FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1999
Commission File No. 0-24143
RIDGEWOOD ELECTRIC POWER TRUST V
(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-3437351
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices (Zip Code)
(201) 447-9000
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 [ ]
<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Ridgewood Electric Power Trust V
Consolidated Financial Statements
March 31, 1999
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Balance Sheet
- --------------------------------------------------------------------------------
March 31, December 31,
1999 1998
------------ -----------
(unaudited)
Assets:
Cash and cash equivalents ................ $ 40,812,203 $ 42,832,241
Due from affiliates ...................... 1,406,496 1,165,140
Interest receivable ...................... 184,410 96,806
Other current assets ..................... 167,563 165,683
------------ ------------
Total current assets ................. 42,570,672 44,259,870
Investments:
Maine Hydro Projects ..................... 6,754,424 6,217,289
Maine Biomass Projects ................... 6,238,664 6,306,817
MetaSound Systems ........................ 2,204,925 2,447,413
Quantum Conveyor ......................... 3,085,461 3,096,170
Santee River Rubber ...................... 8,797,748 9,007,968
Deferred due diligence costs ............. 662,151 399,498
------------ ------------
Total assets ......................... $ 70,314,045 $ 71,735,025
------------ ------------
Liabilities and shareholders' equity:
Accounts payable and accrued expenses .... $ 196,813 $ 194,531
Due to affiliates ........................ 227,582 593,582
------------ ------------
Total current liabilities ............ 424,395 788,113
------------ ------------
Minority interest ........................ 1,731,878 1,730,174
Commitments and contingencies
Shareholders' equity:
Shareholders' equity (950 shares issued
and outstanding) ....................... 68,268,458 69,315,887
Managing shareholder's accumulated deficit (110,686) (99,149)
------------ ------------
Total shareholders' equity ........... 68,157,772 69,216,738
------------ ------------
Total liabilities and shareholders'
equity ............................. $ 70,314,045 $ 71,735,025
------------ ------------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
--------------------------------
March 31, 1999 March 31, 1998
Revenue:
--------- ---------
Interest income .......................... $ 614,026 $ 825,129
Income from Maine Hydro Projects ......... 537,135 326,530
Loss from Maine Biomass Projects ......... (168,403) (267,857)
Loss from MetaSound Systems .............. (248,639) --
Loss from Quantum Conveyor ............... (10,709) --
Income from Santee River Rubber .......... 4,034 --
--------- ---------
Total revenue .................... 727,444 883,802
--------- ---------
Expenses:
Investment fee ............................ 6,500 260,773
Management fee ............................ 601,202 --
Allocated management costs ................ -- 138,461
Accounting and legal fees ................. 20,039 9,505
Research and development .................. 201,332 --
Miscellaneous ............................. 53,114 8,046
--------- ---------
Total expenses .................... 882,187 416,785
--------- ---------
(Loss) income from operations .... (154,743) 467,017
Minority interest in income of consolidated
subsidiary ............................ (1,704) --
--------- ---------
Net (loss) income ................ $(156,447) $ 467,017
--------- ---------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
- --------------------------------------------------------------------------------
Managing
Shareholders Shareholder Total
------------ ------------ -----------
Shareholders' equity, December
31, 1998 .................. $ 69,315,887 $ (99,149) $ 69,216,738
Capital contributions ........ 94,800 -- 94,800
Cash distributions ........... (987,346) (9,973) (997,319)
Net income for the ........... (154,883) (1,564) (156,447)
period
------------ ------------ ------------
Shareholders' equity, March
31, 1999 ................... $ 68,268,458 $ (110,686) $ 68,157,772
------------ ------------ ------------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Cash Flows (unaudited)
- --------------------------------------------------------------------------------
ree Months Ended
----------------------------
March 31, March 31,
1999 1998
------------ ------------
Cash flows from operating activities:
Net (loss) income ......................... $ (156,447) $ 467,017
------------ ------------
Adjustments to reconcile net income to net
cash flows from operating activities:
Income from unconsolidated Maine Hydro
Projects .............................. (537,135) (326,530)
Loss from unconsolidated Maine Biomass
Projects .............................. 168,403 267,857
Loss from unconsolidated MetaSound
Systems ............................... 248,639 --
Loss from unconsolidated Quantum Conveyor 10,709 --
Income from unconsolidated Santee River
Rubber ................................ (4,034) --
Minority interest in income of
consolidated subsidiary ............... 1,704 --
Changes in assets and liabilities:
Increase in interest receivable ....... (87,604) (114,560)
Increase in other current assets ...... (1,880) --
(Decrease) increase in accounts payable
and accrued expenses ................ 2,282 (1,064,862)
Decrease in due to affiliate, net ..... (607,356) (134,081)
------------ ------------
Total adjustments ................... (806,272) (1,372,176)
------------ ------------
Net cash (used in) provided by operating
activities .............................. (962,719) (905,159)
------------ ------------
Cash flows from investing activities:
Loans to Maine Biomass Projects ........... (100,250) (250,000)
Investment in MetaSound Systems ........... (6,151) --
Distributions from Santee River Rubber .... 214,254 --
Deferred due diligence costs .............. (262,653) (179,268)
------------ ------------
Net cash used in investing activities ..... (154,800) (429,268)
------------ ------------
Cash flows from financing activities:
Proceeds from shareholders' contributions . 130,500 21,641,833
Selling commissions and offering costs paid (35,700) (2,446,278)
Cash distributions to shareholders ........ (997,319) (1,246,739)
------------ ------------
Net cash provided by financing activities . (902,519) 17,948,816
------------ ------------
Net increase in cash and cash equivalents ... (2,020,038) 16,614,389
Cash and cash equivalents, beginning of year 42,832,241 40,821,582
------------ ------------
Cash and cash equivalents, end of period .... $ 40,812,203 $ 57,435,971
------------ ------------
See accompanying notes to financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Notes to Consolidated Financial Statements (unaudited)
1. General
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments which consist of normal recurring adjustments, necessary
for the pair presentation of the results for the interim periods. Additional
footnote disclosure concerning accounting policies and other matters are
disclosed in Ridgewood Electric Power Trust V's financial statements included in
the 1998 Annual Report on Form 10-K, which should be read in conjunction with
these financial statements.
The results of operations for an interim period should not necessarily be taken
as indicative of the results of operations that may be expected for a twelve
month period.
2. Maine Biomass Projects
In the first quarter of 1999 and April 1999, the Trust loaned $100,250 and
$62,250, respectively, to Indeck Maine Energy, L.L.C. ("Maine Biomass
Projects"). The loan is in the form of two demand notes that bear interest at 5%
per annum. Ridgewood Electric Power Trust IV, which owns an identical preferred
membership interest in the Maine Biomass Projects, also made identical loans to
the Maine Biomass Projects. The other Maine Biomass Project members also loaned
$150,000 in the first quarter of 1999 and $177,000 in April 1999 to the Maine
Biomass Projects with the same terms.
The Maine Biomass Projects were operated by Indeck Operations, Inc., an
affiliate of the members of the Maine Biomass Projects. The annual operator's
fee is $300,000, of which $200,00 is payable contingent upon the Trusts
receiving their cumulative annual return. The management agreement had a term of
one year and automatically continued for successive one year terms, unless
canceled by either the Maine Biomass Projects or Indeck Operations, Inc. The
Maine Biomass Projects exercised their right to terminate the contract on March
1, 1999 because certain preferred membership interest payments have not been
made. Under an Operating Agreement with the Trust, Ridgewood Power Management
Corporation ("Ridgewood Management"), an entity related to the managing
shareholder through common ownership, will provide management, purchasing,
engineering, planning and administrative services to the Maine Biomass Projects.
Ridgewood Management charges the projects at its cost for these services and for
the allocable amount of certain overhead items. Allocations of costs are on the
basis of identifiable direct costs, time records or in proportion to amounts
invested in projects
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are generally rounded to the nearest $1,000.
Introduction
The consolidated financial statements include only the accounts of the Trust and
its majority owned subsidiary, Ridgewood WaterPure Corporation. The Trust uses
the equity method of accounting for its investments in the Maine Hydro Projects,
the Maine Biomass Projects, the Santee River Rubber Project, Quantum Conveyors
and MetaSound Systems, which are owned 50% or less by the Trust.
Results of Operations
Quarter ended March 31, 1999 compared to quarter ended March 31, 1998.
In the first quarter of 1999, the Trust had total revenue of $727,000, a decline
of $157,000 from total revenue of $884,000 in the same period in 1998. Interest
income declined by $211,000 from $825,000 in the first quarter of 1998 to
$614,000 in the first quarter of 1999 due to lower average cash balances. Equity
income from the Maine Hydro Projects increased $210,000 from $327,000 in the
first quarter of 1998 to $537,000 in the same period in 1999 due to higher
production because of above-average river flows. The equity loss from the
shut-down Maine Biomass Projects decreased from $268,000 in the first quarter of
1998 to $168,000 in the same period in 1999 due to cost reductions and installed
electric capacity at the plants. The Trust recorded a loss of $249,000 in the
first quarter of 1999 equal to its share of losses incurred at MetaSound
Systems. The Trust acquired a minority interest in that company in December
1998.
The investment fee declined from $261,000 in the first quarter of 1998 to $7,000
in the first quarter of 1999 as a result of the closing of the Trust's offering
in April 1998. In the first quarter of 1999, the most significant expense was
the management fee of $601,202 (2.5% annually of capital contributions), which
began to be charged at the termination of the offering in April 1998. This fee
supersedes reimbursements for project management services (computed at cost or
the allocable amount of certain overhead expenses) provided by the Managing
Shareholder, which totalled $138,000 in the first quarter of 1998.
In the first quarter of 1999, the Trust's Ridgewood WaterPure subsidiary
incurred $201,000 of research and development costs related to its water
distillation technology.
Quarter ended March 31, 1998 compared to quarter ended March 31, 1997.
In the first three months of 1998, the Trust had total revenues of $884,000,
which were $552,000 higher than the total revenue of $332,000 in the same period
in 1997. The increase was a result of higher interest income resulting from the
Trust's greater cash balances. In addition, the Trust recorded greater equity
income from the Maine Hydro Projects and recorded an equity loss from the Maine
Biomass Projects. The increase in income from the Maine Hydro Projects is due to
higher revenues from the hydroelectric dams. The Maine Biomass Projects, which
were acquired in July 1997, recorded losses because the plants were temporarily
shut-down.
Expenses were $417,000 in the first quarter of 1998 compared to $93,000 in the
same period in 1997. The primary cause of the increase was a $182,000 increase
in the investment fee resulting from a higher level of capital contributions.
The 1998 expense also included $138,000 of reimbursements for project management
services (computed at cost or the allocable amount of certain overhead expenses)
provided by the Managing Shareholder.
Liquidity and Capital Resources
In 1997, the Trust and Fleet Bank, N.A. (the "Bank") entered into a revolving
line of credit agreement, whereby the Bank provides a three year committed line
of credit facility of $1,150,000. Outstanding borrowings bear interest at the
Bank's prime rate or, at the Trust's choice, at LIBOR plus 2.5%. The credit
agreement requires the Trust to maintain a ratio of total debt to tangible net
worth of no more than 1 to 1 and a minimum debt service coverage ratio of 2 to
1. The credit facility was obtained in order to allow the Trust to operate using
a minimum amount of cash, maximize the amount invested in Projects and maximize
cash distributions to shareholders. There have been no borrowings under the line
of credit in 1999.
Other than investments of available cash in power generation Projects,
obligations of the Trust are generally limited to payment of Project operating
expenses, payment of a management fee to the Managing Shareholder, payments for
certain accounting and legal services to third persons and distributions to
shareholders of available operating cash flow generated by the Trust's
investments. The Trust's policy is to distribute as much cash as is prudent to
shareholders. Accordingly, the Trust has not found it necessary to retain a
material amount of working capital. The amount of working capital retained is
further reduced by the availability of the line of credit facility.
The Trust anticipates that, during 1999, its cash flow from operations,
unexpended offering proceeds and line of credit facility will be adequate to
fund its obligations.
Year 2000 remediation
Please refer to the Trust's disclosures at Item 7 - Management's Discussion and
Analysis of its Annual Report on Form 10-K for 1998 for a discussion of year
2000 issues affecting the Trust. Since that report was filed, the only material
change in the Trust's year 2000 compliance is that the changes to the Managing
Shareholder's investor distribution system have been completed. Testing of those
changes has been rescheduled to late May 1999 in conjunction with a regularly
scheduled set of distributions. No other material changes in the Trust's
remediation efforts or its plans for year 2000 compliance have occurred.
<PAGE>
PART II - OTHER INFORMATION
Item 5. Other Information
Ridgewood Power Corporation has been the managing shareholder of the Trust. It
organized the Trust and acted as managing shareholder until April 1999. On or
about April 20, 1999 it was merged into Ridgewood Power LLC, a New Jersey
limited liability company, which thus became the Managing Shareholder of the
Trust. Ridgewood Power LLC was organized in early April 1999 and has no business
other than acting as the successor to Ridgewood Power Corporation. No material
change in the Trust's operations or business will result from the merger.
Robert E. Swanson has been the President, sole director and sole stockholder of
Ridgewood Power Corporation since its inception in February 1991 and is now the
controlling member, sole manager and President of the Managing Shareholder. Mr.
Swanson currently is the sole equity owner of the Managing Shareholder but is
considering a transfer of 53% of the equity ownership to two family trusts. If
that transfer is made, he will have the power on behalf of those trusts to vote
or dispose of the membership equity interests owned by them and accordingly will
continue to have sole control of the Managing Shareholder. Further, Mr. Swanson
is designated as the sole manager of the Managing Shareholder in its operating
agreement.
Ridgewood Power LLC is also the managing shareholder of the other five business
trusts organized by Ridgewood Power Corporation to participate in the
independent electric power industry.
Similarly, Ridgewood Power Management Corporation, which operates certain
Projects on behalf of the Trust, was merged on or about April 20, 1999 into a
new New Jersey limited liability company, Ridgewood Power Management LLC. The
ownership and control of Ridgewood Power Management LLC are the same as those of
Ridgewood Power LLC and its only business is to be the successor to Ridgewood
Power Management Corporation. No material change in the operation of the
Projects is expected as a result of that merger.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
<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.
RIDGEWOOD ELECTRIC POWER TRUST V
Registrant
May 17, 1999 By /s/ Martin V. Quinn
Date Martin V. Quinn
Senior Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)
<TABLE> <S> <C>
<ARTICLE>5
<LEGEND>This schedule contains summary financial information extracted from the
Registrant's audited financial statements for the quarter ended March 31, 1999
and is qualified in its entirety by reference to those financial statements.
</LEGEND>
<CIK>0001060755
<NAME> RIDGEWOOD ELECTRIC POWER TRUST V
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 40,812,203
<SECURITIES> 27,081,222<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 69,651,894<F2>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 70,314,045
<CURRENT-LIABILITIES> 424,395<F3>
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 68,157,772<F4>
<TOTAL-LIABILITY-AND-EQUITY> 70,314,045
<SALES> 0
<TOTAL-REVENUES> 727,444
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 882,187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (156,447)<F5>
<INCOME-TAX> 0
<INCOME-CONTINUING> (156,447)<F5>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (156,447)<F5>
<EPS-BASIC> (165)
<EPS-DILUTED> (165)
<FN>
<F1>Investment in power project partnership and limited liability company
accounted for on equity basis.
<F2>Includes $1,406,496 due from affiliates.
<F3>Includes $227,582 due to affiliates.
<F4>Shareholders' equity of $68,268,458 less managing share-
holders' accumulated deficit of $110,686.
<F5>After deduction of minority interest in Ridgewood WaterPure Corporation
earnings of $1,704.
</FN>
</TABLE>
