds, to speak our piece. That is something we are elected to tell people exactly what we think. We don’t generally put it a lot of sugar on it.

Our father was a lawyer. Very plain spoken. Very direct. And I think very well respected. All of his children have that directness. Now my mother, she always says nice things. She’s a believer that your word should be sweet in case you ever have to eat them. Accurate and true. She was always the one on the more tempering side.

(Elected siblings) My twin brother Tom was elected the mayor of Roswell. At one time all three of us were in elected office. My godfather was former state senator Dr. Emmett Jennings.

(Takes call from a woman thinking about running for Chaves County Clerk. “It’d be fun, but it would be a lot of work. I think you could do the job; I just don’t know if you want the headaches.”)

(Jennings carries two cell phones because of the quality of the service from ENMR-Plateau. His district crosses the cell phone service areas.)

I can talk almost all the way up here (to Santa Fe) from Roswell on Plateau.

HM: Anything else…

TJ: Health care is an issue that my wife and I have been very much in tune with for over 20 years. Out of my 34 years of public service and 30 years in the senate. We have sponsored an awful lot of legislation on health care. Everything from the high-risk pool to mandating coverage for mammograms, mandating coverage for smoking cessation services. A lot of people complain about some of those issues. They’re all things that make good economic sense. And they’re good about reducing the cost of health insurance. Early detection of cancer or stopping smoking are all things that reduce the cost of insurance and health care. The high risk pool, my wife wrote the bill. (A daughter has Downs Syndrome.) “She should have the availability to have her own insurance and have her own home. That’s part of the American dream. Health insurance is something that we are in tune with.

I don’t claim to know anything about health care compared to my wife. My wife is an expert in the field. I’m becoming an expert in the field because of things we are going through with health care I our own family. The thing people should know is that health care coverage something that you need to have. We need to make it affordable. I believe in a competitive market. The more people you have competing, you’ll get the best price and the best value for your dollar by a good competitive market. I think that’s something we should all look at.

There’s one thing I would tell all of these individuals is that preventative health care makes a lot of difference. People need to be vigilant in their preventative health care. You have to stay on of it.

HM: Where is this group going to go?

TJ: We’re going to meet some more. We’re just trying to get to speed on where we’re going. This is all new to these people, to most of them. We’ve to look and see what areas we can do. One of things of this health care task force and the governor’s plan… It sounds real good when you start talking about health care for all, but how do you sit down and figure out, we’re going to have health care for all and all of these great things when you don’t even talk about long term care for the elderly. Where are we going to be in the next ten years, 15 years? All the baby boomers are all there; they’re all going to be in long term health care. The United States government nor the state government does not have a plan anywhere that has begun to address the long term care costs.

They’re estimating that the people our age, that one out of eight will have Alzheimer’s. You figure it out. (Does the math. Estimates.) The problem comes in that there are other people coming up in that system. The Baby Boomers are such a bubble in the population. (Younger people) can’t afford to pay for the long term care of their parents, just because of the debt load we are piling on our children.

When you look at the senate and look at our finance committee, I think we’re very much in tune with what we’re piling on down the road. We’re telling everybody you have to be vigilant in what you’re doing. We can’t pile on all the health care costs of everybody in the retiree health care association to all the government employees today. That’s what social security has done to us. They spent all our money all our money on our older generation. At some point in time we have to stop that because we can’t afford to do it. All this has to be solved. We know that. Even if our congressional delegation in Washington doesn’t have the courage to do it, we have got to do it here because we can’t deficit spend.

HM: On your lunch with the working group, was that a first time thing with the collegiality?

TJ: It was just amazing to me. I looked at our people when we all went there. It was unique how we came together We ended up split up, it wasn’t by party. It wasn’t by male and female. It wasn’t geographic area. We just had a wonderful lunch.

It’s been coming. But it’s been something I think is there.

When the governor vetoed all this stuff…. We didn’t have any wild harangue of the governor. I mean, it’s well, that’s his problem. He didn’t hurt us. He hurt the little people at Carrie Tingley Hospital (in Albuquerque) that lost all their dental chairs. They needed the dental chairs. The little acqueias (vetoed) in Senator Griego’s district; he didn’t hurt Griego, he hurt a bunch of poor farmers.

The biggest question of all that to me is why would a probably 250-lb healthy man go after and attack dental chairs for a bunch of people at Carrie Tingley Hospital. I’ve been there. I know about Carrie Tingley Hospital. It wasn’t even my stuff (it was) Cravens’ stuff. Why would anyone get even with someone else over a dental chair for handicapped individuals. That’s beyond my scope of decency.

H That off the record?

TJ: It’s on the record. This is an issue that’s very close to me. Challenged individuals. Individuals… that the public has described as having developmental disabilities. We’ve have record amounts of new money. Yet, our waiting list has steadily climbed for those individuals.

The only real money that’s come into those programs that’s never been planned has come in from the legislative side of the institution. It’s not been requested by the executive branch of government. I find that appalling. I just do.

We can have battles with those that can take care of themselves. But those that can’t, those aren’t the ones I was brought up to wage war against. I will not do that. There’s limits to money. The individuals (at Carrie Tingley (Hospital) are extremely challenged. That’s not a place I would wage war on. I would commend Sen. Cravens for putting his capitol outlay into that facility. It’s truly needed. I even feel bad because I didn’t put any of mine in there because I did think of it. I should have. I can’t see how that is something that a governor could use or anyone could use to get even with someone else because they didn’t cooperate. I would like to see a little more cooperation with those people waiting on the waiting list that can’t take care of themselves. That’s what I would like to see.

If you use any of it, that’s fine. It’s something that’s close to home. Carrie Tingley Hospital is a very special place in New Mexico.

HM: Thank you.

TJ: Did I give you enough to get me I trouble? There’s one thing I do; I will speak from the heart.

Thursday, May 22, 2008

National Stories (and not)

Yesterday, May 21, New Mexico made the page one of the Wall Street Journal. The story was about the military "turning into an alternative fuels pioneer." The anecdote starting the story was about Air Force Captain Rick Fournier flying a B-1 stealth bomber over White Sands Missile Range faster than the speed of sound for the first time using fuel that was a mix of a synthetic fuel and regular petroleum fuel. The big news was the "unremarkable" nature of the flight. The military uses 1.5% of the fuel the nation consumes. The push for alternatives is obvious. And there is tax money to spend.
A sidenote, not mentioned in the story, is that Navajo Refining's Artesia facility, not mentioned in the story, is very big on producing jet fuel.
Today, May 20, New Mexico did not make page A4 of the Wall Street Journal. This is curious because the page A4 story was about the race between states to offer ever more generous movie making subsidies. Under the Richardson administration, New Mexico has been a leader in such subsidies. The story was based on a report from Entertainment Partners, which, on it's Web site (, says it is the "largest provider of production management services in the entertainment industry." Though the Wall Street report, headlined "States Race to Woo Producers," EP's did, noting our 25% benefit, er...., kickback, of 25% of qualifying local spending. A bunch of states are kicking up the kickbacks. Michigan was featured. Unable to get attention with a previous set of subsidies, Michigan has upped its ante. 

Tuesday, May 20, 2008

Jobs Rural

The table, which seems just barely readable, summarizes employment and wage job growth from March 2007 until March 2008. It is compiled from the Labor Market Review publication of the Department of Workforce Solutions. For rural areas, there is a twist, which I guess has something to do both with economic structure and the techniques that produce the numbers. "Employment" and "Wage and Salary" job figures overlap substantially, but not entirely and therefore are not strictly comparable. Wage and salary job figures are best because they are counted, as opposed to estimated. It turns out the two numbers don't quite behave the same. I will ask wizards about the reasons. Albuquerque is the only one of the state's four metro areas with more wage jobs than employment. Albuquerque has 47% of the state's wage jobs and 43% of employment. 
The table shows the four metro areas and then subtracts to get the rural area figures. This is legit; I asked. 
Statewide, "employment" grew 0.7% during the March-to-March year. Wage jobs grew 0.6%. Albuquerque lost employment during the year and Santa Fe performed well under the state growth rate. Las Cruces, Farmington and the rural areas did better than the statewide performance. This is the performance twist mentioned above. In wage jobs, Albuquerque again performed under the state growth rate, such as it was, but the other three metros all did much better. That left the 26 rural counties to add only 200 jobs during the year. The rural counties have a third of employment and 31% of wage jobs.

Monday, May 19, 2008

Running Out of Oil?

That's certainly the drumbeat of the conventional wisdom. Rafael Sandrea begs to disagree. Sandrea is an oil and gas veteran who sold his Venezuelan firm in 2004 and returned to Tulsa, Oklahoma, (for some reason) where he had attended university. Now a consultant, he got the lead story in the May 18 issue of the Oklahoma City-based legal newspaper, The Journal Record ( Even if Sandrea's argument makes few headlines these days, it isn't new. 
There is a whole lot of oil still in the ground, Sandrea says. A new focus on enhanced oil recovery methods "could unlock 70 percent of more of (the) remaining oil" in the ground. "In the U.S., two-thirds of the oil is still in the ground," he told The Journal Record. Enhanced oil recovery techniques account for three percent of present world oil production. In New Mexico, carbon dioxide, the same evil stuff behind global warming, is produced from the 1.2 million acre Bravo Dome Field in Union, Harding and Quay counties and transported to the Permian Basin in southeast New Mexico and Texas for enhanced oil recovery.
Sandrea has released a study of world oil resources through the Oil & Gas Journal Research Center, a subsidiary of PennEnergy of Tulsa.

Thursday, May 15, 2008

Job Growth: March

According to the Department of Workforce Solutions, which finally got its Labor Market Review publication posted ten days or so after the promised time, New Mexico has reassumed its traditional position as the job growth laggard in a nine-state Rocky Mountain / southwest group. New Mexico's non-farm wage job growth was 0.6% for the year ended March 31. The states doing worse than New Mexico—California, Arizona and Nevada—all lost jobs over the year. But for now, they are a special case because they are three of the four states hit worst by the real estate crash.

Monday, May 12, 2008

Income and Wealth

Our 3.5 hour truck tour yesterday of Canyon de Chelly yielded another insight about income that doesn't show in the official income numbers. The tour started 20 minutes late and ended an hour late. Canyon de Chelly is a National Monument run under a trust agreement, we were told by our driver / guide, between the Navajo Nation and the federal government. The canyon entrance is the access point. Transportation is truck, horse or foot. Tourists may not come in on their own. 
The first stop was a small privately owned farm. The ownership is a legacy of the Navajos return from exile at Fort Sumner. Some land was provided as recompense. When the truck, carrying about 20 people, stopped, four children made their way from the farmhouse, equipped with smiles, bead necklaces and small rugs. The passengers purchased maybe $100 worth of goods, all using cash. Tour demand surely varies. On our day, Sunday, May 11, there were two half-day tours and an all-day tour. Figure 60 people and as a pure guess, perhaps $250 in sales. I would be very surprised if any of that money was reported. To a fair degree, this family is off the economic grid. They are also off the power and water grids, our guide said. The money allows the family to live better than their probably small officially measured income allows.
The tale is repeated here because of my recent syndicated column that raised a number of issues about a report, released in New Mexico by Voices for Children, One of my points is that a few people have cash income that brings them a better life than their reported income would allow.  The VC spokeswoman complained about some of my column points. However, I got flack about the basic problem with the report which was unhappy that the increasing income gap between the lowest 20% of earners and the highest 20%. I said that the two groups earnings could not be compared over time because membership in each group changes. It it not inconceivable, for example, that someone could be in the low group and then a few years later be in the top group. I got no argument from VC on this point.
Income that probably shows in the numbers goes to the craftspeople producing jewelry sold by traders and other retailers. The income probably shows because the businesses keep records. A long-time Shiprock area trader told us that increasing prices of gas and silver are making it very tough on the craftspeople. The work is done by hand which means volume is low. Traditionally, they have used a variety of outlets, meaning they must drive among the outlets. The driving is done in pickups and SUVs, neither known for high gas mileage. Chevron gas prices were $3.64 / gallon in Chinle yesterday and $3.83 in Cuba today.

Thursday, May 8, 2008

PNM Again

I got an "Urgent Call to Action" in the mail from the New Mexico Utility Shareholders Alliance today. I am a PNM shareholder (of about 170 shares) but don't pay Alliance dues. The group, which gets support from PNM, "is concerned" about recent Public Regulatory Commission actions with regard to PNM. 
Two Notes: A "concern" is hardly urgent. Also, the Urgent Call said PNM's "stock is valued at 230% less than a year ago." I'll be charitable and suggest this is sloppy arithmetic. PNM closed today at $13.40. The 52 week high, according to, was $32.46. That means that today's price was 41% of the price a year ago. That also means a 59% price decline. The maximum percentage decline of any number is 100%. Such a drop would take the number to zero.
People who deal in this stuff should know how to do the math. 

Wednesday, May 7, 2008

High School Graduation

Silly me. With my deep skepticism of the Albuquerque Public Schools, I figured other New Mexico school districts kept their high school seniors in school until the end of the school year and it was only APS that let them go early. For me the end of the school year means the last day of class as stated by the official district calendar. For APS that is May 21. Albuquerque seniors start graduating May 10 and are done by the 15th.
I was wrong about other districts. Brief Internet searching shows APS to only be the worst offender. In Hobbs, the last day is May 22 and graduation is May 17. In Farmington it is May 28 and 22. In Las Cruces, the last day is May 22 with the first graduation May 15.
My problems have to do with money and knowledge. The knowledge is part obvious. If the seniors stayed in school a bit longer, maybe they would learn a little more, assuming they were forced, which is a separate issue. The money issue is a guess. Our public schools get money on the basis of the number of students and a specified number of school days. I have never heard the number of days stated with the addition that the figure is up to eight days less for seniors, depending on district scheduling whims. It would seem, therefore, that sending students away early would save some money.  I wonder also what the teachers of the departed seniors do, hang out in empty classrooms? It would further seem, therefore, that this money should be returned to the state. 
Ah, right....

Monday, May 5, 2008


Life is grim around the Public Service Company of New Mexico a long-time staffer on the technical side commented yesterday, though some things do seem to be looking up including the stock price which is back to around $15 as this is written from $9 a couple of months ago. However, PNM's annual report, which is from PNM Resources Inc., parent of the new utility and of Texas-New Mexico Power Company of Irving, Texas, makes some design choices that don't reflect grim reality. The choices could reflect habit or the designers getting carried away and management not asking questions. Annual reports from public companies of size such as PNM have three parts: the marketing part with pictures and soothing words, form 10-K, and the notice of the annual meeting. The latter two are boring with lots of numbers. Some very large companies have dumped the marketing part, even in good years. Other have gone further, sending shareholders an annual meeting ballot/proxy card card and putting everything else online. 
For the 2007 annual report, PNM seems to have compromised. The report is 6" x 9" while the 10-K and meeting notice are 8.25" x 10.75". However, the only color pictures inside the report are of the management team and the board of directors. This may just reflect habit. Even so, black and white photos would have been better. The odd and expensive choices are with the 10-K. One solves a problem that didn't exist. The cover of the 10-K has a slit into which the annual report is inserted. Making the slit would be expensive and the insertion most likely was done by hand. Someone apparently thought the shareholders somehow couldn't hold the two in one hand and needed help keeping them together. When inserted, the annual report actually goes into a pocket in the front cover of the 10-K, which is a heavy stock printed in politically correct green and folded to be double thick front and back. The major corporate 10-Ks I see these days are self cover as is PNMs annual meeting notice. 
The expensive cuteness with the 10-K seems out of place.