FORM 10-Q -- QUARTERLY REPORT UNDER SECTION 13
OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended March 31, 2000
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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: 333-83815
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COSO POWER DEVELOPERS
----------------------
(Exact name of registrant as specified in its charter)
California 94-3102796
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1114 Avenue of the Americas, 41st Floor, New York, New York 10036-7790
----------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(212) 921-9099
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former
fiscal year, if changed since last report.)
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. [ X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Not Applicable
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COSO POWER DEVELOPERS
Form 10-Q
For the Quarter Ended March 31, 2000
PART I. FINANCIAL INFORMATION Page No.
ITEM 1. Financial Statements
CAITHNESS COSO FUNDING CORP.
Unaudited condensed balance sheet at March 31, 2000 and
December 31, 1999 4
Unaudited condensed statement of operations for the period
ended March 31, 2000 5
Unaudited condensed statement of cash flows for the period
ended March 31, 2000 6
Notes to the unaudited condensed financial statements 7
COSO FINANCE PARTNERS
Unaudited condensed combined balance sheets at March 31, 2000
and December 31, 1999 8
Unaudited condensed combined statements of operations for
the three months ended March 31, 2000, the two months ended
February 28, 1999, the one month ended March 31, 1999 and the
three months ended March 31, 1999 9
Unaudited condensed combined statements of cash flows for the
three months ended March 31, 2000, the two months ended
February 28, 1999, the one month ended March 31, 1999, and the
three months ended March 31, 1999. 10
Notes to the unaudited condensed combined financial statements 11
COSO ENERGY DEVELOPERS
Unaudited condensed balance sheets at March 31, 2000
and December 31, 1999 12
Unaudited condensed statements of operations for the three
months ended March 31, 2000, the two months ended
February 28, 1999, the one month ended March 31, 1999 and
the three months ended March 31, 1999 13
Unaudited condensed statements of cash flows for the three months
ended March 31, 2000, the two months ended February 28, 1999,
the one month ended March 31, 1999, and the three months
ended March 31, 1999. 14
Notes to the unaudited condensed financial statements 15
2
COSO POWER DEVELOPERS
Unaudited condensed balance sheets at March 31, 2000
and December 31, 1999 16
Unaudited condensed statements of operations for the three
months ended March 31, 2000, the two months ended
February 28, 1999, the one month ended March 31, 1999 and
the three months ended March 31, 1999 17
Unaudited condensed statements of cash flows for the three months
ended March 31, 2000, the two months ended February 28, 1999,
the one month ended March 31, 1999, and the three
months ended March 31, 1999. 18
Notes to the unaudited condensed financial statements 19
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 20
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 28
ITEM 2. Change in Securities and Use of Proceeds 29
ITEM 3. Defaults upon Senior Securities 29
ITEM 4. Submission of Matters to a Vote of Security Holders 29
ITEM 5. Other Information 29
ITEM 6. Exhibits and Reports on Form 8-K 29
3
<PAGE>
<TABLE>
<CAPTION>
CAITHNESS COSO FUNDING CORP.
UNAUDITED CONDENSED BALANCE SHEET
(Dollars in thousands)
<S> <C> <C>
March 31, December 31,
2000 1999
(Note)
Assets:
Accrued interest receivable............................ $ 9,221 $ 1,392
Project loan to Coso Finance Partners.................. 145,994 151,550
Project loan to Coso Energy Developers................. 103,795 107,900
Project loan to Coso Power Developers.................. 110,546 153,550
------- -------
$ 369,556 $ 414,392
======= =======
Liabilities and Stockholders' Equity:
Senior secured notes:
Accrued interest payable............................ $ 9,221 $ 1,392
6.80% notes due 2001................................ 57,335 110,000
9.05% notes due 2009................................ 303,000 303,000
------- -------
Total liabilities......................................... 369,556 414,392
Stockholders' equity...................................... --- ---
------- -------
$ 369,556 $ 414,392
======= =======
Note: The condensed balance sheet at December 31, 1999 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See accompanying notes to the unaudited condensed financial statements
</TABLE>
4
<PAGE>
CAITHNESS COSO FUNDING CORP.
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
(Dollars in thousands)
Three Months
Ended
March 31,
2000
Interest income...................................... $ 9,221
Interest expense..................................... (9,221)
-------
Net income........................................ $ ---
=======
See accompanying notes to the unaudited condensed financial statements
5
<PAGE>
CAITHNESS COSO FUNDING CORP.
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
(Dollars in thousands)
Three Months
Ended
March 31,
2000
Cash flows from investing activities................. $ 52,665
Cash flows from financing activities................. (52,665)
-------
---
Net change in cash................................ $ =======
See accompanying notes to the unaudited condensed financial statements
6
<PAGE>
CAITHNESS COSO FUNDING CORP.
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Organization and Operations
Caithness Coso Funding Corp. (Funding Corp.) was incorporated on April 22, 1999,
in Delaware. Funding Corp. is a special purpose corporation that was formed for
the purpose of issuing senior secured notes on behalf of Coso Finance Partners,
Coso Energy Developers and Coso Power Developers (the Coso partnerships),
affiliates of Funding Corp. Funding Corp. has loaned all of the proceeds from
the offering of 6.80% senior secured notes due 2001 and 9.05% senior secured
notes due 2009 (a total of $413 million) to the Coso partnerships, and the Coso
partnerships have jointly and severally guaranteed on a senior secured basis,
repayment of the senior secured notes.
Funding Corp. has no material assets other than the loans, and the accrued
interest thereon, that have been made to the Coso partnerships. Also, Funding
Corp. does not conduct any business, other than issuing the senior secured notes
and making the loans to the Coso partnerships.
(2) Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules.
Management believes that the disclosures are adequate to make the information
presented not misleading when read in conjunction with the financial statements
and the notes thereto in the audited financial statements for the year ended
December 31, 1999.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year.
7
<PAGE>
<TABLE>
<CAPTION>
COSO FINANCE PARTNERS
UNAUDITED CONDENSED COMBINED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31, 1999
2000 (Note)
(New Basis)
<S> <C> <C>
Assets:
Cash....................................................................... $ 13,334 $ 7,821
Restricted cash and investments............................................ 20,051 25,001
Accounts receivable........................................................ 2,888 5,154
Prepaid expenses & other assets............................................ 46 --
Amounts due from related parties........................................... 2,460 4,508
Property, plant & equipment, net........................................... 154,318 153,879
Power purchase agreement, net.............................................. 13,101 13,388
Investment in China Lake Plant Services, Inc............................... 4,196 4,212
Deferred financing costs, net.............................................. 3,619 3,749
------- -------
$ 214,013 $ 217,712
======= =======
Liabilities and Partners' Capital:
Accounts payable and accrued liabilities................................... $ 14,536 $ 16,236
Amounts due to related parties............................................. 3,735 564
Project loan............................................................... 145,994 151,550
-------- -------
164,265 168,350
Partners' capital............................................................. 49,748 49,362
-------- -------
$ 214,013 $ 217,712
======== =======
Note: The condensed balance sheet at December 31, 1999 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See accompanying notes to the unaudited condensed combined financial statements
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
COSO FINANCE PARTNERS
UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three Months Two Months One Month Three Months
Ended Ended Ended Ended
March 31, February 28, March 31, March 31,
2000 1999 1999 1999
(New Basis) (Old Basis) (New Basis)
<S> <C> <C> <C> <C>
Revenue:
Energy revenues......................... $ 7,725 $ 8,098 $ 4,399 $ 12,497
Capacity................................ 1,255 474 237 711
Interest and other income............... 323 824 827 1,651
------ ------ ------- ------
Total revenue....................... 9,303 9,396 5,463 14,859
Operating expenses:
Plant operating expenses............... 2,072 3,125 1,458 4,583
Royalty expense........................ 1,189 987 451 1,438
Depreciation and amortization.......... 2,353 1,604 783 2,387
------ ------ ------- ------
Total operating expenses............ 5,614 5,716 2,692 8,408
Operating income.................... 3,689 3,680 2,771 6,451
Other expenses:
Interest expense...................... 3,173 663 1,630 2,293
Costs related to acquisition debt 130 --- --- ---
------ ------ ------ ------
Total other expenses................ 3,303 663 1,630 2,293
Net income.......................... $ 386 $ 3,017 $ 1,141 $ 4,158
====== ====== ====== ======
See accompanying notes to the unaudited condensed combined financial statements
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
COSO FINANCE PARTNERS
UNAUDITED CONDENSED COMBINED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Two Months One Month Three Months
Ended Ended Ended Ended
March 31, February 28, March 31, March 31,
2000 1999 1999 1999
(New Basis) (Old Basis) (New Basis)
<S> <C> <C> <C> <C>
Net cash provided by operating activities.............. $ 8,624 $ 6,592 $ 2,665 $ 9,257
Net cash provided by (used in) investing activities.... 2,445 (538) (397) (935)
Net cash provided by (used in) financing activities.... (5,556) (1,926) --- (1,926)
------- ------ ------ ------
Net change in cash and cash equivalents................ $ 5,513 $ 4,128 $ 2,268 $ 6,396
======= ====== ====== ======
See accompanying notes to the unaudited condensed combined financial statements
</TABLE>
10
<PAGE>
COSO FINANCE PARTNERS
NOTES TO THE UNAUDITED CONDENSED
COMBINED FINANCIAL STATEMENTS
(1) Organization and Operation
Coso Finance Partners (CFP), a general partnership, is engaged in the operation
of a 80 MW power generation facility located at the China Lake Naval Air Weapons
Station, China Lake California. CFP sells all electricity produced to Southern
California Edison under a 24-year power purchase contract expiring in 2011.
(2) Basis of Presentation
The accompanying unaudited condensed combined financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules. Management believes that the disclosures are adequate to make the
information presented not misleading when read in conjunction with the financial
statements and the notes thereto in the audited financial statements for the
year ended December 31, 1999.
On May 27, 1999 Coso Finance Partners II was merged into Coso Finance Partners
to form one partnership.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year. CFP has experienced significant quarterly
fluctuations in operating results and it expects that these fluctuations in
energy revenues, expenses and net income will continue.
(3) Acquisition
On February 25, 1999, Caithness Acquisition Company, LLC (Caithness
Acquisition), a wholly owned subsidiary of Caithness Energy LLC, purchased all
of CalEnergy Company Inc.'s (CalEnergy) interest in CFP for approximately $62.0
million. The acquisition was accounted for under the purchase method, and no
goodwill was recorded. After Caithness Acquisition's purchase of CalEnergy's
interest in CFP, a new basis of accounting was adopted and is referred to as
"New Basis" as compared to the former cost basis which is referred to as "Old
Basis" in the financial statements. The purchase price was allocated to the
portion of the assets and liabilities purchased from CalEnergy based upon their
fair values, with the amount of fair value of net assets in excess of the
purchase price being allocated to long-lived assets on a pro-rata basis.
In order to complete the purchase of CalEnergy's interest in CFP, Caithness
Acquisition arranged for short-term debt financing of approximately $77.6
million. This short-term debt was repaid on May 28, 1999 from a portion of the
proceeds from the offering of senior secured notes (see note 4).
(4) Debt Financing
On May 28, 1999 Caithness Coso Funding Corp. loaned approximately $151.6 million
to CFP from a portion of the proceeds from the offering of senior secured notes.
The loan consists of one note of $29.0 million at 6.80% and another of $122.6
million at 9.05% with maturity dates of December 15, 2001 and December 15, 2009,
respectively. All prior project loans of approximately $180.0 million were
repaid from the proceeds of the financing and an extraordinary loss from the
early extinguishment of this debt was incurred for approximately $2.4 million.
The extraordinary loss was due to a premium and other costs incurred to pay the
prior project loans before maturity.
11
<PAGE>
<TABLE>
<CAPTION>
COSO ENERGY DEVELOPERS
UNAUDITED CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
2000 1999
(New Basis) (Note)
<S> <C> <C>
Assets:
Cash................................................................... $ 14,937 $ 6,423
Restricted cash and investments........................................ 5,916 9,806
Accounts receivable.................................................... 5,444 6,095
Prepaid expenses and other assets...................................... 146 100
Amounts due from related parties....................................... 1,123 761
Property, plant and equipment, net..................................... 162,964 165,650
Power purchase agreement, net.......................................... 20,281 20,549
Investment in Coso Transmission Line Partners.......................... 2,981 2,981
Investment in China Lake Plant Services, Inc........................... 1,262 1,228
Deferred financing costs, net.......................................... 2,718 2,798
------- -------
$ 217,772 $ 216,391
======= =======
Liabilities and Partners' Capital:
Accounts payable and accrued liabilities............................... $ 6,028 $ 6,681
Amounts due to related parties......................................... 24,972 22,460
Project loan........................................................... 103,795 107,900
------- -------
134,795 137,041
Partners' capital...................................................... 82,977 79,350
------- -------
$ 217,772 $ 216,391
======= =======
Note: The condensed balance sheet at December 31, 1999 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See accompanying notes to the unaudited condensed financial statements
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
COSO ENERGY DEVELOPERS
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
(Dollars in thousands)
Three Months Two Months One Month Three Months
Ended Ended Ended Ended
March 31, February 28, March 31, March 31,
2000 1999 1999 1999
(New Basis) (Old Basis) (New Basis)
<S> <C> <C> <C> <C>
Revenue:
Energy revenues...................... $ 5,953 $ 16,716 $ 3,434 $ 20,150
Capacity............................. 1,227 817 410 1,227
Interest and other income............ 5,315 78 118 196
------- -------- ------- ------
Total revenue..................... 12,495 17,611 3,962 21,573
Operating expenses:
Plant operating expenses.............. 2,539 4,039 1,604 5,643
Royalty expense....................... 65 1,592 347 1,939
Depreciation and amortization......... 3,876 2,550 1,175 3,725
------ ------ ------ ------
Total operating expenses......... 6,480 8,181 3,126 11,307
Operating income................. 6,015 9,430 836 10,266
Other expenses:
Interest expense..................... 2,308 616 1,233 1,849
Costs related to acquisition debt.... 80 --- --- ---
------ -------- ------- -------
Total other expenses................ 2,388 616 1,233 1,849
Net income (loss)................. $ 3,627 $ 8,814 $ (397) $ 8,417
====== ======== ======= =======
See accompanying notes to the unaudited condensed financial statements
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
COSO ENERGY DEVELOPERS
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Two Months One Month Three Months
Ended Ended Ended Ended
March 31, February 28, March 31, March 31,
2000 1999 1999 1999
(New Basis) (Old Basis) (New Basis)
<S> <C> <C> <C> <C>
Net cash provided by operating activities.............. $ 9,651 $ 10,367 $ 6,595 $ 16,962
Net cash provided by (used in) investing activities.... 2,968 120 (294) (174)
Net cash provided by (used in) financing activities.... (4,105) 425 (198) 227
------- ------- ------ ------
Net change in cash and cash equivalents................ $ 8,514 $ 10,912 $ 6,103 $ 17,015
======= ======= ====== ======
See accompanying notes to the unaudited condensed financial statements
</TABLE>
14
<PAGE>
COSO ENERGY DEVELOPERS
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Organization and Operation
Coso Energy Developers (CED), a general partnership, is engaged in the operation
of a 80 MW power generation facility located at the Coso Hot Springs, China Lake
California. CED sells all electricity produced to Southern California Edison
under a 24-year power purchase contract expiring in 2019.
(2) Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules.
Management believes that the disclosures are adequate to make the information
presented not misleading when read in conjunction with the financial statements
and the notes thereto in the audited financial statements for the year ended
December 31, 1999.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year. CED has experienced significant quarterly
fluctuations in operating results and it expects that these fluctuations in
energy revenues, expenses and net income will continue.
(3) Acquisition
On February 25, 1999, Caithness Acquisition Company, LLC (Caithness
Acquisition), a wholly owned subsidiary of Caithness Energy LLC, purchased all
of CalEnergy Company, Inc.'s (CalEnergy) interest in CED for approximately $69.0
million. The acquisition was accounted for under the purchase method, and no
goodwill was recorded. After Caithness Acquisition's purchase of CalEnergy's
interest in CED, a new basis of accounting was adopted and is referred to as
"New Basis" as compared to the former cost basis which is referred to as "Old
Basis" in the financial statements. The purchase price was allocated to the
portion of the assets and liabilities purchased from CalEnergy based upon their
fair values, with the amount of fair value of net assets in excess of the
purchase price being allocated to long-lived assets on a pro-rata basis.
In order to complete the purchase of CalEnergy's interest in CED, Caithness
Acquisition arranged for short-term debt financing of approximately $55.2
million. This short-term debt was repaid on May 28, 1999 from a portion of the
proceeds from the offering of senior secured notes (see note 4).
(4) Debt Financing
On May 28, 1999 Caithness Coso Funding Corp. loaned approximately $107.9 million
to CED from a portion of the proceeds from the offering of senior secured notes.
The loan consists of one note of $11.65 million at 6.80% and another of $96.25
million at 9.05% with maturity dates of December 15, 2001 and December 15, 2009,
respectively. All prior project loans of approximately $93.2 million were repaid
from the proceeds of the financing and an extraordinary loss from the early
extinguishment of this debt was incurred for approximately $1.8 million. The
extraordinary loss was due to a premium and other costs incurred to pay the
prior project loans before maturity.
15
<PAGE>
<TABLE>
<CAPTION>
COSO POWER DEVELOPERS
UNAUDITED CONDENSED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
2000 1999
(New Basis) (Note)
<S>
Assets <C> <C>
Cash..................................................................... $ 22,653 $ 6,020
Restricted cash and investments.......................................... 11,516 54,338
Accounts receivable...................................................... 5,598 20,540
Prepaid expenses and other assets........................................ 46 ---
Amounts due from related parties......................................... 7,540 7,058
Property, plant and equipment, net....................................... 144,521 147,522
Power purchase agreement, net............................................ 27,712 28,409
Investment in Coso Transmission Line Partners............................ 3,660 3,660
Investment in China Lake Plant Services, Inc............................. 2,079 2,098
Deferred financing costs, net............................................ 3,432 3,624
-------- --------
$ 228,757 $ 273,269
======== ========
Liabilities and Partners' Capital:
Accounts payable and accrued liabilities................................. $ 10,425 $ 12,163
Amounts due to related parties........................................... 3,262 3,225
Project loan............................................................. 110,546 153,550
-------- --------
124,233 168,938
Partners' capital........................................................... 104,524 104,331
-------- --------
$ 228,757 $ 273,269
======== ========
Note: The condensed balance sheet at December 31, 1999 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See accompanying notes to the unaudited condensed financial statements
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
COSO POWER DEVELOPERS
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three Months Two Months One Month Three Months
Ended Ended Ended Ended
March 31, February 28, March 31, March 31,
2000 1999 1999 1999
(New Basis) (Old Basis) (New Basis)
<S> <C> <C> <C> <C>
Revenue:
Energy revenues.............................. $ 8,554 $ 16,687 $ 6,716 $ 23,403
Capacity..................................... 1,234 822 412 1,234
Interest and other income.................... 529 150 156 306
------ ------ ------ -------
Total revenue.............................. 10,317 17,659 7,284 24,943
Operating expenses:
Plant operating expenses..................... 2,105 3,195 1,293 4,488
Royalty expense.............................. 1,775 1,806 1,064 2,870
Depreciation and amortization................ 3,698 2,339 1,188 3,527
------- -------- -------- -------
Total operating expenses................... 7,578 7,340 3,545 10,885
Operating income........................... 2,739 10,319 3,739 14,058
Other expenses:
Interest expense............................. 2,354 953 1,792 2,745
Costs related to acquisition debt............ 192 --- --- ---
------ ------- ------- -------
Total other expenses...................... 2,546 953 1,792 2,745
Net income................................ $ 193 $ 9,366 $ 1,947 $ 11,313
====== ======== ======== =========
See accompanying notes to the unaudited condensed financial statements
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
COSO POWER DEVELOPERS
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Three Months Two Months One Month Three Months
Ended Ended Ended Ended
March 31, February 28, March 31, March 31,
2000 1999 1999 1999
(New Basis) (Old Basis) (New Basis)
<S> <C> <C> <C> <C>
Net cash provided by operating activities.............. $ 16,815 $ 12,016 $ 6,265 $ 18,281
Net cash provided by (used in) investing activities.... 42,822 (1,126) (218) (1,344)
Net cash provided by (used in) financing activities.... (43,004) 1,766 518 2,284
-------- ------- ------- -------
Net change in cash and cash equivalents................ $ 16,633 $ 12,656 $ 6,565 $ 19,221
======== ======= ======= =======
See accompanying notes to the unaudited condensed financial statements
</TABLE>
18
<PAGE>
COSO POWER DEVELOPERS
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Organization and Operation
Coso Power Developers (CPD), a general partnership, is engaged in the operation
of a 80 MW power generation facility located at the Coso Hot Springs, China Lake
California. CPD sells all electricity produced to Southern California Edison
under a 24-year power purchase contract expiring in 2010.
(2) Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules.
Management believes that the disclosures are adequate to make the information
presented not misleading when read in conjunction with the financial statements
and the notes thereto in the audited financial statements for the year ended
December 31, 1999.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year. CPD has experienced significant quarterly
fluctuations in operating results and it expects that these fluctuations in
energy revenues, expenses and net income will continue.
(3) Acquisition
On February 25, 1999, Caithness Acquisition Company, LLC (Caithness
Acquisition), a wholly owned subsidiary of Caithness Energy LLC, purchased all
of CalEnergy Company, Inc.'s (CalEnergy) interest in CPD for approximately $75.0
million. The acquisition was accounted for under the purchase method, and no
goodwill was recorded. After Caithness Acquisition's purchase of CalEnergy's
interest in CPD, a new basis of accounting was adopted and is referred to as
"New Basis" as compared to the former cost basis which is referred to as "Old
Basis" in the financial statements. The purchase price was allocated to the
portion of the assets and liabilities purchased from CalEnergy based upon their
fair values, with the amount of fair value of net assets in excess of the
purchase price being allocated to long-lived assets on a pro-rata basis.
In order to complete the purchase of CalEnergy's interest in CPD, Caithness
Acquisition arranged for short-term debt financing of approximately $78.6
million. This short-term debt was repaid on May 28, 1999 from a portion of the
proceeds from the offering of senior secured notes (see note 4).
(4) Debt Financing
On May 28, 1999 Caithness Coso Funding Corp. loaned approximately $153.6 million
to CPD from a portion of the proceeds from the offering of senior secured notes.
The loan consists of one note of $69.4 million at 6.80% and another note of
$84.2 million at 9.05% with maturity dates of December 15, 2001 and December 15,
2009, respectively. All prior project loans of approximately $139.9 million were
repaid from the proceeds of the financing and an extraordinary loss from the
early extinguishment of this debt was incurred for approximately $2.1 million.
The extraordinary loss was due to a premium and other costs incurred to pay the
prior project loans before maturity.
19
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Except for historical financial information contained herein, the
matters discussed in this quarterly report may be considered forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and
subject to the safe harbor created by the Securities Litigation Reform Act of
1995. Such statements include declarations regarding the intent, belief or
current expectations of Caithness Coso Funding Corp. ("Funding Corp."), Coso
Finance Partners ("the Navy I Partnership"), Coso Energy Developers ("the BLM
Partnership"), and Coso Power Developers ("the Navy II Partnership", and
together with the Navy I Partnership and the BLM Partnership (the "Coso
Partnerships") and their respective management. Any such forward-looking
statements are not guarantees of future performance and involve a number of
risks and uncertainties; actual results could differ materially from those
indicated by such forward-looking statements. Among the important factors that
could cause actual results to differ materially from those indicated by such
forward-looking statements are: (i) that the information is of a preliminary
nature and may be subject to further adjustment, (ii) risks related to the
operation of power plants, (iii) the impact of avoided cost pricing, (iv)
general operating risks, (v) the dependence on third parties, (vi) changes in
government regulation, (vii) the effects of competition, (viii) the dependence
on senior management, (ix) fluctuations in quarterly results and (x)
seasonality.
General
The Coso projects consist of three 80MW geothermal power plants, which
are referred to as Navy I, BLM and Navy II, and their transmission lines, wells,
gathering system and other related facilities. The Coso projects are located
near one another at the United States Naval Air Weapons Center at China Lake,
California. The Navy I partnership owns Navy I and its related facilities. The
BLM partnership owns BLM and its related facilities. The Navy II partnership
owns Navy II and its related facilities. Affiliates of Caithness Corporation and
CalEnergy Company, Inc. ("CalEnergy"), which is now known as MidAmerican Energy
Holdings Company, formed the Coso partnerships in the 1980s to develop,
construct, own and operate the Coso projects. On February 25, 1999 Caithness
Acquisition Company, LLC, purchased all of CalEnergy's interests in the Coso
projects for $205.0 million in cash, plus $5.0 million in contingent payments,
plus the assumption of CalEnergy's and its affiliates' share of debt outstanding
at the Coso projects which then totaled approximately $67.0 million.
Each Coso partnership sells 100% of the electrical energy generated at
its plant to Southern California Edison ("Edison") under a long-term Standard
Offer No.4 power purchase agreement. Each Partnership's power purchase agreement
expires after the final maturity date of the 6.8% Series B Senior Secured Notes
due 2001 and the 9.05% Series B Senior Secured Notes due 2009 issued by Funding
Corp.
Each Coso partnership receives the following payments under its power
purchase agreement:
o Capacity payments for being able to produce electricity at certain levels.
Capacity payments are fixed throughout the life of each power purchase
agreement;
o Capacity bonus payments if the Coso partnership is able to produce
electricity above a specified higher level. The maximum annual capacity
bonus payment available is also fixed throughout the life of each power
purchase agreement; and
o Energy payments which are based on the amount of electricity the Coso
partnership's plant actually produces.
20
Energy payments are fixed for the first ten years of firm operation
under each power purchase agreement. Firm operation was achieved for each Coso
partnership when Edison and that Coso partnership agreed that each generating
unit at such Coso partnership's plant was a reliable source of generation and
could reasonably be expected to operate continuously at its effective rating.
After the first ten years of firm operation and until a Coso partnership's power
purchase agreement expires, Edison makes energy payments to the Coso partnership
based on Edison's "avoided cost of energy". Edison's avoided cost of energy is
Edison's cost to generate electricity if Edison were to produce the energy
itself or buy it from another power producer rather than buy it from the
relevant Coso partnership. The power purchase agreement for the Navy I
partnership will expire in August 2011, the power purchase agreement for the BLM
partnership will expire March 2019, and the power purchase agreement for the
Navy II partnership will expire in January 2010. The fixed energy price period
in the power purchase agreement expired in August 1997 for the Navy I
partnership, in March 1999 for the BLM partnership and in January 2000 for the
Navy II partnership.
The Coso Partnerships have implemented a steam-sharing program, which
they established under a Coso Geothermal Exchange Agreement they entered into in
1994. The purpose of the steam sharing program is to enhance the management of
the Coso geothermal resource and to optimize the resource's overall benefits to
the Coso Partnerships by transferring steam among the Coso projects. Under the
steam-sharing program, the partnership receiving the steam transfer splits
revenue earned from electricity generated with the partnership that transferred
the steam.
For the three months ended March 31, 2000 (and since January 12, 2000
for the Navy II partnership), Edison's average avoided cost of energy paid to
the Navy I, the BLM and the Navy II Partnerships was 3.25(cent) per kWh, which
is substantially below the fixed energy prices earned by the partnerships prior
to the expiration of the fixed energy price periods of their respective power
purchase agreements. It is not possible to predict the likely level of future
avoided cost of energy prices.
The Coso Partnerships are required to make royalty payments to the Navy
and the Bureau of Land Management. The Navy I partnership pays a royalty for
Unit I through reimbursement of electricity supplied to the Navy by Edison from
electricity generated at the Navy I plant. The reimbursement is based on a
pricing formula that is included in the Navy Contract. For Units 2 and 3, the
Navy I partnership's royalty expense paid to the Navy is a fixed percentage of
electricity sales at 15% of revenue received by the Navy I partnership through
2003 and will increase to 20% from 2004 through 2009. The BLM partnership pays a
10% royalty to the Bureau of Land Management based on the value of steam
produced. The Navy II partnership pays a royalty to the Navy based on a fixed
percentage of electricity sales to Edison. The royalty rate was 10.0% of
electricity sales through 1999, and increased to 18.0% for 2000 through 2004 and
will increase to 20.0% from 2005 through the end of the contract term.
Coso Funding Corp is a special purpose corporation and a wholly owned
subsidiary of the Coso partnerships. It was formed for the purpose of issuing
the senior secured notes on behalf of the Coso partnerships. The Coso
partnerships have jointly, severally, and unconditionally guaranteed repayment
of the senior secured notes.
On May 28, 1999, Coso Funding Corp. issued $110.0 million of 6.80% senior
secured notes due in 2001 and $303.0 million of 9.05% senior secured notes due
in 2009. The proceeds from the notes were loaned to the Coso partnerships and
are payable to Coso Funding Corp from payments of principal and interest on the
notes. Coso Funding Corp. does not conduct any other operations apart from
issuing the notes.
Under the note agreement, the Coso partnerships established accounts with
a depositary and pledged those accounts as security for the benefit of the
holders of the senior secured notes. All amounts deposited with the depositary
are, at the direction of the Coso partnerships, invested by the depositary in
permitted investments. All revenues or other proceeds actually received by the
Coso partnerships are deposited in a revenue account and withdrawn upon receipt
by the depositary of a certificate from the relevant Coso partnerships detailing
the amounts to be paid from funds in its respective revenue account.
21
Capacity Utilization
For purposes of consistency in financial presentation, the plant
capacity factor for each of the Coso partnerships is based on a nominal capacity
amount of 80MW (240MW in the aggregate). The Coso partnerships have a gross
operating capacity that allows for the production of electricity in excess of
their nominal capacity amounts. Utilization of this operating capacity is based
upon a number of factors and can be expected to vary throughout the year under
normal operating conditions.
The following data includes the operating capacity factor, capacity and
electricity production (in kWh) for each Coso partnership on a stand-alone
basis:
Three Months Ended
March 31
2000 1999
---- ----
Navy I Partnership (stand alone)
Operating capacity factor 113.3% 74.8%
Capacity (MW) (average) 90.62 59.81
kWh produced (000s) 197,916 129,141
BLM Partnership (stand alone)
Operating capacity factor 106.3% 110.6%
Capacity (MW) (average) 85.06 88.51
kWh produced (000s) 185,858 191,056
Navy II Partnership (stand alone)
Operating capacity factor 113.9% 112.7%
Capacity (MW) (average) 91.08 90.19
kWh produced (000s) 198,906 194,718
The Navy I partnership's energy production for the three months ended
March 31, 2000, was 197.9 million kWh as compared to 129.1 million kWh for the
same period in 1999, an increase of 53.3%. This increase for the three months
ended March 31, 2000, is attributable to the outage of one turbine generator
unit during that period in 1999. The changes in energy production for the Navy
II and BLM partnership's were insignificant over the two periods.
22
Results of Operations for the three months ended March 31, 2000 and 1999
The following discusses the results of operations of the Coso
partnerships for the three months ending March 31, 2000 and 1999 (dollar amounts
in tables are in thousands, except per kWh data):
Revenue
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
$ cents/kWh $ cents/kWh
- --------- - ---------
<S> <C> <C> <C> <C>
Total Operating Revenues
Navy I partnership 8,980 4.5 13,208 10.2
BLM partnership 7,180 3.9 21,377 11.2
Navy II partnership 9,788 4.9 24,637 12.7
Capacity & Capacity Bonus Revenues
Navy I partnership 1,255 0.6 711 0.6
BLM partnership 1,227 0.7 1,227 0.6
Navy II partnership 1,234 0.6 1,234 0.6
Energy Revenues
Navy I partnership 7,725 3.9 12,497 9.7
BLM partnership 5,953 3.2 20,150 10.5
Navy II partnership 8,554 4.3 23,403 12.0
</TABLE>
Total operating revenues for the Navy I partnership, which consist of
capacity payments, capacity bonus payments and energy payments, were $9.0
million for the three months ended March 31, 2000, as compared to $13.2 million
for the same period in 1999, a decrease of 31.8%. The Navy I partnership
capacity and capacity bonus revenues were $1.3 million for the three months
ended March 31, 2000, as compared to $0.7 million for the comparable period in
1999, an increase of 85.7%. The Navy I partnership's energy revenues were $7.7
million for the three months ended March 31, 2000, as compared to $12.5 million
for the same period in 1999, a decrease of 38.4%. The decreases in operating and
energy revenues for the three month period ending March 31, 2000, were primarily
due to a reduction in steam transfers from the Navy I partnership to the BLM
partnership and the Navy II partnership during that period. These two
partnerships were both receiving higher fixed energy prices under their
respective power purchase agreements during the same period in 1999 and were
passing along the additional revenue to Navy I. For the three months ended March
31, 2000, the Navy I partnership recorded steam transfer revenues of
approximately $ 0.3 million from the BLM partnership and $ 0.9 million from the
Navy II partnership. Steam transfer revenues for the three months ended March
31, 2000, were a total of $1.2 million as compared to $8.5 million for the same
period in 1999, a decrease of $7.3 million. The decrease in steam transfer
revenues was partially offset by an increase in energy revenues excluding the
steam transfer payments of $2.6 million due to the outage of one turbine
generator unit during that period in 1999 which increased capacity and capacity
bonus revenues during that same period in 2000.
Total operating revenues for the BLM partnership were $ 7.2 million for
the three months ended March 31, 2000, as compared to $21.4 million for the same
period in 1999, a decrease of 66.4%. The BLM partnership's energy revenues were
$6.0 million for the three months ended March 31, 2000, as compared to $20.2
million for the same period in 1999, a decrease of 70.3%. These significant
decreases were due to the expiration of the fixed energy price period under the
BLM partnership's power purchase agreement in March 1999 and the receipt of
energy payments based on Edison's avoided cost of energy since that time. Until
March 1999 the BLM partnership received approximately 14.6 cents per kWh for
energy delivered. Under the avoided cost of energy formula, the BLM partnership
has been receiving an average of approximately 3.25 cents per kWh for energy
delivered. The decrease in revenues due to the reduction in energy price was
partially offset by a reduction in steam transfer payments to the Navy I
partnership of $3.2 million compared to the same period in 1999.
23
Total operating revenues for the Navy II partnership were $9.8 million
for the three months ended March 31, 2000, as compared to $24.6 million for the
same period in 1999, a decrease of 60.2%. The Navy II partnership's energy
revenues were $8.6 million for the three months ended March 31, 2000, as
compared to $23.4 million for the same period in 1999, a decrease of 63.2%. The
decreases were due to the expiration in January 2000 of the fixed energy price
period under the Navy II partnership's power purchase agreement and the receipt
of energy payments based on Edison's avoided cost of energy since that time.
Until January 11, 2000, the Navy II partnership received approximately 14.6
cents per kWh for energy delivered. Under the avoided cost of energy formula,
the Navy II partnership has been receiving an average of approximately 3.25
cents per kWh for energy delivered. Similar decreases are expected in the
upcoming quarters as the Navy II partnership experiences the full effect of the
expiration of the fixed energy price period. The decrease in revenues due to the
reduction in energy price has been partially offset by a reduction in steam
transfer payments to the Navy I partnership of $4.1 million compared to the same
period in 1999.
Interest and Other Income
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
$ cents/kWh $ cents/kWh
- --------- - ---------
Navy I partnership 323 0.2 1,651 1.3
BLM partnership 5,315 2.9 196 0.1
Navy II partnership 529 0.3 306 0.2
The Navy I partnership's interest and other income were $323,000 for the
three months ended March 31, 2000, as compared to $1.7 million for the same
period in 1999, a decrease of 81.0%. The decrease for the three months ended
March 31, 2000, is attributable to a $1.6 million insurance recovery recorded
during the first quarter of 1999 in connection with the shut-down of one of the
Navy I partnership's turbine generator unit. The partnership has recovered
$500,000 with respect to the insurance and has reserved the remaining $1.1
million pending resolution of the insurance claim. The decrease was partially
offset by an increase in interest income due to a larger restricted cash balance
during the three months ended March 31, 2000 from that of March 31, 1999. The
BLM partnership's interest and other income was $5.3 million for the three
months ended March 31, 2000, as compared to $196,000 for the same period in
1999. This increase of $5.1 million was primarily due to a legal settlement of
$5 million with Dow Chemical Company ("Dow") paid to the BLM partnership
combined with a larger restricted cash balance during the three months ended
March 31, 2000 from that of March 31, 1999. The Navy II partnership's interest
and other income was $529,000 for the three month period ending March 31, 2000,
as compared to $306,000 for the same period in 1999, an increase of 72.9%. The
increase resulted from increased interest income due to a larger restricted cash
balance required by the senior secured notes during the three months ended March
31, 2000 from that of March 31, 1999.
24
Plant Operations
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
$ cents/kWh $ cents/kWh
- --------- - ---------
Navy I partnership 2,072 1.0 4,583 3.5
BLM partnership 2,539 1.4 5,643 3.0
Navy II partnership 2,105 1.1 4,488 2.3
The Navy I partnership's operating expenses, including operating and
general and administrative expenses, were $2.0 million for the three months
ended March 31, 2000, as compared to $4.6 million for the same period in 1999, a
decrease of 56.5%. The BLM partnership's operating expenses, including operating
and general and administrative expenses, were $2.5 million for the three months
ended March 31, 2000, as compared to $5.6 million for the same period in 1999, a
decrease of 55.4%. The Navy II partnership's operating expenses, including
operating and general and administrative expenses, were $2.1 million for the
three months ended March 31, 2000, as compared to $4.5 million for the same
period in 1999, a decrease of 53.3%. The decreases for each of the partnerships
for the three months ended March 31, 2000, as compared to 1999, were primarily
due to reductions in legal expenses as a result of a settlement agreement with
Edison that is subject to California Public Utility Commission approval and
reductions in operator and management committee fees due to the replacement of
the Coso project's prior operator and managing partner. Operating costs were
also reduced as compared to the same period in 1999 with the exception of
property tax payments for the Navy I and Navy II partnerships. The Coso
Partnerships are currently disputing their property tax assessment with the
County of Inyo.
Royalty Expenses
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
$ cents/kWh $ cents/kWh
- --------- - ---------
Navy I partnership 1,189 0.6 1,438 1.1
BLM partnership 65 0.0 1,939 1.0
Navy II partnership 1,775 0.9 2,870 1.5
The Navy I partnership's royalty expense was $1.2 million for the three
months ended March 31, 2000, as compared to $1.4 million for the same period in
1999, a decrease of 14.3%. This decrease was due to decreased steam sharing
revenues over the same period in 1999. The BLM partnership's royalty expense was
$65,000 for the three months ended March 31, 2000, as compared to $1.9 million
for the same period in 1999, a decrease of 96.6%. This decrease was due to a
reduction in BLM partnership's revenue caused by the expiration of the fixed
energy price period under the BLM partnership's power purchase agreement in
March 1999 and the receipt of energy payments under Edison's avoided cost of
energy since that time. The Navy II partnership's royalty expense was $1.8
million for the three months ended March 31, 2000, as compared to $2.9 million
for the same period in 1999, a decrease of 37.9%. This decrease was due to a
reduction in Navy II partnership revenues caused by the expiration of the fixed
energy price period under the Navy II partnership's power purchase agreement in
January 2000 and the receipt of energy payments under Edison's avoided cost of
energy since that time partially offset by an increase in royalty rate for that
same period in 2000.
25
Depreciation and Amortization
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
$ cents/kWh $ cents/kWh
- --------- - ---------
Navy I partnership 2,353 1.2 2,387 1.9
BLM partnership 3,876 2.1 3,725 2.0
Navy II partnership 3,698 2.0 3,527 1.8
The BLM partnership's depreciation and amortization expense was $3.9
million for the three months ended March 31, 2000, as compared to $3.7 million
for the same period in 1999, a increase of 5.4%. The Navy II partnership's
depreciation and amortization expense was $3.7 million for the three months
ended March 31, 2000, as compared to $3.5 million for the same period in 1999,
an increase of 5.7%. These increases were primarily due to an increase in
capital improvements.
Interest Expense and Other Related Costs
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
$ cents/kWh $ cents/kWh
- --------- - ---------
Navy I partnership 3,303 1.7 2,293 1.8
BLM partnership 2,388 1.3 1,849 0.9
Navy II partnership 2,546 1.3 2,745 1.4
The Navy I partnership's interest expense and other related costs were
$3.3 million for the three months ended March 31, 2000, as compared to $2.3
million for the same period in 1999, an increase of 43.5%. The BLM partnership's
interest expense and other related costs were $2.4 million for the three months
ended March 31, 2000, as compared to $1.8 million for the same period in 1999,
an increase of 33.3%. The Navy II partnership's interest expense and other
related costs were $2.5 million for the three months ended March 31, 2000, as
compared to $2.7 million for the same period in 1999, a decrease of 7.4%. These
changes were due to the allocation of outstanding debt balances resulting from
the $413 million senior secured financing which closed on May 28, 1999.
Liquidity and Capital Resources
Each of the Navy I partnership, the BLM partnership and the Navy II
partnership derive substantially all of their cash flow from Edison under their
power purchase agreements and from interest income earned on funds on deposit.
The Coso partnerships have used their cash primarily for capital expenditures
for power plant improvements, resource and development costs, distributions to
partners and payments with respect to the project debt.
The following table sets forth a summary of each Coso partnership's
cash flows for the three months ended March 31, 2000 and March 31, 1999.
26
<TABLE>
<CAPTION> Three Months Three Months
Ended Ended
March 31, March 31,
2000 1999
<S> <C> <C>
Navy I partnership (stand alone)
Net cash provided by operating activities $ 8,624 $ 9,257
Net cash provided by (used in) investing activities 2,445 (935)
Net cash provided by (used in) financing activities (5,556) (1,926)
------ -------
Net change in cash and cash equivalents $ 5,513 $ 6,396
====== =======
BLM partnership (stand alone)
Net cash provided by operating activities $ 9,651 $ 16,962
Net cash provided by (used in) investing activities 2,968 (174)
Net cash provided by (used in) financing activities (4,105) 227
------ -------
Net change in cash and cash equivalents $ 8,514 $ 17,015
====== =======
Navy II partnership (stand alone)
Net cash provided by operating activities $ 16,815 $ 18,281
Net cash provided by (used in) investing activities 42,822 (1,344)
Net cash provided by (used in) financing activities (43,004) 2,284
------- -------
Net change in cash and cash equivalents $ 16,633 $ 19,221
======= =======
</TABLE>
The Navy I partnership's cash flows from operating activities decreased
by $633,000 for the three months ended March 31, 2000 as compared to March 31,
1999, primarily due to a reduction in net income caused by a decrease in steam
transfer revenue. The decrease was partially offset by an increase in cash flows
caused by decreases in both accounts receivable and intercompany receivables.
Cash used in investing activities at the Navy I partnership decreased
by $3.4 million for the three months ended March 31, 2000 as compared to March
31, 1999, primarily due to the use of restricted cash, for the repayment of the
project loan.
The Navy I partnership's cash flows from financing activities decreased
by $3.6 million for the three months ended March 31, 2000 as compared to March
31, 1999, primarily due to repayment of the project loan.
The BLM partnership's cash flows from operating activities decreased by
$7.3 million for the three months ended March 31, 2000 as compared to March 31,
1999, primarily due to a reduction in net income resulting from the expiration
of the fixed energy price period under the BLM partnership's power purchase
agreement in March 1999 and the receipt of energy payments based on Edison's
avoided cost of energy since that time. Cash flows from operating activities
also decreased due to increases in both accounts receivable and prepaid
expenses.
Cash used in investing activities at the BLM partnership decreased by
$3.1 million for the three months ended March 31, 2000 as compared to March 31,
1999, primarily due to the use of restricted cash, for the repayment of the
project loan.
The BLM partnership's cash flows from financing activities decreased by
$4.3 million for the three months ended March 31, 2000 as compared to March 31,
1999, primarily due to repayment of the project loan.
27
The Navy II partnership's cash flows from operating activities
decreased by $1.5 million for the three months ended March 31, 2000 as compared
to March 31, 1999, primarily due to a reduction in net income caused by the
expiration in early January 2000 of the fixed energy price period under the Navy
II partnership's power purchase agreement and the receipt of energy payments
based on Edison's avoided cost of energy since that time. The decrease in cash
flows was partially offset by a decrease in accounts receivable.
Cash used in investing activities at the Navy II partnership's
decreased by $44.2 million for the three months ended March 31, 2000 as compared
to March 31, 1999, primarily due to the use of restricted cash for the repayment
of the project loan.
The Navy II partnership's cash flows from financing activities
decreased by $45.3 million for the three months ended March 31, 2000 as compared
to March 31, 1999, primarily due to repayment of the project loan.
Year 2000
In 1999, the Coso partnership's developed a plan to identify, assess
and remediate "Year 2000" issues within each of their significant computer
programs and certain machinery and equipment. The Coso partnerships have not
experienced disruptions to their financial or operating activities caused by
failure of computerized systems from Year 2000 issues. In addition, the Coso
partnerships have not experienced disruptions to operations caused by failure of
computerized systems of suppliers or customers from Year 2000 issues. Management
of the Coso partnerships do not expect Year 2000 issues to have a material
adverse effect on their power plant's operations or financial results in 2000.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Settlement of Litigation
In February 2000, the Navy I, Navy II, and BLM partnerships and Edison
reached a settlement, subject to the approval of the California Public Utilities
Commission of litigation between the Coso Partnerships and Edison as more fully
described in the 10-Q for the quarter ended September 30, 1999. The cost of the
settlement was allocated among the Coso Partnerships. A portion of that cost was
reflected in the purchase accounting applied to the acquisition of CalEnergy's
interest in the partnership.
General
Except as otherwise described above, the Coso partnerships are
currently parties to various minor items of litigation, none of which, if
determined adversely, would be material to the financial condition and results
of operations of the Coso partnerships, either individually or taken as a whole.
28
ITEM 2. Change in Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other information
None
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule--Form SX--Coso Funding Corp.
27.2 Financial Data Schedule--Form SX--Coso Finance Partners
27.3 Financial Data Schedule--Form SX--Coso Energy Developers
27.4 Financial Data Schedule--Form SX--Coso Power Developers
(b) Reports on Form 8-K
The Coso Partnerships filed current reports on Form 8-K dated February
23, 2000 reporting settlement agreements to resolve litigation
proceedings with Edison, Dow and Fuji Electric Company.
29
<PAGE>
EXHIBIT 27.1
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: CAITHNESS COSO FUNDING CORP
---------------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *___________
--- --- and is qualified in its entirety by
reference to such financial statements.
*Identify the financial statement(s)
to be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously filed period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT NAME:
MULTIPLIER X 1,000 1,000,000,000
Do the financials require a multiplier --- ---
other than 1 (one)? 1,000,000 1,000,000,000,000
X Yes No --- ---
--- ---
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 3 - MOS
-- ---- --- ----
X YEAR YEAR
--- ---
(For annual report filings)
OTHER OTHER
--- ---
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-1999 DEC-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-1999 JAN-01-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-1999 MAR-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? (Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
<TABLE>
<CAPTION>
PERIOD TYPE: Year PERIOD TYPE: 3-M0S
---- ------
<S> <C> <C>
CASH 0 0
SECURITIES 0 0
RECEIVABLES 414,392 369,556
ALLOWANCES 0 0
INVENTORY 0 0
CURRENT ASSETS 1,392 9,221
PP&E 0 0
DEPRECIATION 0 0
TOTAL ASSETS 414,392 369,556
CURRENT LIABILITIES 1,392 9,221
BONDS 413,000 360,335
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 414,392 369,556
SALES 0 0
TOTAL REVENUES 20,491 9,221
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 0 0
LOSS PROVISION 0 0
INTEREST EXPENSE 20,491 9,221
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 0 0
CHANGES 0 0
NET INCOME 0 0
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>
<PAGE>
EXHIBIT 27.2
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: COSO FINANCE PARTNERS
---------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *___________
--- --- and is qualified in its entirety by
reference to such financial statements.
*Identify the financial statement(s)
to be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously filed period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT NAME:
MULTIPLIER X 1,000 1,000,000,000
Do the financials require a multiplier --- ---
other than 1 (one)? 1,000,000 1,000,000,000,000
X Yes No --- ---
--- ---
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 3 - MOS
-- ---- --- ----
X YEAR YEAR
--- ---
(For annual report filings)
OTHER OTHER
--- ---
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-1999 DEC-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-1999 JAN-01-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-1999 DEC-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? (Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
<PAGE>
<TABLE>
<CAPTION>
PERIOD TYPE: Year PERIOD TYPE: 3- MOS
<S> <C> <C>
CASH 7,821 13,334
SECURITIES 25,001 20,051
RECEIVABLES 9,662 5,348
ALLOWANCE 0 0
INVENTORY 0 0
CURRENT ASSETS 17,483 18,728
PP&E 225,157 227,643
DEPRECIATION 71,278 73,325
TOTAL ASSETS 217,712 214,014
CURRENT LIABILITIES 16,800 18,271
BONDS 151,550 145,994
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 217,712 214,013
SALES 55,666 8,980
TOTAL REVENUES 57,442 9,303
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 31,671 5,614
LOSS PROVISION 0 0
INTEREST EXPENSE 13,575 3,303
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 2,375 0
CHANGES 0 0
NET INCOME 9,821 386
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>
<PAGE>
EXHIBIT 27.3
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: COSO ENERGY DEVELOPERS
------------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *___________
--- --- and is qualified in its entirety by
reference to such financial statements.
*Identify the financial statement(s)
to be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously filed period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT NAME:
MULTIPLIER X 1,000 1,000,000,000
Do the financials require a multiplier --- ---
other than 1 (one)? 1,000,000 1,000,000,000,000
X Yes No --- ---
--- ---
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 3 - MOS
-- ---- --- ----
X YEAR YEAR
--- ---
(For annual report filings)
OTHER OTHER
--- ---
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-1999 DEC-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-1999 JAN-01-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-1999 DEC-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? (Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
<TABLE>
<CAPTION>
PERIOD TYPE: Year PERIOD TYPE 3- MOS
<S> <C> <C>
CASH 6,423 14,937
SECURITIES 9,806 5,916
RECEIVABLES 6,856 6,567
ALLOWANCE 0 0
INVENTORY 0 0
CURRENT ASSETS 13,379 21,650
PP&E 237,183 237,144
DEPRECIATION 71,533 74,180
TOTAL ASSETS 216,391 217,772
CURRENT LIABILITIES 29,141 31,000
BONDS 107,900 103,795
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 216,391 217,772
SALES 49,877 7,180
TOTAL REVENUES 50,943 12,495
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 38,534 6,480
LOSS PROVISION 0 0
INTEREST EXPENSE 10,235 2,388
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 1,822 0
CHANGES 0 0
NET INCOME 352 3,627
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>
<PAGE>
EXHIBIT 27.4
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: COSO POWER DEVELOPERS
---------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *___________
--- --- and is qualified in its entirety by
reference to such financial statements.
*Identify the financial statement(s)
to be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously filed period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes No
--- --- COREGISTRANT NAME:
MULTIPLIER X 1,000 1,000,000,000
Do the financials require a multiplier --- ---
other than 1 (one)? 1,000,000 1,000,000,000,000
X Yes No --- ---
--- ---
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 3 - MOS
-- ---- --- ----
X YEAR YEAR
--- ---
(For annual report filings)
OTHER OTHER
--- ---
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-1999 DEC-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-1999 JAN-01-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-1999 DEC-31-2000
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? (Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
<TABLE>
<CAPTION>
PERIOD TYPE: Year PERIOD TYPE: Year
<S> <C> <C>
CASH 6,020 22,653
SECURITIES 54,338 11,516
RECEIVABLES 27,598 13,138
ALLOWANCE 0 0
INVENTORY 0 0
CURRENT ASSETS 33,618 35,837
PP&E 208,048 208,102
DEPRECIATION 60,526 63,581
TOTAL ASSETS 273,269 228,757
CURRENT LIABILITIES 15,388 13,687
BONDS 153,550 110,546
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 273,269 228,757
SALES 113,746 9,788
TOTAL REVENUES 115,920 10,317
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 43,577 7,578
LOSS PROVISION 0 0
INTEREST EXPENSE 13,991 2,546
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 2,147 0
CHANGES 0 0
NET INCOME 56,205 193
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
</TABLE>
<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.
Date: May 12, 2000 COSO POWER DEVELOPERS,
a California general partnership
By: New CTC Company, LLC,
its Managing General Partner
By: /S/ CHRISTOPHER T. MCCALLION
---------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
