10-Q 1 q10qseptember2001.txt + FORM 10-Q -- QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934 (MarkOne) [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2001 ------------------ 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) 1114 Avenue of the Americas, 41st Floor, New York, New York 10036-7790 ----------------------------------------------------------- ---------- (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 November 7, 2001 ------------------------------------------------------------------ CAITHNESS COSO FUNDING CORP. Form 10-Q For the Quarter Ended September 30, 2001 PART I. FINANCIAL INFORMATION Page No. ITEM 1. Financial Statements Caithness Coso Funding Corp. Unaudited condensed balance sheets at September 30, 2001 and December 31, 2000 4 Unaudited condensed statements of operations for the three-months ended September 30, 2001, the three-months ended September 30, 2000, the nine-months ended September 30, 2001, and the nine-months ended September 30, 2000 5 Unaudited condensed statements of cash flows for the nine-months ended September 30, 2001 and the nine-months ended September 30, 2000 6 Notes to the unaudited condensed financial statements 7 Coso Finance Partners Unaudited condensed balance sheets at September 30, 2001 and December 31, 2000 8 Unaudited condensed statements of operations for the three-months ended September 30, 2001, the three-months ended September 30, 2000, the nine-months ended September 30, 2001, and the nine-months ended September 30, 2000 9 Unaudited condensed statements of cash flows for the nine-months ended September 30, 2001 and the nine-months ended September 30, 2000 10 Notes to the unaudited condensed financial statements 11 Coso Energy Developers Unaudited condensed balance sheets at September 30, 2001 and December 31, 2000 12 Unaudited condensed statements of operations for the three-months ended September 30, 2001, the three-months ended September 30, 2000, the nine-months ended September 30, 2001, and the nine-months ended September 30, 2000 13 Unaudited condensed statements of cash flows for the nine-months ended September 30, 2001 and the nine-months ended September 30, 2000 14 Notes to the unaudited condensed financial statements 15 2 Coso Power Developers Unaudited condensed balance sheets at September 30, 2001 and December 31, 2000 16 Unaudited condensed statements of operations for the three-months months ended September 30, 2001, the three-months ended September 30, 2000, the nine-months ended September 30, 2001, and the nine-months ended September 30, 2000 17 Unaudited condensed statements of cash flows for the nine-months ended September 30, 2001 and the nine-months ended September 30, 2000 18 Notes to the unaudited condensed financial statements 19 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 30 ITEM 2. Change in Securities and Use of Proceeds 30 ITEM 3. Defaults upon Senior Securities 30 ITEM 4. Submission of Matters to a Vote of Security Holders 30 ITEM 5. Other Information 31 Supplemental condensed combined financial information for the Coso Partnerships Unaudited condensed combined balance sheets at September 30, 2001 and December 31, 2000 32 Unaudited condensed combined statements of operations for the three- months ended September 30, 2001, the three-months ended September 30, 2000, the nine-months ended September 30, 2001, and the nine- months ended September 30, 2000 33 Unaudited condensed combined statements of cash flows for the nine- months ended September 30, 2001 and the nine-months ended September 30, 2000 34 Notes to the unaudited condensed combined financial statements 35 ITEM 6. Exhibits and Reports on Form 8-K 36 3 CAITHNESS COSO FUNDING CORP. UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
September 30, December 31, 2001 2000 (Note) Assets: Accrued interest receivable....................... $ 8,359 $ 1,286 Project loan to Coso Finance Partners............. 129,893 134,984 Project loan to Coso Energy Developers............ 99,040 100,907 Project loan to Coso Power Developers............. 89,925 94,176 ------ ------ $ 327,217 $ 331,353 ======= ======= Liabilities and Stockholders' Equity: Senior secured notes: Accrued interest payable....................... $ 8,359 $ 1,286 6.80% notes due 2001........................... 15,858 27,067 9.05% notes due 2009........................... 303,000 303,000 ------- ------- 327,217 331,353 Stockholders' equity................................. --- --- ------- ------- $ 327,217 $ 331,353 ======= =======
Note: The condensed balance sheet at December 31, 2000 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 Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2001 2000 2001 2000 Interest income.......... $ 7,105 $ 7,671 $ 21,703 $ 24,600 Interest expense......... (7,105) (7,671) (21,703) (24,600) ------ ----- ------ ------ 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) Nine-Months Nine-Months Ended Ended September 30, September 30, 2001 2000 Cash flows from investing activities....... $ 4,136 $ 57,298 Cash flows from financing activities....... (4,136) (57,298) ----- ------ Net change in cash and cash equivalents.... $ --- $ --- ===== ====== Supplemental cash flow disclosure: Cash paid for interest............... $ 14,631 $ 15,660 ====== ====== See accompanying notes to the unaudited condensed financial statements 6 CAITHNESS COSO FUNDING CORP. NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (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 senior secured notes. Pursuant to separate credit agreements between Funding Corp. and each partnership, the net proceeds from the offering of $110,000 of 6.80% senior secured notes due 2001 and $303,000 of 9.05% senior secured 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, 2000. 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. (3) New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, FASB issued FAS No. 138, "Accounting for Certain Derivative Instruments and Hedging Activities," which amended FAS No. 133 and addressed certain implementation issues. The statement establishes accounting and reporting standards requiring every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires the changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Funding Corp. has adopted FAS 133, as amended, and assessed that it has no material effect on its financial statements. 7 COSO FINANCE PARTNERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
September 30, December 31, 2001 2000 (Note) Assets: Cash and cash equivalents.................................................. $ 13,719 $ 3,506 Restricted cash and investments............................................ 24,414 22,996 Accounts receivable, net................................................... 5,178 521 Prepaid expenses & other assets............................................ 942 809 Amounts due from related parties........................................... 7,115 1,960 Property, plant & equipment, net........................................... 142,697 149,076 Power purchase agreement, net.............................................. 11,380 12,240 Investment in China Lake Plant Services, Inc............................... 4,046 4,072 Deferred financing costs, net.............................................. 2,840 3,229 ------- ------- $ 212,331 $ 198,409 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities................................... $ 24,100 $ 15,857 Amounts due to related parties............................................. 4,217 697 Project loans.............................................................. 129,893 134,984 ------- ------- 158,210 151,538 Partners' capital.......................................................... 54,121 46,871 ------- ------- $ 212,331 $ 198,409 ======= =======
Note: The condensed balance sheet at December 31, 2000 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 Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2001 2000 2001 2000 Revenue: Energy revenues.............................. $ 7,666 $ 14,322 $ 54,303 $ 31,505 Capacity revenues............................ 8,190 8,190 13,011 13,011 Interest and other income.................... 977 417 2,155 1,199 ------ ------ ------ ------ Total revenue......................... 16,833 22,929 69,469 45,715 Operating expenses: Plant operating expenses..................... 2,055 2,167 6,629 6,513 Royalty expense.............................. 7,005 4,484 13,759 7,689 Provision for doubtful accounts.............. --- --- 21,613 --- Depreciation and amortization................ 2,647 2,497 7,687 7,085 ------ ------ ------ ------ Total operating expenses.............. 11,707 9,148 49,688 21,287 Operating income...................... 5,126 13,781 19,781 24,428 Other expenses: Interest expense............................ 2,896 3,094 8,851 9,387 Amortization on deferred financing.......... 130 131 390 390 ------ ------ ------ ------ Total other expenses.................. 3,026 3,225 9,241 9,777 Net income............................ $ 2,100 $ 10,556 $ 10,540 $ 14,651 ====== ====== ====== ======
See accompanying notes to the unaudited condensed financial statements 9 COSO FINANCE PARTNERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Nine-Months Nine-Months Ended Ended September 30, September 30, 2001 2000 Net cash provided by operating activities.................... $ 20,461 $ 14,752 Net cash provided by (used in) investing activities.......... (1,867) 614 Net cash provided by (used in) financing activities.......... (8,381) (10,048) ------ ------ Net change in cash and cash equivalents...................... $ 10,213 $ 5,318 ====== ====== Supplemental cash flow disclosure: Cash paid for interest................................... $ 5,968 $ 6,342 ====== ======
See accompanying notes to the unaudited condensed financial statements 10 COSO FINANCE PARTNERS NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (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 under a 24-year power purchase contract expiring in 2011. (2) Basis of Presentation The accompanying unaudited condensed combined 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, 2000. 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) New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, FASB issued FAS No. 138, "Accounting for Certain Derivative Instruments and Hedging Activities," which amended FAS No. 133 and addressed certain implementation issues. The statement establishes accounting and reporting standards requiring every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires the changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. CFP has adopted FAS 133, as amended, and assessed that it has no material effect on its financial statements. 11 COSO ENERGY DEVELOPERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
September 30, December 31, 2001 2000 (Note) Assets: Cash and cash equivalents.............................................. $ 18,216 $ 5,862 Restricted cash and investments........................................ 8,160 14,502 Accounts receivable, net............................................... 4,239 40 Prepaid expenses and other assets...................................... 1,226 1,013 Amounts due from related parties....................................... 1,200 365 Property, plant and equipment, net..................................... 152,055 153,618 Power purchase agreement, net.......................................... 18,705 19,510 Investment in Coso Transmission Line Partners.......................... 2,874 2,871 Investment in China Lake Plant Services, Inc........................... 871 1,051 Deferred financing costs, net.......................................... 2,242 2,480 ------- ------- $ 209,788 $ 201,312 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities............................... $ 8,871 $ 6,839 Amounts due to related parties......................................... 28,021 24,321 Project loans.......................................................... 99,040 100,907 ------- ------- 135,932 132,067 Partners' capital......................................................... 73,856 69,245 ------- ------- $ 209,788 $ 201,312 ======= =======
Note: The condensed balance sheet at December 31, 2000 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 12 COSO ENERGY DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands)
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2001 2000 2001 2000 Revenue: Energy revenues........................... $ 6,039 $ 11,828 $ 46,294 $ 25,559 Capacity revenues......................... 8,016 8,017 12,728 12,728 Interest and other income................. 1,040 466 2,877 6,147 ------ ------ ------ ------ Total revenue...................... 15,095 20,311 61,899 44,434 Operating expenses: Plant operating expenses.................. 2,384 2,605 7,592 8,022 Royalty expense........................... 967 1,813 4,993 2,391 Provisions for doubtful accounts.......... --- --- 21,830 --- Depreciation and amortization............. 4,009 4,013 11,884 11,427 ------ ------ ------ ------ Total operating expenses........... 7,360 8,431 46,299 21,840 Operating income................... 7,735 11,880 15,600 22,594 Other expenses: Interest expense......................... 2,225 2,287 6,733 6,870 Amortization of deferred financing....... 79 79 238 238 ------ ------ ------ ------ Total other expenses............... 2,304 2,366 6,971 7,108 Net income........................ $ 5,431 $ 9,514 $ 8,629 $ 15,486 ====== ====== ====== ======
See accompanying notes to the unaudited condensed financial statements 13 COSO ENERGY DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Nine-Months Nine-Months Ended Ended September 30, September 30, 2001 2000 Net cash provided by operating activities.................... $ 21,413 $ 19,739 Net cash provided by (used in) investing activities.......... (3,174) 1,895 Net cash provided by (used in) financing activities.......... (5,885) (5,182) ------ ------ Net change in cash and cash equivalents...................... $ 12,354 $ 16,452 ====== ====== Supplemental cash flow disclosure: Cash paid for interest.................................. $ 4,514 $ 4,612 ====== ======
See accompanying notes to the unaudited condensed financial statements 14 COSO ENERGY DEVELOPERS NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (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 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, 2000. 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) New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, FASB issued FAS No. 138, "Accounting for Certain Derivative Instruments and Hedging Activities," which amended FAS No. 133 and addressed certain implementation issues. The statement establishes accounting and reporting standards requiring every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires the changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. CED has adopted FAS 133, as amended, and assessed that it has no material effect on its financial statements. 15 COSO POWER DEVELOPERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands)
September 30, December 31, 2001 2000 (Note) Assets: Cash and cash equivalents.............................................. $ 11,346 $ 7,741 Restricted cash and investments........................................ 10,728 10,214 Accounts receivable, net............................................... 1,982 29 Prepaid expenses and other assets...................................... 948 849 Amounts due from related parties....................................... 5,633 5,953 Property, plant and equipment, net..................................... 127,898 136,947 Power purchase agreement, net.......................................... 23,519 25,614 Investment in Coso Transmission Line Partners.......................... 3,531 3,528 Investment in China Lake Plant Services, Inc........................... 1,954 1,963 Deferred financing costs, net.......................................... 2,278 2,855 ------- ------- $ 189,817 $ 195,693 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities............................... $ 16,211 $ 12,278 Amounts due to related parties......................................... 8,488 1,816 Project loans.......................................................... 89,925 94,176 ------- ------- 114,624 108,270 Partners' capital...................................................... 75,193 87,423 ------- ------- $ 189,817 $ 195,693 ======= =======
Note: The condensed balance sheet at December 31, 2000 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 16 COSO POWER DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands)
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2001 2000 2001 2000 Revenue: Energy revenues........................ $ 5,006 $ 11,600 $ 39,684 $ 27,589 Capacity revenues...................... 8,047 8,047 12,785 12,785 Interest and other income.............. 881 560 2,135 1,962 ----- ------ ------ ------ Total revenue................... 13,934 20,207 54,604 42,336 Operating expenses: Plant operating expenses............... 2,360 2,230 7,210 6,876 Royalty expense........................ 2,316 3,267 8,209 7,028 Provision for doubtful accounts........ --- --- 22,733 --- Depreciation and amortization.......... 3,870 3,883 11,454 11,289 ----- ------ ------ ------ Total operating expenses........ 8,546 9,380 49,606 25,193 Operating income................ 5,388 10,827 4,998 17,143 Other expenses: Interest expense....................... 2,003 2,286 6,140 6,947 Amortization on deferred financing..... 192 192 577 577 ----- ------ ------ ------- Total other expenses............ 2,195 2,478 6,717 7,524 Net income (loss)............... $ 3,193 $ 8,349 $ (1,719) $ 9,619 ===== ====== ====== ======
See accompanying notes to the unaudited condensed financial statements 17 COSO POWER DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Nine-Months Nine-Months Ended Ended September 30, September 30, 2001 2000 Net cash provided by operating activities.................... $ 19,184 $ 26,052 Net cash provided by (used in) investing activities.......... (817) 37,714 Net cash provided by (used in) financing activities.......... (14,762) (49,616) ------ ------ Net change in cash and cash equivalents...................... $ 3,605 $ 14,150 ====== ====== Supplemental cash flow disclosure: Cash paid for interest.................................. $ 4,149 $ 4,706 ====== ======
See accompanying notes to the unaudited condensed financial statements 18 COSO POWER DEVELOPERS NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS (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 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, 2000. 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) New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, FASB issued FAS No. 138, "Accounting for Certain Derivative Instruments and Hedging Activities," which amended FAS No. 133 and addressed certain implementation issues. The statement establishes accounting and reporting standards requiring every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires the changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. CPD has adopted FAS 133, as amended, and assessed that it has no material effect on its financial statements. 19 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Except for historical financial information contained herein, the matters discussed in this quarterly 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"), respectively, (the "Coso Partnerships") or collectively ("Coso") and their respective management. 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 are: (i) risks relating to the uncertainties in the California energy market, (ii) the financial viability of Southern California Edison, ("Edison"), (iii) that 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, (vi) general operating risks, (vii) the dependence on third parties, (viii) changes in government regulation, (ix) the effects of competition, (x) the dependence on senior management, (xi) fluctuations in quarterly results and (xii) seasonality. General The Coso projects 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 projects. On February 25, 1999 Caithness Acquisition Company, LLC, (CAC) purchased all of CalEnergy's interests in the Coso projects for $205.0 million in cash plus the assumption of CalEnergy's and its affiliates' share of debt outstanding at the Coso projects which then totaled approximately $67.0 million. 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 6.8% Senior Secured Notes and the 9.05% 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 higher level. The maximum annual capacity bonus payment available is also fixed throughout the life of each power purchase agreement; and 20 * Energy payments which are based on the amount of electricity the Coso Partnership's plant actually produces. 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 Partnership 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. For the three months ended September 30, 2001, Edison's average avoided cost of energy paid to the Coso Partnerships was 3.6 cents per kWh, as compared to 6.2 cents per kWh for the three months ended September 30, 2000. On June 19, 2001, Edison entered into an agreement with the Coso Partnerships that would establish an average short run avoided cost of 5.37 cents/kWh for energy sales to Edison for five years. The agreement requires the approval by the California legislature, which is now not expected to be received. Subsequent to that agreement with the Coso Partnerships, Edison entered into a settlement agreement with the CPUC on October 2, 2001 whereby Edison will recover in retail electric rates their historical shortfall in electricity purchase costs with interest by December 31, 2005. That settlement which was approved in federal court on October 5, 2001, was stayed, by an appeals court on October 30, 2001 so that certain intervenors can provide opposition briefs to the court. The Coso Partnerships and Edison are now in discussion regarding the implementation of average short run avoided cost of 5.37 cents/kWh for the five year period in light of the developments that occurred after the June 19, 2001 agreement was reached. There can be no assurances as to the ultimate outcome of these discussions. The Coso Partnerships implemented a steam-sharing program, which they established under the Coso Geothermal Exchange Agreement they entered into in 1994. 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 projects. 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. This formula is largely based upon the tariff rates charged by Edison, which have recently been increased by the CPUC. Negotiations with the U.S. Navy are continuing to re-adjust the formula to reflect recent activity in the local energy market. 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. The BLM Partnership pays a 10% royalty to the Bureau of Land Management based on the 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, which are not material at various rates. 21 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 on behalf of the Coso Partnerships who have jointly, severally, and unconditionally guaranteed repayment of the senior secured notes. On May 28, 1999, Funding Corp. issued $110 million of 6.80% senior secured notes due in 2001 and $303 million of 9.05% senior secured 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 a depositary agreement with the trustee for the notes, the Coso Partnerships established accounts with a depositary and pledged those accounts as security for the benefit of the holders of the senior secured notes. All amounts deposited with the depositary are, at the direction of the Coso Partnerships, invested by the depositary 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 depositary 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 pays 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. Subsequently, pursuant to a California Public Utilities Commission (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 continues to pay interest on the outstanding amount at 7% per annum. That payment was made pursuant to the June 19, 2001 agreement between Edison and the Coso Partnerships described above. Subsequent to that agreement with the Coso Partnerships, Edison entered into the settlement agreement discussed above. The Coso Partnerships and Edison are now in discussions regarding the timing and amounts of payments to be made to the Coso Partnerships in light of the developments that occurred after June 19, 2001 agreement was reached. There can be no assurances as to the ultimate outcome of these discussions. 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 capacity is based upon a number of factors and can be expected to vary throughout the year under normal operating conditions. 22 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 Nine-Months Ended Ended September 30 September 30 2001 2000 2001 2000 ---- ---- ---- ---- Navy I Partnership (stand alone) Operating capacity factor 110.1% 113.0% 107.9% 111.9% Capacity (MW) (average) 88.10 90.39 86.29 89.49 kWh produced (000s) 194,525 199,573 565,345 588,479 BLM Partnership (stand alone) Operating capacity factor 99.3% 111.7% 103.2% 108.8% Capacity (MW) (average) 79.45 89.39 82.55 87.02 kWh produced (000s) 175,417 197,369 540,837 572,251 Navy II Partnership (stand alone) Operating capacity factor 102.0% 112.3% 103.5% 110.8% Capacity (MW) (average) 81.64 89.86 82.83 88.66 kWh produced (000s) 180,257 198,402 542,677 583,061
The BLM Partnership's energy production was 175.4 million kWh and 540.8 million kWh for the three and nine-months ended September 30, 2001, respectively, as compared to 197.4 million kWh and 572.3 million kWh for the same periods in 2000, decreases of 11.1% and 5.5%, respectively. The Navy II Partnership's energy production was 180.3 million kWh and 542.7 million kWh for the three and nine-months ended September 30, 2001, respectively, as compared to 198.4 million kWh and 583.1 million kWh for the same periods in 2000, decreases of 9.1% and 6.9%, respectively. The decreases in energy production were primarily due to the deferment of certain capital and maintenance projects by the Coso Partnerships, due to non-payment by Edison during the period November 1, 2000 through March 26, 2001. These projects have been resumed as Edison has resumed payment for production starting in late March 2001. Results of Operations for the three and nine-months ended September 30, 2001 and 2000 The following discusses the results of operations of the Coso Partnerships for the three and nine-months ending September 30, 2001 and 2000 (dollar amounts in tables are in thousands, except per kWh data): 23 Revenue
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2001 2000 2001 2000 $ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh - --------- - --------- - --------- - --------- Total Operating Revenues Navy I Partnership 15,856 8.2 22,512 11.3 67,314 11.9 44,516 7.6 BLM Partnership 14,055 8.0 19,845 10.1 59,022 10.9 38,287 6.7 Navy II Partnership 13,053 7.2 19,647 9.9 52,469 9.7 40,374 6.9 Capacity & Capacity Bonus Revenues Navy I Partnership 8,190 4.2 8,190 4.1 13,011 2.3 13,011 2.2 BLM Partnership 8,016 4.6 8,017 4.1 12,728 2.4 12,728 2.2 Navy II Partnership 8,047 4.5 8,047 4.1 12,785 2.4 12,785 2.2 Energy Revenues Navy I Partnership 7,666 3.9 14,322 7.2 54,303 9.6 31,505 5.4 BLM Partnership 6,039 3.4 11,828 6.0 46,294 8.6 25,559 4.5 Navy II Partnership 5,006 2.8 11,600 5.8 39,684 7.3 27,589 4.7
Total operating revenues for the Navy I Partnership, which consist of capacity payments, capacity bonus payments and energy payments, were $15.9 million and $67.3 million for the three and nine-months ended September 30, 2001, respectively, as compared to $22.5 million and $44.5 million for the same periods in 2000, a decrease of 29.3% and an increase of 51.2%, respectively. The Navy I Partnership's energy revenues were $7.7 million and $54.3 million for the three and nine-months ended September 30, 2001, respectively, as compared to $14.3 million and $31.5 million for the same periods in 2000, a decrease of 46.2% and an increase of 72.4%, respectively. Total operating revenues for the BLM Partnership, which consist of capacity payments, capacity bonus payments and energy payments, were $14.1 million and $59.0 million for the three and nine-months ended September 30, 2001, respectively, as compared to $19.8 million and $38.3 million for the same periods in 2000, a decrease of 28.8% and an increase of 54.0%, respectively. The BLM Partnership's energy revenues were $6.0 million and $46.3 million for the three and nine-months ended September 30, 2001, respectively, as compared to $11.8 million and $25.6 million for the same periods in 2000, a decrease of 49.2% and an increase of 80.9%, respectively. Total operating revenues for the Navy II Partnership, which consist of capacity payments, capacity bonus payments and energy payments, were $13.1 million and $52.5 million for the three and nine-months ended September 30, 2001, respectively, as compared to $19.6 million and $40.4 million for the same periods in 2000, a decrease of 33.2% and an increase of 30.0%, respectively. The Navy II Partnership's energy revenues were $5.0 million and $39.7 million for the three and nine-months ended September 30, 2001, respectively, as compared to $11.6 million and $27.6 million for the same periods in 2000, a decrease of 56.9% and an increase of 43.8%, respectively. Each Coso Partnership's decrease in operating and energy revenues for the three-month period ended September 30, 2001, as compared to the same period in 2000, were due to decreases in the average avoided cost of energy paid to the respective partnership, as well as previously discussed decreases in generation. The average avoided cost of energy decreased from 6.2 cents per kWh for the three-month period ended September 30, 2000, to 3.6 cents per kWh for the same period in 2001. Each Coso Partnership's increase in operating and energy revenues for the nine-month period ended September 30, 2001, as compared to the same period in 2000, were due to increases in the average avoided cost of energy paid to the respective partnerships, offset, somewhat by previously discussed decreases in generation. The average avoided cost of energy increased from 4.6 cents per kWh for the nine-month period ended September 30, 2000, to 8.9 cents per kWh for the same period in 2001. Estimates of Edison's future avoided cost of energy, which fluctuate with the prices of natural gas, may vary significantly, and no one can predict the likely level of future avoided cost of energy prices. 24 Interest and Other Income
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, 2001 September 30, 2000 September 30, 2001 September 30, 2000 $ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh - --------- - --------- - --------- - --------- Navy I Partnership 977 0.5 417 0.2 2,155 0.4 1,199 0.2 BLM Partnership 1,040 0.6 466 0.2 2,877 0.5 6,147 1.1 Navy II Partnership 881 0.5 560 0.3 2,135 0.4 1,962 0.3
The Navy I Partnership's interest and other income was $1.0 million and $2.2 million for the three and nine-months ended September 30, 2001, respectively, as compared to $0.4 million and $1.2 million for the same periods in 2000, increases of $0.6 million and 83.3%, respectively. The increases for the three and nine-months ended September 30, 2001, as compared to the same periods in 2000, were primarily due to interest on amounts in arrears owed by Edison in 2001. The BLM Partnership's interest and other income was $1.0 million and $2.9 million for the three and nine-months ended September 30, 2001, respectively, as compared to $0.5 million and $6.1 million for the same periods in 2000, an increase of 100% and a decrease of 52.5%, respectively. The increase for the three-month period ended September 30, 2001, as compared to the same period in 2000, was primarily due to interest on amounts in arrears owed by Edison in 2001. The decrease for the nine-months ended September 30, 2001, as compared to the same period in 2000, was primarily due to a legal settlement of $5 million with Dow Chemical Company paid to the BLM Partnership in January of 2000, partially offset by an increase in interest income on amounts in arrears owed by Edison in 2001. The Navy II Partnership's interest and other income was $0.9 million and $2.1 million for the three and nine-months ended September 30, 2001, respectively, as compared to $0.6 million and $2.0 million for the same periods in 2000, increases of 50.0% and 5.0%, respectively. The increases for the three and nine-months ended September 30, 2001, as compared to the same periods in 2000, were primarily due to interest on amounts in arrears owed by Edison in 2001. 25 Plant Operations
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, 2001 September 30, 2000 September 30, 2001 September 30, 2000 $ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh - --------- - --------- - --------- - --------- Navy I Partnership 2,055 1.1 2,167 1.1 6,629 1.2 6,513 1.1 BLM Partnership 2,384 1.4 2,605 1.3 7,592 1.4 8,022 1.4 Navy II Partnership 2,360 1.3 2,230 1.1 7,210 1.3 6,876 1.2
The BLM Partnership's operating expenses, including operating and general and administrative expenses, were $2.4 million and $7.6 million for the three and nine-months ended September 30, 2001, respectively, as compared to $2.6 million and $8.0 million for the same periods in 2000, decreases of 7.7% and 5.0% respectively. The decreases for the three and nine-months ended September 30, 2001, as compared to the same periods in 2000, were primarily due to an offset of current property taxes from a partial refund of an appealed amount and lower well maintenance and workover costs during those periods in 2001. The Navy II Partnership's operating expenses, including operating and general and administrative expenses, was $2.4 million for the three-months ended September 30, 2001, as compared to $2.2 million for the same period in 2000, an increases of 9.1%. The increase for the three-months ended September 30, 2001, as compared to the same periods in 2000, was primarily due to increased well maintenance and workover costs, partially reduced by an offset of current property taxes from a partial refund of an appealed amount. Royalty Expense
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, 2001 September 30, 2000 September 30, 2001 September 30, 2000 $ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh - --------- - --------- - --------- - --------- Navy I Partnership 7,005 3.6 4,484 2.2 13,759 2.4 7,689 1.3 BLM Partnership 967 0.6 1,813 0.9 4,993 0.9 2,391 0.4 Navy II Partnership 2,316 1.3 3,267 1.6 8,209 1.5 7,028 1.2
The Navy I Partnership's royalty expenses were $7.0 million and $13.8 million for the three and nine-months ended September 30, 2001, respectively, as compared to $4.5 million and $7.7 million for the same periods in 2000, increases of 55.6% and 79.2%, respectively. The increase for the three-month period ended September 30, 2001, as compared to the same period in 2000, was due to the increase in electricity price used to calculate the Navy I Partnership's Unit 1 royalty. The increase for the nine-month period ended September 30, 2001 as compared to the same period in 2000, was due to the increase in the average avoided cost of energy paid to the Navy I Partnership during that period in 2001. The BLM Partnership's royalty expenses were $1.0 million and $5.0 million for the three and nine-months ended September 30, 2001, respectively, as compared to $1.8 million and $2.4 million for the same periods in 2000, a decrease of $0.8 million and an increase of $2.6 million, respectively. The decrease for the three-month period ended September 30, 2001 as compared to the same period in 2000, was due to the decrease in the average avoided cost of energy paid to the BLM Partnership during that period in 2001. The increase for the nine-month period ended September 30, 2001 as compared to the same period in 2000, was due to the increase in the average avoided cost of energy paid to the BLM Partnership during that period in 2001. 26 The Navy II Partnership's royalty expenses were $2.3 million and $8.2 million for the three and nine-months ended September 30, 2001, respectively, as compared to $3.3 million and $7.0 million for the same periods in 2000, a decrease of 30.3% and an increase of 17.1%, respectively. The decrease for the three-month period ended September 30, 2001 as compared to the same period in 2000, was due to the decrease in the average avoided cost of energy paid to the Navy II Partnership during that period in 2001. The increase for the nine-month period ended September 30, 2001 as compared to the same period in 2000, was due to the increase in the average avoided cost of energy paid to the Navy II partnership during that period in 2001. Depreciation and Amortization
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, 2001 September 30, 2000 September 30, 2001 September 30, 2000 $ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh - --------- - --------- - --------- - --------- Navy I Partnership 2,647 1.4 2,497 1.3 7,687 1.4 7,085 1.2 BLM Partnership 4,009 2.3 4,013 2.0 11,884 2.2 11,427 2.0 Navy II Partnership 3,870 2.1 3,883 2.0 11,454 2.1 11,289 1.9
The Navy I Partnership's depreciation and amortization expense was $7.7 million for the nine-months ended September 30, 2001, as compared to $7.1 million for the same period in 2000, an increase of 8.5%. The Navy I Partnership's increase in depreciation and amortization expense for the nine-months ended September 30, 2001, as compared to the same period in 2000, was primarily due to an increase in capitalized assets in 2001. Interest Expense
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, 2001 September 30, 2000 September 30, 2001 September 30, 2000 $ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh - --------- - --------- - --------- - --------- Navy I Partnership 2,896 1.5 3,094 1.6 8,851 1.6 9,387 1.6 BLM Partnership 2,225 1.3 2,287 1.2 6,733 1.2 6,870 1.2 Navy II Partnership 2,003 1.1 2,286 1.2 6,140 1.1 6,947 1.2
The Navy I Partnership's interest expense was $2.9 million and $8.9 million for the three and nine-months ended September 30, 2001, respectively, as compared to $3.1 million and $9.4 million for the same periods in 2000, decreases of 6.5% and 5.3%, respectively. The Navy II Partnership's interest expense was $2.0 million and $6.1 million for the three and nine-months ended September 30, 2001, respectively, as compared to $2.3 million and $6.9 million for the same periods in 2000, decreases of 13.0% and 11.6%, respectively. These decreases in interest expense for the three and nine-months ended September 30, 2001, as compared to the same periods in 2000 were due to reductions in the principal amount of the project loan from Funding Corp. 27 Provision for Doubtful Accounts Edison experienced significant cash flow problems earlier this year due in part to the difference between revenues received from its customers through frozen electric rates and the cost of producing service to its customers, including the cost to acquire electricity. This cash flow shortfall has 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. The Navy I, BLM and Navy II Partnerships fully reserved their receivables of $15,234, $15,279 and $15,312, respectively, from Edison for energy delivered during this period. On June 19, 2001, Edison entered into an agreement with the Coso Partnerships that addressed energy pricing and payment issues. On June 21, 2001, the Navy I, BLM, and Navy II Partnerships received their first payments of $4,139, $4,118 and $4,227, respectively, for partial payment of amounts due from November 2000 through March 26, 2001. Any future payments are subject to further negotiations with Edison subsequent to its settlement with the CPUC on October 2, 2001. That settlement, which was approved in federal court on October 5, 2001, allows Edison to recover in retail electric rates its historical shortfall in electricity purchase costs with interest by December 31, 2005. Despite the partial payment of 10% of the uncollected amount on June 21, 2001, the Coso Partnerships are unable to determine the time frame during which any future payments may be received. Liquidity and Capital Resources Each of 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. 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 Partnership's 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. Edison's shortfall in collections, coupled with its near term capital requirements, materially and adversely affected its liquidity. 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. Accordingly, that will eliminate some of the uncertainty of collection of current receivables owed to the Navy I, BLM and Navy II Partnerships of $15,234, $15,279 and $15,312, respectively, for revenues generated from November 2000 through March 26, 2001 and forward. Edison's failure to pay its future obligations may have a material adverse effect on the Coso Partnership's ability to make debt service payments to Funding Corp. as they come due under the Funding Corp. notes. Current year cash flow from operations should be sufficient to fully retire the $110 million senior secured note due on December 15, 2001. On March 27, 2001 the CPUC ordered Edison to resume paying qualifying facilities such as the Coso Partnerships at rates stipulated by the CPUC. Since April, Edison has resumed full payments to the Coso Partnerships for current purchases of electricity generated. On June 21, 2001, Edison paid 10% of its unpaid liabilities to the Coso Partnerships, for power generated from November 2000 through March 26, 2001, amounting to $12,485 and continues to pay interest on the outstanding amount at 7% per annum. The following table sets forth a summary of each Coso Partnership's cash flows for the nine-months ended September 30, 2001 and September 30, 2000. 28
Nine-Months Nine-Months Ended Ended September 30, September 30, 2001 2000 Navy I Partnership (stand alone) Net cash provided by operating activities $ 20,461 $ 14,752 Net cash provided by (used in) investing activities (1,867) 614 Net cash provided by (used in) financing activities (8,381) (10,048) ------ ------ Net change in cash and cash equivalents $ 10,213 $ 5,318 ====== ====== BLM Partnership (stand alone) Net cash provided by operating activities $ 21,413 $ 19,739 Net cash provided by (used in) investing activities (3,174) 1,895 Net cash provided by (used in) financing activities (5,885) (5,182) ------ ------ Net change in cash and cash equivalents $ 12,354 $ 16,452 ====== ====== Navy II Partnership (stand alone) Net cash provided by operating activities $ 19,184 $ 26,052 Net cash provided by (used in) investing activities (817) 37,714 Net cash provided by (used in) financing activities (14,762) (49,616) ------ ------ Net change in cash and cash equivalents $ 3,605 $ 14,150 ====== ======
The Navy I Partnership's cash flows from operating activities increased by $5.7 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, primarily due to increases in trade payables partially offset by an increase in amounts due from related parties. Cash used in investing activities at the Navy I Partnership increased by $2.5 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, primarily due to an increase in restricted cash requirements associated with the project loan from Funding Corp., partially offset by a decrease in capital expenditures in 2001. The Navy I Partnership's cash used in financing activities decreased by $1.7 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, due to a decrease in the payment amount on the project loan from Funding Corp., partially offset by increased distributions in 2001. The BLM Partnership's cash flows from operating activities increased by $1.7 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, primarily due to increases in trade payables. Cash used in investing activities at the BLM Partnership increased by $5.1 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, primarily due to an increase in capital expenditures in 2001. The BLM Partnership's cash used in financing activities increased by $0.7 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, due to an increase in distributions in 2001, partially offset by a decrease in the payment amount on the project loan from Funding Corp. 29 The Navy II Partnership's cash flows from operating activities decreased by $6.9 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, primarily due to an increases in trade payables and amounts due to related parties in 2001. Cash from investing activities at the Navy II Partnership increased by $38.5 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, primarily due to the decrease in restricted cash requirements associated with the project loan from Funding Corp. The Navy II Partnership's cash used in financing activities decreased by $34.9 million for the nine-months ended September 30, 2001, as compared to the same period in 2000, due to a decrease in the payment amount on the project loan from Funding Corp., partially offset by increased distributions in 2001. New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, FASB issued FAS No. 138, "Accounting for Certain Derivative Instruments and Hedging Activities," which amended FAS No. 133 and addressed certain implementation issues. The statement establishes accounting and reporting standards requiring every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires the changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. The Coso Partnerships have adopted FAS 133, as amended, and assessed that it has no material effect on their financial statements. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings General Except as otherwise described above, the Coso Partnerships are currently parties to various minor items of litigation, 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. 30 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. 31 COSO PARTNERSHIPS UNAUDITED CONDENSED COMBINED BALANCE SHEETS (Dollars in thousands)
September 30, December 31, 2001 2000 Assets: Cash and cash equivalents......................... $ 43,281 $ 17,109 Restricted cash and investments................... 43,302 47,712 Accounts receivable, net.......................... 11,399 590 Prepaid expenses and other assets................. 3,116 2,671 Amounts due from related parties.................. 6,152 6,191 Property, plant and equipment, net................ 422,650 439,641 Power purchase agreement, net..................... 53,604 57,364 Investments....................................... 13,276 13,485 Deferred financing costs, net..................... 7,360 8,564 ------- ------- $ 604,140 $ 593,327 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities.......... $ 57,541 $ 36,260 Amounts due to related parties.................... 24,571 23,460 Project loans..................................... 318,858 330,067 ------- ------- 400,970 389,787 Partners' capital.................................... 203,170 203,540 ------- ------- $ 604,140 $ 593,327 ======= =======
See accompanying notes to the unaudited condensed combined financial statements. 32 COSO PARTNERSHIPS UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS (Dollars in thousands)
Three-Months Three-Months Nine-Months Nine-Months Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2001 2000 2001 2000 Revenue: Energy revenues............................... $ 18,711 $ 37,750 $ 140,281 $ 84,653 Capacity revenues............................. 24,253 24,254 38,524 38,524 Interest and other income..................... 2,898 1,443 7,167 9,308 ------ ------ ------- ------- Total revenue.......................... 45,862 63,447 185,972 132,485 Operating expenses: Plant operating expenses...................... 6,799 7,002 21,431 21,411 Royalty expense............................... 10,288 9,564 26,961 17,108 Provision for doubtful accounts............... --- --- 66,176 --- Depreciation and amortization................. 10,526 10,393 31,025 29,801 ------ ------ ------- ------- Total operating expenses............... 27,613 26,959 145,593 68,320 Operating income....................... 18,249 36,488 40,379 64,165 Other expenses: Interest expense.............................. 7,124 7,667 21,724 23,204 Amortization on deferred financing............ 401 402 1,205 1,205 ------ ------ ------- ------- Total other expenses................... 7,525 8,069 22,929 24,409 Net income............................. $ 10,724 $ 28,419 $ 17,450 $ 39,756 ====== ====== ====== ======
See accompanying notes to the unaudited condensed combined financial statements. 33 COSO PARTNERSHIPS UNAUDITED CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Nine-Months Nine-Months Ended Ended September 30, September 30, 2001 2000 Net cash provided by (used in) operating activities.... $ 61,058 $ 60,543 Net cash provided by (used in) investing activities.... (5,858) 40,223 Net cash provided by (used in) financing activities.... (29,028) (64,846) ------ ------ Net change in cash and cash equivalents................ $ 26,172 $ 35,920 ====== ====== Supplemental cash flow disclosure: Cash paid for interest............................. $ 14,631 $ 15,660 ====== ======
See accompanying notes to the unaudited condensed combined financial statements. 34 COSO PARTNERSHIPS NOTES TO THE UNAUDITED CONDENSED COMBINED FINANCIAL STATEMENTS (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) New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (FASB) issued Financial Accounting Standards No. (FAS) 133, "Accounting for Derivative Instruments and Hedging Activities." In June 2000, FASB issued FAS No. 138, "Accounting for Certain Derivative Instruments and Hedging Activities," which amended FAS No. 133 and addressed certain implementation issues. The statement establishes accounting and reporting standards requiring every derivative instrument (including certain derivative instruments embedded in other contracts) be recorded in the balance sheet as either an asset or liability measured at its fair value. The statement requires the changes in the derivative's fair value be recognized currently in earnings unless specific hedge accounting criteria are met. The Coso Partnership's have adopted FAS 133, as amended and assessed that it has no material effect on their financial statements. 35 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 (b) Reports on Form 8-K None 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 9 - MOS -- ---- -- --- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec-31-2000 DEC-31-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) Jan-01-2000 JAN-01-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) Dec-31-2000 SEP-30-2001 ----------- ----------- 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 9 MOS ---- ---- CASH 0 0 SECURITIES 0 0 RECEIVABLES 331,353 327,217 ALLOWANCES 0 0 INVENTORY 0 0 CURRENT ASSETDS 1,286 8,359 PP&E 0 0 DEPRECIATION 0 0 TOTAL ASSETS 331,353 327,217 CURRENT LIABILITIES 1,286 8,359 BONDS 300,067 318,858 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 331,353 327,217 SALES 0 0 TOTAL REVENUES 30,799 21,703 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 0 0 LOSS PROVISION 0 0 INTEREST EXPENSES 30,799 21,703 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 9 - MOS -- ---- -- ---- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec-31-2000 DEC-31-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) Jan-01-2000 JAN-01-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) Dec-31-2000 SEP-30-2001 ----------- ----------- 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 9 MOS ---- --- CASH 3,506 13,719 SECURITIES 22,996 24,414 RECEIVABLES 17,715 49,140 ALLOWANCES 15,234 36,847 INVENTORY 0 0 CURRENT ASSETS 6,796 26,954 PP&E 228,718 229,552 DEPRECIATION 79,642 86,855 TOTAL ASSETS 198,409 212,331 CURRENT LIABILITIES 16,554 28,317 BONDS 134,984 129,893 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 198,409 212,331 SALES 67,653 67,314 TOTAL REVENUES 70,159 69,469 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 44,358 49,688 LOSS PROVISION 0 0 INTEREST EXPENSES 13,013 9,241 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 0 NET INCOME 12,788 10,540 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 9 - MOS -- ---- -- ---- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec-31-2000 DEC-31-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) Jan-01-2000 JAN-01-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) Dec-31-2000 SEP-30-2001 ----------- ----------- 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 9 MOS ---- --- CASH 5,862 18,216 SECURITIES 14,502 8,160 RECEIVABLES 15,684 42,548 ALLOWANCES 15,279 37,109 INVENTORY 0 0 CURRENT ASSETS 7,280 24,881 PP&E 238,244 247,265 DEPRECIATION 84,626 95,210 TOTAL ASSETS 201,312 209,788 CURRENT LIABILITIES 31,160 36,892 BONDS 100,907 99,040 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 201,312 209,788 SALES 57,453 59,022 TOTAL REVENUES 65,578 61,899 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 46,693 46,299 LOSS PROVISION 0 0 INTEREST EXPENSES 9,492 6,971 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 0 NET INCOME 9,393 8,629 (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 9 - MOS -- ---- -- ---- X YEAR YEAR --- --- (for annual report filings) OTHER OTHER ---- ---- FISCAL YEAR END (example: DEC-31-1997) Dec-31-2000 DEC-31-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) Jan-01-2000 JAN-01-2001 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) Dec-31-2000 SEP-30-2001 ----------- ----------- 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 9 MOS ---- --- CASH 7,741 11,346 SECURITIES 10,214 10,728 RECEIVABLES 21,294 45,660 ALLOWANCES 15,312 38,045 INVENTORY 0 0 CURRENT ASSETS 14,572 19,909 PP&E 209,605 210,230 DEPRECIATION 72,658 82,332 TOTAL ASSETS 195,693 189,817 CURRENT LIABILITIES 14,094 24,699 BONDS 94,176 89,925 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 195,639 189,817 SALES 58,366 52,469 TOTAL REVENUES 61,234 54,604 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 49,895 49,606 LOSS PROVISION 0 0 INTEREST EXPENSES 9,899 6,717 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 0 0 CHANGES 0 0 NET INCOME 1,440 (1,719) 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)
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. Date: November 7, 2001 CAITHNESS COSO FUNDING CORP., a Delaware corporation 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 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 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 By: /S/ CHRISTOPHER T. MCCALLION ---------------------------- Christopher T. McCallion Executive Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)