UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
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.
(Exact name of registrant as specified in its charter)
Texas 75-1907501
State of Incorporation I.R.S. Employer Identification Number
4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113
(Address of Registrant's Principal Executive Offices)
Telephone Number: 817-731-0099
----------------------------------------------
Commission File Number: 2-97230
TEXAS-NEW MEXICO POWER COMPANY
(Exact name of registrant as specified in its charter)
Texas 75-0204070
State of Incorporation I.R.S. Employer Identification Number
4100 International Plaza, P. O. Box 2943, Fort Worth, Texas 76113
(Address of Registrant's Principal Executive Offices)
Telephone Number: 817-731-0099
--------------------------------------------
Indicate by check mark whether the registrants (1) have 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) have been subject to
such filing requirements for the past 90 days.
Yes X No
As of July 25, 1994, TNP Enterprises, Inc. had outstanding 10,744,451 shares of
common stock, no par value. As of July 25, 1994, all 10,705 outstanding shares
of Texas-New Mexico Power Company's common stock ($10 par value), were held,
beneficially and of record, by TNP Enterprises, Inc.
<PAGE>
TNP ENTERPRISES INC. AND SUBSIDIARIES
TEXAS NEW-MEXICO POWER COMPANY AND SUBSIDIARIES
Form 10-Q for the period ended June 30, 1994
This combined Form 10-Q is separately filed by TNP Enterprises, Inc. and
Texas-New Mexico Power Company. Information contained herein relating to
Texas-New Mexico Power Company is filed by TNP Enterprises, Inc. and separately
by Texas-New Mexico Power Company on its own behalf. 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 I. FINANCIAL INFORMATION PAGE NO.
Item 1. Consolidated Financial Statements
(Unaudited for Periods Ended June 30, 1994 and 1993)
TNP Enterprises, Inc. and Subsidiaries:
Consolidated Statements of Operations
Three and Six Month Periods Ended June 30, 1994 and 1993 3
Consolidated Balance Sheets
June 30, 1994 and December 31, 1993 4
Consolidated Statements of Cash Flows
Six Month Periods Ended June 30, 1994 and 1993 5
Texas-New Mexico Power Company and Subsidiaries:
Consolidated Statements of Operations
Three and Six Month Periods Ended June 30, 1994 and 1993 6
Consolidated Balance Sheets
June 30, 1994 and December 31, 1993 7
Consolidated Statements of Cash Flows
Six Month Periods Ended June 30, 1994 and 1993 8
Notes to Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 20
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 28
Item 4. Submission of Matters to a Vote of Security Holders 28
Item 6. Exhibits and Reports on Form 8-K 28
(a) Exhibit Index 28
(b) Reports on Form 8-K 28
Signature page (TNPE) 38
Signature page (TNP) 39
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS.
The following interim consolidated financial statements of TNP Enterprises, Inc
("TNPE") and subsidiaries and Texas-New Mexico Power Company (the "Utility")
and subsidiaries are unaudited but, in the opinion of management, reflect all
adjustments consisting of the provision for regulatory disallowances and the
normal recurring accruals which are necessary for the fair statement of the
results of the interim periods presented. Results for interim periods are not
necessarily indicative of the results to be expected for a full year or for
periods which have been previously reported, due in part to the seasonal
fluctuations in revenues and possible developments in regulatory and judicial
proceedings. Amounts shown for TNPE and the Utility at December 31, 1993, are
based on audited consolidated financial statements appearing in TNPE's 1993
Annual Report and the Utility's 1993 Annual Report on Form 10-K, respectively.
<TABLE>
<CAPTION>
TNP ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
(In Thousands Except Per Share Amounts)
<S> <C> <C> <C> <C>
Operating revenues. . . . . . . . . .$111,046 107,530 218,645 210,680
Operating expenses:
Power purchased for resale. . . . . 45,694 45,678 92,002 89,699
Fuel. . . . . . . . . . . . . . . . 10,757 9,770 20,929 19,645
Other operating and general expenses 18,403 17,906 35,853 35,374
Maintenance . . . . . . . . . . . . 3,008 2,930 6,061 5,930
Depreciation of utility plant . . . 9,222 8,974 18,327 17,945
Taxes, other than on income . . . . 7,398 7,478 14,590 14,630
Income taxes (note 3) . . . . . . . (1,058) (928) (2,443) (2,719)
Total operating expenses. . . . . 93,424 91,808 185,319 180,504
Net operating income. . . . . . . 17,622 15,722 33,326 30,176
Other income (loss):
Provision for regulatory
disallowances (note 4). . . . . . (31,546) - (31,546) -
Other income and deductions, net. . 102 497 137 1,009
Income taxes (notes 3,4). . . . . . 11,004 (169) 10,976 (343)
Other income (loss), net of taxes (20,440) 328 (20,433) 666
Earnings (loss) before
interest charges . . . . . . . . .(2,818) 16,050 12,893 30,842
Interest charges:
Interest on long-term debt. . . . . .17,939 15,367 35,692 30,868
Other interest and amortization of
debt discount, premium and expense. 950 1,181 1,900 2,391
Allowance for borrowed funds used
during construction . . . . . . . . (53) (88) (161) (141)
Total interest charges. . . . . . .18,836 16,460 37,431 33,118
Net loss. . . . . . . . . . . . . (21,654) (410) (24,538) (2,276)
Dividends on preferred stocks . . . . . (201) (224) (412) (457)
Loss applicable to common stock . (21,855) (634) (24,950) (2,733)
Weighted average number of common
shares outstanding. . . . . . . . .10,725 10,626 10,713 10,615
Loss per share of common stock. . . . $ (2.04) (0.06) (2.33) (0.26)
Dividends per share of common stock . $0.4075 0.4075 0.8150 0.8150
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TNP ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1994 December 31,
ASSETS (Unaudited) 1993
(In Thousands)
<S> <C> <C>
Utility plant, at original cost (note 1):
Electric plant. . . . . . . . . . . . . . . . $ 1,216,318 1,203,636
Construction work in progress . . . . . . . . 2,386 5,282
1,218,704 1,208,918
Less accumulated depreciation . . . . . . . . 217,399 202,923
Utility plant less accumulated depreciation . 1,001,305 1,005,995
Less reserve for regulatory
disallowances (note 4). . . . . . . . . . . 31,546 -
Net utility plant . . . . . . . . . . . . 969,759 1,005,995
Nonutility property, at cost. . . . . . . . . . . 1,311 1,673
Current assets:
Cash and cash equivalents . . . . . . . . . . . 16,173 12,423
Customer receivables. . . . . . . . . . . . . . 4,095 764
Inventories, at lower of average cost or market:
Fuel. . . . . . . . . . . . . . . . . . . . . 1,427 1,422
Materials and supplies. . . . . . . . . . . . 7,771 7,793
Deferred purchased power and fuel costs . . . . 20,591 15,151
Accumulated deferred taxes on income (note 3) . 4,488 4,251
Other current assets. . . . . . . . . . . . . . 2,784 1,071
Total current assets. . . . . . . . . . . 57,329 42,875
Regulatory tax assets . . . . . . . . . . . . . . 17,635 16,915
Deferred charges. . . . . . . . . . . . . . . . . 35,629 37,779
$ 1,081,663 1,105,237
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock equity:
Common stock - no par value per share. Shares authorized
50,000,000; issued 10,741,926 in 1994
and 10,695,860 in 1993. . . . . . . . $ 132,363 131,615
Retained earnings (notes 2,4) . . . . . . 48,331 82,012
Total common stock equity . . . . . . 180,694 213,627
Redeemable cumulative
preferred stock (note 2). . . . . . . . . 8,860 9,560
Long-term debt, net of
amount due within one year (note 1). . . . 700,364 678,994
Total capitalization. . . . . . . . . 889,918 902,181
Current liabilities:
Long-term debt due within one year. . . . . 1,070 1,070
Accounts payable. . . . . . . . . . . . . . 27,050 22,450
Accrued interest. . . . . . . . . . . . . . 15,802 16,115
Accrued taxes . . . . . . . . . . . . . . . 10,568 17,221
Customers' deposits . . . . . . . . . . . . 4,553 4,464
Revenues subject to refund. . . . . . . . . 4,087 3,400
Other current and accrued liabilities . . . 15,141 13,581
Total current liabilities . . . . . . 78,271 78,301
Regulatory tax liabilities. . . . . . . . . . 50,729 49,314
Accumulated deferred taxes on income (note 3) 45,334 57,093
Accumulated deferred investment tax credits . 17,411 18,348
Commitments and contingencies (note 4) $ 1,081,663 1,105,237
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TNP ENTERPRISES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net loss . . . . . . . . . . . . . . . . . . . . $ (24,538) (2,276)
Items not requiring cash:
Depreciation of utility plant. . . . . . . . . 18,327 17,945
Amortization of debt expense, discount and premium
and other deferred charges . . . . . . . . . 2,792 2,153
Allowance for borrowed funds
used during construction . . . . . . . . . . (161) (141)
Deferred taxes on income . . . . . . . . . . . (11,301) (2,500)
Investment tax credit adjustments. . . . . . . (937) (391)
Provision for regulatory disallowances . . . . 31,546 -
15,728 14,790
Changes in certain current assets and liabilities:
Customer receivables . . . . . . . . . . . . . (3,331) (627)
Inventories. . . . . . . . . . . . . . . . . . 17 (1,291)
Deferred purchased power and fuel costs. . . . (5,440) 1,395
Other current assets . . . . . . . . . . . . . (1,713) (1,931)
Accounts payable . . . . . . . . . . . . . . . 4,600 1,122
Accrued interest . . . . . . . . . . . . . . . (313) 8,405
Accrued taxes. . . . . . . . . . . . . . . . . (6,653) (6,708)
Customers' deposits. . . . . . . . . . . . . . 89 225
Revenues subject to refund . . . . . . . . . . 687 2,482
Other current and accrued liabilities. . . . . 1,560 5,364
Other - net. . . . . . . . . . . . . . . . . . . (655) 911
TOTAL . . . . . . . . . . . . . . . . . . 4,576 24,137
CASH FLOWS FROM INVESTING ACTIVITIES ---
Additions to utility plant, net of
capitalized depreciation and interest. . . . . (13,082) (11,787)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends on preferred and common stocks . . . . (9,143) (9,108)
Issuances:
Common stock . . . . . . . . . . . . . . . . . 748 819
Long-term debt . . . . . . . . . . . . . . . . 113,500 -
Redemptions:
Preferred stock. . . . . . . . . . . . . . . . (700) (700)
Long-term debt . . . . . . . . . . . . . . . . (92,149) (400)
TOTAL . . . . . . . . . . . . . . . . . . 12,256 (9,389)
NET CHANGE IN CASH AND CASH EQUIVALENTS . . . . . . . . 3,750 2,961
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12,423 86,785
CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . . $ 16,173 89,746
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest . . . . . . . . . . . . . . . . . . . $ 36,129 22,436
Income taxes . . . . . . . . . . . . . . . . . 50 1,846
</TABLE>
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
On January 1, 1993, TNPE recognized certain assets and liabilities and
certain reclassifications as the result of implementation of Statement of
Financial Accounting Standards No. 109.
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIAR
Consolidated Statements of Operations (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
(In Thousands)
<S> <C> <C> <C> <C>
Operating revenues. . . . . . . . .$111,046 107,530 218,645 210,680
Operating expenses:
Power purchased for resale. . . . 45,694 45,678 92,002 89,699
Fuel. . . . . . . . . . . . . . . 10,757 9,770 20,929 19,645
Other operating and
general expenses. . . . . . . . 18,403 17,906 35,853 35,374
Maintenance . . . . . . . . . . . 3,008 2,930 6,061 5,930
Depreciation of utility plant . . 9,222 8,974 18,327 17,945
Taxes, other than on income . . . 7,398 7,478 14,590 14,630
Income taxes (note 3) . . . . . . (1,058) (928) (2,443) (2,719)
Total operating expenses. . . . 93,424 91,808 185,319 180,504
Net operating income. . . . . . 17,622 15,722 33,326 30,176
Other income (loss):
Provision for regulatory
disallowances (note 4) . . . . . (31,546) - (31,546) -
Other income and deductions, net. 192 518 351 1,038
Income taxes (notes 3,4). . . . . 10,967 (176) 10,901 (353)
Other income (loss),
net of taxes . . . . . . . (20,387) 342 (20,294) 685
Earnings (loss) before
interest charges . . . . . . (2,765) 16,064 13,032 30,861
Interest charges:
Interest on long-term debt. . . . 17,939 15,367 35,692 30,868
Other interest and amortization of
debt discount, premium and expense 950 1,181 1,900 2,391
Allowance for borrowed funds used
during construction . . . . . . (53) (88) (161) (141)
Total interest charges. . . . . 18,836 16,460 37,431 33,118
Net loss. . . . . . . . . . . . (21,601) (396) (24,399) (2,257)
Dividends on preferred stock. . . . (201) (224) (412) (457)
Loss applicable to
common stock . . . . . . . . $(21,802) (620) (24,811) (2,714)
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1994 December 31,
ASSETS (Unaudited) 1993
(In Thousands)
<S> <C> <C>
Utility plant, at original cost (note 1):
Electric plant. . . . . . . . . . . . . . $ 1,216,318 1,203,636
Construction work in progress . . . . . . 2,386 5,282
1,218,704 1,208,918
Less accumulated depreciation . . . . . . 217,399 202,923
Utility plant less
accumulated depreciation . . . . . 1,001,305 1,005,995
Less reserve for regulatory
disallowances (note 4). . . . . . . . . . 31,546 -
Net utility plant . . . . . . . . . . 969,759 1,005,995
Nonutility property, at cost. . . . . . . . . 183 541
Current assets:
Cash and cash equivalents . . . . . . . . . 5,456 2,078
Customer receivables. . . . . . . . . . . . 4,095 764
Inventories, at lower of average cost or market:
Fuel. . . . . . . . . . . . . . . . . . . 1,427 1,422
Materials and supplies. . . . . . . . . . 7,771 7,793
Deferred purchased power and fuel costs . . 20,591 15,151
Accumulated deferred taxes on income (note 3) 4,488 4,251
Other current assets. . . . . . . . . . . . 2,573 1,091
Total current assets. . . . . . . . . 46,401 32,550
Regulatory tax assets . . . . . . . . . . . . 17,635 16,915
Deferred charges. . . . . . . . . . . . . . . 36,967 39,118
$ 1,070,945 1,095,119
CAPITALIZATION AND LIABILITIES
Capitalization:
Common stock 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. . . . . . 175,094 175,094
Retained earnings (notes 2,4) . . . . . . 5,373 38,983
Total common stock equity . . . . . . 180,574 214,184
Redeemable cumulative preferred
stock (note 2). . . . . . . . . . . . . . 8,860 9,560
Long-term debt, net of amount
due within one year (note 1). . . . . . . 700,364 678,994
Total capitalization. . . . . . . . . 889,798 902,738
Current liabilities:
Long-term debt due within one year. . . . . 1,070 1,070
Accounts payable. . . . . . . . . . . . . . 27,050 22,450
Accrued interest. . . . . . . . . . . . . . 15,802 16,115
Accrued taxes . . . . . . . . . . . . . . . 11,385 18,006
Customers' deposits . . . . . . . . . . . . 4,553 4,464
Revenues subject to refund . . . . . . . . 4,087 3,400
Other current and accrued liabilities . . . 15,136 13,573
Total current liabilities . . . . . . 79,083 79,078
Regulatory tax liabilities. . . . . . . . . . 50,729 49,314
Accumulated deferred taxes on income (note 3) 35,180 46,907
Accumulated deferred investment tax credits . 16,155 17,082
Commitments and contingencies (note 4)
$ 1,070,945 1,095,119
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
TEXAS-NEW MEXICO POWER COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net loss . . . . . . . . . . . . . . . . . . . $ (24,399) (2,257)
Items not requiring cash:
Depreciation of utility plant. . . . . . . . 18,327 17,945
Amortization of debt expense,
discount and premium
and other deferred charges . . . . . . . . 2,792 2,153
Allowance for borrowed funds used
during construction. . . . . . . . . . . . (161) (141)
Deferred taxes on income . . . . . . . . . . (11,269) (2,496)
Investment tax credit adjustments. . . . . . (927) (390)
Provision for regulatory disallowances . . . 31,546 -
15,909 14,814
Changes in certain current assets and liabilities:
Customer receivables . . . . . . . . . . . . (3,331) (627)
Inventories. . . . . . . . . . . . . . . . . 17 (1,291)
Deferred purchased power and fuel costs. . . (5,440) 1,395
Other current assets . . . . . . . . . . . . (1,482) (1,641)
Accounts payable . . . . . . . . . . . . . . 4,600 1,122
Accrued interest . . . . . . . . . . . . . . (313) 8,405
Accrued taxes. . . . . . . . . . . . . . . . (6,621) (5,941)
Customers' deposits. . . . . . . . . . . . . 89 225
Revenues subject to refund . . . . . . . . . 687 2,482
Other current and accrued liabilities. . . . 1,563 5,454
Other - net. . . . . . . . . . . . . . . . . . (657) (610)
TOTAL . . . . . . . . . . . . . . . . . 5,021 23,787
CASH FLOWS FROM INVESTING ACTIVITIES ---
Additions to utility plant, net of
capitalized depreciation and interest. . . . (13,082) (11,787)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends on preferred and common stocks . . . (9,212) (9,128)
Issuances:
Long-term debt . . . . . . . . . . . . . . . 113,500 -
Redemptions:
Preferred stock. . . . . . . . . . . . . . . (700) (700)
Long-term debt . . . . . . . . . . . . . . . (92,149) (400)
TOTAL . . . . . . . . . . . . . . . . . 11,439 (10,228)
NET CHANGE IN CASH AND CASH EQUIVALENTS . . . . . . . 3,378 1,772
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD. . . 2,078 63,843
CASH AND CASH EQUIVALENTS AT END OF PERIOD. . . . . . $ 5,456 65,615
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest . . . . . . . . . . . . . . . . . . $ 36,129 22,436
Income taxes . . . . . . . . . . . . . . . . 50 1,168
</TABLE>
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES:
On January 1, 1993, the Utility recognized certain assets and liabilities
and certain reclassifications as the result of implementation of Statement of
Financial Accounting Standards No. 109.
See accompanying notes to consolidated financial statements.
<PAGE>
(1) Long-term Debt
Long-term debt outstanding was as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
(In Thousands)
<S> <C> <C>
First mortgage bonds:
Series L, 10.500% due 2000 $ 9,720 9,840
Series M, 8.700 due 2006 8,400 8,400
Series R, 10.000 due 2017 63,700 63,700
Series S, 9.625 due 2019 20,000 20,000
Series T, 11.250 due 1997 130,000 130,000
Series U, 9.250 due 2000 100,000 100,000
Total 331,820 331,940
Unamortized discount, net of premium (658) (676)
First mortgage bonds, net 331,162 331,264
Secured debentures:
12.5% due 1999 130,000 130,000
Series A, 10.75% due 2003 140,000 140,000
270,000 270,000
Secured notes payable 100,272 78,800
Total long-term debt 701,434 680,064
Less long-term debt due within one year (1,070) (1,070)
Total long-term debt, net $ 700,364 678,994
</TABLE>
Secured notes payable represented loans issued under a financing facility for
the construction of Unit 2 of the TNP One generating plant. The Unit 2
financing facility was assumed in 1991 by Texas Generating Company II ("TGC II")
and consists of a series of renewable loans from various lenders in a financing
syndicate. TGC II is a wholly owned subsidiary of the Utility.
Under the terms of the Unit 2 financing facility, as amended, the total commit-
ment available is $147.75 million. The Utility is permitted to prepay up to
$141.5 million of the $147.75 million commitment and reborrow up to the amount
of the prepayments. The reborrowings under the Unit 2 financing facility will
be subject to compliance with the EBIT test (as described below) and maintenance
of an equity to total capital ratio of 20% or more as defined in the financing
facility. As of June 30, 1994, the unused commitment available to be borrowed
under the Unit 2 financing facility was approximately $47 million. A commitment
fee of 1/4 of 1% per annum is payable on the unused portion of the reducing
commitment.
As required by the terms of the Unit 2 financing facility, as amended, the
Utility received the required regulatory approvals from the Federal Energy
Regulatory Commission and the New Mexico Public Utility Commission for the
extension of the maturities of the remaining loans to be outstanding under the
Unit 2 financing facility. On June 15, 1994, the Utility paid a $369,000
extension fee on the $147.75 million commitment and completed the
necessary requirements under the Unit 2 financing facility to finalize the
extension of the maturities of the remaining loans. The extended maturities
provide for scheduled reductions of the commitment of approximately $36.9
million each at December 31, 1995, 1996, 1997 and 1998.
Based upon the June 30, 1994 outstanding balance, $1.6 million will be due on
December 31, 1995, $24.8 million will be due on December 31, 1996, and the
remaining amounts will be due in two equal installments of approximately $36.9
million on December 31, 1997 and 1998.
<PAGE>
(1) Long-term Debt - continued
The Unit 2 financing facility and instruments securing both issues of the
Utility's secured debentures contain certain covenants which, under specified
conditions, restrict the payment of cash dividends on common stock of the
Utility. The most restrictive of such covenants are an interest coverage test
and an equity ratio test. Under the interest coverage test, the Utility may
not pay cash dividends on its common stock unless the amount of its prior
twelve months'earnings (exclusive of any writedowns resulting from actions of
the Public Utility Commission of Texas ("PUCT"), to the extent included in
operating expenses) before interest and income taxes equals or exceeds the sum
of all of the interest expense on indebtedness for the same period (said
calculation, the "EBIT Test"). This restriction becomes effective only
after the third consecutive calendar quarter during which the Utility does not
meet the EBIT Test and continues in effect until after the quarter in which
the Utility has met the twelve-month EBIT Test. Under the equity ratio
test, the Utility may not pay cash dividends on its common stock
if, at the preceding quarterly date, the Utility's ratio of equity
capitalization (excluding any writedowns resulting from actions of the PUCT) to
total capitalization is less than 20%. The Utility has met the tests at each
quarterly date since each test became effective. See note 2 for discussion of
Bond Indenture restrictions on payment of cash dividends.
Under the Unit 2 financing facility, interest rates are determined under several
alternative methods. During 1994, all rates at the time of borrowing will be no
higher than the prime lending rate plus a margin of 1-7/8%. The margin will
increase by 1/2 of 1% in 1995 and by an additional 1/4 of 1% in 1996, 1997 and
1998. The effective costs of borrowing for the secured notes payable at June
30, 1994 and December 31, 1993 were 7.57% and 7.23%, respectively.
(2) Redeemable Cumulative Preferred Stock
Redeemable cumulative preferred stock (authorized 1,000,000 shares at $100 par
value per share) issued by the Utility and outstanding at June 30, 1994 and
December 31, 1993, with related redemption prices (at the Utility's option),
were as follows:
<TABLE>
<CAPTION>
Series Redemption price Shares outstanding Total par value
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31,
1994 1993 1994 1993 1994 1993
(In Thousands) (In Thousands)
<C> <C> <C> <C> <C> <C> <C>
B 4.650% $100.000 100.000 25.2 25.2 $2,520 2,520
C 4.750 100.000 100.000 14.4 14.4 1,440 1,440
D 11.000 101.040 101.570 2.0 3.2 200 320
E 11.000 101.040 101.570 1.0 1.6 100 160
F 11.000 101.040 101.570 2.0 3.2 200 320
G 11.875 106.432 106.927 44.0 48.0 4,400 4,800
88.6 95.6 $8,860 9,560
</TABLE>
Charter provisions relating to the preferred stocks and the Bond Indenture under
which the first mortgage bonds are issued contain restrictions as to the payment
of cash dividends on common stock of the Utility. As discussed in note 3 of
both the "Notes to Consolidated Financial Statements" included in TNPE's 1993
Annual Report, incorporated by reference in TNPE's 1993 Annual Report on Form
10-K, and the "Notes to Consolidated Financial Statements" included in the
Utility's 1993 Annual Report on Form 10-K, the amount of the Utility's
restricted retained earnings at December 31, 1993 was approximately $12,800,000.
<PAGE>
(2) Redeemable Cumulative Preferred Stock - continued
Due to the provision for certain regulatory disallowances discussed in note 4,
the Utility's unrestricted retained earnings have been eliminated during the
second quarter of 1994, thus requiring a suspension of cash dividends on the
Utility's common stock solely held by TNPE. The effect on the Utility's
retained earning at June 30, is summarized below:
<TABLE>
<CAPTION>
(In Thousands)
<S> <C>
Restricted level required by Bond Indenture
before payment of common stock dividends $ 13,517
Amount necessary to meet required level (8,144)
Retained earnings at June 30, 1994 $ 5,373
</TABLE>
The provision will not impair the ability of the Utility to pay cash dividends
on its preferred stock.
(3) Income Taxes
(a) TNP Enterprises, Inc. and Subsidiaries
Income taxes as set forth in TNPE's consolidated statements of operations
consisted of the following components:
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Charged (credited) to operating expenses:
Current Federal $ (737) 1,802
Current State 56 109
(681) 1,911
Deferred Federal 107 (3,234)
Investment tax credit adjustments:
Investment tax credits made available
through net operating loss carryback (220) -
Investment tax credits utilized - 658
Amortization of accumulated
deferred investment tax credits (264) (263)
(484) 395
Total credited to operating expenses (1,058) (928)
Charged (credited) to other income (loss):
Current Federal 58 172
Deferred Federal (11,057) (3)
Investment tax credits
made available through
net operating loss carryback (5) -
Total charged
(credited) to other income (loss) (11,004) 169
Total $ (12,062) (759)
</TABLE>
<PAGE>
(3) Income Taxes - continued
(a) TNP Enterprises, Inc. and Subsidiaries - continued
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Charged (credited) to operating expenses:
Current Federal $ (1,344) 56
Current State 56 111
(1,288) 167
Deferred Federal (228) (2,496)
Investment tax credit adjustments:
Investment tax credits made available
through net operating loss carryback (401) -
Investment tax credits utilized - 136
Amortization of accumulated
deferred investment tax credits (526) (526)
(927) (390)
Total credited to operating expenses (2,443) (2,719)
Charged (credited) to other income (loss):
Current Federal 107 348
Deferred Federal (11,073) (4)
Investment tax credits made available through
net operating loss carryback (10) (1)
Total charged (credited)
to other income (loss) (10,976) 343
Total $ (13,419) (2,376)
</TABLE>
<PAGE>
(3) Income Taxes - continued
(a) TNP Enterprises, Inc. and Subsidiaries - continued
Total income tax benefit for 1994 and 1993 was different than the amount
computed by applying the appropriate statutory Federal income tax rate to loss
before income taxes. The reasons for the differences were as follows:
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Income tax benefit at statutory rate $(11,482) (434)
Amortization of accumulated deferred
investment tax credits (264) (263)
Amortization of excess deferred taxes (183) (226)
Other - net (133) 164
$(12,062) (759)
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Income tax benefit at statutory rate $ (12,924) (1,619)
Amortization of accumulated deferred
investment tax credits (526) (526)
Amortization of excess deferred taxes (93) (452)
Other - net 124 221
$(13,419) (2,376)
</TABLE>
<PAGE>
(3) Income Taxes - continued
(a) TNP Enterprises, Inc. and Subsidiaries - continued
The tax effects of temporary differences that give rise to significant portions
of net current accumulated deferred taxes on income and net noncurrent
accumulated deferred taxes on income at June 30, 1994 and December 31, 1993 are
presented below:
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
(In Thousands)
<S> <C> <C>
Current accumulated deferred taxes on income:
Deferred tax assets:
Unbilled revenues $ 8,760 6,914
Revenues subject to refund 1,233 1,053
Other 1,496 1,435
11,489 9,402
Deferred tax liability -
Deferred purchased power and fuel costs (7,001) (5,151)
Current accumulated deferred
taxes on income, net $ 4,488 4,251
Noncurrent accumulated deferred taxes on income:
Deferred tax assets:
Regulatory related items $ 19,915 10,116
Minimum tax credit carryforwards 8,418 10,067
Federal regular tax NOL carryforwards 17,058 10,005
Investment tax credit carryforward 17,846 17,434
Other 2,234 2,388
65,471 50,010
Deferred tax liabilities:
Regulatory related items (2,309) -
Utility plant, principally
due to depreciation and
capitalized basis differences (102,930) (101,839)
Deferred rate case expenses (2,196) (2,553)
Deferred loss on reacquired debt (1,801) (1,823)
Deferred accounting treatment (1,569) (1,617)
Other - 729
(110,805) (107,103)
Noncurrent accumulated
deferred taxes on income, net $ (45,334) (57,093)
</TABLE>
TNPE generated both a Federal regular tax net operating loss ("NOL") and a
Federal minimum tax ("MT") NOL for the six months ended June 30, 1994 and,
therefore, has no current income tax liability for this period. When carried
back to the appropriate years, the MT NOL resulted in a net refundable amount of
approximately $1,237,000.
At June 30, 1994, TNPE has NOL carryforwards for Federal income tax purposes of
approximately $48,700,000 which are available to offset future Federal taxable
income through 2009. TNPE also has ITC carryforwards for Federal income tax
purposes of approximately $17,800,000 which are available to reduce future
Federal income taxes through 2005. In addition, TNPE has minimum tax credit
carryforwards of approximately $8,400,000 which are available to reduce future
Federal regular income taxes over an indefinite period.
In order to fully realize the Federal regular tax NOL carryforwards, TNPE will
need to generate future taxable income of approximately $48,700,000 prior to
expiration of the Federal regular tax NOL carryforwards which will begin to
expire in 2008. Based on TNPE's historical and projected pretax earnings,
management believes it is more likely than not that TNPE will realize the
benefit of the Federal regular tax NOL carryforwards existing at June 30, 1994
before such carryforwards begin to expire in 2008. Deferred tax assets related
to regulatory items will be realized in accordance with regulatory commission
requirements. Certain 1993 amounts have been reclassified to conform with the
1994 method of presentation.
<PAGE>
(3) Income Taxes - continued
(b) Texas-New Mexico Power Company and Subsidiaries
Income taxes as set forth in the Utility's consolidated statements of operations
consisted of the following components:
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Charged (credited) to operating expenses:
Current Federal $ (737) 1,802
Current State 56 109
(681) 1,911
Deferred Federal 107 (3,234)
Investment tax credit adjustments:
Investment tax credits made available
through net operating loss carryback (220) -
Investment tax credits utilized - 658
Amortization of accumulated
deferred investment tax credits (264) (263)
(484) 395
Total credited to operating expenses (1,058) (928)
Charged (credited) to other income (loss):
Current Federal 74 176
Deferred Federal (11,041) -
Total charged (credited)
to other income (loss) (10,967) 176
Total $(12,025) (752)
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Charged (credited) to operating expenses:
Current Federal $ (1,344) 56
Current State 56 111
(1,288) 167
Deferred Federal (228) (2,496)
Investment tax credit adjustments:
Investment tax credits made available
through net operating loss carryback (401) -
Investment tax credits utilized - 136
Amortization of accumulated
deferred investment tax credits (526) (526)
(927) (390)
Total credited to operating expenses (2,443) (2,719)
Charged (credited) to other income (loss):
Current Federal 140 353
Deferred Federal (11,041) -
Total charged (credited)
to other income (loss) (10,901) 353
Total $ (13,344) (2,366)
</TABLE>
<PAGE>
(3) Income Taxes - continued
(b) Texas-New Mexico Power Company and Subsidiaries - continued
Total income tax benefit for 1994 and 1993 was different than the amount
computed by applying the appropriate statutory Federal income tax rate to loss
before income taxes. The reasons for the differences were as follows:
<TABLE>
<CAPTION>
Three Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Income tax benefit at statutory rate $ (11,451) (427)
Amortization of accumulated deferred
investment tax credits (264) (263)
Amortization of excess deferred taxes (183) (226)
Other - net (127) 164
$ (12,025) (752)
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1994 1993
(In Thousands)
<S> <C> <C>
Income tax benefit at statutory rate $ (12,851) (1,609)
Amortization of accumulated deferred
investment tax credits (526) (526)
Amortization of excess deferred taxes (93) (452)
Other - net 126 221
$ (13,344) (2,366)
<PAGE>
(3) Income Taxes - continued
(b) Texas-New Mexico Power Company and Subsidiaries - continued
The tax effects of the Utility's temporary differences that give rise to
significant portions of net current accumulated deferred taxes on income and net
noncurrent accumulated deferred taxes on income at June 30, 1994 and December 31,
1993 are presented below:
</TABLE>
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
(In Thousands)
<S> <C> <C>
Current accumulated deferred taxes on income:
Deferred tax assets:
Unbilled revenues $ 8,760 6,914
Revenues subject to refund 1,233 1,053
Other 1,496 1,435
11,489 9,402
Deferred tax liability -
Deferred purchased power and fuel costs (7,001) (5,151)
Current accumulated
deferred taxes on income, net $ 4,488 4,251
Noncurrent accumulated deferred taxes on income:
Deferred tax assets:
Regulatory related items $ 19,915 10,116
Minimum tax credit carryforwards 13,285 14,890
Federal regular tax NOL carryforwards 22,571 15,679
Investment tax credit carryforward 19,099 18,786
Other 755 792
75,625 60,263
Deferred tax liabilities:
Regulatory related items (2,309) -
Utility plant, principally
due to depreciation and
capitalized basis differences (102,930) (101,839)
Deferred rate case expenses (2,196) (2,553)
Deferred loss on reacquired debt (1,801) (1,823)
Deferred accounting treatment (1,569) (1,617)
Other - 662
(110,805) (107,170)
Noncurrent accumulated
deferred taxes on income, net $ (35,180) (46,907)
</TABLE>
The Utility generated both a Federal regular tax NOL and a Federal MT NOL for
the six months ended June 30, 1994 and, therefore, has no current income tax
liability for this period. When carried back to the appropriate years, the MT
NOL resulted in a net refundable amount of approximately $1,204,000.
At June 30, 1994, the Utility has NOL carryforwards for Federal income tax pur-
poses of approximately $64,500,000 which are available to offset future Federal
taxable income through 2009. The Utility also has ITC carryforwards for Federal
income tax purposes of approximately $19,100,000 which are available to reduce
future Federal income taxes through 2005. In addition, the Utility has minimum
tax credit carryforwards of approximately $13,300,000 which are available to
reduce future Federal regular income taxes over an indefinite period.
<PAGE>
(3) Income Taxes - continued
(b) Texas-New Mexico Power Company and Subsidiaries - continued
In order to fully realize the Federal regular tax NOL carryforwards, the Utility
will need to generate future taxable income of approximately $64,500,000 prior
to expiration of the Federal regular tax NOL carryforwards which will begin to
expire in 2006. Based on the Utility's historical and projected pretax
earnings, management believes it is more likely than not that the Utility will
realize the benefit of the Federal regular tax NOL carryforwards existing at
June 30, 1994 before such carryforwards begin to expire in 2006. Deferred tax
assets related to regulatory items will be realized in accordance with
regulatory commission requirements. Certain 1993 amounts have been reclassified
to conform with the 1994 method of presentation.
The consolidated Federal income tax return, filed by TNPE, includes the
consolidated operations of the Utility and its subsidiaries. The amounts of
income taxes and investment tax credits recognized in the accompanying
consolidated financial statements of the Utility were computed as if the Utility
and its subsidiaries filed a separate consolidated Federal income tax return,
and the amounts could differ from those recognized as a member of TNPE's
consolidated group.
(4) Commitments and Contingencies
On March 30, 1994, the Utility filed a retail rate application, Docket No.
12900, with the Public Utility Commission of Texas ("PUCT") requesting an
increase of $34.8 million, or 8.9%, over annualized test year revenues. The
Utility's request includes the remaining $11.1 million of Unit 2 costs in rate
base, as prescribed in a previous rate case, PUCT Docket No. 10200. On July 18,
1994, a settlement agreement was executed by most of the parties involved in the
current rate application. All parties subsequently signed a stipulation and
joint motion for approval of the settlement. The agreement is subject to
approval by the city councils of the intervening cities, the Utility's Board
of Directors and the PUCT. Assuming final approval by the parties, the agreement
allows for an increase of $17.5 million, or 4.5%, over adjusted test year
revenues to go into effect no later than October 2, 1994. This agreement
resolves all issues of the rate application.
The approval of the agreement will resolve all outstanding court appeals in
connection with the Utility's two previous rate cases, PUCT Docket Nos. 9491 and
10200. The agreement provides for the Utility to write off $35 million of the
PUCT's total disallowances of $61.4 million regarding TNP One. For a discussion
of the judicial appeals of the Utility's rate orders in Docket Nos. 9491 and
10200 and certain other matters concerning the Texas rate base treatment of TNP
One, reference is made to note 5 of both the "Notes to Consolidated Financial
Statements" included in TNPE's 1993 Annual Report, incorporated by reference in
TNPE's 1993 Annual Report on Form 10-K, the "Notes to Consolidated Financial
Statements" included in the Utility's 1993 Annual Report on Form 10-K, and the
June 3, 1994 reports on Form 8-K (see Part II, Item 6) for TNPE and the Utility,
which notes and reports on Form 8-K are incorporated herein by reference.
The agreement provides for a moratorium restricting the Utility from filing
applications for rate increases in Texas for a five-year period beginning March
31, 1994, subject to certain conditions. Those conditions would not allow the
Utility to file for any base rate increase prior to March 31, 1997 but would
allow an application for increased rates to be filed after that time upon the
occurrence of any force majeure event (as defined in the agreement) at any time
during the five-year period.
<PAGE>
(4) Commitments and Contingencies - continued
The accompanying consolidated financial statements of the Utility and TNPE
include a provision for $35 million of the disallowances, which resulted in an
after-tax charge to second quarter results of operations of approximately $20.5
million, or $1.91 per share of TNPE common stock, as detailed below:
<TABLE>
<S> <S>
Disallowances to be recognized
under the settlement agreement $ 35,000,000
Less accumulated depreciation
previously recognized (3,453,930)
Provision for regulatory disallowances 31,546,070
Less related income taxes (11,041,025)
$ 20,505,045
Weighted average number of TNPE
common shares outstanding 10,724,851
Loss per share of TNPE common stock $ 1.91
</TABLE>
The recognition of the disallowances eliminated the Utility's unrestricted
retained earnings, triggering bond indenture provisions which will require a
suspension of cash dividends on the Utility's common stock solely held by TNPE.
Assuming no abnormal circumstances occur during the next fifteen months, the
Utility anticipates that it will again have unrestricted retained earnings
before the end of that fifteen-month period.
Since there are unrestricted retained earnings at TNPE, the provision for the
write-off will not by itself preclude the continuing payment of cash dividends
on TNPE's common stock. The ability of TNPE to pay cash dividends on common
stock is subject to approval of its Board of Directors and is dependent upon
TNPE's unconsolidated available cash and cash equivalents (approximately $10.5
million at June 30, 1994), other cash resources and, in the longer term, the
Utility's ability to produce earnings sufficient to pay cash dividends to its
parent. The write-off will be among the factors that TNPE's Board of Directors
will consider when evaluating the settlement and appropriate dividend policy at
its next board meeting, currently scheduled for mid-August.
The Utility anticipates that the settlement agreement will not be contested by
any party; however, if, for any reason, the parties fail to approve the
settlement agreement, the appellate proceedings respectively related to Docket
Nos. 9491 and 10200 would continue. Under such circumstances, the reserve for
the regulatory disallowances could be subsequently adjusted. An increase in
the reserve could result in a significant negative impact on earnings in the
period of resolution.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
This discussion presents management's analysis of significant factors in TNPE's
and the Utility's consolidated financial condition and results of operations and
should be read in conjunction with related consolidated financial statements and
notes thereto.
The only business of TNPE is conducted by the Utility. The principal effects of
nonutility activities on the consolidated financial statements are from short-
term investments, certain tax benefits and issuance of TNPE's common stock.
Since 1991, the Utility and TNPE have faced challenges to their financial
stability as a result of uncertainties with respect to judicial appeals of rate
orders issued by the Public Utility Commission of Texas ("PUCT") and the
servicing of debt incurred for refinancings of both the Unit 1 and the Unit 2
financing facilities. These matters have arisen by reason of the acquisition
and operation by the Utility of TNP One, a two-unit, lignite-fueled,
circulating fluidized bed generating facility located in Robertson County,
Texas, and the related rate proceedings in Texas which disallowed recovery in
rates of certain costs of TNP One. As discussed below under "Regulatory
Matters," the Utility and other parties involved in the previous rate cases have
reached a settlement agreement which, if approved, would lead to the resolution
of the appeals of the rate orders. The following discussion of certain matters
related to TNP One is essential to an analysis of the Utility's and TNPE's
financial condition and results of operations.
FINANCIAL CONDITION
Regulatory Matters
Appeals of the PUCT orders in Docket Nos. 9491 and 10200 remain pending in the
Texas courts. The primary issues in the Docket No. 9491 appeal are the PUCT's
order which disallowed $39.5 million of the requested costs of Unit 1 and the
Finding of Fact No. 84 ("FF No. 84") which found that the Utility failed to
prove that its decision to start construction of Unit 2 was prudent. Although
the Utility received the majority of requested Unit 2 costs in Docket No. 10200,
the effect of the appeal of FF No. 84 on Unit 2 costs cannot presently be
determined. In the Docket No. 10200 appeal, the primary issues are the $21.1
million disallowances of Unit 2 costs, an additional $800,000 disallowance of
Unit 1 costs and the PUCT ruling departing from the "stand-alone-return" method
of calculating the Utility's Federal income tax component of cost of service.
A more thorough discussion of the procedural aspects of both PUCT dockets is
included in note 5 of the "Notes to Consolidated Financial Statements" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in TNPE's 1993 Annual Report, both incorporated by
reference in TNPE's 1993 Annual Report on Form 10-K, note 5 of the "Notes to
Consolidated Financial Statements" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included in the Utility's
1993 Annual Report on Form 10-K and the June 3, 1994 reports on Form 8-K
(see Part II, Item 6) for TNPE and the Utility, all of which are incorporated
herein by reference.
On July 18, 1994, a settlement agreement was executed by most of the parties
involved in the Utility's current Texas rate case (Docket No. 12900) which was
filed on March 30, 1994. All parties subsequently signed a stipulation and
joint motion for approval of the settlement. The agreement is subject to
approval by the city councils of the intervening cities, the Utility's Board of
Directors and the PUCT. Assuming final approval by the parties, the agreement
will resolve all outstanding court appeals in connection with PUCT Docket Nos.
9491 and 10200. The agreement provides for the Utility to write off $35
million of the PUCT's total disallowances of $61.4 million regarding TNP
One (see note 4 to the consolidated financial statements).
With respect to the pending Texas retail rate application, the agreement will
allow for an increase of $17.5 million, or 4.5%, over adjusted test year
revenues to go into effect no later than October 2, 1994. In its application,
the Utility had requested an increase of $34.8 million, or 8.9%. The agreement
resolves all issues of Docket No. 12900.
<PAGE>
The agreement provides for a moratorium restricting the Utility from filing
applications for rate increases in Texas for a five-year period beginning March
31, 1994, subject to certain conditions. Those conditions would not allow the
Utility to file for any base rate increase prior to March 31, 1997 but would
allow an application for increased rates to be filed after that time upon the
occurrence of any force majeure event (as defined in the agreement) at any time
during the five-year period.
The Utility anticipates that the settlement agreement will not be contested by
any party; however, if, for any reason, the parties fail to approve the
settlement agreement, the appellate proceedings respectively related to Docket
Nos. 9491 and 10200 would continue. Under such circumstances, the reserve for
the regulatory disallowances could be subsequently adjusted. An increase in
the reserve could result in a significant negative impact on earnings in the
period of resolution.
Liquidity And Capital Resources
The Unit 2 Financing Facility
Under the terms of the Unit 2 financing facility, as amended, the total
commitment available is $147.75 million. The Utility is permitted to prepay
up to $141.5 million of the $147.75 million commitment and reborrow up to the
amount of the prepayments. The reborrowings under the Unit 2 financing
facility will be subject to compliance with the EBIT test (as described in
note 1 to the Consolidated Financial Statements) and maintenance of an equity
to total capital ratio of 20% or more as defined in the financing facility.
The provision for the write-off discussed above does not cause a violation
of either of these requirements. As of June 30, 1994, the unused commitment
available to be borrowed under the Unit 2 financing facility was approximately
$47 million. A commitment fee of 1/4 of 1% per annum is payable on the unused
portion of the reducing commitment.
As required by the terms of the Unit 2 financing facility, as amended, the
Utility received the required regulatory approvals from the Federal Energy
Regulatory Commission and the New Mexico Public Utility Commission for the
extension of the maturities of the remaining loans to be outstanding under the
Unit 2 financing facility. On June 15, 1994, the Utility paid a $369,000
extension fee on the $147.75 million commitment and completed the necessary
requirements under the Unit 2 financing facility to finalize the extension of
the maturities of the remaining loans. The extended maturities provide
for scheduled reductions of the commitment of approximately $36.9 million each
at December 31, 1995, 1996, 1997 and 1998. Based upon the June 30, 1994
outstanding balance, $1.6 million will be due on December 31, 1995,
$24.8 million will be due on December 31, 1996, and the remaining amounts will
be due in two equal installments of approximately $36.9 million on December 31,
1997 and 1998.
If the aforementioned settlement agreement is approved by all parties, the
Utility expects to be able to repay the remaining amounts due under the Unit 2
financing facility through internal cash generation, issuance of debt and the
receipt of proceeds from the issuance of common equity by TNPE.
Capital Requirements
The Utility's 1994 capital requirements consist of (1) additions to utility
plant and (2) bond sinking fund payments and maturities and preferred stock
redemptions. Capital requirements of $13 million for the six months ended June
30, 1994, were funded with approximately $5 million in cash flows from
operations and the remainder with reborrowings under the Unit 2 financing
facility. Due to the seasonal nature of the Utility's business, cash flows
from operations may fluctuate between quarters, but the Utility expects
positive cash flows from operations on an annual basis. The Utility expects
that the remaining capital requirements for 1994 will be funded internally with
cash flows from operations.
<PAGE>
During the period from January 1, 1994 to December 31, 1999, the Utility
currently estimates that its total debt and preferred stock repayments will be
$370.8 million. This amount includes the repayments in 1995, 1996, 1997 and
1998 in discharge of the $100.2 million outstanding under the Unit 2 financing
facility at June 30, 1994. In addition, the Utility expects its utility plant
additions to be approximately $180.9 million during the period from January 1,
1994 to December 31, 1999. The Utility expects the requirements for utility
plant additions will be funded internally with cash flows from operations.
The amounts and types of the foregoing requirements through 1999 are estimated
as follows:
<TABLE>
<CAPTION>
Capital Requirements (1)
1994 1995 1996 1997 1998 1999 Total
(Dollars in Millions)
<S> <C> <C> <C> <C> <C> <C> <C>
Preferred stock redemptions $ 0.9 0.9 0.8 0.6 0.6 0.2 4.0
Unit 2 financing facility (2) - 1.6 24.8 36.9 36.9 - 100.2
First Mortgage Bond sinking
fund payments and retirements 1.1 1.1 1.1 131.1 1.1 1.1 136.6
Secured Debentures,
due 1999 maturity. . . . . . - - - - - 130.0 130.0
Total debt and preferred
stock repayments. . . . . . 2.0 3.6 26.7 168.6 38.6 131.3 370.8
Utility plant additions . . . 25.9 28.3 32.7 30.4 31.5 32.1 180.9
Total capital requirements. . $27.9 31.9 59.4 199.0 70.1 163.4 551.7
</TABLE>
<F1>
(1) See note 1 to the Consolidated Financial Statements for details of
the maturities of all outstanding debt.
<F2>
(2) Based upon the balance outstanding at June 30, 1994.
Included in the First Mortgage Bond sinking fund payments and retirements amount
for 1997 is $130 million of First Mortgage Bonds, Series T, which mature January
15, 1997. The Utility anticipates that it will refinance these bonds and the
Secured Debentures due in 1999 through the issuance of additional First Mortgage
Bonds or other debt securities, and/or the receipt of proceeds from the issuance
of common equity by TNPE. The Utility does not need additional Available
Additions (described below under "Capital Resources") in order to issue First
Mortgage Bonds for the purpose of refunding outstanding First Mortgage Bonds.
Capital Resources
At any time, the Utility's ability to access the capital markets on a reasonable
basis or otherwise obtain needed financing for operating and capital require-
ments is subject to the receipt of adequate and timely regulatory relief and
market conditions. Within the past few years, the Utility's ability to access
the capital markets at reasonable costs has been impacted by uncertainties
concerning the ultimate resolution of (1) the amount of rate relief granted for
Unit 1 and Unit 2, (2) the contested PUCT disallowances of up to $40.3 million
and $21.1 million of the costs of Unit 1 and Unit 2, respectively, and (3) the
PUCT ruling concerning the treatment of the Federal income tax component of
the Utility's cost of service.
<PAGE>
The rate case settlement agreement (discussed under "Regulatory Matters"), if
approved, is expected to resolve the uncertainties regarding the amount of rate
relief and the disallowances. The Utility anticipates that the settlement
agreement will not be contested by any party; however, if, for any reason, the
parties fail to approve the settlement agreement, the appellate proceedings
respectively related to Docket Nos. 9491 and 10200 would continue. Under such
circumstances, the reserve for the regulatory disallowances could be
subsequently adjusted. An increase in the reserve could result in a significant
negative impact on earnings in the period of resolution.
In addition to the aforementioned Unit 2 financing facility, the Utility's
external sources for acquiring capital are outlined below:
First Mortgage Bonds. Assuming an interest rate of 10.50% and satisfactory
market conditions and, based upon June 30, 1994 financial information, the
Utility could have issued approximately $68 million of additional First
Mortgage Bonds under the Interest Coverage Ratio requirement. With certain
exceptions, the amount of additional First Mortgage Bonds that may be issued
is also limited by the Bond Indenture to a certain amount of physical
properties which are to be collateralized by the first lien mortgage of the Bond
Indenture ("Available Additions"). Because of the issuance of the Series U
First Mortgage Bonds in September 1993, the Utility has limited ability to issue
additional First Mortgage Bonds until more Available Additions are provided upon
further repayment of amounts under the financing facilities.
Secured Debentures. The indenture, under which the Series A Secured Debentures
were issued in September 1993, permits, generally, the issuance of additional
secured debentures to the extent that the proceeds from such issuance are used
to purchase an equal amount of loans under the Unit 1 and Unit 2 financing
facilities.
Preferred Stock. Due to interest and dividend coverage tests required for
issuance of its preferred stock, the Utility cannot presently issue any
preferred stock. The Utility does not expect to have the ability to issue
preferred stock through 1996.
Receipt of Common Equity. One source for repayment of the Unit 2 financing
facility is anticipated to be the receipt of proceeds from the issuance of
common equity by TNPE. Receipt of future equity contributions by the Utility
from TNPE will be largely dependent upon TNPE's ability to issue common stock.
Since most of the assets, liabilities and earnings capability of TNPE are those
of the Utility, the ability of TNPE to issue common stock and pay dividends will
be largely dependent upon the Utility's operations and the Utility's
restrictions regarding payment of cash dividends on its common stock.
The Utility may not pay dividends on its common stock unless all past and cur-
rent dividends on outstanding preferred stock of the Utility have been paid or
declared and set apart for payment and all requisite sinking or purchase fund
obligations for the preferred stock of the Utility have been fulfilled. Charter
provisions relating to the preferred stock and the Bond Indenture under which
First Mortgage Bonds are issued contain restrictions regarding the retained
earnings of the Utility. At June 30, 1994, pursuant to the terms of the Bond
Indenture, all of the Utility's $5.4 million of retained earnings was
restricted. In addition, the financing facilities place certain restrictions
on the Utility's ability to pay dividends on its common stock, unless certain
threshold tests are met.
The recognition of the disallowances eliminated the Utility's unrestricted
retained earnings, triggering bond indenture provisions which will require a
suspension of cash dividends on the Utility's common stock solely held by TNPE.
Assuming no abnormal circumstances occur during the next fifteen months, the
Utility anticipates that it will again have unrestricted retained earnings
before the end of that fifteen-month period.
Since there are unrestricted retained earnings at TNPE, the provision for the
write-off will not by itself preclude the continuing payment of cash dividends
on TNPE's common stock. The ability of TNPE to pay cash dividends on common
stock is subject to approval of its Board of Directors and is dependent upon
TNPE's unconsolidated available cash and cash equivalents (approximately $10.5
million at June 30, 1994), other cash resources and, in the longer term, the
Utility's ability to produce earnings sufficient to pay cash dividends to its
parent. The write-off will be among the factors that TNPE's Board of Directors
will consider when evaluating the settlement and appropriate dividend policy at
its next board meeting, currently scheduled for mid-August.
<PAGE>
New Mexico Rate Application
On May 16, 1994, the New Mexico Public Utility Commission approved the unanimous
settlement of the Utility's 1993 rate application. The approval will result in
an increase in annual base rate revenues in New Mexico of approximately $400,000
or 0.57%; however, when considered in conjunction with a decrease of
approximately $7.1 million in firm purchased power costs, the Utility's New
Mexico customers will receive a net decrease in their overall rates. The
Utility implemented the new rates in May 1994.
Other
Implementation in 1993 of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions," has
resulted in increased costs of employee benefits. The Utility's settlement of
its New Mexico rate application includes recovery of postretirement benefits for
its New Mexico operations. The Utility's rate application with the PUCT filed
on March 30, 1994, requested inclusion in rates of the postretirement benefits
for its Texas operations. The proposed agreement between the parties in the
Texas rate application does not address specific issues in the application; the
$17.5 million increase in annualized revenues is intended to resolve overall the
issues in the application.
RESULTS OF OPERATIONS
TNPE's consolidated loss applicable to common stock ("Loss") and loss per share
of common stock ("LPS") for the three months and the six months ended June 30,
1994 and 1993, were as follows:
<TABLE>
<CAPTION>
Three Months Ended June 30,
1994 1993
Loss* LPS Loss* LPS
<S> <C> <C> <C> <C>
Utility Operations. . . . . . . . . .$ (21,802) (2.03) (620) (.06)
Nonutility Operations . . . . . . . . (53) (.01) (14) (.00)
$ (21,855) (2.04) (634) (.06)
<CAPTION> Six Months Ended June 30,
1994 1993
Loss* LPS Loss* LPS
<S> <C> <C> <C> <C>
Utility Operations. . . . . . . . . $ (24,811) (2.32) (2,714) (.26)
Nonutility Operations . . . . . . . (139) (.01) (19) (.00)
$ (24,950) (2.33) (2,733) (.26)
* Amounts in thousands
<PAGE>
The following table sets forth, for the periods indicated, the percentage
relationship of items to operating revenues in TNPE's consolidated statements of
operations.
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1994 1993
<S> <C> <C>
Operating revenues 100.0% 100.0%
Operating expenses:
Power purchased for resale 42.1 42.6
Fuel 9.6 9.3
Other operating and general expenses 16.4 16.8
Maintenance 2.8 2.8
Depreciation of utility plant 8.4 8.5
Taxes, other than on income 6.7 6.9
Income taxes (1.0) (1.2)
Total operating expenses 85.0 85.7
Net operating income 15.0 14.3
Other income (loss), net of taxes (9.2) 0.3
Earnings before interest charges 5.8 14.6
Total interest charges 17.0 15.7
Net loss (11.2)% (1.1)%
</TABLE>
UTILITY OPERATIONS
Operating Revenues
The following table presents the components of the changes in operating
revenues:
<TABLE>
<CAPTION>
Increase (Decrease) From Prior Year
Three Months Ended Six Months Ended
June 30, 1994 June 30, 1994
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Base operating revenues . . . . . . $ 795 0.7% $ 259 0.2%
Recovery of purchased power costs . 16 0.1 2,303 1.1
Recovery of fuel costs. . . . . . . 730 0.7 865 0.4
Customer usage. . . . . . . . . . . 2,266 2.1 4,561 2.2
Other revenues. . . . . . . . . . . (291) (0.3) (23) (0.1)
Total. . . . . . . . . . . . . . $3,516 3.3% $7,965 3.8%
</TABLE>
The increases in base operating revenues for the three and six month periods
resulted from increased demand charges for certain nonresidential customers.
Purchased power costs are recovered through cost recovery factor clauses in both
Texas and New Mexico. Fuel costs are recovered through a fixed fuel factor
approved by the PUCT. Recovery of purchased power costs and fuel costs are
discussed under "Operating Expenses."
<PAGE>
The increases resulting from customer usage are due to increases in the number
of customers and average customer use in the residential, commercial and
industrial classes of customers. Most of the average use increase was that of
residential customers due to warmer temperatures in Texas compared to last year.
Selected information for the Utility's operations is presented in the following
table:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
Operating Revenues (thousands of dollars):
<S> <C> <C> <C> <C>
Residential $ 40,932 38,410 83,075 77,821
Commercial 33,829 33,096 64,792 62,736
Industrial 31,856 31,490 61,432 61,170
Other 4,429 4,534 9,346 8,953
Total $ 111,046 107,530 218,645 210,680
Sales (thousand kilowatt-hours):
Residential 443,071 412,444 908,840 846,679
Commercial 386,538 372,626 732,091 702,696
Industrial 698,975 686,158 1,313,125 1,278,736
Other 28,565 25,197 55,578 49,949
Total 1,557,149 1,496,425 3,009,634 2,878,060
Number of Customers (at period-end):
Residential 183,787 180,486
Commercial 30,475 30,282
Industrial 149 146
Other 237 228
Total 214,648 211,142
Operating Expenses
The increase in operating expenses for the second quarter of 1994 compared to
1993 was primarily the result of a $987,000 increase in fuel expense resulting
primarily from increased KWH sales to the Utility's Texas customers.
For the six months ended June 30, 1994 compared to 1993, increases in power
purchased for resale and fuel expense of $2,303,000 and $1,284,000,
respectively, were the main reasons for an increase in operating expenses.
Factors affecting the expense of power purchased for resale are (1) the number
of KWH purchased from suppliers, (2) the cost per KWH purchased, (3) the
recovery or refund of prior under- or over-collections, respectively, of
purchased power costs (deferred purchased power costs), and (4) occasional fuel
cost refunds from the Utility's suppliers.
The power purchased for resale increase for the six months-to-date occurred
primarily from increased KWH purchased and an increase in the average cost per
KWH. The fuel expense increase discussed for the second quarter is reflected in
the six months-to-date increase.
As indicated previously in the 1993 annual reports on Form 10-K, the Utility
resumed its employer thrift plan contributions in July 1994. Such contributions
are expected to be approximately $800,000 for the remainder of 1994.
<PAGE>
Other Income (Loss), Net of Taxes
The Utility's after-tax provision of $20.5 million regarding regulatory
disallowances associated with TNP One led to the significant loss for the
quarter and six months ended June 30, 1994. Further discussion of the
disallowances is provided under "Regulatory Matters" and in note 4 to the
consolidated financial statements.
Interest Charges
Total interest charges for the second quarter and the first half of 1994
increased $2,376,000 and $4,313,000, respectively, over the 1993 amounts.
Series U First Mortgage Bonds and Series A Secured Debentures issued in
September 1993, bear higher interest rates than the debt replaced by these
issues. The Utility believes that the September 1993 financings were favorably
timed compared to financings which would have been required in 1994 and 1995
under the prior repayment schedule for the construction financing facilities
for Unit 1 and 2 of TNP One.
Proceeds from future issuances of debt securities by the Utility and proceeds
from the issuance of equity by TNPE are anticipated to help satisfy the
scheduled repayments of the Unit 2 financing facility. Interest rates on future
issues of debt securities are expected to be greater than those interest rates
under the financing facility.
Net Loss
The Utility's significant loss for the second quarter and six months ended June
30, 1994 was mainly due to the provision for the regulatory disallowances
resulting from the PUCT rate case settlement discussed previously. Increased
interest charges also contributed to the net loss. Due to the provision for
the regulatory disallowances, a net loss for 1994 is expected.
Should the Utility's current PUCT rate application agreement be approved (as
discussed under "Regulatory Matters"), the resulting $17.5 million annualized
revenue increase is expected to lead to an improvement in the Utility's results
of operations, beginning in 1995.
NONUTILITY OPERATIONS
Due to TNPE's $15 million equity contribution to the Utility in November 1993,
TNPE's short-term investments and related income were less in 1994 than in 1993.
Nonutility operations are included in other income and deductions in TNPE's
consolidated statements of operations.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Item 6(b).
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of TNPE held on April 28, 1994,
the following matters were voted upon:
(1) Three persons were elected to the Board of Directors with the
voting as follows:
For Withheld
Cass O. Edwards, II 9,128,121 133,129
Harris L. Kempner, Jr. 9,098,969 162,281
R. D. Woofter 9,123,486 137,764
(2) The appointment of KPMG Peat Marwick as independent auditors for
1994 was ratified with the voting as follows:
For Against Abstention
9,105,923 51,694 103,633
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
See Exhibit Index, Pages 29-37.
(b) Reports on Form 8-K.
On June 3, 1994, the Utility and TNPE, each filed a Form 8-K which
reported the Third District of Texas Court of Appeals' denial
(on June 1, 1994) of the Utility's motions for rehearing on the
Court's decision rendered on August 25, 1993. The August 1993 ruling
related to the 53rd District Court of Texas' decision on appeals of
the PUCT final order in Docket No. 9491.
<PAGE>
Exhibits filed herewith are denoted by "*." The other exhibits have
heretofore been filed with the Commission and are incorporated herein by
reference.
Exhibit
No. Description
3(a) - Restated Articles of Incorporation of the Utility (Exhibit 4(a),
File No. 2-86282).
3(b) - Amendment to Restated Articles of Incorporation dated October 26,
1983 (Exhibit 3(b) to Form 10-K for the year ended December 31, 1984,
File No. 1-2660-2).
3(c) - Amendment to Restated Articles of Incorporation dated April 8, 1984
(Exhibit 3(c) to Form 10-K for the year ended December 31, 1984, File
No. 1-2660-2).
3(d) - Amendment to Restated Articles of Incorporation dated October 2,
1984 (Exhibit 3(d) to Form 10-K for the year ended December 31, 1984,
File No. 1-2660-2).
3(e) - Articles of Merger dated October 3, 1984 (Exhibit 3(e) to Form 10-K for the year
ended December 31, 1984, File No. 1-2660-2).
3(f) - Amendment to Restated Articles of Incorporation dated May 22, 1985
(Exhibit 3(a) to Form 10-K for the year ended December 31, 1985, File
No. 2-97230).
3(g) - Amendment to Restated Articles of Incorporation dated August 20, 1985
(Exhibit 3(b) to Form 10-K for the year ended December 31, 1985, File
No. 2-97230).
3(h) - Amendment to Restated Articles of Incorporation dated October 7, 1985
(Exhibit 3(c) to Form 10-K for the year ended December 31, 1985, File
No. 2-97230).
3(i) - Amendment to Restated Articles of Incorporation dated June 12, 1986
(Exhibit 3(a) to Form 10-K for the year ended December 31, 1986, File
No. 2-97230).
3(j) - Amendment to Restated Articles of Incorporation dated October 17, 1986
(Exhibit 3(b) to Form 10-K for the year ended December 31, 1986, File
No. 2-97230).
3(k) - Amendment to Restated Articles of Incorporation dated July 14, 1987
(Exhibit 3(k) to Form 10-K for the year ended December 31, 1987,
File No. 2-97230).
3(l) - Amendment to Restated Articles of Incorporation dated October 23, 1987
(Exhibit 3(l) to Form 10-K for the year ended December 31, 1987, File
No. 2-97230).
3(m) - Amendment to Restated Articles of Incorporation dated May 4, 1988
(Exhibit 3(m) to Form 10-K for the year ended December 31, 1988, File
No. 2-97230).
3(n) - Amendment to Restated Articles of Incorporation dated May 5, 1988
(Exhibit 3(n) to Form 10-K for the year ended December 31, 1988, File
No. 2-97230).
3(o) - Amendment to Restated Articles of Incorporation dated May 5, 1988
(Exhibit 3(o) to Form 10-K for the year ended December 31, 1988, File
No. 2-97230).
3(p) - Amendment to Restated Articles of Incorporation dated December 5, 1988
(Exhibit 3(p) to Form 10-K for the year ended December 31, 1988, File
No. 2-97230).
3(q) - Amendment to Restated Articles of Incorporation dated April 11, 1989
(Exhibit 3(q) to Form 10-K for the year ended December 31, 1989, File
No. 2-97230).
3(r) - Amendment to Restated Articles of Incorporation dated July 27, 1989
(Exhibit 3(r) to Form 10-K for the year ended December 31, 1989, File
No. 2-97230).
<PAGE>
Exhibit
No. Description
3(s) - Amendment to Restated Articles of Incorporation dated October 23, 1989
(Exhibit 3(s) to Form 10-K for the year ended December 31, 1989, File
No. 2-97230).
3(t) - Amendment to Restated Articles of Incorporation dated May 16, 1990
(Exhibit 3(t) to Form 10-K for the year ended December 31, 1990, File
No. 2-97230).
3(u) - Amendment to Restated Articles of Incorporation dated June 26, 1990
(Exhibit 3(u) to Form 10-K for the year ended December 31, 1990,
File No. 2-97230).
3(v) - Amendment to Restated Articles of Incorporation dated November 27,
1990 (Exhibit 3(v) to Form 10-K for the year ended December 31, 1990,
File No. 2-97230).
3(w) - Amendment to Restated Articles of Incorporation dated May 1, 1991
(Exhibit 3(w) to Form 10-K for the year ended December 31, 1991, File
No. 2-97230).
3(x) - Amendment to Restated Articles of Incorporation dated July 18, 1991
(Exhibit 3(x) to Form 10-K for the year ended December 31, 1991, File
No. 2-97230).
3(y) - Amendment to Restated Articles of Incorporation dated October 18, 1991
(Exhibit 3(y) to Form 10-K for the year ended December 31, 1991, File
No. 2-97230).
3(z) - Amendment to Restated Articles of Incorporation dated April 30, 1992
(Exhibit 3(z) to Form 10-K for the year ended December 31, 1992, File
No. 2-97230).
3(aa) - Amendment to Restated Articles of Incorporation dated June 19, 1992
(Exhibit 3(aa) to Form 10-K for the year ended December 31, 1992, File
No. 2-97230).
3(bb) - Amendment to Restated Articles of Incorporation dated November 3, 1992
(Exhibit 3(bb) to Form 10-K for the year ended December 31, 1992, File
No. 2-97230).
3(cc) - Amendment to Restated Articles of Incorporation dated April 7, 1993
(Exhibit 3(cc) to Form 10-K for the year ended December 31, 1993, File
No. 2-97230).
3(dd) - Amendment to Restated Articles of Incorporation dated July 22, 1993
(Exhibit 3(dd) to Form 10-K for the year ended December 31, 1993, File
No. 2-97230).
3(ee) - Amendment to Restated Articles of Incorporation dated October 21, 1993
(Exhibit 3(ee) to Form 10-K for the year ended December 31, 1993, File
No. 2-97230).
*3(ff) - Amendment to Restated Articles of Incorporation dated April 13, 1994.
*3(gg) - Amendment to Restated Articles of Incorporation dated June 27, 1994.
3(hh) - Bylaws of the Utility, as amended February 18, 1992 (Exhibit 3(cc)
to Form 10-K for the year ended December 31, 1992, File No. 2-97230).
4(a) - Indenture of Mortgage and Deed of Trust dated as of November 1, 1944
(Exhibit 2(d), File No. 2-61323).
4(b) - Seventh Supplemental Indenture dated as of May 1, 1963 (Exhibit 2(k),
File No. 2-61323).
4(c) - Eighth Supplemental Indenture dated as of July 1, 1963 (Exhibit 2(1),
File No. 2-61323).
4(d) - Ninth Supplemental Indenture dated as of August 1, 1965 (Exhibit 2(m),
File No. 2-61323).
4(e) - Tenth Supplemental Indenture dated as of May 1, 1966 (Exhibit 2(n),
File No. 2-61323).
<PAGE>
Exhibit
No. Description
4(f) - Eleventh Supplemental Indenture dated as of October 1, 1969 (Exhibit
2(o), File No. 2-61323).
4(g) - Twelfth Supplemental Indenture dated as of May 1, 1971 (Exhibit 2(p),
File No. 2-61323).
4(h) - Thirteenth Supplemental Indenture dated as of July 1, 1974 (Exhibit
2(q), File No. 2-61323).
4(i) - Fourteenth Supplemental Indenture dated as of March 1, 1975 (Exhibit
2(r), File No. 2-61323).
4(j) - Fifteenth Supplemental Indenture dated as of September 1, 1976
(Exhibit 2(e), File No. 2-57034).
4(k) - Sixteenth Supplemental Indenture dated as of November 1, 1981 (Exhibit
4(x), File No. 2-74332).
4(l) - Seventeenth Supplemental Indenture dated as of December 1, 1982
(Exhibit 4(cc), File No. 2-80407).
4(m) - Eighteenth Supplemental Indenture dated as of September 1, 1983
(Exhibit (a) to Form 10-Q for the quarter ended September 30, 1983,
File No. 1-4756).
4(n) - Nineteenth Supplemental Indenture dated as of May 1, 1985 (Exhibit
4(v), File No. 2-97230).
4(o) - Twentieth Supplemental Indenture dated as of July 1, 1987 (Exhibit
4(o) to Form 10-K for the year ended December 31, 1987, File No.
2-97230).
4(p) - Twenty-First Supplemental Indenture dated as of July 1, 1989 (Exhibit
4(p) to Form 10-Q for the quarter ended June 30, 1989, File No.
2-97230).
4(q) - Twenty-Second Supplemental Indenture dated as of January 15, 1992
(Exhibit 4(q) to Form 10-K for the year ended December 31, 1991, File
No. 2-97230).
4(r) - Twenty-Third Supplemental Indenture dated as of September 15, 1993.
(Exhibit 4(r) to Form 10-K for the year ended December 31, 1993, File
No. 2-97230).
4(s) - Indenture and Security Agreement for Secured Debentures dated as of
January 15, 1992 (Exhibit 4(r) to Form 10-K for the year ended
December 31, 1991, File No. 2-97230).
4(t) - Indenture and Security Agreement for Secured Debentures dated as of
September 15, 1993 (Exhibit 4(t) to Form 10-K for the year ended
December 31, 1993, File No. 2-97230).
Material Contracts Relating to TNP One
10(a) - Fuel Supply Agreement, dated November 18, 1987, between Phillips Coal
Company and the Utility (Exhibit 10(j) to Form 10-K for the year ended
December 31, 1987, File No. 2-97230).
10(b) - Unit 1 First Amended and Restated Project Loan and Credit Agreement,
dated as of January 8, 1992 (the "Unit 1 Credit Agreement"), among the
Utility, Texas Generating Company ("TGC"), the banks named therein as
Banks (the "Unit 1 Banks") and The Chase Manhattan Bank (National
Association), as Agent for the Unit 1 Banks (the "Unit 1 Agent"),
amending and restating the Project Loan and Credit Agreement among
such parties dated as of December 1, 1987 (Exhibit 10(c) to Form 10-K
for the year ended December 31, 1991, File No. 2-97230).
10(b)1 - Participation Agreement, dated as of January 8, 1992, among the banks
named therein as Banks, the parties named therein as Participants and
the Unit 1 Agent (Exhibit 10(c)1 to Form 10-K for the year ended
December 31, 1991, File No. 2-97230).
<PAGE>
Exhibit
No. Description
10(b)2 - Amendment No. 1, dated as of September 21, 1993, to the Unit 1 Credit
Agreement (Exhibit 10(b)(2) to Form 10-K for the year ended December
31, 1993, File No. 2-97230).
10(c) - Assignment and Security Agreement, dated as of January 8, 1992, among
TGC and the Unit 1 Agent, for the benefit of the Secured Parties, as
defined in the Unit 1 Credit Agreement, amending and restating the
Assignment and Security Agreement among such parties dated as of
December 1, 1987 (Exhibit 10(d) to Form 10-K for the year ended
December 31, 1991, File No. 2-97230).
10(d) - Assignment and Security Agreement, dated December 1, 1987, executed by
the Utility in favor of the Unit 1 Agent for the benefit of the
Secured Parties, as defined therein (Exhibit 10(u) to Form 10-K for
the year ended December 31, 1987, File No. 2-97230).
10(e) - Amended and Restated Subordination Agreement, dated as of October 1,
1988, among the Utility, Continental Illinois National Bank and Trust
Company of Chicago and the Unit 1 Agent, amending and restating the
Subordination Agreement among such parties dated as of December 1,
1987 (Exhibit 10(uu) to Form 10-K for the year ended December 31,
1988, File No. 2-97230).
10(f) - Mortgage and Deed of Trust (With Security Agreement and UCC Financing
Statement for Fixture Filing), dated to be effective as of December 1,
1987, and executed by Project Funding Corporation ("PFC"), as
Mortgagor, to Donald H. Snell, as Mortgage Trustee, for the benefit
of the Secured Parties, as defined therein (Exhibit 10(ee) to Form
10-K for the year ended December 31, 1987, File No. 2-97230).
10(f)1 - Supplemental Mortgage and Deed of Trust (With Security Agreement and
UCC Financing Statement for Fixture Filing),executed by TGC, as
Mortgagor, on January 27, 1992, to be effective as of December 1,
1987, to Donald H. Snell, as Mortgage Trustee, for the benefit of the
Secured Parties, as defined therein (Exhibit 10(g)4 to Form 10-K for
the year ended December 31, 1991, File No. 2-97230).
10(f)2 - First TGC Modification and Extension Agreement, dated as of January
24, 1992, among the Unit 1 Banks, the Unit 1 Agent, the Utility and
TGC (Exhibit 10(g)1 to Form 10-K for the year ended December 31, 1991,
File No. 2-97230).
10(f)3 - Second TGC Modification and Extension Agreement, dated as of January
27, 1992, among the Unit 1 Banks, the Unit 1 Agent, the Utility and
TGC (Exhibit 10(g)2 to Form 10-K for the year ended December 31, 1991,
File No. 2-97230).
10(f)4 - Third TGC Modification and Extension Agreement, dated as of January
27, 1992, among the Unit 1 Banks, the Unit 1 Agent, the Utility and
TGC (Exhibit 10(g)3 to Form 10-K for the year ended December 31, 1991,
File No. 2-97230).
10(f)5 - Fourth TGC Modification and Extension Agreement, dated as of September
29, 1993, among the Unit 1 Banks, the Unit 1 Agent, the Utility and
TGC (Exhibit 10(f)5 to Form 10-K for the year ended December 31, 1993,
File No. 2-97230).
10(f)6 - Fifth TGC Modification and Extension Agreement, dated as of September
29, 1993, among the Unit 1 Banks, the Unit 1 Agent, the Utility and
TGC (Exhibit 10(f)6 to Form 10-K for the year ended December 31, 1993,
File No. 2-97230).
10(g) - Indemnity Agreement, made as of the 1st day of December, 1987, by
Westinghouse, CE and Zachry, as Indemnitors, for the benefit of the
Secured Parties, as defined therein (Exhibit 10(ff) to Form 10-K for
the year ended December 31, 1987, File No. 2-97230).
10(h) - Second Lien Mortgage and Deed of Trust (With Security Agreement)
executed by the Utility, as Mortgagor, to Donald H. Snell, as Mortgage
Trustee, for the benefit of the Secured Parties, as defined therein
(Exhibit 10(jj) to Form 10-K for the year ended December 31, 1987,
File No. 2-97230).
<PAGE>
Exhibit
No. Description
10(h)1 - Correction Second Lien Mortgage and Deed of Trust (with Security
Agreement), dated as of December 1, 1987, executed by the Utility, as
Mortgagor, to Donald H. Snell, as Mortgage Trustee, for the benefit
of the Secured Parties, as defined therein (Exhibit 10(vv) to Form
10-K for the year ended December 31, 1988, File No. 2-97230).
10(h)2 - Second Lien Mortgage and Deed of Trust (with Security Agreement)
Modification, Extension and Amendment Agreement, dated as of January
8, 1992, executed by the Utility to Donald H. Snell, as Mortgage
Trustee, for the benefit of the Secured Parties, as defined therein
(Exhibit 10(i)2 to Form 10-K for the year ended December 31, 1991,
File No. 2-97230).
10(h)3 - TNP Second Lien Mortgage Modification No. 2, dated as of September 21,
1993, executed by the Utility to Donald H. Snell, as Mortgage Trustee,
for the benefit of the Secured Parties, as defined therein (Exhibit
10(h)3 to Form 10-K for the year ended December 31, 1993, File No.
2-97230).
10(i) - Agreement for Conveyance and Partial Release of Liens, made as of the
1st day of December, 1987, by PFC and the Unit 1 Agent for the benefit
of the Utility (Exhibit 10(kk) to Form 10-K for the year ended
December 31, 1987, File No. 2-97230).
10(j) - Inducement and Consent Agreement, dated as of June 15, 1988, between
Phillips Coal Company, Kiewit Texas Mining Company, the Utility,
Phillips Petroleum Company and Peter Kiewit Son's, Inc. (Exhibit
10(nn) to Form 10-K for the year ended December 31, 1988, File No.
2-97230).
10(k) - Assumption Agreement, dated as of October 1, 1988, executed by TGC,
in favor of the Issuing Bank, as defined therein, the Unit 1 Banks,
the Unit 1 Agent and the Depositary, as defined therein (Exhibit
10(ww) to Form 10-K for the year ended December 31, 1988, File No.
2-97230).
10(l) - Guaranty, dated as of October 1, 1988, executed by the Utility and
given in respect of the TGC obligations under the Unit 1 Credit
Agreement (Exhibit 10(xx) to Form 10-K for the year ended December 31,
1988, File No. 2-97230).
10(m) - First Amended and Restated Facility Purchase Agreement, dated as of
January 8, 1992, among the Utility, as the Purchaser, and TGC, as the
Seller, amending and restating the Facility Purchase Agreement among
such parties dated as of October 1, 1988 (Exhibit 10(n) to Form 10-K
for the year ended December 31, 1991, File No. 2-97230).
10(n) - Operating Agreement, dated as of October 1, 1988, among the Utility
and TGC (Exhibit 10(zz) to Form 10-K for the year ended December 31,
1988, File No. 2-97230).
10(o) - Unit 2 First Amended and Restated Project Loan and Credit Agreement,
dated as of January 8, 1992 (the "Unit 2 Credit Agreement"), among
the Utility, Texas Generating Company II ("TGCII"), the banks named
therein as Banks (the "Unit 2 Banks") and The Chase Manhattan Bank
(National Association), as Agent for the Unit 2 Banks (the "Unit 2
Agent"), amending and restating the Project Loan and Credit Agreement
among such parties dated as of October 1, 1988 (Exhibit 10(q) to Form
10-K for the year ended December 31, 1991, File No. 2-97230).
10(o)1 - Amendment No. 1, dated as of September 21, 1993, to the Unit 2 Credit
Agreement (Exhibit 10(o)1 to Form 10-K for the year ended December 31,
1993, File No. 2-97230).
10(p) - Assignment and Security Agreement, dated as of January 8, 1992, among
TGCII and the Unit 2 Agent, for the benefit of the Secured Parties, as
defined in the Unit 2 Credit Agreement, amending and restating the
Assignment and Security Agreement among such parties dated as of
October 1, 1988 (Exhibit 10(r) to Form 10-K for the year ended
December 31, 1991, File No. 2-97230).
10(q) - Assignment and Security Agreement, dated as of October 1, 1988,
executed by the Utility in favor of the Unit 2 Agent for the benefit
of the Secured Parties, as defined therein (Exhibit 10(jjj) to Form
10-K for the year ended December 31, 1988, File No. 2-97230).
<PAGE>
Exhibit
No. Description
10(r) - Subordination Agreement, dated as of October 1, 1988, among the
Utility, Continental Illinois National Bank and Trust Company of
Chicago and the Unit 2 Agent (Exhibit 10(mmm) to Form 10-K for the
year ended December 31, 1988, File No. 2-97230).
10(s) - Mortgage and Deed of Trust (With Security Agreement and UCC Financing
Statement for Fixture Filing), dated to be effective as of October 1,
1988, and executed by Texas PFC, Inc., as Mortgagor, to Donald H.
Snell, as Mortgage Trustee, for the benefit of the Secured Parties,
as defined therein (Exhibit 10(uuu) to Form 10-K for the year ended
December 31, 1988, File No. 2-97230).
10(s)1 - First TGCII Modification and Extension Agreement, dated as of January
24, 1992, among the Unit 2 Banks, the Unit 2 Agent, the Utility and
TGCII (Exhibit 10(u)1 to Form 10-K for the year ended December 31,
1991, File No. 2-97230).
10(s)2 - Second TGCII Modification and Extension Agreement, dated as of January
27, 1992, among the Unit 2 Banks, the Unit 2 Agent, the Utility and
TGCII (Exhibit 10(u)2 to Form 10-K for the year ended December 31,
1991, File No. 2-97230).
10(s)3 - Third TGCII Modification and Extension Agreement, dated as of January
27, 1992, among the Unit 2 Banks, the Unit 2 Agent, the Utility and
TGCII (Exhibit 10(u)3 to Form 10-K for the year ended December 31,
1991, File No. 2-97230).
10(s)4 - Fourth TGCII Modification and Extension Agreement, dated as of
September 29, 1993, among the Unit 2 Banks, the Unit 2 Agent, the
Utility and TGCII (Exhibit 10(s)4 to Form 10-K for the year ended
December 31, 1993, File No. 2-97230).
*10(s)5 - Fifth TGCII Modification and Extension Agreement, dated as of June 15,
1994, among the Unit 2 Banks, the Unit 2 Agent, the Utility and TGCII.
10(t) - Release and Waiver of Liens and Indemnity Agreement, made effective
as of the 1st day of October, 1988, by a consortium composed of
Westinghouse, CE, and Zachry (Exhibit 10(vvv) to Form 10-K for the
year ended December 31, 1988, File No. 2-97230).
10(u) - Second Lien Mortgage and Deed of Trust (With Security Agreement),
dated as of October 1, 1988, and executed by the Utility, as
Mortgagor, to Donald H. Snell, as Mortgage Trustee, for the
benefit of the Secured Parties, as defined therein (Exhibit 10(www)
to Form 10-K for the year ended December 31, 1988, File No. 2-97230).
10(u)1 - Second Lien Mortgage and Deed of Trust (with Security Agreement)
Modification, Extension and Amendment Ag 8, 1992, executed by the
Utility to Donald H. Snell, as Mortgage Trustee, for the benefit of
the Secured Parties, as defined therein (Exhibit 10(w)1 to Form 10-K
for the year ended December 31, 1991, File No. 2-97230).
10(u)2 - TNP Second Lien Mortgage Modification No. 2, dated as of September 21,
1993, executed by the Utility to Donald H. Snell, as Mortgage Trustee,
for the benefit of the Secured Parties, as defined therein (Exhibit
10(u)2 to Form 10-K for the year ended December 31, 1993, File No.
2-97230).
10(v) - Intercreditor and Nondisturbance Agreement, dated as of October 1,
1988, among PFC, Texas PFC, Inc., the Utility, the Project Creditors,
as defined therein, and the Collateral Agent, as defined therein
(Exhibit 10(xxx) to Form 10-K for the year ended December 31, 1988,
File No. 2-97230).
10(v)1 - Amendment #1, dated as of January 8, 1992, to the Intercreditor and
Nondisturbance Agreement, dated as of TGCII, the Utility, the Unit 1
Banks, the Unit 2 Banks and The Chase Manhattan Bank (National
Association) in its capacity as collateral Unit 1 Banks and the Unit
2 Banks (Exhibit 10(x)1 to Form 10-K for the year December 31, 1991,
File No. 2-97230).
<PAGE>
Exhibit
No. Description
10(v)2 - Amendment No. 2, dated as of September 21, 1993, to the Intercreditor
and Nondisturbance Agreement, among TGC, TGCII, the Utility, the Unit
1 Banks, the Unit 2 Banks and The Chase Manhattan Bank (National
Association) in its capacity as collateral agent for the Unit 1 Banks
and the Unit 2 Banks (Exhibit 10(v)2 to Form 10-K for the year ended
December 31, 1993, File No. 2-97230).
10(w) - Grant of Reciprocal Easements and Declaration of Covenants Running
with the Land, dated as of the 1st day of October, 1988 between PFC
and Texas PFC, Inc. (Exhibit 10(yyy) to Form 10-K for the year ended
December 31, 1988, File No. 2-97230).
10(x) - Non-Partition Agreement, dated as of May 30, 1990, among the Utility,
TGC and The Chase Manhattan Bank (National Association), as Agent for
the Banks which are parties to the Unit 1 Credit Agreement (Exhibit
10(ss) to Form 10-K for the year ended December 31, 1990, File No.
2-97230).
10(y) - Assumption Agreement, dated July 26, 1991, to be effective as of May
31, 1991, by TGCII in favor of the Issuing Bank, the Unit 2 Banks, the
Unit 2 Agent and the Depositary, as defined therein (Exhibit 10(kkk)
to Amendment No. 1 to File No. 33-41903).
10(z) - Guaranty, dated July 26, 1991, to be effective as of May 31, 1991, by
the Utility and given in respect of the TGCII obligations under the
Unit 2 Credit Agreement (Exhibit 10(lll) to Amendment No. 1 to File
No. 33-41903).
10(aa) - First Amended and Restated Facility Purchase Agreement, dated as of
January 8, 1992, among the Utility, as the Purchaser, and TGCII, as
the Seller, amending and restating the Facility Purchase Agreement
among such parties dated July 26, 1991, to be effective as of May 31,
1991 (Exhibit 10(dd) to Form 10-K for the year ended December 31,
1991, File No. 2-97230).
10(aa)1 - Amendment No. 1 to the Unit 2 First Amended and Restated Facility
Purchase Agreement, dated as of September 21, 1993, among the Utility,
as the Purchaser, and TGCII, as the Seller (Exhibit 10(aa)1 to Form
10-K for the year ended December 31, 1993, File No. 2-97230).
10(bb) - Operating Agreement, dated July 26, 1991, to be effective as of 31,
1991, between the Utility and TGCII (Exhibit 10(nnn) to Amendment
No. 1 to File No. 33-41903).
10(cc) - Non-Partition Agreement, executed July 26, 1991, to be effective as
of May 31, 1991, among the Utility, TGCII and The Chase Manhattan Bank
(National Association) (Exhibit 10(ppp) to Amendment No. 1 to File No.
33-41903).
Power Supply Contracts
10(dd) - Contract dated May 12, 1976 between the Utility and Houston Lighting &
Power Company (Exhibit 5(a), File No. 2-69353).
10(dd)1- Amendment, dated January 4, 1989, to the Contract dated May 12, 1976
between the Utility and Houston Lighting & Power Company (Exhibit
10(cccc) to Form 10-K for the year ended December 31, 1988, File
No. 2-97230).
10(ee) - Contract dated May 1, 1986 between the Utility and Texas Electric
Utilities Company, amended September 29, 1986, October 24, 1986 and
February 21, 1987 (Exhibit 10(c) of Form 8 applicable to Form 10-K
for the yearended December 31, 1986, File No. 2-97230).
10(ff) - Amended and Restated Agreement for Electric Service dated May 14, 1990
between the Utility and Texas Utilities Electric Company (Exhibit
10(vv) to Form 10-K for the year ended December 31, 1990, File
No. 2-97230).
<PAGE>
Exhibit
No. Description
10(ff)1- Amendment, dated April 19, 1993, to Amended and Restated Agreement for
Electric Service, dated May 14, 1990, As Amended between the Utility
and Texas Utilities Electric Company (Exhibit 10(ii)1 to Form S-2
Registration Statement, filed on July 19, 1993, File No. 33-66232).
10(gg) - Contract dated June 11, 1984 between the Utility and Southwestern
Public Service Company (Exhibit 10(d) of Form 8 applicable to Form
10-K for the year ended December 31, 1986, File No. 2-97230).
10(hh) - Contract dated April 27, 1977 between the Utility and West Texas
Utilities Company amended April 14, 1982, April 19, 1983, May 18,
1984 and October 21, 1985 (Exhibit 10(e) of Form 8 applicable to
Form 10-K for the year ended December 31, 1986, File No. 2-97230).
10(ii) - Contract dated April 29, 1987 between the Utility and El Paso Electric
Company (Exhibit 10(f) of Form 8 applicable to Form 10-K for the year
ended December 31, 1986, File No. 2-97230).
10(jj) - Contract dated February 28, 1974, amended May 13, 1974, November 26,
1975, August 26, 1976 and October 7, 1980 between the Utility and
Public Service Company of New Mexico (Exhibit 10(g) of Form 8
applicable to Form 10-K for the year ended December 31, 1986, File
No. 2-97230).
10(jj)1- Amendment, dated February 22, 1982, to the Contract dated February 28,
1974, amended May 13, 1974, November 26, 1975, August 26, 1976, and
October 7, 1980 between the Utility and Public Service Company of
New Mexico (Exhibit 10(iiii) to Form 10-K for the year ended December
31, 1988, File No. 2-97230).
10(jj)2- Amendment, dated February 8, 1988, to the Contract dated February 28,
1974, amended May 13, 1974, November 26, 1975, August 26, 1976, and
October 7, 1980 between the Utility and Public Service Company of New
Mexico (Exhibit 10(jjjj) to Form 10-K for the year ended December 31,
1988, File No. 2-97230).
10(jj)3- Amended and Restated Contract for Electric Service, dated April 29,
1988, between the Utility and Public Service Company of New Mexico
(Exhibit 10(zz)3 to Amendment No. 1 to File No. 33-41903).
10(kk) - Contract dated December 8, 1981 between the Utility and Southwestern
Public Service Company amended December 12, 1984, December 2, 1985 and
December 19, 1986 (Exhibit 10(h) of Form for the year ended December
31, 1986, File No. 2-97230).
10(kk)1- Amendment, dated December 12, 1988, to the Contract dated December 8,
1981 between the Utility and Southwestern Public Service Company
amended December 12, 1984, December 2, 1985 a 10(llll) to Form 10-K
for the year ended December 31, 1988, File No 2-97230).
10(kk)2 - Amendment, dated December 12, 1990, to the Contract dated December 8,
1981 between the Utility and Southwestern Public Service Company
(Exhibit 19(t) to Form 10-K for the year ended December 31, 1990,
File No. 2-97230).
10(ll) - Contract dated August 31, 1983, between the Utility and Capitol
Cogeneration Company, Ltd. (including letter agreement dated August
14, 1986) (Exhibit 10(i) of Form 8 applicable to Form 10-K for the
year ended December 31,1986, File No. 2-97230).
10(ll)1- Agreement Substituting a Party, dated May 3, 1988, among Capitol
Cogeneration Company, Ltd., Clear Lake Cogeneration Limited Partner-
ship and the Utility (Exhibit 10(nnnn) to Form 10-K for the year ended
December 31, 1988, File No. 2-97230).
<PAGE>
Exhibit
No. Description
10(ll)2 - Letter Agreements, dated May 30, 1990 and August 28, 1991, between
Clear Lake Cogeneration Limited Partnership and the Utility (Exhibit
10(oo)2 to Form 10-K for the year ended December 31, 1992, File No.
2-97230).
10(ll)3 - Notice of Extension Letter, dated August 31, 1992, between Clear Lake
Cogeneration Limited Partnership and the Utility (Exhibit 10(oo)3 to
Form 10-K for the year ended December 31, 1992, File No. 2-97230).
10(ll)4 - Scheduling Agreement, dated September 15, 1992, between Clear Lake
Cogeneration Limited Partnership and the Utility (Exhibit 10(oo)4 to
Form 10-K for the year ended December 31, 1992, File No. 2-97230).
10(mm) - Interconnection Agreement between the Utility and Plains Electric
Generation and Transmission Cooperative, Inc. dated July 19, 1984
(Exhibit 10(j) of Form 8 applicable to Form 10-K for the year ended
December 31, 1986, File No. 2-97230).
10(nn) - Interchange Agreement between the Utility and El Paso Electric
Company dated April 29, 1987 (Exhibit 10(l) of Form 8 applicable to
Form 10-K for the year ended December 31, 1986, File No. 2-97230).
10(oo) - DC Terminal Participation Agreement between the Utility and El Paso
Electric Company dated December 8, 1981 amended April 29, 1987
(Exhibit 10(m) of Form 8 applicable to Form 10-K for the year ended
December 31, 1986, File No. 2-97230).
Employment Contracts
10(pp) - Texas-New Mexico Power Company Executive Agreement for Severance
Compensation Upon Change in Control, executed November 11, 1993,
between Sector Vice President and Chief Financial Officer and the
Utility (Pursuant to Instruction 2 of Reg. 229.601(a), accompanying
this document is a schedule: (i) identifying documents
substantially identical to the document which have been omitted from
the Exhibits; and (ii) setting forth the material details in which
such omitted documents differ from the document). (Exhibit 10(pp)
to Form 10-K for the year ended December 31, 1993, File No. 2-97230).
10(qq) - Texas-New Mexico Power Company Key Employee Agreement for Severance
Compensation Upon Change in Control, executed November 11, 1993,
between Assistant Treasurer and the Utility (Pursuant to Instruction
2 of Reg. 229.601(a), accompanying this document is a schedule:
(i) identifying documents substantially identical to the document
which have been omitted from the Exhibits; and (ii) setting forth
the material details in which such omitted documents differ from the
document). (Exhibit 10(qq) to Form 10-K for the year ended December
31, 1993, File No. 2-97230).
10(rr) - Agreement between James M. Tarpley and TNPE and the Utility, effective
January 1, 1994 (Exhibit 10(rr) to Form 10-K for the year ended
December 31, 1993, File No. 2-97230).
10(ss) - Agreement between Dwight R. Spurlock and TNPE and the Utility,
effective November 9, 1993 (Exhibit 10(ss) to Form 10-K for the year
ended December 31, 1993, File No. 2-97230).
10(tt) - Agreement between Kevern Joyce and TNPE and the Utility, executed
March 25, 1994 (Exhibit 10(tt) to Form 10-Q for the quarter ended
March 31, 1994, File No. 2-97230).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TNP
ENTERPRISES, INC.
Date August 8, 1994 By /s/D. R. Barnard
D. R. Barnard
Vice President and
Chief Financial Officer
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEXAS-NEW
MEXICO POWER COMPANY
Date August 8, 1994 By /s/D. R. Barnard
D. R. Barnard
Senior Vice President and
Chief Financial Officer
</TABLE>
