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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
/ / 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: 333-40478
AES RED OAK, L.L.C.
(Exact name of registrant as specified in its charter)
DELAWARE 54-1889658
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1001 NORTH 19TH STREET, ARLINGTON, VIRGINIA 22209,
C/O THE AES CORPORATION
(703) 522-1315
(Registrant's address of principal executive offices,)
(zip code and 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 / / No /X/
(Page 1 of 15)
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AES RED OAK, L.L.C.
TABLE OF CONTENTS
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Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Statements of Operations,
Three months ended September 30, 2000, Six months
ended September 30, 2000 and the period from
March 15, 2000 (inception) through September 30, 2000 ....... 3
Condensed Consolidated Balance Sheets
September 30, 2000 and March 31, 2000 ....................... 4
Condensed Consolidated Statements of Changes in Member's
Deficit, Period from March 15, 2000 (inception)
through September 30, 2000 ................................. 5
Condensed Consolidated Statements of Cash Flows, Six
months ended September 30, 2000 and the period from
March 15, 2000 (inception) through September 30, 2000 ....... 6
Notes to the Condensed Consolidated Financial Statements........ 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................. 10
Item 3. Quantitative and Qualitative Disclosures
About Market Risk............................................... 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................................... 13
SIGNATURES..................................................................... 14
</TABLE>
(Page 2 of 15)
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PART I. FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
AES RED OAK, L.L.C.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS,
THREE MONTHS ENDED SEPTEMBER 30, 2000, SIX MONTHS ENDED SEPTEMBER 30, 2000
AND THE PERIOD FROM MARCH 15, 2000 (INCEPTION) THROUGH
SEPTEMBER 30, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
March 15, 2000
Three Months Ended Six Months Ended (inception) through
September 30, 2000 September 30, 2000 September 30, 2000
------------------ ------------------ -------------------
<S> <C> <C> <C>
OPERATING EXPENSES
General administrative costs......... $ (11) $ (21) $ (183)
------- ------- -------
Operating Loss....................... (11) (21) (183)
OTHER INCOME/EXPENSE
Interest income...................... 615 1,248 1,369
Interest expense..................... (792) (1,795) (1,999)
------- ------- -------
NET LOSS.................................. $ (188) $ (568) $ (813)
======= ======= =======
</TABLE>
See notes to condensed consolidated financial statements.
(Page 3 of 15)
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AES RED OAK, L.L.C.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 AND MARCH 31, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
As of As of
September 30, 2000 March 31, 2000
<S> <C> <C>
ASSETS:
Current Assets:
Cash ......................................................................... $ 32 $ 26
Investments held by trustee-at cost, which approximates market value ......... 6,197 2,940
--------- ---------
Total current assets ......................................................... 6,229 2,966
Prepaid Construction Costs ................................................... 227,609 288,573
Land ......................................................................... 4,240 4,240
Construction in progress ..................................................... 106,445 26,398
Deferred financing costs - net of accumulated amortization of $443 and $10,
respectively............................................................. 18,227 18,709
Investments held by trustee-at cost, which approximates market value ......... 26,634 45,809
--------- ---------
Total assets ................................................................. $ 389,384 $ 386,695
========= =========
LIABILITIES AND MEMBER'S DEFICIT:
Current Liabilities:
Accounts payable ............................................................. $ 418 $ 213
Accrued Interest ............................................................. 2,821 1,598
Payable to affiliate ......................................................... 1,974 252
Payable to parent ............................................................ 984 877
--------- ---------
Total current liabilities .................................................... 6,197 2,940
Bonds payable ................................................................ 384,000 384,000
--------- ---------
Total liabilities ............................................................ 390,197 386,940
========= =========
Commitments (Notes 4 and 5)
Member's deficit:
Common stock, $1 par value-10 shares authorized, none issued or outstanding .. -- --
Deficit accumulated during the development stage ............................. (813) (245)
--------- ---------
Total member's deficit ....................................................... (813) (245)
--------- ---------
Total liabilities and member's deficit ....................................... $ 389,384 $ 386,695
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
(Page 4 of 15)
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AES RED OAK, L.L.C.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S DEFICIT
PERIOD FROM MARCH 15, 2000
(INCEPTION) THROUGH SEPTEMBER 30, 2000
(DOLLARS IN THOUSANDS)
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Common Stock Accumulated
Shares Amount Deficit Total
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BALANCE, MARCH 15, 2000 ........... -- -- -- --
Net Loss .......................... $(245) $(245)
----- ----- ----- -----
BALANCE, MARCH 31, 2000 ........... -- -- (245) (245)
Net Loss .......................... -- -- (380) (380)
----- ----- ----- -----
BALANCE, JUNE 30, 2000 ............ -- -- (625) (625)
Net Loss .......................... -- -- (188) (188)
----- ----- ----- -----
BALANCE, SEPTEMBER 30, 2000 ....... -- -- $(813) $(813)
===== ===== ===== =====
</TABLE>
See notes to condensed consolidated financial statements.
(Page 5 of 15)
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AES RED OAK, L.L.C.
(A DEVELOPMENT STAGE ENTERPRISE)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED SEPTEMBER 30, 2000 AND THE PERIOD FROM MARCH 15, 2000 (INCEPTION)
THROUGH SEPTEMBER 30, 2000
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
March 15, 2000
Six Months Ended (inception) through
September 30, 2000 September 30, 2000
------------------ -------------------
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OPERATING ACTIVITIES:
Net loss ......................................... $ (568) $ (813)
Amortization of deferred financing costs ......... 433 443
Change in:
Accounts Payable ................................. 205 418
Accrued interest ................................. 1,223 2,821
Payable to affiliates ............................ 1,829 2,958
--------- ---------
Net cash provided by operating activities ........ 3,122 5,827
--------- ---------
INVESTING ACTIVITIES:
Change in prepaid construction account ........... 60,964 (227,609)
Payments for construction in progress ............ (80,047) (106,445)
Payments for land ................................ -- (4,240)
Change in debt service reserve ................... 15,918 (32,831)
--------- ---------
Net cash used in investing activities ............ (3,165) (371,125)
--------- ---------
FINANCING ACTIVITIES:
Proceeds from project debt issuance .............. -- 384,000
Payments for deferred financing costs ............ -- (18,719)
Other ............................................ 49 49
--------- ---------
Net cash provided by financing activities ........ 49 365,330
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS ........ 6 32
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ... 26 --
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD ......... $ 32 $ 32
========= =========
SUPPLEMENTAL DISCLOSURE:
Interest paid .................................... $ 15,514 $ 15,514
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
(Page 6 of 15)
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AES RED OAK, L.L.C.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED AND
SIX MONTHS ENDED SEPTEMBER 30, 2000 AND THE PERIOD FROM MARCH 15, 2000
(INCEPTION) THROUGH SEPTEMBER 30, 2000
1. ORGANIZATION
AES Red Oak, L.L.C. (the Company) was formed on September 13, 1998, in the
State of Delaware, to develop, construct, own and operate an 830-megawatt
(MW) gas-fired, combined cycle electric generating facility (the facility)
in Sayreville, New Jersey. The Company was considered dormant until March
15, 2000, at which time it consummated a project financing and certain
related agreements. The facility, currently under construction, will
consist of three Westinghouse 501 FD combustion turbines, three unfired
heat recovery steam generators, and one multicylinder steam turbine. The
facility will produce and sell electricity, as well as provide fuel
conversion and ancillary services, solely to Williams Energy Marketing and
Trading Company (Williams) under a power purchase agreement with a term of
20 years that will commence on the facility's anticipated commercial
operation date, December 31, 2001.
The Company is in the development stage and is not expected to generate any
operating revenues until the facility achieves commercial operations. As
with any new business venture of this size and nature, operation of the
facility could be affected by many factors. Management of the Company
believes that the assets of the Company are realizable.
The Company is a wholly owned subsidiary of AES Red Oak, Inc. (Red Oak),
which is a wholly-owned subsidiary of The AES Corporation (AES). Red Oak
has no assets other than its ownership interests in the Company and AES
Sayreville, L.L.C. Red Oak has no operations and is not expected to have
any operations. Red Oak's only income will be from distributions it
receives from the Company and AES Sayreville, L.L.C., once the Company
achieves commercial operation. The equity that Red Oak is to provide to the
Company will be provided to Red Oak by AES, which owns all of the stock of
Red Oak. AES files quarterly and annual audited reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, which
are publicly available. Red Oak's equity contribution obligations are
required to be supported by either an insurance bond or letter of credit.
Currently those obligations are supported by an insurance bond issued to
the collateral agent.
The Company owns all of the equity interests in AES Red Oak Urban Renewal
Corporation (URC), which was organized as an urban renewal corporation
under New Jersey Law. As an urban renewal corporation under New Jersey law,
portions of the facility can be designated as redevelopment areas in order
to provide real estate tax and development benefits to the facility. URC
has no operations outside of its activities in connection with the
facility.
On March 15, 2000, the Company issued $384 million in senior secured bonds
for the purpose of providing financing for the construction of the facility
and to fund, through the construction period, interest payments to the
bondholders. In late September 2000, the Company consummated an exchange
offer whereby the holders of the senior secured bonds exchanged their
privately placed senior secured bonds for registered senior secured bonds.
(Page 7 of 15)
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Pursuant to an equity subscription agreement (See Note 3), Red Oak has
agreed to contribute up to approximately $55.7 million to the Company to
fund construction after the bond proceeds have been fully utilized.
2. BASIS OF PRESENTATION
In the Company's opinion, all adjustments necessary for a fair presentation
of the unaudited results of operations for the three months ended and six
months ended September 30, 2000, and the period from March 15, 2000
(inception) through September 30, 2000 are included. All such adjustments
are accruals of a normal and recurring nature. The results of operations
for the three months ended and six months ended September 30, 2000 and the
period from March 15, 2000 (inception) through September 30, 2000, are not
necessarily indicative of the results of operations to be expected for the
full year.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with
the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. Because the
accompanying condensed consolidated financial statements do not include all
of the information and footnotes required by generally accepted accounting
principles, they should be read in conjunction with the audited financial
statements for the period ended March 31, 2000 and notes thereto included
in the Company's prospectus dated August 11, 2000.
3. EQUITY SUBSCRIPTION AGREEMENT
The Company, along with Red Oak, has entered into an Equity Subscription
Agreement, pursuant to which Red Oak has agreed to contribute up to
approximately $55.7 million to the Company to fund project costs. This
amount is secured by an acceptable bond issued by Red Oak. Red Oak will
fund these amounts as they come due upon the earlier of (a) expenditure of
all funds that have been established for construction or (b) the
occurrence, and during the continuation of, an event of default, as defined
under the indenture governing its senior secured bonds. A portion of this
equity requirement may be made in the form of affiliate debt, between Red
Oak and the Company, which would be subordinate to the senior secured
bonds.
4. POWER PURCHASE AGREEMENT
The Company and Williams have entered into a power purchase agreement (PPA)
for the sale of all electric energy and capacity produced by the facility,
as well as ancillary services and fuel conversion services. The term of the
PPA is 20 years, commencing on the Commercial Operation Date defined in the
PPA as the day the initial start up testing procedures have been
successfully completed and notified to Williams by the Company. Payment
obligations to the Company are guaranteed by The Williams Companies, Inc.
Such payment obligations under the guarantee are capped at an amount equal
to 125% of the sum of the principal amount of the senior secured bonds plus
the maximum debt service reserve account required balance. The Company has
provided Williams a guaranty issued by AES of specific payment obligations
should the facility not achieve commercial operation by December 31, 2001.
AES's liability under the guaranty is capped at $30 million. The Company
has the option, and may be required under specific conditions described in
the PPA, to replace the guaranty issued by AES with a letter of credit
issued by a commercial bank. In such case, the repayment obligations with
respect to drawings under the letter of credit are to be a senior debt
obligation of the Company.
(Page 8 of 15)
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5. COMMITMENTS AND CONTINGENCIES
CONSTRUCTION - The Company has entered into a fixed-price turnkey
construction agreement (EPC) with Raytheon Engineers and Constructors, Inc.
(the Contractor) for the design, engineering, procurement and construction
of the facility. The Company has prepaid the EPC in the amount of $288.6
million, representing a discounted fixed price. In consideration of the
prepayment, the Contractor issued in favor of the Company a letter of
credit with an initial amount of $237.7 million to be reduced over the
construction period. As of September 30, 2000, the letter of credit has
been reduced by approximately $61 million representing completion of
certain construction milestones.
On July 7, 2000, Morrison Knudsen Corporation completed its acquisition of
the Contractor and formed the Washington Group International, Inc. (The
Washington Group). The Washington Group is comprised of Morrison Knudsen
Corporation, Raytheon Engineers & Constructors and Westinghouse Government
Services Group. The terms and conditions under the EPC and the letter of
credit obligation remain unchanged.
MAINTENANCE SERVICES AGREEMENT - The Company has entered into an agreement
with Siemens Westinghouse Power Corporation (Siemens). Siemens will provide
the Company with specific combustion turbine maintenance services and spare
parts for an initial term of between six and sixteen years. For the first
six years of operation, the Company is committed to pay $306 per kilowatt
hour of service. The value of this commitment is difficult to ascertain at
this time due to the unknown operational mode Williams will require from
the Company.
WATER SUPPLY - The Company has entered into a contract with the Borough of
Sayreville (the Borough) by which the Borough will provide untreated water
to the Company. The contract has a term of 30 years with an option to
extend for up to four additional five-year terms. The Company is
contractually committed to a minimum annual payment of $300,000. Based on
estimated maximum usage, the Company believes that its annual payment will
not exceed approximately $400,000.
INTERCONNECTION AGREEMENT - The Company has entered into an interconnection
agreement with Jersey Central Power & Light Company d/b/a GPU Energy (GPU)
to transmit the electricity generated by the facility to the transmission
grid so that it may be sold as prescribed under the Company's PPA. The
agreement is in effect for the life of the facility, yet may be terminated
by mutual consent of both GPU and the Company under certain circumstances
as detailed in the agreement. Costs associated with the agreement are based
on electricity transmitted via GPU at a variable price, the PJM
(Pennsylvania/New Jersey/Maryland) Tariff as charged by GPU to the Company,
which is comprised of both service cost and asset recovery cost, as
determined by GPU and approved by the Federal Energy Regulatory Committee.
WATER SUPPLY PIPELINE - The Borough will design the Lagoon Water Pipeline,
Lagoon Pumping Station and Sayreville Interconnection Number 2 in
conformance with standard water system practice. The Company is responsible
for selection of a contractor and for payment of all costs. The pipeline
engineering and routing has been finalized. The construction contract has
been awarded, pipeline materials have been procured and the construction
will commence after closing of the right-of-way. The value of the pipeline
contract is approximately $1 million and will be payable by December 2000.
The construction contract for the Pumping Station has not been awarded. The
value of the project is estimated to be approximately $500,000.
(Page 9 of 15)
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements in this Form 10-Q, as well as statements made by the
Company in periodic press releases and other public communications,
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Certain, but not necessarily all,
of such forward-looking statements can be identified by the use of
forward-looking terminology, such as "believes," "estimates," "plans,"
"projects," "expects," "may," "will," "should," "approximately," or
"anticipates" or the negative thereof or other variations thereof or
comparable terminology, or by discussion of strategies, each of which
involves risks and uncertainties. The Company has based these
forward-looking statements on its current expectations and projections
about future events based upon its knowledge of facts as of the date of
this Form 10-Q and its assumptions about future events.
All statements other than of historical facts included herein, including
those regarding market trends, the Company's financial position, business
strategy, projected plans and objectives of management for future
operations and the anticipated commercial operation date of the facility,
are forward-looking statements. Such forward-looking statements involve
known and unknown risks, uncertainties and other factors outside of the
Company's control that may cause the actual results or performance of the
Company to be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. These
risks, uncertainties and other factors include, among others, the
following:
- unexpected construction delays,
- unexpected problems relating to the start-up, commissioning and
performance of the facility,
- the financial condition of third parties on which we depend,
- an adequate merchant market after the expiration of the power
purchase agreement,
- capital shortfalls and access to additional capital on reasonable
terms,
- inadequate insurance coverage,
- unexpected expenses or lower than expected revenues once
commercial operations have begun,
- environmental and regulatory compliance, and
- the additional factors discussed in the "Risk Factors" section of
the Company's prospectus dated August 11, 2000.
The Company has no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise.
GENERAL
The Company was formed on September 13, 1998 to develop, construct, own,
operate and maintain its facility. The Company was dormant until March 15,
2000, the date of the sale of the senior secured bonds. The Company is in
the development stage and has no operating revenues. The Company obtained
$384.0 million of project financing from the sale of the senior secured
bonds. The total cost of the construction of the Company's facility is
estimated to be approximately $439.8 million, which
(Page 10 of 15)
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will be financed by the proceeds from the sale of the senior secured bonds
and the equity contribution described below. In late September 2000, the
Company consummated an exchange offer whereby the holders of the senior
secured bonds exchanged their privately placed senior secured bonds for
registered senior secured bonds.
The Company's facility is still under construction and is expected to be
completed and operational by approximately December 31, 2001. The Company
cannot assure that these expectations will be met. See "--Cautionary Note
Regarding Forward-Looking Statements."
EQUITY CONTRIBUTIONS
Under the equity subscription agreement, Red Oak is obligated to contribute
up to approximately $55.7 million to the Company to fund project costs. Red
Oak's obligation to make the contributions is, and will be, supported by an
acceptable letter of credit or an acceptable bond.
RESULTS OF OPERATIONS
As of September 30, 2000 and March 31, 2000, Construction in Progress,
which includes capitalized facility construction costs, was $106.4 million
and $26.4 million, respectively. For the three months and six months ended
September 30, 2000, capitalized facility construction costs were $45.6
million and $80.0 million, respectively. As discussed in greater detail
below, Construction in Progress also includes the capitalization of
construction related interest cost incurred on the portion of the bond
proceeds expended during the construction period. These capitalized costs
are included as assets on the balance sheet.
The Company has prepaid the EPC contract in the amount of $288.6 million
and in consideration of the prepayment the Contractor issued in favor of
the Company a letter of credit. As of September 30, 2000, the letter of
credit has been reduced by approximately $61 million, representing
completion of certain construction milestones resulting in prepaid
construction costs in the amount of $227.6 million and included as assets
on the balance sheet. The cost of purchasing land for construction of the
Company's facility has been separately identified on the Balance Sheets.
For the three months and six months ended September 30, 2000 and the period
from March 15, 2000 (inception) through September 30, 2000, general and
administrative costs of $11,000, $21,000 and $183,000, respectively, were
incurred. These costs did not directly relate to construction and are
included as expenses in the Statement of Operations.
A portion of the proceeds from the sale of the senior secured bonds have
not yet been expended on construction and were invested by the trustee. For
the three months and six months ended September 30, 2000 and the period
from March 15, 2000 (inception) through September 30, 2000, the interest
income earned on these invested funds was approximately $615,000, $1.2
million and $1.4 million, respectively, and is included in the Statement of
Operations.
As noted above, for the three and six months ended September 30, 2000 and
the period from March 15, 2000 (inception) through September 30, 2000,
construction related interest costs incurred on the portion of the bond
proceeds expended during the construction period is capitalized to
Construction in Progress, was approximately $7.5 million, $14.9 million and
$16.3 million respectively, and is included on the balance sheet. For the
three months and six months ended September 30, 2000 and the period from
March 15, 2000 (inception) through September 30, 2000, interest cost
incurred on the bond proceeds not spent on construction of the Company's
facility was approximately $792,000, $1.8
(Page 11 of 15)
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million and $2.0 million respectively, and is included as interest expense
in the Statement of Operations.
For the three and six months ended September 30, 2000 and the period from
March 15, 2000 (inception) through September 30 2000, non-capitalizable
costs plus interest cost and less interest income resulted in a net loss of
approximately $188,000, $568,000 and $813,000 respectively. The results of
operations may not be comparable with the results of operations during
future periods, especially when the Company's facility commences commercial
operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company believes that the net proceeds from the sale of the senior
secured bonds, together with the equity contribution, will be sufficient to
(1) fund the engineering, procurement, construction, testing and
commissioning of the Company's facility until it is placed in commercial
operation, (2) pay certain fees and expenses in connection with the
financing and development of the Company's project and (3) pay project
costs, including interest on the senior secured bonds. After the Company's
facility is placed in commercial operation, it will depend on revenues
under the power purchase agreement, and after the power purchase agreement
expires, it will depend revenues generated from market sales of
electricity.
In order to provide liquidity in the event of cash flow shortfalls, the
debt service reserve account will contain an amount equal to the debt
service reserve account required balance through cash funding, issuance of
the debt service reserve letter of credit or a combination of the two.
As of September 30, 2000, apart from commitments totaling $541,000 arising
from the construction of the facility, the Company has committed to three
additional capital expenditures totaling $1.8 million. These expenditures
are for a water pipeline for approximately $1 million, road modifications
for an estimated $332,000 and a water pumping station for an estimated
$500,000. The Company expects to pay these amounts in fiscal year 2000 with
the proceeds from the sale of the senior secured bonds issued on March 15,
2000. As of September 30, 2000, water inlet infrastructure and pump-house
design was complete. The electrical supply to the pump-house design is
currently 95% complete. The Company is seeking bids for the installation of
this scope of work.
BUSINESS STRATEGY AND OUTLOOK
The Company's overall business strategy is to market and sell all of its
net capacity, fuel conversion and ancillary services to Williams during the
20-year term of the power purchase agreement. After expiration of the power
purchase agreement, the Company anticipates selling its facility's
capacity, ancillary services and energy under a power purchase agreement or
into the PJM power pool market. The Company intends to cause its facility
to be managed, operated and maintained in compliance with the project
contracts and all applicable legal requirements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company's market risks are not materially different from those market
risks described in its prospectus dated August 11, 2000.
(Page 12 of 15)
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) EXHIBITS
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Exhibit Number Description
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27 Financial data schedule
</TABLE>
b) REPORTS ON FORM 8-K.
The Company did not file any reports on Form 8-K during the quarter ended
September 30, 2000.
(Page 13 of 15)
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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.
AES RED OAK, L.L.C.
Date: November 13, 2000 By: /s/ John Ruggirello
----------------------------
John Ruggirello
President
Date: November 13, 2000 By: /s/ Barry Sharp
------------------------------
Barry Sharp
Vice President and Chief Financial
Officer (and principal accounting
officer)
(Page 14 of 15)
