4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113 (Address and zip code of principal executive offices)
Registrant's telephone number, including area code:817-731-0099
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes \X\ No \ \
TNP Enterprises, Inc. has no publicly traded shares of common stock outstanding.
4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113 (Address and zip code of principal executive offices)
Registrant's telephone number, including area code:817-731-0099
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes \X\ No \ \
TNP Enterprises, Inc. holds all 10,705 outstanding common shares of Texas-New Mexico Power Company.
TNP ENTERPRISES INC. AND SUBSIDIARIES TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES Combined Quarterly Report on Form 10-Q for the Period Ended March 31, 2002
This Combined Quarterly Report on Form 10-Q is filed separately by TNP Enterprises, Inc. and Texas-New Mexico Power Company. Texas-New Mexico Power Company makes no representation as to information relating to TNP Enterprises, Inc., except as it may relate to Texas-New Mexico Power Company, or to any other affiliate or subsidiary of TNP Enterprises, Inc.
TABLE OF CONTENTS
PART 1. FINANCIAL STATEMENTS
Item 1.
Financial Statements.
TNP Enterprises, Inc. (TNP) and Subsidiaries:
Consolidated Statements of Income (Loss)
Three Month Periods Ended March 31, 2002 and 2001
3
Consolidated Statements of Cash Flows
Three Month Periods Ended March 31, 2002 and 2001
4
Consolidated Balance Sheets
March 31, 2002, and December 31, 2001
5
Texas-New Mexico Power Company (TNMP) and Subsidiaries:
Consolidated Statements of Income
Three Month Periods Ended March 31, 2002 and 2001
6
Consolidated Statements of Cash Flows
Three Month Periods Ended March 31, 2002 and 2001
7
Consolidated Balance Sheets
March 31, 2002, and December 31, 2001
8
Notes to Consolidated Financial Statements
9
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
13
PART 2. OTHER INFORMATION
Item 1.
Legal Proceedings.
18
Item 6.
Exhibits and Reports on Form 8-K
18
(a) Exhibit Index
18
(b) Reports on Form 8-K
18
Statement Regarding Forward Looking Information
18
Signature Page
18
-2-
TNP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three Months Ended March 31,
2002
2001
(In thousands)
OPERATING REVENUES
$ 120,664
$ 168,354
OPERATING EXPENSES:
Purchased power and fuel
54,255
104,575
Other operating and maintenance
29,332
25,059
Depreciation and amortization
7,021
13,511
Charge for recovery of stranded plant
(733)
3,112
Taxes other than income taxes
8,067
8,420
Total operating expenses
97,942
154,677
OPERATING INCOME
22,722
13,677
Other income and deductions, net
102
480
INCOME BEFORE INTEREST CHARGES
AND INCOME TAXES
22,824
14,157
INTEREST CHARGES:
Interest on long-term debt
13,719
17,761
Other interest and amortization of debt-related costs
1,276
1,134
Total interest charges
14,995
18,895
INCOME (LOSS) BEFORE INCOME TAXES
7,829
(4,738)
Income taxes
2,659
(1,597)
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING
5,170
(3,141)
Cumulative effect of change in accounting for
major maintenance costs, net of taxes (Note 3)
-
(1,170)
NET INCOME (LOSS)
5,170
(4,311)
Dividends on preferred stock and other
4,491
3,919
INCOME (LOSS) APPLICABLE TO COMMON STOCK
$ 679
$ (8,230)
The accompanying notes are an integral part of these consolidated financial statements.
-3-
TNP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2002
2001
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from sales to customers
$ 72,436
$ 181,367
Purchased power and fuel costs paid
(58,694)
(106,789)
Cash paid for payroll and to other suppliers
(27,700)
(26,111)
Interest paid, net of amounts capitalized
(10,616)
(12,086)
Income taxes refunded
-
2,000
Other taxes paid
(17,832)
(16,550)
Other operating cash receipts and payments, net
-
(73)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(42,406)
21,758
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant
(7,575)
(7,975)
Other investing activities
-
(913)
NET CASH USED IN INVESTING ACTIVITIES
(7,575)
(8,888)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from (repayments to) revolving credit facilities - net
TNMP/FCP $325 million facility
52,000
(11,000)
Other
(5,839)
-
Redemptions:
TNP term loan
(400)
(400)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
45,761
(11,400)
NET CHANGE IN CASH AND CASH EQUIVALENTS
(4,220)
1,470
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
14,145
8,110
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 9,925
$ 9,580
RECONCILIATION OF NET INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss)
$ 5,170
$ (4,311)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Cumulative effect of change in accounting for major maintenance costs, net of taxes
-
1,170
Depreciation and amortization
7,021
13,511
Charge for recovery of stranded plant
(733)
3,112
Amortization of debt-related costs and other deferred charges
1,053
1,031
Allowance for funds used during construction
(86)
(41)
Deferred income taxes
1,129
(2,038)
Investment tax credits
(390)
(868)
Deferred purchased power and fuel costs
10,143
9,712
Cash flows impacted by changes in current assets and liabilities:
Accounts receivable
(50,145)
6,311
Accounts payable
(3,271)
(4,249)
Accrued interest
3,190
5,814
Accrued taxes
(7,843)
(3,771)
Changes in other current assets and liabilities
(9,824)
(694)
Other, net
2,180
(2,931)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
$ (42,406)
$ 21,758
The accompanying notes are an integral part of these consolidated financial statements.
-4-
TNP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 2002
December 31,
(Unaudited)
2001
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 9,925
$ 14,145
Accounts receivable, net
59,682
9,537
Materials and supplies, at lower of cost or market
1,053
1,109
Deferred purchased power and fuel costs
2,142
1,852
Accumulated deferred income taxes
230
1,622
Assets held for sale
103,500
103,500
Other current assets
690
651
Total current assets
177,222
132,416
UTILITY PLANT:
Electric plant
543,856
538,025
Construction work in progress
4,899
3,147
Total
548,755
541,172
Less accumulated depreciation
53,842
46,821
Net utility plant
494,913
494,351
LONG-TERM AND OTHER ASSETS:
Other property and investments, at cost
3,763
3,763
Goodwill
270,256
270,256
Recoverable stranded costs
312,677
311,944
Deferred charges
49,025
51,827
Total long-term and other assets
635,721
637,790
$ 1,307,856
$ 1,264,557
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt
$ 1,600
$ 1,600
Accounts payable
30,330
33,601
Accrued interest
17,029
13,839
Accrued taxes
16,158
24,001
Customers' deposits
5,971
5,780
Other current liabilities
7,648
23,518
Total current liabilities
78,736
102,339
LONG-TERM AND OTHER LIABILITIES:
Deferred purchased power and fuel costs
21,098
10,665
Accumulated deferred income taxes
113,671
113,748
Accumulated deferred investment tax credits
20,402
20,792
Deferred credits
38,145
38,000
Total long-term and other liabilities
193,316
183,205
LONG-TERM DEBT, LESS CURRENT MATURITIES
830,632
779,011
SHAREHOLDERS' EQUITY:
Common shareholder's equity:
Common stock - no par value per share. Authorized 1,000,000
shares; issued 100 shares
100,000
100,000
Accumulated deficit
(20,510)
(21,189)
Total common shareholder's equity
79,490
78,811
Redeemable cumulative preferred stock
125,682
121,191
Total shareholders' equity
205,172
200,002
COMMITMENTS AND CONTINGENCIES (Note 7)
$ 1,307,856
$ 1,264,557
The accompanying notes are an integral part of these consolidated financial statements.
-5-
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of TNP Enterprises, Inc.)
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended March 31,
2002
2001
(In thousands)
OPERATING REVENUES
$ 77,578
$ 168,354
OPERATING EXPENSES:
Purchased power and fuel
30,534
104,575
Other operating and maintenance
18,170
23,428
Depreciation of utility plant
6,964
10,590
Charge for recovery of stranded plant
(733)
3,112
Taxes other than income taxes
6,749
8,261
Total operating expenses
61,684
149,966
OPERATING INCOME
15,894
18,388
Other income and deductions, net
58
407
INCOME BEFORE INTEREST CHARGES
AND INCOME TAXES
15,952
18,795
INTEREST CHARGES:
Interest on long-term debt
4,584
7,271
Other interest and amortization of debt-related costs
882
717
Total interest charges
5,466
7,988
INCOME BEFORE INCOME TAXES
10,486
10,807
Income taxes
3,361
2,921
INCOME BEFORE CUMULATIVE EFFECT
OF CHANGE IN ACCOUNTING
7,125
7,886
Cumulative effect of change in accounting for
major maintenance costs, net of taxes (Note 3)
-
(1,170)
NET INCOME
$ 7,125
$ 6,716
The accompanying notes are an integral part of these consolidated financial statements.
-6-
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of TNP Enterprises, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2002
2001
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from sales to customers
$ 43,604
$ 181,348
Purchased power and fuel costs paid
(49,137)
(106,789)
Cash paid for payroll and to other suppliers
(16,180)
(24,532)
Interest paid, net of amounts capitalized
(7,620)
(9,517)
Other taxes paid
(18,050)
(16,492)
Other operating cash receipts and payments, net
(44)
(145)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(47,427)
23,873
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant
(7,308)
(7,965)
Additions to other property
-
(128)
NET CASH USED IN INVESTING ACTIVITIES
(7,308)
(8,093)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid on common stocks
(5,000)
(4,000)
Borrowings from (repayments to) revolving credit facilities - net
$325 million facility
58,000
(11,000)
Capitalization of First Choice Power
(23,000)
-
Intercompany note payable
25,000
-
Other
(5,839)
-
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
49,161
(15,000)
NET CHANGE IN CASH AND CASH EQUIVALENTS
(5,574)
780
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
5,634
2,613
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 60
$ 3,393
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income
$ 7,125
$ 6,716
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Cumulative effect of change in accounting for major maintenance costs, net of taxes
-
1,170
Depreciation of utility plant
6,964
10,590
Charge for recovery of stranded plant
(733)
3,112
Amortization of debt-related costs and other deferred charges
636
614
Allowance for funds used during construction
(86)
(41)
Deferred income taxes
1,546
(631)
Investment tax credits
(390)
(395)
Deferred purchased power and fuel costs
10,143
9,712
Cash flows impacted by changes in current assets and liabilities:
Accounts receivable
(30,374)
6,293
Accounts payable
(19,514)
(4,252)
Accrued interest
(2,927)
(2,107)
Accrued taxes
(9,096)
(4,566)
Changes in other current assets and liabilities
(14,719)
(400)
Other, net
3,998
(1,942)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
$ (47,427)
$ 23,873
The accompanying notes are an integral part of these consolidated financial statements.
-7-
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
(a wholly owned subsidiary of TNP Enterprises, Inc.)
CONSOLIDATED BALANCE SHEETS
March 31, 2002
December 31,
(Unaudited)
2001
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 60
$ 5,634
Accounts receivable, net
35,962
5,588
Materials and supplies, at lower of cost or market
The accompanying notes are an integral part of these consolidated financial statements.
-8-
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