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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
THIRD QUARTER
REPORT
1999
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SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 30, 1999 Commission File Number 33-79220
33-56377
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
(exact name of Registrant as specified in its charter)
Delaware 04-3232976
(State of incorporation) (I.R.S. Employer
Identification No.)
Room 6/9, One International Place, Boston, Massachusetts 02110-2624
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (617) 951-7727
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,
and (2) has been subject to such filing requirements for the past
90 days.
YES X NO
Number of shares outstanding of each class of Registrant's Common
Stock as of October 31, 1999.
Common, $1.00 par value.............................1,000 shares
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1999
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Review Report of Independent Accountants
Unaudited Condensed Balance Sheet -
September 30,1999 and December 31, 1998.
Unaudited Condensed Income Statement
Nine Months Ended September 30,1999 and 1998
Unaudited Condensed Statement of Cash Flows -
Nine Months Ended September 30,1999 and 1998
Notes to Unaudited Condensed Financial
Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative disclosures
about Market Risk
PART II OTHER INFORMATION
Item 1. Legal Proceedings
SIGNATURES
Omitted items are not applicable
1
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PART I FINANCIAL INFORMATION
Item 1. Financial Statements
REVIEW REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of California Petroleum Transport Corporation
We have reviewed the accompanying condensed balance sheet of
California Petroleum Transport Corporation as of September 30,
1999, and the related condensed statements of income and the
condensed statement of cash flows for the nine-month periods
ended September 30, 1999 and 1998. These financial statements
are the responsibility of the Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with United States generally accepted
auditing standards, which will be performed for the full year
with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the financial statements
referred to above for them to be in conformity with United States
generally accepted accounting principles.
We have previously audited, in accordance with United States
generally accepted auditing standards, the balance sheet of
California Petroleum Transport Corporation as at December 31,
1998, and the related statements of income and cash flows for the
year then ended, not presented herein, and in our report dated
March 12, 1999, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth
in the accompanying condensed balance sheet as of December 31,
1998, is fairly stated, in all material respects, in relation to
balance sheet from which it has been extracted.
Ernst & Young
Chartered Accountants
Douglas, Isle of Man
October 31, 1999
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED BALANCE SHEET
(US Dollars in thousands) September 30, Dec 31,
1999 1998
ASSETS
Current assets:
Cash and cash equivalents 1 1
Current portion of serial
loan (note 2)
(Maturity date April 1, 2000) 18,160 18,160
Interest receivable 8,611 4,637
Other assets 24 6
_______ _______
TOTAL CURRENT ASSETS 26,796 22,804
Serial loans receivable less
current portion (note 2) 76,816 94,850
Terms loans receivable (note 3) 116,532 116,466
Deferred charges and other assets 2,252 2,444
________ ________
TOTAL ASSETS 222,396 236,564
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Interest accrued 8,611 4,637
Current portion of serial
mortgage notes (note 4)
(due April 1, 2000) 18,160 18,160
Other liabilities 24 6
_______ _______
TOTAL CURRENT LIABILITIES 26,795 22,803
Serial mortgage notes (note 4) 77,700 95,860
Term mortgage notes (note 5) 117,900 117,900
________ ________
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TOTAL LIABILITIES 222,395 236,563
________ ________
Stockholders' equity:
Common stock: 1,000 shares
authorized, issued and outstanding 1 1
____ ____
________ ________
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 222,396 236,564
========= =========
The accompanying notes are an integral part of this statement
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED INCOME STATEMENT
(US Dollars in thousands)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1999 1998 1999 1998
INCOME
Interest income 4,370 4,701 13,441 14,428
Recovery of overheads 15 15 4545
______ ______ _______ ______
4,385 4,716 13,486 14,473
Deduct:
EXPENSES
Interest payable 4,306 4,637 13,249 14,236
Overheads 15 15 45 45
Amortization of debt
issue costs 64 64 192 192
______ ______ ______ _____
NET RESULT FOR THE PERIOD NIL NIL NIL NIL
______ ______ ______ _____
The accompanying notes are an integral part of this statement
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
(US Dollars in thousands) NINE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income - -
Adjustments to reconcile net income to
net cash provided by operating activities:
Recognition of deferred expenses (192) (192)
Recognition of unearned income 192 192
Changes in assets and liabilities
Accounts receivable (3,992) (4,293)
Accounts payable 3,992 4,293
________ ________
Net cash provided by operating
activities NIL NIL
________ ________
CASH FLOWS FROM INVESTING ACTIVITIES
Serial loans repaid 18,160 18,160
________ ________
CASH FLOWS FROM FINANCING ACTIVITIES
Serial notes redeemed (18,160) (18,160)
________ ________
NET INCREASE IN CASH AND
CASH EQUIVALENTS NIL NIL
======== ========
SUPPLEMENTARY DISCLOSURE OF CASH
FLOW INFORMATION
Interest paid 9,275 9,924
======== ========
The accompanying notes are an integral part of this statement
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
NOTE 1- BUSINESS AND SUMMARY OF ACCOUNTING POLICIES
ORGANIZATION AND HISTORY
California Petroleum Transport Corporation was incorporated
under the laws of the state of Delaware on May 18, 1994. The
company is a special purpose corporation that has been organized
solely for the purpose of issuing as agent Serial Mortgage Notes
and Term Mortgage Notes as full recourse obligations of the
company and loaning the proceeds of the sale of the Notes to four
vessel owning companies. The Serial Mortgage Notes and the Term
Mortgage Notes were issued on April 5, 1995.
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with United States
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. 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 (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. The principal accounting policies used in
the preparation of these financial statements are set out below.
REVENUE AND EXPENSE RECOGNITION
Interest receivable on the Serial Loans and on the Term Loans
is accrued on a daily basis. Interest payable on the Serial
Mortgage Notes and on the Term Mortgage Notes is accrued on a
daily basis. General and administrative expenses incurred by the
company are reimbursed by the vessel owning companies.
DEFERRED CHARGES
Deferred charges represent the capitalization of debt issue
costs. These costs are amortized over the term of the Notes to
which they relate.
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NOTE 2- SERIAL LOANS
The principal balances of the Serial Loans earn interest at
rates ranging from 7.35% to 7.62% and mature over a seven year
period beginning April 1, 2000. The loans are reported net of
the related discounts which are amortized over the term of the
loans.
NOTE 3- TERM LOANS
The principal balances of the Term Loans earn interest at a
rate of 8.52% per annum and are to be repaid over a twelve year
period beginning nine years from April 1, 1995. The loans are
reported net of the related discounts which are amortized over
the term of the loans.
NOTE 4- SERIAL MORTGAGE NOTES
The Serial Mortgage Notes bear interest at rates ranging from
7.35% to 7.62% through maturity. The Notes mature over a seven
year period beginning April 1, 2000. Interest is payable semi-
annually.
NOTE 5- TERM MORTGAGE NOTES
The Term Mortgages Notes bear interest at a rate of 8.52% per
annum. Principal is repayable on the Term Mortgage Notes in
accordance with a twelve year sinking fund schedule commencing
nine years from April 1, 1995. Interest is payable semi-
annually.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
N/A
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
(a) QUANTITATIVE INFORMATION ABOUT MARKET RISK
Quantitative information about market risk
instruments at September 30, 1999 is as follows:-
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i) SERIAL LOANS
The principal balances of the Serial Loans
earn interest at rates ranging from 7.35% to
7.62% and mature over a seven year period
beginning April 1, 2000. The loans are
reported net of the related discounts which
are amortized over the term of the loans.
The outstanding serial loans have the
following characteristics:
Principal Interest Maturity
due rate date
$ 000
18,160 7.35% April 1, 2000
18,160 7.44% April 1, 2001
18,160 7.49% April 1, 2002
18,160 7.55% April 1, 2003
12,950 7.57% April 1, 2004
7,740 7.60% April 1, 2005
2,530 7.62% April 1, 2006
_______
95,860
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ii) TERM LOANS
The principal balances of the Term Loans earn
interest at a rate of 8.52% per annum and are
to be repaid over a twelve year period
beginning nine years from April 1, 1995. The
loans are reported net of the related
discounts which are amortized over the term of
the loans.
The table below provides the final principal
payments on the Term Loans if none of the
Initial Charters is terminated and if all of
the Initial Charters are terminated on the
earliest termination dates.
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SCHEDULED NO INITIAL ALL INITIAL
PAYMENT DATE CHARTERS CHARTERS
TERMINATED TERMINATED
$ 000 $ 000
April 1, 2004 3,355 1,700
April 1, 2005 6,542 3,480
April 1, 2006 9,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
_______ _______
117,900 117,900
_______ _______
iii) SERIAL MORTGAGE NOTES
The Serial Mortgage Notes bear interest at
rates ranging from 7.35% to 7.62% through
maturity. The Notes mature over a seven year
period beginning one year from April 1, 2000.
Interest is payable semi-annually.
The outstanding serial loans have the
following characteristics:
PRINCIPAL DUE INTEREST RATE MATURITY DATE
ON MATURITY
$000
18,160 7.35% April 1, 2000
18,160 7.44% April 1, 2001
18,160 7.49% April 1, 2002
18,160 7.55% April 1, 2003
12,950 7.57% April 1, 2004
7,740 7.60% April 1, 2005
2,530 7.62% April 1, 2006
________
95,860
________
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iv) TERM MORTGAGE NOTES
The Term Mortgage Notes bear interest at a
rate of 8.52% per annum. Principal is
repayable on the Term Mortgage Notes in
accordance with a twelve year sinking fund
schedule commencing nine years from April 1,
1995. Interest is payable semi-annually.
The table below provides the scheduled sinking
fund redemption amounts and final principal
payments on the Term Mortgage Notes if none of
the Initial Charters is terminated and if all
of the Initial Charters are terminated on the
earliest termination dates.
SCHEDULED NO INITIAL ALL INITIAL
PAYMENT DATE CHARTERS CHARTERS
TERMINATED TERMINATED
$ 000 $ 000
April 1, 200 43,355 1,700
April 1, 2005 6,542 3,480
April 1, 2006 9,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
_______ _______
117,900 117,900
________________
(b) QUALITATIVE INFORMATION ABOUT MARKET RISK
The Corporation was organized solely for the
purpose of issuing, as agent on behalf of certain
ship Owners, the Term Mortgage in Notes and Serial
Mortgage Notes as obligations of California
Petroleum and loaning the proceeds of the sale of
the Notes to the Owners to facilitate the funding
of the acquisition of four Vessels from Chevron
Transport Corporation.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The company is not party to any legal proceedings the
results of which could, in the opinion of management,
have a material adverse effect upon the company.
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.
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION
Registrant
November 5, 1999 R. Douglas Donaldson
Principal Financial
Officer and Treasurer
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02089006.AB8
