SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________________________________
FORM 8-K/A-2
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: April 23, 1999
TRIGEN ENERGY CORPORATION
Delaware 1-13264 13-3378939
- --------------- ------------------- ------------------
State or other Commission File No. IRS Employer
Jurisdiction of Identification No.
Incorporation
One Water Street
White Plains, NY 10601-1009
- ----------------------- -------------
Address of Principal Zip Code
Executive Offices
914-286-6600
-------------------
Registrant's telephone number
<PAGE>
Item 2. Acquisition or Disposition of Assets
On April 23, 1999, the Pennsylvania Court of Common Pleas of Philadelphia
County approved a settlement agreement which ended the lawsuit brought by Grays
Ferry Cogeneration Partnership (the "Partnership"), Trigen-Schuylkill
Cogeneration, Inc. ("Trigen- Schuylkill") and Cogen America Schuylkill Inc.
("Cogen America") against PECO Energy Company ("PECO") and Adwin (Schuylkill)
Cogeneration, Inc. ("Adwin"). The Partnership is the owner of the Grays Ferry
Cogeneration Facility located in Philadelphia, Pennsylvania. The Partnership,
Trigen-Schuylkill and Cogen America commenced this lawsuit in reaction to the
alleged termination by PECO on March 3, 1998, of the electric power purchase
agreements between the Partnership and PECO (the "Power Purchase Agreements").
Under the settlement agreement PECO's subsidiary, Adwin, surrendered its
rights to its one-third partnership interest in the Partnership to the two
remaining partners, Trigen-Schuylkill and Cogen America. As a result, Trigen-
Schuylkill now owns one half of the Partnership and Cogen America owns the other
half. Trigen-Schuylkill is a wholly owned subsidiary of Trigen Energy
Corporation. The receipt of the additional interest in the Partnership will be
accounted for by Trigen Energy Corporation using the purchase method of
accounting for business combinations. Trigen Energy Corporation which now owns
a 50% interest in the Partnership, will continue to account for its investment
using the equity method.
Item 7. Financial Statements and Exhibits
(a) Financial Statements:
The financial statements of Grays Ferry Cogeneration Partnership which were
filed as Exhibit 99 in the Trigen Energy Corporation's Form 10-K for the year
ended December 31, 1998, are incorporated herein by reference.
The interim unaudited financial statements of Grays Ferry Cogeneration
Partnership as of March 31, 1999 and for the periods ended March 31, 1999 and
1998 are included herein.
<PAGE>
<TABLE>
<CAPTION>
GRAYS FERRY COGENERATION PARTNERSHIP
STATEMENTS OF INCOME
For the Three Months Ended March 31, 1999 and 1998
Unaudited
(In thousands)
1999 1998
<S> <C> <C>
Revenues
Electric energy sales $10,217 $10,310
Steam sales 5,013 4,002
Capacity fees: Electric 2,403 2,189
Steam 750 532
Fees earned and other revenues 790 -
-------------------
Total revenues 19,173 17,033
------------------
Operating expenses
Fuel and consumables:
Related parties 876 714
Other 8,163 7,646
Production and operating expenses:
Related parties 393 354
Other 480 320
Depreciation and amortization 1,891 1,620
General and administrative:
Related parties 888 653
Other 1,944 345
------------------
Total operating expenses 14,635 11,652
------------------
Operating income 4,538 5,381
Other income (expense)
Interest expense (3,006) (2,241)
Other income (expense), net (221) 27
------------------
Earnings before income taxes and cumulative
effect of a change in an accounting principle 1,311 3,167
Income taxes 85 209
------------------
Earnings before cumulative effect of a change
in an accounting principle 1,226 2,958
Cumulative effect of a change in an accounting
principle, net of tax benefit (357) -
------------------
Net earnings $ 869 $ 2,958
==================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
[CAPTION]
<TABLE>
GRAYS FERRY COGENERATION PARTNERSHIP
BALANCE SHEET
Unaudited
(In thousands)
March 31,
1999
------------
Assets
<S> <C>
Current assets
Cash and cash equivalents $ 19,050
Accounts receivable
Related parties 7,492
Other 2,596
Inventories 1,457
-------------
Total current assets 30,595
Property, plant and equipment, net 141,647
Other assets 6,878
--------------
Total assets $179,120
==============
Liabilities and Partners' Capital
Current liabilities
Construction loan $ 85,809
Subordinated debt 15,000
Accounts payable and accrued liabilities -
related parties 4,251
Accounts payable and accrued liabilities - other 16,871
Retainage payable 5,582
Total current liabilities 127,513
Partners' capital 51,607
Total liabilities and partners' capital $179,120
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
GRAYS FERRY COGENERATION PARTNERSHIP
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1999 and 1998
Unaudited
(In thousands)
1999 1998
-------------
<S> <C> <C>
Cash flows from operating activities
Net earnings $ 869 $ 2,958
Adjustments to reconcile net income to net cash Flow
Cumulative effect of a change in an
accounting principle 357 -
Depreciation 1,891 1,620
Amortization of other asset 109 100
Changes in assets and liabilities which provided
(used) cash
Accounts receivable - related parties 3,187 (15,332)
Accounts receivable - other (791) (3,071)
Prepaid assets 707 (979)
Inventories 117 (73)
Accounts payable and accrued expenses -
related parties 747 1,629
Accounts payable and accrued expenses - other 1,854 5,661
Other assets (110) 55
------------------
Net cash provided by operating activities 8,937 (7,432)
-------------------
Cash flows from investing activities
Capital expenditures - (2,478)
------------------
Net cash used in investing activities - (2,478)
--------------------
Cash flows from financing activities
Proceeds from borrowings under construction
loan and subordinated debt - 8,500
Repayment of construction loan (8,515) -
-------------------
Net cash provided by (used in) financing
activities (8,515) 8,500
--------------------
Cash and cash equivalent
Increase (decrease) 422 (1,410)
At beginning of period 18,628 6,442
---------------------
At end of period $19,050 $ 5,032
====================
Supplemental disclosure of cash flow information
Cash paid during the period for
Interest $ 1,686 $ 1,982
---------------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
GRAYS FERRY COGENERATION PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
Unaudited
1. Organization of Partnership
Grays Ferry Cogeneration Partnership, (the "Partnership") was organized on
October 29, 1991 as a Pennsylvania general partnership for the sole purpose of
developing, owning, constructing and operating a 150 megawatt gas and oil fired
qualifying cogeneration facility at the Schuylkill Station of Trigen-
Philadelphia Energy Corporation in Philadelphia, Pennsylvania. For the period
from October 29, 1991 through January 8, 1998, the Partnership was considered a
development stage entity as its sole activity was construction of the facility.
Pursuant to 20-year electricity and 25-year steam purchase agreements between
the Partnership and its two customers, sales of electricity and steam began in
January 9, 1998, the date of Commercial Operations.
Up to April 23, 1999, the Partnership's general partners were Adwin
(Schuylkill) Cogeneration, Inc. ("Adwin"), Trigen (Schuylkill) Cogeneration,
Inc. ("Trigen-Schuylkill") and Cogen America Schuylkill, Inc. ("Cogen America").
The three general partners were equal partners, with net operating profits and
losses and distributions to be allocated equally to the partners, subject to the
terms and provisions as stated in the Amended and Restated Partnership
Agreement.
2. Basis of Presentation
The financial statements of the Partnership presented herein are unaudited.
However, such information reflects all adjustments, consisting of normal
recurring adjustments, which are, in the opinion of management, necessary to
present fairly the financial position as of March 31, 1999, and the results of
operations and the cash flows for the three months ended March 31, 1999 and
1998. The results of operations and cash flows for the three month period
ended March 31, 1999 are not indicative of those to be expected for the year
ending December 31, 1999. These financial statements should be read in
conjunction with the audited financial statements and notes thereto for the
year ended December 31, 1998 filed as Exhibit 99 in Trigen Energy
Corporation's Form 10-K for the year ended December 31, 1998.
3. Legal Proceedings
On April 23, 1999, the Pennsylvania Court of Common Pleas of Philadelphia
County approved a settlement agreement which ended the lawsuit brought by the
Partnership, Trigen-Schuylkill and Cogen America against PECO Energy Company
("PECO") and Adwin. The Partnership is the owner of the Grays Ferry
Cogeneration Facility located in Philadelphia, Pennsylvania. The Partnership,
Trigen-Schuylkill and Cogen America commenced this lawsuit in reaction to the
alleged termination by PECO on March 3, 1998, of the electric power purchase
agreements between the Partnership and PECO (the "Power Purchase Agreements").
<PAGE>
GRAYS FERRY COGENERATION PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
Unaudited
Under the settlement agreement PECO's subsidiary, Adwin, surrendered its
rights to its one-third partnership interest in the Partnership to the two
remaining partners, Trigen-Schuylkill and Cogen America. As a result, Trigen-
Schuylkill now owns one half of the Partnership and Cogen America owns the other
half.
4. Cumulative Effect of a Change in an Accounting Principle
Effective January 1, 1999, the Partnership adopted the American Institute
of Certified Public Accountants Statement of Position No. 98-5, "Reporting on
the Costs of Start-Up Activities" ("SOP 98-5"). SOP 98-5 requires that costs
associated with start-up activities and organizational costs be expensed as
incurred. The effect of the adoption was an after-tax charge of $357,000, to
expense deferred organizational and start-up costs as a cumulative effect of a
change in an accounting principle.
<PAGE>
Item 7. Financial Statements and Exhibits (Continued)
(b) Pro Forma Financial Information:
The following unaudited pro forma financial data gives effect to the
settlement and receipt of the additional interest in the Partnership. The
unaudited pro forma consolidated balance sheet was prepared based on Trigen
Energy Corporation's unaudited consolidated financial statements as of March 31,
1999 giving effect to the settlement and receipt of the additional interest in
the Partnership as if such event occurred on March 31, 1999. The unaudited pro
forma consolidated statements of operations for the year ended December 31, 1998
and the three months ended March 31, 1999 were prepared based on Trigen Energy
Corporation's audited and unaudited consolidated financial statements for such
periods, giving effect to the settlement and the receipt of the additional
interest in the Partnership as if such event occurred on January 1, 1998.
The pro forma consolidated financial statements and accompanying notes
should be read in conjunction with the historical financial statements of Trigen
Energy Corporation and the Partnership and the related notes thereto.
The pro forma consolidated financial statements are provided for
informational purposes only in response to SEC requirements and do not purport
to represent what Trigen Energy Corporation's financial position or results of
operations would actually have been if the settlement and receipt of an
additional interest in the Partnership had in fact occurred at such dates or to
project Trigen Energy Corporation's financial position or results of operations
for any future date or period.
<PAGE>
<TABLE>
<CAPTION>
TRIGEN ENERGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
As of March 31, 1999
(In Thousands)
Consolidated Pro forma Pro Forma
Trigen Adjustments Consolidated
ASSETS
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $12,186 $ 12,186
Accounts receivable, net 50,981 50,981
Inventories 7,250 7,250
Prepaid expenses 6,608 6,608
------- --------- ----------
Total current assets 77,025 - 77,025
Restricted cash and cash equivalents 4,599 4,599
Property, plant and equipment, net 454,197 454,197
Investment in non-consolidated
partnerships 28,577 12,245 (a) 40,822
Intangible assets, net 48,042 48,042
Deferred costs and other assets, net 21,402 21,402
-------- -------- --------
Total Assets $633,842 $12,245 $646,087
========= ========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 11,700 $ 11,700
Current portion of long-term debt 16,650 16,650
Account payable 8,472 8,472
Accrued income taxes 6,515 5,069 (b) 11,584
Accrued fuel 10,136 10,136
Accrued expenses and other current
liabilities 25,956 25,956
----------- --------- ---------
Total current liabilities 79,429 5,069 84,498
Long-term debt 352,643 352,643
Other liabilities 4,492 4,492
Deferred income taxes 39,126 39,126
---------- ----------- ----------
Total liabilities 475,690 5,069 480,759
Minority interests in subsidiaries 8,692 8,692
Stockholders' equity
Preferred stock - -
Common stock 124 124
Additional paid in capital 120,386 120,386
Retained earnings 37,212 7,176 (c) 44,388
Unearned compensation - restricted
stock (4,840) (4,840)
Accumulated other comprehensive loss (1,936) (1,936)
Treasury stock, at cost (1,486) (1,486)
--------- ---------- -------
Total stockholders' equity 149,460 7,176 156,636
--------- ----------- --------
- --
Total liabilities and
stockholders' equity $633,842 $ 12,245 $646,087
======== =========== =========
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
TRIGEN ENERGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 1998
(In Thousands, except per share data)
Consolidated Pro forma Pro forma Pro Forma
Trigen Adjustments Adjustmts Consolidated
<S> <C> <C> <C> <C>
Revenues
Thermal energy $ 182,432 $182,432
Electric energy 42,667 42,667
Equity in earnings of non-
Consolidated partnerships 4,475 2,549 (f) 7,024
Fees earned and other revenues 12,820 12,820
---------- ------ --------- ---------
Total revenues 242,394 - 2,549 244,943
Operating expenses
Fuel and consumables 95,957 95,957
Production and operating 53,840 53,840
Depreciation 19,780 19,780
General and administration 40,994 40,994
--------- -------- ---------- ----------
Total operating expenses 210,571 - - 210,571
-------- -------- --------- ----------
Operating income 31,823 - 2,549 34,372
Other income (expense)
Interest expense (23,742) (23,742)
Other income, net 5,570 12,245 (d) 17,815
--------- -------- ---------- ----------
Earnings before minority
interests, income taxes
and extraordinary item 13,651 12,245 2,549 28,445
Minority interests in earnings
of subsidiaries (2,519) (2,519)
--------- --------- --------- ---------
Earnings before income taxes
and extraordinary item 11,132 12,245 2,549 25,926
Income taxes 4,575 5,069 (e) 1,055 (g) 10,699
---------- -------- ------------ ---------
Earnings before extraordinary
item 6,557 7,176 1,494 15,227
Extraordinary loss from
extinguishment of debt,
net of income tax benefit (299) (299)
---------- --------- ----------- ---------
Net earnings $ 6,258 $7,176 $1,494 $14,928
=========== ========= =========== ==========
Basic earnings per common share
Before extraordinary item $ 0.55 $ 1.27
Extraordinary loss (0.03) (0.03)
----------- ---------
Net earnings $ 0.52 $ 1.24
----------- ----------
Diluted earnings per common
share
Before extraordinary item $ 0.55 $ 1.27
Extraordinary loss (0.03) (0.03)
----------- ---------
Net earnings $ 0.52 $ 1.24
----------- ----------
Average shares outstanding -
basic 12,007 12,007
------------- ----------
Average shares outstanding -
diluted 12,009 12,009
----------- ---------
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
TRIGEN ENERGY CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1999
(In Thousands, except per share data)
Consolidated Pro forma Pro Forma
Trigen Adjustments Consolidated
<S> <C> <C> <C>
Revenues
Thermal energy $70,685 $70,685
Electric energy 10,793 10,793
Equity in earnings of non-
Consolidated partnerships 146 204 (h) 350
Fees earned and other revenues 3,805 3,805
Total revenues 85,429 204 85,633
Operating expenses
Fuel and consumables 38,291 38,291
Production and operating 13,534 13,534
Depreciation 6,500 6,500
General and administration 10,219 10,219
-------- ------- --------
Total operating expenses 68,544 - 68,544
-------- ------- ---------
Operating income 16,885 204 17,089
Other income (expense)
Interest expense (6,280) (6,280)
Other income, net 358 358
------- ------- ----------
Earnings before minority interests,
income taxes and cumulative effect
of a change in an accounting principle 10,963 204 11,167
Minority interests in earnings of
subsidiaries (504) (504)
Earnings before income taxes and
cumulative effect of a change in an
accounting principle 10,459 204 10,663
Income taxes 4,330 84 (i) 4,414
-------- -------- ---------
Earnings before cumulative effect of a
change in an accounting principle 6,129 120 6,249
Cumulative effect of a change in an
accounting principle, net of income
tax benefit (4,903) (4,903)
--------- -------- ----------
Net earnings $1,226 $120 $ 1,346
========= ======== =========
Basic earnings per common share before
Cumulative effect of a change in an
accounting principle $ 0.51 $ 0.52
Cumulative effect of a change in an
accounting principle (0.41) (0.41)
--------- ----------
Net earnings $ 0.10 $ 0.11
--------- ----------
Diluted earnings per common share
before cumulative effect of a
change in an accounting principle $ 0.51 $ 0.52
Cumulative effect of a change in an
accounting principle (0.41) (0.41)
-------- --------
Net earnings $ 0.10 $ 0.11
-------- --------
Average shares outstanding - basic 12,004 12,004
-------- ----------
Average shares outstanding - diluted 12,005 12,005
--------- ----------
</TABLE>
See accompanying notes to Unaudited Pro Forma Consolidated Financial Statements
<PAGE>
Notes to Unaudited Pro Forma Consolidated Financial Statements
(a) Pro forma Balance Sheet adjustment of $12.2 million to increase investments
in non-consolidated partnerships to reflect the gain associated with the
settlement of the Partnership lawsuit. This pro forma gain represents the
fair value of one-half of Adwin's one-third investment in the Partnership
which Adwin surrendered to Trigen-Schuylkill under the terms of the settlement
agreement. We had previously stated that if the book value of that interest
approximated market value, the gain would have been $9.2 million.
(b) Pro forma Balance Sheet adjustment to reflect an increase of $5.1 million
in accrued tax liabilities for tax expense associated with the gain. The
income tax balance is based on the U.S. statutory rate of 35% plus state and
local income taxes.
(c) Pro forma Balance Sheet adjustment of $7.2 million to retained earnings to
reflect the net income effect of the gain.
(d) Pro forma Statement of Operations adjustment of $12.2 million to other
income, net, to reflect the gain associated with the settlement of the
Partnership lawsuit. This pro forma gain represents the fair value of one-
half of Adwin's one-third investment in the Partnership which Adwin
surrendered to Trigen-Schuylkill under the terms of the settlement agreement.
(e) Pro forma Statement of Operations adjustment to reflect a $5.1 million
accrued tax expense associated with the gain. The income tax expense is based
on the U.S. statutory rate of 35% plus state and local income taxes.
(f) Pro forma Statement of Operations adjustment to include incremental 1998
Partnership income of $2.5 million reflecting the 16.7% increase in ownership
percentage.
(g) Pro forma Statement of Operations adjustment to reflect tax expense of $1.1
million associated with the incremental 1998 partnership income. The income
tax expense is based on the U.S. statutory rate of 35% plus state and local
income taxes.
(h) Pro forma Statement of Operations adjustment to include incremental 1999
Partnership income of $.2 million reflecting the 16.7% increase in ownership
percentage.
(i) Pro forma Statement of Operations adjustment to reflect tax expense of $.1
million associated with the incremental 1999 partnership income. The income
tax expense is based on the U.S. statutory rate of 35% plus state and local
income taxes.
<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 hereunto duly authorized.
TRIGEN ENERGY CORPORATION
Date: July 2, 1999 By: /s/ Martin S. Stone
-------------------------
Martin S. Stone,
Vice President and
Chief Financial Officer
