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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
FIRST 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 March 31, 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 (zip code)
executive offices)
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 April 30, 1999
Common, $1.00 par value............................1,000 shares
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 31, 1999
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Review Report of Independent Accountants 2
Unaudited Condensed Balance Sheet - March 31, 1999 and
December 31, 1998. 3
Unaudited Condensed Income Statement
Three Months Ended March 31, 1999 and 1998 4
Unaudited Condensed Statement of Cash Flows -
Three Months Ended March 31, 1999 and 1998 5
Notes to Unaudited Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative disclosures about
Market Risk 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
SIGNATURES 11
Omitted items are not applicable
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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 March 31, 1999,
and the related condensed statements of income and the condensed
statement of cash flows for the Three-month periods ended March
31, 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.
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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
April 30, 1999
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED BALANCE SHEET
(US Dollars in thousands) Mar 31, Dec 31,
1999 1998
Assets
Current assets:
Cash and cash equivalents 1 1
Current portion of serial
loan (note 2)
(Maturity date April 1, 1999) 18,160 18,160
Interest receivable 9,274 4,637
Other assets 21 6
_______ _______
Total current assets 27,456 22,804
Serial loans receivable less
current portion (note 2) 94,892 94,850
Terms loans receivable (note 3) 116,488 116,466
Deferred charges and other assets 2,380 2,444
________ ________
Total assets 241,216 236,564
======== ========
Liabilities and stockholders' equity
Current liabilities:
Interest accrued 9,274 4,637
Current portion of serial
mortgage notes (note 4)
(due April 1, 1999) 18,160 18,160
Other liabilities 21 6
_______ _______
Total current liabilities 27,455 22,803
Serial mortgage notes (note 4) 95,860 95,860
Term mortgage notes (note 5) 117,900 117,900
________ ________
Total liabilities 241,215 236,563
________ ________
Stockholders' equity:
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Common stock: 1,000
shares authorized,
issued and outstanding 1 1
_______ ________
Total liabilities and
stockholders' equity 241,216 236,564
======== ========
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
ended Mar 31,
1999 1998
Income
Interest income 4,701 5,026
Recovery of overheads 15 15
______ ______
4,716 5,041
Deduct:
Expenses
Interest payable 4,637 4,962
Overheads 15 15
Amortization of debt issue costs 64 64
______ _____
Net result for the period 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) Three months Three months
ended Mar 31, ended Mar 31,
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 (64) (64)
Recognition of unearned income 64 64
Changes in assets and
liabilities
Accounts receivable (4,652) (4,958)
Accounts payable 4,652 4,958
______ ______
Net cash provided by
operating activities NIL NIL
______ ______
Net increase in cash and
cash equivalents NIL NIL
==== ====
Cash at bank at beginning
and end of year NIL NIL
==== ====
Supplementary disclosure
of cash flow information
Three months
ended Mar 31,
1999 1998
$000 $000
Interest paid NIL NIL
===== =====
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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.
Note 2- Serial Loans
The principal balances of the Serial Loans earn interest at
rates ranging from 7.30% to 7.62% and mature over an eight year
period beginning April 1, 1999. The loans are reported net of
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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.
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
Note 4- Serial Mortgage Notes
The Serial Mortgage Notes bear interest at rates ranging from
7.30% to 7.62% through maturity. The Notes mature over a eight
year period beginning April 1, 1999. 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 December 31, 1998 is as follows:-
i) Serial Loans
The principal balances of the Serial Loans earn
interest at rates ranging from 7.30% to 7.62% and
mature over an eight year period beginning April 1,
1999. 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 7.30% April 1, 1999
18,160 7.35% April 1, 2000
18,160 7.44% April 1, 2001
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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
_______
114,020
_______
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.
Item 3. Quantitative and Qualitative disclosures about
Market Risk (continued)
(a) Quantitative information about market
risk (continued)
ii) Term 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.
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
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_______ _______
iii) Serial Mortgage Notes
The Serial Mortgage Notes bear interest at rates
ranging from 7.30% to 7.62% through maturity. The
Notes mature over an eleven year period beginning
one year from April 1, 1995. Interest is payable
semi-annually. The outstanding serial loans have
the following characteristics:
Principal Interest Maturity
on maturity Rate Date
$000 $000
18,160 7.30% April 1, 1999
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
________
114,020
________
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
NOTES TO THE FINANCIAL STATEMENTS
(CONTINUED)
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 43,35 51,700
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 10,9413 8,660
_______ _______
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
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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
1999 R. Douglas Donaldson
Principal Financial Officer
and Treasurer
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02089006.AA3
