UNITED STATES SECURITIES AND EXCHANGE COMMISSION |
FORM 10-Q |
(Mark One) |
(X) COMBINED ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period endedMarch 31, 2002 |
or |
|
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
____________________________________________________________________________________________________________
Commission File Number: 1-8847
TNP ENTERPRISES, INC. | ||||
Texas | 75-1907501 | |||
4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113 | ||||
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. | ||||
______________________________________________________________________________________________________________ | ||||
Commission File Number:2-97230 | ||||
TEXAS-NEW MEXICO POWER COMPANY | ||||
Texas | 75-0204070 | |||
4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113 | ||||
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 | ||
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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. | |||||||
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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. | |||||||
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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. | |||||||
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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. | |||||||
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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. | |||||||
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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 | 1,053 | 1,109 | |||||
Deferred purchased power and fuel costs | 2,142 | 1,852 | |||||
Accumulated deferred income taxes | 177 | 1,570 | |||||
Assets held for sale | 103,500 | 103,500 | |||||
Other current assets | 313 | 520 | |||||
Total current assets | 143,207 | 119,773 | |||||
UTILITY PLANT: | |||||||
Electric plant | 757,791 | 757,230 | |||||
Construction work in progress | 4,899 | 3,147 | |||||
Total | 762,690 | 760,377 | |||||
Less accumulated depreciation | 270,477 | 266,728 | |||||
Net utility plant | 492,213 | 493,649 | |||||
LONG-TERM AND OTHER ASSETS: | |||||||
Other property and investments, at cost | 333 | 334 | |||||
Recoverable stranded costs | 312,677 | 311,944 | |||||
Deferred charges | 10,736 | 15,099 | |||||
Total long-term and other assets | 323,746 | 327,377 | |||||
$ 959,166 | $ 940,799 | ||||||
LIABILITIES AND SHAREHOLDER'S EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ 12,438 | $ 31,952 | |||||
Accrued interest | 2,599 | 5,526 | |||||
Accrued taxes | 13,117 | 22,213 | |||||
Customers' deposits | 1,083 | 5,776 | |||||
Other current liabilities | 16,108 | 28,310 | |||||
Total current liabilities | 45,345 | 93,777 | |||||
LONG-TERM AND OTHER LIABILITIES: | |||||||
Deferred purchased power and fuel costs | 21,098 | 10,665 | |||||
Accumulated deferred income taxes | 125,228 | 124,889 | |||||
Accumulated deferred investment tax credits | 20,402 | 20,792 | |||||
Deferred credits | 10,893 | 10,854 | |||||
Total long-term and other liabilities | 177,621 | 167,200 | |||||
LONG-TERM DEBT, LESS CURRENT MATURITIES | 425,432 | 342,411 | |||||
COMMON SHAREHOLDER'S EQUITY: | |||||||
Common stock, $10 par value per share | |||||||
Authorized 12,000,000 shares; issued 10,705 shares | 107 | 107 | |||||
Capital in excess of par value | 197,381 | 222,149 | |||||
Retained earnings | 113,810 | 115,685 | |||||
Accumulated other comprehensive loss | (530) | (530) | |||||
Total common shareholder's equity | 310,768 | 337,411 | |||||
COMMITMENTS AND CONTINGENCIES (Note 7) | | | |||||
$ 959,166 | $ 940,799 | ||||||
The accompanying notes are an integral part of these consolidated financial statements. | |||||||
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