SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended December 31, 1993,
or
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from __________ to
______________.
Commission file number TNP Enterprises, Inc.'s
Registration No. 2-93265
A. Full title of the Plan and the address of the Plan, if different from
that of the issuer named below:
TEXAS-NEW MEXICO POWER COMPANY
Thrift Plan for Employees and Trust Agreement
4100 International Plaza
P. O. Box 2943
Fort Worth, Texas 76113
B. Name of issuer of the securities held pursuant to the Plan and the
address of its principal executive office:
TNP ENTERPRISES, INC.
4100 International Plaza
P. O. Box 2943
Fort Worth, Texas 76113
FORM 11-K
Financial Statements and Exhibits.
(a) Financial Statements
Independent Auditors' Report
Statements of Net Assets Available for Benefits, December 31,
1993, and 1992
Statements of Changes in Net Assets Available for Benefits, Years
Ended December 31, 1993, and 1992
Notes to Financial Statements
Item 27a - Schedule of Assets Held for Investment Purposes,
December 31, 1993
Item 27d - Schedule of Reportable Transactions, Year Ended
December 31, 1993
Independent Auditors' Consent
SIGNATURE
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the Thrift Plan Committee has duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
TEXAS-NEW MEXICO POWER COMPANY
THRIFT PLAN FOR EMPLOYEES AND
TRUST AGREEMENT
Date: March 22, 1994 By:\s\ Gary L. Spooner
GARY L. SPOONER
Chairman and Member of
the Thrift Plan Committee
Texas-New Mexico Power Company
Thrift Plan For Employees
Financial Statements and Supplemental Schedules
December 31, 1993 and 1992
(With Independent Auditors'
Report Thereon)
Independent Auditors' Report
The Trustee and Thrift Plan Committee
Texas-New Mexico Power Company
Thrift Plan for Employees:
We have audited the accompanying statements of net assets available for
benefits of Texas-New Mexico Power Company Thrift Plan for Employees (the
Plan) as of December 31, 1993 and 1992, and the related statements of changes
in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Texas-New
Mexico Power Company Thrift Plan for Employees as of December 31, 1993 and
1992, and the changes in net assets available for benefits for the years then
ended, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Item
27a - Schedule of Assets Held for Investment Purposes and Item 27d - Schedule
of Reportable Transactions are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but
are supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules have been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
KPMG PEAT MARWICK
Fort Worth, Texas
March 10, 1994
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Statements of Net Assets Available for Benefits
December 31, 1993 and 1992
1993 1992
Investments (note 5):
Common stock of TNP Enterprises, Inc. - at
fair value (identified cost - 1,471,213
shares, $25,781,170 in 1993 and 1,482,490
shares, $25,831,263 in 1992) $ 24,275,237 28,167,310
Vanguard Wellesley Income Fund - at fair
value (identified cost - 251,916 units,
$4,694,400 in 1993 and 116,703 units,
$2,083,756 in 1992) 4,846,364 2,119,326
Vanguard Index 500 Fund - at fair value
(identified cost - 114,195 units,
$4,653,904 in 1993 and 64,445 units,
$2,527,611 in 1992) 5,007,668 2,640,310
United States Savings Bonds Series E and
Series EE - at fair value (cost of
$38,431 in 1993 and $39,819 in 1992) 144,175 141,937
United States Treasury Bills - at fair
value (cost of $16,011,007 in 1993 and
$22,867,253 in 1992) 16,061,141 22,949,071
Total investments 50,334,585 56,017,954
Cash 227,037 546,745
Net assets available for
benefits (note 4) $ 50,561,622 56,564,699
<FN>
See accompanying notes to financial statements.
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1993 and 1992
1993 1992
Additions to net assets attributed to:
Investment income:
Dividends on common stock of
TNP Enterprises, Inc. $ 2,245,538 2,360,682
Dividends on Vanguard Mutual Funds 462,081 190,471
Amortization of discount on United States
Savings Bonds Series E and Series EE 9,974 12,893
Interest on United States Treasury Bills 553,839 854,800
Net depreciation in fair value of common
stock of TNP Enterprises, Inc. and
Vanguard Mutual Funds (note 5) (3,225,966) (217,986)
Net investment income 45,466 3,200,860
Contributions (note 1(b)):
Employer - 1,591,816
Employees 2,351,518 2,677,583
2,351,518 4,269,399
Total additions 2,396,984 7,470,259
Deductions from net assets attributed to
withdrawals by participants 8,400,061 4,845,291
Net increase (decrease) (6,003,077) 2,624,968
Net assets available for benefits:
Beginning of year 56,564,699 53,939,731
End of year $ 50,561,622 56,564,699
<FN>
See accompanying notes to financial statements.
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Notes to Financial Statements
December 31, 1993 and 1992
(1) Description of Plan
The following description of the Texas-New Mexico Power Company
Thrift Plan for Employees (the Plan) provides only general
information. Participants should refer to the Plan agreement
for a more complete description of the Plan's provisions.
(a) General
The Plan is a defined contribution plan covering employees of
Texas-New Mexico Power Company (the Company), a wholly owned
subsidiary of TNP Enterprises, Inc., who have one year of
service and are age twenty-one or older. The Plan is subject
to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
(b) Contributions
The Plan is a voluntary thrift plan, administered by a Trustee,
with a provision for the Company to contribute to the Plan
amounts equal to certain percentages of amounts contributed
by employees. The Company's contributions for the account of
an employee and any income and earnings therefrom and
accretions thereon vest immediately with employee
participants upon payment to the Trustee or receipt by the
Trustee of such income, earnings and accretions. Employees
have the option of investing their contributions and
contributions of the Company, if any, in either, or a
combination of, certain United States government securities,
TNP Enterprises, Inc. (TNPE) common stock or, since January
1, 1992, two mutual funds. Since January 1, 1992, the
Company's contributions have been used to purchase TNPE
common stock which the employees may later convert into
investments in one or more of the other investing options.
In general, an employee may make withdrawals at any time from
amounts deposited with the Trustee, subject to various
restrictions as defined in the Plan agreement.
At December 31, 1993, 391 employees (433 in 1992) had elected
investment of contributions in TNPE's common stock, 117
employees (140 in 1992) had elected investment of
contributions in certain United States government securities,
54 employees (55 in 1992) had elected investment of
contributions in Vanguard Index 500 Fund, 29 employees (17 in
1992) had elected investment of contributions in Vanguard
Wellesley Income Fund and 403 employees (391 in 1992) had
elected to allocate, in 10% increments, investment of
contributions in the various investment options that are
available.
Each participant agrees to a reduction in compensation of
amounts ranging from 2% to 9% to be contributed to the Plan.
This results in the deferral of the compensation reduction
from the employee's taxable income until withdrawals are made
from the Plan. Compensation reductions up to 6% are matched
by the Company at the discretion of the Board of Directors.
Effective January 1, 1993, the Company suspended its matching
contributions to the Plan; however, the Company's Board of
Directors has approved restoration of the Company's matching
contributions, to be effective for employee contributions
made after June 30, 1994.
(Continued)
2
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Notes to Financial Statements, Continued
(1) Description of Plan, Continued
(c) Expenses of Administering the Plan
All costs and expenses incurred in administering the Plan are
borne by the Company.
(d) Participant Accounts
Each participant's account is credited with (a) the Company's
matching contributions, (b) the participant's contributions,
and (c) allocated earnings and losses of the directed
investments in the participant's account.
(e) Vesting
Participants' contributions and employer contributions plus
actual earnings thereon are 100% vested at all times.
In the event of complete or partial termination of the Plan,
the rights of all participants to benefits accrued to the
date of such termination are fully vested and nonforfeitable
and the assets of the Plan shall be distributed to the
participants and their beneficiaries in accordance with the
trust agreement.
(f) Payment of Benefits
Upon termination of service, a participant may elect to receive
either a lump-sum amount equal to the value of their account,
or installments over a 5-year period.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on an
accrual basis of accounting.
(b) Investment Valuation
Investments in common stock of TNPE are stated at fair value.
The fair value is based on quotations obtained from national
stock exchanges. Stock transactions are recognized on the
trade date (the date the order to buy or sell is executed).
Dividend income is recorded on the ex-dividend date.
Investments in Vanguard Mutual Funds (Index 500 and Wellesley
Income) are stated at fair value. The fair value is based on
quotations obtained from national stock exchanges. Trade
transactions are recognized on the trade date (the date the
buy or sell order is executed). Dividend income is recorded
when received.
Investments in United States Treasury Bills are stated at fair
value, which is based on published market quotations.
(Continued)
3
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Notes to Financial Statements, Continued
(2) Summary of Significant Accounting Policies, Continued
(b) Investment Valuation, Continued
Investments in United States Savings Bonds Series E and Series
EE are stated at fair value. The fair value is based on
redemption value at the end of the year.
(3) Tax Status
By letter dated June 13, 1991, the Internal Revenue Service has
determined that the Plan is a qualified plan and the related
trust is exempt from Federal income taxes under the applicable
provisions of the Internal Revenue Code. Participants of the
Plan do not include the Company's contributions to the Plan or
the earnings of the Plan in their taxable income until actually
distributed to them.
(4) Reconciliation of Net Assets Available for Benefits
In order to present the accompanying financial statements in
accordance with generally accepted accounting principles,
certain adjustments have been made to the accounts which are
not reflected on the Plan's books. The adjustments and their
effect on the Plan's net assets available for benefits as of
December 31, 1993 and 1992 are as follows:
1993 1992
Net assets per the Plan's books $ 51,405,949 53,896,447
To reflect the cumulative unrealized
appreciation (depreciation) on the
common stock of TNPE (1,505,933) 2,336,047
To reflect the cumulative unrealized
appreciation on the units of Vanguard
Wellesley Income Fund 151,964 35,570
To reflect the cumulative unrealized
appreciation on the units of Vanguard
Index 500 Fund 353,764 112,699
To reflect the cumulative accretion
of discount on United States Savings
Bonds Series E and Series EE 105,744 102,118
To reflect the cumulative accretion
of discount on United States Treasury
Bills 50,134 81,818
Net assets per the accompanying
financial statements $ 50,561,622 56,564,699
(Continued)
4
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Notes to Financial Statements, Continued
(5) Investments
The following schedule presents the fair values, as determined by
quoted market prices, of investments which represent 5% or more
of the Plan's net assets at December 31, 1993 and 1992:
1993 1992
Common Stocks:
TNPE no par common stock $ 24,275,237 28,167,310
U.S. Government Obligations:
$4,020,000 United States Treasury Bills
due January 28, 1993 yielding 2.71% $ - 4,012,402
$3,005,000 United States Treasury Bills
due February 25, 1993 yielding 2.95% - 2,991,928
$6,290,000 United States Treasury Bills
due March 18, 1993 yielding 3.11% - 6,250,813
$3,185,000 United States Treasury Bills
due March 25, 1993 yielding 3.13% - 3,163,215
Other United States Treasury Bills 16,061,141 6,530,713
$ 16,061,141 22,949,071
Vanguard Mutual Funds
Vanguard Wellesley Income Fund $ 4,846,364 2,119,326
Vanguard Index 500 Fund $ 5,007,668 2,640,310
Net appreciation (depreciation) in fair value, as determined by
quoted market prices, of investments bought, sold, and held by
the Plan during the years ended December 31, 1993 and 1992 is
summarized as follows:
1993 1992
TNPE no par common stock $ (3,620,308) (366,457)
Vanguard Index 500 Fund 255,960 112,808
Vanguard Wellesley Income Fund 138,382 35,663
$ (3,225,966) (217,986)
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1993
Description of Investment
Identity of Issue, Including Maturity Date, Cost or
Borrower, Lessor Rate of Interest, Collateral, Amortized Current
or Similar Party Par or Maturity Value Cost Value
Common Stocks:
TNP Enterprises, Inc.* 1,471,213 shares of no
par common stock $ 25,781,170 24,275,237
March 18Mutual Funds:
Vanguard Wellesley 251,916 units
Income Fund 4,694,400 4,846,364
Vanguard Index 500 114,195 units
Fund 4,653,904 5,007,668
9,348,304 9,854,032
U.S. Government Obligations:
U.S. Government $38,431 Series E and
Series EE Savings Bonds,
various maturities at
various interest rates 38,431 144,175
U.S. Government $997,000 Treasury Bills
due January 6,1994
yielding 2.35% 989,553 996,781
U.S. Government $1,018,000 Treasury Bills
due January 13, 1994
yielding 2.60% 1,010,304 1,017,237
U.S. Government $2,000,000 Treasury Bills
due January 20, 1994
yielding 2.81% 1,994,381 1,997,300
U.S. Government $1,133,000 Treasury Bills
due January 27, 1994
yielding 2.77% 1,124,236 1,130,859
U.S. Government $2,000,000 Treasury Bills
due February 3, 1994
yielding 2.93% 1,992,133 1,994,980
U.S. Government $2,307,000 Treasury Bills
due February 10, 1994
yielding 2.94% 2,289,236 2,299,848
U.S. Government $870,000 Treasury Bills
due February 17, 1994
yielding 2.92% 863,238 866,842
(Continued)
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Item 27a - Schedule of Assets Held for Investment Purposes, Continued
Description of Investment
Identity of Issue, Including Maturity Date, Cost or
Borrower, Lessor Rate of Interest, Collateral, Amortized Current
or Similar Party Par or Maturity Value Cost Value
U.S. Government Obligations, Continued:
U.S. Government $1,012,000 Treasury Bills
due February 24, 1994
yielding 2.95% $ 1,004,106 1,007,689
U.S. Government $503,000 Treasury Bills
due March 03, 1994
yielding 3.01% 499,039 500,550
U.S. Government $2,000,000 Treasury Bills
due March 10, 1994
yielding 3.05% 1,985,953 1,988,920
U.S. Government $1,942,000 Treasury Bills
due March 31, 1994
yielding 3.05% 1,927,322 1,927,823
U.S. Government $337,000 Treasury Bills
due June 9, 1994
yielding 3.26% 331,506 332,312
16,011,007 16,061,141
16,049,438 16,205,316
$ 51,178,912 50,334,585
* Party-in-interest
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Item 27d - Schedule of Reportable Transactions
Year ended December 31, 1993
Current
Expense Value of
Identity of Incurred Asset on
Party Description Lease with Cost Transaction Net Gain
Involved of Asset Rental Transaction of Asset Date or (Loss)
Common Stocks:
NationsBank, as Purchases of 281,926 shares
trustee of TNP Enterprises, Inc.*
common stock $ - - 5,009,275 5,009,275 -
NationsBank, as Sales of 293,203 shares
trustee of TNP Enterprises, Inc.*
common stock - - 5,059,368 5,281,040 221,672
Mutual Funds
NationsBank, as Purchases of 162,587 shares
trustee of Vanguard Wellesley
Income Fund - - 3,107,008 3,107,008 -
NationsBank, as Sales of 27,374 shares of
Vanguard Wellesley
Income Fund - - 496,364 515,811 19,447
<FN>
* Party-in-interest
Independent Auditors' Consent
The Board of Directors
TNP Enterprises, Inc.
The Trustee and Thrift Plan Committee
Texas-New Mexico Power Company
Thrift Plan for Employees:
We consent to incorporation by reference in the Registration Statement (No.
2-93265) on Form S-8 of TNP Enterprises, Inc. of our report dated March 10,
1994, relating to the statements of net assets available for benefits of
Texas-New Mexico Power Company Thrift Plan for Employees as of December 31,
1993 and 1992, and the related statements of changes in net assets
available for benefits for the years then ended and related supplemental
schedules, which report appears in the December 31, 1993 annual report on
Form 11-K of TNP Enterprises, Inc.
KPMG PEAT MARWICK
Fort Worth, Texas
March 24, 1994