FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OFTHE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1999
Commission file Number 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
June 30, 1999
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Balance Sheet
- --------------------------------------------------------------------------------
June 30, December 31,
1999 1998
------------ ------------
(unaudited)
Assets:
Cash and cash equivalents .................. $ 24,575,852 $ 42,832,241
Due from affiliates ........................ 9,713 1,165,140
Other current assets ....................... 338,563 262,489
------------ ------------
Total current assets ..................... 24,924,128 44,259,870
Investments:
Maine Hydro Projects ....................... 6,331,943 6,217,289
Maine Biomass Projects ..................... 6,121,321 6,306,817
MetaSound Systems .......................... 2,073,362 2,447,413
Quantum Conveyor ........................... 2,974,202 3,096,170
UK Landfill Projects ....................... 16,104,987 --
Santee River Rubber ........................ 8,764,484 9,007,968
Deferred due diligence costs ............... 1,197,109 399,498
Other assets ............................... 46,218 --
------------ ------------
Total assets ............................. $ 68,537,754 $ 71,735,025
------------ ------------
Liabilities and shareholders' equity:
Accounts payable and accrued expenses ...... $ 175,959 $ 194,531
Due to affiliates .......................... 219,132 593,582
------------ ------------
Total current liabilities ................ 395,091 788,113
------------ ------------
Minority interest .......................... 1,607,753 1,730,174
Commitments and contingencies
Shareholders' equity:
Shareholders' equity (950 shares
issued and outstanding) ................... 66,662,038 69,315,887
Managing shareholder's accumulated deficit . (127,128) (99,149)
------------ ------------
Total shareholders' equity ............... 66,534,910 69,216,738
------------ ------------
Total liabilities and shareholders' equity $ 68,537,754 $ 71,735,025
------------ ------------
See accompanying notes to consolidated financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
Six Months Ended Three Months Ended
-------------------------- --------------------------
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
Revenue:
Interest income .... $ 1,092,329 $ 1,601,073 $ 478,303 $ 775,944
Income from Maine
Hydro Projects .... 654,661 687,540 117,526 361,010
Loss from Maine
Biomass Projects .. (410,497) (311,033) (242,094) (43,176)
Income from Santee
River Rubber ...... 129,605 -- 125,571 --
Loss from Quantum
Conveyor .......... (129,752) -- (119,043) --
Loss from MetaSound (427,463) -- (178,824) --
----------- ----------- ----------- -----------
Total revenue .... 908,883 1,977,580 181,439 1,093,778
----------- ----------- ----------- -----------
Expenses:
Investment fee ..... 6,500 303,368 -- 42,595
Due diligence costs 101,988 19,169 101,988 19,169
Accounting and legal
fees .............. 64,869 27,665 44,830 18,160
Management fee ..... 1,263,522 472,432 662,320 472,432
Allocated management
costs ............. -- 238,989 -- 100,528
Research and
development ....... 350,284 -- 118,952 --
Miscellaneous ...... 74,774 19,835 21,660 11,789
----------- ----------- ----------- -----------
Total expenses ... 1,861,937 1,081,458 949,750 664,673
----------- ----------- ----------- -----------
Income (loss) from
operations ........ (953,054) 896,122 (768,311) 429,105
Minority interest in
loss of subsidiary 122,421 -- 124,125 --
----------- ----------- ----------- -----------
Net income (loss) .. $ (830,633) $ 896,122 $ (644,186) $ 429,105
----------- ----------- ----------- -----------
See accompanying notes to consolidated 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 116,100 -- 116,100
Cash distributions .. (1,947,622) (19,673) (1,967,295)
Net loss for the
period .............. (822,327) (8,306) (830,633)
------------ ------------ ------------
Shareholders' equity,
June 30, 1999 ...... $ 66,662,038 $ (127,128) $ 66,534,910
------------ ------------ ------------
See accompanying notes to consolidated financial statements.
<PAGE>
Ridgewood Electric Power Trust V
Consolidated Statement of Cash Flows (unaudited)
- --------------------------------------------------------------------------------
Six Months Ended
-----------------------------
June 30, June 30,
1999 1998
-----------------------------
Cash flows from operating activities:
Net (loss) income .............................. $ (830,633) $ 896,122
------------ ------------
Adjustments to reconcile net income to net
cash flows from operating activities:
Income from unconsolidated Maine Hydro Projects (654,661) (687,540)
Loss from unconsolidated Maine Biomass Projects 410,496 311,033
Loss from unconsolidated MetaSound Systems .... 427,463 --
Loss from unconsolidated Quantum Conveyor ..... 129,752 --
Income from unconsolidated Santee River Rubber (129,605) --
Minority interest in loss of consolidated
subsidiary ................................... (122,421) --
Changes in assets and liabilities:
Decrease (increase) in due from affiliates ... 1,155,427 (174,831)
Increase in other current assets ............. (76,074) (193,218)
Increase in other assets ..................... (46,218) --
Decrease in accounts payable and accrued
expenses (18,572) (12,435)
(Decrease) increase in due to affiliates ...... (374,450) 283,891
------------ ------------
Total adjustments ............................. 701,137 (473,100)
------------ ------------
Net cash provided by (used in) operating
activities ................................... (129,496) 423,022
------------ ------------
Cash flows from investing activities:
Loans to Maine Biomass Projects .............. (225,000) (250,000)
Investment in UK Landfill Projects ........... (16,104,987) --
Investment in MetaSound Systems .............. (53,412) --
Investment in Quantum Conveyor ............... (7,784) --
Distributions from Maine Hydro Projects ...... 540,007 --
Distributions from Santee River Rubber ....... 373,089 --
Deferred due diligence costs ................. (797,611) (903,637)
------------ ------------
Net cash used in investing activities ........ (16,275,698) (1,153,637)
------------ ------------
Cash flows from financing activities:
Proceeds from shareholders' contributions .... 128,250 24,177,311
Selling commissions and offering costs paid .. (12,150) (3,847,767)
Cash distributions to shareholders ........... (1,967,295) (2,203,641)
------------ ------------
Net cash (used in) provided by financing
activities .................................. (1,851,195) 18,125,903
------------ ------------
Net increase in cash and cash equivalents ..... (18,256,389) 17,395,288
Cash and cash equivalents, beginning of year .. 42,832,241 40,821,582
------------ ------------
Cash and cash equivalents, end of period ...... $ 24,575,852 $ 58,216,870
------------ ------------
See accompanying notes to consolidated 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 year-end balance sheet data was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles.
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 six months of 1999, the Trust loaned $225,000 to Indeck Maine
Energy, L.L.C. ("Maine Biomass Projects"). The loan is in the form of 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 $450,000 in the first six months of
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 of 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.
3. Combined Landfill Projects
On June 30, 1999, a newly-created subsidiary of the Trust purchased 100% of the
equity in four operating landfill gas power plant and one plant in the late
stages of development located in Great Britain. The purchase price was
$16,104,987. The Trust has the right to develop and construct another 20
landfill gas plants in Great Britain. The estimated cost of the package of
completed plants and the 20 developmental sites, if all the developmental plants
are built and the Trust elects to acquire them, is $36 to $38 million. The Trust
expects to supply the first $19 million and The Ridgewood Power Growth Fund, a
similar investment program managed by managing shareholder, will supply the
remainder of the development equity. To the extent that The Ridgewood Power
Growth Fund supplies capital, it will receive an undivided interest in the
entire package of operating and developmental projects.
The first five plants have an installed capacity of 14.5 megawatts and sell the
electricity under a 17 year contract to a quasi-autonomous non-governmental
organization that purchases electricity generated by renewable sources on behalf
of all English utilities. The first five projects have been or will be financed
with a total of $16.6 million of long-term bank debt, in addition to the equity
interest purchased by the Trust.
4. Summary Results of Operations for Selected Investments
Summary results of operations for the Maine Hydro projects, which are accounted
for under the equity method, were as follows:
Six months ended June 30,
1999 1998
Total revenue ............... $2,861,095 3,037,670
Depreciation and amortization 550,907 544,715
Income from operations ...... 1,349,818 1,380,957
Net income .................. 1,309,321 1,396,401
Summary results of operations for the Maine Biomass projects, which are
accounted for under the equity method, were as follows:
Six months ended June 30,
1999 1998
Total revenue ............... $ 575,230 646,167
Depreciation and amortization 90,415 90,415
Loss from operations ........ (774,807) (617,015)
Net loss .................... (820,995) (626,815)
<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, the UK Landfill
Projects, Quantum Conveyors and MetaSound Systems, over which the Trust does not
exercise control.
Results of Operations
In the second quarter of 1999, the Trust had total revenue of $181,000, a
decline of $913,000 from total revenue of $1,094,000 in the same period in 1998.
For the first six months of 1999, the Trust had total revenue of $909,000, a
decline of $1,069,000 from total revenue of $1,978,000 in the same period in
1998.
Interest income declined by $298,000 from $776,000 in the second quarter of 1998
to $478,000 in the second quarter of 1999 due to lower average cash balances.
Interest income also declined by $509,000 from $1,601,000 in the first six
months of 1998 to $1,092,000 in the same period of 1999 due to the lower average
cash balances.
Equity income from the Maine Hydro Projects decreased from $361,000 in the
second quarter of 1998 to $118,000 in the same period in 1999 due to lower
production because of below-average river flows. However, river flows were
higher than average in the first three months of 1999 resulting in comparable
results for the first six months of 1999 and 1998 ($655,000 for the first six
months of 1999 compared to $688,000 for the first six months of 1998).
The equity loss from the shut-down Maine Biomass Projects increased from $43,000
in the second quarter of 1998 ($311,000 for the first six months of 1998) to
$242,000 in the second quarter of 1999 ($410,000 for the first six months of
1999) due to lower revenues from the sale of installed capacity at the plants
and additional maintenance costs incurred to prepare the plants for limited
summer operations.
The Trust recorded income from its equity interest in the Santee River Rubber
project of $126,000 and $130,000 in the second quarter and first six months of
1999, respectively. The Trust acquired its investment in Santee River Rubber in
the third quarter of 1998.
The Santee River Rubber project is expected to begin operations in the last
quarter of 1999.
The Trust recorded losses of $179,000 and $427,000 in the second quarter and
first six months of 1999, respectively, equal to its share of losses incurred at
MetaSound Systems. The Trust acquired a minority interest in that company in the
fourth quarter of 1998.
The Trust recorded losses of $119,000 and $129,000 in the second quarter and
first six months of 1999, respectively, equal to its share of losses incurred at
Quantum Conveyors. The Trust acquired a minority interest in that company in the
third quarter of 1998.
The Trust recorded $7,000 of investment fees from subscriptions receivable
collected in the first quarter of 1999 and none in the second quarter. The
decline from the higher 1998 levels reflects the closing of the Trust's offering
in April 1998. In the second quarter and first six months of 1999, the most
significant expense was the management fee of $662,000 and $1,264,000,
respectively, (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 totaled $101,000 and $239,000 in the second quarter and first
six months of 1998, respectively.
In the second quarter and first six months of 1999, the Trust's Ridgewood
WaterPure subsidiary incurred $350,000 and $119,000, respectively, of research
and development costs related to its water distillation technology. The Trust
acquired approximately 54% of Ridgewood WaterPure's outstanding common stock in
the fourth quarter of 1998.
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.
On June 30, 1999, the Trust entered into agreements with the stockholders of
Combined Landfill Projects Limited ("CLP"), of London, England, for a $16.1
million purchase of 100% of the equity interest in four operating landfill gas
power plants and one plant in the late stages of construction, as well as the
rights to develop and construct another 20 landfill gas plants in Great Britain.
The estimated cost of the package of completed plants and the 20 developmental
sites, if all the developmental plants are built, is $36 to $38 million. The
Trust will supply the first $19 million of the purchase price and developmental
equity and The Ridgewood Power Growth Fund (the "Growth Fund'), a similar
investment program sponsored by the Managing Shareholder, will supply the
remainder of the developmental equity. To the extent that the Growth Fund
supplies capital, it will receive an undivided interest in the entire package of
operating and developmental projects.
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. No 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.
<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
August 13, 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 unaudited interim financial statements for the six month period
ended June 30, 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 24,575,852
<SECURITIES> 42,370,299<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 67,294,327<F2>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 68,537,754
<CURRENT-LIABILITIES> 395,091<F3>
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 66,534,910<F4>
<TOTAL-LIABILITY-AND-EQUITY> 68,537,754
<SALES> 0
<TOTAL-REVENUES> 908,883
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,861,937
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (830,633)<F5>
<INCOME-TAX> 0
<INCOME-CONTINUING> (830,633)<F5>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (830,633)<F5>
<EPS-BASIC> (874)
<EPS-DILUTED> (874)
<FN>
<F1>Investment in power project partnership and limited liability company
accounted for on equity basis.
<F2>Includes $9,713 due from affiliates.
<F3>Includes $219,132 due to affiliates.
<F4>Shareholders' equity of $66,662,038 less managing share-
holders' accumulated deficit of $127,128.
<F5>After addition of minority interest in Ridgewood WaterPure Corporation
loss of $122,421.
</FN>
</TABLE>
