UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(X) ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the fiscal year ended December 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from ____________ to ____________.
Commission file number 2-93265
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Texas-New Mexico Power Company Thrift Plan for Employees
4100 International Plaza
P.O. Box 2943
Fort Worth, Texas 76113
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office.
TNP Enterprises, Inc.
4100 International Plaza
P.O. Box 2943
Fort Worth, Texas 76113
REQUIRED INFORMATION
The following financial statements prepared in accordance with the financial
reporting requirements of ERISA and exhibits are filed for the Texas-New Mexico
Power Company Thrift Plan for Employees:
Financial Statements and Schedules
Report of Independent Public Accountants - Arthur Andersen LLP
Statements of Net Assets Available for Benefits, December 31, 1997, and 1996
Statements of Changes in Net Assets Available for Benefits, Years Ended
December 31, 1997, and 1996
Notes to Financial Statements
Item 27(a) - Schedule of Assets Held for Investment Purposes,
December 31, 1997
<PAGE>
Item 27(d) - Schedule of Reportable Transactions, Year Ended
December 31, 1997
Exhibit
Consent of Independent Public Accountants - Arthur Andersen LLP
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the administrator and/or Thrift Plan Committee has duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
TEXAS-NEW MEXICO POWER COMPANY
THRIFT PLAN FOR EMPLOYEES
Date: June 26, 1998
By Dennis R. Cash
\s\Dennis R. Cash DENNIS R. CASH, as Vice President of
Texas-New Mexico Power Company and as a member of the Thrift
Plan Committee
<PAGE>
TEXAS-NEW MEXICO POWER COMPANY
THRIFT PLAN FOR EMPLOYEES
Financial Statements
As Of December 31, 1997 And 1996,
And Supplemental Schedules,
As Of December 31, 1997
Together With Report of Independent
Public Accountants
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustee and Thrift Plan Committee
Texas-New Mexico Power Company Thrift
Plan for Employees:
We have audited the accompanying statements of net assets available for benefits
of Texas-New Mexico Power Company Thrift Plan for Employees (the "Plan") as of
December 31, 1997 and 1996, and the related statement of changes in net assets
available for benefits for the years then ended. These financial statements, and
the supplemental schedules referred to below, are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance that the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997 and 1996, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions are presented for purposes
of additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the statement of
net assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for plan benefits and changes in net
assets available for plan benefits of each fund. The supplemental schedules and
fund information have been subjected to the auditing procedures applied in the
audit of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
ARTHUR ANDERSEN LLP
Dallas, Texas,
June 10, 1998
<PAGE>
<TABLE>
<CAPTION>
Texas-New Mexico Power Company
Thrift Plan For Employees
Statement of Net Assets Available for Benefits
As of December 31,
1997 1996
-------------- ------------
INVESTMENTS, at fair value:
<S> <C> <C>
TNP Enterprises, Inc. Common Stock Fund $ 41,565,228 $ 38,451,789
Vanguard Index Trust Fund 11,201,926 8,647,430
Nations Prime Fund 8,740,600 7,698,287
Vanguard Wellesley Income Fund 5,452,034 4,989,628
Participants' Notes Receivable 3,466,055 3,784,281
AIM Constellation Fund 2,835,867 1,929,197
Templeton Foreign Fund 1,183,468 701,737
Nations Short-Intermediate Government Fund 716,685 309,914
---------- ----------
Total investments 75,161,863 66,512,263
EMPLOYER'S CONTRIBUTION RECEIVABLE 999,471 975,897
PARTICIPANTS' CONTRIBUTION RECEIVABLE 97,227 108,369
CASH -- 112,590
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 76,258,561 $ 67,709,119
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE>
<TABLE>
<CAPTION>
Texas-New Mexico Power Company
Thrift Plan For Employees
Statement of Changes in Net Assets Available for Benefits With Fund Information
As of December 31, 1997
TNP
Enterprises, Vanguard Vanguard Participants AIM
Inc. Stock Index Trust Nations Wellesley Notes Constellation
Fund Fund Prime Fund Income Fund Receivable Fund
------------ ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to-
Investment income-
Net appreciation (depreciation)
in fair value of investments $ 9,350,807 $ 2,141,351 $ -- $ 254,460 $ -- $ (14,467)
Interest 147,295 58,699 360,738 38,261 -- 48,101
Dividends -- 100,228 -- 279,531 -- --
Gain (loss) on sale (714,760) 343,335 -- 39,940 -- 54,500
Other income 495 5,149 -- 165,469 -- 200,770
Contributions
Participants 1,112,540 522,943 148,110 322,225 -- 375,888
Employer's 1,859,995 -- -- -- -- --
Rollovers 55,473 54,849 2,555 35,951 -- 22,554
----------- ----------- ----------- ----------- ----------- -----------
Total Additions 11,811,845 3,226,554 511,403 1,135,837 -- 687,346
Deductions from net assets attributed to-
Benefits paid to participants 3,266,630 1,205,625 1,729,642 436,457 223,296 216,439
Administrative expenses 9,847 2,277 2,048 1,598 -- 812
----------- ----------- ----------- ----------- ----------- -----------
Total Deductions 3,276,477 1,207,902 1,731,690 438,055 223,296 217,251
Net increase (decrease) prior to
interfund transfers 8,535,368 2,018,652 (1,220,287) 697,782 (223,296) 470,095
Interfund transfers (4,089,186) 735,698 2,286,835 (150,057) -- 379,384
Transfers out of the plan (1,114,732) (222,093) (45,804) (172,110) -- (72,256)
Loan activity - net (218,011) 22,239 21,569 86,791 (94,930) 129,447
Increase/(decrease)in contributions receivable -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) 3,113,439 2,554,496 1,042,313 462,406 (318,226) 906,670
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 38,451,789 8,647,430 7,698,287 4,989,628 3,784,281 1,929,197
----------- ----------- ----------- ----------- ----------- -----------
End of year $41,565,228 $11,201,926 $ 8,740,600 $ 5,452,034 $ 3,466,055 $ 2,835,867
=========== =========== =========== =========== =========== ===========
<PAGE>
<CAPTION>
Templeton Nations Short
Foreign Intermediate Contributions
Fund Government Fund Cash Receivable Total
----------- --------------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to-
Investment income-
Net appreciation (depreciation) in
fair value of investments $ (94,966) $ 7,826 $ -- $ -- $11,645,011
Interest 11,359 30,350 -- -- 694,803
Dividends 32,603 -- -- -- 412,362
Gain (loss) on sale 1,054 200 -- -- (275,731)
Other income 85,679 -- (12) -- 457,550
Contributions
Participants 119,891 66,923 -- -- 2,668,520
Employer's -- -- -- -- 1,859,995
Rollovers 23,194 14,863 -- -- 209,439
----------- ----------- ----------- ----------- -----------
Total Additions 178,814 120,162 (12) -- 17,671,949
Deductions from net assets attributed to-
Benefits paid to participants 44,665 223,189 46,905 -- 7,392,848
Administrative expenses 165 128 -- -- 16,875
=========== =========== =========== =========== ===========
Total Deductions 44,830 223,317 46,905 -- 7,409,723
Net increase (decrease) prior to
interfund transfers 133,984 (103,155) (46,917) -- 10,262,226
Interfund transfers 383,788 507,289 (53,751) -- --
Transfers out of the plan (68,920) (17,406) -- -- (1,713,321)
Loan activity - net 32,879 20,043 (27) -- --
Increase/(decrease)in contributions receivable -- -- (11,895) 12,432 537
----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) 481,731 406,771 (112,590) 12,432 8,549,442
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 701,737 309,914 112,590 1,084,266 67,709,119
----------- ----------- ----------- ----------- -----------
End of year $ 1,183,468 $ 716,685 $ -- $ 1,096,698 $76,258,561
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this financial statement.
- 3 -
<PAGE>
<TABLE>
<CAPTION>
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
TNP
Enterprises, Vanguard Nations Vanguard Participants AIM
Inc. Stock Index Trust Prime Wellesley Notes Constellation
Fund Fund Fund Income Fund Receivable Fund
------------ ------------- ------------ ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to-
Investment income-
Net appreciation (depreciation) in
fair value of investments $ 11,980,962 $ 1,221,657 $ -- $ 40,928 $ -- $ 77,683
Interest 138,355 59,993 436,333 42,803 -- 54,821
Dividends -- 157,762 -- 197,111 -- --
Gain (loss) on sale 1,996,292 160,135 -- (47,939) -- 39,243
Other income 5,020 32,369 1,408 23,293 -- 64,009
Contributions-
Participants 1,168,255 536,463 152,525 355,901 -- 404,259
Employer's 1,621,210 -- -- -- -- --
Rollovers 45,442 25,041 12,756 3,271 -- 24,407
------------ ------------ ------------ ------------ ------------ ------------
Total Additions 16,955,536 2,193,420 603,022 615,368 -- 664,422
Deductions from net assets attributed to-
Benefits paid to participants 3,617,876 586,664 1,569,503 387,957 -- 59,486
Administrative expenses 10,196 1,573 4,319 2,165 -- 531
Other distributions 7,785 -- 1,242 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Total Deductions 3,635,857 588,237 1,575,064 390,122 -- 60,017
Net increase (decrease) prior to
interfund transfers 13,319,679 1,605,183 (972,042) 225,246 -- 604,405
Interfund transfers (2,044,929) 447,824 397,148 (78,255) -- 602,249
Loan activity - net (828,801) (61,814) (90,434) (2,310) 685,101 78,474
Increase in contributions receivable -- -- -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) 10,445,949 1,991,193 (665,328) 144,681 685,101 1,285,128
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 28,005,840 6,656,237 8,363,615 4,844,947 3,099,180 644,069
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 38,451,789 $ 8,647,430 $ 7,698,287 $ 4,989,628 $ 3,784,281 $ 1,929,179
============ ============ ============ ============ ============ ============
<PAGE>
<CAPTION>
Nations
Short-
Templeton Intermediate
Foreign Government Contributions
Fund Fund Cash Receivable Total
----------- ------------ ------------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to-
Investment income-
Net appreciation (depreciation) in
fair value of investments $ 42,626 $ (491) $ -- $ -- $ 13,363,365
Interest 14,079 23,046 -- -- 769,430
Dividends 16,177 -- -- -- 371,050
Gain (loss) on sale 7,598 (8,212) -- -- 2,147,117
Other income 9,988 28 11 -- 136,126
Contributions-
Participants 129,793 81,398 -- -- 2,828,594
Employer's -- -- -- -- 1,621,210
Rollovers 16,281 1,359 -- -- 128,557
----------- ----------- ---------- ---------- ------------
Total Additions 236,542 97,128 11 -- 21,365,449
Deductions from net assets attributed to-
Benefits paid to participants 12,422 216,159 -- -- 6,450,067
Administrative expenses 65 1,401 -- -- 20,250
Other distributions -- -- -- -- 9,027
----------- ----------- ---------- ----------- ------------
Total Deductions 12,487 217,560 -- -- 6,479,344
Net increase (decrease) prior to
interfund transfers 224,055 (120,432) 11 -- 14,886,150
Interfund transfers 301,064 274,241 100,658 -- --
Loan activity - net 9,604 9,558 -- -- (200,622)
Increase in contributions receivable -- -- -- 290,900 290,900
----------- ------------ ---------- ----------- ------------
NET INCREASE (DECREASE) 534,723 163,367 100,669 290,900 14,976,383
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 167,014 146,547 11,921 793,366 52,732,736
----------- ------------- ---------- ----------- ------------
End of year $ 701,737 309,914 $ 112,590 $ 1,084,266 $ 67,709,119
=========== ============= ========== ============ ============
The accompanying notes are an integral part of this financial statement.
</TABLE>
- 4-
<PAGE>
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF PLAN:
The following description of the Texas-New Mexico Power Company Thrift Plan for
Employees (the "Plan") is provided for general information purposes only.
Complete information regarding the Plan's provisions may be found in the plan
document.
General
The Plan is a defined contribution retirement plan covering employees of
Texas-New Mexico Power Company (the "Company"), a wholly owned subsidiary of TNP
Enterprises, Inc. (TNPE), who are scheduled to work at least 1,000 hours year.
The Plan is administered by NationsBank of Georgia, N. A., as trustee and is
subject to the provisions of the Employee Retirement Income Security Act of 1974
(ERISA) and section 401(a) of the Internal Revenue Code.
Contributions
Each year, participants may contribute between two percent and 12 percent of
their annual pretax compensation, as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or contribution plans.
The Company, at the discretion of the Company's Board of Directors, matches 50
percent of eligible employee contributions up to the first six percent of each
employees conpensation. Additional amounts may be contributed at the option of
the Company's Board of Directors. All employer contributions are invested in the
TNPE Common Stock Fund. All employer and employee contributions are subject to
limitations of section 401(k) and 401(m) of the Internal revenue Code.
Effective May 1, 1995, the Company's Board of Directors voted to contribute an
additional incentive amount up to three percent of eligible employee
compensation based on specific Company performance goals. The Plan accrued
$963,927 and $933,739 for 1997 and 1996 respectfully and paid $933,739 and
$653,148 in 1997 and 1996 respectfully as a result of meeting these goals. These
amounts are included in employer's contributions receivable on the statement of
net assets available for benefits and in employer's contributions on the
statement of changes in net assets available for benefits, respectively.
Participant Accounts
Each participant's account is credited with that participant's contributions,
allocations of the Company's matching contributions and the pro rata share of
plan earnings. All costs and expenses incurred in administering the Plan, except
for costs borne by respective participants to originate and administer
participant notes receivable, have been paid by the Company.
Vesting
Participants are immediately fully vested in all contributions, and actual
earnings upon enrollment in the Plan.
Investment Options
Currently, participants may direct contributions in one percent increments in
any of seven investment options:
TNP Enterprises, Inc. Common Stock Fund - Funds are invested in a unitized
fund that invests primarily in the common stock of TNPE with a portion in
a money market fund for liquidity purposes.
-5-
<PAGE>
Vanguard Index Trust Fund - Funds are invested in equity securities
designed to replicate the performance of the S&P 500 Stock Index.
Nations Prime Fund - Funds are invested in units of a registered
investment company that invests primarily in commercial paper,
certificates of deposit and other money market instruments, all with a
maturity of less than thirteen months.
Vanguard Wellesley Income Fund - Funds are invested in units of a
registered investment company that invests primarily in various equity
security portfolios that seek to match the performance of distinct market
indices.
AIM Constellation Fund - Funds are invested in common stocks with an
emphasis on medium-sized and smaller emerging growth companies.
Templeton Foreign Fund - Funds are invested in units of a registered
investment company that seeks long-term capital growth through investments
in equity securities and debt obligations of companies and governments
outside the United States.
Nations Short Intermediate Government Fund - Funds are invested in units
of a registered investment company that invests primarily in U.S. Treasury
bonds and notes, U.S. Government Agency bonds and Government
mortgage-backed securities, all structured to have an average weighted
maturity of less than five years.
Participants may change their investment options daily.
Participants' Notes Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 less the highest outstanding balance in
the previous 12 months or 50 percent of their account balance. Loan transactions
are treated as a transfer to (from) an investment fund from (to) the
participants' notes receivable. Loan terms range from 6 to 60 months.
The loans are secured by the balance in the participants' account and bear
interest at a rate equal to the NationsBank prime rate on the first business day
of the month in which the loan originated plus 1 percent. Interest rates range
from 9.25 percent to 9.5 percent. Principal and interest is paid ratably through
biweekly payroll deductions. Participants' notes receivable were $3,466,055 and
$3,784,281as of December 31,1997 and 1996, respectively.
Payment of Benefits
Upon termination of service, a participant may receive a lump-sum amount equal
to the value of the participant's account. Upon retirement or death a
participant or their beneficiary receives a lump sum amount equal to the value
of the participants' account or annual installments over a five-year period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounting
The accompanying financial statements of the Plan are prepared on the accrual
basis of accounting.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of additions and deductions during the reporting period.
Actual results could differ from those estimates.
-6-
<PAGE>
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of registered investment
companies are valued at quoted market prices, which represent the net asset
value of shares held by the Plan at year-end. The TNPE Common Stock Fund is
valued at its quoted market price along with the quoted market price of shares
held by money market funds included in the fund. Participants' notes receivable
are valued at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade date basis. Interest
income is recorded as earned on the accrual basis. Dividends on common stock of
TNPE are recorded on the ex-dividend date. Dividends on mutual funds are
recorded when declared.
Payment of Benefits
Benefits are recorded when paid.
Administration Expenses
The Company pays all administrative expenses of the Plan.
Net Appreciation in Fair Value of Investments
Net realized and unrealized appreciation (depreciation) is recorded in the
accompanying statements of changes in net assets available for benefits, as net
appreciation (depreciation) in fair value of investments. Brokerage fees are
added to the acquisition costs of assets purchased and subtracted from the
proceeds of assets sold.
3. RELATED-PARTY TRANSACTIONS:
Certain Plan investments are shares of mutual funds managed by NationsBank
Corporation affiliates. NationsBank of Georgia, N.A., a wholly owned subsidiary
of NationsBank Corporation, is the trustee as defined by the Plan and,
therefore, qualifies these funds as party-in-interest.
4. PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
As of December 31, 1996, the Plan had $46,906 in pending distributions to
participants who elected to withdraw from the Plan. These amounts are recorded
as a liability in the Plan's Form 5500; however, these amounts are not recorded
as a liability in the accompanying statements of net assets available for
benefits in accordance with generally accepted accounting principles. As of
December 31, 1997, this amount was paid to withdrawing participants and as such
is included as a reconciling item below.
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company for the years
ended December 31, 1997 and 1996:
-7-
<PAGE>
<TABLE>
<CAPTION>
Benefits Payable Net Assets Available
to Participants Benefits Paid for Plan Benefits
------------------------------
1997 1996
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per financial statements $0 $7,389,958 $76,258,561 $67,709,119
1997 amounts pending
distribution to participants 0 46,906 (46,906) 0
1996 amounts pending
distribution to participants 46,906 (46,906) 0 46,906
- --------------------------------------------------------------------------------------------------------------
Per Form 5500 $46,906 $7,389,958 $76,305,467 $67,662,213
==============================================================================================================
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, 1996 and 1997 but not yet paid as of that date.
6. TAX STATUS
The Internal Revenue Service has determined and informed the Company by letter
dated December 8,1997, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC).
Contributions to a participant's account and the related investment earnings are
not included in a participant's taxable income until such amounts are
distributed to that participant.
7. INVESTMENT BALANCES:
The following investments represent investment balances that account for five
percent or more of the total net assets available for benefits:
1997 1996
----------- -----------
TNP Enterprises, Inc. Common Stock Fund $41,565,228 $38,451,789
Vanguard Index Trust Fund 11,201,926 8,647,430
Nations Prime Fund 8,740,600 7,698,287
Vanguard Wellesley Income Fund 5,452,034 4,989,628
8. SUBSEQUENT EVENTS:
On April 7,1997, the Company was notified that NationsBank will terminate its
trustee arrangement with the Plan effective December 31, 1997 as it intends to
no longer pursue that line of business. Effective January 1,1998, the Company
has made trustee arrangements with The Vanguard Group to administrate the Plan.
Transfer of account information from NationsBank to The Vanguard Group was
successfully completed on February 25, 1998.
Effective January 1, 1997, Facility Works, Inc. (a wholly-owned subsidiary of
TNPE) employees began contributing to the Facility Works Inc. Employee Thrift
Plan 401(k). In March 1997, the accounts of all TNMP employees who were
transferred to Facility Works Inc., the employee accounts were transfered out of
the Plan and into Facility Works, Inc. Employee Thrift Plan 401(k).
-8-
<PAGE>
<TABLE>
<CAPTION>
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AT DECEMBER 31, 1997
PLAN NUMBER: 002
EIN: 75-0204070
(A) (B) (C) (D) (E)
Description of Investment
Identity of Issue, Including Maturity Date,
Borrower, Lessor Rate of Interest, Collateral, Current
or Similar Party Par or Maturity Value Cost Value
- ----------- ------------------------------- -------------------------------- --------------- --------------
<S> <C> <C>
MUTUAL FUNDS:
* TNP Enterprises, Inc. Common Stock Fund
1,827,316 units
(no par value) $ 21,671,757 $ 41,565,228
* The Vanguard Group Vanguard Index Trust Fund
124,369 units
(common stock) 7,206,164 11,201,926
* NationsBank Nations Prime Fund
8,740,600 units
(money market) 8,740,600 8,740,600
The Vanguard Group Vanguard Wellesley Income Fund
249,407 units
(common stock and bonds) 4,901,628 5,452,034
Participants' note receivable 9.25% to 9.50% notes
receivable due various
dates within 60 months - 3,466,055
AIM Management Group, Inc. AIM Constellation Fund
107,501 units 2,737,382 2,835,867
(common stock)
Franklin Templeton Templeton Foreign Fund
Distributors, Inc. 118,942 units
(foreign stock and debt
obligations) 1,247,395 1,183,468
* NationsBank Nations Short - Intermediate
Government Fund
173,953 units
(goverment bonds, mortgage-
backed securities, and U.S.
Treasury obligations) 711,467 716,685
* Column (A) indicates each person / entity known to be a party-in-interest.
This supplemental schedule lists assets held for investment purposes at December 31, 1997,
as required by the Department of Labor Rules and Regulations for Reporting and Disclosure.
</TABLE>
- 9 -
<PAGE>
<TABLE>
<CAPTION>
TEXAS-NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
PLAN NUMBER: 002
EIN: 75-0204070
(A) (B) (C) (D) (G) (H) (I)
Identity Value Of
of Asset On
Party Purchase Selling Cost of Transaction Net Gain
Involved Description of Asset Price Price Asset Date or (Loss)
- --------------- ------------------------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NationsBank TNP Enterprises Stock Fund - 11,393,957 7,848,998 11,393,957 3,544,959
5,871,349 - 5,871,349 5,871,349 -
NationsBank Nations Prime Fund 4,590,692 - 4,590,692 4,590,692 -
- 3,548,379 3,548,379 3,548,379 -
Columns (E) Lease Rental and (F) Expense Incurred with Transaction are not
applicable to any reportable transactions.
</TABLE>
This supplemental schedule lists individual and series of transactions in excess
of 5% of the fair market value of Plan assets at the beginning of the year as
required by the Department of Labor Rules and Regulations for Reporting and
Disclosure.
- 10 -
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors of
TNP Enterprises, Inc.
and
The Trustee and Thrift Plan Committee of
Texas-New Mexico Power Company
Thrift Plan for Employees:
We consent to incorporation by reference in the Registration Statements (No.
2-93265) and (No. 33-58897) on Form S-8 of TNP Enterprises, Inc. of our report
dated June 10,1998, relating to the statement of net assets available for
benefits of Texas-New Mexico Power Company Thrift Plan for Employees as of
December 31,1997 and 1996, and the related statement of changes in net assets
available for benefits for the years then ended and related supplemental
schedules, which report appears in the December 31,1997, annual report on Form
11-K of TNP Enterprises, Inc.
ARTHUR ANDERSEN LLP
Dallas, Texas,
June 26, 1998
- 11 -
