SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q/A
AMENDMENT NO. 1
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File No. 1-13264
TRIGEN ENERGY CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-3378939
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
One Water Street
White Plains, New York 10601-1009
(Address of principal executive offices) (Zip Code)
(914) 286-6600
(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
----- -----
There were 12,407,102 shares of the Registrant's Common Stock outstanding as of
November 5, 1999.
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
INDEX TO FORM 10-Q/A
Quarter Ended September 30, 1999
Page
Part I - Financial Information:
Item 1. Financial Statements 4
Note 6. Legal Proceedings 8
Signatures: 16
Disclosure Regarding Forward-Looking Statements
This report includes historical information as well as statements regarding our
future expectations. The statements regarding the future (referred to as
"forward-looking statements") include among other things, statements about
future energy markets, cost reduction targets, return on capital goals,
development, production and acceptance of new products and process technologies,
ongoing and planned capacity additions and expansions and joint ventures.
Important factors that could cause actual results to differ materially from
those discussed in such forward-looking statements include: supply/demand for
our products, competitive pricing pressures, weather patterns, changes in
industry laws and regulations, competitive technology, failure to achieve our
cost reduction targets or complete construction projects on schedule and Year
2000 computer related difficulties. We believe in good faith that the forward-
looking statements in this report have a reasonable basis, including without
limitation, management's examination of historical operating trends, data
contained in our records and other data available from third parties, but such
forward-looking statements are not guarantees of future performance and actual
results may differ materially from any results expressed or implied by such
forward-looking statements.
<PAGE>
EXPLANATORY NOTE
We are filing this amended report on Form 10-Q/A to amend Note 6 Legal
Proceedings of Trigen Energy Corporation and Subsidiaries Notes to
Consolidated Financial Statements (unaudited) included in Part I- Financial
Information, Item 1, Financial Information of our Quarterly Report on Form 10-
Q dated November 12, 1999.
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
<TABLE>
<CAPTION>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Nine Months Ended September 30, 1999 and 1998
Unaudited
(In thousands, except per share data)
Three Months Nine Months
------------ -----------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Thermal energy.................... $40,724 $35,300 $153,700 $132,578
Electric energy.................. 11,065 11,001 32,704 31,210
Equity in earnings of non-consolidated
partnerships 2,725 1,598 6,749 3,624
Fees earned and other revenues 3,223 2,940 10,899 9,133
------ ------- ------- -------
Total revenues 57,737 50,839 204,052 176,545
------ ------- ------- -------
Operating Expenses
Fuel and consumables 23,279 21,316 84,860 74,012
Production and operating costs 12,476 12,017 39,783 36,068
Depreciation and amortization 5,863 5,839 18,312 17,401
General and administrative 10,123 8,466 30,588 27,785
------- ------ ------- -------
Total operating expenses 51,741 47,638 173,543 155,266
------- ------ ------- -------
Operating income 5,996 3,201 30,509 21,279
Other income (expense)
Interest expense (6,423) (6,046) (18,829) (17,613)
Other income, net 50 332 15,397 4,931
------ ------ ------- -------
Earnings (losses) before minority
interests, income taxes, extraordinary
item, and cumulative effect of a change
in an accounting principle (377) (2,513) 27,077 8,597
Minority interests in earnings of
subsidiaries 1,350 799 2,390 2,374
------ ------ ------- ------
Earnings (losses) before income taxes,
extraordinary item and cumulative
effect of a change in an accounting
principle (1,727) (3,312) 24,687 6,223
Income taxes ( 715) (1,424) 10,220 2,676
------ ------ ------- ------
Earnings (losses) before extraordinary
item and cumulative effect of
a change in an accounting principle (1,012) (1,888) 14,467 3,547
Extraordinary loss from extinguishment
of debt, net of tax benefit - - - - - - (299)
Cumulative effect of change in an
accounting principle, net of tax benefit - - - - (4,903) - -
------- ------
Net earnings (losses) $ (1,012) $(1,888) $ 9,564 $ 3,248
======== ======== ======== =======
Basic earnings per common share
Before extraordinary item and
cumulative effect of a change
in an accounting principle $ (.09) $ (.15) $ 1.20 $ .30
Extraordinary loss - - - - - - (.03)
Cumulative effect of change in an
accounting principle - - - - (.41) - -
--------- ------- ---------- --------
Net earnings (losses) $ (.09) $ (.15) $ .79 $ .27
========= ======= ========== ========
Diluted earnings per common share
Before extraordinary item and cumulative
effect of a change in an accounting
principle $ (.09) $ (.15) $ 1.20 $ .30
Extraordinary loss - - - - - - (.03)
Cumulative effect of change in an
accounting principle _ - - - - (.41) - -
--------- ------- --------- -------
Net earnings (losses) $ (.09) $ (.15) $ .79 $ .27
========= ======= ========= =======
Average shares outstanding - basic 12,051 11,999 12,038 12,010
--------- ------- --------- --------
Average shares outstanding - diluted 12,219 11,999 12,087 12,011
-------- ------- --------- --------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Unaudited
(In thousands, except share data)
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 21,544 $ 10,074
Accounts receivable
Trade (less allowance for doubtful
accounts of $1,460 in 1999 and
$1,278 in 1998) 34,791 35,236
Other 9,593 5,686
------- -------
Total accounts receivable 44,384 40,922
Inventories 7,613 7,074
Prepaid expenses and other current assets 8,350 8,016
Total current assets 81,891 66,086
Restricted cash and cash equivalents 4,552 4,623
Property, plant and equipment, net 484,768 442,755
Investment in non-consolidated partnerships 47,550 30,319
Intangible assets, net 46,749 49,968
Deferred costs and other assets, net 29,847 24,405
------- -------
Total assets $695,357 $618,156
======= =======
Liabilities and Stockholders' Equity
Current liabilities
Short-term debt $ 11,700 $ 15,000
Current portion of long-term debt 17,054 16,398
Accounts payable 8,067 4,756
Accrued income taxes 4,581 5,728
Accrued fuel 9,495 14,121
Accrued expenses and other current
liabilities 26,758 19,626
-------- -------
Total current liabilities 77,655 75,629
Long-term debt 396,614 343,685
Other liabilities 4,132 4,254
Deferred income taxes 43,701 39,422
-------- --------
Total liabilities 522,102 462,990
Minority interests in subsidiaries 14,685 7,238
Stockholders' equity
Preferred stock-$.01 par value,
authorized and unissued
15,000,000 shares - -
Common stock-$.01 par value, authorized
60,000,000 shares, issued 12,417,934
shares in 1999 and 1998 124 124
Additional paid-in capital 120,242 120,595
Retained earnings 44,683 36,417
Unearned compensation - restricted stock (4,592) (4,967)
Accumulated other comprehensive loss (1,254) (2,002)
Treasury stock, at cost, 41,285 shares
in 1999 and 145,842 shares in 1998 (633) (2,239)
-------- --------
Total stockholders' equity 158,570 147,928
-------- --------
Total liabilities and stockholders' equity $695,357 $618,156
======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 1999 and 1998
Unaudited
(In thousands)
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities
Net earnings $ 9,564 $ 3,248
Reconciliation of net earnings to cash
provided by operating activities
Non-cash after-tax gain on litigation
settlement ( 8,518) - -
Extraordinary item - - 299
Cumulative effect of a change in an
accounting principle 4,903 - -
Depreciation and amortization 18,312 17,401
Deferred income taxes 4,279 199
Provision for doubtful accounts 379 339
Minority interests in subsidiaries 2,390 2,374
Changes in assets and liabilities
Accounts receivable (3,290) 13,257
Inventories and other current assets (873) 187
Accounts payable and other current
liabilities 2,671 ( 6,170)
Non-current assets and liabilities (2,874) ( 2,171)
------- --------
Net cash provided by operating activities 26,943 28,963
-------- --------
Cash flows from investing activities
Acquisition of energy facilities (5,903) (65,350)
Investments in non-consolidated
partnerships (278) (979)
Purchase of marketable securities (1,013) --
Capital expenditures (56,530) (28,709)
-------- --------
Net cash used in investing activities (63,724) (95,038)
-------- --------
Cash flows from financing activities
Short-term debt, net (3,300) (3,850)
Proceeds of long-term debt 67,950 110,100
Payments of long-term debt (15,136) (32,123)
Dividends paid (1,297) (1,293)
Purchase of treasury stock (38) (608)
Distribution to minority interests - - (2,089)
-------- --------
Net cash provided by financing
activities 48,179 70,137
------- --------
Cash and cash equivalents
Increase 11,398 4,062
At beginning of period 14,698 13,693
------- -------
At end of period $26,096 $17,755
======== =======
Current $21,544 $13,108
Restricted 4,552 4,647
------- -------
At end of period $26,096 $17,755
======= =======
Supplemental disclosure of cash flow information
Cash paid during the period for
Interest $17,543 $10,606
------- -------
Income taxes 5,708 1,629
------- -------
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
Trigen Energy Corporation and its subsidiaries ("we"), develop, own and operate
commercial and industrial energy systems in the United States, Canada and
Mexico. We use our expertise in thermal engineering and proprietary
cogeneration processes to convert fuel to various forms of thermal energy and
electricity. We combine heat and power generation, producing electricity as
a by-product, for use in our facilities and for sale to customers.
The consolidated financial statements of Trigen Energy Corporation and its
subsidiaries 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
September 30, 1999 and December 31, 1998, and the results of operations for the
three and nine months ended September 30, 1999 and 1998 and the cash flows
for the nine months ended September 30, 1999 and 1998. The results of
operations for the three and nine month periods ended September 30, 1999 and
cash flows for the nine month period ended September 30, 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 consolidated
financial statements and notes thereto for the year ended December 31, 1998
included in our Annual Report on Form 10-K for the year ended December 31, 1998.
Certain reclassifications have been made to the 1998 financial statements to
conform to the 1999 presentation.
2. Recent Accounting Pronouncements
In September 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging
activities. In July 1999, SFAS No. 137 was issued, which deferred the
effective date of SFAS No. 133. We will adopt SFAS No. 133 effective January
1, 2001. Based on preliminary analysis, we do not expect the future adoption of
SFAS No. 133 to have a material effect on results of operations and financial
condition.
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. Supplementary Income Information
Included in other income, net for the nine months ended September 30, 1999 is
a pre-tax gain of $14.5 million related to the Grays Ferry Cogeneration
Partnership litigation settlement agreement. The gain represents the market
value of the share of the Partnership that we received as part of this
settlement. (See Note 6- Legal Proceedings). Included in other income, net
for the nine months ended September 30, 1998 were gains of $2.1 million from
the sale of nitrogen oxide emission allowances and $1.7 million from an
insurance settlement.
4. Cumulative Effect of a Change in an Accounting Principle
Effective January 1, 1999, we 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 $4.9 million, net of a tax
benefit of $3.5 million, to expense deferred organizational and start-up
costs as a cumulative effect of a change in an accounting principle.
5. Extraordinary Item
We incurred an extraordinary charge of $.3 million, net of a tax benefit of
$.2 million, in the nine months ended September 30, 1998 in connection with the
early retirement of debt.
6. Legal Proceedings
Oklahoma Litigation
In September 1996, our subsidiary, Trigen-Oklahoma City Energy Corporation
("Trigen-Oklahoma City"), commenced an antitrust action in Federal District
Court in Oklahoma City seeking injunctions and actual, treble and punitive
damages from a local utility, Oklahoma Gas and Electric Company ("OG&E"),
based on alleged anti-competitive actions against Trigen-Oklahoma City Energy
Corporation by OG&E. Trigen-Oklahoma City's antitrust action went
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
to trial in 1998 and on December 21, 1998, the jury returned a verdict in favor
of Trigen. On January 19, 1999, the Court entered a judgment in favor of Trigen
in the amount of $27.8 million. On January 25, 2000 the court decided post-
trial motions to vacate or modify the judgment reducing the judgment to $20.6
million. OG&E has filed an appeal to the Tenth Circuit Court of Appeals and
has posted a bond in order to stay enforcement of the judgment pending
appeal. Trigen has filed a cross-appeal. Trigen's separate motion for
attorney's fees (seeking approximately $3 million) is pending but OG&E has
requested that the court postpone a hearing on that motion until the appeals are
decided by the Circuit Court. We have not recognized any gain with respect to
this matter because we cannot predict the final outcome.
Kinetic Energy Litigation
On May 2, 1997, a judgment was entered against us in the amount of $4.3 million
following a jury trial in a law suit by Kinetic Energy Development Corporation
against Trigen in the Circuit Court of Jackson County, Missouri, in connection
with our acquisition of the Kansas City steam system. Kinetic claimed for
compensation alleged to be owed to it by Trigen in connection with that
acquisition. On August 6, 1997, the Court set aside the jury verdict and
granted judgment for Trigen. Kinetic Energy Development Corporation appealed
that order and on December 8, 1998, the Missouri Court of Appeals set aside
the lower court decision and ordered a new trial. On December 22, 1998, we
filed a motion for rehearing with the Missouri Court of Appeals and/or a review
by the Missouri Supreme Court. The Court of Appeals granted our motion for
rehearing. On September 7, 1999, the Court of Appeals held that Kinetic had
proven only nominal damages at trial and returned the case to Circuit Court
for retrial. The retrial will allow Kinetic to attempt to establish that it
is entitled to some award for the reasonable value of its services, if any,
in connection with the Trigen acquisition of the Kansas City steam system. The
case presently awaits rescheduling for trial. We believe we have good defenses
to these claims. Accordingly, we have not recognized any loss or expense (other
than defense costs) with respect to this matter, although we cannot predict the
final outcome.
Grays Ferry Litigation
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. and CogenAmerica Schuylkill Inc. against PECO Energy Company
and Adwin (Schuylkill) Cogeneration, Inc. The Partnership is
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
the owner of the Grays Ferry Cogeneration Facility located in Philadelphia,
Pennsylvania. The Partnership, Trigen-Schuylkill and CogenAmerica 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").
Prior to the settlement, we owned a one-third interest in the Partnership
through our wholly owned subsidiary, Trigen-Schuylkill. CogenAmerica and Adwin
owned the other two-thirds interests in the Partnership. Adwin is an indirect
wholly owned subsidiary of PECO. 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 CogenAmerica. As a result, we own one half of the Partnership and
CogenAmerica owns the other half. During 1999, we recognized an after tax gain
of $8.5 million ($.70 per diluted share) which represents the market value of
our share of Adwin's interest.
In the year 2001, the energy price under the Power Purchase Agreements will be
based upon a percentage of a market based index, which we expect to produce
substantially lower revenues from sales to PECO than the more favorable rates of
the early contract years. Under the Settlement the Partnership gained the right
to sell to third parties electric energy and capacity from the facility in
excess of the 150 megawatts which PECO is required to purchase under the
Power Purchase Agreements, subject to a right of first refusal for PECO. We
expect that the ability to sell to third parties electric energy and capacity
above the 150 megawatts under contract to PECO, will result in an opportunity to
improve the financial performance of the Partnership. The Partnership will now
have the ability to institute capital modifications to the combustion turbine to
increase electric capacity during the summer months when the price of electric
capacity and energy are historically the highest.
Separately, The Chase Manhattan Bank, as agent for several commercial banks
(collectively "Chase"), and Westinghouse Power Generation, which collectively
financed the construction of the Gray's Ferry Cogeneration Facility, agreed to
dismiss their lawsuits against PECO. Chase and Westinghouse also agreed that
they will not charge the Partnership for any default interest up to April 16,
1999, although they have reserved the right to do so with respect to the
period after April 16, 1999.
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The Partnership is in default under its separate credit agreements with
Westinghouse and Chase for the following reasons. The Partnership did not
convert on time its short-term construction loan from Chase to a longer term
loan. The Partnership could not complete that conversion because of a
dispute with the construction contractor, which has now been resolved. The
Partnership also did not make principal payments to Westinghouse because the
Chase loan agreement prohibits such payments to subordinate parties while the
Partnership is in default. Westinghouse is a subordinate party.
The Partnership owes a total principal amount of approximately $79.4 million
to Chase. Chase has not accelerated the debt owing under the Credit Agreement.
Chase has required to date, and may require in the future, the Partnership to
apply available cash held by Partnership (net of operating expenses) toward
repayment of the principal amount of the loans outstanding to Chase. The
Partnership owes a total principal amount of approximately $15 million to
Westinghouse. On March 1, 2000, Westinghouse demanded full payment of the
amount owing to Westinghouse under its credit agreement. Only the
Partnership assets and the Partners' ownership interests in the Partnership
secure the Partnership's debt under the Chase and Westinghouse loans.
To resolve these matters we have negotiated an amendment to the credit
agreement with Chase and we are negotiating with Westinghouse and other
subordinate parties. The Partnership has accrued $3.0 million in default
interest since April 16, 1999.
Nassau Litigation
On May 29, 1998, the County of Nassau, New York commenced an action against
Trigen Energy Corporation and Trigen-Nassau Energy Corporation in New York State
Supreme Court. Trigen-Nassau provides energy services to Nassau County under
various agreements. Nassau County alleges that Trigen-Nassau breached those
agreements by, among other means, charging the County for certain real estate
taxes that the County contends are Trigen-Nassau's responsibility. On
October 8, 1998, the Court dismissed the claims against Trigen Energy
Corporation. On November 9, 1998, Trigen-Nassau filed counterclaims against
Nassau County, seeking $1.6 million in damages. Trigen-Nassau alleges that
Nassau County breached the parties' agreements by, among other things, failing
to operate and maintain certain facilities and equipment. On January 21, 1999,
the County requested that the Court dismiss Trigen-Nassau's
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
counterclaims. On April 5, 1999, the Court dismissed some but not all of
Trigen-Nassau's counterclaims. The Court declined to dismiss Trigen-Nassau's
counterclaims that seek approximately $1.5 million in damages. The County is
seeking approximately $10 million in damages. We believe we have good
defenses to the County's claims. Accordingly, we have not recognized any
loss or expense (other than defense costs) with respect to this matter,
although we cannot predict the final outcome.
ESI Litigation
In 1996 ESI, Inc. commenced an action against, among others, Coastal Power
Company, Latin American Energy Development, Inc. and La Casa Castro S.A. de N.V.
in the United States District Court for the Southern District of New York. On
September 17, 1998, ESI, Inc. amended its complaint naming Trigen as an
additional defendant. This action arises out of the development by Trigen,
Latin American Energy, La Casa Castro and others, of an independent power
project in El Salvador between 1993 and 1994. Trigen transferred its
interest in the project to Tenneco Gas International in May 1994. In July 1994,
Tenneco transferred its interest in the project to Coastal Power Company, which
currently owns and operates the project. ESI claimed that ESI was entitled to a
2.5% interest in the project and that Coastal had wrongfully withheld or
denied ESI's interest. ESI further claimed that Trigen had failed to
disclose ESI's interest to Tenneco and so was responsible, in whole or in
part, for ESI's failure to receive a 2.5% interest in the project from Coastal.
On October 8, 1998, Latin American Energy asserted cross-claims against
Trigen, Coastal and Tenneco claiming that it too had been denied its carried
interest in the Project. On October 28, 1998, La Casa Castro asserted cross-
claims against Trigen and on November 6, 1998, Coastal asserted cross-claims
against Trigen for indemnification, each alleged that Trigen failed to
disclose ESI's claimed interest to Tenneco and that Trigen was responsible
for any damages that each may be required to pay to ESI and Latin American.
On December 15, 1998, Trigen filed an amended answer denying liability for
these claims and cross-claimed against Latin American Energy, Tenneco, Coastal
and La Casa Castro, asserting that these parties were responsible for any
damages owed to ESI and Latin American. On December 23, 1998, ESI and Latin
American dismissed without prejudice their claims against Trigen.
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Coastal and La Casa Castro are continuing to assert their claims against
Trigen for any damages they may be required to pay to ESI or Latin American.
At this time, the case is in the early stages of discovery and as such we are
not able to estimate the amount of damages that ESI and Latin American are
seeking. We believe we have good defenses to Coastal's claims and La Casa
Castro's claims. Accordingly, we have not recognized any loss or expense
(other than defense costs) with respect to this matter, although we cannot
predict the final outcome.
Shareholder Class Actions against Trigen
Complaints of Fothergill, Cortez, and Berkowitz.
On September 23, 1999, three complaints were filed in the Court of Chancery of
the State of Delaware against: Trigen Energy Corporation, Suez Lyonnaise Des
Eaux SA, Patrick Buffet, George F. Keane, Thomas R. Casten, Philippe Brongniart,
Olivier Degos, Patrick Desnos, Richard E. Kessel, Charles E. Bayless, Michel
Bleitrach, Dominique Mangin D'Ouince and Michel Cassou. The individual
defendants were sued in their capacity as Trigen directors and/or former
Trigen directors. The complaints were filed, respectively, by Michael
Fothergill, Rosa Cortez and Sarah Berkowitz. Each complaint was filed
purportedly as a class action on behalf of the Company's shareholders. The
complaints raised substantially identical allegations: that Trigen received a
proposal from Suez to take Trigen private for $22.00 per share in cash. The
plaintiffs alleged that this price does not represent the true value of
Trigen and is unfair to the minority shareholders. Plaintiffs further
alleged that because Suez owns approximately 52% of Trigen's outstanding
shares, Suez has the power to effectuate the transaction without regard to the
minority shareholders. Plaintiffs sought class certification, declaratory and
injunctive relief (or money damages if the transaction is consummated), and an
accounting. By agreement of the parties, an order has been entered
consolidating all three actions under the Fothergill caption.
On February 22, 2000, counsel for ELYO and the plaintiffs reached an agreement
to settle this lawsuit, subject to court approval. The settlement does not
require any payment to the plaintiffs from the Company or its directors.
Accordingly, we have not recognized any loss or expense (other than defense
costs and certain costs of providing Notice of settlement to the Class
members) with respect to this matter, although we cannot predict the final
outcome. The
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
parties are in the process of submitting this settlement to the Court of
Chancery of the State of Delaware for approval.
Complaint of Rice.
On March 16, 2000, Adam Rice filed a complaint in the Supreme Court of the
State of New York, County of Westchester against Trigen Energy Corporation, Suez
Lyonnaise Des Eaux S.A., Elyo, S.A., T Acquisition Corporation, Christine Morin-
Postel, Richard E. Kessel, George Keane, Patrick Buffet, Olivier Degos, Philippe
Brongniart, Michel Bleitrach, Dominique Mangin D'Ouince and Charles Bayless.
The complaint was filed purportedly as a class action on behalf of the
Company's shareholders. The individual defendants were sued in their
capacity as Trigen directors. The plaintiff alleged that the defendants have
breached their fiduciary duties to plaintiff and our public shareholders by not
renegotiating and/or reformulating the terms of the tender offer by which T
Acquisition Corporation has offered to purchase all of our outstanding shares at
a price of $23.50 per share. Plaintiff seeks class certification and money
damages as well as other unspecified relief. We believe we have good
defenses to these claims. Accordingly, we have not recognized any loss or
expense (other than defense costs) with respect to this matter, although we
cannot predict the final outcome.
Other Litigation
We are subject from time to time to various other claims that arise in the
normal course of business, and we believe that the outcome of these matters
(either individually or in the aggregate) will not have a material adverse
effect on our business results of operation or financial condition.
<PAGE>
TRIGEN ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
7. Comprehensive Income
Effective January 1, 1998, we adopted Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income". This statement requires
disclosure of all items recognized under accounting standards as components
of comprehensive income. Following are the components of comprehensive
income for the three months and nine months ended September 30, 1999 and
1998 (in thousands).
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ------------------
1999 1998 1999 1998
Net earnings (losses) $ (1,012) (1,888) $ 9,564 $3,248
Other comprehensive income
Cumulative foreign currency
translation adjustment 315 36 748 55
-------- -------- --------- -------
Comprehensive income (loss) $ (697) $ (1,852) $10,312 $3,303
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<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.
TRIGEN ENERGY CORPORATION
By: /s/ Martin S. Stone
-----------------------------
Martin S. Stone
Vice President Finance &
Chief Financial Officer
Date: March 21, 2000
