UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1996
Commission File Number 0-21304
RIDGEWOOD ELECTRIC POWER TRUST II
(Exact name of registrant as specified in its charter.)
Delaware, U.S.A. 22-3206429
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(201) 447-9000
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90
days.
YES [X] NO [ ]
<PAGE>
<TABLE>
PART I. - FINANCIAL INFORMATION
RIDGEWOOD ELECTRIC POWER TRUST II
BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
<S> <C> <C>
Assets
Cash $ 1,800 $ 101,975
Investments in power
project partnerships 16,116,582 16,056,151
Equipment in storage 331,018 331,018
Other assets 23,804 32,800
Total assets $ 16,473,204 $ 16,521,944
Liabilities and Share-
holders' Equity
Accounts payable and
accrued expenses $ 90,557 $ 44,795
Shareholders' equity
(235.3775 shares issued
and outstanding) 16,419,964 16,513,521
Managing shareholder's
accumulated deficit (37,317) (36,372)
Total shareholders'
equity 16,382,647 16,477,149
Total liabilities and
shareholders' equity $ 16,473,204 $ 16,521,944
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST II
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS AND QUARTERS
ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
(Unaudited)
<CAPTION>
Nine months Quarter ended Nine months
Quarter
ended Septem- September 30, ended Septem-,
ended Septem-
ber 30, 1996 1996 ber 30, 1995 ber
30, 1995
<S> <C> <C> <C> <C>
Income from project
partnerships $ 1,755,375 $ 538,114 $ 2,051,785 $
743,934
Dividend and interest
income 432 231 170,495
2,764
Total income 1,775,807 538,345 2,222,280
746,698
Management fees 200,728 (729) 370,517
109,640
Administrative and other
expense 58,489 15,283 24,417
(3,356)
Total expenses 259,217 14,554 402,156
106,284
Net income $ 1,496,590 $ 523,791 $ 1,820,124
640,414
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
RIDGEWOOD ELECTRIC POWER TRUST II
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS AND QUARTERS
ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
(Unaudited)
<CAPTION>
Nine months Quarter ended Nine months
Quarter ended
ended Septem- September 30,- ended Septem-
September 30,
ber 30, 1996 1996 ber 30, 1995
1995
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income $ 1,496,590 $ 523,791 $ 1,820,124 $
640,414
Adjustments to
reconcile net income
to cash provided (used)
in operating activities:
Changes in assets &
liabilities:
Decrease (increase) in
other assets 8,996 (22,204) (42,314)
50,000
Decrease (increase) in
accounts payable 45,672 47,770 2,955
Increase (decrease) in due
to Managing Shareholder 0 0 0
Total adjustments 54,758 25,566 (39,395)
Net cash provided (used)
by operations before
investing activities 1,551,348 549,357 1,780,765
Investments in power projects
and partnerships (60,431) 0 (5,080,644)
Net cash provided (used
by operations 1,490,917 549,357 (3,299,879)
Cash provided by (used in)
financing activities:
Cash distributions to
Shareholders (1,591,092) (536,952) (1,945,008)
(1,591,092) (536,952) (1,945,008)
Net increase (decrease)
in cash (100,175) 12,405) (5,244,887)
Cash - Beginning of period 101,975 (10,605) 5,468,432
Cash - End of period $ 1,800 $ 1,800 $ 269,545
$ 269,545
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST II
NOTES TO FINANCIAL STATEMENTS
1. Organization and Purpose
Nature of business
Ridgewood Electric Power Trust II (the "Trust") was formed
as a Delaware business trust on November 20,
1992 by Ridgewood Energy Holding Corporation acting as the
Corporate Trustee. The managing shareholder of the Trust is
Ridgewood Power Corporation. The Trust began offering
shares on January 4, 1993. The Trust commenced operations
on April 29, 1993 and discontinued its offering of Trust
shares on January 31, 1994.
The Trust was organized to invest in independent power
generation facilities and in the development of these
facilities. These independent power generation facilities
include cogeneration facilities which produce electricity,
thermal energy and other power plants that use various fuel
sources (except nuclear). The power plants sell electricity
and thermal energy to utilities and industrial users under
long-term contracts.
"Business Development Company" election
Effective April 29, 1993, the Trust elected to be treated as
a "Business Development Company" under the Investment
Company Act of 1940 and registered its shares under the
Securities Exchange Act of 1934.
2. Summary of Significant Accounting Policies
Consolidation
These financial statements represent the
accounts of the Trust. Accounts of subsidiaries formed to
invest in power generation projects are not consolidated.
Investments in project development and power generation
limited partnerships
The Trust holds investments in power generation
projects which are stated at fair value. Due to the
illiquidity of the investments, the fair values of the
investments are assumed to equal cost unless current
available information provides a basis for adjusting the
value of the investments.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST II
NOTES TO FINANCIAL STATEMENTS
The Trust had the following investments in power
generation projects:
September 30, Fair value as of
1996 December 31,
1995
Power generation projects:
Pittsfield Investors
Limited Partnership $ 2,347,330 $ 2,347,330
RSD Power Partners, L.P. 3,507,275 3,507,275
B-3 Limited Partnership 4,001,843 3,941,413
Sunnyside Cogeneration
Partners, L.P. 5,308,467 5,308,467
California Pumping Project 951,667 951,667
TOTALS $16,116,582 $16,056,152
Revenue recognition
Income from investments is recorded when received. Interest
and dividend income are recorded as earned.
Offering costs
Costs associated with offering Trust shares (selling
commissions, distribution and offering costs) are
reflected as a reduction of the shareholders' capital
contributions.
Cash and cash equivalents
The Trust considers monies invested in a U.S. Treasury Bills
Fund with daily liquidation privileges to be a cash
equivalent.
Equipment in storage
Certain used electric power generation equipment has
been purchased by the Trust for future use. The equipment
is held in storage and depreciation is not recorded.
Income taxes
No provision is made for income taxes in the
accompanying financial statements as the income or loss of
the Trust is included in the tax returns of the individual
shareholders.
Reclassification
Certain items in previously issued financial statements have
been reclassified for comparative purposes.
<PAGE>
RIDGEWOOD ELECTRIC POWER TRUST II
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q, like some other statements made by
the Trust from time to time, has forward-looking statements. These
statements discuss business trends and other matters relating to the Trust's
future results and the business climate. In order to make these statements,
the Trust has had to make assumptions as to the future. It has also had to
make estimates in some cases about events that have already happened, and to
rely on data that may be found to be inaccurate at a later time. Because
these forward-looking statements are based on assumptions, estimates and
changeable data, and because any attempt to predict the future is subject to
other errors, what happens to the Trust in the future may be materially
different from the Trust's statements here.
The Trust therefore warns readers of this document that they should not
rely on these forward-looking statements without considering all of the
things that could make them inaccurate. The Trust's other filings with the
Securities and Exchange Commission and its Confidential Memorandum discuss
many (but not all) of the risks and uncertainties that might affect these
forward-looking statements.
Some of these are changes in political and economic conditions, federal
or state regulatory structures, government taxation, spending and budgetary
policies, government mandates, demand for electricity and thermal energy, the
ability of customers to pay for energy received, supplies of fuel and prices
of fuels, operational status of plant, mechanical breakdowns, availability of
labor and the willingness of electric utilities to perform existing power
purchase agreements in good faith.
By making these statements now, the Trust is not making any commitment to
revise these forward-looking statements to reflect events that happen after
the date of this document or to reflect unanticipated future events.
Nine months ended September 30, 1996 versus nine months ended
September 30, 1995
Results of operations
For the nine months ended September 30, 1996, the Trust's net income
decreased by $324,000 (17.8%) from the results for the corresponding period
of 1995. Total revenues for the 1996 period of $1,217,000 were $466,000
(21.0%) less than the 1995 period's results, as the result of a $296,000
(14.4%) decrease in revenue from project partnerships. The decrease
primarily reflected reduced distributions from the San Diego (RSD Power
Partners) and Pump Services Projects, resulting from losses
of customers at San Diego and a prolonged shutdown at Pump
Services. Total revenue also dropped
$170,000 as material interest income on funds awaiting permanent
investment ended in the first quarter of 1995, as the result of the
Trust's completing its investment program at that time.
Total expenses fell $143,000 (35.5%) from the 1995 period to the 1996
period, primarily as the result of a $170,000 (45.8%) decrease in the
management fee payable to the Managing Shareholder. The fee as
prescribed in the management agreement is 2.5% per year of Trust net
assets. Administrative and other expenses rose $34,000 (139.5%) from the
1995 period to the 1996 period, caused by a $23,000 accrual at the Trust
level for insurance costs in 1996 and by increased audit and tax return
preparation expenses. The insurance costs were previously incurred by the
partnerships in which the Trust invested but are now incurred
at the Trust level and charged as Trust expenses rather than Project expenses.
The Trust does not consolidate its financial statements with
those of the Projects it owns and does not include the
Projects' revenue, expense and other items in its financial
statements. Revenue from Projects is only recognized as it
is received as distributions by the Trust, and thus revenues
may fluctuate as the result of delays or accelerations of
distributions from Projects. Further, income and cash flow
earned by the three Projects located in California tends to
be seasonal, peaking in the third quarter of the calendar
year as summer heat increases demand for electricity and for
chilled water and falling in the fourth and first quarters,
when major maintenance tends to be scheduled.
Liquidity and Capital Resources
The Trust's working capital was ($89,000) at September 30, 1996,
compared to $235,000 at September 30, 1995. With the
completion of the Trust's investment program and because the
<PAGE>
Managing Shareholder is responsible for management of the
Trust, the Trust's obligations are substantially limited to
payment of the management fee to the Managing Shareholder
and funding certain services from third parties.
Accordingly, to date the Trust has not found it necessary to
maintain material working capital and the Trust's policy is
to distribute as much cash as is prudent to Investors.
Because the Trust has completed its investment program,
demands on capital resources are expected to be limited to
repairs and routine maintenance, which are to be funded from
operating cash flow of the Projects retained at the Project
level.
PART II - OTHER INFORMATION
Item #6 Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
No reports have been filed on Form 8-K
during this quarter.
RIDGEWOOD ELECTRIC POWER TRUST II
SIGNATURES
Pursuant to the requirement of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
RIDGEWOOD ELECTRIC POWER TRUST II Registrant
November 13, 1996 By /s/ Thomas R. Brown
Date Thomas R. Brown
Senior Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as principal
financial officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information
extracted from the Registrant's unaudited interim financial
statements for the quarter ended September 30, 1996 and is
qualified in its entirety by reference to those financial
statements.
</LEGEND>
<CIK> 0000895993
<NAME> RIDGEWOOD ELECTRIC POWER TRUST II
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1996
<CASH> 1,800
<SECURITIES> 16,116,582<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,800
<PP&E> 331,018<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 16,473,204
<CURRENT-LIABILITIES> 90,557
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 16,382,647<F3>
<TOTAL-LIABILITY-AND-EQUITY> 16,473,204
<SALES> 0
<TOTAL-REVENUES> 1,755,807
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 259,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,496,590
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,496,590
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,496,590
<EPS-PRIMARY> 6358.25
<EPS-DILUTED> 6358.25
<FN>
<F1>Investments in power project partnerships.
<F2>Equipment in storage.
<F3>Represents Investor Shares of beneficial interest in
Trust with capital accounts of $16,419,964 less managing
shareholder's accumulated deficit of $37,317.
</FN>
</TABLE>
