SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-Q
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION
H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.
(Mark One)
|X| Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended September 30, 1999.
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 333-30785
California Infrastructure and Economic
Development Bank Special Purpose Trust SCE-1
(Issuer of the Certificates)
SCE Funding LLC
(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-4640661
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
2244 Walnut Grove Avenue,
Room 180, Rosemead, California 91770
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (626) 302-1850
Indicate by check |X| 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 at least the past 90 days. YES |X| NO
<PAGE>
PART I
Item 1. Financial Statements
<TABLE>
<CAPTION>
SCE FUNDING LLC
BALANCE SHEETS
(In thousands)
September 30, December 31,
ASSETS 1999 1998
----------------------------------------------
(Unaudited)
Current Assets:
<S> <C> <C>
Cash & equivalents $ 504 $ 183
Current portion of note receivable 243,009 246,300
Interest receivable 813 2,324
----------------------------------------------
Total Current Assets 244,326 248,807
----------------------------------------------
Other Assets and Deferred Charges:
Restricted funds 35,715 20,837
Note receivable - net of discount 1,782,122 1,955,693
Unamortized bond issuance costs 15,049 16,417
----------------------------------------------
Total Other Assets & Deferred Charges 1,832,886 1,992,947
----------------------------------------------
Total Assets $ 2,077,212 $ 2,241,754
==============================================
LIABILITIES AND MEMBER'S EQUITY Current Liabilities:
Current portion of long-term debt $ 243,009 $ 246,300
Interest payable 1,905 1,938
Miscellaneous accrued expenses 72 566
----------------------------------------------
----------------------------------------------
Total Current Liabilities 244,986 248,804
----------------------------------------------
Long term debt - net of discount 1,794,846 1,969,783
----------------------------------------------
Member's equity 37,380 23,167
----------------------------------------------
Total Liabilities and Member's Equity $ 2,077,212 $ 2,241,754
==============================================
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
1
<PAGE>
SCE FUNDING LLC
STATEMENTS OF OPERATIONS AND CHANGES IN MEMBER'S EQUITY
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
9 Months Ended
--------------------------------------------------------
September 30, 1999 September 30, 1998
---------------------------- ---------------------------
OPERATING REVENUE:
<S> <C> <C>
Interest income $104,350 $117,189
---------------------------- ---------------------------
Total Operating Revenue 104,350 117,189
---------------------------- ---------------------------
OPERATING EXPENSES:
Interest expense 103,001 115,638
Other expenses 4,129 4,406
---------------------------- ---------------------------
Total Operating Expenses 107,130 120,044
---------------------------- ---------------------------
Net Loss (2,780) (2,855)
Member's Equity - beginning of period 23,167 12,981
Member Contributions - net 16,993 4,637
============================ ===========================
Member's Equity, end of period $37,380 $14,763
============================ ===========================
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
2
<PAGE>
SCE FUNDING LLC
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
9 Months Ended
----------------------------------------
September 30, September 30,
1999 1998
----------------------------------------
Cash Flows from Operating Activities:
<S> <C> <C>
Net Loss $ (2,780) $ (2,855)
Adjustment for non-cash items:
Amortization 2 (30)
Deferred assets 178,280 -
Other-- net (14,878) 581
Changes in working capital:
Receivables 1,511 159,957
Interest payable (33) (6,129)
Accounts payable and other current liabilities (494) (3,300)
----------------------------------------
Net Cash Provided by Operating Activities 161,608 148,224
----------------------------------------
Cash Flows from Financing Activities:
Payment of additional bond issuance costs - (2,542)
Payment of principal on rate reduction notes (178,280) (155,779)
----------------------------------------
Net Cash Used by Financing Activities (178,280) (158,321)
----------------------------------------
Cash Flows from Investing Activities:
Equity contributions from Southern California Edison 16,993 4,637
----------------------------------------
Net Cash Provided by Investing Activities 16,993 4,637
----------------------------------------
Net increase (decrease) in cash and equivalents 321 (5,460)
Cash and equivalents, beginning of period 183 6,616
----------------------------------------
Cash and equivalents, end of period $ 504 $ 1,156
========================================
</TABLE>
The accompanying notes are an integral part of these Financial Statements.
3
<PAGE>
SCE FUNDING LLC
NOTES TO FINaNCIAL STATEMENTS
(Unaudited)
In the opinion of management, all adjustments have been made that are
necessary to present a fair statement of the financial position and results of
operations for the periods covered by this report.
SCE Funding LLC's significant accounting policies were described in
Note 2 of "Notes to Financial Statements" included in its Annual Report on Form
10-K for the fiscal year ended December 31, 1998, filed with the Securities and
Exchange Commission. SCE Funding LLC follows the same accounting policies for
interim reporting purposes. Results of operations for the interim periods are
not necessarily indicative of results to be expected for a full year. This
quarterly report should be read in conjunction with SCE Funding LLC's Annual
Report on Form 10-K.
Note 1. Basis of Presentation.
The financial statements include the accounts of SCE Funding LLC (Note
Issuer), a Delaware special purpose limited liability company, whose sole member
is Southern California Edison Company (SCE), a provider of electric services.
SCE is owned by Edison International. The Note Issuer was formed on June 27,
1997, in order to effect the purchase from SCE of Transition Property (as
defined below) and to fund such purchase from the issuance of SCE Funding LLC
Notes, Series 1997-1, Class A-1 through Class A-7 (Notes) to the California
Infrastructure and Economic Development Bank Special Purpose Trust SCE-1 (Trust)
which issued Certificates with terms and conditions similar to the Notes. The
proceeds from the sale of the Transition Property resulted in a reduction in
revenue requirements sufficient to enable SCE to provide a 10% electric rate
reduction to SCE's residential and small commercial customers in connection with
electric industry restructuring mandated by California Assembly Bill 1890, as
amended by Senate Bill 477 (collectively, electric restructuring legislation).
This rate reduction became effective January 1, 1998.
The Note Issuer was organized for the limited purposes of issuing the
Notes and purchasing Transition Property. Transition Property is the right to be
paid a specified amount from non-bypassable tariffs authorized by the California
Public Utilities Commission (CPUC) pursuant to the electric restructuring
legislation. For financial reporting purposes, the purchase of the Transition
Property by the Note Issuer from SCE was treated as the issuance of a promissory
note by SCE to SCE Funding LLC in the amount of approximately $2.5 billion.
Accordingly, the purchase of the Transition Property is classified as a note
receivable on the accompanying financial statements. Notwithstanding such
classification of the Transition Property, the Transition Property, for legal
purposes, has been sold by SCE to the Note Issuer.
4
<PAGE>
The Note Issuer is restricted by its organizational documents from
engaging in any other activities. In addition, the Note Issuer's organizational
documents require it to operate in such a manner that it should not be
consolidated in the bankruptcy estate of SCE, in the event SCE becomes subject
to such a proceeding.
The Note Issuer is legally separate from SCE. The assets and revenue of
the Note Issuer, including, without limitation, the Transition Property, are not
available to creditors of SCE or Edison International, and the note receivable
from SCE to the Note Issuer (i.e., the Transition Property) is not legally an
asset of SCE or Edison International.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following analysis of the Note Issuer's financial condition and
results of operations is in an abbreviated format pursuant to Instruction H of
Form 10-Q. Such analysis should be read in conjunction with the Financial
Statements included herein, and the Financial Statements and Notes to the
Financial Statements included in the Note Issuer's Annual Report on Form 10-K.
The Note Issuer is a special purpose, single member limited liability
company organized in June 1997 for the limited purposes of owning the Transition
Property (as described below) and issuing notes secured primarily by the
Transition Property. SCE is the sole member of the Note Issuer. The Note
Issuer's organizational documents require it to operate in a manner such that it
should not be consolidated in the bankruptcy estate of SCE in the event SCE
becomes subject to such a proceeding.
The Note Issuer issued $2,463,000,000 in principal amount of the Notes
in December 1997 with scheduled maturities ranging from 1 to 10 years and final
maturities ranging from 3 to 12 years, pursuant to an indenture with Bankers
Trust Company of California, N.A., as trustee (Note Indenture). The Note Issuer
also entered into a servicing agreement (Servicing Agreement) with SCE that
requires SCE to service the Transition Property on behalf of the Note Issuer.
The California Public Utilities Code (PU Code) provides for the
creation of Transition Property. A financing order dated September 3, 1997
(Financing Order), issued by the CPUC, together with the related Issuance Advice
Letter, establishes, among other things, separate non-bypassable charges (FTA
Charges) payable by residential electric customers and small commercial electric
customers in an aggregate amount sufficient to repay in full the Certificates,
fund the Overcollateralization Subaccount established under the Note Indenture
and pay all related costs and fees. Under the PU Code and the Financing Order,
the owner of the Transition Property is entitled to collect FTA Charges until
such owner has received amounts sufficient to retire all outstanding series of
Certificates and cover related fees and expenses and the Overcollateralization
Amount described in the Financing Order. The Transition Property is a property
right under California law that includes, without limitation, ownership of the
FTA Charges and any adjustments thereto as described in the next paragraph.
5
<PAGE>
In order to enhance the likelihood that actual collections with respect
to the Transition Property are neither more nor less than the amount necessary
to amortize the Notes in accordance with their expected amortization schedules,
pay all related fees and expenses, and fund certain accounts established
pursuant to the Note Indenture as required, the Servicing Agreement requires
SCE, as the Servicer of the Transition Property, to seek, and the Financing
Order and the PU Code require the CPUC to approve, periodic adjustments to the
FTA Charges. Such adjustments will be based on actual collections and updated
assumptions by the Servicer as to future usage of electricity by specified
customers, future expenses relating to the Transition Property, the Notes and
the Certificates, and the rate of delinquencies and write-offs. On December 15,
1998, the Servicer filed with the CPUC a routine annual true-up mechanism advice
letter filing. The filing decreased the FTA charges 24% from 1.723 cents to
1.306 cents per kilowatt hour for residential customers and from 1.822 cents to
1.381 cents per kilowatt hour for small commercial customers, effective January
1, 1999. In addition, on August 19, 1999, the Servicer filed with the CPUC an
anniversary true-up mechanism advice letter filing. The filing decreases,
effective October 1, 1999, residential customer FTA charges 11% from 1.306 cents
to 1.235 cents per kilowatt hour and small commercial customer FTA charges 5%
from 1.381 cents to 1.306 cents per kilowatt hour.
The Note Issuer is limited by its organizational documents from
engaging in any activities other than owning the Transition Property, issuing
notes secured by the Transition Property and other limited collateral, and
activities related thereto. Accordingly, income statement effects are limited
primarily to income generated from the Transition Property, interest expense on
the Notes, servicing fees to SCE, and incidental investment interest income.
During the nine months ended September 30, 1999, income generated from the
Transition Property was $104 million, compared with $117 million for the same
period in 1998. The decrease is due to lower FTA charges effective January 1,
1999. Interest on other investments for the nine months ended September 30, 1999
was approximately $2.3 million, compared with $1.8 million for the same period
in 1998. The increase is attributable to higher cash balances resulting from the
excess of FTA cash collections over scheduled quarterly payments. These excess
collections are transferred to investment accounts. These investment accounts
are restricted and appear on the balance sheet as restricted funds. Interest
expense for the nine months ended September 30, 1999 was approximately $103
million compared with $116 million for the same period in 1998, and includes
interest on the Notes and the amortization of debt issuance costs. The decrease
is due to lower outstanding principal balances on the rate reduction notes.
The Note Issuer uses collections with respect to the Transition
Property to make scheduled principal and interest payments on the Notes.
Interest income earned on the Transition Property is expected to offset (1)
interest expense on the Notes, (2) amortization of debt issuance costs and the
discount on the Notes and (3) the fees charged by SCE for servicing the
Transition Property and providing administrative services to the Note Issuer.
Attached as Exhibit 99 is the Quarterly Servicer's Certificate for
the collection periods June 1999 through August 1999 (dated September 16, 1999),
delivered pursuant to the Note Indenture, which includes information relating to
the collections of the FTA Charges. As noted therein, collections of FTA Charges
are currently meeting expectations and were sufficient to pay
6
<PAGE>
100% of all scheduled payments on the Notes and related expenses for the Note
payment date (September 27, 1999) and provide additional funding of
approximately $183,000 for deposit into a previously established reserve
sub-account. The FTA Charges will be adjusted at least annually if there is a
material shortfall or overage in collections. The Note Issuer expects future
collections of FTA Charges to be sufficient to cover expenses and to make
scheduled payments on the Notes on a timely basis.
Year 2000 Issue
Many of SCE's existing computer systems were originally programmed to
represent any date by using six digits (e.g., 12/31/99) rather than eight digits
(e.g., 12/31/1999). Accordingly, such programs, if not appropriately addressed,
could fail or create erroneous results when attempting to process information
containing dates after December 31, 1999. This situation has been referred to as
the Year 2000 Issue.
Under the Servicing Agreement, SCE, as Servicer, is responsible for
functions, such as data acquisition, usage and bill calculation, billing,
customer service, collections, payment processing, and remittance, that are
dependent on SCE's computer systems. Failure of those systems could adversely
affect the ability of the Note Issuer to make timely payments of principal and
interest on the Notes.
SCE has advised the Note Issuer as follows: SCE has a comprehensive program
in place to address potential Year 2000 impacts. Edison International provides
overall coordination of this effort. SCE divides Year 2000 activities into five
phases: inventory, impact assessment, remediation, testing, and implementation.
A critical system is defined by SCE as those of its applications and
systems, which if not appropriately remediated, may have a significant impact on
customers, the health and safety of the public and/or personnel, the revenue
stream, or regulatory compliance. A system, application or physical asset is
deemed to be Year 2000-ready if it is determined by SCE to be suitable for
continued use through 2028 (or through the last year of the anticipated life of
the asset, whichever occurs first), even though it may not be fully Year
2000-compliant. A system, application, or physical asset is deemed to be Year
2000-compliant if it accurately processes date/time data, such as calculating,
comparing, and sequencing from, into, and between the twentieth and twenty-first
centuries, 1999 and 2000, and leap-year calculations.
On June 29, 1999 SCE announced that it had achieved Year 2000 readiness
of 100% of its critical systems. These critical systems include SCE's financial
and customer information and billing systems.
SCE has also advised the Note Issuer that the initial development of
its contingency plans for dealing with the Year 2000 Issue was completed in June
1999, and that it expects that these plans will continue to be revised and
enhanced as year 2000 approaches. SCE has tested its contingency plans by
conducting or participating in exercises and industry-wide drills and will
continue to conduct internal exercises during the fourth quarter of 1999. The
Note Issuer does not have, nor does it intend to create, any separate
contingency plans.
7
<PAGE>
Based upon the information provided by SCE, the Note Issuer does not
expect any material adverse impact on the Note Issuer or its financial position
or results of operations, or on the payment of principal and interest on the
Notes, as a result of any inability of the computer systems on which it
currently relies to recognize or otherwise function correctly with respect to
the Year 2000 Issue.
Forward-looking Information
In the preceding Management's Discussion and Analysis of Financial
Condition and Results of Operations, and elsewhere in this quarterly report, the
Note Issuer uses the words could, estimates, expects, anticipates, believes, and
other similar expressions that are intended to identify forward-looking
information that involves risks and uncertainties. Actual results or outcomes
could differ materially as a result of such important factors as the
commencement and outcome of voter initiatives and legal or regulatory
proceedings challenging the collection of FTA Charges or payment of the Notes or
Certificates, changes in federal or state laws applicable to restructuring the
electric utility industry, and the ability of SCE to address, make and maintain
Year 2000-ready the computer systems commonly used by SCE and the Note Issuer.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Omitted with respect to the Note Issuer pursuant to Instruction H of
Form 10-Q.
8
<PAGE>
PART II
Item 1. Legal Proceedings.
Omitted because there are no reportable proceedings.
Item 2. Changes in Securities and Use of Proceeds.
Omitted with respect to the Note Issuer pursuant to Instruction H of
Form 10-Q.
Item 3. Defaults Upon Senior Securities.
Omitted with respect to the Note Issuer pursuant to Instruction H of
Form 10-Q.
Item 4. Submission of Matters to a Vote of Security Holders.
Omitted with respect to the Note Issuer pursuant to Instruction H of
Form 10-Q.
Item 5. Other Information.
Attached, with respect to the Note Issuer and the Trust, as Exhibit 99 is
the Quarterly Servicer's Certificate for the collection periods June 1999
through August 1999 (dated September 16, 1999), delivered pursuant to the Note
Indenture, which includes information relating to the collections of the FTA
Charges.
Item 6. Exhibits and Reports on Form 8-K.
(a) See the Exhibit Index of this report below.
(b) Reports on Form 8-K filed during the quarter ended September 30,
1999.
The Note Issuer did not file any reports on Form 8-K for the quarter ended
September 30, 1999.
<PAGE>
SIGNATURES
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.
Dated: November 10, 1999 SCE FUNDING LLC
as Registrant
By Mary C. Simpson
------------------------------------------
Name: Mary C. Simpson
Title: Treasurer (Principal Financial and
Accounting Officer)
<PAGE>
Exhibit Index
Exhibit
Number
-------
3.1 Certificate of Formation (incorporated by reference to the same
titled and numbered exhibit to the Note Issuer's Registration
Statement on Form S-3, File No. 333-30785)*
3.2 Limited Liability Company Agreement (incorporated by
reference to the same titled and numbered exhibit to
the Note Issuer's Registration Statement on Form S-3,
File No. 333-30785)*
3.3 Amended and Restated Limited Liability Company
Agreement (incorporated by reference to the same
titled exhibit, included as exhibit number 3.4 to the
Note Issuer's Registration Statement on Form S-3,
File No.
333-30785)*
27 Financial Data Schedule for the nine months ended September 30,
1999
99 Quarterly Servicer's Certificate dated September 16, 1999
- ----------------
* Incorporated by reference pursuant to Rule 12b-32.
<TABLE> <S> <C>
<ARTICLE> UT
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 0
<OTHER-PROPERTY-AND-INVEST> 0
<TOTAL-CURRENT-ASSETS> 244,326
<TOTAL-DEFERRED-CHARGES> 15,049
<OTHER-ASSETS> 1,817,837
<TOTAL-ASSETS> 2,077,212
<COMMON> 0
<CAPITAL-SURPLUS-PAID-IN> 44,997
<RETAINED-EARNINGS> (7,617)
<TOTAL-COMMON-STOCKHOLDERS-EQ> 37,380
0
0
<LONG-TERM-DEBT-NET> 1,794,846
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 243,009
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 1,977
<TOT-CAPITALIZATION-AND-LIAB> 2,077,212
<GROSS-OPERATING-REVENUE> 104,350
<INCOME-TAX-EXPENSE> 0
<OTHER-OPERATING-EXPENSES> 4,129
<TOTAL-OPERATING-EXPENSES> 4,129
<OPERATING-INCOME-LOSS> 100,221
<OTHER-INCOME-NET> 0
<INCOME-BEFORE-INTEREST-EXPEN> 100,221
<TOTAL-INTEREST-EXPENSE> 103,001
<NET-INCOME> (2,780)
0
<EARNINGS-AVAILABLE-FOR-COMM> (2,780)
<COMMON-STOCK-DIVIDENDS> 0
<TOTAL-INTEREST-ON-BONDS> 103,001
<CASH-FLOW-OPERATIONS> 161,608
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
Page 1 of 3 September 16, 1999
Quarterly Servicer's Certificate
(to be delivered pursuant to Section 4.01(d)(ii) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
Pursuant to the Transition Property Servicing Agreement dated as of December 11,
1997 (the "Transition Property Servicing Agreement") between Southern California
Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer, the Servicer
does hereby certify as follows:
Collection Periods: June 1999 through August 1999
Distribution Date: September 27, 1999
Capitalized terms used in this Quarterly Servicer's Certificate have
their respective meanings set forth in the Transition Property Servicing
Agreement.
In WITNESS WHEREOF, the undersigned has duly executed and delivered
this Quarterly Servicer's Certificate this 17th day of September, 1999.
SOUTHERN CALIFORNIA EDISON COMPANY, as Servicer
By: Mary C. Simpson
------------------------------------------
Mary C. Simpson
Title: Assistant Treasurer
1. Distribution of Principal per $1,000 of Original Principal Amount
<TABLE>
<CAPTION>
Principal Payment
per $1,000 of
Original Principal
Original Principal Principal Payment Amount
(A) (B) (B /A x 1,000)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
a. Class A-1 $246,300,000.00 $ - $ -
b. Class A-2 307,251,868.00 58,520,232.00 190.46338882
c. Class A-3 247,840,798.00 - -
d. Class A-4 246,030,125.00 - -
e. Class A-5 360,644,658.00 - -
f. Class A-6 739,988,148.00 - -
g. Class A-7 314,944,403.00 - -
2. Distribution of Interest per $1,000 of Original Principal Amount
Interest Payment per
$1,000 of Original
Original Principal Interest Payment Principal Amount
(A) (B) (B / A x 1,000)
- ------------------------------------------------------------------------------------------------------------------------------------
a. Class A-1 $246,300,000.00 $ - $ -
b. Class A-2 307,251,868.00 2,878,005.70 9.36692662
c. Class A-3 247,840,798.00 3,822,944.31 15.42500000
d. Class A-4 246,030,125.00 3,825,768.44 15.54999998
e. Class A-5 360,644,658.00 5,662,121.13 15.70000000
f. Class A-6 739,988,148.00 11,802,810.96 15.95000000
g. Class A-7 314,944,403.00 5,054,857.67 16.05000001
</TABLE>
<PAGE>
Page 2 of 3 September 16, 1999
Quarterly Servicer's Certificate
(to be delivered pursuant to Section 4.01(d)(ii) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
Pursuant to the Transition Property Servicing Agreement dated as of December 11,
1997 (the "Transition Property Servicing Agreement") between Southern California
Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer, the Servicer
does hereby certify as follows:
<TABLE>
<CAPTION>
Collection Periods: June 1999 through August 1999
Distribution Date: September 27, 1999
3. As of this Payment Date
<S> <C>
a. Required Overcollateralization Level $ 2,155,125.00
b. Required Capital Level 12,215,000.00
c. Outstanding principal balance of Series 1997-1 Notes
i. prior to giving effect to any payments made on this Payment Date 2,096,940,360.00
ii. per Expected Amortization Schedule 2,038,420,128.00
4. Amounts available for distribution this Payment Date:
a. Remittances for December 1998 Collection period $ 27,445,078.77
b. Remittances for January 1999 Collection Period 31,435,261.91
c. Remittances for February 1999 Collection Period 34,515,963.16
d. Net Earnings on Collection Account 810,077.81
e. General Subaccount Balance (sum of a through d above) 94,206,381.65
f. Reserve Subaccount Balance 20,701,083.75
g. Overcollateralization Subaccount Balance 1,847,250.00
h. Capital Subaccount Balance 12,215,000.00
i. Collection Account Balance (sum of e through h above) 128,969,715.41
5. Distribution of amounts remitted:
a. Note, Delaware, Certificate Trustee Fees $ -
b. Servicing Fees 1,310,587.73
c. Quarterly Administration Fees 25,000.00
d. Operating Expenses (up to a maximum of $100,000.00) 2,858.60
e. Quarterly Interest 33,046,508.21
f. Principal Due and Payable -
g. Quarterly Principal 58,520,232.00
h. Operating Expenses in excess of those in d above -
i. Deposit to Overcollateralization Subaccount (up to required level) 307,875.00
j. Deposit to Capital Subaccount (up to required level) -
k. Released to the Note Issuer: Net earnings on Collection Account 810,077.81
l. Released to the Note Issuer upon Series retirement: Overcollateralization Subaccount -
m. Released to the Note Issuer upon Series retirement: Capital Subaccount Balance -
n. Deposit to Reserve Account 183,242.31
o. Released to Note Issuer upon Series Retirement: Collection Account -
TOTAL $ 94,206,381.65
6. For this Payment Date
a. Withdrawal, if any, from Reserve Subaccount (including $224,273.62 in net earnings) $ 224,273.62
b. Withdrawal, if any, from Overcollateralization Subaccount (including
$22,001.99 in net earnings) 22,001.99
c. Withdrawal, if any, from Capital Subaccount (including $152,846.86 in net earnings) 152,846.86
</TABLE>
<PAGE>
Page 3 of 3 September 16, 1999
Quarterly Servicer's Certificate
(to be delivered pursuant to Section 4.01(d)(ii) of
the Transition Property Servicing Agreement on or before each Remittance Date)
Southern California Edison Company, as Servicer
CALIFORNIA INFRASTRUCTURE AND ECONOMIC DEVELOPMENT BANK SPECIAL PURPOSE TRUST
SCE-1
Pursuant to the Transition Property Servicing Agreement dated as of December 11,
1997 (the "Transition Property Servicing Agreement") between Southern California
Edison Company, as Servicer, and SCE Funding LLC, as Note Issuer, the Servicer
does hereby certify as follows:
Collection Periods: June 1999 through August 1999
Distribution Date: September 27, 1999
7. For this Payment Date
a. Current Payment Date September 25, 1999
b. Prior Payment Date* June 25, 1998
c. 30/360 Days in Interest Accrual Period (a-b) 90
8. Interest due and payable as of this Payment Date
<TABLE>
<CAPTION>
Principal Amount
(before giving effect Interest Due
to any payments) Note Interest Rate for this Period Interest Paid
(A) (B) (A x B x 7c /360) this Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
a. Class A-1 $ - 5.98% $ - $ -
b. Class A-2 187,492,228.00 6.14% 2,878,005.70 2,878,005.70
c. Class A-3 247,840,798.00 6.17% 3,822,944.31 3,822,944.31
d. Class A-4 246,030,125.00 6.22% 3,825,768.44 3,825,768.44
e. Class A-5 360,644,658.00 6.28% 5,662,121.13 5,662,121.13
f. Class A-6 739,988,148.00 6.38% 11,802,810.96 11,802,810.96
g. Class A-7 314,944,403.00 6.42% 5,054,857.67 5,054,857.67
9. Principal amount as of this Payment Date
Difference Between
Outstanding
Principal Amount
Principal Amount Principal Amount and Amount Shown
(before giving effect (after giving effect to on Expected
to any payments) Principal Payment any payments) Amortization
(A) (B) (A-B) Schedule
- ------------------------------------------------------------------------------------------------------------------------------------
a. Class A-1 $ - $ - $ - $ -
b. Class A-2 187,492,228.00 58,520,232.00 128,971,996.00 -
c. Class A-3 247,840,798.00 - 247,840,798.00 -
d. Class A-4 246,030,125.00 - 246,030,125.00 -
e. Class A-5 360,644,658.00 - 360,644,658.00 -
f. Class A-6 739,988,148.00 - 739,988,148.00 -
g. Class A-7 314,944,403.00 - 314,944,403.00 -
Total $2,038,420,128.00
Projected outstanding balance of Series 1997-1 $2,038,420,128.00
10. Ending balance this Payment Date:
a. Reserve Subaccount $ 20,884,326.06
b. Overcollateralization Subaccount 2,155,125.00
c. Capital Subaccount 12,215,000.00
</TABLE>
* or Series issuance Date in the case of the first payment date.
