-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TxIJ/mY4QeuF0L2IVX/Ld5yZ2rWeroTyK5Idi45aJ5jfTYyXv/wibRNaSKEZLsXO TkrenCwhQ4/NDtMuD7y/Yw== /in/edgar/work/0001060755-00-000017/0001060755-00-000017.txt : 20001115 0001060755-00-000017.hdr.sgml : 20001115 ACCESSION NUMBER: 0001060755-00-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIDGEWOOD ELECTRIC POWER TRUST V CENTRAL INDEX KEY: 0001060755 STANDARD INDUSTRIAL CLASSIFICATION: [4911 ] IRS NUMBER: 223437351 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24143 FILM NUMBER: 762558 BUSINESS ADDRESS: STREET 1: 947 LINWOOD AVE CITY: RIDGEWOOD STATE: NJ ZIP: 07450 BUSINESS PHONE: 2014479000 MAIL ADDRESS: STREET 1: 947 LINWOOD AVE CITY: RIDGEWOOD STATE: NJ ZIP: 07450-2939 10-Q 1 0001.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended September 30, 2000 Commission file Number 0-24143 RIDGEWOOD ELECTRIC POWER TRUST V (Exact name of registrant as specified in its charter.) Delaware 22-3437351 (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 [ ] PART I. - FINANCIAL INFORMATION Item 1. Financial Statements Ridgewood Electric Power Trust V Consolidated Financial Statements September 30, 2000 Ridgewood Electric Power Trust V Consolidated Balance Sheet - -------------------------------------------------------------------------------- September 30, December 31, 2000 1999 ------------ ------------ Assets: (unaudited) Cash and cash equivalents ..................... $ 2,026,120 $ 14,759,184 Due from affiliates ........................... 852,038 675,185 Other current assets .......................... 433,551 404,351 ------------ ------------ Total current assets ..................... 3,311,709 15,838,720 Investments: Maine Hydro Projects ...................... 5,142,875 5,663,505 Maine Biomass Projects .................... 5,529,722 5,825,271 MetaSound Systems ......................... 203,730 921,163 Quantum Conveyor .......................... 2,889,740 2,810,410 Santee River Rubber Project ............... -- 8,186,456 Egypt Projects ............................ 7,002,735 4,736,093 Mediterranean Fiber Optic Project/GFG ..... -- 1,497,670 United Kingdom Landfill Projects .......... 16,812,025 16,916,309 Synergics Hydro ........................... 5,369,995 -- ------------ ------------ Total assets ............................. $ 46,262,531 $ 62,395,597 ------------ ------------ Liabilities and shareholders' equity: Liabilities: Accounts payable and accrued expenses ......... $ 151,370 $ 174,857 Due to affiliates ............................. 19,519 449,178 ------------ ------------ Total current liabilities ................ 170,889 624,035 ------------ ------------ Minority interest ............................. 970,890 1,337,769 Commitments and contingencies Shareholders' equity: Shareholders' equity (932.8875 investor shares issued and outstanding) .............. 45,484,511 60,644,421 Subscription receivable ...................... (23,000) (23,000) ------------ ------------ Shareholders' equity, net ................ 45,461,511 60,621,421 Managing shareholder's accumulated deficit (1 management share issued and outstanding) ................ (340,759) (187,628) ------------ ------------ Total shareholders' equity ............... 45,120,752 60,433,793 ------------ ------------ Total liabilities and shareholders' equity $ 46,262,531 $ 62,395,597 ------------ ------------ See accompanying notes to financial statements. Ridgewood Electric Power Trust V Consolidated Statement of Operations (unaudited) - -------------------------------------------------------------------------------- Nine Months Ended Three Months Ended ------------------------ ---------------------- September 30, September 30, 2000 1999 2000 1999 ----------- --------- ---------- --------- Revenue: Interest income .............$ 361,101 $ 1,309,706 $ 38,580 $ 217,377 Income (loss) from Maine Hydro Projects ............. 279,370 459,874 (382,363) (194,787) Loss from Maine Biomass Projects ................... (295,549) (666,216) (125,453) (255,719) (Loss) income from Santee River Rubber Project ....... (361,042) 209,167 -- 79,562 Income (loss) from Quantum Conveyor ................... 79,330 (184,890) 173,883 (55,138) (Loss) from MetaSound Systems (717,434) (790,661) (150,992) (363,198) Income from Egypt Projects . 66,386 -- 4,774 -- Loss from Mediterranean Fiber Optic Project/GFG ......... (49,924) -- -- -- Income from United Kingdom Landfill Projects ......... 1,175,012 369,873 355,027 369,873 Income from Synergics Hydro 312,500 -- 187,500 -- ------------ ------------ ------------ ------------ Total revenue ........ 849,750 706,853 100,956 (202,030) ----------- ------------ ------------ ------------ Expenses: Due diligence costs ....... -- 178,988 -- 77,000 Accounting and legal fees . 188,641 61,632 36,088 7,363 Management fee ............ 1,674,301 1,857,274 583,056 593,752 Research and development .. 833,816 567,762 171,204 217,478 Miscellaneous ............. 185,965 85,374 164,449 -- Writedown of investment in Mediterranean Fiber Optic Project/GFG ........ 1,447,746 -- -- -- Writedown of investment in Santee River Rubber Project .................. 8,247,340 -- 8,247,340 -- ------------ ------------ ------------ ------------ Total expenses ........ 12,577,809 2,757,530 9,202,137 895,593 ----------- ------------ ------------ ------------ Loss from operations ........(11,728,059) (2,050,677) (9,101,181) (1,097,623) Minority interest in loss of subsidiary ...... 366,879 176,670 75,329 54,249 ----------- ------------ ------------ ------------ Net loss ...................$(11,361,180)$ (1,874,007)$ (9,025,852)$ (1,043,374) ------------ ------------ ------------ ------------ See accompanying notes to financial statements. Ridgewood Electric Power Trust V Consolidated Statement of Changes in Shareholders' Equity (unaudited) - -------------------------------------------------------------------------------- Subscription Managing Shareholders Receivable Shareholder Total ------------ --------- ----------- ----------- Shareholders' equity, December 31, 1999 ... $ 60,644,421 $(23,000) $ (187,628) $ 60,433,793 Cash distributions ... (2,645,839) -- (26,726) (2,672,565) Cumulative translation adjustment .......... (1,266,503) -- (12,793) (1,279,296) Net loss for the year (11,247,568) -- (113,612) (11,361,180) ------------ --------- ---------- ------------ Shareholders' equity, September 30, 2000 .. $ 45,484,511 $(23,000) (340,759) $ 45,120,752 ------------ --------- ---------- ------------ Ridgewood Electric Power Trust V Consolidated Statement of Comprehensive Loss (unaudited) - -------------------------------------------------------------------------------- Nine Month Ended Three Months Ended ---------------------------- ---------------------------- September 30, September 30, September 30, September 30, 2000 1999 2000 1999 ------------ ------------ ------------ ------------ Net loss .... $(11,361,180) $ (1,874,007) $ (9,025,852) $ (1,043,374) Cumulative translation adjustment . (1,279,296) -- (222,026) -- ------------ ------------ ------------ ------------ Comprehensive loss ....... $(12,640,476) $ (1,874,007) $ (9,247,878) $ (1,043,374) ------------ ------------ ------------ ------------ See accompanying notes to financial statements. Ridgewood Electric Power Trust V Consolidated Statement of Cash Flows (unaudited) - -------------------------------------------------------------------------------- Nine Months Ended ------------------------------- September 30, September 30, 2000 1999 ------------ ----------- Cash flows from operating activities: Net loss ...................................... $(11,361,180) $ (1,874,007) ------------ ------------ Adjustments to reconcile net income to net cash flows from operating activities: Income from Maine Hydro Projects ............. (279,370) (459,874) Loss from Maine Biomass Projects ............. 295,549 666,216 Loss from MetaSound Systems .................. 717,434 790,661 Loss (income) from Quantum Conveyor .......... (79,330) 184,890 Loss (income) from Santee River Rubber Project .............................. 361,042 (209,167) Income from Egypt Projects ................... (66,386) -- Loss from Mediterranean Fiber Optic Project/GFG ................................. 49,924 -- Income from United Kingdom Landfill Projects .................................... (1,175,012) (369,873) Income from Synergics Hydro .................. (312,500) -- Writedown of investment in Mediterranean Fiber Optic Project/GFG ....... 1,447,746 -- Writedown of investment in Santee River Rubber Project ........................ 8,247,340 -- Minority interest in loss of consolidated subsidiary ..................... (366,879) (176,670) Changes in assets and liabilities: (Increase) decrease in due from affiliates .. (176,853) 558,914 (Increase) decrease in other current assets . (29,200) 12,349 Increase in other assets .................... -- (123,873) Decrease in accounts payable and accrued expenses ....................... (23,487) (19,971) (Decrease) increase in due to affiliates .... (429,659) 1,407,048 ------------ ------------ Total adjustments ........................ 8,180,359 2,260,650 ------------ ------------ Net cash (used in) provided by operating activities ................................... (3,180,821) 386,643 ------------ ------------ Cash flows from investing activities: Loans to Maine Biomass Projects .............. -- (225,000) Investment in UK Landfill Projects ........... -- (16,374,162) Investment in MetaSound Systems .............. -- (53,412) Investment in Quantum Conveyor ............... -- (68,555) Investment in GFG/Med Fiber .................. -- (1,500,000) Investments in Egypt Projects ................ (2,200,256) (2,287,201) Investments in Synergics Hydro ............... (5,057,494) -- Investments in Santee River Rubber Project ... (421,928) -- Distributions from Maine Hydro Projects ...... 800,000 540,007 Distributions from Santee River Rubber Project -- 688,110 Deferred due diligence costs ................. -- (720,520) ------------ ------------ Net cash used in investing activities ......... (6,879,678) (20,000,733) ------------ ------------ Cash flows from financing activities: Proceeds from shareholders' contributions .... -- 128,250 Selling commissions and offering costs paid .. -- (12,150) Cash distributions to shareholders ........... (2,672,565) (2,955,799) ------------ ------------ Net cash used in financing activities ......... (2,672,565) (2,839,699) ------------ ------------ Net decrease in cash and cash equivalents .... (12,733,064) (22,453,789) Cash and cash equivalents, beginning of year . 14,759,184 42,832,241 ------------ ------------ Cash and cash equivalents, end of period ..... $ 2,026,120 $ 20,378,452 ------------ ------------ See accompanying notes to financial statements. Ridgewood Electric Power Trust V Notes to Consolidated Financial Statements (unaudited) 1. General In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments which consist of normal recurring adjustments, necessary for the fair presentation of the results for the interim periods. Additional footnote disclosure concerning accounting policies and other matters are disclosed in Ridgewood Electric Power Trust V's (the "Trust") consolidated financial statements included in the 1999 Annual Report on Form 10-K, which should be read in conjunction with these financial statements. 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. 2. Writedown of investment in Mediterranean Fiber Optic Project/GFG In September 1999, the Trust and The Ridgewood Power Growth Fund (the "Growth Fund") made a joint investment of $3,000,000 in Global Fiber Group ("GFG"), which was in the process of developing an underwater fiber optic cable in the Western Mediterranean (the "Mediterranean Fiber Optic Project"). The investment, which was funded equally by the Growth Fund and the Trust, provided for a 25% ownership interest in GFG and the right to invest in projects developed by GFG. In the first quarter of 2000, the Trust determined that GFG would probably not be able to develop the Mediterranean Fiber Optic Project or any other project. As a result, the Trust determined that it would be unlikely to recover its investment in GFG. As a result, the Trust recorded a writedown of $1,447,746 in the first quarter of 2000 to reduce the estimated fair value of the investment to zero. 3. Writedown of investment in Santee River Rubber Company As previously disclosed in the Trust's Annual Reports on Form 10-K and its most recent Quarterly Report on Form 10-Q, dated August 14, 2000, the Trust beneficially owns a 67% preferred membership interest in Santee River Rubber Company, LLC ("Santee River"), a South Carolina limited liability company. Santee River has constructed a used tire recycling plant located in Berkeley County, South Carolina, financed with $32 million of industrial revenue bonds. During the third quarter of 2000, Ridgewood Power (on behalf of the Trust and Trust IV), Environmental Processing Services, Inc. (the manager of the Santee River Project) and the holders of the Project's industrial revenue bonds attempted to negotiate a change in management and to refinance the Santee River Project. The negotiations failed and on October 26, 2000 Santee River Rubber Company filed for Chapter 11 bankruptcy in the U.S. District Court for South Carolina. On November 2, 2000, the U.S. Bankruptcy Court ordered that a trustee in bankruptcy be appointed to manage Santee River. As a result, the Trust determined that it would be unlikely to recover its investment in Santee River Rubber Company. As a result, the Trust recorded a writedown of $8,247,340 in the third quarter of 2000 to reduce the estimated fair value of the investment to zero. 4. Synergics, Inc. Acquisition Beginning in late 1999, Ridgewood Power LLC, the Managing Shareholder of the Trust, began negotiations to buy nine existing hydroelectric generating plants from Synergics, Inc. ("Synergics"). In the course of negotiations and due diligence, Ridgewood Power learned that one of Synergics' lenders had declared a payment default against Synergics and that the lender had agreed to discharge the debt at a substantial discount from the face amount if payment were made by the end of April 2000. In order to preserve the benefit of the lender's offer and to allow completion of the acquisition on favorable terms, the Trust and the Growth Fund, through a joint venture, acquired the debt from the lender on April 28, 2000 for a payment of $17 million to the lender. The debt remains in default, but the joint venture is not exercising its remedies against Synergics or the Synergics subsidiaries pending the proposed acquisition described below. The joint venture intends to acquire the Synergics hydroelectric generation business by forgiving the $17 million of outstanding debt and paying an additional $1 million to the shareholders of Synergics and paying up to an additional $1.7 million of Synergics' tax liabilities that might be incurred as a result of the sale of its assets. In addition, if a project lease for Synergics' Box Canyon, California hydroelectric plant is extended beyond the year 2010, the joint venture will pay the Synergics shareholders the lesser of $500,000 or one-half of the agreed present value derived from the lease extension. The structuring and closing of the acquisition is to be determined after a review of certain financial, contractual and tax considerations and termination of the Hart-Scott-Rodino Act antitrust waiting period. Until the acquisition closes, Synergics has agreed to retain all working capital for the account of the joint venture and to allow the joint venture to approve all operational decisions and expenditures. Synergics is cooperating closely with the joint venture in making operational decisions. However, although the joint venture currently intends to acquire the Synergics hydroelectric generation business as promptly as possible, neither the joint venture nor the Trust and the Growth Fund are obligated to acquire Synergics or any of its assets. Wayne L. Rogers, the president of Synergics, agreed to vote the stock of Synergics, Inc. beneficially owned by him (approximately 69% of the voting stock) in favor of a merger or other corporate reorganization as specified by the Trust and the Growth Fund that materially complies with the provisions outlined above. Although the joint venture now owns $17 million of the senior debt of Synergics, there is approximately $11.725 million of debt owed to Fleet Bank, N.A. The Trust and the Growth Fund are in discussions with Fleet Bank concerning the assumption of the Fleet debt in connection with the acquisition. The Trust supplied $5 million of the capital used by the joint venture to acquire the debt and the Growth Fund supplied the remaining $12 million. Any additional capital needed for the acquisition will be supplied to the joint venture by the Growth Fund. The Trust and the Growth Fund will own the joint venture in proportion to the capital each supplies and neither will have preferred rights over the other. Until the joint venture acquires the hydroelectric generation business, Synergics and the joint venture have agreed that the debt of Synergics will bear interest equal to the lesser of 15% or the cash flows generated by the hydroelectric generation business. For the two months ended June 30, 2000, the Trust recorded $125,000 of income related to the debt of Synergics. 5. Summary Results of Operations for Selected Investments Summary results of operations for the Maine Hydro Projects, which are accounted for under the equity method, were as follows: Nine Months Ended September 30, 2000 1999 ---- ---- Total revenue $ 3,082,000 $ 3,195,000 Depreciation and amortization 841,000 829,000 Net income 559,000 920,000 Summary results of operations for the Maine Biomass Projects, which are accounted for under the equity method, were as follows: Nine Months Ended September 30, 2000 1999 ---- ---- Total revenue $1,838,000 $ 925,000 Depreciation and amortization 177,000 136,000 Net loss (591,000) (1,332,000) Summary results of operations for the Santee River Rubber Project, which is accounted for under the equity method, were as follows. Information for Santee River Rubber for 2000 is only through June 30, 2000 because third quarter information is not available. See note 2 above. Nine Months Ended September 30, 2000 1999 Total revenue $ 601,000 $ --- Depreciation and amortization --- --- Net loss (2,166,000) (1,080,000) Summary results of operations for MetaSound Systems, which is accounted for under the equity method, were as follows: Nine Months Ended September 30, 2000 1999 Total revenue $ 825,000 $ 456,000 Net loss (3,510,000) (1,987,000) Summary results of operations for the Egypt Projects, which are accounted for under the equity method, were as follows: Nine Months Ended September 30, 2000 1999 Total revenue $ 1,169,000 $ --- Net income 179,000 --- Summary results of operations for the UK Landfill Gas Projects, which are accounted for under the equity method, were as follows: Nine Months Ended September 30, 2000 1999 ---- ---- Total revenue $ 4,172,000 $1,230,456 Net income 1,175,000 369,873 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Dollar amounts in this discussion are generally rounded to the nearest $1,000. Introduction The consolidated financial statements include only the accounts of the Trust and its majority owned subsidiary, Ridgewood WaterPure Corporation. The Trust uses the equity method of accounting for its investments in the Maine Hydro Projects, the Maine Biomass Projects, the United Kingdom Landfill Projects, Egypt Projects, Mediterranean Fiber Optic Project/GFG, the Santee River Rubber Project, Quantum Conveyors and MetaSound Systems, which are owned 50% or less by the Trust. Results of Operations In the third quarter of 2000, the Trust had total revenue of $101,000, an increase of $303,000 from a loss of $202,000 in the same period in 1999. For the first nine months of 2000, the Trust had total revenue of $850,000, an increase of $141,000 from total revenue of $709,000 in the same period in 1999. Interest income declined by $179,000 from $217,000 in the third quarter of 1999 to $39,000 in the third quarter of 2000 due to lower average cash balances. Interest income also declined by $949,000 from $1,309,000 in the first nine months of 1999 to $361,000 in the same period of 2000 due to the lower average cash balances. Equity income from the Maine Hydro Projects for the first nine months of 2000 of $279,000 was lower compared to $460,000 in the same period of 1999, a loss in the third quarter of 2000 of $382,000 was substantially higher than the third quarter 1999 loss of $195,000. Decreased overall revenues and higher maintenance and labor costs attributed to the shortfall. The equity loss from the shut-down Maine Biomass Projects decreased from $256,000 in the third quarter of 1999 ($666,000 for the first nine months of 1999) to $125,000 in the third quarter of 2000 ($295,000 for the first nine months of 2000) due to higher energy revenues and reduced maintenance costs. The Trust losses from its equity interest in the Santee River Rubber Project in 2000 ($361,000 for the first nine months and zero in the third quarter) compared to income in 1999 ($130,000 for the first nine months and $209,000 in the third quarter) because the project was under construction in 1999, but was fully staffed and undergoing testing in 2000. As discussed in Note 3 to the September 30, 2000 financial statements, the Trust recorded a $8,247,000 writedown of its investment in the Santee River Rubber Company. The Trust recorded losses from its equity interest in MetaSound Systems of $151,000 in the third quarter ($717,000 in the first nine months) of 2000 compared to $363,000 in the third quarter ($791,000 in the first nine months) of 1999. The loss is a result of the increased operating expenses incurred by MetaSound. The Trust recorded income from its equity interest in Quantum Conveyors of $174,000 in the third quarter ($79,000 in the first nine months) of 2000 compared to a $55,000 loss in the third quarter ($185,000 loss in the first nine months) of 1999. The increase is a result of Quantum Conveyors' program of reducing expenditures due to its poor financial condition. The Trust recorded income of $355,000 and $1,175,000 in the third quarter and first nine months of 2000 respectively, from the United Kingdom Landfill Projects. The Trust acquired the projects at the end of the second quarter of 1999 and third quarter 1999 income was $369,000. The Trust recorded income of $5,000 and $66,000 in the third quarter and first nine months of 2000 respectively, equal to its share of income from the Egyptian Projects. The first Egyptian Projects began operation in the first quarter of 2000. In the third quarter of 2000, the Trust recorded income of $188,000 from its Synergics, Inc. investment which was acquired in April 2000. The acquisition of the Synergics investment is discussed in Note 3 to the June 30, 2000 financial statements As discussed in Note 2 to the September 30, 2000 financial statements, the Trust recorded a $1,447,746 writedown of its investment in Mediterranean Fiber Optic Project/GFG in the first quarter of 2000. In the third quarter of 2000, the most significant expense was the management fee of $583,000 ($1,674,000 in the first nine months of 2000), which is comparable to the $594,000 charged in the third quarter of 1999 ($1,857,000 in the first nine months of 1999). In the third quarter of 2000, the Trust's Ridgewood WaterPure subsidiary incurred $171,000 ($834,000 in the first nine months of 2000) of research and development costs related to its water distillation technology, a decrease over the $208,000 incurred in the third quarter of 1999 (an increase from the $563,000 in the first nine months of 1999). The nine month increase in cost reflects the more intensive development programs at WaterPure, which was acquired in December 1998. Liquidity and Capital Resources In 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 $1,150,000. 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. There have been no borrowings under the line of credit in 2000. Other than investments of available cash in power generation Projects, obligations of the Trust are generally limited to payment of Project operating expenses, payment of a management fee to the Managing Shareholder, payments for certain accounting and legal services to third persons 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, during 2000 and 2001, its cash flow from operations, unexpended offering proceeds, cash held at unconsolidated subsidiaries and the line of credit facility will be adequate to fund its obligations and the current level of distributions. The Trust expects that its reported cash flow from operations and investments will be positive in the fourth quarter of 2000 and in 2001. Forward-looking statement advisory This Quarterly Report on Form 10-Q, as with some other statements made by the Trust from time to time, contains 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. PART II - OTHER INFORMATION Item 1. Legal Proceedings Indeck Maine On June 2, 2000, Indeck Maine Energy LLC, the owner of the Maine Biomass Projects, brought a complaint before the Federal Energy Regulatory Commission (Docket No. EL00-80-000) requesting FERC to remove bid restrictions imposed on Indeck by ISO-New England, Inc., the operator of the New England Power Pool. Those restrictions capped the price that the ISO would pay for Indeck's electric power output at approximately $810 per megawatt-hour, substantially less than Indeck's own bids. The complaint also challenged the ISO's authority to impose those restrictions. On July 26, 2000 FERC ordered the ISO "to remove the bid restrictions previously imposed on Indeck." FERC found that the ISO had not provided any evidence to support its conclusion that the Indeck power bids materially affected the markets. That conclusion was a necessary condition for imposing the restrictions. Because of their cost structure, the Maine Biomass Projects currently run only during power shortages in the summer and occasionally at other times when transmission constraints or local problems require their use. Thus the lifting of the bid restrictions will not result in revenue increases unless a power shortage or similar situation occurs in the future. The Trust does not expect any such situation to occur during the rest of 2000, although the weather in particular is unpredictable. The FERC order does not expressly lift the bid restrictions for earlier dates in 2000 and certain dates in 1999 on which the Projects sold power to the ISO and there is some language in the order that could be read to say that FERC did not invalidate the prior bid restrictions. The Trust believes that the order clearly rejected the reasons given by the ISO for capping Indeck's prices on most of those dates and also discredited the ISO's decision to impose caps retroactively for the 1999 dates. The Trust intends to bring additional complaints at FERC to clarify the order, to rescind the price caps for those prior dates on which the Projects sold power and to recover additional compensation for those sales based on the prices that Indeck had submitted. Until such proceedings are resolved favorably to Indeck or unless a settlement with the ISO results, the Trust will receive no additional revenue from the ISO for those prior dates. Indeck filed a Motion for Clarification, or Alternatively, Rehearing before FERC, requesting that FERC confirm that the ISO's May 2000 price caps were void and that Indeck is entitled to payment for those days. In addition, the ISO has escrowed approximately $287,000 of Indeck's revenues, based on the ISO's assertion that an overpayment was made for a price-capped event in October 1999. The Trust expects to bring an additional proceeding in the appropriate forum to recover the escrowed amount and to invalidate the caps. Indeck took action to recover payment for its operations at ISO-NE's request during October 1999 which were not addressed in the FERC order. On October 24, 2000, Indeck filed a complaint in the Superior Court of the State of Delaware against the IS0-New England, Inc. to recover from the ISO up to $27 million for electric power supplied to ISO-NE in October 1999 and for other costs incurred. No answer has yet been filed. Santee River Rubber Company As disclosed at Note 2 to the Consolidated Financial Statements, a Chapter 11 voluntary bankruptcy proceeding against Santee River Rubber Company was brought in the U.S. Bankruptcy Court for the District of South Carolina at Charleston on October 25, 2000. Currently, only Santee River Rubber Company is a party to the proceedings. Santee River Rubber Company is insolvent and requires reorganization and additional capital if it is to resume operation. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits --------- None (b) Reports on Form 8-K 1) A current report on Form 8-K was filed with the Securities and Exchange Commission on October 31, 2000 in connection with the Santee River Rubber Company ("Santee River") filing a petition in bankruptcy in the United States Bankruptcy Court for the District of South Carolina on October 26, 2000. 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 V Registrant November 13, 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) EX-27 2 0002.txt ARTICLE 5 FIN. DATA SCHEDULE FOR 3RD QTR. 10-Q
5 This schedule contains summary financial information extracted from the Registrant's unaudited interim financial statements for the nine month period ended September 30, 2000 and is qualified in its entirety by reference to those financial statements. 0001060755 RIDGEWOOD ELECTRIC POWER TRUST V 9-MOS DEC-31-2000 SEP-30-2000 2,026,120 42,950,822 0 0 0 3,311,709 0 0 46,262,531 170,889 0 0 0 0 45,120,752 46,262,531 0 849,750 0 0 12,577,809 0 0 (11,361,180) 0 (11,361,180) 0 0 0 (11,361,180) (12,179) (12,179) Investment in power project partnership and limited liability company accounted for on equity basis. Includes $852,038 due from affiliates. Shareholders' equity of $45,461,511 less managing share- holders' accumulated deficit of $340,759. After addition of minority interest in Ridgewood WaterPure Corporation loss of $366,879.
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