UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
x COMBINED QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
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 and zip code of principal executive offices) | ||
| 817-731-0099 | ||
| (Registrant’s telephone number, including area code) | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes \X\ No \ \
TNP Enterprises, Inc. has no publicly traded shares of common stock outstanding.
Commission File Number: 2-97230
TEXAS-NEW MEXICO POWER COMPANY
(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 and zip code of principal executive offices) | ||
| 817-731-0099 | ||
| (Registrant’s telephone number, including area code) | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes \X\ No \ \
TNP Enterprises, Inc. holds all 10,705 outstanding common shares of Texas-New Mexico Power Company.
TNP Enterprises, Inc. And Subsidiaries
Texas New-Mexico Power Company and Subsidiaries
Combined Quarterly Report on Form 10-Q for the period ended March 31, 2003
This Combined Quarterly Report on Form 10-Q is filed separately by TNP Enterprises, Inc., and Texas-New Mexico Power Company. Texas-New Mexico Power Company makes no representation as to information relating to TNP Enterprises, Inc., except as it may relate to Texas-New Mexico Power Company, or to any other affiliate or subsidiary of TNP Enterprises, Inc.
TABLE OF CONTENTS
| PART 1. FINANCIAL STATEMENTS |
||||
| Item 1. |
Financial Statements. |
|||
| TNP Enterprises, Inc. (TNP) and Subsidiaries: |
||||
| Consolidated Statements of Income (Loss) Three Month Periods Ended March 31, 2003 and 2002 |
3 | |||
| Consolidated Statements of Comprehensive Income (Loss) Three Month Periods Ended March 31, 2003 and 2002 |
4 | |||
| Consolidated Statements of Cash Flows Three Month Periods Ended March 31, 2003 and 2002 |
5 | |||
| March 31, 2003, and December 31, 2002 |
6 | |||
| Texas-New Mexico Power Company (TNMP) and Subsidiaries: |
||||
| Consolidated Statements of Income Three Month Periods Ended March 31, 2003 and 2002 |
7 | |||
| Consolidated Statements of Comprehensive Income Three Month Periods Ended March 31, 2003 and 2002 |
8 | |||
| Consolidated Statements of Cash Flows Three Month Periods Ended March 31, 2003 and 2002 |
9 | |||
| March 31, 2003, and December 31, 2002 |
10 | |||
| 11 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
19 | ||
| Item 4. |
28 | |||
| Item 1. |
29 | |||
| Item 6. |
29 | |||
| 29 | ||||
| 29 | ||||
| 29 | ||||
| 30 | ||||
| 31 | ||||
-2-
TNP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
| Three Months Ended |
||||||||
| 2003 |
2002 |
|||||||
| (In thousands) |
||||||||
| OPERATING REVENUES |
$ |
183,721 |
|
$ |
120,664 |
| ||
| OPERATING EXPENSES: |
||||||||
| Purchased power and fuel |
|
136,969 |
|
|
54,255 |
| ||
| Other operating and maintenance |
|
52,062 |
|
|
29,332 |
| ||
| Depreciation |
|
7,123 |
|
|
7,021 |
| ||
| Credit for recovery of stranded plant |
|
— |
|
|
(733 |
) | ||
| Taxes other than income taxes |
|
6,770 |
|
|
8,067 |
| ||
| Total operating expenses |
|
202,924 |
|
|
97,942 |
| ||
| OPERATING INCOME (LOSS) |
|
(19,203 |
) |
|
22,722 |
| ||
| INTEREST CHARGES AND OTHER INCOME AND DEDUCTIONS: |
||||||||
| Interest on long-term debt |
|
12,434 |
|
|
13,719 |
| ||
| Other interest and amortization of debt-related costs |
|
1,116 |
|
|
1,276 |
| ||
| Other income and deductions, net |
|
(369 |
) |
|
(102 |
) | ||
| Total |
|
13,181 |
|
|
14,893 |
| ||
| INCOME (LOSS) BEFORE INCOME TAXES |
|
(32,384 |
) |
|
7,829 |
| ||
| Income taxes |
|
(12,359 |
) |
|
2,659 |
| ||
| NET INCOME (LOSS) |
|
(20,025 |
) |
|
5,170 |
| ||
| Dividends on preferred stock and other |
|
5,149 |
|
|
4,491 |
| ||
| INCOME (LOSS) APPLICABLE TO COMMON STOCK |
$ |
(25,174 |
) |
$ |
679 |
| ||
The accompanying notes are an integral part of these consolidated financial statements.
-3-
TNP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| Three Months Ended March 31, | |||||||
| 2003 |
2002 | ||||||
| (In thousands) | |||||||
| NET INCOME (LOSS) |
$ |
(20,025 |
) |
$ |
5,170 | ||
| Cash flow hedges, net of tax: |
|||||||
| Interest rate hedge, net of reclassification adjustment (Note 4) |
|
(645 |
) |
|
— | ||
| Gas hedge |
|
(3,024 |
) |
|
— | ||
| Total cash flow hedges |
|
(3,669 |
) |
|
— | ||
| COMPREHENSIVE INCOME (LOSS) |
$ |
(23,694 |
) |
$ |
5,170 | ||
The accompanying notes are an integral part of these consolidated financial statements.
-4-
TNP ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended |
||||||||
| 2003 |
2002 |
|||||||
| (In thousands) |
||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Cash received from sales to customers |
$ |
163,935 |
|
$ |
72,436 |
| ||
| Purchased power and fuel costs paid |
|
(96,382 |
) |
|
(58,694 |
) | ||
| Natural gas option premims paid |
|
(18,652 |
) |
|
— |
| ||
| Cash paid for payroll and to other suppliers |
|
(44,341 |
) |
|
(27,700 |
) | ||
| Interest paid, net of amounts capitalized |
|
(7,912 |
) |
|
(10,616 |
) | ||
| Income taxes refunded |
|
2,862 |
|
|
— |
| ||
| Other taxes paid |
|
(11,526 |
) |
|
(17,832 |
) | ||
| Other operating cash receipts and payments, net |
|
(24 |
) |
|
— |
| ||
| NET CASH USED IN OPERATING ACTIVITIES |
|
(12,040 |
) |
|
(42,406 |
) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Additions to utility plant and other investing activities |
|
(9,035 |
) |
|
(7,575 |
) | ||
| NET CASH USED IN INVESTING ACTIVITIES |
|
(9,035 |
) |
|
(7,575 |
) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Borrowings from TNMP/First Choice credit facility—net |
|
14,000 |
|
|
52,000 |
| ||
| Other |
|
— |
|
|
(5,839 |
) | ||
| Redemptions: |
||||||||
| TNP term loan |
|
(400 |
) |
|
(400 |
) | ||
| NET CASH USED IN FINANCING ACTIVITIES |
|
13,600 |
|
|
45,761 |
| ||
| NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
(7,475 |
) |
|
(4,220 |
) | ||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
|
16,690 |
|
|
14,145 |
| ||
| CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ |
9,215 |
|
$ |
9,925 |
| ||
| RECONCILIATION OF NET INCOME (LOSS) TO NET |
||||||||
| Net income (loss) |
$ |
(20,025 |
) |
$ |
5,170 |
| ||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: |
||||||||
| Depreciation |
|
7,123 |
|
|
7,021 |
| ||
| Credit for recovery of stranded plant |
|
— |
|
|
(733 |
) | ||
| Amortization of debt-related costs and other deferred charges |
|
1,041 |
|
|
1,053 |
| ||
| Allowance for funds used during construction |
|
(220 |
) |
|
(86 |
) | ||
| Deferred income taxes |
|
(288 |
) |
|
1,129 |
| ||
| Investment tax credits |
|
(159 |
) |
|
(390 |
) | ||
| Deferred purchased power and fuel costs |
|
921 |
|
|
10,143 |
| ||
| Cash flows impacted by changes in current assets and liabilities: |
||||||||
| Accounts receivable |
|
(12,437 |
) |
|
(50,145 |
) | ||
| Accounts payable |
|
43,108 |
|
|
(3,271 |
) | ||
| Accrued interest |
|
4,603 |
|
|
3,190 |
| ||
| Accrued taxes |
|
(14,151 |
) |
|
(7,843 |
) | ||
| Changes in other current assets and liabilities |
|
(17,227 |
) |
|
(9,824 |
) | ||
| Other, net |
|
(4,329 |
) |
|
2,180 |
| ||
| NET CASH USED IN OPERATING ACTIVITIES |
$ |
(12,040 |
) |
$ |
(42,406 |
) | ||