<PAGE>
Page 1 of 20
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT TO FORM U-3A-2
FOR THE YEAR ENDED DECEMBER 31, 1998
CATALYST VIDALIA CORPORATION
(Name of Company)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its statement on Form U-3A-2 as set
forth in the pages attached hereto:
Exhibit A1 - Catalyst Old River Hydroelectric Limited Partnership
Audited 1998 Financial Statements
Exhibit A2 - Catalyst Vidalia Corporation Unaudited 1998 Financial
Statements
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
CATALYST VIDALIA CORPORATION
By: /s/ Jack R. Sauer
-----------------------------
Name: Jack R. Sauer
---------------------------
Title: Vice President
--------------------------
Date: March 24, 1999
<PAGE>
EXHIBIT A-1
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Financial Statements
Catalyst Old River Hydroelectric
Limited Partnership
December 31, 1998 and 1997
with Report of Independent Auditors
<PAGE>
EXHIBIT A-1
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Financial Statements
CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
December 31, 1998 and 1997
Report of Independent Auditors ............................................... 1
Balance Sheets ............................................................... 2
Statements of Income ......................................................... 3
Statements of Cash Flows ..................................................... 4
Statements of Partners' Capital .............................................. 5
Notes to Financial Statements ................................................ 6
<PAGE>
EXHIBIT A-1
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REPORT OF INDEPENDENT AUDITORS
The Partners
Catalyst Old River Hydroelectric Limited Partnership
We have audited the accompanying balance sheets of Catalyst Old River
Hydroelectric Limited Partnership (the "Partnership") as of December 31, 1998
and 1997 and the related statements of income, cash flows and partners' capital
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 audits.
We conducted our audits 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 audits provide 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 the Partnership at December 31,
1998 and 1997, and the results of its operations, its cash flows and its
partners' capital for the years then ended in conformity with generally accepted
accounting principles.
March 1, 1999
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
BALANCE SHEETS
AS OF DECEMBER 31
(In thousands)
ASSETS
------
<TABLE>
<CAPTION>
1998 1997
-------------- --------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 137 $ 4,118
Cash escrowed for current liabilities 11,020 9,352
Accounts receivable 1,586 1,723
Prepaid expenses and other current assets 388 338
-------------- --------------
Total current assets 13,131 15,531
Plant, property and equipment, net 445,333 457,862
Cash held in escrow including accrued interest 67,004 79,630
Deferred financing costs, net 24,262 25,323
Other noncurrent assets, net 548 600
Accrued levelized revenue 392,704 332,691
-------------- --------------
$ 942,982 $ 911,637
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
---------------------------------
Current liabilities
Accrued interest payable $ 10,323 $ 8,752
Accounts payable and other current liabilities 2,046 7,519
-------------- --------------
Total current liabilities 12,369 16,271
Finance debt obligation 763,003 740,437
Accrued levelized royalty expense 44,242 37,541
Accrued property taxes 13,377 11,705
-------------- --------------
Total liabilities 832,991 805,954
Partners' capital 109,991 105,683
-------------- --------------
$ 942,982 $ 911,637
============== ==============
</TABLE>
See accompanying notes to financial statements.
2
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
STATEMENTS OF INCOME
FOR THE YEAR ENDED DECEMBER 31
(In thousands)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Revenues $ 139,637 $ 128,322
Operating expenses
Depreciation 13,709 13,633
Operations and maintenance 7,096 6,204
Property taxes 1,686 1,686
Royalties 11,080 10,107
General and administrative 1,830 1,757
------------ ------------
Total operating expenses 35,401 33,387
------------ ------------
Operating income 104,236 94,935
Interest expense (77,661) (75,307)
Investment income 4,873 5,319
------------ ------------
Net income $ 31,448 $ 24,947
============ ============
</TABLE>
See accompanying notes to financial statements.
3
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31
(In thousands)
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
Cash flows (used in) provided by operations:
Net income $ 31,448 $ 24,947
Adjustments to reconcile net income to net
cash (used in) provided by operating activities:
Depreciation 13,709 13,633
Amortization of deferred financing costs 1,061 1,026
Changes in operating assets and liabilities:
Accounts receivable 137 5,032
Prepaid expenses and other current assets (50) (79)
Accrued levelized revenue (60,013) (59,515)
Accounts payable and other current liabilities (5,473) 2,124
Accrued levelized royalty expense 6,701 6,494
Finance debt obligation 22,566 24,220
Other operating assets and liabilities (15,350) (16,956)
------------- -------------
Net cash (used in) provided by operating activities (5,264) 926
------------- -------------
Cash flow used in investing activities
relating to plant, property, and equipment (1,425) (1,590)
------------- -------------
Cash flows provided by (used in) financing activities:
Sale and leaseback escrowed proceeds released 29,848 778
Partner distribution (27,140) -
------------- -------------
Net cash provided by financing activities 2,708 778
------------- -------------
Net (decrease) increase in cash and cash equivalents (3,981) 114
Cash and cash equivalents at beginning of the period 4,118 4,004
------------- -------------
Cash and cash equivalents at end of period $ 137 $ 4,118
============= =============
</TABLE>
See accompanying notes to financial statements.
4
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
STATEMENTS OF PARTNERS' CAPITAL
(In thousands)
Balances, December 31, 1996 $ 80,736
Net income 24,947
---------
Balances, December 31, 1997 105,683
Net income 31,448
Partner distributions (27,140)
---------
Balances, December 31, 1998 $ 109,991
=========
See accompanying notes to financial statements.
5
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
1. Organization
Catalyst Old River Hydroelectric Limited Partnership (the "Partnership") is a
Louisiana limited partnership. The Partnership was formed to develop, construct
and operate a 192 megawatt hydroelectric generating facility (the "Project") on
a site of approximately 1,100 acres on the Mississippi River near the Town of
Vidalia, Louisiana ("Vidalia"). The Partnership has two partners, Catalyst
Vidalia Corporation ("CVC"), as the general partner, and Dominion Capital, Inc.
("DCI"), as the limited partner, (collectively the "Partners") and each have an
undivided 50% interest in the Partnership.
On August 25, 1990, the Partnership sold its interests in the Project to certain
institutional investors and concurrently leased back such property from the
investors. In connection with the sale and leaseback transaction, certain sales
proceeds were deposited with an independent collateral agent for the purposes of
providing for, among other things, future lease payments, construction
completion, dredging costs and construction contractor bonus.
The sale and leaseback is being accounted for using the financing method in
accordance with Statement of Financial Accounting Standards No. 66 "Accounting
for Sales of Real Estate" and Statement of Financial Accounting Standards No. 98
"Accounting for Leases".
2. Summary of Significant Accounting Policies
Revenue and Royalty Expense Recognition
The Partnership records revenue from the sale of electric power using a method
of accounting which produces a levelized rate per kilowatt hour ("Kwh"). This
levelized rate is applied to actual net annual energy output over the life of
the power sales contracts, with an adjustment for the time value of money at
9.25%. Revenue in the accompanying statements of operations for 1998 and 1997
includes approximately $33.2 million and $28.2 million, respectively, of
interest income derived on an annual basis to reflect the time value of money.
The power sales contracts provide for predetermined fixed rates and as such, the
levelized basis results in a difference between revenue recognized and revenue
collected. This difference is recorded as accrued levelized revenue and will
accumulate until such time as the contract rate exceeds the levelized rate. At
that point, the accrued levelized revenue will be reduced by the excess of
revenue collected over levelized revenue recognized (See Note 5).
6
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (continued)
Revenue and Royalty Expense Recognition (continued)
Pursuant to the Amended and Restated Project Development Agreement (the "PDA")
with Vidalia, the Partnership is required to make royalty payments to Vidalia at
predetermined fixed percentages of net power sales over the term of the power
sales contracts. As with revenue recognition, the Partnership records royalty
expense using a method of accounting which produces a levelized rate. This
levelized rate is applied to levelized revenue, with an adjustment for the time
value of money at 9.25%. Royalty expense in the accompanying statements of
operations for 1998 and 1997 includes approximately $3.7 million and $3.2
million, respectively, of interest expense derived on an annual basis to reflect
the time value of money. The levelized basis results in a difference between the
royalties due pursuant to the PDA and royalty expense recognized. This
difference is recorded as accrued levelized royalty expense and will accumulate
until royalties due pursuant to the PDA exceed levelized royalty expense. At
that point, the accrued levelized royalty expense will be reduced by the excess
of amounts paid over levelized royalty expense recognized (See Note 5).
Cash and Cash Equivalents
Included in cash and cash equivalents are temporary cash investments which
represent short-term, highly liquid investments with maturities of 90 days or
less, when purchased. The carrying amount on the accompanying balance sheets
approximates its fair value.
Plant, Property and Equipment
Plant, property and equipment is carried at cost net of accumulated
depreciation. Depreciation is computed using the straight-line method based upon
useful lives ranging from 5 to 41 years.
All renewals and betterments are capitalized. Maintenance and repair costs are
expensed as incurred.
Deferred Financing Costs
Deferred financing costs are carried at cost net of accumulated amortization.
Deferred financing costs are being amortized using the interest method, over the
total lease term of 41 years.
7
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (continued)
Income Taxes
Income or loss of the Partnership for income tax purposes is includable in the
tax returns of the Partners. Accordingly, no recognition has been given to
income taxes in the accompanying financial statements.
FERC Regulation
The Project is operated pursuant to a license issued by the Federal Energy
Regulatory Commission ("FERC"), and is subject to regulation by the FERC.
However, the rates contained in the power sales contracts, have been previously
established by contract and approved by the FERC. In addition, the FERC license
includes a provision, effective after 20 years of operations under the license,
that may result in a restriction of dividend distributions from retained
earnings. The restriction is calculated as one-half of earnings in excess of a
specified rate of return based upon the net investment in the Project. For the
purpose of this provision, the specified rate of return is equivalent to the
average annual interest rate on U.S. Treasury obligations adjusted to a 10 year
constant maturity plus 4%. Management's intention is to seek a waiver from this
provision, on the basis that this provision only applies to suppliers of energy
that are subject to rate making procedures based on cost of service.
Use of Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the balance sheet dates and
the reported amounts of contract revenue and expenses during the reporting
periods. However, due to uncertainties in the estimation process, actual results
could differ from those estimates.
3. Sale and Leaseback of the Project
Under the terms of the sale and leaseback transaction, the initial lease term is
30 years, however, the lease agreement includes two renewal options; a fixed
rate renewal option, and periodic fair market renewal options. The lease also
includes periodic purchase options which are based upon the Project's fair
market value. Minimum lease payments vary over the initial lease term in
accordance with the cash flows associated with the power sales contracts. It is
management's current opinion that the fixed rate renewal option will be
exercised through the end of the power sales contracts, and that the other
8
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
3. Sale and Leaseback of the Project (continued)
options will not be exercised. Such fixed rate renewal option payments are
approximately $49.5 million annually.
The initial finance debt obligation represented the proceeds from the sale and
leaseback transaction. The finance debt obligation will be repaid over the term
of the lease and the fixed rate renewal periods. The annual lease payments are
made on a semi-annual basis and will range from approximately $49.0 million to
$116.0 million. During 1998 and 1997, the lease payments totaled approximately
$52.1 million and $49.0 million, respectively. The imputed interest rate on the
finance debt obligation is approximately 10.3%. Due to the unequal lease payment
amounts, the finance debt obligation, on the accompanying balance sheets,
increases through the year 2005 as the annual payments are less than the annual
accrued interest. The excess of the interest expense over the annual lease
payments is recorded as an addition to the finance debt obligation. It is
management's opinion that it is impracticable to fair value this financial
instrument due to the Project's power sales contracts, royalty agreement, and
the Project's overall uniqueness. However, since the project's inception,
long-term interest rates have declined.
All revenues from the Project are contractually required to be deposited into a
series of trust accounts administered by an independent collateral agent
pursuant to the disbursement agreement which provides for, among other things,
the disbursement of funds for Project operations and maintenance costs, lease
and royalty payments. Under the terms of the disbursement agreement, on each May
1 (Partners' distribution date), cash in the Partners' lessee account will be
distributed to the Partners when there is no outstanding Trigger Event or
Special Trigger Event (the "Events"), as those terms are defined in the sale and
leaseback documents. The occurrence of an Event traps all or part of the
available Partnership lessee account cash in escrow accounts until the
applicable Event is cured. The Events include, among other things, not meeting
the required lease coverage ratio, and drawing the lease reserve accounts below
specified levels in order to pay the semi-annual lease payment. The lease
coverage ratio, which is calculated as the ratio of cumulative net cash
generated by the Project to the cumulative lease payments reduced by scheduled
releases from the coverage lease reserve account, for specified prior and future
periods, must be at least 1.2 to 1 through December 31, 2000 and 1.25 to 1
thereafter.
As of May 1, 1998, the Project was in compliance with its lease coverage ratio
requirements and there were no outstanding Events. As such, and in accordance
with the terms of the sale and leaseback documents, during the first week of May
1998, the total in the Partner's lessee account as of May 1, 1998 ($28.6
million) was distributed to the Partnership. During that same time period, the
Partnership made a Partnership distribution of $27.1 million in total to the two
Partners.
9
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
3. Sale and Leaseback of the Project (continued)
As of December 31, 1998, there are no outstanding Events. Unless an Event occurs
prior to May 1, 1999, a distribution is expected to be made to the Partners on
that date.
As a result of outstanding Events as of May 1, 1997, no distribution was made to
the Partners on that date.
The cash reserves are included in both cash escrowed for current liabilities and
cash held in escrow including accrued interest on the accompanying balance
sheets. Investment income earned on these funds also remains in escrow until
released under specified provisions of the sale and leaseback documents.
The following is a schedule of future minimum lease payments due under the above
lease at December 31, 1998 (in thousands):
1999 $ 61,674
2000 68,274
2001 71,639
2002 74,912
2003 76,456
Thereafter (2004-2031) 2,141,888
---------------
2,494,843
Less portion representing
interest 1,731,840
---------------
Present value of future
minimum lease payments $ 763,003
===============
In connection with the sale and leaseback transaction, the Partnership has
agreed to indemnify the lessors, under certain circumstances, in the event of
the lessors' loss of certain tax benefits associated with the Project (See Note
7).
4. Plant, Property and Equipment
Plant, property and equipment is summarized as follows (in thousands):
<TABLE>
<CAPTION>
Estimated Useful
1998 1997 Life
------------ ------------ ------------
<S> <C> <C> <C>
Land and land improvements $ 131,252 $ 131,252 41 years
Power plant structure 257,967 257,967 41 years
Machinery, equipment, and furniture 163,532 162,490 5-41 years
------------ -------------
552,751 551,709
Less accumulated depreciation 107,418 93,847
------------ -------------
$ 445,333 $ 457,862
============ =============
</TABLE>
10
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
5. Power Sales Contracts and Royalty Agreement
The Project's electrical power output is sold to Entergy Services, Inc.
("Entergy"), and Vidalia at fixed annual rates, pursuant to contracts (the
"Contracts") approved by the FERC and the Louisiana Public Service Commission.
The Contracts expire on December 31, 2031, simultaneously with the expiration of
the FERC license. During 1998 and 1997, 94% of the Project's electrical power
was sold to Entergy and the remaining 6% was sold to Vidalia.
The Contract rates are fixed and increase incrementally. For 1998 and 1997 the
rates were $0.085 per Kwh and $0.075 per Kwh, respectively. The rate increases
incrementally to $0.205 per Kwh in 2010 through 2013 and subsequently decreases
to $0.175 per Kwh in 2014 through 2016 and then to $0.150 per Kwh in 2017
through 2031.
Pursuant to the PDA, royalties are due to Vidalia based upon net power sales.
The royalty rate was 5.50% of power sales for 1998 and 5.25% for 1997. The rate
increases incrementally to 11.60% in 2021, and to 20.0% in 2022 through 2031.
In connection with the PDA, the Partnership guaranteed the timely payment of
royalties to Vidalia through August 24, 1998 (the "Guaranty") and agreed to make
$7.5 million available to Vidalia for this purpose.
The total payments made to Vidalia under the Guaranty were $4.5 million of which
$.6 million is owing to the Partnership at the Guaranty termination date, August
24, 1998. The $.6 million is to be repaid to the Partnership with interest, (the
"Guaranty Amount Receivable") over the first twenty quarters commencing
September 30, 1998 as an offset to the quarterly royalty payment owed Vidalia.
During 1998, $79,000 was offset against the Vidalia quarterly royalty as payment
against the Guaranty Amount Receivable.
6. Low Water Flow Revolving Credit Facility
The Partnership has a $24.0 million Low Water Flow Revolving Credit Facility
(the "Facility") with a bank (the "Low Flow Lender") that expires on November 1,
2003. This Facility can only be used when certain low water flow conditions
exist and can only be used to supplement cash flows needed to pay amounts due
under the lease agreement. The Facility bears interest at one of three options,
and there is an annual commitment fee on the unused Facility amount of 0.6%
through November 1, 1999 and then 0.9% thereafter.
During 1996, when the previous Facility expired and before the new Facility was
obtained, excess cash of approximately $1.2 million was funded to the low flow
reserve account in accordance with the terms of the sale and leaseback
documents. With the new
11
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
6. Low Water Flow Revolving Credit Facility (continued)
Facility in place and all necessary conditions met under the terms of the sale
and leaseback documents, the balance ($1.3 million) in the low flow reserve
account was transferred to the Partnership on May 1, 1998.
7. Potential Tax Indemnification
During September 1994 one of the Project's four Owner Participants ("OP")
notified the Partnership that it had received a Notice of Proposed Adjustment
("NOPA") from the Internal Revenue Service ("IRS"). The NOPA asserted that the
difference between the Partnership's tax basis in the Project prior to the 1990
sale and leaseback transaction and the purchase price paid by the OP as part of
that transaction was not five year ACRS property and this difference
(approximately $98 million for all four OP's) should be depreciated over 20
years instead of 5 years. Under terms of a Tax Indemnification Agreement, the
Partnership would be liable to compensate the OP for its total after-tax cash
flow loss that would result from the loss of the five year ACRS depreciation,
including interest and penalties attributable to any assessment, as well as all
reasonable costs incurred by the OP in contesting the NOPA.
Receipt of the NOPA notification from the OP was a Trigger Event and would have
reduced future Partner Distributions by the potential indemnity payment that
would have been paid by the Partnership if the NOPA was upheld.
On August 20, 1997, the OP that received the NOPA notified the Partnership that,
in a letter they received from the IRS dated July 22, 1997, the IRS conceded the
above discussed tax depreciation issue in favor of the OP. As a result, the
above described Trigger Event was effectively cured as of July 22, 1997.
8. Related Party Transactions
During 1998 and 1997, CVC received approximately $5.5 million and $355,000, and
DCI received $1.1 million and $45,000 respectively, as partial reimbursements of
their direct and indirect costs incurred in connection with their Partnership
duties and responsibilities. As of December 31, 1998, the Partnership had a $1.1
million and $.3 million accrued liability to CVC and DCI, respectively, for
unpaid costs.
Louisiana Hydro Electric Capital Corporation, a wholly-owned subsidiary of DCI,
owns a 9.93% undivided interest in the Project which it purchased in 1990 for
$62.9 million as a lessor in connection with the sale and leaseback transaction
discussed in Note 1.
12
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EXHIBIT A-1
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CATALYST OLD RIVER HYDROELECTRIC LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
9. Year 2000 (Unaudited)
The Partnership is in the process of preparing its information technology to be
Year 2000 compliant, pursuant to its readiness plan. This process includes
reformatting existing software code as well as upgrading existing software and
hardware. The Partnership does not expect the project to have a significant
effect on its operations, and management estimates that the costs to be incurred
to correct or replace the non-compliant systems will not be material.
13
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EXHIBIT A2
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CATALYST VIDALIA CORPORATION
BALANCE SHEETS
(in thousands)
Unaudited
ASSETS
December December
31, 31,
1998 1997
-------- --------
Cash and cash equivalents ............................... $ 113 $ 87
Investment in CORHLP .................................... 48,973 46,819
Management fee receivable, including
accrued interest - CORHLP ............................ 1,195 4,996
Note receivable-parent company .......................... -- 9,801
Advances to parent company .............................. (395) 77,762
-------- --------
Total assets .............................. $ 49,886 $139,465
======== ========
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Intercompany payable to TCG, Inc. .............. $ 731 $ 603
Accounts payable and accrued expenses .......... 2 --
Management fee payable to CVHC ................. -- 11,483
Income taxes payable-parent company ............ 33,209 27,115
-------- --------
Total liabilities ......................... 33,942 39,201
-------- --------
Stockholder's equity:
Common stock ................................... -- --
Additional paid-in capital ..................... -- 77,350
Retained earnings .............................. 15,944 22,914
-------- --------
Total stockholder's equity ................ 15,944 100,264
-------- --------
Total liabilities and stockholders equity . $ 49,886 $139,465
======== ========
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EXHIBIT A2
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CATALYST VIDALIA CORPORATION
STATEMENTS OF OPERATIONS
(in thousands)
Unaudited
Twelve Months
Ended December 31,
----------------------
1998 1997
-------- --------
Revenues:
Equity interest in operating
results of CORHLP ...................... $ 15,724 $ 12,474
Management fee including accrued
interest - CORHLP ....................... 1,616 1,696
Other income - tax refunds/interest ......... 72 112
-------- --------
17,412 14,282
-------- --------
Expenses:
General and administrative .................. 81 217
Management fee including accrued
interest - parent company .............. 1,616 6,692
-------- --------
1,697 6,909
Pre tax income ..................................... 15,715 7,373
Tax provision ..................................... (6,094) (2,949)
-------- --------
Net income ......................................... $ 9,621 $ 4,424
======== ========
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EXHIBIT A2
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CATALYST VIDALIA CORPORATION
STATEMENTS OF CASH FLOWS
(in thousands)
Unaudited
Twelve Months
Ended December 31,
----------------------
1998 1997
-------- --------
Cash flows provided by (used in) operations:
Net income ...................................... $ 9,621 $ 4,424
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Equity interest in operating results
of CORHLP ................................. (15,724) (12,474)
Distribution from CORHLP .................... 13,570 --
Dividend payout to CVHC ..................... (16,491) --
Changes in operating assets and
liabilities:
Management fee receivable from
CORHLP ................................ 3,801 (1,340)
Management fee payable to parent
company ............................... (11,483) 6,692
Advances to parent company .............. 10,508 (454)
Other operating assets and
liabilities, net ...................... 130 123
Income taxes - parent company ........... 6,094 2,933
-------- --------
Net cash provided by (used in) operating
activities ....................................... 26 (96)
-------- --------
Net increase (decrease) in cash and cash
equivalents ...................................... 26 (96)
Cash and cash equivalents beginning of
the period ....................................... 87 183
-------- --------
Cash and cash equivalents at end of period ......... $ 113 $ 87
======== ========
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EXHIBIT A2
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CATALYST VIDALIA CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(in thousands)
Unaudited
<TABLE>
<CAPTION>
Additional
Shares Paid
of Common Common In Retained
Stock Stock Capital Earnings Total
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1996 ...... 10 $ -- $ 77,350 $ 18,490 $ 95,840
Net income ..................... 4,424 4,424
--------- --------- --------- --------- ---------
Balance December 31, 1997 ...... 10 -- 77,350 22,914 100,264
Dividend (Prior Year - See Note) (77,350) (100) (77,450)
Dividend ....................... (16,491) (16,491)
Net income ..................... 9,621 9,621
--------- --------- --------- --------- ---------
Balance December 31, 1998 ...... 10 $ -- $ -- $ 15,944 $ 15,944
========= ========= ========= ========= =========
</TABLE>
Note: This dividend represents a prior period adjustment to R/E for cash
distributions from CVC to CVHC which were improperly recorded as loans in the
G/L.
