This electronic filing is confirmatory of the written filing made
on January 25, 1996
Submitted January 25, 1996
File Number 0-14452
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3 TRANSACTION STATEMENT
Pursuant to Section 13(e) of the Securities Exchange Act of 1934
and Rule 13e-3 (Section 240.13e-3) thereunder
This Statement Is Filed In Connection With The Filing Of
Solicitation Materials Subject To Regulation 14A
Preliminary Copies
Far West Electric Energy Fund, L.P.
(Name of the issuer)
Far West Electric Energy Fund, L.P.
(Name of the person filing statement)
Units of Limited Partnership Interest
(Title of Class of Securities)
Stanford S. Smith
2921 Devon Drive
Bountiful, Utah 84010
Tel/Fax (801) 295-1444
(Person authorized to receive notices
on behalf of person filing statement)
Filing Fee (1/50th of 1% of transaction value;
No offsetting fee has been previously paid)
Transaction Valuation: $1,250,000
Amount of Filing Fee: $250
SCHEDULE 13E-3 TRANSACTION STATEMENT
Item 1. Issuer and Class of Security Subject to the Transaction
(a) The issuer is Far West Electric Energy Fund, L.P., a Delaware
limited partnership. It has issued 10,306 units of limited
partnership interest (the 'Units') as its sole outstanding
securities. The issuer's principal executive offices are located
at 921 Executive Park Drive, Salt Lake City, Utah 84117. Holders
of the Units are the limited partners (the 'Limited Partners').
(b) In a solicitation of consent filed with the Securities and
Exchange Commission on January 8, 1996 (the "Consent
Solicitation'), the issuer described its proposed solicitation from
all Limited Partners written consent:
The sale of substantially all of the issuer's assets for
$1,250,000;
Distribution of the proceeds of sale to the Limited Partners
(estimated to be $44 per limited partnership Unit; and
Termination of the issuer (generally resulting in
approximately $44 of taxable gain per Unit).
These three steps are collectively referred to in the Consent
Solicitation and in this Schedule 13e-3 as the 'Proposed
Transaction.'
(c) The Units are not traded in any public market or on any
exchange.
(d) No cash distributions to Limited Partners have been made
during the past two years. The sole income producing asset of the
issuer, a thermal-hydroelectric plant located near Reno, Nevada,
(the "Power Plant') has. been unable to operate profitably. In the
opinion of the issuer, this situation will not change in the
foreseeable future. The section of the Consent solicitation
entitled 'Summary - Recommendation of FWC' is incorporated herein
by reference,
(e) No public offering of the Units has been made for the past
three years.
(f) Neither the issuer nor any affiliate has purchased Units since
the commencement of the issuer's second full fiscal year preceding
the date of this Schedule 13e-3 (the 'Schedule").
Item 2. Identity and Background
This Schedule is filed by the issuer.
(a) The issuer is Far West Electric Energy Fund, L.P., a Delaware
limited partnership. Its sole general partner is Far West Capital,
Inc., a Utah corporation ('FWC"). The owners of FWC are Alan 0.
Melchior, Thomas A. Quinn, and Ronald E. Burch; they serve as
directors, along with John S. Bo, Robert K. Mouritsen, Kenneth R.
Beck, and Richard V. Francis (collectively, the "Principals").
(b) The principal executive offices of the issuer, FWC, and the
Principals are located at 921 Executive Park Drive, Salt Lake City,
Utah 84117
(c) The Principals are engaged primarily as officers and directors
of FWC, a developer, owner, and operator of electric energy
producing projects.
(d) During the last 5 years, Principals Melchior, Quinn, Bo, and
Mouritsen, have been engaged primarily with FWC. Principal Burch
joined FWC in July, 1991, having been previously employed by
Calpine Corporation, a California corporation, as a Business
Development Manager.
(e) The issuer, FWC, and the Principals have not been convicted of
any criminal actions during the past 5 years,
(f) On January 29, 1993, a permanent injunction was entered by the
United States District Court, District of Utah, Central Division,
enjoining the issuer, FWC, and Principal Melchior (previously a
general partner of the issuer until his resignation effective
January 1, 1995) from violating provisions of the Securities Act of
1933. No monetary awards were granted by the Court. Details of
this proceeding were reported to Unit holders in the December 31,
1992 10-K.
An action filed against the issuer, FWC, Principal Melchior and
others by the Arizona Corporation Commission was settled on May 19,
1993, pursuant to a cease and desist order and without any expense
to the issuer. FWC Principal Melchior, and others were ordered to
pay $86,690 in restitution to Arizona investors. Details of this
proceeding were reported to Unit holders in the December 31, 1993
Form 10-K.
(g) The issuer and FWC are entities organized in the United
States; the Principals are United States Citizens.
Item 3. Past Contacts, Transactions or Negotiations
(a)(1) No transactions outside the ordinary course of business have
occurred between the issuer and any affiliate thereof since . the
commencement of the issuer's second full fiscal year preceding the
date of this Schedule.
(2) No contacts, negotiations, or transactions outside the
ordinary course of business have occurred between the issuer and
any affiliate thereof since the commencement of the issuer's second
full fiscal year preceding the date of this Schedule.
(b) Except as described in the Consent Solicitation, no material
contacts or negotiations have occurred since the commencement of
the issuer's second full fiscal year preceding the date of this
Schedule between (i) the issuer or any of its affiliates, or (ii)
between the issuer (or any affiliate) and any person who is not
affiliated with the issuer.
Item 4. Terms of the Transaction
(a) The Proposed Transaction is described in the Consent
Solicitation in the section entitled "The Proposed Transaction,"
which is incorporated herein by reference.
(b) There are no arrangements relating to any security holder of
the issuer which are not identical to that relating to other
security holders of the same class of securities of the issuer.
Item 5. Plans or Proposals of the Issuer or Affiliate
(a) If the Proposed Transaction is completed, the issuer will be
liquidated. The Proposed Transaction is described in the Consent
Solicitation section entitled "The Proposed Transaction," which is
incorporated herein by reference.
(b) If the Proposed Transaction is completed, the assets of the
issuer will be sold. The Proposed Transaction is described in the
Consent Solicitation section entitled "The Proposed Transaction,"
which is incorporated herein by reference.
(c) If the Proposed Transaction is completed, the issuer will be
liquidated.
(d) If the Proposed Transaction is completed, the issuer will be
liquidated.
(e) If the Proposed Transaction is completed, the issuer will be
liquidated.
(f) If the Proposed Transaction is completed, the issuer will be
liquidated and its duty to file reports pursuant to section 12 of
the Securities Exchange Act will cease.
(g) If the Proposed Transaction is completed, the issuer will be
liquidated and its duty to file any reports with the Securities and
Exchange Commission will cease.
Item 6. Source and Amounts of Funds or Other Consideration
(a) If the Proposed Transaction is completed, the issuer will be
paid $1,250,000 by Steamboat Envirosystems, L.L.C., ('SBE") an
affiliate of FWC, as described in the Consent Solicitation section
entitled "The Proposed Transaction,' which is incorporated herein
by reference. In brief, SBE will be capitalized by U.S.
Envirosysterns, Inc., a Delaware corporation ('USEN"), which will
seek all funds necessary to finance the Proposed Transaction from
public and private offerings of its securities. Completion of the
Proposed Transaction is contingent upon USEN's success raising at
least $10 million. USEN is not affiliated with the issuer, FWC, or
the Principals.
(b) The issuer expects the total expenses to be incurred in
connection with the Proposed Transaction to total approximately
$86,075, consisting of roughly $13,000 in accounting and tax
services, $43,000 for a fairness opinion from the financial
advisor, $25,000 in legal expenses, $375 in filing expenses, $1,700
in postage, and $3,000 in printing expense. All expenses will be
paid by the issuer.
(c) No part of such funds or other consideration will be directly
or indirectly borrowed.
(d) No part of such funds or other consideration will be directly
or indirectly a loan made in the ordinary course of business by a
bank.
Item 7. Purpose, Alternatives, Reasons, and Effects
(a) The purpose of the Rule 13e-3 transaction is to sell the Power
Plant before it is lost to the project lender in foreclosure, as
described in the Consent Solicitation section entitled "The
Proposed Transaction' which is incorporated herein by reference.
(b) As explained in the Consent Solicitation section entitled "The
Proposed Transaction" which is incorporated herein by reference,
the issuer has attempted to renegotiate the power sales rate with
Sierra Pacific Power Company, the purchaser of the Power Plant's
electricity, or, in the alternative, to sell the Plant to Sierra,
but without success. The issuer has received two offers to
exchange the Power Plant for solely for stock in small start-up
companies. These offers were rejected because the firms lacked any
significant assets, there was no market for the stock, and such
transactions would have created taxable income for the Limited
Partners without providing cash distributions to pay the tax.
The issuer has been seeking a purchaser for the Power Plant for the
past 2 years, believing that a financially capable purchaser may
succeed in locating an alternative purchaser for the power plant's
electricity, improving plant equipment, purchasing plant
indebtedness, and buying-out overriding royalty interests in the
plant's production, steps the issuer lacks the resources to pursue.
These are the only alternative measures deemed practical, and
explored, by the issuer.
(c) The structure of the Proposed Transaction was determined by
negotiations between U.S. Envirosysterns, Inc. and FWC. The
Proposed Transaction is being undertaken at this time to give the
purchaser of the issuer's assets as much time as possible to take
the steps described in (b) above, and to maximize the return to the
Limited Partners.
(d) The financial effects of the Proposed Transaction upon the
issuer and its unaffiliated security holders (the Limited
Partners), and the potential benefits and detriments of the
Proposed Transaction, are described in the Consent Solicitation
section entitled "The Proposed Transaction,' which is incorporated
herein by reference. Tax effects are discussed in the section
entitled "Federal Tax Consequences,' which is incorporated herein
by reference.
Item 8. Fairness of the Transaction
(a) The issuer and all of its directors believe that the Proposed
Transaction is fair to unaffiliated security holders.
(b)
(c) Although the issuer has been seeking a purchaser for the
issuer's assets for 2 years, the Proposed Transaction is the first
opportunity the issuer has had to sell its assets. The issuer
proposes to sell these assets for two principal reasons:
(i) In December, 1996, the income of the issuer's sole power
plant, SB-1, will drop below the level necessary to cover operating
expenses, pay royalties, and service debt. On that date the rate
paid by Sierra Pacific Power Company ('Sierra"), the local utility,
declines from the current rate of 7.170 per kwh to short-term
avoided cost rates (currently estimated to be 2.80 per kwh) under
the terms of the issuer's power sales agreement with Sierra. The
probable result of this decrease is that the issuer will be unable
to service the debt on SB-1, and the project will taken over by
Westinghouse Credit Corporation ("WCC"), the primary project
lender, resulting in financial loss and possible adverse tax
consequences to the Limited Partners.
(ii) Even if current income and expense levels could be maintained,
FWC believes that the issuer would face a long period of allocating
taxable "paper gain" to the Partners, without distributing the cash
necessary to cover the amount of the associated tax.
(c) The Proposed Transaction will not be completed unless a
majority in interest of Limited Partners participating by vote
approve the Proposed Transaction.
(d) No unaffiliated representative has been retained by the issuer
to act solely in behalf of the unaffiliated security holders. As
set forth in Item 9 below, the issuer has engaged an independent
financial advisor to evaluate the Proposed Transaction.
(e) All directors of the general partner favor the Proposed
Transaction. Of the FWC directors, only Messrs. Bo, Beck, and
Francis are not employed by FWC; they are employed by FWC
Properties, Inc., an affiliate of FWC.
(f) Apart from the offer of U.S. Envirosystems, Inc. giving rise
to the Proposed Transaction as described in the Consent
Solicitation, the issuer has received no feasible offers to acquire
the issuer or its assets during the preceding 18 months (see 7b
above).
Item 9. Reports, Opinions, Appraisals, and Certain Negotiations
(a) The issuer has received an opinion from an outside party which
is materially related to the Proposed Transaction.
(b)(1) The issuer engaged Corporate Capital Consultants, Inc.
("CCC') to provide an opinion respecting the fairness of the
Proposed Transaction (see "Opinion of Financial Advisor' which
appears as Exhibit 3 to the Consent Solicitation and is
incorporated herein by reference).
(2) CCC is a New York City-based investment banking firm organized
in 1974 which specializes in providing corporate valuations, often
in conjunction with pending purchase offers. It has issued many
"fairness opinions" to public companies and others.
(3) This firm was recommended to the issuer by Mr. Theodore Rosen,
Chairman of the Board of U.S. Envirosystems, Inc.
(4) There is no material relationship between CCC and the issuer
or its affiliates.
(5) The amount of consideration to be paid was determined by U.S.
Envirosystems, Inc., after discussions with FWC; CCC did not take
part in these discussions or otherwise make any recommendations.
(6) The procedures followed by CCC are set forth in detail in its
opinion (see Exhibit 3 to the Consent Solicitation-"Fairness
Opinion,' which is incorporated herein by reference). A copy of
this opinion will be mailed to Limited Partners as a pain of the
Consent Solicitation.
Item 10. Interest in Securities of the Issuer
(a) FWC, proposed 50% owner of the purchaser of the issuer's
assets (Steamboat Envirosystems, Inc.), owns 530 of the issuer's
Units, representing 5% of the outstanding Units. No Principals or
affiliates of FWC, or any pension or profit sharing plans of the
foregoing, have any interest in issuer.
(b) No transaction in Units has been effected during the past 60
days by the issuer, any affiliate or Principal.
Item 11. Contracts, Arrangements or Understandings with Respect to
the lssuer's Securities
The issuer and the proposed purchaser entered into a Purchase and
Sale Agreement on December 31, 1995 (see Exhibit 1 to the Consent
Solicitation, which is incorporated herein by reference). This
agreement is described in detail in the Consent Solicitation
section entitled "The Proposed Transaction." The issuer, FWC, and
the Principals have no other contracts, arrangements or
understandings respecting this Rule 13e-3 transaction.
Item 12. Present Intention and Recommendation of Certain Persons
with Regard to the Transaction
(a) The Proposed Transaction involves sale of substantially all
the issuer's assets, and does not involve the sale of securities.
(b) FWC and the Principals are recommending that Limited Partners
approve the Proposed Transaction. The reasons for this
recommendation are set forth in detail in the Consent Solicitation
Section entitled "Summary - Recommendation of FWC" which is
incorporated herein by reference.
Item 13. Other Provisions of the Transaction
(a) No appraisal rights are provided to Limited Partners under
applicable state law or under the issuer's articles of
incorporation, nor will any be accorded. If a security holder
opposes the Proposed Transaction, such holder may vote against it
and seek to influence others to do likewise.
Upon request of a Limited Partner, the issuer will provide a list
of names and addresses of all Limited Partners. The issuer knows
of no legal impediments to the Proposed Transaction, but
understands that a court may block a transaction it determines
involves fraud, misrepresentation, breach of duty, or violation of
securities laws or regulations.
(b) The issuer's agreement of limited partnership provides that a
Limited Partner may examine the issuer's records upon reasonable
notice. No provision has been made for any Limited Partner to
order an appraisal or obtain counsel at the expense of the issuer
or an affiliate.
(c) The Proposed Transaction does not involve the exchange of any
debt securities.
Item 14. Financial Information
(a) The issuer has provided the information required by this item
14 in Exhibit I to this Schedule.
(b)(1) and (b)(2): The issuer does not believe it material to
provide pro forma data disclosing the effect of the Proposed
Transaction. If the Proposed Transaction is completed, all the
issuer's assets will be sold, the proceeds will be distributed to
Limited Partners, and the issuer will be terminated.
Item 15. Persons and Assets Employed, Retained or Utilized
(a) Clerical employees of the issuer will mail the Consent
Solicitation and tabulate the returned reply cards. The issuer's
Principals have directed preparation of the issuer's proxy
statement and Schedule 13e-3, and will, if the Proposed Transaction
is approved by Limited Partners, direct the completion of the
Proposed Transaction as described in the Consent Solicitation
section entitled 'The Proposed Transaction."
lb) No person other than those identified in (a) above has been or
will be engaged to make solicitations or recommendations to the
Limited Partners.
Item 16. Additional Information
The issuer believes it has provided all relevant information in the
Consent Solicitation and this Schedule.
Item 17. Material to be Filed as Exhibits
(a) No loan agreements are involved in the Proposed Transaction.
(b) The issuer has obtained, and included as exhibits to the
Consent Solicitation, a tax opinion from Robison, Hill Associates,
Inc. and a fairness opinion from Corporate Capital Consultants,
Inc. These opinions appear as Exhibits 2 and 3, respectively, to
the Consent Solicitation and will be mailed to Limited Partners as
part of the consent solicitation package.
(c) The Purchase and Sale Agreement, with exhibits, is appended to
the Consent Solicitation as exhibit 1. There are no other
arrangements, understandings, or relationships related to the sale
of the issuer or its assets.
(d) The Consent Solicitation will be mailed to Limited Partners.
(a) The Limited Partners have no appraisal rights.
(f) No oral solicitation will be made by the issuer or any
affiliate.
Signature
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete, and correct.
Dated this 24th day of January, 1996.
Thomas A. Quinn, authorized officer of
Far West Capital, Inc., general partner of
Far West Electric Energy Fund, L.P.
EXHIBIT 2. CROSS-REFERENCE SHEET
Item In Schedule 13e-3 Location in Consent Solicitation Where
Requested Information is Provided
Item 1. Issuer and Class The Fund-Organization;Summary
of Security -Recommendation of FWC
Subject to the
Transaction
Item 2. Identity and
Background
Item 3. Past Contracts,
Transactions or
Negotiations
Item 4. Terms of the The Proposed Transaction
Transactions
Item 5. Plans or The Proposed Transaction-Improvements
Proposals of of Power Plants and Purchase of
the Issuer or Royalty Interests, Purchase of Debt
Affiliate
Item 6. Source and The Proposed Transaction-The
Amounts of Purchaser; Conditions of Sale
Funds or Other
Consideration
Item 7. Purposes, The Proposed Transaction
Alternatives,
Reasons, and Effects
Item 8. Fairness of Exhibit 3 to the Consent Solicitation
the Transaction
Item 9. Reports, Opinions, Exhibit 3 to the Consent Solititation
Appraisals and
Certain Negotiations
Item 10. Interest in Summary-Interest of FWC and its
Securities of the Principals
Issuer
Item 11. Contracts, Exhibit 1 to the Consent Solicitation
Arrangements or
Understandings with
Respect to the
Issuer's Securities
Item 12. Present Intention Summary-Recommendation of FWC
and Recommendation
of Certain Persons
with Regard to the
Transaction
Item 13. Other Provisions of
the Transaction
Item 14. Financial Exhibit 1 to this Schedule 13e-3
Information
Item 15. Persons and Assets
Employed, Retained
or Utilized
Item 16. Additional Information
Item 17. Material to be Exhibits 1,2,3,4 and 5 to the Consent
Filed as Exhibits Solicitation
EXHIBIT 1. FINANCIAL INFORMATION
(1) Audited financial statements for the two fiscal years required
to be filed with the issuers most recent annual report under
sections 12 and 15(d) of the Act.
(2) Unaudited balance sheets and comparative year-to-date income
statements and statements of cash flows and related earnings per
share amounts required to be included in the issuer's most recent
quarterly report filed pursuant to the Act.
(3) In the opinion of Robison, Hill & Co., Inc., the issuer's
accounting firm, the requirement for the ratio of earnings to fixed
charges for the two most recent fiscal years and the interim
periods provided under Item 14(a)(2) is not applicable to the
Proposed Transaction.
(4) Book value per share as of the most recent fiscal year end and
as of the date of the latest interim balance sheet provided under
Item 14(a)(2).
INDEPENDENT AUDITOR'S REPORT
General Partner
Far West Electric Energy Fund, L.P.
Salt Lake City, Utah
We have audited the balance sheet of Far West Electric Energy
Fund, L.P. as of December 31, 1994 and 1993, and the related
statements of income, partners' capital and cash flows for the
years then ended. These financial statements are the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Far West Electric Energy Fund, L.P. as of December 31, 1994 and
1993, and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting
principles.
Respectfully submitted,
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
March 7, 1995
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
1994 1993
Assets
Utility Plant:
Plant in Service $18,716,000 $18,692,000
Equipment 335,000 220,000
Construction in Progress 118,000 118,000
Accumulated Depreciation (6,010,000) (5,367,000)
Net Utility Plant 13,159,000 13,663,000
Restricted Marketable Securities 1,145,000 1,102,000
Other Assets 124,000 142,000
Current Assets:
Cash 278,000 280,000
Receivables - Trade 437,000 393,000
Receivables - Other 6,000 3,000
Receivable - Related Party 159,000 82,000
Prepaid Expenses 12,000 12,000
Total Current Assets 892,000 770,000
Total Assets $15,320,000 $15,677,000
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
BALANCE SHEETS
DECEMBER 31, 1994 AND 1993
(Continued)
1994 1993
Partners' Capital and Liabilities
Partners' Capital:
Limited Partners $ 4,868,000 $ 4,796,000
General Partner (11,000) (12,000)
Total Partners' Capital 4,857,000 4,784,000
Contingencies (Note 9) - -
Other Liabilities 150,000 150,000
Long-term Debt:
Notes Payable - Related Party 230,000 268,000
Partners' Capital and Long-Term
Liabilities 5,237,000 5,202,000
Current Liabilities:
Current Portion - Long-term Debt 7,140,000 7,857,000
Note Payable - Related Party 1,043,000 956,000
Payable-Related Party 573,000 455,000
Accrued Liabilities
Operations 495,000 596,000
Royalties 220,000 186,000
Interest 612,000 425,000
Total Accrued Liabilities 1,327,000 1,207,000
Total Current Liabilities 10,083,000 10,475,000
Total Partners' Capital and
Liabilities $15,320,000 $15,677,000
See accompanying notes to the financial statements.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
STATEMENTS OF INCOME
FOR THE YEARS ENDED
DECEMBER 31,
1994 1993 1992
Revenues:
Electric Power
Revenues $ 2,728,000 $ 3,162,000 $ 2,360,000
Other Revenues 151,000 622,000 1,083,000
Total Revenues 2,879,000 3,784,000 3,443,000
Expenses:
Operations 1,779,000 2,163,000 2,014,000
General and
Administrative:
Professional Services 54,000 72,000 366,000
General Partners-
Related Party 123,000 223,000 437,000
Total General and
Administrative 177,000 295,000 803,000
Total Expenses 1,956,000 2,458,000 2,817,000
Income From
Operations 923,000 1,326,000 626,000
Other Income (Expense):
Interest Income 52,000 38,000 56,000
Interest Expense (902,000) (806,000) (1,478,000)
Write-down of Assets - - (345,000)
Bad Debt Expense - (31,000) -
Net Other Expense (850,000) (799,000) (1,767,000)
Net Income (Loss)
Before Extraordinary
Item 73,000 527,000 (1,141,000)
Extraordinary Item - Early
Extinguishment of Debt - 175,000 1,794,000
Net Income $ 73,000 $ 702,000 $ 653,000
Net Income Per
Limited Partnership
Unit $ 7 $ 68 $ 63
See accompanying notes to the financial statements.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
STATEMENT OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
General Partner Limited Partners
Number Number Total
of Units Amount of Units Amount Amount
Balances at
December 31,
1991 1 $ (25,103) 10,305 $ 3,454,103 $3,429,000
Net Income - 6,530 - 646,470 653,000
Balances at
December 31,
1992 1 (18,573) 10,305 4,100,573 4,082,000
Net Income - 7,020 - 694,980 702,000
Balances at
December 31,
1993 1 (11,553) 10,305 4,795,553 4,784,000
Net Income - 730 - 72,270 73,000
Balances at
December 31,
1994 1 $ (10,823) 10,305 $ 4,867,823 $ 4,857,000
See accompanying notes to the financial statements.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
FOR THE YEARS ENDED DECEMBER 31,
1994 1993 1992
Cash Flows From Operating
Activities:
Net Income (Loss) $ 73,000 $ 702,000 $ 653,000
Adjustments to Net
Income (Loss):
Depreciation and
Amortization 661,000 716,000 784,000
Write-down of Assets - - 345,000
Gain on Debt Restructure - (175,000) (1,794,000)
(Increase) Decrease in
Receivables (124,000) (59,000) 94,000
(Increase) Decrease in
Prepaid Insurance - (9,000) 2,000
(Increase) Decrease in Other
Assets 18,000 18,000 -
Increase (Decrease) in
Accrued Liabilities 120,000 (234,000) 188,000
Increase (Decrease) in
Amount Due to General
Partner 100,000 214,000 170,000
Total Adjustments 775,000 471,000 (211,000)
Net Cash Provided by
Operating Activities 848,000 1,173,000 442,000
Cash Flows From Investing
Activities:
Capital Expenditures (139,000) (222,000) (42,000)
Net Cash Provided by (Used)
in Investing Activities (139,000) (222,000) (42,000)
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31,
1994 1993 1992
Cash Flows From Financing
Activities:
Principal Payments on Long-
term Debt $ (751,000) $(1,109,000) $ (947,000)
Proceeds From the Issuance
of Debt 83,000 171,000 350,000
Net Cash Provided by (Used)
in Financing Activities (668,000) (938,000) (597,000)
Increase (Decrease) in Cash,
Restricted Cash and Cash
Equivalents 41,000 13,000 (197,000)
Cash, Restricted Cash, and
Cash Equivalents at
Beginning of Year 1,382,000 1,369,000 1,566,000
Cash, Restricted Cash, and
Cash Equivalents at
End of Year $ 1,423,000 $ 1,382,000 $ 1,369,000
Supplemental Disclosure of
Cash Flow Information:
Cash Paid During the Year
For Interest $ 727,000 $ 755,000 $ 750,000
Non-Cash Activities:
The Partnership reduced a contract payable for the year ended
December 31, 1993 and 1992 by $13,000 and $187,000, respectively,
and recognized income relating to option payments not made; see
Note 6.
An extraordinary gain of $175,000 and $1,794,000 for the
years
ended December 31, 1993 and 1992, was recognized relating to the
extinguishment and restructuring of debt and accrued interest; see
Note 4.
Notes payable and accrued interest were reduced and other
income recognized for the year ended December 31, 1993 and 1992 in
the amount of $424,000 and $387,000, respectively, relating to
offsets allowed under the performance guaranty on the Steamboat
Springs project; see Note 6.
See accompanying notes to the financial statements.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are followed by
Far West Electric Energy Fund, L.P. in preparing and presenting the
financial statements, and are to assist the users in understanding
the financial statements.
Organization
Far West Electric Energy Fund, L.P., a Delaware limited
partnership (the Partnership) was organized in 1985 to acquire and
operate electric generating plants.
Utility Plant and Equipment
Utility plants and equipment are carried at cost or adjusted
cost (see Note 2). Fixed assets are depreciated over their
estimated useful life (utility plants - thirty years, equipment -
five to ten years).
Cash Equivalents
For purposes of the statement of cash flows, the
Partnership's policy is that all investments with maturities of
three months or less are considered cash equivalents.
Income Taxes
No provision for income taxes has been made since the
Partnership files partnership return under provisions for federal
and state tax laws. The assets and liabilities of the Partnership
for tax purposes are lower than the financial statements for 1994
by $11,154,000 and $2,208,000, for 1993 by $11,492,000 and
$2,011,000, respectively.
Income Per Limited Partnership Unit
The income before extraordinary item is calculated on the
weighted average units outstanding during the year. The weighted
average of units outstanding during 1994, 1993, and 1992 were
10,305.
Reclassifications
Certain amounts in 1994 and 1993 have been reclassified to
conform with financial statement presentations adopted in 1994.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 2 - UTILITY PLANT
Plant in service consists of the following at December 31,
1994 and 1993:
Estimated
1994 1993 Useful Lives
Steamboat Springs
Thermal Hydroelectric
Power Plant $15,599,000 $15,597,000 30 Years
Expansion Pipeline 400,000 400,000 5 to 7 Years
Crystal Springs
Hydroelectric
Power Plant 4,738,000 4,716,000 30 Years
Valuation Allowance (2,021,000) (2,021,000)
$18,716,000 $18,629,000
The valuation allowance relates to the Crystal Springs
Hydroelectric Power Project. The valuation allowance is a result
of the rights to a purchase option being waived and a decline in
the value of the project.
NOTE 3 - OTHER ASSETS
Other assets consist of the following at December 31, 1994
and 1993:
1994 1993
Loan Origination Fees $183,000 $183,000
Organization Costs 65,000 65,000
Other Assets 35,000 35,000
Accumulated Amortization (159,000) (141,000)
Total Other Assets $124,000 $142,000
The loan origination fees are being amortized on a
straight-line basis over the respective lives of the loans.
Organization costs are amortized over a five year period on a
straight-line basis. Amortization was $18,000, $18,000, $20,000
for the years ended December 31, 1994, 1993, and 1992,
respectively.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - LONG-TERM DEBT
Long-term debt as of December 31, 1994 and 1993 consists of
the following:
1994 1993
Note Payable to a corporation is in
default as of 10/23/92 and is
immediately due and payable. Note is
secured by the Steamboat Springs
Project and all associated rights.
Interest rate is 11.5% $5,340,000 $6,035,000
Note Payable to a bank is due and pay-
able in full originally on December
1, 1994, extended to September 30, 1994
per a restructuring agreement, is in
default. Interest is due in quarterly
installments. Note is secured by Crystal
Springs Project and associated rights.
Interest rate is prime plus 2%, prime
was 6% at year end (See Note 12 - Sub-
sequent Events). 1,800,000 1,800,000
7,140,000 7,857,000
Less Current Installments Due 7,140,000 7,857,000
$ - $ -
The Partnership is required to maintain an escrowed bank
account as security under the terms of the note payable to a
corporation with the note payable balance as of December 31, 1994
of $5,340,000. The reserve account was drawn down to $1,145,000
due to insufficient operating funds to meet principal and interest
payments. The note is in default due to the reserve account being
drawn below required amounts. The reserve includes the initial
deposit of $1,000,000 and requires an additional $70,000 annually
for the first seven years, interest income is also retained in the
reserve account. Disbursements from the reserve account for
principal and interest payments on the note are allowed to the
extent that there are insufficient funds in the Partnership's
operating accounts.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4 - LONG-TERM DEBT (Continued)
The aggregate maturities of long-term debt for each of the
five years subsequent to December 31, 1994 are as follows:
Year Ending December 31,
1995 $ 7,140,000
1996 -
1997 -
1998 -
1999 -
Thereafter -
$ 7,140,000
A note payable to a corporation was extinguished in the
amount of $175,000 in December 1993. The extinguishment was a
result of negotiations to settle litigation on the performance
guaranty. The principal note amount and related accrued interest
are shown as an extraordinary item in the statement of operations
for the year ended December 31, 1993.
During December 1992, a note payable to a bank was
restructured resulting in a reduction of principal amount, accrued
interest, and a renegotiation of terms. The difference of the
restructured principal and future cash payments and the amount
previously due is shown as an extraordinary item in the statement
of operations for the year ended December 31, 1992 in the amount of
$1,794,000.
Interest payments relating to the reduced note were offset to
accrued interest payable. The total amount offset against accrued
interest payable in 1994 was $26,000.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 5 - NOTE PAYABLE-RELATED PARTY
The Partnership had notes payable to related parties for the
years ended December 31, 1994, and 1993 as follows:
1994 1993
Notes Payable to General Partner
payable on demand, unsecured.
Interest rate is 13% $1,005,000 $ 922,000
Note Payable to 1-A Enterprises,
a partnership, due in quarterly
installments, including interest;
commencing April 16, 1990, re-
maining principal due January 16,
2000; unsecured. Interest rate
is 11% 268,000 302,000
1,273,000 1,224,000
Less Current Installments Due 1,043,000 956,000
$ 230,000 $ 268,000
NOTE 6 - PURCHASE AND OPERATING AGREEMENTS
Steamboat Springs Thermal Hydroelectric Power Plant (Steamboat
Springs)
Under the terms of the Steamboat Springs purchase agreement
(the Agreement), the Partnership is required to pay royalties
aggregating 14.05 percent of annual gross revenues plus an annual
lump sum of $50,000. For the years ended December 31, 1994, 1993,
and 1992, royalty expense related to these commitments amounted to
$410,000, $419,000, and $382,000, respectively.
As part of the Agreement, the original developer of Steamboat
Springs (the Developer) guaranteed annual net operating revenues,
as defined (Net Operating Revenues) of $2,000,000 for a period of
ten years following the date of commissioning, March 31, 1987 (the
Guarantee). In 1992, the debt and related performance guarantee
with the original developer was extinguished. Pursuant to the
Guarantee and included in other revenues in the statements of
income for the years ended December 31, 1993, and 1992 are
$424,000, and $387,000, respectively. Amounts due to the
Partnership under the Guarantee are offset annually against a note
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 6 - PURCHASE AND OPERATING AGREEMENTS (Continued)
payable to the Developer, and the corporation which subsequently
sold the project to the Partnership. The note payable to the
developer has been fully offset as of December 31, 1993.
The Partnership is also required to pay the Developer annual
royalties equal to 50 percent of the first $100,000 over the
guaranteed Net Operating Revenues and 75 percent of amounts in
excess of the $100,000 each year for the first ten years following
the date of commissioning. For years 11 through 20 after
commissioning, the royalty equals 30 percent of Net Operating
Revenues; principal debt service payments incurred to finance
construction or operations are not deducted in determining the
revised net operating revenues (Revised Net Operating Revenues).
For years 21 inclusive and thereafter, the royalty is equal to 50
percent of Revised Net Operating Revenues. No royalties have been
paid pursuant with this commitment.
Crystal Springs Hydroelectric Company
The Partnership owns the entire beneficial interest of the
partnership units of Crystal Springs Hydroelectric Company (an
Idaho Limited Partnership) (the Company). The Company owns the
Crystal Springs Hydroelectric Plant (the Project). The Company
purchased the Project from its operator (the Operator). Under the
terms of the original purchase agreement, the Company was required
to pay the Operator royalties equaling 20 percent of gross annual
revenues and the Operator received an option to purchase the
Project from the Company 30 days prior to May 14, 2020 for $1. On
July 7, 1988, effective October 1987, the Partnership issued the
Operator a purchase option (the Option) to either purchase the
Partnership's interest in the Project or Company. As consideration
for the Option, the Operator waived rights to the previous purchase
option, paid the Partnership cash of $150,000, forgave $998,000 in
debt obligations, and agreed to make annual cash payments of
$187,000 until the Option is exercised or expires. The quarterly
option payment was not made for the period ending December 31,
1992, thereby waiving the option. Per the contract agreement
option payments not made were offset against an original contract
amount of $200,000, resulting in a reduction of $13,000, and
$187,000 which is shown as miscellaneous income in the statements
of income for the year ended December 31, 1993 and 1992,
respectively. Previous option payments received by the Partnership
had been recorded as deferred revenue.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 6 - PURCHASE AND OPERATING AGREEMENTS (Continued)
Prior to December 1, 1992, the Company restated the operating
agreement for the Project with the Operator effective October 1987.
Under the terms of the operating agreement, the Operator staffs and
operates the Project, pays operating expenses (excluding insurance
and taxes), and pays debt service payments related to the Project.
In view of the limited participation of the Company in operations,
including profits and losses, except as described elsewhere herein,
operations of the Project are not included in the financial
statements for the years ended December 31, 1992, and 1991. The
net cost of the utility plant of the Project, related long-term
debt and depreciation, interest, insurance, and tax expenses are
included in the financial statements of the Partnership. For the
year ended December 31, 1991, debt service payments from the
Operator of $339,000, are included in other revenues. The Operator
did not make any debt service payments in 1992.
The debt service was restructured in December 1992 and will
beserviced out of revenues of the project. The restructuring
agreement with the bank changed the terms of the note payable (see
Note 4). Also, any excess cash flows from the Project are to be
used by the bank to offset the prior reduction of debt. As a
result of the restructuring agreement, the Partnership now oversees
the Project. The revenues and expenses of the Project are
reflected in the statement of operations for the year ended
December 31, 1994.
The Partnership entered into an agreement, effective December
1, 1992 with Little Mac Power Services Co. for the operation and
maintenance of the Crystal Springs Hydroelectric Project. Under
the terms of the operating agreement, the operator staffs and
operates the Project, pays operating expenses to maintain the
highest available plant efficiency. The Partnership pays a monthly
fee of $2,200 to cover salary, travel and expenses. An initial
non-refundable start-up cost of $2,500 was paid at the time the
agreement was executed. The monthly fee will increase by 4%
annually if contract continues for longer than one year.
Under the terms of the Crystal Springs purchase agreement
dated May 15, 1985, the Partnership is required to pay royalties
aggregating 20 percent of gross revenue received from the sale of
Hydroelectric Power of which 17 percent is subordinated to debt.
An additional five percent is payable to Twin Falls Canal Company
per an agreement dated March 8, 1993.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 7 - RELATED PARTY TRANSACTIONS
Under the terms of the Partnership agreement, the general
partner is allowed various fees and reimbursements of expenses
incurred to manage the Partnership. For each of the years in the
three-year period ended December 31, 1994, the Partnership expensed
the following amounts as cost reimbursements to the general
partner:
1994 1993 1992
General and Administrative
Expenses $123,000 $223,000 $437,000
In addition, during the years ended December 31, 1993 and
1992, the Partnership paid $3,300 and $18,000 to a Utah partnership
for private air transportation, in the ordinary course of business,
in lieu of commercial airfare. The general partners are partners
of the Utah Partnership.
As a term of the amended and restated Partnership agreement,
the general partner is entitled to 5 percent of the limited
partnership units (Units) as compensation.
During 1988, the Partnership assigned their rights to build
an expansion unit to Steamboat Springs to a Nevada general
partnership. As consideration for the rights, the Nevada general
partnership deeded the Partnership rights and title to piping and
valves installed from Steamboat Springs to the expansion unit and
agreed to pay the Partnership royalties equaling 10 percent of net
operating income from the expansion for the years ended December
31, 1988 through 1992, 15 percent for 1993 through 1998, 40 percent
for 1999 through 2010, 45 percent thereafter, and an annual pumping
charge. Included in other revenues in the statement of operations
for the years ended December 31, 1994, 1993 and 1992, are $144,000,
$135,000, and $102,000, respectively related to this agreement.
As of December 31, 1994 and 1993, two of the general partners held
a 75 percent ownership in the Nevada general partnership.
During 1991, the Partnership assigned its 77% ownership in SB
Geo, Inc. a Utah Corporation, to two of the general partners. SB
Geo, Inc. operates the Partnership's Steamboat Springs Thermal
Hydroelectric Power Plant and a related expansion unit. At the
time of the transfer, SB Geo, Inc. had no assets and operated on a
cost reimbursement basis. No gain or loss was recognized as a
result of the assignment.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 8 - MAJOR CUSTOMER
The Partnership has contracted with Sierra Pacific Power
Company to sell electric energy from Steamboat Springs for a term
of 20 years. The contract entitles the Partnership to a rate of
71.7 mills per kilowatt hour for the first 10 years and a variable
amount related to the short-term cost of power to Sierra Pacific
Power Company for the second 10 years. Sales to Sierra Pacific
Power Company account for 100 percent of electric power sales. The
Partnership is dependent upon this customer for the purchase of all
electricity generated from this power plant.
The partnership has contracted with Idaho Power Company to
sell electric energy from Crystal Springs for a term of 35 years.
The contract entitles the Partnership to a base payment rate as
determined by seasonal water flows plus an adjustable component
pursuant to commission order. Sales to Idaho Power Company account
for 100 percent of electric power sales. The Partnership is
dependent upon this customer for purchase of all electricity
generated from this power plant.
NOTE 9 - LITIGATION
Ormat Arbitration
The arbitrators have made their award regarding the
lawsuitagainst Ormat alleging breach of contract on the Steamboat
Springs project and Ormat's counter-suit regarding the cancellation
of the operating agreement. The Partnership was awarded $188,000
in damages including a portion of the previously restricted cash.
Ormat was awarded $255,000 for past fixed operating fees, which the
majority had been held in an escrow account.
Subsequent to the arbitrators award the Partnership and Ormat
reached an additional agreement which cancels the note payable to
Ormat which was previously offset by the performance guaranty.
Bonneville Pacific Corporation Bankruptcy
The Partnership has filed a claim in the Chapter 11 filing of
Bonneville Pacific Corporation. The claim relates to fraud claims
and other transactions on the Crystal Springs project.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 9 - LITIGATION
General
The Partnership is involved in various other claims and legal
actions arising in the ordinary course of business. In the
opinionof the general partner, these matters will not have a
material adverse effect on the Partnership's financial position.
NOTE 10 - NOTE DEFAULTS
The Partnership received a notice of default as of 10/23/92
on a note to a bank. The balance as of December 31, 1994 and 1993
was $5,340,000, and $6,035,000, respectively. Under the terms of
the note all principal and interest is immediately due and payable.
The note is secured by the Steamboat Springs project and related
revenues and other assets.
The Partnership is in default on a note payable to a bank as
of 9/30/94. The balance as of December 31, 1994 and 1993 was
$1,800,000. Due to events occurring subsequent to December 31,
1994, this note will be reduced to $537,000 (see Note 12).
NOTE 11 - LIQUIDITY
As shown in the accompanying financial statements for the
year ended December 31, 1994, current liabilities exceeded current
assets by $9,191,000. Of this amount $7,140,000 relates to the
note defaults described in Note 10.
NOTE 12 - SUBSEQUENT EVENTS
Steamboat Springs Project
The Partnership is investigating the possibility of selling
the Steamboat Springs Project. At this time, there has been no
formal discussion.
Crystal Springs Project
The Partnership signed an agreement dated February 28, 1995
to sell the Crystal Springs project. The assets to be sold are
valued at $2,717,000 with accumulated depreciation of $1,245,000
for a basis of $1,472,000. Assets to be sold:
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 12 - SUBSEQUENT EVENTS (Continued)
Crystal Plant $4,500,000
Additional costs 216,000
Valuation Allowance (see Note 2) (2,021,000)
Unit Overhauls 22,000
2,717,000
Less: Accumulated Depreciation 1,245,000
$1,472,000
In consideration for the assets sold; a note Payable to First
Security Bank, which is secured by the assets, will be reduced by
$1,263,000, interest payable of $133,000 will be made current, and
royalties payable of $120,000 will be made current bringing total
sales proceeds to $1,516,000. Total proceeds of $1,516,000 less
basis of the assets of $1,472,000 provides for a gain on sale of
$44,000.
The note payable will be amended as follows:
Upon receipt of First Security (Lender) of a principle
payment on the loan in the amount of $1,100,000, the note
shall be modified to provide that the remaining principle
balance owed shall be $537,000 and interest and costs on
the loan shall be deemed current.
If the note is paid in full within two years after the
payment of $1,100,000, the Lender will discount the
amount of the principle due by $100,000 (requiring a
principle payment of only $437,000), and if paid within
three years, the Lender will discount the amount of the
principle due by $50,000 (requiring a principle payment
of only $487,000). There will be no discount if paid
after the third anniversary.
The following pro forma balance sheet and statement of
operations give effect to the above events as if they had occurred
on January 1, 1994:
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
DECEMBER 31, 1994
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 12 - SUBSEQUENT EVENTS (Continued)
PRO FORMA BALANCE SHEETS
As Reported Pro Forma
in Adjustments
Accompanying For Pro Forma
Financial Subsequent Balance
Statements Events Sheet
ASSETS
Utility Plant:
Plant in Service $18,716,000 $(2,717,000) A $15,999,000
Equipment 335,000 - 335,000
Construction in
Progress 118,000 - 118,000
Accumulated
Depreciation (6,010,000) 1,245,000 A (4,765,000)
Net Utility
Plant 13,159,000 (1,472,000) 11,687,000
Restricted Marketable
Securities 1,145,000 - 1,145,000
Other Assets 124,000 - 124,000
Current Assets:
Cash 278,000 - 278,000
Receivables - Trade 437,000 (1,000) B 436,000
Receivables - Other 6,000 - 6,000
Receivables - Related
Party 159,000 - 159,000
Prepaid Insurance 12,000 (9,000) C 3,000
Total Current
Assets 892,000 (10,000) 882,000
Total Assets $15,320,000 $(1,482,000) $13,838,000
A - All assets of Crystal Spring Project are to be sold per sales
agreement date
February 28, 1995.
B - Receivables attributable to Crystal Springs Project.
C - Prepaid Insurance attributable to Crystal Springs Project.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
DECEMBER 31, 1994
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 12 - SUBSEQUENT EVENTS (Continued)
PRO FORMA BALANCE SHEETS
As Reported Pro Forma
in Adjustments
Accompanying For Pro Forma
Financial Subsequent Balance
Statements Events Sheet
PARTNERS' CAPITAL & LIABILITIES
Partners' Capital $ 4,857,000 $ 34,000 D $ 4,891,000
Other Liabilities 150,000 - 150,000
Long-term Debt:
Notes Payable -
Related Party 230,000 - 230,000
Partners' Capital &
Long-term Liabilities 5,237,000 34,000 5,271,000
Current Liabilities:
Current Portion -
Long-term Debt 7,140,000 (1,263,000) E 5,877,000
Note Payable -
Related Party 1,043,000 - 1,043,000
Payable - Related Party 573,000 - 573,000
Accrued Liabilities:
Operations 495,000 - 495,000
Royalties 220,000 (120,000) F 100,000
Interest 612,000 (133,000) G 479,000
Total Current
Liabilities 10,083,000 (1,516,000) 8,567,000
Total Partners'
Capital and
Liabilities $15,320,000 $(1,482,000) $13,838,000
D - Net income from Crystal Springs project allocated to partners.
E - Long-term debt attributable to Crystal Springs project.
F - Royalties payable attributable to Crystal Springs project.
G - Interest payable attributable to Crystal Springs project.
FAR WEST ELECTRIC ENERGY FUND, L.P.
A DELAWARE LIMITED PARTNERSHIP
DECEMBER 31, 1994
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 12 - SUBSEQUENT EVENTS (Continued)
PRO FORMA STATEMENT OF OPERATIONS
As Reported Pro Forma
in Adjustments
Accompanying For Pro Forma
Financial Subsequent Statement of
Statements Events Operations
REVENUES
Electric Power Sales $ 2,728,000 $ (163,000) H $ 2,565,000
Other Revenues 151,000 - 151,000
Total Revenues 2,879,000 (163,000) 2,716,000
EXPENSES
Interest 902,000 (95,000) I 807,000
Depreciation 643,000 (67,000) I 576,000
Royalty 451,000 (41,000) I 410,000
Professional Services 54,000 (25,000) I 29,000
Administrative Services -
General Partner 123,000 (54,000) I 69,000
Amortization 18,000 - 18,000
Insurance 52,000 (18,000) I 34,000
Maintenance 436,000 (28,000) I 408,000
Taxes 47,000 (14,000) I 33,000
Other 80,000 (20,000) I 60,000
Total Expenses 2,806,000 (362,000) 2,444,000
Net Income (Loss)
Before Gain on Sale 73,000 199,000 272,000
Gain on Sale of Crystal
Springs Project - 44,000 J 44,000
Net Income (Loss) $ 73,000 $ 243,000 $ 316,000
Net Income (Loss)
Per Limited
Partnership Unit $ 7 $ 24 $ 31
H - Electric power sales attributable to Crystal Springs Project.
I - Operating expenses attributable to Crystal Springs Project.
J - Gain on sale of Crystal Springs Project.
FORM 10-QSB
[As last amended in Release No. 34-32231, April 28, 1993, 58 F.R.
26509]
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the transition period from ________________ to ______________
Commission file number 0-14452
Far West Electric Energy Fund, L.P.
(Exact name of small business issuer as specified in its charter)
Delaware 87-0414725
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification
No.)
921 Executive Park Drive, Suite B, Salt Lake City, Utah 84117
(Address of principal executive offices)
(801) 268-4444
Issuer's telephone number
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Check whether the issuer (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
past 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
FAR WEST ELECTRIC ENERGY FUND, L.P.
Balance Sheets
December 31, 1994 and September 30, 1995
(Unaudited)
Assets 09/30/95 12/31/94
Utility plant:
Plant in service $15,998,000 $ 18,716,000
Equipment 590,000 335,000
Construction in progress 118,000 118,000
Accumulated depreciation (5,226,000) (6,010,000)
Net utility plant 11,480,000 13,159,000
Restricted Marketable Securities 1,012,000 1,145,000
Other assets 110,000 124,000
Current assets:
Cash 193,000 278,000
Receivables - Trade 260,000 437,000
Receivables - Other --- 6,000
Prepaid Insurance 16,000 12,000
Total current assets 469,000 733,000
Total assets $ 13,071,000 $ 15,161,000
The accompanying notes are an integral
part of these financial statements.
FAR WEST ELECTRIC ENERGY FUND, L.P.
Balance Sheets
December 31, 1994 and September 30, 1995
(Unaudited)
Partners' Capital and Liabilities 09/30/95 12/31/94
Partners' capital $ 4,667,000 $ 4,857,000
Other liabilities --- 150,000
Long-term debt:
Long-term debt, excluding
current portion 537,000 0
Notes payable - Related party 203,000 230,000
Partners' capital and Long-term
Liabilities 5,407,000 5,237,000
Current liabilities:
Current portion - Long-term debt 4,746,000 7,140,000
Note payable - Related party 1,069,000 1,043,000
Payable - Related party 546,000 414,000
Accrued Liabilities
Operations 289,000 495,000
Royalties 76,000 220,000
Interest 938,000 612,000
Total current liabilities 7,664,000 9,924,000
Total partners' capital
and liabilities $ 13,071,000 $15,161,000
The accompanying notes are an integral
part of these financial statements
FAR WEST ELECTRIC ENERGY FUND, L.P.
Statements of Operations
(Unaudited)
For The For The For The For The
3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
09/30/95 09/30/94 09/30/95 09/30/94
Revenues
Electric power sales $ 494,000 $463,000 $1,794,000 1,882,000
(note 8)
Pumping charges 22,000 20,000 47,000 45,000
Royalty income 22,000 28,000 63,000 63,000
Interest income 18,000 14,000 50,000 31,000
Other income 0 0 0 7,000
Total Revenues 556,000 525,000 1,954,000 2,028,000
Expenses
Interest 143,000 237,000 924,000 665,000
Depreciation 158,000 160,000 462,000 480,000
Royalty 82,000 72,000 290,000 291,000
Professional Services 1,000 4,000 42,000 43,000
Administrative services -
general partner 13,000 8,000 95,000 73,000
Amortization 4,000 4,000 13,000 13,000
Insurance 11,000 14,000 34,000 42,000
Maintenance 164,000 129,000 443,000 366,000
Travel 7,000 0 7,000 0
Taxes 1,000 0 1,000 0
Other 6,000 3,000 21,000 18,000
Total Expenses 590,000 631,000 2,332,000 1,991,000
Net Income (Loss)
Before Gain on Sale (34,000) (106,000) (378,000) 37,000
Gain on Sale of Crystal
Springs Project 0 0 188,000 0
Net Income $ (34,000) $(106,000) $(190,000) $ 37,000
The accompanying notes are an integral
part of these financial statements.
FAR WEST ELECTRIC ENERGY FUND, L.P.
Statements of Cash Flows
For the Nine Months Ended September 30, 1995
(Unaudited)
09/30/95
Cash flows from operating activities:
Net income (loss) $ (190,000)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation and amortization 475,000
Change in assets and liabilities
Decrease (increase) in receivables 183,000
Decrease (increase) in prepaid insurance (4,000)
Decrease (increase) in other assets 14,000
Increase (decrease) in accounts
payable and accrued expenses (55,000)
Increase (decrease) in amount due to
general partner 26,000
Total Adjustments 639,000
Net cash provided by (used in)
operating activities 449,000
Cash flows from investing activities:
Purchase of plant and equipment (255,000)
Disposal of plant and equipment 1,472,000
Net cash provided by (used in)
investing activities 1,217,000
Cash flows from financing activities:
Payment of principal on long-term debt (2,421,000)
Issuance of Long-term debt 537,000
Net cash provided by (used in)
financing activities (1,884,000)
Increase (decrease) in cash (218,000)
Cash at beginning of period 1,423,000
Cash and Cash Equivalents
at the end of the period $1,205,000
Supplemental disclosures of cash flow information:
Cash paid during the period of interest $ 205,000
The accompanying notes are an integral
part of these financial statements.
Far West Electric Energy Fund, L.P.
September 30, 1995
Notes to Financial Statements
1. Interim Reporting
The accompanying unaudited financial statements have been pre-
pared in accordance with generally accepted accounting principles
and with Form 10-QSB requirements. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments considered necessary
for a fair presentation have been included. Operating results for
the nine month period ended September 30, 1995, are not necessarily
indicative of the results that may be expected for the year ended
December 31, 1995. For further information, refer to the financial
statements and footnotes thereto included in the Partnership's
annual report on Form 10-K for the year ended December 31, 1994.
2. Related Party Transactions
Under the terms of the Partnership Agreement, the General
Partner is allowed reimbursements of expenses incurred to manage
the Partnership. For the nine month periods ended September 30,
1994 and 1995, the Partnership accrued, but did not pay, fees and
reimbursements to the general partner of $73,000 and $95,000
respectively.
3. Long-term Debt
In January 1990, the Partnership received the proceeds of an
$8,000,000 non-recourse refinancing of its Steamboat Springs
Project ("Project" or "Steamboat Springs Plant") with Westinghouse
Credit Corporation ("WCC"). The WCC loan, which is secured by the
Project assets including the resource lease, plant and equipment
and related contract rights, bears interest at 11.5% per annum and
must be repaid over ten years in 40 quarterly payments of principal
and interest. This loan is currently in default, primarily because
the loan reserves have not been maintained at required levels.
Item 2. Management's Discussion and Analysis of Results of Opera-
tions and Financial Condition.
Overall electric power sales increased about 4% this past
quarter as compared to the third quarter of 1994. This increase in
power sales was mainly due to plant upgrades. Maintenance and
repair costs this past quarter were about 30% higher than those of
the third quarter of 1994, due to such plant upgrades.
The Steamboat Springs Plant is in compliance with
environmental and regulatory agencies.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There have been no material changes in the status of legal
proceedings since the Partnership's report on Form 10-Q dated June
30, 1995.
Item 5. Other Information
The general partner has received an offer to purchase the
Steamboat 1 and 1-A power plants which is currently in the form of
a Letter of Intent. A more definitive agreement is being prepared.
We expect that a description of the proposed transaction and its
tax effect will be submitted to you for your approval within the
next sixty days. The reason for the delay is the necessity of
obtaining tax and fairness opinions and review of the form of
Solicitation of Consent by the SEC.
Item 6. Exhibits and Reports on Form 8-K
The Partnership did not file a report on Form 8-K during the
three months ended September 30, 1995.
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 duly authorized persons.
Registrant: Far West Electric Energy Fund, L.P.
By: Far West Capital, Inc.,
General Partner
DATE: November 14, 1995 By: /s/
Thomas A. Quinn
Vice President
DATE: November 14, 1995 By: /s/
Jody Rolfson
Controller
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 duly authorized persons.
Registrant: Far West Electric Energy Fund, L.P.
By: Far West Capital, Inc.,
General Partner
DATE: November 14, 1995 By:
Thomas A. Quinn
Vice President
DATE: November 14, 1995 By:
Jody Rolfson
Controller
ITEM 14 (a)(3) RATIO OF EARNINGS TO FIXED CHARGES
Not Applicable.
ITEM 14 (a)(4) BOOK VALUE PER PARTNERSHIP UNIT.
September 30. December 31,
1995 1994
$453 $471
ITEM 14 (b) PRO FORMA EFFECT OF TRANSACTION.
Not Applicable
