11-K 1 UNITED STATES 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, 1994, 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 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. Financial Statements Independent Auditors' Report Statements of Net Assets Available for Benefits, December 31, 1994 and 1993 Statements of Changes in Net Assets Available for Benefits, Years Ended December 31, 1994 and 1993 Notes to Financial Statements, December 31, 1994 and 1993 Item 27a - Schedule of Assets Held for Investment Purposes, December 31, 1994 Item 27d - Schedule of Reportable Transactions, Year Ended December 31, 1994 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 Date: March 24, 1995 By:____________________________ 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, 1994 and 1993 (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, 1994 and 1993, 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, 1994 and 1993, 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 LLP Fort Worth, Texas March 10, 1995 TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Statements of Net Assets Available for Benefits December 31, 1994 and 1993
1994 1993 Investments, at fair value: Common stock of TNP Enterprises, Inc. (1,722,018 shares in 1994 and 1,471,213 shares in 1993) $ 25,615,021 24,275,237 United States Treasury Bills 14,306,147 16,061,141 Vanguard Wellesley Income Fund (355,230 units in 1994 and 251,916 units in 1993) 6,056,669 4,846,364 Vanguard Index 500 Fund (134,954 units in 1994 and 114,195 units in 1993) 5,798,963 5,007,668 United States Savings Bonds 116,372 144,175 __________ __________ Total investments 51,893,172 50,334,585 Cash 128,702 227,037 ____________ __________ Net assets available for benefits $ 52,021,874 50,561,622 ============ ==========
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, 1994 and 1993
1994 1993 Additions to net assets: Investment income: Dividends on common stock of TNP Enterprises, Inc. $ 1,861,905 2,245,538 Dividends on Vanguard mutual funds 629,591 462,081 Net depreciation in fair value of investments (note 5) (2,647,227) (2,662,153) ____________ __________ Net investment income (loss) (155,731) 45,466 ____________ __________ Contributions (note 1(b)): Employer 753,349 - Employees 2,517,943 2,351,518 ___________ __________ 3,271,292 2,351,518 ___________ __________ Total additions 3,115,561 2,396,984 Deduction from net assets - benefits paid to participants 1,655,309 8,400,061 ___________ __________ Net increase (decrease) 1,460,252 (6,003,077) ___________ __________ Net assets available for benefits: Beginning of year 50,561,622 56,564,699 ____________ __________ End of year (note 6) $ 52,021,874 50,561,622 ============ ==========
See accompanying notes to financial statements. TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Notes to Financial Statements December 31, 1994 and 1993 (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. (TNPE), 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). Effective January 1, 1995, employees age twenty-one or older become eligible on the first entry date of the Plan year (January 1 or July 1) in which they are scheduled to work at least 1,000 hours. The Plan is administered by NationsBank of Texas, N. A., as trustee. (b) Contributions Each year, participants may contribute, pursuant to a salary reduction arrangement, from 2% to 9% of their annual compensation (up to $9,240 in 1994 and $8,994 in 1993). The Company may make matching contributions, up to 6% of eligible compensation, at the discretion of the Company's Board of Directors. Effective January 1, 1993, the Company suspended its matching contributions to the Plan; however, in 1994 the Company's Board of Directors approved restoration of the Company's matching contributions, effective for participant contributions after June 30, 1994. (c) Expenses of Administering the Plan All costs and expenses incurred in administering the Plan have been paid by the Company. (d) Participant Accounts Each participant's account is credited with that participant's contributions, the Company's matching contributions and allocated investment earnings and losses of the directed investments in the participant's account. Effective April 28, 1994, the Plan was amended to also allow participants to transfer funds from other qualified plans. (e) Vesting Participants are fully vested in their contributions and the Company's matching contributions, including actual earnings thereon, at all times. In the event of complete or partial termination of the Plan, the assets of the Plan shall be distributed to the participants and their beneficiaries in accordance with the Plan agreement. (1) Description of Plan, Continued (f) Investment Options Participants may direct contributions in 10% increments in any of four investment options: TNPE Common Stock - Funds are invested in the common stock of TNPE. Certain U. S. Government securities - Funds are invested in certain U. S. treasury bills and savings bonds. Vanguard Wellesley Income Fund - Funds are invested in shares of a registered investment company that invests primarily in various equity security portfolios that seek to match the performance of distinct market indices. Vanguard Index 500 Fund - Funds are invested in shares of a registered investment company that invests primarily in U.S. Government and corporate debt obligations and dividend- paying equity securities. Participants may change their investment options quarterly. (g) 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 the accrual basis of accounting. (b) Investment Valuation and Income Recognition The Plan's investments are stated at fair value. Common stock of TNPE is valued using quoted market prices. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. U. S. Treasury Bills are valued using quoted market prices. U. S. Savings Bonds are valued at redemption value, which approximates fair value. Purchases and sales of securities are recorded on the trade date (the date the buy or sell order is executed). Interest income is recorded on the accrual basis. Dividends on common stock of TNPE are recorded on the ex-dividend date. Dividends on mutual funds are recorded when declared. (c) Payment of Benefits Benefits are recorded when paid. (Continued) TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Notes to Financial Statements (3) Plan Termination Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the provisions of ERISA. (4) Tax Status The Internal Revenue Service has determined and informed the Company by letter dated June 12, 1991, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes the Plan i s designed and is currently being operated in compliance with the applicable requirements of the IRC. Contributions to a participant's account and the related investment earnings are not included in a participant's taxable income until such amounts are distributed to that participant. (5) Investments Net appreciation (depreciation) in the fair value of investments bought, sold, and held by the Plan during 1994 and 1993 is summarized as follows:
1994 1993 Common stock of TNPE $(2,418,409) (3,620,308) United States Treasury Bills 581,751 555,227 Vanguard Wellesley Income Fund (702,907) 138,382 Vanguard Index 500 Fund (110,569) 255,960 United States Savings Bonds 2,907 8,586 ____________ __________ $(2,647,227) (2,662,153) ============ ==========
(Continued) TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Notes to Financial Statements (6) Changes in Net Assets Allocated to Investment Funds The following is an analysis of changes in net assets allocated to investment funds for the years ended December 31, 1994 and 1993:
Net Balance at Investment Balance at January 1, Income Benefits December 31, 1994 1994 (Loss) Contributions Paid Transfers 1994 Common stock of TNPE $24,275,237 (556,504) 1,873,701 (448,344) 470,931 25,615,021 United States Treasury Bills 16,061 ,141 581,751 404,226 (980,396) (1,760,575) 14,306,147 Vanguard Wellesley Income Fund 4,846,364 (251,611) 468,509 (150,883) 1,144,290 6,056,669 Vanguard Index 500 Fund 5,007,668 67,726 524,856 (75, 686) 274,399 5,798,963 United States Savings Bonds 144,175 2,907 - - (30,710) 116,372 Cash 227,037 _ _ _ (98,335) 128,702 ___________ ________ ________ _________ ________ _________ Total $50,561,622 (155,731) 3,271,292 (1,655,309) - 52,021,874 =========== ======== ========= ========== ======== ========== Net Balance at Investment Balance at January 1, Income Benefits December 31, 1993 1993 (Loss) Contributions Paid Transfers 1993 Common stock of TNPE $28,167,310 (1,374,770) 441,356 (1,159,681) (1,798,978) 24,275,237 United States Treasury Bills 23,431,128 553,839 1,056,208 (7,240,380) (1,739,654) 16,061,141 Vanguard Wellesley Income Fund 2,119,326 479,648 379,130 - 1,868,260 4,846,364 Vanguard Index 500 Fund 2,640,310 376,775 474,824 - 1,515,759 5,007,668 United States Savings Bonds 141,938 9,974 - - (7,737) 144,175 Cash 64,687 - - - 162,350 227,037 ___________ _______ _________ __________ _________ __________ Total $56,564,699 45,466 2,351,518 (8,400,061) _ 50,561,622 =========== ======= ========= ========== ========== ==========
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Item 27a - Schedule of Assets Held for Investment Purposes December 31, 1994
Description of Investment Identity of Issue, Including Maturity Date, Borrower, Lessor Rate of Interest, Collateral, Current or Similar Party Par or Maturity Value Cost Value Common Stocks: TNP Enterprises, Inc.* 1,722,018 shares of no $ 29,418,081 25,615,021 par common stock United States Treasury Bills: United States $2,115,000 Treasury Bills, Government due January 19, 1995, yielding 5.52% 2,088,590 2,109,797 United States $1,955,000 Treasury Bills, Government due February 9, 1995, yielding 4.85% 1,929,673 1,945,420 United States $1,945,000 Treasury Bills, Government due March 30, 1995, yielding 5.66% 1,918,156 1,919,268 United States $1,865,000 Treasury Bills, Government due March 9, 1995, yielding 5.54% 1,838,364 1,846,686 United States $1,830,000 Treasury Bills, Government due February 2, 1995, yielding 4.72% 1,806,501 1,822,735 United States $1,140,000 Treasury Bills, Government due January 26, 1995, yielding 3.58% 1,125,765 1,136,546 United States $1,100,000 Treasury Bills, Government due February 23, 1995, yielding 5.17% 1,085,425 1,092,047 United States $1,045,000 Treasury Bills, Government due January 5, 1995, yielding 2.76% 1,032,120 1,044,812 (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, Borrower, Lessor Rate of Interest, Collateral, Current or Similar Party Par or Maturity Value Cost Value United States Treasury Bills, Continued: United States $555,000 Treasury Bills, Government due February 16, 1995, yielding 4.98% $547,508 551,675 United States $380,000 Treasury Bills, Government due March 2, 1995, yielding 5.45% 374,717 376,694 United States $265,000 Treasury Bills, Government due January 12, 1995, yielding 4.25% 261,800 264,735 United States $108,000 Treasury Bills, Government due March 23, 1995, yielding 5.59% 106,533 106,708 United States $90,000 Treasury Bills, Government due March 16, 1995, yielding 5.54% 88,751 89,024 14,203,903 14,306,147 Mutual Funds: Vanguard Wellesley 355,230 units 6,589,170 6,056,669 Income Fund Vanguard Index 500 134,954 units 5,577,595 5,798,963 Fund 12,166,765 11,855,632 United States Savings Bonds: United States $31,344 Series E and Government Series EE Savings Bonds, various maturities at various interest rates 31,344 116,372 ____________ __________ $ 55,820,093 51,893,172 ============ ========== * Party-in-interest TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Item 27d - Schedule of Reportable Transactions Year ended December 31, 1994
Current Expense Value of Identity of Incurred Asset on Party Description Purchase Selling Lease with Cost Transaction Net Gain Involved of Asset Price Price Rental Transaction of Asset Date or (Loss) Common Stocks: NationsBank,as Purchases of trustee* 333,351 shares of common stock of TNP Enterprises, Inc.* $ 5,079,393 - - - 5,079,393 5,079,393 - NationsBank, as Sales of 82,546 shares trustee* of common stock of TNP Enterprises, Inc.* - 1,321,200 - - 1,442,482 1,321,200 (121,282) * 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, 1995, relating to the statements of net assets available for benefits of Texas-New Mexico Power Company Thrift Plan for Employees as of December 31, 1994 and 1993, 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, 1994, annual report on Form 11-K of TNP Enterprises, Inc. KPMG Peat Marwick LLP Fort Worth, Texas March 24, 1995