FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OFTHE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 2000
Commission file Number 0-23432
RIDGEWOOD ELECTRIC POWER TRUST III
(Exact name of registrant as specified in its charter.)
Delaware 22-3264565
(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)
(201) 447-9000
Registrant's telephone number, including area code:
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
<PAGE>
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Ridgewood Electric Power Trust III
Financial Statements
March 31, 2000
<PAGE>
Ridgewood Electric Power Trust III
Balance Sheet
- --------------------------------------------------------------------------------
March 31, December 31,
2000 1999
(unaudited)
--------- ---------
Assets:
Investments in power generation projects ... $ 23,614,234 $ 23,202,879
Cash and cash equivalents .................. 151,038 603,922
Due from affiliates ........................ 14,279 80
Other assets ............................... 57,035 7,416
--------- ---------
Total assets ............................. $ 23,836,586 $ 23,814,297
--------- ---------
Liabilities and Shareholders' Equity:
Accounts payable and accrued expenses ...... $ 32,071 $ 51,676
Borrowings under line of credit facility ... 350,000 --
Due to affiliates .......................... 137,456 11,438
--------- ---------
Total liabilities ........................ 519,527 63,114
Commitments and contingencies ..............
Shareholders' equity:
Shareholders' equity (391.8444 shares
issued and outstanding) 23,414,923 23,844,706
Managing shareholder's accumulated deficit . (97,864) (93,523)
--------- ---------
Total shareholders' equity ............... 23,317,059 23,751,183
--------- ---------
Total liabilities and shareholders' equity $ 23,836,586 $ 23,814,297
--------- ---------
See accompanying note to financial statements.
<PAGE>
Ridgewood Electric Power Trust III
Statement of Operations (unaudited)
- --------------------------------------------------------------------------------
Three Months Ended
March 31, March 31,
2000 1999
-------- --------
Revenues:
Income from power generation projects $363,905 $258,045
Interest income ..................... 2,629 25,749
-------- --------
Total revenue ............... 366,534 283,794
-------- --------
Expenses:
Management fee ...................... 148,644 148,644
Accounting and legal fees ........... 48,191 27,936
Miscellaneous ....................... 10,119 21,989
-------- --------
Total expenses .............. 206,954 198,569
-------- --------
Net income .................. $159,580 $ 85,225
-------- --------
See accompanying note to financial statements.
<PAGE>
Ridgewood Electric Power Trust III
Statement of Changes in Shareholders' Equity (unaudited)
- --------------------------------------------------------------------------------
Managing
Shareholders Shareholder Total
------------ ----------- -----------
Shareholders' equity,
December 31, 1999 ...... $ 23,844,706 $ (93,523) $ 23,751,183
Cash distributions ...... (587,767) (5,937) (593,704)
Net income for the period 157,984 1,596 159,580
------------ ----------- -----------
Shareholders' equity,
March 31, 2000 ......... $ 23,414,923 $ (97,864) $ 23,317,059
------------ ----------- -----------
See accompanying note to financial statements.
<PAGE>
Ridgewood Electric Power Trust III
Statement of Cash Flows (unaudited)
-------------------------------------------------------------------------------
Three Months Ended
March 31, 2000 March 31, 1999
----------- ------------
Cash flows from operating activities:
Net income ..................................... $ 159,580 $ 85,225
----------- ------------
Adjustment to reconcile net income to cash flows
from operating activities:
Additional investments in power
generation projects, net ...................... (411,355) (1,197,700)
Changes in assets and liabilities:
(Increase) decrease in due from affiliates .... (14,199) 2,392
(Increase) decrease in other assets ........... (49,619) 92,121
Decrease in accounts payable and accrued
expenses ..................................... (19,605) (138,400)
Increase in due to affiliates ................. 126,018 86,186
----------- ------------
Total adjustments ............................. (368,760) (1,155,401)
----------- ------------
Net cash used in operating activities ......... (209,180) (1,070,176)
----------- ------------
Cash flows from financing activities:
Borrowing under line of credit facility ........ 350,000 --
Cash distributions to shareholders ............. (593,704) (596,105)
----------- ------------
Net cash used in financing activities ........ (243,704) (596,105)
----------- ------------
Net decrease in cash and cash equivalents ....... (452,884) (1,666,281)
Cash and cash equivalents, beginning of year .... 603,922 2,414,916
----------- ------------
Cash and cash equivalents, end of period ........ $ 151,038 $ 748,635
----------- ------------
See accompanying note to financial statements.
<PAGE>
Ridgewood Electric Power Trust III
Note to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. General
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which consist of normal recurring adjustments,
necessary for the pair presentation of the results for the interim periods.
Additional footnote disclosure concerning accounting policies and other matters
are disclosed in Ridgewood Electric Power Trust III's financial statements
included in the 1999 Annual Report on Form 10-K, which should be read in
conjunction with these financial statements. Certain prior year amounts have
been reclassified to conform to the current year presentation.
The results of operations for an interim period should not necessarily be taken
as indicative of the results of operations that may be expected for a twelve
month period
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are rounded to the nearest $1,000.
Introduction
The Trust carries its investment in Projects at fair value and does not
consolidate its financial statements with the financial statements of the
Projects. Revenue is recorded by the Trust as cash distributions are received
from the Projects. Trust revenues may fluctuate from period to period depending
on the operating cash flow generated by the Projects and the amount of cash
retained to fund capital expenditures.
Results of Operations
Quarter ended March 31, 2000 compared to the quarter ended March 31, 1999
As summarized below, total revenue increased 29.2% to $367,000 in the first
quarter of 2000 compared to $284,000 in the first quarter of 1999:
Project 2000 1999
- -------- ---- ----
On-site Cogeneration:
Massachusetts ... $ -- $109,000
Others .......... 115,000 --
-------- --------
Subtotal ........ 115,000 109,000
Providence .......... 116,000 128,000
Hawthorne ........... 116,000 --
Ridgewood/AES ....... 17,000 21,000
Interest income ..... 3,000 26,000
-------- --------
Total ............... $367,000 $284,000
-------- --------
Revenues from the on-site cogeneration projects increased slightly from $109,000
in the first quarter of 1999 to $115,000 in the corresponding period in 2000.
Distributions in 1999 from the on-site cogeneration projects were generated by
the Massachusetts project which was shut down in the latter half of 1999 (see
the 1999 Annual Report on Form 10-K for information on the dispute with the host
company). Distributions in 2000 from the other on-site cogeneration projects
were primarily generated from the Elmsford facility which had lower maintenance
costs and higher revenue in 2000 compared to the prior year.
Revenues from the Providence and Ridgewood/AES projects were relatively
unchanged for the first quarter of 1999 and 2000.
The Trust recorded $116,000 of rental revenue from the Hawthorne Caterpillar
engines which were acquired in the second half of 1999.
Interest income declined from $26,000 in the first quarter of 1999 to $3,000 in
the first quarter of 2000 due to lower cash balances.
The Trust's expenses did not change significantly from the first quarter of 1999
to the first quarter of 2000.
Quarter ended March 31, 1999 compared to the quarter ended March 31, 1998
As summarized below, total revenue decreased 32.9% to $284,000 in the first
quarter of 1999 compared to $423,000 in the first quarter of 1998:
Project 1999 1998
- -------- ---- ----
On-site Cogeneration:
Massachusetts ... $109,000 $163,000
Others .......... -- 10,000
-------- --------
Subtotal ........ 109,000 173,000
Providence .......... 128,000 167,000
San Joaquin ......... -- 35,000
Ridgewood/AES ....... 21,000 --
Interest income ..... 26,000 49,000
-------- --------
Total ............... $284,000 $424,000
-------- --------
Revenues from the on-site cogeneration projects decreased by $64,000 to $109,000
in the first quarter of 1999 compared to $173,000 in the corresponding period in
1998. Distributions were $54,000 lower from the Massachusetts on-site
cogeneration project due to slightly lower revenues at the Globe facility caused
by an unscheduled outage. Revenues from the Providence and San Joaquin
facilities decreased by $39,000 and $35,000, respectively, due to higher
maintenance costs.
The increase in distribution income from Ridgewood/AES reflects revenue from
projects that entered operation in the second half of 1998.
The management fee decreased from $176,000 in the first quarter of 1998 to
$149,000 in the first quarter of 1999 reflecting the reduced net assets of the
Trust caused by the writedown of the on-site cogeneration projects. The Trust's
other expenses did not change significantly from the first quarter of 1998 to
the first quarter of 1999.
Liquidity and Capital Resources
During 1997, the Trust and Fleet Bank, N.A. (the "Bank") entered into a
revolving line of credit agreement, whereby the Bank provides a three year
committed line of credit facility of $750,000. Outstanding borrowings bear
interest at the Bank's prime rate or, at the Trust's choice, at LIBOR plus 2.5%.
The credit agreement requires the Trust to maintain a ratio of total debt to
tangible net worth of no more than 1 to 1 and a minimum debt service coverage
ratio of 2 to 1. The credit facility was obtained in order to allow the Trust to
operate using a minimum amount of cash, maximize the amount invested in Projects
and maximize cash distributions to shareholders. The trust borrowed $350,000
under this line of credit in the first quarter of 2000.
Obligations of the Trust are generally limited to payment of the management fee
to the Managing Shareholder, payments for certain accounting and legal services
to third persons, repayment of borrowings under the line of credit facility and
distributions to shareholders of available operating cash flow generated by the
Trust's investments. The Trust's policy is to distribute as much cash as is
prudent to shareholders. Accordingly, the Trust has not found it necessary to
retain a material amount of working capital. The amount of working capital
retained is further reduced by the availability of the line of credit facility.
The Trust anticipates that its cash flow from operations during 2000, proceeds
from the arbitration proceeding and line of credit facility will be adequate to
fund its obligations.
Forward-looking statement advisory
This Quarterly Report on Form 10-Q, as with 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 and are found, among other places, in the notes to
financial statements and at Part I, Item 2, Management's Discussion and
Analysis. 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. Some of the cautionary factors that readers should
consider are described in the Trust's most recent Annual Report on Form 10-K.
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.
<PAGE>
PART II - OTHER INFORMATION
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RIDGEWOOD ELECTRIC POWER TRUST III
Registrant
May 15, 2000 By /s/ Christopher I. Naunton
Date Christopher I. Naunton
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 nine month period
ended March 31, 2000 and is qualified in its entirety by reference to those
financial statements.
</LEGEND>
<CIK> 0000917032
<NAME> RIDGEWOOD ELECTRIC POWER TRUST III
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 151,038
<SECURITIES> 23,614,234<F1>
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 222,352<F2>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 23,836,586
<CURRENT-LIABILITIES> 519,527<F3>
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 23,317,059<F4>
<TOTAL-LIABILITY-AND-EQUITY> 23,836,586
<SALES> 0
<TOTAL-REVENUES> 366,534
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 206,954
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 159,580
<INCOME-TAX> 0
<INCOME-CONTINUING> 159,580
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 159,580
<EPS-BASIC> 405
<EPS-DILUTED> 405
<FN>
<F1>Investments in power project partnerships.
<F2>Includes $14,279 due from affiliates.
<F3>Includes $137,456 due to affiliates.
<F3>Represents Investor Shares of beneficial interest
in Trust with capital accounts of $23,414,923 less
managing shareholder's accumulated deficit of $97,864.
</FN>
</TABLE>
