UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
Commission File No. --
RIDGEWOOD ELECTRIC POWER TRUST V
(Exact Name of Registrant as Specified in Its Charter)
Delaware 22-3437351
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
c/o Ridgewood Power Corporation, 947 Linwood Avenue, Ridgewood, New Jersey
07450
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (201) 447-9000
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 [ ] NO [X]
Exhibit Index is located on page .
<PAGE>
PART I
Item #1. Financial Statements
<PAGE>
PART I. - FINANCIAL INFORMATION
RIDGEWOOD ELECTRIC POWER TRUST V
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1998 1997
(unaudited)
Assets:
Cash and cash equivalents $ 45,665,398 $ 40,821,582
Due from affiliates 111,078 14,467
Other assets 197,695 167,170
Total current assets 45,974,171 41,003,219
Investment in Maine
Hydro Projects 7,278,561 6,694,826
Investment in and
loans to Maine
Biomass Projects 6,433,360 6,617,862
Investment in
Santee River
Project 8,939,301 ---
Investment in and
loans to Quantum
Conveyor, LLC 3,019,999 ---
Deferred due
diligence costs 1,048,596 154,018
Total assets $72,693,988 $54,469,925
Liabilities and Shareholders' Equity:
Accounts payable and
accrued expenses $ 34,500 $1,101,285
Due to affiliates 357,724 322,522
Total current
liabilities 392,224 1,423,807
Commitments and
contingencies
Shareholders' equity:
Shareholders' equity
(950 and 762.8
shares issued and
outstanding at Sep-
tember 30, 1998 and
December 31, 1997) 72,364,956 53,077,526
Managing shareholder's
accumulated deficit (63,192) (31,408)
Total shareholders'
equity 72,301,764 53,046,118
Total liabilities and
shareholders' equity $72,693,988 $54,469,925
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST V
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS AND QUARTERS
ENDED SEPTEMBER 30, 1998 AND SEPTEMBER 30, 1997
(Unaudited)
<CAPTION>
Nine months ended Quarter ended
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenue:
Interest income $2,251,014 $589,815 $ 649,941 $ 257,316
Income from Maine
Hydro Projects 583,735 595,928 (103,805) (177,771)
Income from Quantum
Conveyor LLC 18,899 --- 18,899 ---
Loss from Maine
Biomass Projects (434,502) (214,213) (123,469) (214,213)
Total revenue 2,419,146 971,530 441,566 58,124
Expenses:
Due diligence costs 633,790 8,159 614,621 763
Investment fee 318,488 520,786 15,120 209,280
Management fee 1,039,351 --- 566,919 ---
Allocated management
costs 356,221 234,409 117,232 234,409
Accounting and legal fees 39,320 33,503 11,655 17,501
Miscellaneous 34,244 15,270 14,409 7,052
Total expenses 2,421,414 812,127 1,339,956 469,005
Net income (loss) $ (2,268) $159,403 $(898,390) $(410,881)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST V
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
(unaudited)
<CAPTION>
Managing
Shareholders Shareholder Total
<S> <C> <C> <C>
Shareholders'
equity, December 31,
1997 (762.8 shares) $ 53,077,526 $ (31,408) $ 53,046,118
Capital contributions,
net (187.2 shares) 22,434,032 --- 22,434,032
Cash distributions (3,144,357) (31,761) (3,176,118)
Net loss
for the period (2,245) (23) (2,268)
Shareholders'
equity,
September 30,
1998 (950 shares) $ 72,364,956 (63,192) $ 72,301,764
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST V
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND
SEPTEMBER 30, 1997
(Unaudited)
<CAPTION>
Nine Months Ended
September 30, 1998 September 30, 1997
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (2,268) $ 159,403
Adjustments to reconcile net income
to net cash flows from
operating activities:
Income from unconsolidated Maine
Hydro Projects (583,735) (595,928)
Income from unconsolidated
Quantum Conveyor LLC (18,899) ---
Loss from unconsolidated Maine
Biomass Projects 434,502 214,213
Changes in assets and liabilities:
Increase in other assets (30,525) (67,628)
Increase (decrease) in accounts
payable and accrued expenses 3,996 (342,082)
Increase (decrease) in due to
affiliate, net (61,409) 311,988
Total adjustments (256,070) (479,437)
Net cash (used in) provided by
operating activities (258,338) (320,034)
Cash flows from investing activities:
Investment in Maine Hydro Projects --- (102,762)
Loans to Maine Biomass Projects (250,000) (7,311,327)
Investment in and loans to
Quantum Conveyor LLC (3,001,100) ---
Investment in Santee River Project (8,939,301) ---
Deferred due diligence costs (894,578) (214,321)
Net cash used in
investing activities (13,084,979) (7,628,410)
Cash flows from financing activities:
Proceeds from
shareholders' contributions 25,945,198 24,195,182
Selling commissions
and offering costs paid (4,581,947) (1,650,929)
Cash distributions
to shareholders (3,176,118) (582,854)
Net cash provided
by financing activities 18,187,133 21,961,399
Net increase in cash
and cash equivalents 4,843,816 15,458,592
Cash and cash equivalents,
beginning of period 40,821,582 7,654,619
Cash and cash equivalents,
end of period $ 45,665,398 $ 23,113,211
</TABLE>
See accompanying notes to financial statements.
<PAGE>
Item #2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
This Quarterly Report on Form 10-Q, like some other statements made by the Trust
from time to time, has forward-looking statements. These statements discuss
business trends and other matters relating to the Trust's future results and the
business climate. In order to make these statements, the Trust has had to make
assumptions as to the future. It has also had to make estimates in some cases
about events that have already happened, and to rely on data that may be found
to be inaccurate at a later time. Because these forward-looking statements are
based on assumptions, estimates and changeable data, and because any attempt to
predict the future is subject to other errors, what happens to the Trust in the
future may be materially different from the Trust's forward-looking statements
here.
The Trust therefore warns readers of this document that they should not rely on
these forward-looking statements without considering all of the things that
could make them inaccurate. The Trust's other filings with the Securities and
Exchange Commission and its Confidential Memorandum discuss many (but not all)
of the risks and uncertainties that might affect these forward-looking
statements.
Some of these are changes in political and economic conditions, federal or state
regulatory structures, government taxation, spending and budgetary policies,
government mandates, demand for electricity and thermal energy, the ability of
customers to pay for energy received, supplies of fuel and prices of fuels,
operational status of plant, mechanical breakdowns, availability of labor and
the willingness of electric utilities to perform existing power purchase
agreements in good faith.
By making these statements now, the Trust is not making any commitment to revise
these forward-looking statements to reflect events that happen after the date of
this document or to reflect unanticipated future events.
Dollar amounts in this discussion are generally rounded to the nearest $1,000.
Introduction
The financial statements include only the accounts of the Trust. The Trust uses
the equity method of accounting for its investments in the Maine Hydro Projects,
the Maine Biomass Projects and Quantum Conveyor.
Results of Operations
In the first nine months of 1998, the Trust had total revenues of $2,419,000,
which were $1,037,000 (75%) higher than the total revenue of $1,382,000 in the
same period in 1997. Revenues in the third quarter of 1998 of $442,000 were
$166,000 (60%) higher than the 1997 third quarter revenues of $276,000. In both
periods, these increases were the results of higher interest income resulting
from the Trust's greater cash balances.
The Trust's equity in income from the Maine Hydro Projects decreased from
$596,000 in the first nine months of 1997 to $584,000 in the same period in 1998
but improved from a loss of $178,000 in the third quarter of 1997 to a loss of
$104,000 in the same period in 1998. These variations were caused by changes in
project revenues resulting from precipitation fluctuations affecting the flow of
water and were within the expected range of variations. The Trust recorded a
loss of $435,000 in the first nine months of 1998 and a loss of $123,000 in the
third quarter of 1998 with respect to its equity in Maine Biomass Projects that
was acquired in July 1997. The projects are not operating (except for required
testing) but in April 1998 they began selling "installed capability" (a measure
of their capability to provide electricity) under contract to participants in
the New England Power Pool. Revenues from those sales caused the loss
attributable to the Trust from the Maine Biomass Projects to be significantly
reduced in the second and third quarters of 1998.
In the 1997 periods, the investment fee of 2% of Capital Contributions was the
major component of the Trust's expenses. The Trust's offering of shares wound
down in early 1998, causing the investment fee charge to fall to $15,000 in the
third quarter of 1998 as opposed to $209,000 in the comparable period of 1997.
The investment fee will not be charged in the future unless the Trust were to
make a new offering of shares, which is not contemplated.
In the 1998 period, the major components of Trust expenses were the annual
management fee (2.5% of assets), which began to be charged at the termination of
the offering in April, and reimbursements for project management services
(computed at cost or the allocable amount of certain overhead expenses) provided
by the Managing Shareholder in 1998. In addition, in the third quarter of 1998
the Trust recorded $615,000 of project due diligence expense primarily due to
the write off of costs associated with a rejected potential investment in a
series of landfill gas fueled generation plants
Other expenses in the first nine months of 1997 and 1998 were comparable.
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 $750,000. 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 1998.
In September 1998, the Trust and an affiliate, Ridgewood Electric Power Trust IV
("Trust IV"), purchased a preferred membership interest in Santee River Rubber
Company, LLC, ("Santee River LLC"). Santee River LLC is building a waste tire
and rubber processing facility located near Charleston, South Carolina. The
Trust's share of the net purchase price was $8,939,301 and Trust IV provided the
remaining $4,469,650 of the price.
In September 1998, the Trust through a subsidiary purchased a 15% membership
interest in Quantum Conveyor Systems, LLC, ("Quantum Conveyor") for $15,000.
Quantum Conveyor designs, manufactures and sells modular conveyor systems used
by post offices, distribution centers, warehouses, and other facilities. At the
same time as it purchased its membership interest, the Trust's subsidiary made a
secured loan of $2,985,000 to Quantum Conveyor. In addition, the subsidiary has
an option that expires on March 2, 1999 to purchase an additional 10% membership
interest for $10,000 and loan an addition $1,990,000 to Quantum Conveyor. The
Trust intends to allow Ridgewood Capital Venture Partners, LLC, a
recently-organized investment program that is an affiliate of the Managing
Shareholder, to invest up to $2 million in the subsidiary on the same terms as
the Trust in order to fund exercise of the option.
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 and other expenses 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.
PART II - OTHER INFORMATION
Item #6 - Exhibits and Reports on Form 8-K
a. Exhibits Exhibit 27. Financial Data Schedule c. Reports on Form 8-K. The
Trust filed a Current Report on Form 8-K, dated , reporting its investment
in Santee River Rubber Company, LLC.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST V
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
By /s/Martin V. Quinn
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 six months ended September 30,
1998 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 58,216,870
<SECURITIES> 13,939,195<F1>
<RECEIVABLES> 189,298<F2>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 58,766,556
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 73,763,406
<CURRENT-LIABILITIES> 624,482<F2>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 73,138,924<F4>
<TOTAL-LIABILITY-AND-EQUITY> 73,763,406
<SALES> 0
<TOTAL-REVENUES> 1,977,580<F5>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,081,458
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 896,122
<INCOME-TAX> 0
<INCOME-CONTINUING> 896,122
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 896,122
<EPS-BASIC> 943
<EPS-DILUTED> 943
<FN>
<F1>Investment in power project partnership and limited liability company
accounted for on equity basis.
<F2>Due from affiliates.
<F3>Includes $606,413 due to affiliates.
<F4>Represents Investor Shares of beneficial interest in Trust with capital
accounts of $73,183,407 less managing shareholder's accumulated deficit of
$44,483. <F5>Is net of $1,601,073 of interest income, $687,540 of income from
hydroelectric projects and a $311,033 loss from biomass projects.
</FN>
</TABLE>
