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, 1998
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, 1998, and 1997
Statements of Changes in Net Assets Available for Benefits, Years Ended
December 31, 1998, and 1997
Notes to Financial Statements
Item 27(a) - Schedule of Assets Held for Investment Purposes,
December 31, 1998
Item 27(d) - Schedule of Reportable Transactions, Year Ended
December 31, 1998
Exhibit
Consent of Independent Public Accountants - Arthur Andersen LLP
<PAGE>
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 29, 1999
By \s\ Melissa D. Davis
-------------------------------------------
MELISSA D. DAVIS, as Vice President of Texas-
New Mexico Power Company and as a
member of Thrift Plan Committee
<PAGE>
TEXAS - NEW MEXICO POWER COMPANY THRIFT PLAN
FOR EMPLOYEES
Financial Statements as of December 31, 1998 and 1997
and Supplemental Schedules as of December 31, 1998
Together With Report of Independent Public Accountants
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustee and Thrift Plan Committee of the
Texas-New Mexico Power Company Thrift Plan
for Employees:
We have audited the accompanying statements of net assets available for benefits
of the Texas-New Mexico Power Company Thrift Plan for Employees (the "Plan") as
of December 31, 1998 and 1997, and the related statements 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31,1998 and 1997, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were 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
statements 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 audits of the basic financial statements and, in our opinion, are
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Fort Worth, Texas,
June 16, 1999
<PAGE>
TEXAS - NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Table of Contents
- --------------------------------------------------------------------------------
Page Number
Basic Financial Statements
Statements of Net Assets Available for Benefits 1
Statements of Changes in Net Assets Available for Benefits 2
Notes to Financial Statements 3 - 12
Additional Information
Schedule I - Schedule of Assets Held for Investment Purposes 13
Schedule II - Schedule of Reportable Transactions (Transactions 14
or Series of Transactions in Excess of 5% of
Plan Assets)
<PAGE>
TEXAS - NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
<TABLE>
<CAPTION>
Statements of Net Assets Available for Benefits
- -----------------------------------------------------------------------------------------------------------------------
As of December 31,
1998 1997
------------------------------------------------
<S> <C> <C>
Investments, at fair value
Registered investment companies:
AIM Constellation Fund, Class A $ 4,044,976 $ -
Templeton Foreign Fund 1,294,964 1,183,468
Vanguard 500 Index Fund 16,593,216 11,201,926
Vanguard Prime Money Market Fund 9,175,938 -
Nations Prime Fund - 8,740,600
Vanguard Short-Term Bond Index Fund 1,603,950 -
Nations Short-Intermediate Government Fund - 716,685
Vanguard Wellesley Income Fund 8,137,055 5,452,034
------------------------------------------------
40,850,099 27,294,713
TNP AIM Constellation Fund - 2,835,867
TNP ENT Common Stock Fund 43,801,545 41,565,228
Participant loans 3,334,028 3,466,055
------------------------------------------------
Total investments
87,985,672 75,161,863
Contributions receivable - employer 873,214 999,471
Contributions receivable - participants - 97,227
------------------------------------------------
Net assets available for benefits $ 88,858,886 $ 76,258,561
================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TEXAS - NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
<TABLE>
<CAPTION>
Statements of Changes in Net Assets Available for Benefits
- ---------------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
1998 1997
-------------------------------------
<S> <C> <C>
Additions
Investment income:
Interest and dividend income $ 3,386,142 $ 1,107,165
Net appreciation in fair value of investments 9,746,601 11,826,830
-------------------------------------
13,132,743 12,933,995
-------------------------------------
Contributions:
Employer 1,832,320 1,883,569
Participant 3,099,633 2,866,817
-------------------------------------
4,931,953 4,750,386
-------------------------------------
Asset transfers in 13,178,895 -
-------------------------------------
Total additions
31,243,591 17,684,381
-------------------------------------
Deductions
Payment of benefits 9,145,956 7,392,848
Asset transfers out 9,497,310 1,713,321
Other - 28,770
-------------------------------------
Total deductions
18,643,266 9,134,939
-------------------------------------
Net increase 12,600,325 8,549,442
Net assets available for plan benefits:
Beginning of period 76,258,561 67,709,119
-------------------------------------
End of period $ 88,858,886 $ 76,258,561
=====================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TEXAS - NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 - DESCRIPTION OF PLAN
The following description of the Texas - New Mexico Power Company Thrift Plan
for Employees (the "Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of the Plan's
provisions.
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. (TNP), who are scheduled to work at least 1,000 hours per
year.
Effective January 1, 1998, the Company terminated its trustee arrangement with
NationsBank, and entered into 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. Income of
$578,500 was recognized during the transfer due to appreciation in the value of
the funds. The Plan 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
employee's compensation. Additional amounts may be contributed at the option of
the Company's Board of Directors. All employer contributions are invested in the
TNP Common Stock Fund. All employer and employee contributions are subject to
limitations of section 401(k) and 401(m) of the Internal Revenue Code.
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 $873,214 and $963,927 for 1998 and
1997, respectively, and paid $960,500 and $933,739 in 1998 and 1997,
respectively, as a result of meeting these goals. These amounts are included in
employer's contributions receivable on the statements of net assets available
for benefits and in employer's contributions on the statements 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.
Vesting
Participants are immediately fully vested in all contributions and actual
earnings upon enrollment in the plan.
Participant Loans
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' loan. 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 of one percentage point above the Wall Street Journal prime
rate on the first workday of the quarter in which the loan originated. Interest
rates on loans outstanding as of December 31, 1998, ranged from 9.25 percent to
10.00 percent. Principal and interest is paid ratably through biweekly payroll
deductions. Participant loans outstanding were $3,334,028 and $3,466,055 as of
December 31, 1998 and 1997, 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.
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.
Investment Options
During the Plan year ending December 31, 1998, participants were able to
allocate their contributions among the following investment options:
AIM Constellation Fund, Class A/TNP AIM Constellation Fund: Seeks capital
appreciation. The fund invests primarily in common stocks, emphasizing
small- to mid-size emerging-growth companies.
Templeton Foreign Fund: The fund seeks long-term capital growth through
international investing.
Vanguard 500 Index Fund: Seeks to provide long-term growth of capital and
income from dividends by holding all of the 500 stocks that make up the
unmanaged Standard & Poor's 500 Composite Stock Price Index, a widely
recognized benchmark of U.S. stock market performance.
Vanguard Prime Money Market Fund: Seeks to provide high income and a
stable share price of $1 by investing in short-term, high-quality money
market instruments issued by financial institutions, nonfinancial
corporations, the U.S. government, and federal agencies.
Vanguard Short-Term Bond Index Fund: Seeks to provide a high level of
interest income by attempting to match the performance of the unmanaged
Lehman Brothers 1-5 Year Government/Corporate Bond Index, which is made up
of some 1,500 short-term bonds issued by the U.S. Treasury, federal
agencies, and corporations.
Vanguard Wellesley Income Fund: Seeks to provide a high level of income,
long-term growth of income, and moderate long-term growth of capital by
investing 60% to 65% of its assets in high-quality long-term and
intermediate-term bonds and the remainder in dividend-paying stocks.
TNP ENT Common Stock Fund: Invests in TNP Enterprises, Inc. Common Stock
to provide long-term growth through increases in the value of the stock
and the reinvestment of its dividends.
Participants may change their investment options daily.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
The following accounting policies, which conform with generally accepted
accounting principles, have been used consistently in the preparation of the
Plan's financial statements:
Basis of Accounting
The financial statements of the Plan are prepared using the accrual method 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.
Reclassification
Certain items in 1997 were reclassified to conform to the 1998 presentation.
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 Company stock fund is valued at its
year-end unit closing price (comprised of year-end market price plus uninvested
cash position). Participant loans are valued at cost which approximates fair
value.
Purchases and sales of investments are recorded on a trade-date basis. Interest
income is accrued when earned. Dividend income is recorded on the ex-dividend
date. Capital gain distributions are included in dividend income.
Payment of Benefits
Benefits are recorded when paid.
Net Appreciation in Fair Value of Investments
Net realized gain (loss) is the difference between the selling price of an
investment and the average cost of that investment. This average is based on
revalued and not historical cost. Under this method, the cost of a security is
equal to its market value at the beginning of the plan year or its acquisition
cost if acquired during the plan year.
Unrealized appreciation (depreciation) is the difference between the market
value of an investment at the end of the plan year and the market value of the
same investment at the beginning of the plan year or at its acquisition date if
acquired during the plan year.
NOTE 3 - RELATED PARTY TRANSACTIONS
The Plan invests in shares of mutual funds managed by an affiliate of Vanguard
Fiduciary Trust Company ("VFTC"). VFTC acts as trustee for only those
investments as defined by the Plan. Transactions in such investments qualify as
party-in-interest transactions which are exempt from the prohibited transaction
rules.
<PAGE>
NOTE 4 - BENEFIT OBLIGATIONS PAYABLE
As of December 31, 1998, the Plan had $103,815 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.
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company.
Dec. 31, 1998 Dec. 31, 1997
------------- -------------
As reported in financial statements $ 88,858,886 $ 76,258,561
Amounts pending distribution
to participants (103,815) -
------------- -------------
As reported in Form 5500 $ 88,755,071 $ 76,258,561
============== =============
NOTE 5 - PLAN EXPENSES
All costs and expenses incurred in administering the Plan, except for costs
borne by respective participants to originate and administer participant loans,
have been paid by the Company. For the plan years ending December 31, 1998 and
1997, the Company paid administrative costs totaling $59,560 and $83,816,
respectively, none of which are reimbursable by the Plan.
NOTE 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.
NOTE 7 - INVESTMENT BALANCES
The following investments represent investment balances that account for five
percent or more of the total net assets available for benefits at December 31,
1998:
1998 1997
------ ------
TNP ENT Common Stock Fund $ 43,801,545 $ 41,565,228
Vanguard 500 Index Fund 16,593,216 11,201,926
Vanguard Prime Money Market Fund 9,175,938 -
Vanguard Wellesley Income Fund 8,137,055 5,452,034
NOTE 8 - SUBSEQUENT EVENTS
TNP entered into an agreement to be acquired by an investor group in a
transaction valued at approximately $1 billion, including assumed debt. Under
the terms of the agreement, which has been unanimously approved by TNP's board
of directors, the company's shareholders will receive $44 per share in cash,
converting TNP from a listed public corporation to a privately owned
corporation. This transaction, pending regulatory and shareholder approval, will
affect the balances of those participants with investments in the TNP Common
Stock Fund.
<PAGE>
NOTE 9 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT FUND
<TABLE>
<CAPTION>
The allocation of changes in net assets available for plan benefits for the year ended December 31, 1998, is as follows:
PARTICIPANT DIRECTED
----------------------------------------------------------------------------
AIM Vanguard
Constellation Templeton Vanguard 500 Prime Money Nations Prime
Fund, Class A Foreign Fund Index Fund Market Fund Fund
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
Additions
Investment income:
Interest and dividend income $ 99,591 $ 136,360 $ 246,531 $ 417,104 $ -
Net realized gain (loss) on sale of investments (8,642) (13,141) 183,911 - -
Net unrealized apprec. (deprec.) of investments 272,672 (195,199) 3,173,928 - 36,839
---------------------------------------------------------------------------
363,621 (71,980) 3,604,370 417,104 36,839
---------------------------------------------------------------------------
Contributions:
Employer - - - - -
Participant 285,566 163,058 758,514 173,759 -
Participant loan repayments 98,297 45,050 273,479 54,535 -
---------------------------------------------------------------------------
383,863 208,108 1,031,993 228,294 -
---------------------------------------------------------------------------
Asset transfers in 3,437,429 - 13,160 8,777,439 -
---------------------------------------------------------------------------
Total additions 4,184,913 136,128 4,649,523 9,422,837 36,839
---------------------------------------------------------------------------
Deductions
Payment of benefits 61,147 37,672 506,922 2,189,843 -
Participant loan withdrawals 53,456 22,558 200,612 211,481 -
Asset transfers out - - - - 8,777,439
---------------------------------------------------------------------------
Total deductions 114,603 60,230 707,534 2,401,324 8,777,439
---------------------------------------------------------------------------
Net increase (decrease) prior to interfund transfers 4,070,310 75,898 3,941,989 7,021,513 (8,740,600)
Interfund transfers (25,334) 35,598 1,449,301 2,154,425 -
---------------------------------------------------------------------------
Net increase (decrease) 4,044,976 111,496 5,391,290 9,175,938 (8,740,600)
Net assets available for plan benefits:
Beginning of period - 1,183,468 11,201,926 - 8,740,600
---------------------------------------------------------------------------
End of period $ 4,044,976 $ 1,294,964 $ 16,593,216 $ 9,175,938 $ -
===========================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 9 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT FUND(Continued)
The allocation of changes in net assets available for plan benefits for the year ended December 31, 1998, is as follows (Continued):
PARTICIPANT DIRECTED
----------------------------------------------------------------------------
Vanguard Nations Short- Vanguard TNP AIM TNP ENT Common
Short-Term Intermediate Wellesley Constellation Stock Fund
Bond Index Fund Government Fund Income Fund Fund
<S> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
Additions
Investment income:
Interest and dividend income $ 70,234 $ - $ 759,147 $ 930 $ 1,336,224
Net realized gain (loss) on sale of investments 702 - 18,179 253,712 352,357
Net unrealized apprec. (deprec.) of investments 9,022 3,186 423,747 (442) 5,235,770
---------------------------------------------------------------------------
79,958 3,186 1,201,073 254,200 6,924,351
---------------------------------------------------------------------------
Contributions:
Employer - - - - 1,958,577
Participant 82,087 - 427,071 194,994 1,111,811
Participant loan repayments 30,115 - 179,302 68,708 917,708
---------------------------------------------------------------------------
112,202 - 606,373 263,702 3,988,096
---------------------------------------------------------------------------
Asset transfers in 719,871 - 109,113 - 121,883
---------------------------------------------------------------------------
Total additions 912,031 3,186 1,916,559 517,902 11,034,330
---------------------------------------------------------------------------
Deductions
Payment of benefits 13,814 - 223,164 3,514,739 2,438,998
Participant loan withdrawals 28,105 - 111,746 13,931 732,914
Asset transfers out - 719,871 - - -
---------------------------------------------------------------------------
Total deductions 41,919 719,871 334,910 3,528,670 3,171,912
---------------------------------------------------------------------------
Net increase (decrease) prior to interfund transfers 870,112 (716,685) 1,581,649 (3,010,768) 7,862,418
Interfund transfers 733,838 - 1,103,372 174,901 (5,626,101)
---------------------------------------------------------------------------
Net increase (decrease) 1,603,950 (716,685) 2,685,021 (2,835,867) 2,236,317
Net assets available for plan benefits:
Beginning of period - 716,685 5,452,034 2,835,867 41,565,228
---------------------------------------------------------------------------
End of period $ 1,603,950 $ - $ 8,137,055 $ - $ 43,801,545
===========================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 9 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT FUND (Continued)
The allocation of changes in net assets available for plan benefits for the year ended December 31, 1998, is as follows (Continued):
PARTICIPANT DIRECTED
----------------------------------------------------------------------
Participant loans Contributions Total
receivable
<S> <C> <C> <C>
----------------------------------------------------------------------
Additions
Investment income:
Interest and dividend income $ 320,021 $ - $ 3,386,142
Net realized gain (loss) on sale of investments - - 787,078
Net unrealized apprec. (deprec.) of investments - - 8,959,523
----------------------------------------------------------------------
320,021 - 13,132,743
----------------------------------------------------------------------
Contributions:
Employer - (126,257) 1,832,320
Participant - (97,227) 3,099,633
Participant loan repayments (1,667,194) - -
----------------------------------------------------------------------
(1,667,194) (223,484) 4,931,953
----------------------------------------------------------------------
Asset transfers in - - 13,178,895
----------------------------------------------------------------------
Total additions (1,347,173) (223,484) 31,243,591
----------------------------------------------------------------------
Deductions
Payment of benefits 159,657 - 9,145,956
Participant loan withdrawals (1,374,803) - -
Asset transfers out - - 9,497,310
----------------------------------------------------------------------
Total deductions (1,215,146) - 18,643,266
----------------------------------------------------------------------
Net increase (decrease) prior to interfund transfers (132,027) (223,484) 12,600,325
Interfund transfers - - -
----------------------------------------------------------------------
Net increase (decrease) (132,027) (223,484) 12,600,325
Net assets available for plan benefits:
Beginning of period 3,466,055 1,096,698 76,258,561
----------------------------------------------------------------------
End of period $ 3,334,028 $ 873,214 $ 88,858,886
======================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 9 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT FUND
The allocation of changes in net assets available for plan benefits for the year ended December 31, 1997, is as follows:
PARTICIPANT DIRECTED
---------------------------------------------------------------------------------
Templeton Vanguard Nations Nations Short- Vanguard TNP AIM
Foreign 500 Index Prime Intermediate Wellesley Constellation
Fund Fund Fund Government Fund Income Fund Fund
<S> <C> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------
Additions
Investment income:
Interest and dividend income, investments $ 43,962 $ 158,927 $ 360,738 $ 30,350 $ 317,792 $ 48,101
Net realized gain (loss) on sale of investments 1,054 343,335 - 200 39,940 54,500
Net unrealized apprec. (deprec.) of investments (9,287) 2,146,500 - 7,826 419,929 186,303
---------------------------------------------------------------------------------
35,729 2,648,762 360,738 38,376 777,661 288,904
---------------------------------------------------------------------------------
Contributions:
Employer - - - - - -
Participant 143,085 577,792 150,665 81,786 358,176 398,442
---------------------------------------------------------------------------------
143,085 577,792 150,665 81,786 358,176 398,442
---------------------------------------------------------------------------------
Total additions 178,814 3,226,554 511,403 120,162 1,135,837 687,346
---------------------------------------------------------------------------------
Deductions
Payment of benefits 44,665 1,205,625 1,729,642 223,189 436,457 216,439
Asset transfers out 68,920 222,093 45,804 17,406 172,110 72,256
Other 165 2,277 2,048 128 1,598 812
---------------------------------------------------------------------------------
Total deductions 113,750 1,429,995 1,777,494 240,723 610,165 289,507
---------------------------------------------------------------------------------
Participant loan activity - net 32,879 22,239 21,569 20,043 86,791 129,447
---------------------------------------------------------------------------------
Net increase (decrease) prior to interfund transfers 97,943 1,818,798 (1,244,522) (100,518) 612,463 527,286
Interfund transfers 383,788 735,698 2,286,835 507,289 (150,057) 379,384
---------------------------------------------------------------------------------
Net increase (decrease) 481,731 2,554,496 1,042,313 406,771 462,406 906,670
Net assets available for plan benefits:
Beginning of period 701,737 8,647,430 7,698,287 309,914 4,989,628 1,929,197
---------------------------------------------------------------------------------
End of period $1,183,468 $11,201,926 $8,740,600 $ 716,685 $ 5,452,034 $ 2,835,867
=================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 9 - CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY INVESTMENT FUND (Continued)
The allocation of changes in net assets available for plan benefits for the year ended December 31, 1997, is as follows (Continued):
PARTICIPANT DIRECTED
---------------------------------------------------------------------------
TNP ENT Common Participant Cash Contributions Total
Stock Fund loans receivable
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------
Additions
Investment income:
Interest and dividend income, investments $ 147,295 $ - $ - $ - $ 1,107,165
Net realized gain (loss) on sale of investments (714,760) - - - (275,731)
Net unrealized apprec. (deprec.) of investments 9,351,302 - (12) - 12,102,561
---------------------------------------------------------------------------
8,783,837 - (12) - 12,933,995
---------------------------------------------------------------------------
Contributions:
Employer 1,859,995 - - 23,574 1,883,569
Participant 1,168,013 - - (11,142) 2,866,817
---------------------------------------------------------------------------
3,028,008 - - 12,432 4,750,386
---------------------------------------------------------------------------
Total additions 11,811,845 - (12) 12,432 17,684,381
---------------------------------------------------------------------------
Deductions
Payment of benefits 3,266,630 223,296 46,905 - 7,392,848
Asset transfers out 1,114,732 - - - 1,713,321
Other 9,847 - 11,895 - 28,770
---------------------------------------------------------------------------
Total deductions 4,391,209 223,296 58,800 - 9,134,939
---------------------------------------------------------------------------
Participant loan activity - net (218,011) (94,930) (27) - -
---------------------------------------------------------------------------
Net increase (decrease) prior to interfund transfers 7,202,625 (318,226) (58,839) 12,432 8,549,442
Interfund transfers (4,089,186) - (53,751) - -
---------------------------------------------------------------------------
Net increase (decrease) 3,113,439 (318,226) (112,590) 12,432 8,549,442
Net assets available for plan benefits:
Beginning of period 38,451,789 3,784,281 112,590 1,084,266 67,709,119
---------------------------------------------------------------------------
End of period $ 41,565,228 $ 3,466,055 $ - $ 1,096,698 $76,258,561
===========================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TEXAS - NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Schedule I
Schedule of Assets Held for Investment Purposes
As of December 31, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - New Mexico Power Company Thrift Plan, EIN 75-0204070
Attachment to Form 5500, Line 27(a):
Identity of Issue, Borrower, Lessor or Similar Party Description of Investment Cost Current Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AIM Management Group, Inc. AIM Constellation Fund, Class A $ 3,772,304 $ 4,044,976
132,535 units (common stock)
Franklin Templeton Distributors, Inc. Templeton Foreign Fund 1,490,130 1,294,964
154,346 units (foreign investments)
* The Vanguard Group Vanguard 500 Index Fund 13,555,110 16,593,216
145,618 units (common stock)
* The Vanguard Group Vanguard Prime Money Market Fund 9,175,938 9,175,938
9,175,938 units (money market)
* The Vanguard Group Vanguard ST Bond Index Fund 1,594,928 1,603,950
158,807 units (short-term bonds)
* The Vanguard Group Vanguard Wellesley Income Fund 8,117,065 8,137,055
367,860 units (bonds and stock)
* TNP Enterprises, Inc. Company Stock Fund 22,587,817 43,801,545
3,852,379 units (no par value)
* Participant loans Loans to participants, interest - 3,334,028
rates ranging from 9.25% to 10%
----------------------------------------
Total assets held for investment purposes $ 60,293,292 $ 87,985,672
========================================
* Party in Interest
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TEXAS - NEW MEXICO POWER COMPANY THRIFT PLAN FOR EMPLOYEES Schedule II
Schedule of Reportable Transactions *
Year Ended December 31, 1998
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Texas - New Mexico Power Company Thrift Plan, EIN 75-0204070
Attachment to Form 5500, Line 27(d):
(A) (B) (C) (D) (G) (H) (I)
Identity of Party Description of Asset (include rate and Purchase Selling Historical Current Value Historical Gain
Involved maturity in the case of a loan) Price Price Cost of Asset of Asset on (Loss)
Transaction Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
The Vanguard Group AIM Constellation Fund $ 4,098,451 $ 4,098,451
The Vanguard Group AIM Constellation Fund $ 317,505 $ 325,646 317,505 $ (8,141)
The Vanguard Group Vanguard 500 Index Fund 4,609,223 4,609,223
The Vanguard Group Vanguard 500 Index Fund 2,575,771 2,395,499 2,575,771 180,272
The Vanguard Group Vanguard Prime Money Mkt 6,270,781 6,270,781
The Vanguard Group Vanguard Prime Money Mkt 5,872,283 5,872,283 5,872,283 -
The Vanguard Group Vanguard Wellesley Fund 4,361,480 4,361,480
The Vanguard Group Vanguard Wellesley Fund 2,118,384 2,100,820 2,118,384 17,564
The Vanguard Group TNP AIM Constellation Fund 519,756 519,756
The Vanguard Group TNP AIM Constellation Fund 3,608,893 3,355,278 3,608,893 253,615
The Vanguard Group TNP ENT Stock Fund 8,943,972 8,943,972
The Vanguard Group TNP ENT Stock Fund 12,295,795 8,037,343 12,295,795 4,258,452
Columns (E) Lease Rental and (F) Expense Incurred with Transaction are not applicable to any reportable transactions.
* Transactions or a series of transactions in excess of 5% of the current value of the Plan's assets as of the beginning of the
plan year as defined in section 2520.103-6 of the Department of Labor's Rules and Regulations for Reporting and Disclosure
under ERISA.
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board of Directors of
TNP Enterprises, Inc. and The Trustee
and Thrift Plan Committee of the
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 and Registration Statements (No.
333-64215) and (No. 333-17835) on Form S-3 of TNP Enterprises, Inc. of our
report dated June 16, 1999, relating to the statements of net assets available
for benefits of the Texas-New Mexico Power Company Thrift Plan for Employees as
of December 31, 1998 and 1997, and the related statements of changes in net
assets available for benefits for the years then ended and related supplemental
schedules, which appear in the December 31, 1998, annual report on Form 11-K of
TNP Enterprises, Inc.
ARTHUR ANDERSEN LLP
Fort Worth, Texas,
June 16, 1999
