-----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, OQJw0Wb6sC36kq8/tt0dQFoKmkWBgkm16Ez/ppe3COn56HTVYsAC9mzc40tHZZnG hsOLHuEJpDHAWDzIxvvnFA== 0001088866-03-000018.txt : 20030513 0001088866-03-000018.hdr.sgml : 20030513 20030513164355 ACCESSION NUMBER: 0001088866-03-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030513 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAITHNESS COSO FUNDING CORP CENTRAL INDEX KEY: 0001088866 STANDARD INDUSTRIAL CLASSIFICATION: STEAM & AIR CONDITIONING SUPPLY [4961] IRS NUMBER: 943328762 STATE OF INCORPORATION: DE FISCAL YEAR END: 0923 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-83815 FILM NUMBER: 03696047 BUSINESS ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 565 FIFTH AVENUE, 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017-2478 BUSINESS PHONE: 2129219099 MAIL ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 565 FIFTH AVENUE, 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017-2478 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COSO ENERGY DEVELOPERS CENTRAL INDEX KEY: 0001088869 STANDARD INDUSTRIAL CLASSIFICATION: STEAM & AIR CONDITIONING SUPPLY [4961] IRS NUMBER: 943071296 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-83815-01 FILM NUMBER: 03696050 BUSINESS ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 1114 AVENUE OF THE AMERICAS 41ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10036-7790 BUSINESS PHONE: 2129219099 MAIL ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 1114 AVENUE OF THE AMERICAS 41ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10036-7790 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COSO FINANCE PARTNERS CENTRAL INDEX KEY: 0001088870 STANDARD INDUSTRIAL CLASSIFICATION: STEAM & AIR CONDITIONING SUPPLY [4961] IRS NUMBER: 580133679 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-83815-02 FILM NUMBER: 03696049 BUSINESS ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 1114 AVENUE OF THE AMERICAS 41ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10036-7790 BUSINESS PHONE: 2129219099 MAIL ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 1114 AVENUE OF THE AMERICAS 41ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10036-7790 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COSO POWER DEVELOPERS CENTRAL INDEX KEY: 0001088873 STANDARD INDUSTRIAL CLASSIFICATION: STEAM & AIR CONDITIONING SUPPLY [4961] IRS NUMBER: 943102796 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 333-83815-03 FILM NUMBER: 03696048 BUSINESS ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 1114 AVENUE OF THE AMERICAS 41ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10036-7790 BUSINESS PHONE: 2129219099 MAIL ADDRESS: STREET 1: C/O CAITHNESS ENERGY LLC STREET 2: 1114 AVENUE OF THE AMERICAS 41ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10036-7790 10-Q 1 marck10q2003.txt FORM 10-Q (Mark One) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2003 -------------- 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 Number: 333-83815 --------- Caithness Coso Funding Corp. ---------------------------- (Exact name of registrant as specified in its charter) Delaware 94-3328762 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Coso Finance Partners California 68-0133679 Coso Energy Developers California 94-3071296 Coso Power Developers California 94-3102796 --------------------- ---------- ---------- (Exact names of Registrants (State or other (I.R.S. Employer as specified in their charters) jurisdiction of Identification No.) incorporation or organization) 565 Fifth Avenue, 29th Floor, New York, New York 10017-2478 - ------------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (212) 921-9099 -------------- (Registrant's telephone number, including area code) Not Applicable -------------- (Former name, former address and former fiscal year, if changed since last report.) 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. [X] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 300 shares in Caithness Coso Funding Corp. as of May 13, 2003 ------------------------------------------------------------- CAITHNESS COSO FUNDING CORP. Form 10-Q For the Quarter Ended March 31, 2003 PART I. FINANCIAL INFORMATION Page No. ITEM 1. Financial Statements Caithness Coso Funding Corp. Unaudited condensed balance sheets at March 31, 2003 and December 31, 2002 4 Unaudited condensed statements of operations for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 5 Unaudited condensed statements of cash flows for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 6 Notes to the unaudited condensed financial statements 7 Coso Finance Partners Unaudited condensed balance sheets at March 31, 2003 and December 31, 2002 8 Unaudited condensed statements of operations for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 9 Unaudited condensed statements of cash flows for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 10 Notes to the unaudited condensed financial statements 11 Coso Energy Developers Unaudited condensed balance sheets at March 31, 2003 and December 31, 2002 13 Unaudited condensed statements of operations for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 14 Unaudited condensed statements of cash flows for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 15 Notes to the unaudited condensed financial statements 16 Coso Power Developers Unaudited condensed balance sheets at March 31, 2003 and December 31, 2002 18 Unaudited condensed statements of operations for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 19 Unaudited condensed statements of cash flows for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 20 Notes to the unaudited condensed financial statements 21 2 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 33 ITEM 2. Change in Securities and Use of Proceeds 33 ITEM 3. Defaults upon Senior Securities 33 ITEM 4. Submission of Matters to a Vote of Security Holders 33 ITEM 5. Other Information 33 Supplemental condensed combined financial information for the Coso Partnerships Unaudited condensed combined balance sheets at March 31, 2003 and December 31, 2002 34 Unaudited condensed combined statements of operations for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 35 Unaudited condensed combined statements of cash flows for the three-months ended March 31, 2003 and the three-months ended March 31, 2002 36 Notes to the unaudited condensed combined financial statements 37 ITEM 6. Exhibits and Reports on Form 8-K 38 CAITHNESS COSO FUNDING CORP. UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 2003 2002 (Note) Assets: Accrued interest receivable....................... $ 7,424 $ 1,130 Project loan to Coso Finance Partners............. 110,955 110,955 Project loan to Coso Energy Developers............ 89,875 89,875 Project loan to Coso Power Developers............. 80,401 80,401 ------- ------- $ 288,655 $ 282,361 ======= ======= Liabilities and Stockholders' Equity: Senior secured notes: Accrued interest payable....................... $ 7,424 $ 1,130 9.05% notes due 2009........................... 281,231 281,231 ------- ------- 288,655 282,361 Stockholders' equity................................ -- -- ------- ------- $ 288,655 $ 282,361 ======= =======
Note: The condensed balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See accompanying notes to the unaudited condensed financial statements 4 CAITHNESS COSO FUNDING CORP. UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands) Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Interest income....................... $ 6,294 $ 6,854 Interest expense...................... (6,294) (6,854) ------- ------- Net income........................ $ -- $ -- ======= ======= See accompanying notes to the unaudited condensed financial statements 5 CAITHNESS COSO FUNDING CORP. UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Net cash provided by (used in) investing activities....... $ 6,294 $ 6,854 Net cash provided by (used in) financing activities....... (6,294) (6,854) ------- ------- Net change in cash and cash equivalents.................. $ -- $ -- ======= =======
See accompanying notes to the unaudited condensed financial statements 6 CAITHNESS COSO FUNDING CORP. NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands) (1) Organization and Operations Caithness Coso Funding Corp. (Funding Corp.), which was incorporated on April 22, 1999, is a single-purpose Delaware corporation formed to issue senior secured notes (Notes) for its own account and as an agent acting on behalf of Coso Finance Partners (CFP), Coso Energy Developers (CED), and Coso Power Developers (CPD), collectively, the "Partnerships." The Partnerships are California general Partnerships. On May 28, 1999, Funding Corp. sold $413,000 of Notes. Pursuant to separate credit agreements between Funding Corp. and each Partnership, the net proceeds from the offering of $110,000 of 6.80% Notes due 2001 and $303,000 of 9.05% Notes due 2009 were loaned to the Partnerships, and the Partnerships have jointly and severally guaranteed repayment on a senior basis. Payment of the Notes is provided for by payments made by the Partnerships under their respective project loans. Funding Corp. has no material assets other than the loans, and the accrued interest thereon, that have been made to the Partnerships. Also, Funding Corp. does not conduct any business, other than issuing the senior secured notes and making the loans to the Partnerships. (2) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules. Management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto in the audited financial statements for the year ended December 31, 2002. The financial information herein presented reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results for interim periods presented. The results for the interim periods are not necessarily indicative of results to be expected for the full year. 7 COSO FINANCE PARTNERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 2003 2002 (Note) Assets: Cash and cash equivalents................................................. $ 6,777 $ 4,215 Restricted cash and investments........................................... 29,012 28,692 Accounts receivable, net.................................................. 6,888 7,431 Prepaid expenses & other assets........................................... 605 1,068 Amounts due from related parties.......................................... 1,504 1,190 Property, plant & equipment, net.......................................... 136,140 136,313 Power purchase agreement, net............................................. 9,658 9,945 Advances to New CLPSI Company, LLC........................................ 4,109 4,010 Deferred financing costs, net............................................. 2,129 2,208 ----- ----- $ 196,822 $ 195,072 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities.................................. $ 1,925 $ 5,764 Amounts due to related parties............................................ 2,991 467 Other liabilities......................................................... 14,783 12,478 Project loans............................................................. 110,955 110,955 ------- ------- 130,654 129,664 66,168 65,408 Partners' capital............................................................ ------- ------- $ 196,822 $ 195,072 ======= =======
Note: The condensed balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See accompanying notes to the unaudited condensed financial statements 8 COSO FINANCE PARTNERS UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Revenue: Energy revenues............................. $ 11,298 $ 42,350 Capacity revenues........................... 1,255 3,148 ------ ------ Total revenue........................ 12,553 45,498 Operating expenses: Plant operating expenses.................... 2,267 2,307 Royalty expense............................. 2,681 2,212 Depreciation and amortization............... 2,562 2,536 ----- ----- Total operating expenses............. 7,510 7,055 Operating income..................... 5,043 38,443 Other (income)/expenses: Interest and other income.................. (59) (474) Interest expense........................... 2,483 2,775 Amortization of deferred financing costs... 79 79 ----- ----- Total other expenses................. 2,503 2,380 ----- ----- Income before cumulative effect of change in accounting principle............. 2,540 36,063 Cumulative effect of change in accounting principle....................... 1,780 -- ----- ------ Net income.......................... $ 760 $ 36,063 ===== ======
See accompanying notes to the unaudited condensed financial statements 9 COSO FINANCE PARTNERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Net cash provided by (used in) operating activities..... $ 4,674 $ 47,122 Net cash provided by (used in) investing activities..... (2,112) (2,484) Net cash provided by (used in) financing activities..... -- (29,910) ----- ------ Net change in cash and cash equivalents................. $ 2,562 $ 14,728 ===== ======
See accompanying notes to the unaudited condensed financial statements 10 COSO FINANCE PARTNERS NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands) (1) Organization and Operation Coso Finance Partners (CFP), a general partnership, is engaged in the operation of a 80 MW power generation facility located at the China Lake Naval Air Weapons Station, China Lake California. CFP sells all electricity produced to Southern California Edison (Edison) under a 24-year power purchase contract expiring in 2011. (2) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules. Management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto in the audited financial statements for the year ended December 31, 2002. The financial information herein presented reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results for interim periods presented. The results for the interim periods are not necessarily indicative of results to be expected for the full year. CFP has experienced significant quarterly fluctuations in operating results and it expects that these fluctuations in energy revenues, expenses and net income will continue. (3) Accounts Receivable and Revenue Recognition Due to the uncertainty surrounding Edison's ability to make payment on past due amounts, collection was not reasonably assured and CFP had not recognized revenue from Edison for energy delivered during the period November 1, 2000 through March 26, 2001. On March 1, 2002, Edison reached certain financing milestones and paid CFP for revenue generated, but not recognized for the period November 1, 2000 through March 26, 2001. For the three-month period ended March 31, 2002, CFP recognized revenue for energy delivered from November 1, 2000 through March 26, 2001 of $37.3 million. (4) Reclassifications Certain balances in prior years have been reclassified to conform to the presentation adopted in the current year. (5) New Accounting Pronouncements In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs and amends SFAS No. 19, Financial Accounting and Reporting by Oil and Gas Producing Companies. The Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of a fair value can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. 11 As a result of the adoption of SFAS No. 143, the Partnership was required to recognize a liability of $2,039, a net asset of $259 and a loss from the cumulative effect of a change in accounting principle of $1,780 as of January 1, 2003. In 2003 additional depreciation and accretion expense resulting from adoption of SFAS No. 143 is estimated to be $218. 12 COSO ENERGY DEVELOPERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 2003 2002 (Note) Assets: Cash and cash equivalents...................................... $ 8,268 $ 1,423 Restricted cash and investments................................ 6,664 6,646 Accounts receivable, net....................................... 6,435 6,681 Prepaid expenses and other assets.............................. 747 1,370 Amounts due from related parties............................... 430 421 Property, plant and equipment, net............................. 135,543 135,853 Power purchase agreement, net.................................. 17,097 17,365 Investment in Coso Transmission Line Partners.................. 2,625 2,653 Advances to New CLPSI Company, LLC............................. 688 674 Deferred financing costs, net.................................. 1,721 1,785 ------- ------- $ 180,218 $ 174,871 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities........................ $ 2,414 $ 1,644 Amounts due to related parties.................................. 28,230 26,317 Other liabilities............................................... 1,582 432 Project loans................................................... 89,875 89,875 ------ ------ 122,101 118,268 Partners' capital.................................................. 58,117 56,603 ------- ------- $ 180,218 $ 174,871 ======= =======
Note: The condensed balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See accompanying notes to the unaudited condensed financial statements 13 COSO ENERGY DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Revenue: Energy revenues................................. $ 8,107 $ 40,429 Capacity revenues............................... 1,227 3,051 ----- ------ Total revenue............................ 9,334 43,480 Operating expenses: Plant operating expenses........................ 2,738 2,605 Royalty expense................................. 25 11 Depreciation and amortization................... 2,340 4,059 ----- ----- Total operating expenses................. 5,103 6,675 Operating income......................... 4,231 36,805 Other (income)/expenses: Interest and other income...................... (282) (642) Interest expense............................... 2,011 2,180 Amortization of deferred financing costs....... 64 64 ----- ----- Total other expenses..................... 1,793 1,602 ----- ----- Income before cumulative effect of change in accounting principle........................... 2,438 35,203 Cumulative effect of change in accounting principle........................... 924 -- ----- ------ Net income.............................. $ 1,514 $ 35,203 ===== ======
See accompanying notes to the unaudited condensed financial statements 14 COSO ENERGY DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Net cash provided by (used in) operating activities.... $ 8,371 $ 34,552 Net cash provided by (used in) investing activities.... (1,526) (1,569) Net cash provided by (used in) financing activities.... -- (22,750) ----- ------ Net change in cash and cash equivalents................ $ 6,845 $ 10,233 ===== ======
See accompanying notes to the unaudited condensed financial statements 15 COSO ENERGY DEVELOPERS NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands) (1) Organization and Operation Coso Energy Developers (CED), a general partnership, is engaged in the operation of a 80 MW power generation facility located at the Coso Hot Springs, China Lake California. CED sells all electricity produced to Southern California Edison (Edison) under a 30-year power purchase contract expiring in 2019. (2) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules. Management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto in the audited financial statements for the year ended December 31, 2002. The financial information herein presented reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results for interim periods presented. The results for the interim periods are not necessarily indicative of results to be expected for the full year. CED has experienced significant quarterly fluctuations in operating results and it expects that these fluctuations in energy revenues, expenses and net income will continue. (3) Accounts Receivable and Revenue Recognition Due to the uncertainty surrounding Edison's ability to make payment on past due amounts, collection was not reasonably assured and CED had not recognized revenue from Edison for energy delivered during the period November 1, 2000 through March 26, 2001. On March 1, 2002, Edison reached certain financing milestones and paid CED for revenue generated, but not recognized for the period November 1, 2000 through March 26, 2001. For the three-month period ended March 31, 2002, CED recognized revenue for energy delivered from November 1, 2000 through March 26, 2001 of $37.1 million. (4) Reclassifications Certain balances in prior years have been reclassified to conform to the presentation adopted in the current year. (5) New Accounting Pronouncements In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs and amends SFAS No. 19, Financial Accounting and Reporting by Oil and Gas Producing Companies. The Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of a fair value 16 can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. As a result of the adoption of SFAS No. 143 the Partnership was required to recognize a liability of $1,122, a net asset of $198 and a loss from the cumulative effect of a change in accounting principle of $924 as of January 1, 2003. In 2003 additional depreciation and accretion expense resulting from adoption of SFAS No. 143 is estimated to be $120. 17 COSO POWER DEVELOPERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 2003 2002 (Note) Assets: Cash and cash equivalents............................................ $ 5,917 $ 824 Restricted cash and investments...................................... 10,883 10,855 Accounts receivable, net............................................. 6,762 7,234 Prepaid expenses and other assets.................................... 617 1,111 Amounts due from related parties..................................... 6,287 5,902 Property, plant and equipment, net................................... 115,591 116,192 Power purchase agreement, net........................................ 19,327 20,026 Investment in Coso Transmission Line Partners........................ 3,227 3,260 Advances to New CLPSI Company, LLC................................... 1,924 1,911 Deferred financing costs, net........................................ 1,465 1,519 ----- ----- $ 172,000 $ 168,834 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities............................. $ 1,987 $ 1,948 Amounts due to related parties....................................... 3,335 758 Other liabilities.................................................... 2,550 366 Project loans........................................................ 80,401 80,401 ------ ------ 88,273 83,473 Partners' capital....................................................... 83,727 85,361 ------ ------ $ 172,000 $ 168,834 ======= =======
Note: The condensed balance sheet at December 31, 2002 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. See accompanying notes to the unaudited condensed financial statements 18 COSO POWER DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Revenue: Energy revenues...................................... $ 7,278 $ 41,371 Capacity revenues.................................... 1,234 3,051 ----- ------ Total revenue................................. 8,512 44,422 Operating expenses: Plant operating expenses............................. 2,355 1,971 Royalty expense...................................... 1,472 1,057 Depreciation and amortization........................ 2,768 3,829 ----- ----- Total operating expenses...................... 6,595 6,857 Operating income.............................. 1,917 37,565 Other (income)/expenses: Interest and other income........................... (79) (482) Interest expense.................................... 1,799 1,908 Amortization on deferred financing costs............ 54 54 ----- ----- Total other expenses.......................... 1,774 1,480 ----- ----- Income before cumulative effect of change in accounting principle................................ 143 36,085 Cumulative effect of change in accounting principle................................ 1,777 -- ----- ------ Net (loss) income............................ $ (1,634) $ 36,085 ===== ======
See accompanying notes to the unaudited condensed financial statements 19 COSO POWER DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Net cash provided by (used in) operating activities.... $ 6,149 $ 26,844 Net cash provided by (used in) investing activities.... (1,056) (107) Net cash provided by (used in) financing activities.... -- (13,550) ----- ------ Net change in cash and cash equivalents................ $ 5,093 $ 13,187 ===== ======
See accompanying notes to the unaudited condensed financial statements 20 COSO POWER DEVELOPERS NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (Dollars in thousands) (1) Organization and Operation Coso Power Developers (CPD), a general partnership, is engaged in the operation of a 80 MW power generation facility located at the Coso Hot Springs, China Lake California. CPD sells all electricity produced to Southern California Edison (Edison) under a 20-year power purchase contract expiring in 2010. (2) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules. Management believes that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto in the audited financial statements for the year ended December 31, 2002. The financial information herein presented reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results for interim periods presented. The results for the interim periods are not necessarily indicative of results to be expected for the full year. CPD has experienced significant quarterly fluctuations in operating results and it expects that these fluctuations in energy revenues, expenses and net income will continue. (3) Accounts Receivable and Revenue Recognition Due to the uncertainty surrounding Edison's ability to make payment on past due amounts, collection was not reasonably assured and CPD had not recognized revenue from Edison for energy delivered during the period November 1, 2000 through March 26, 2001. On March 1, 2002, Edison reached certain financing milestones and paid CPD for revenue generated but not recognized for the period November 1, 2000 through March 26, 2001. For the three-month period ended March 31, 2002, CPD recognized revenue for energy delivered from November 1, 2000 through March 26, 2001 of $38.0 million. (4) Reclassifications Certain balances in prior years have been reclassified to conform to the presentation adopted in the current year. (5) New Accounting Pronouncements In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs and amends SFAS No. 19, Financial Accounting and Reporting by Oil and Gas Producing Companies. The Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of a fair value 21 can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. As a result of the adoption of SFAS No. 143 the Partnership was required to recognize a liability of $2,131, a net asset of $354 and a loss from the cumulative effect of a change in accounting principle of $1,777 as of January 1, 2003. In 2003 additional depreciation and accretion expense resulting from adoption of SFAS No. 143 is estimated to be $334. 22 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Except for financial information contained herein, the matters discussed in this annual report may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and subject to the safe harbor created by the Securities Litigation Reform Act of 1995. Such statements include declarations regarding the intent, belief or current expectations of Caithness Coso Funding Corp. ("Funding Corp."), Coso Finance Partners ("the Navy I partnership"), Coso Energy Developers ("the BLM partnership"), and Coso Power Developers ("the Navy II partnership"), collectively, (the "Coso Partnerships") and their respective management. Such statements may be identified by terms such as expected, anticipated, may, will, believe or other terms or variations of such words. Any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties; actual results could differ materially from those indicated by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include but are not limited to: (i) risks relating to the uncertainties in the California energy market, (ii) the financial viability of Southern California Edison, ("Edison"), (iii) the information is of a preliminary nature and may be subject to further adjustment, (iv) risks related to the operation of power plants (v) the impact of avoided cost pricing along with other pricing variables, (vi) general operating risks, including resource availability and regulatory oversight, (vii) the dependence on third parties including public and private entities, (viii) changes in government regulation, (ix) the effects of competition, (x) the dependence on senior management, (xi) fluctuations in quarterly results due in part to seasonality, (xii) affects of September 11, 2001, including U.S. Navy activity and (xiii) the alleged manipulation of the California energy market. General The Coso Partnerships consist of three 80MW geothermal power plants, which are referred to as Navy I, BLM and Navy II, and their transmission lines, wells, gathering systems and other related facilities. The Coso projects are located near one another at the United States Naval Air Weapons Center at China Lake, California. The Navy I partnership owns Navy I and its related facilities. The BLM partnership owns BLM and its related facilities. The Navy II partnership owns Navy II and its related facilities. Affiliates of Caithness Corporation and CalEnergy Company, Inc. ("CalEnergy"), which is now known as MidAmerican Energy Holdings Company, formed the Coso Partnerships in the 1980s to develop, construct, own and operate the Coso Partnerships. On February 25, 1999 Caithness Acquisition Company, LLC, (CAC) purchased all of CalEnergy's interests in the Coso Partnerships. Each Coso partnership sells 100% of the electrical energy generated at its plant to Edison under a long-term Standard Offer No.4 power purchase agreement. Each power purchase agreement expires after the final maturity date of the 9.05% Series B Senior Secured Notes issued by Funding Corp. Each Coso partnership is entitled to the following payments under its power purchase agreement: * Capacity payments for being able to produce electricity at certain levels. Capacity payments are fixed throughout the life of each power purchase agreement; * Capacity bonus payments if the Coso partnership is able to produce electricity above a specified level. The maximum annual capacity bonus payment available is also fixed throughout the life of each power purchase agreement; and * Energy payments which are based on the amount of electricity the Coso partnership's plant actually produces. 23 Energy payments were fixed for the first ten years of firm operation under each power purchase agreement. After the first ten years of firm operation and until a Coso Partnership's power purchase agreement expires, Edison makes energy payments to the Coso Partnerships based on Edison's avoided cost of energy. Edison's avoided cost of energy is Edison's cost to generate electricity if Edison were to produce it itself or buy it from another power producer rather than buy it from the Coso Partnerships. The power purchase agreement for the Navy I partnership will expire in August 2011, the power purchase agreement for the BLM partnership will expire in March 2019, and the power purchase agreement for the Navy II partnership will expire in January 2010. The fixed energy price period expired in August 1997 for the Navy I partnership, in March 1999 for the BLM partnership and in January 2000 for the Navy II partnership. Edison entered into an agreement ("Agreement") with the Coso Partnerships on June 19, 2001 that addressed renewable energy pricing and issues concerning California's energy crisis. The Agreement, which was amended on November 30, 2001, established May 1, 2002 as the date the Coso Partnerships began receiving a fixed energy rate of 5.37 cents per kWh for five (5) years in lieu of the rate calculated based on the avoided cost of energy. Subsequent to the five-year period, Edison will be required to make energy payments to the Coso Partnerships based on its avoided cost of energy until each partnership's power purchase agreement expires. Estimates of Edison's future avoided cost of energy may vary significantly and it is not possible to predict with accuracy the likely level of future avoided cost of energy prices. From January 1, 2002 through April 30, 2002, the Coso Partnerships elected to receive from Edison a fixed energy rate of 3.25 cents per kWh. Starting May 1, 2002, the Coso Partnerships received 5.37 cents per kWh, pursuant to the agreement discussed above. In 1994, the Coso Partnerships implemented a steam-sharing program, under the Coso Geothermal Exchange Agreement. The purpose of the steam-sharing program is to enhance the management of the Coso geothermal resource and to optimize the resource's overall benefits to the Coso Partnerships by transferring steam among the Coso Partnerships. Under the steam sharing program, the partnership receiving the steam transfer splits revenue earned from electricity generated with the partnership that transferred the steam. The Coso Partnerships are required to make royalty payments to the U.S. Navy and the Bureau of Land Management. The Navy I partnership pays a royalty for Unit I through reimbursement of electricity supplied to the U.S. Navy by Edison from electricity generated at the Navy I plant. The reimbursement is based on a pricing formula that is included in the U.S. Navy Contract as amended. This formula is primarily based on the tariff rates charged by Edison, which were increased in 2001 by the California Public Utilities Commission (CPUC), and is subject to future revision. Indices utilized in the calculation of the Navy I partnership Unit 1 contract energy pricing remained unchanged historically based on an agreement between the U.S. Navy and the Navy I partnership. In October 2002 and November 2001, modifications to the calculation of the reimbursement pricing formula were made to the U.S. Navy Contract resulting in a reduction of accrued royalties of $1.3 million and $6.5 million, respectively, which was agreed to by the U.S. Navy. The parties have currently agreed to a replacement index and true-up calculation in favor of the Navy I partnership. For Units 2 and 3, the Navy I partnership's royalty expense paid to the U.S. Navy is a fixed percentage of electricity sales at 15% of revenue received by the Navy I partnership through 2003 and will increase to 20% from 2004 through 2009. In addition, the Navy I partnership is required to pay the U.S. Navy $25.0 million in December 2009, the date its contract expires. The payment is secured by funds placed on deposit monthly, which funds plus accrued interest are anticipated to aggregate $25.0 million by the expiration date of the contract. Currently, the monthly amount deposited is approximately $60,000. The BLM partnership pays a 10% royalty to the Bureau of Land Management based on the net value of steam produced. The Navy II partnership pays a royalty to the U.S. Navy based on a fixed percentage of electricity sales to Edison. The royalty rate was 10% of electricity sales through 1999, and increased to 18% for 2000 through 2004 and will increase to 20% from 2005 through the end of the contract term. The Coso Partnerships also pay other royalties, at various rates which in the aggregate are not material. Funding Corp is a special purpose corporation and a wholly owned subsidiary of the Coso Partnerships. It was formed for the purpose of issuing the senior secured notes (Notes) on behalf of the Coso Partnerships who have jointly, severally, and unconditionally guaranteed repayment of the Notes. 24 On May 28, 1999, Funding Corp. issued $110.0 million of 6.80% Notes that were due in 2001, and were paid off on December 15, 2001, and $303.0 million of 9.05% Notes due in 2009. The proceeds from the notes were loaned to the Coso Partnerships and are payable to Funding Corp from payments of principal and interest on the Notes. Funding Corp. does not conduct any other operations apart from issuing the Notes. Under the depository agreement with the trustee for the Notes, the Coso Partnerships established accounts with a depository and pledged those accounts as security for the benefit of the holders of the Notes. All amounts deposited with the depository are, at the direction of the Coso Partnerships, invested by the depository in permitted investments. All revenues or other proceeds actually received by the Coso Partnerships are deposited in a revenue account and withdrawn upon receipt by the depository of a certificate from the relevant Coso Partnerships detailing the amounts to be paid from funds in its respective revenue account. Periodic increases in natural gas prices and imbalances between supply and demand, among other factors, have at times led to significant increases in wholesale electricity prices in California. During those periods, Edison had fixed tariffs with their retail customers that were significantly below the wholesale prices it paid in California. This resulted in significant under-recoveries by Edison of its electricity purchase costs. On January 16, 2001, Edison announced that it was temporarily suspending payments for energy provided, including the energy provided by the Coso Partnerships, pending a permanent solution to its liquidity crisis. This cash flow shortfall adversely affected Edison's liquidity and in turn it did not pay the Coso Partnerships for energy delivered from November 2000 through March 26, 2001. As of December 31, 2001, the Coso Partnerships were unable to determine the time frame during which any future payments would be received. Due to the uncertainty surrounding Edison's ability to make payment on past due amounts, collection was not reasonably assured and the Navy I, BLM and Navy II Partnerships had not recognized revenue of $22.0 million, $21.8 million and $22.7 million, respectively, from Edison for Energy delivered during the period January 1, 2001 through March 26, 2001. Pursuant to a CPUC order, Edison resumed making payments to the Coso Partnerships beginning with power generated on March 27, 2001. Edison also made a payment equal to 10% of the unpaid balance for power generated from November 1, 2000 to March 26, 2001, and paid interest on the outstanding amount at 7% per annum. That payment was made pursuant to the Agreement between Edison and the Coso Partnerships described above. On March 1, 2002, Edison reached certain financing milestones and paid Navy I, BLM and Navy II $37.3 million, $37.1 million and $38.0 million, respectively, for revenue generated but not recognized for the period November 1, 2000 through March 26, 2001. On September 23, 2002, the United States Court of Appeals for the Ninth Circuit issued an opinion and order on appeal from a district court's stipulated judgment, which affirmed the stipulated judgment in part and referred questions based on California state law to the California Supreme Court. The appeals court stated that if the Agreement violated California state law, then the appeals court would be required to void the stipulated judgment. The California Supreme Court has accepted the Ninth Circuit Court of Appeals request to address the issues referred to it in the September 23, 2002 ruling. Pending the findings of the California Supreme Court on matters relating to state law, the Agreement remains in full force and effect. Edison filed a petition for a writ of review of a January 2001 CPUC decision, claiming that the "floor" line loss factor of 0.95 for renewable generators violated the Public Utility Regulatory Policies Act of 1978 (PURPA). Subsequently, the California Court of Appeals issued a decision on August 20, 2002 in response to the writs affirming the January 2001 CPUC decision, except for the 0.95 "floor", which it rejected as an abuse of discretion by the CPUC. While this matter was appealed to the California Supreme Court, the petition for review was denied. The Coso Partnerships are currently evaluating potential actions to redress this issue. The Coso Partnerships' Agreements set a 1.0 line loss factor for all energy sold between May 2002 through April 2007. After April 2007, the Coso Partnerships will have a line loss factor of less than 1.0, if Edison's challenge to the CPUC ruling stands. 25 The Coso Partnerships cannot predict whether any subsequent action regarding this matter will be successful. Capacity Utilization For purposes of consistency in financial presentation, the plant capacity factor for each of the Coso Partnerships is based on a nominal capacity amount of 80MW (240MW in the aggregate). The Coso Partnerships have a gross operating capacity that allows for the production of electricity in excess of their nominal capacity amounts. Utilization of this operating margin is based upon a number of factors and can be expected to vary throughout the year under normal operating conditions. The following data includes the operating capacity factor, capacity and electricity production (in kWh) for each Coso Partnership on a stand-alone basis: Three-Months Ended March 31 2003 2002 ---- ---- Navy I Partnership (stand alone) Operating capacity factor 100.5% 106.6% Capacity (MW)(average) 80.42 85.30 kWh produced (000s) 173,706 184,240 BLM Partnership (stand alone) Operating capacity factor 88.6% 92.7% Capacity (MW) (average) 70.92 74.15 kWh produced (000s) 153,177 160,161 Navy II Partnership (stand alone) Operating capacity factor 98.3% 109.0% Capacity (MW) (average) 78.61 87.23 kWh produced (000s) 169,795 188,414 Total energy production for the Navy I Partnership was 173.7 million kWh for the three-months ended March 31, 2003, as compared to 184.2 million kWh for the same period in 2002, a decrease of 5.7%. Total energy production for the Navy II Partnership was 169.8 million kWh for the three-months ended March 31, 2003, as compared to 188.4 million kWh for the same period in 2002, a decrease of 9.9%. The decrease in energy production for the Navy I and Navy II Partnerships was primarily due to a decline in steam which management is attempting to remediate through well maintenance and capital improvements. The decline in total energy production for the BLM Partnership was not significant for the period March 31, 2003 as compared to March 31, 2002. In an effort to increase production, the Coso Partnerships have implemented a capital program including drilling two new productions wells and performing workovers on three existing wells to regain production currently limited due to wellbore obstructions. The Coso Partnerships expect to enhance the steam utilization and efficiency of the projects through a turbine enhancement and modifications to wellfield piping and gas removal systems. With respect to the reservoir, an injection augmentation program, aimed at improving reservoir pressure and minimizing resource decline, is currently in the engineering design phase. 26 Results of Operations for the three-months ended March 31, 2003 and 2002 The following discusses the results of operations of the Coso Partnerships for the three-months ended March 31, 2003 and 2002 (dollar amounts in tables are in thousands, except per kWh data): Revenue Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 $ Cents/kWh $ Cents/kWh - --------- - --------- Total Operating Revenues Navy I Partnership 12,553 7.2 45,498 24.7 BLM Partnership 9,334 6.1 43,480 27.1 Navy II Partnership 8,512 5.0 44,422 23.6 Capacity & Capacity Bonus Revenues Navy I Partnership 1,255 0.7 3,148 1.7 BLM Partnership 1,227 0.8 3,051 1.9 Navy II Partnership 1,234 0.7 3,051 1.6 Energy Revenues, net of steam transfers Navy I Partnership 11,298 6.5 42,350 23.0 BLM Partnership 8,107 5.3 40,429 25.2 Navy II Partnership 7,278 4.3 41,371 22.0 Total operating revenues for the Navy I, BLM and Navy II Partnerships, which consist of capacity payments, capacity bonus payments, energy payments, were $12.6 million, $9.3 million and $8.5 million, respectively, for the three-months ended March 31, 2003, as compared to $45.5 million, $43.5 million and of $44.4 million, respectively, for the same period in 2002, decreases of $32.9 million, $34.2 million and $35.9 million, respectively. Capacity and capacity bonus revenues for each of the Navy I, BLM and Navy II Partnerships were $1.3 million, $1.2 million and $1.2 million, respectively, for the three-months ended March 31, 2003, as compared to $3.1 million for each of the Partnerships for the same period in 2002, decreases of $1.8 million, $1.9 million and $1.9 million respectively. Total energy revenues for the Navy I, BLM and Navy II Partnerships were $11.3 million, $8.1 million and $7.3 million, respectively, for the three-months ended March 31, 2003, as compared to $42.4 million, $40.4 million and of $41.4 million, respectively, for the same period in 2002, decreases of $31.1 million $32.3 million and $34.1 million, respectively. Each of the Coso Partnerships' decreases in operating revenues, capacity and capacity bonus revenues and energy revenues for the three-months ended March 31, 2003, as compared to the same period in 2002, were primarily due to the recognition of revenues generated but not recognized for the period from November 1, 2000 through March 26, 2001 discussed above. On March 1, 2002, the Navy I, BLM and Navy II Partnerships received payment and recognized revenue of $37.3 million, $37.1 million and $38.0 million, respectively. These decreases were partially offset by an increase in the fixed rate of energy to 5.37 cents per kWh paid during the three-months ended March 31, 2003 as compared to 3.25 cents per kWh for the same period in 2002, also discussed above. 27 Plant Operations Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 $ Cents/kWh $ Cents/kWh - --------- - --------- Navy I Partnership 2,267 1.3 2,307 1.3 BLM Partnership 2,738 1.8 2,605 1.6 Navy II Partnership 2,355 1.4 1,971 1.0 The Navy II Partnership's operating expenses, including operating and general and administrative expenses, were $2.4 million for the three-months ended March 31, 2003 as compared to $2.0 million for the same period in 2002, an increase of 20.0%. The increase for the three-months ended March 31, 2003, as compared to the same period in 2002 was primarily due to increased insurance costs and property tax. The Navy I and BLM Partnerships operating expenses, including operating and general and administrative expenses for the three-months ended March 31, 2003 as compared to the same period in 2002 had insignificant changes over the two periods. The increased insurance costs and property taxes for the Navy I and BLM Partnerships for the three-month period ended March 31, 2003 were insignificant, due to increased drilling and maintenance costs incurred during the same period in 2002. Royalty Expense Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 $ Cents/kWh $ Cents/kWh - --------- - --------- Navy I Partnership 2,681 1.5 2,212 1.2 BLM Partnership 25 0.0 11 0.0 Navy II Partnership 1,472 0.9 1,057 0.6 The Navy I Partnership's royalty expenses were $2.7 million for the three-months ended March 31, 2003, as compared to $2.2 million for the same period in 2002, an increase of 22.7%. The BLM Partnership's royalty expenses were $25,000 for the three-months ended March 31, 2003, as compared to $11,000 for the same period in 2002, an increase of $14,000. The Navy II Partnership's royalty expenses were $1.5 million for the three-months ended March 31, 2003, as compared to $1.1 million for the same period in 2002, an increase of 36.4%. These increases in royalty expense for the Navy I, BLM and Navy II Partnerships for the three-months ended March 31, 2003 as compared to the same period in 2002, were due to an increase in the fixed rate of energy to 5.37 cents per kWh for the three-month period ended March 31, 2003 from 3.25 cents per kWh for the three-month period ended March 31, 2002 discussed above. 28 Depreciation and Amortization Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 $ Cents/kWh $ Cents/kWh - --------- - --------- Navy I Partnership 2,562 1.5 2,536 1.4 BLM Partnership 2,340 1.5 4,059 2.5 Navy II Partnership 2,768 1.6 3,829 2.0 The BLM Partnership's depreciation and amortization expense was $2.3 million for the three-months ended March 31, 2003, as compared to $4.1 million for the same period in 2002, a decrease of 43.9%. The Navy II Partnership's depreciation and amortization expense was $2.8 million for the three-months ended March 31, 2003, as compared to $3.8 million for the same period in 2002, a decrease of 26.3%. These decreases in depreciation and amortization expense for the three-months ended March 31, 2003 as compared to the same period in 2002, were due to older wells being fully depreciated during the second half of 2002. Interest and Other Income Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 $ Cents/kWh $ Cents/kWh - --------- - --------- Navy I Partnership 59 0.0 474 0.3 BLM Partnership 282 0.2 642 0.4 Navy II Partnership 79 0.0 482 0.3 Interest and other income for the Navy I, BLM and Navy II Partnerships were $59,000, $282,000 and $79,000, respectively, for the three-months ended March 31, 2003, as compared to $474,000, $642,000 and $482,000, respectively, for the same period in 2002, decreases of $415,000, $360,000 and $403,000, respectively. These decreases for the three-months ended March 31, 2003, as compared to the same period in 2002, were primarily due to interest on amounts in arrears, owed by Edison in 2001, that were settled and paid by Edison on March 1, 2002. Interest Expense Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 $ Cents/kWh $ Cents/kWh - --------- - --------- Navy I Partnership 2,483 1.4 2,775 1.5 BLM Partnership 2,011 1.3 2,180 1.4 Navy II Partnership 1,799 1.1 1,908 1.0 The Navy I Partnership's interest expense was $2.5 million for the three-months ended March 31, 2003, as compared to $2.8 million for the same period in 2002, a decrease of 10.7%. The BLM Partnership's interest expense was $2.0 million for the three-months ended March 31, 2003, as compared to $2.2 million for the same period in 2002, a decrease of 9.1%. The Navy II Partnership's interest expense was $1.8 million for the three-months ended March 31, 2003, as compared to $1.9 million for the same period in 2002, a decrease of 5.3%. These decreases in interest expense for the three-months ended March 31, 2003, as compared to the same period in 2002 were due to reductions in the principal amount of the project loan from Funding Corp. 29 Change in Accounting Principle The Navy I, BLM and Navy II Partnerships recorded a loss on the cumulative effect of change in accounting principle in the amounts of $1.8 million, $0.9 million and $1.8 million, respectively for the three-months ended March 31, 2003. This loss was due to adoption of SFAS No. 143 as described in the notes to the financial statements. Liquidity and Capital Resources The Navy I Partnership, the BLM Partnership and the Navy II Partnership derive substantially all of their cash flow from Edison under their power purchase agreements and from interest income earned on funds on deposit. As of December 2001, the 6.8% notes were repaid, subsequently leaving the Coso Partnerships with more cash flow annually. The Coso Partnerships have used their cash primarily for capital expenditures for power plant improvements, resource and operating costs, distributions to partners and payments with respect to the project debt. The Coso Partnerships ability to meet their obligations as they come due will depend upon the ability of Edison to meet its obligations under the terms of the standard offer No. 4 power purchase agreements and ability to continue to generate electricity. Edison's shortfall in collections, coupled with its near term capital requirements, materially and adversely affected its liquidity during 2000 and 2001. In resolution of that issue, Edison settled with the CPUC on October 2, 2001, enabling it to recover in retail electric rates its historical shortfall in electric purchase costs. On September 23, 2002, the United States Court of Appeals for the Ninth Circuit issued an opinion and order on appeal from the district court's stipulated judgment which affirmed the stipulated judgment in part and referred questions based on California state law to the Supreme Court of California. The appeals court stated that if the Agreement violated California state law then the appeals court would be required to void the stipulated judgment. Pending a response from the California Supreme Court, the Agreement remains in full force and effect. Immediately after this Edison-CPUC settlement, Edison and each of the Coso Partnerships entered into an amendment of their respective Agreement (referenced above) pertaining to partial payment and interest payments relating to Edison's past due obligations for the period from November 1, 2000 through March 26, 2001. The Agreement, as amended, was approved by the CPUC in January of 2002, and established the fixed energy rates discussed above and set payment terms for the past due amounts owed to the Coso Partnerships by Edison. Edison's failure to pay its future obligations may have a material adverse effect on the Coso Partnerships ability to make debt service payments to Funding Corp., as they come due under the Funding Corp. notes. On March 1, 2002, Edison reached certain financing milestones and paid the Coso Partnerships for revenue generated but not recognized for the period from November 1, 2000 through March 26, 2001. In the first quarter of 2002, the Navy I, BLM and Navy II Partnerships recognized revenue for energy delivered during that period of $37.3 million, $37.1 million and $38.0 million, respectively. The following table sets forth a summary of each Coso Partnership's cash flows for the three-months ended March 31, 2003 and March 31, 2002. 30
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Navy I Partnership (stand alone) Net cash provided by (used in) operating activities $ 4,674 $ 47,122 Net cash provided by (used in) investing activities (2,112) (2,484) Net cash provided by (used in) financing activities -- (29,910) ----- ------ Net change in cash and cash equivalents $ 2,562 $ 14,728 ===== ====== BLM Partnership (stand alone) Net cash provided by operating activities $ 8,371 $ 34,552 Net cash provided by (used in) investing activities (1,526) (1,569) Net cash provided by (used in) financing activities -- (22,750) ----- ------ Net change in cash and cash equivalents $ 6,845 $ 10,233 ===== ====== Navy II Partnership (stand alone) Net cash provided by (used in) operating activities $ 6,149 $ 26,844 Net cash provided by (used in) investing activities (1,056) (107) Net cash provided by (used in) financing activities -- (13,550) ----- ------ Net change in cash and cash equivalents $ 5,093 $ 13,187 ===== ======
The Navy I Partnership's cash flows from operating activities decreased by $42.4 million for the three-months ended March 31, 2003, as compared to the same period in 2002, primarily due to the increase in net income resulting from Edison's payment received on March 1, 2002 for revenue generated but not recognized for the period November 1, 2000 through March 26, 2001 and a decrease in amounts due from related parties. Cash used in investing activities at the Navy I Partnership decreased by $0.4 million for the three-months ended March 31, 2003, as compared to the same period in 2002, primarily due to an decrease in restricted cash requirements associated with the project loan from Funding Corp. partially offset by an increase in capital expenditures during that period in 2003. The Navy I Partnership's cash used in financing activities decreased by $29.9 million for the three-months ended March 31, 2003, as compared to the same period in 2002, due to decreased partner distributions paid during that period in 2003. The BLM Partnership's cash flows from operating activities decreased by $26.2 million for the three-months ended March 31, 2003, as compared to the same period in 2002, primarily due to the increase in net income resulting from Edison's payment received on March 1, 2002 for revenue generated but not recognized for the period November 1, 2000 through March 26, 2001 partially offset by a decrease in trade payables. Cash used in investing activities at the BLM Partnership for the three-months ended March 31, 2003, as compared to the same period in 2002 decreased by an insignificant amount over the two periods. The BLM Partnership's cash used in financing activities decreased by $22.8 million for the three-months ended March 31, 2003, as compared to the same period in 2002, due to decreased partner distributions paid during that period in 2003. The Navy II Partnership's cash flows from operating activities decreased by $20.7 million for the three-months ended March 31, 2003, as compared to the same period in 2002, primarily due to the increase in net income resulting from Edison's payment received on March 1, 2002 for revenue generated but not recognized for the period November 1, 2000 through March 26, 2001 partially offset by increases in trade payables and amounts due to related parties. 31 Cash used in investing activities at the Navy II Partnership increased by $0.9 million for the three-months ended March 31, 2003, as compared to the same period in 2002, primarily due to an increase in capital expenditures during that period in 2003. The Navy II Partnership's cash used in financing activities decreased by $13.6 million for the three-months ended March 31, 2003, as compared to the same period in 2002, due to decreased partner distributions paid during that period in 2003. 32 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings General The Coso Partnerships are currently parties to various items of litigation relating to day-to-day operations, none of which, if determined adversely, would be material to the financial condition and results of operations of the Coso Partnerships, either individually or taken as a whole. ITEM 2. Change in Securities and Use of Proceeds None. ITEM 3. Defaults Upon Senior Securities None. ITEM 4. Submission of Matters to a Vote of Security Holders None. ITEM 5. Other Information Supplemental Condensed Combined Financial Information for the Coso Partnerships The following information presents unaudited condensed combined financial statements of the Coso Partnerships. These financial statements represent a combination of the financial statements of Caithness Coso Funding Corp., Coso Finance Partners, Coso Energy Developers and Coso Power Developers for the periods indicated. This supplemental financial information is not required by accounting principles generally accepted in the United States of America and has been provided to facilitate a more comprehensive understanding of the financial position, operating results and cash flows of the Coso Partnerships as a whole, which jointly and severally guarantee the repayment of Caithness Coso Funding Corp's senior notes. The unaudited condensed combined financial statements should be read in conjunction with each individual Coso Partnership's financial statements and their accompanying notes. The financial information herein presented reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results for interim periods presented. The results for the interim periods are not necessarily indicative of results to be expected for the full year. 33 COSO PARTNERSHIPS UNAUDITED CONDENSED COMBINED BALANCE SHEETS (Dollars in thousands)
March 31, December 31, 2003 2002 Assets: Cash and cash equivalents.............................................. $ 20,962 $ 6,462 Restricted cash and investments........................................ 46,559 46,193 Accounts receivable, net............................................... 20,085 21,346 Prepaid expenses and other assets...................................... 1,969 3,549 Amounts due from related parties....................................... 7,803 6,516 Property, plant and equipment, net..................................... 387,274 388,358 Power purchase agreement, net.......................................... 46,082 47,336 Investments and advances............................................... 12,573 12,508 Deferred financing costs, net.......................................... 5,315 5,512 ------- ------- $ 548,622 $ 537,780 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities............................... $ 6,326 $ 10,486 Amounts due to related parties......................................... 34,138 25,415 Other liabilities...................................................... 18,915 13,276 Project loans.......................................................... 281,231 281,231 ------- ------- 340,610 330,408 Partners' capital......................................................... 208,012 207,372 ------- ------- $ 548,622 $ 537,780 ======= =======
See accompanying notes to the unaudited condensed combined financial statements. 34 COSO PARTNERSHIPS UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Revenue: Energy revenues................................ $ 26,683 $ 124,150 Capacity revenues.............................. 3,716 9,250 ------ ------- Total revenue........................... 30,399 133,400 Operating expenses: Plant operating expenses....................... 7,360 6,883 Royalty expense................................ 4,178 3,280 Depreciation and amortization.................. 7,670 10,424 ----- ------ Total operating expenses................ 19,208 20,587 Operating income........................ 11,191 112,813 Other (income)/expenses: Interest and other income...................... (420) (1,598) Interest expense............................... 6,293 6,863 Amortization of deferred financing costs....... 197 197 ----- ----- Total other expenses.................... 6,070 5,462 ----- ----- Income before cumulative effect of change in accounting principle........................ 5,121 107,351 Cumulative effect of change in accounting principle........................... 4,481 -- ----- ------- Net income............................. $ 640 $ 107,351 ===== =======
See accompanying notes to the unaudited condensed combined financial statements. 35 COSO PARTNERSHIPS UNAUDITED CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three-Months Three-Months Ended Ended March 31, March 31, 2003 2002 Net cash provided by (used in) operating activities... $ 19,194 $ 108,518 Net cash provided by (used in) investing activities... (4,694) (4,160) Net cash provided by (used in) financing activities... -- (66,210) ------ ------ Net change in cash and cash equivalents............... $ 14,500 $ 38,148 ====== ======
See accompanying notes to the unaudited condensed combined financial statements. 36 COSO PARTNERSHIPS NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (Dollars in thousands) (1) Basis of Presentation The accompanying unaudited condensed combined financial statements were derived from the stand alone unaudited condensed financial statements of Caithness Coso Funding Corp., Coso Finance Partners, Coso Energy Developers and Coso Power Developers ("the Coso Partnerships"). All intercompany accounts and transactions were eliminated. This financial information has been provided to facilitate a more comprehensive understanding of the financial position, operating results and cash flows of the Coso Partnerships as a whole. The unaudited condensed combined financial statements should be read in conjunction with each individual Partnership's unaudited condensed financial statements. (2) Accounts Receivable and Revenue Recognition Due to the uncertainty surrounding Edison's ability to make payment on past due amounts, collection was not reasonably assured and the Coso Partnerships had not recognized revenue from Edison for energy delivered during the period November 1, 2000 through March 26, 2001. On March 1, 2002, Edison reached certain financing milestones and paid the Coso Partnerships for revenue generated, but not recognized for the period November 1, 2000 through March 26, 2001. For the three-month period ended March 31, 2002, the Coso Partnerships recognized revenue for energy delivered from November 1, 2000 through March 26, 2001 of $112.4 million. (3) Reclassifications Certain balances in prior years have been reclassified to conform to the presentation adopted in the current year. (4) New Accounting Pronouncements In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations. This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs and amends SFAS No. 19, Financial Accounting and Reporting by Oil and Gas Producing Companies. The Statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of a fair value can be made, and that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset. The Statement is effective for financial statements issued for fiscal years beginning after June 15, 2002. As a result of the adoption of SFAS No. 143 the Partnership was required to recognize a liability of $5,292, a net asset of $811 and a loss from a cumulative effect of a change in accounting principle of $4,481 as of January 1, 2003. In 2003 an additional depreciation and accretion expense resulting from adoption of SFAS No. 143 is estimated to be $675. 37 ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits 27.1 Financial Data Schedule--Form SX--Caithness Coso Funding Corp. 27.2 Financial Data Schedule--Form SX--Coso Finance Partners 27.3 Financial Data Schedule--Form SX--Coso Energy Developers 27.4 Financial Data Schedule--Form SX--Coso Power Developers Certification of Chief Executive Officer Certification of Chief Financial Officer 99.1 Certification of Chief Executive Officer 99.2 Certification of Chief Financial Officer (b) Reports on Form 8-K None 38 EXHIBIT 27.1 Form S-X Commercial and Industrial Companies Financial Data Schedule Worksheet for: CAITHNESS COSO FUNDING CORP. ---------------------------- Review the following list of tags for Article 5 and fill in the correct data in the column(s) provided. Generally, only one column of information will be required, however, two columns are provided if required in the Financial Data Schedule. Unless otherwise noted, all tags are required. A response is required for each item within the schedule. Use the value "0" (zero) if information is immaterial, inapplicable or unknown. Decimals may not be used to state financial data except as indicated. Values not provided will be entered as "0" (zero). Missing dates will be entered as "TO COME". Please be sure to verify all information in the EDGARized exhibit. To include a footnote, place a number in parentheses next to the value and provide the text of each corresponding footnote at the end of the worksheet form. Do you wish to include a LEGEND? This schedule contains summary financial Yes X No information extracted from *_____________ --- --- and is equalified in its entirety by reference to such financial statements. *Identify the financial statement(s) to be referenced in the legend: RESTATED Are your financials being "restated" (NO VALUE REQUIRED) from a previously file period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT NAME: MULTIPLIER Do the financials require a multiplier X 1,000 1,000,000,000 --- ---- other than 1 (one)? X Yes No 1,000,000 1,000,000,000,000 --- --- --- ---- CURRENCY CURRENCY OF FINANCIAL DATA: Is the currency used other than US Dollars? Use in conjunction with EXCHANGE RATE tag. Yes X No --- --- PERIOD TYPE - MOS X 3 - MOS --- --- --- --- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec - 31 - 2002 DEC - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD START (example: JAN-01-1997) Jan - 01 - 2002 JAN - 01 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD END (example: SEP-30-1997) Dec - 31 - 2002 MAR - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE: Is the exchange rate other than 1 (one)? Value may contain up to 5 decimal places) Use in conjunction with CURRENCY tag. Yes X No --- ---
PERIOD TYPE Year PERIOD TYPE 3 MOS ---- ----- CASH 0 0 SECURITIES 0 0 RECEIVABLES 282,361 288,655 ALLOWANCES 0 0 INVENTORY 0 0 CURRENT ASSETDS 1,130 7,424 PP&E 0 0 DEPRECIATION 0 0 TOTAL ASSETS 282,361 288,655 CURRENT LIABILITIES 1,130 7,424 BONDS 281,231 281,231 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 282,361 288,655 SALES 0 0 TOTAL REVENUES 26,931 6,294 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 0 0 LOSS PROVISION 0 0 INTEREST EXPENSES 26,931 6,294 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 0 NET INCOME 0 0 EPS BASIC 0 0 (Value may contain up to 3 decimal places) EPS DILUTED 0 0 (Value may contain up to 3 decimal places) Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
EXHIBIT 27.2 Form S-X Commercial and Industrial Companies Financial Data Schedule Worksheet for: COSO FINANCE PARTNERS --------------------- Review the following list of tags for Article 5 and fill in the correct data in the column(s) provided. Generally, only one column of information will be required, however, two columns are provided if required in the Financial Data Schedule. Unless otherwise noted, all tags are required. A response is required for each item within the schedule. Use the value "0" (zero) if information is immaterial, inapplicable or unknown. Decimals may not be used to state financial data except as indicated. Values not provided will be entered as "0" (zero). Missing dates will be entered as "TO COME". Please be sure to verify all information in the EDGARized exhibit. To include a footnote, place a number in parentheses next to the value and provide the text of each corresponding footnote at the end of the worksheet form. Do you wish to include a LEGEND? This schedule contains summary financial Yes X No information extracted from *_____________ --- --- and is equalified in its entirety by reference to such financial statements. *Identify the financial statement(s) to be referenced in the legend: RESTATED Are your financials being "restated" (NO VALUE REQUIRED) from a previously file period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT NAME: MULTIPLIER Do the financials require a multiplier X 1,000 1,000,000,000 --- ---- other than 1 (one)? X Yes No 1,000,000 1,000,000,000,000 --- --- --- ---- CURRENCY CURRENCY OF FINANCIAL DATA: Is the currency used other than US Dollars? Use in conjunction with EXCHANGE RATE tag. Yes X No --- --- PERIOD TYPE - MOS X 3 - MOS --- --- --- --- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec - 31 - 2002 DEC - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD START (example: JAN-01-1997) Jan - 01 - 2002 JAN - 01 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD END (example: SEP-30-1997) Dec - 31 - 2002 MAR - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE: Is the exchange rate other than 1 (one)? Value may contain up to 5 decimal places) Use in conjunction with CURRENCY tag. Yes X No --- ---
PERIOD TYPE Year PERIOD TYPE 3 MOS ---- ----- CASH 4,215 6,777 SECURITIES 28,692 29,012 RECEIVABLES 8,621 8,392 ALLOWANCES 0 0 INVENTORY 0 0 CURRENT ASSETS 13,904 15,774 PP&E 234,442 236,706 DEPRECIATION 98,129 100,566 TOTAL ASSETS 195,072 196,822 CURRENT LIABILITIES 6,231 4,916 BONDS 110,955 110,955 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 195,072 196,822 SALES 92,065 12,553 TOTAL REVENUES 93,639 12,612 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 33,376 7,510 LOSS PROVISION 0 0 INTEREST EXPENSES 11,151 2,562 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 1,780 NET INCOME 49,112 760 EPS BASIC 0 0 (Value may contain up to 3 decimal places) EPS DILUTED 0 0 (Value may contain up to 3 decimal places) Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
EXHIBIT 27.3 Form S-X Commercial and Industrial Companies Financial Data Schedule Worksheet for: COSO ENERGY DEVELOPERS ---------------------- Review the following list of tags for Article 5 and fill in the correct data in the column(s) provided. Generally, only one column of information will be required, however, two columns are provided if required in the Financial Data Schedule. Unless otherwise noted, all tags are required. A response is required for each item within the schedule. Use the value "0" (zero) if information is immaterial, inapplicable or unknown. Decimals may not be used to state financial data except as indicated. Values not provided will be entered as "0" (zero). Missing dates will be entered as "TO COME". Please be sure to verify all information in the EDGARized exhibit. To include a footnote, place a number in parentheses next to the value and provide the text of each corresponding footnote at the end of the worksheet form. Do you wish to include a LEGEND? This schedule contains summary financial Yes X No information extracted from *_____________ --- --- and is equalified in its entirety by reference to such financial statements. *Identify the financial statement(s) to be referenced in the legend: RESTATED Are your financials being "restated" (NO VALUE REQUIRED) from a previously file period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT NAME: MULTIPLIER Do the financials require a multiplier X 1,000 1,000,000,000 --- ---- other than 1 (one)? X Yes No 1,000,000 1,000,000,000,000 --- --- --- ---- CURRENCY CURRENCY OF FINANCIAL DATA: Is the currency used other than US Dollars? Use in conjunction with EXCHANGE RATE tag. Yes X No --- --- PERIOD TYPE - MOS X 3 - MOS --- --- --- --- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec - 31 - 2002 DEC - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD START (example: JAN-01-1997) Jan - 01 - 2002 JAN - 01 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD END (example: SEP-30-1997) Dec - 31 - 2002 MAR - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE: Is the exchange rate other than 1 (one)? Value may contain up to 5 decimal places) Use in conjunction with CURRENCY tag. Yes X No --- ---
PERIOD TYPE Year PERIOD TYPE 3 MOS ---- ----- CASH 1,423 8,268 SECURITIES 6,646 6,664 RECEIVABLES 7,102 6,865 ALLOWANCES 0 0 INVENTORY 0 0 CURRENT ASSETS 9,895 15,880 PP&E 247,912 249,748 DEPRECIATION 112,059 114,205 TOTAL ASSETS 174,871 180,190 CURRENT LIABILITIES 27,961 30,644 BONDS 89,875 89,875 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 174,871 180,190 SALES 81,252 9,334 TOTAL REVENUES 82,707 9,616 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 28,526 5,103 LOSS PROVISION 0 0 INTEREST EXPENSES 8,822 2,075 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 924 NET INCOME 45,359 1,514 EPS BASIC 0 0 (Value may contain up to 3 decimal places) EPS DILUTED 0 0 (Value may contain up to 3 decimal places) Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
EXHIBIT 27.4 Form S-X Commercial and Industrial Companies Financial Data Schedule Worksheet for: COSO POWER DEVELOPERS --------------------- Review the following list of tags for Article 5 and fill in the correct data in the column(s) provided. Generally, only one column of information will be required, however, two columns are provided if required in the Financial Data Schedule. Unless otherwise noted, all tags are required. A response is required for each item within the schedule. Use the value "0" (zero) if information is immaterial, inapplicable or unknown. Decimals may not be used to state financial data except as indicated. Values not provided will be entered as "0" (zero). Missing dates will be entered as "TO COME". Please be sure to verify all information in the EDGARized exhibit. To include a footnote, place a number in parentheses next to the value and provide the text of each corresponding footnote at the end of the worksheet form. Do you wish to include a LEGEND? This schedule contains summary financial Yes X No information extracted from *_____________ --- --- and is equalified in its entirety by reference to such financial statements. *Identify the financial statement(s) to be referenced in the legend: RESTATED Are your financials being "restated" (NO VALUE REQUIRED) from a previously file period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes X No --- --- COREGISTRANT NAME: MULTIPLIER Do the financials require a multiplier X 1,000 1,000,000,000 --- ---- other than 1 (one)? X Yes No 1,000,000 1,000,000,000,000 --- --- --- ---- CURRENCY CURRENCY OF FINANCIAL DATA: Is the currency used other than US Dollars? Use in conjunction with EXCHANGE RATE tag. Yes X No --- --- PERIOD TYPE - MOS X 3 - MOS --- --- --- --- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec - 31 - 2002 DEC - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD START (example: JAN-01-1997) Jan - 01 - 2002 JAN - 01 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy PERIOD END (example: SEP-30-1997) Dec - 31 - 2002 MAR - 31 - 2003 --------------- --------------- mmm - dd - yyyy mmm - dd - yyyy EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE: Is the exchange rate other than 1 (one)? Value may contain up to 5 decimal places) Use in conjunction with CURRENCY tag. Yes X No --- ---
PERIOD TYPE Year PERIOD TYPE 3 MOS ---- ----- CASH 824 5,917 SECURITIES 10,855 10,883 RECEIVABLES 13,136 13,049 ALLOWANCES 0 0 INVENTORY 0 0 CURRENT ASSETS 15,071 19,583 PP&E 210,548 212,231 DEPRECIATION 94,356 96,640 TOTAL ASSETS 168,834 172,000 CURRENT LIABILITIES 2,706 5,322 BONDS 80,401 80,401 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 168,834 172,000 SALES 79,592 8,512 TOTAL REVENUES 80,486 8,591 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 29,428 6,595 LOSS PROVISION 0 0 INTEREST EXPENSES 7,755 1,853 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 1,777 NET INCOME 43,303 (1,634) EPS BASIC 0 0 (Value may contain up to 3 decimal places) EPS DILUTED 0 0 (Value may contain up to 3 decimal places) Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002 I, James D. Bishop, Sr., certify that: 1. I have reviewed this quarterly report on Form 10-Q of Caithness Coso Funding Corp., Coso Finance Partners, Coso Energy Developers, and Coso Power Developers (collectively, the "Registrant"); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 13, 2003 Caithness Coso Funding Corp. a Delaware Corporation By: /S/ JAMES D. BISHOP, SR. ------------------------ James D. Bishop, Sr. Director, Chairman & Chief Executive Officer CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002 I, Christopher T. McCallion, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Caithness Coso Funding Corp., Coso Finance Partners, Coso Energy Developers, and Coso Power Developers (collectively, the "Registrant"); 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 13, 2003 Caithness Coso Funding Corp. a Delaware Corporation By: /S/ CHRISTOPHER T. MCCALLION ---------------------------- Christopher T. McCallion Executive Vice President & Chief Financial Officer (Principal Financial & Accounting Officer) Exhibit 99.1 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Caithness Coso Funding Corp., Coso Finance Partners, Coso Energy Developers, and Coso Power Developers (collectively, the "Registrant") on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James D. Bishop, Sr., Chief Executive Officer of the Registrant, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: May 13, 2003 Caithness Coso Funding Corp. a Delaware Corporation By: /S/ JAMES D. BISHOP, SR. ------------------------ James D. Bishop, Sr. Director, Chairman & Chief Executive Officer Exhibit 99.2 CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Caithness Coso Funding Corp., Coso Finance Partners, Coso Energy Developers, and Coso Power Developers (collectively, the "Registrant") on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, James D. Bishop, Sr., Chief Executive Officer of the Registrant, certify, to the best of my knowledge and belief, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: May 13, 2003 Caithness Coso Funding Corp. a Delaware Corporation By: /S/ CHRISTOPHER T. MCCALLION ---------------------------- Christopher T. McCallion Executive Vice President & Chief Financial Officer (Principal Financial & Accounting Officer) 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. CAITHNESS COSO FUNDING CORP., a Delaware corporation Date: May 13, 2003 By: /S/ CHRISTOPHER T. MCCALLION ---------------------------- Christopher T. McCallion Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer) COSO FINANCE PARTNERS a California general Partnership By: New CLOC Company, LLC, its Managing General Partner Date: May 13, 2003 By: /S/ CHRISTOPHER T. MCCALLION ---------------------------- Christopher T. McCallion Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer) COSO ENERGY DEVELOPERS a California general Partnership By: New CHIP Company, LLC, its Managing General Partner Date: May 13, 2003 By: /S/ CHRISTOPHER T. MCCALLION ---------------------------- Christopher T. McCallion Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer) COSO POWER DEVELOPERS a California general Partnership By: New CTC Company, LLC, its Managing General Partner Date: May 13, 2003 By: /S/ CHRISTOPHER T. MCCALLION ---------------------------- Christopher T. McCallion Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer) -----END PRIVACY-ENHANCED MESSAGE-----