-----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, E4tgvunf4f9WSrr2Uqc5UUyjWBkiS/n4+wDB7sHtcFSM/5URM/CmK0mHiLkmziEB Gg3VEkGJcOmbtfp0xGgl7Q== 0001088869-00-000023.txt : 20000515 0001088869-00-000023.hdr.sgml : 20000515 ACCESSION NUMBER: 0001088869-00-000023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 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: SEC FILE NUMBER: 333-83815-03 FILM NUMBER: 628169 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 QUARTERLY REPORT FORM 10-Q -- QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934 (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, 2000 -------------- 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 --------- COSO POWER DEVELOPERS ---------------------- (Exact name of registrant as specified in its charter) California 94-3102796 ---------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 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. Not Applicable -------------- COSO POWER DEVELOPERS Form 10-Q For the Quarter Ended March 31, 2000 PART I. FINANCIAL INFORMATION Page No. ITEM 1. Financial Statements CAITHNESS COSO FUNDING CORP. Unaudited condensed balance sheet at March 31, 2000 and December 31, 1999 4 Unaudited condensed statement of operations for the period ended March 31, 2000 5 Unaudited condensed statement of cash flows for the period ended March 31, 2000 6 Notes to the unaudited condensed financial statements 7 COSO FINANCE PARTNERS Unaudited condensed combined balance sheets at March 31, 2000 and December 31, 1999 8 Unaudited condensed combined statements of operations for the three months ended March 31, 2000, the two months ended February 28, 1999, the one month ended March 31, 1999 and the three months ended March 31, 1999 9 Unaudited condensed combined statements of cash flows for the three months ended March 31, 2000, the two months ended February 28, 1999, the one month ended March 31, 1999, and the three months ended March 31, 1999. 10 Notes to the unaudited condensed combined financial statements 11 COSO ENERGY DEVELOPERS Unaudited condensed balance sheets at March 31, 2000 and December 31, 1999 12 Unaudited condensed statements of operations for the three months ended March 31, 2000, the two months ended February 28, 1999, the one month ended March 31, 1999 and the three months ended March 31, 1999 13 Unaudited condensed statements of cash flows for the three months ended March 31, 2000, the two months ended February 28, 1999, the one month ended March 31, 1999, and the three months ended March 31, 1999. 14 Notes to the unaudited condensed financial statements 15 2 COSO POWER DEVELOPERS Unaudited condensed balance sheets at March 31, 2000 and December 31, 1999 16 Unaudited condensed statements of operations for the three months ended March 31, 2000, the two months ended February 28, 1999, the one month ended March 31, 1999 and the three months ended March 31, 1999 17 Unaudited condensed statements of cash flows for the three months ended March 31, 2000, the two months ended February 28, 1999, the one month ended March 31, 1999, and the three months ended March 31, 1999. 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 28 ITEM 2. Change in Securities and Use of Proceeds 29 ITEM 3. Defaults upon Senior Securities 29 ITEM 4. Submission of Matters to a Vote of Security Holders 29 ITEM 5. Other Information 29 ITEM 6. Exhibits and Reports on Form 8-K 29 3
CAITHNESS COSO FUNDING CORP. UNAUDITED CONDENSED BALANCE SHEET (Dollars in thousands) March 31, December 31, 2000 1999 (Note) Assets: Accrued interest receivable............................ $ 9,221 $ 1,392 Project loan to Coso Finance Partners.................. 145,994 151,550 Project loan to Coso Energy Developers................. 103,795 107,900 Project loan to Coso Power Developers.................. 110,546 153,550 ------- ------- $ 369,556 $ 414,392 ======= ======= Liabilities and Stockholders' Equity: Senior secured notes: Accrued interest payable............................ $ 9,221 $ 1,392 6.80% notes due 2001................................ 57,335 110,000 9.05% notes due 2009................................ 303,000 303,000 ------- ------- Total liabilities......................................... 369,556 414,392 Stockholders' equity...................................... --- --- ------- ------- $ 369,556 $ 414,392 ======= ======= Note: The condensed balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes to the unaudited condensed financial statements
4 CAITHNESS COSO FUNDING CORP. UNAUDITED CONDENSED STATEMENT OF OPERATIONS (Dollars in thousands) Three Months Ended March 31, 2000 Interest income...................................... $ 9,221 Interest expense..................................... (9,221) ------- Net income........................................ $ --- ======= See accompanying notes to the unaudited condensed financial statements 5 CAITHNESS COSO FUNDING CORP. UNAUDITED CONDENSED STATEMENT OF CASH FLOWS (Dollars in thousands) Three Months Ended March 31, 2000 Cash flows from investing activities................. $ 52,665 Cash flows from financing activities................. (52,665) ------- --- Net change in cash................................ $ ======= 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.) was incorporated on April 22, 1999, in Delaware. Funding Corp. is a special purpose corporation that was formed for the purpose of issuing senior secured notes on behalf of Coso Finance Partners, Coso Energy Developers and Coso Power Developers (the Coso partnerships), affiliates of Funding Corp. Funding Corp. has loaned all of the proceeds from the offering of 6.80% senior secured notes due 2001 and 9.05% senior secured notes due 2009 (a total of $413 million) to the Coso partnerships, and the Coso partnerships have jointly and severally guaranteed on a senior secured basis, repayment of the senior secured notes. Funding Corp. has no material assets other than the loans, and the accrued interest thereon, that have been made to the Coso partnerships. Also, Funding Corp. does not conduct any business, other than issuing the senior secured notes and making the loans to the Coso partnerships. (2) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles 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, 1999. 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 COMBINED BALANCE SHEETS (Dollars in thousands) March 31, December 31, 1999 2000 (Note) (New Basis) Assets: Cash....................................................................... $ 13,334 $ 7,821 Restricted cash and investments............................................ 20,051 25,001 Accounts receivable........................................................ 2,888 5,154 Prepaid expenses & other assets............................................ 46 -- Amounts due from related parties........................................... 2,460 4,508 Property, plant & equipment, net........................................... 154,318 153,879 Power purchase agreement, net.............................................. 13,101 13,388 Investment in China Lake Plant Services, Inc............................... 4,196 4,212 Deferred financing costs, net.............................................. 3,619 3,749 ------- ------- $ 214,013 $ 217,712 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities................................... $ 14,536 $ 16,236 Amounts due to related parties............................................. 3,735 564 Project loan............................................................... 145,994 151,550 -------- ------- 164,265 168,350 Partners' capital............................................................. 49,748 49,362 -------- ------- $ 214,013 $ 217,712 ======== ======= Note: The condensed balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes to the unaudited condensed combined financial statements
8
COSO FINANCE PARTNERS UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS (Dollars in thousands) Three Months Two Months One Month Three Months Ended Ended Ended Ended March 31, February 28, March 31, March 31, 2000 1999 1999 1999 (New Basis) (Old Basis) (New Basis) Revenue: Energy revenues......................... $ 7,725 $ 8,098 $ 4,399 $ 12,497 Capacity................................ 1,255 474 237 711 Interest and other income............... 323 824 827 1,651 ------ ------ ------- ------ Total revenue....................... 9,303 9,396 5,463 14,859 Operating expenses: Plant operating expenses............... 2,072 3,125 1,458 4,583 Royalty expense........................ 1,189 987 451 1,438 Depreciation and amortization.......... 2,353 1,604 783 2,387 ------ ------ ------- ------ Total operating expenses............ 5,614 5,716 2,692 8,408 Operating income.................... 3,689 3,680 2,771 6,451 Other expenses: Interest expense...................... 3,173 663 1,630 2,293 Costs related to acquisition debt 130 --- --- --- ------ ------ ------ ------ Total other expenses................ 3,303 663 1,630 2,293 Net income.......................... $ 386 $ 3,017 $ 1,141 $ 4,158 ====== ====== ====== ====== See accompanying notes to the unaudited condensed combined financial statements
9
COSO FINANCE PARTNERS UNAUDITED CONDENSED COMBINED STATEMENTS OF CASH FLOWS (Dollars in thousands) Three Months Two Months One Month Three Months Ended Ended Ended Ended March 31, February 28, March 31, March 31, 2000 1999 1999 1999 (New Basis) (Old Basis) (New Basis) Net cash provided by operating activities.............. $ 8,624 $ 6,592 $ 2,665 $ 9,257 Net cash provided by (used in) investing activities.... 2,445 (538) (397) (935) Net cash provided by (used in) financing activities.... (5,556) (1,926) --- (1,926) ------- ------ ------ ------ Net change in cash and cash equivalents................ $ 5,513 $ 4,128 $ 2,268 $ 6,396 ======= ====== ====== ====== See accompanying notes to the unaudited condensed combined financial statements
10 COSO FINANCE PARTNERS NOTES TO THE UNAUDITED CONDENSED COMBINED 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 generally accepted accounting principles for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles 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, 1999. On May 27, 1999 Coso Finance Partners II was merged into Coso Finance Partners to form one partnership. 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) Acquisition On February 25, 1999, Caithness Acquisition Company, LLC (Caithness Acquisition), a wholly owned subsidiary of Caithness Energy LLC, purchased all of CalEnergy Company Inc.'s (CalEnergy) interest in CFP for approximately $62.0 million. The acquisition was accounted for under the purchase method, and no goodwill was recorded. After Caithness Acquisition's purchase of CalEnergy's interest in CFP, a new basis of accounting was adopted and is referred to as "New Basis" as compared to the former cost basis which is referred to as "Old Basis" in the financial statements. The purchase price was allocated to the portion of the assets and liabilities purchased from CalEnergy based upon their fair values, with the amount of fair value of net assets in excess of the purchase price being allocated to long-lived assets on a pro-rata basis. In order to complete the purchase of CalEnergy's interest in CFP, Caithness Acquisition arranged for short-term debt financing of approximately $77.6 million. This short-term debt was repaid on May 28, 1999 from a portion of the proceeds from the offering of senior secured notes (see note 4). (4) Debt Financing On May 28, 1999 Caithness Coso Funding Corp. loaned approximately $151.6 million to CFP from a portion of the proceeds from the offering of senior secured notes. The loan consists of one note of $29.0 million at 6.80% and another of $122.6 million at 9.05% with maturity dates of December 15, 2001 and December 15, 2009, respectively. All prior project loans of approximately $180.0 million were repaid from the proceeds of the financing and an extraordinary loss from the early extinguishment of this debt was incurred for approximately $2.4 million. The extraordinary loss was due to a premium and other costs incurred to pay the prior project loans before maturity. 11
COSO ENERGY DEVELOPERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands) March 31, December 31, 2000 1999 (New Basis) (Note) Assets: Cash................................................................... $ 14,937 $ 6,423 Restricted cash and investments........................................ 5,916 9,806 Accounts receivable.................................................... 5,444 6,095 Prepaid expenses and other assets...................................... 146 100 Amounts due from related parties....................................... 1,123 761 Property, plant and equipment, net..................................... 162,964 165,650 Power purchase agreement, net.......................................... 20,281 20,549 Investment in Coso Transmission Line Partners.......................... 2,981 2,981 Investment in China Lake Plant Services, Inc........................... 1,262 1,228 Deferred financing costs, net.......................................... 2,718 2,798 ------- ------- $ 217,772 $ 216,391 ======= ======= Liabilities and Partners' Capital: Accounts payable and accrued liabilities............................... $ 6,028 $ 6,681 Amounts due to related parties......................................... 24,972 22,460 Project loan........................................................... 103,795 107,900 ------- ------- 134,795 137,041 Partners' capital...................................................... 82,977 79,350 ------- ------- $ 217,772 $ 216,391 ======= ======= Note: The condensed balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See accompanying notes to the unaudited condensed financial statements
12
COSO ENERGY DEVELOPERS UNAUDITED CONDENSED STATEMENT OF OPERATIONS (Dollars in thousands) Three Months Two Months One Month Three Months Ended Ended Ended Ended March 31, February 28, March 31, March 31, 2000 1999 1999 1999 (New Basis) (Old Basis) (New Basis) Revenue: Energy revenues...................... $ 5,953 $ 16,716 $ 3,434 $ 20,150 Capacity............................. 1,227 817 410 1,227 Interest and other income............ 5,315 78 118 196 ------- -------- ------- ------ Total revenue..................... 12,495 17,611 3,962 21,573 Operating expenses: Plant operating expenses.............. 2,539 4,039 1,604 5,643 Royalty expense....................... 65 1,592 347 1,939 Depreciation and amortization......... 3,876 2,550 1,175 3,725 ------ ------ ------ ------ Total operating expenses......... 6,480 8,181 3,126 11,307 Operating income................. 6,015 9,430 836 10,266 Other expenses: Interest expense..................... 2,308 616 1,233 1,849 Costs related to acquisition debt.... 80 --- --- --- ------ -------- ------- ------- Total other expenses................ 2,388 616 1,233 1,849 Net income (loss)................. $ 3,627 $ 8,814 $ (397) $ 8,417 ====== ======== ======= ======= See accompanying notes to the unaudited condensed financial statements
13
COSO ENERGY DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) Three Months Two Months One Month Three Months Ended Ended Ended Ended March 31, February 28, March 31, March 31, 2000 1999 1999 1999 (New Basis) (Old Basis) (New Basis) Net cash provided by operating activities.............. $ 9,651 $ 10,367 $ 6,595 $ 16,962 Net cash provided by (used in) investing activities.... 2,968 120 (294) (174) Net cash provided by (used in) financing activities.... (4,105) 425 (198) 227 ------- ------- ------ ------ Net change in cash and cash equivalents................ $ 8,514 $ 10,912 $ 6,103 $ 17,015 ======= ======= ====== ====== 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 24-year power purchase contract expiring in 2019. (2) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles 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, 1999. 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) Acquisition On February 25, 1999, Caithness Acquisition Company, LLC (Caithness Acquisition), a wholly owned subsidiary of Caithness Energy LLC, purchased all of CalEnergy Company, Inc.'s (CalEnergy) interest in CED for approximately $69.0 million. The acquisition was accounted for under the purchase method, and no goodwill was recorded. After Caithness Acquisition's purchase of CalEnergy's interest in CED, a new basis of accounting was adopted and is referred to as "New Basis" as compared to the former cost basis which is referred to as "Old Basis" in the financial statements. The purchase price was allocated to the portion of the assets and liabilities purchased from CalEnergy based upon their fair values, with the amount of fair value of net assets in excess of the purchase price being allocated to long-lived assets on a pro-rata basis. In order to complete the purchase of CalEnergy's interest in CED, Caithness Acquisition arranged for short-term debt financing of approximately $55.2 million. This short-term debt was repaid on May 28, 1999 from a portion of the proceeds from the offering of senior secured notes (see note 4). (4) Debt Financing On May 28, 1999 Caithness Coso Funding Corp. loaned approximately $107.9 million to CED from a portion of the proceeds from the offering of senior secured notes. The loan consists of one note of $11.65 million at 6.80% and another of $96.25 million at 9.05% with maturity dates of December 15, 2001 and December 15, 2009, respectively. All prior project loans of approximately $93.2 million were repaid from the proceeds of the financing and an extraordinary loss from the early extinguishment of this debt was incurred for approximately $1.8 million. The extraordinary loss was due to a premium and other costs incurred to pay the prior project loans before maturity. 15
COSO POWER DEVELOPERS UNAUDITED CONDENSED BALANCE SHEETS (Dollars in thousands) March 31, December 31, 2000 1999 (New Basis) (Note) Assets Cash..................................................................... $ 22,653 $ 6,020 Restricted cash and investments.......................................... 11,516 54,338 Accounts receivable...................................................... 5,598 20,540 Prepaid expenses and other assets........................................ 46 --- Amounts due from related parties......................................... 7,540 7,058 Property, plant and equipment, net....................................... 144,521 147,522 Power purchase agreement, net............................................ 27,712 28,409 Investment in Coso Transmission Line Partners............................ 3,660 3,660 Investment in China Lake Plant Services, Inc............................. 2,079 2,098 Deferred financing costs, net............................................ 3,432 3,624 -------- -------- $ 228,757 $ 273,269 ======== ======== Liabilities and Partners' Capital: Accounts payable and accrued liabilities................................. $ 10,425 $ 12,163 Amounts due to related parties........................................... 3,262 3,225 Project loan............................................................. 110,546 153,550 -------- -------- 124,233 168,938 Partners' capital........................................................... 104,524 104,331 -------- -------- $ 228,757 $ 273,269 ======== ======== Note: The condensed balance sheet at December 31, 1999 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles 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 Two Months One Month Three Months Ended Ended Ended Ended March 31, February 28, March 31, March 31, 2000 1999 1999 1999 (New Basis) (Old Basis) (New Basis) Revenue: Energy revenues.............................. $ 8,554 $ 16,687 $ 6,716 $ 23,403 Capacity..................................... 1,234 822 412 1,234 Interest and other income.................... 529 150 156 306 ------ ------ ------ ------- Total revenue.............................. 10,317 17,659 7,284 24,943 Operating expenses: Plant operating expenses..................... 2,105 3,195 1,293 4,488 Royalty expense.............................. 1,775 1,806 1,064 2,870 Depreciation and amortization................ 3,698 2,339 1,188 3,527 ------- -------- -------- ------- Total operating expenses................... 7,578 7,340 3,545 10,885 Operating income........................... 2,739 10,319 3,739 14,058 Other expenses: Interest expense............................. 2,354 953 1,792 2,745 Costs related to acquisition debt............ 192 --- --- --- ------ ------- ------- ------- Total other expenses...................... 2,546 953 1,792 2,745 Net income................................ $ 193 $ 9,366 $ 1,947 $ 11,313 ====== ======== ======== ========= See accompanying notes to the unaudited condensed financial statements
17
COSO POWER DEVELOPERS UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) Three Months Two Months One Month Three Months Ended Ended Ended Ended March 31, February 28, March 31, March 31, 2000 1999 1999 1999 (New Basis) (Old Basis) (New Basis) Net cash provided by operating activities.............. $ 16,815 $ 12,016 $ 6,265 $ 18,281 Net cash provided by (used in) investing activities.... 42,822 (1,126) (218) (1,344) Net cash provided by (used in) financing activities.... (43,004) 1,766 518 2,284 -------- ------- ------- ------- Net change in cash and cash equivalents................ $ 16,633 $ 12,656 $ 6,565 $ 19,221 ======== ======= ======= ======= 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 24-year power purchase contract expiring in 2010. (2) Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles 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, 1999. 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) Acquisition On February 25, 1999, Caithness Acquisition Company, LLC (Caithness Acquisition), a wholly owned subsidiary of Caithness Energy LLC, purchased all of CalEnergy Company, Inc.'s (CalEnergy) interest in CPD for approximately $75.0 million. The acquisition was accounted for under the purchase method, and no goodwill was recorded. After Caithness Acquisition's purchase of CalEnergy's interest in CPD, a new basis of accounting was adopted and is referred to as "New Basis" as compared to the former cost basis which is referred to as "Old Basis" in the financial statements. The purchase price was allocated to the portion of the assets and liabilities purchased from CalEnergy based upon their fair values, with the amount of fair value of net assets in excess of the purchase price being allocated to long-lived assets on a pro-rata basis. In order to complete the purchase of CalEnergy's interest in CPD, Caithness Acquisition arranged for short-term debt financing of approximately $78.6 million. This short-term debt was repaid on May 28, 1999 from a portion of the proceeds from the offering of senior secured notes (see note 4). (4) Debt Financing On May 28, 1999 Caithness Coso Funding Corp. loaned approximately $153.6 million to CPD from a portion of the proceeds from the offering of senior secured notes. The loan consists of one note of $69.4 million at 6.80% and another note of $84.2 million at 9.05% with maturity dates of December 15, 2001 and December 15, 2009, respectively. All prior project loans of approximately $139.9 million were repaid from the proceeds of the financing and an extraordinary loss from the early extinguishment of this debt was incurred for approximately $2.1 million. The extraordinary loss was due to a premium and other costs incurred to pay the prior project loans before maturity. 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", and together with the Navy I Partnership and the BLM Partnership (the "Coso Partnerships") 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) that the information is of a preliminary nature and may be subject to further adjustment, (ii) risks related to the operation of power plants, (iii) the impact of avoided cost pricing, (iv) general operating risks, (v) the dependence on third parties, (vi) changes in government regulation, (vii) the effects of competition, (viii) the dependence on senior management, (ix) fluctuations in quarterly results and (x) 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 system 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, purchased all of CalEnergy's interests in the Coso projects for $205.0 million in cash, plus $5.0 million in contingent payments, 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 Southern California Edison ("Edison") under a long-term Standard Offer No.4 power purchase agreement. Each Partnership's power purchase agreement expires after the final maturity date of the 6.8% Series B Senior Secured Notes due 2001 and the 9.05% Series B Senior Secured Notes due 2009 issued by Funding Corp. Each Coso partnership receives the following payments under its power purchase agreement: o Capacity payments for being able to produce electricity at certain levels. Capacity payments are fixed throughout the life of each power purchase agreement; o 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 o Energy payments which are based on the amount of electricity the Coso partnership's plant actually produces. 20 Energy payments are fixed for the first ten years of firm operation under each power purchase agreement. Firm operation was achieved for each Coso partnership when Edison and that Coso partnership agreed that each generating unit at such Coso partnership's plant was a reliable source of generation and could reasonably be expected to operate continuously at its effective rating. 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 the energy itself or buy it from another power producer rather than buy it from the relevant Coso partnership. The power purchase agreement for the Navy I partnership will expire in August 2011, the power purchase agreement for the BLM partnership will expire March 2019, and the power purchase agreement for the Navy II partnership will expire in January 2010. The fixed energy price period in the power purchase agreement 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. The Coso Partnerships have implemented a steam-sharing program, which they established under a 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. For the three months ended March 31, 2000 (and since January 12, 2000 for the Navy II partnership), Edison's average avoided cost of energy paid to the Navy I, the BLM and the Navy II Partnerships was 3.25(cent) per kWh, which is substantially below the fixed energy prices earned by the partnerships prior to the expiration of the fixed energy price periods of their respective power purchase agreements. It is not possible to predict the likely level of future avoided cost of energy prices. The Coso Partnerships are required to make royalty payments to the Navy and the Bureau of Land Management. The Navy I partnership pays a royalty for Unit I through reimbursement of electricity supplied to the Navy by Edison from electricity generated at the Navy I plant. The reimbursement is based on a pricing formula that is included in the Navy Contract. For Units 2 and 3, the Navy I partnership's royalty expense paid to the 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 Navy based on a fixed percentage of electricity sales to Edison. The royalty rate was 10.0% of electricity sales through 1999, and increased to 18.0% for 2000 through 2004 and will increase to 20.0% from 2005 through the end of the contract term. Coso 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. The Coso partnerships have jointly, severally, and unconditionally guaranteed repayment of the senior secured notes. On May 28, 1999, Coso Funding Corp. issued $110.0 million of 6.80% senior secured notes due in 2001 and $303.0 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 Coso Funding Corp from payments of principal and interest on the notes. Coso Funding Corp. does not conduct any other operations apart from issuing the notes. Under the note agreement, 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. 21 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. 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 2000 1999 ---- ---- Navy I Partnership (stand alone) Operating capacity factor 113.3% 74.8% Capacity (MW) (average) 90.62 59.81 kWh produced (000s) 197,916 129,141 BLM Partnership (stand alone) Operating capacity factor 106.3% 110.6% Capacity (MW) (average) 85.06 88.51 kWh produced (000s) 185,858 191,056 Navy II Partnership (stand alone) Operating capacity factor 113.9% 112.7% Capacity (MW) (average) 91.08 90.19 kWh produced (000s) 198,906 194,718 The Navy I partnership's energy production for the three months ended March 31, 2000, was 197.9 million kWh as compared to 129.1 million kWh for the same period in 1999, an increase of 53.3%. This increase for the three months ended March 31, 2000, is attributable to the outage of one turbine generator unit during that period in 1999. The changes in energy production for the Navy II and BLM partnership's were insignificant over the two periods. 22 Results of Operations for the three months ended March 31, 2000 and 1999 The following discusses the results of operations of the Coso partnerships for the three months ending March 31, 2000 and 1999 (dollar amounts in tables are in thousands, except per kWh data): Revenue
Three Months Ended Three Months Ended March 31, 2000 March 31, 1999 $ cents/kWh $ cents/kWh - --------- - --------- Total Operating Revenues Navy I partnership 8,980 4.5 13,208 10.2 BLM partnership 7,180 3.9 21,377 11.2 Navy II partnership 9,788 4.9 24,637 12.7 Capacity & Capacity Bonus Revenues Navy I partnership 1,255 0.6 711 0.6 BLM partnership 1,227 0.7 1,227 0.6 Navy II partnership 1,234 0.6 1,234 0.6 Energy Revenues Navy I partnership 7,725 3.9 12,497 9.7 BLM partnership 5,953 3.2 20,150 10.5 Navy II partnership 8,554 4.3 23,403 12.0
Total operating revenues for the Navy I partnership, which consist of capacity payments, capacity bonus payments and energy payments, were $9.0 million for the three months ended March 31, 2000, as compared to $13.2 million for the same period in 1999, a decrease of 31.8%. The Navy I partnership capacity and capacity bonus revenues were $1.3 million for the three months ended March 31, 2000, as compared to $0.7 million for the comparable period in 1999, an increase of 85.7%. The Navy I partnership's energy revenues were $7.7 million for the three months ended March 31, 2000, as compared to $12.5 million for the same period in 1999, a decrease of 38.4%. The decreases in operating and energy revenues for the three month period ending March 31, 2000, were primarily due to a reduction in steam transfers from the Navy I partnership to the BLM partnership and the Navy II partnership during that period. These two partnerships were both receiving higher fixed energy prices under their respective power purchase agreements during the same period in 1999 and were passing along the additional revenue to Navy I. For the three months ended March 31, 2000, the Navy I partnership recorded steam transfer revenues of approximately $ 0.3 million from the BLM partnership and $ 0.9 million from the Navy II partnership. Steam transfer revenues for the three months ended March 31, 2000, were a total of $1.2 million as compared to $8.5 million for the same period in 1999, a decrease of $7.3 million. The decrease in steam transfer revenues was partially offset by an increase in energy revenues excluding the steam transfer payments of $2.6 million due to the outage of one turbine generator unit during that period in 1999 which increased capacity and capacity bonus revenues during that same period in 2000. Total operating revenues for the BLM partnership were $ 7.2 million for the three months ended March 31, 2000, as compared to $21.4 million for the same period in 1999, a decrease of 66.4%. The BLM partnership's energy revenues were $6.0 million for the three months ended March 31, 2000, as compared to $20.2 million for the same period in 1999, a decrease of 70.3%. These significant decreases were due to the expiration of the fixed energy price period under the BLM partnership's power purchase agreement in March 1999 and the receipt of energy payments based on Edison's avoided cost of energy since that time. Until March 1999 the BLM partnership received approximately 14.6 cents per kWh for energy delivered. Under the avoided cost of energy formula, the BLM partnership has been receiving an average of approximately 3.25 cents per kWh for energy delivered. The decrease in revenues due to the reduction in energy price was partially offset by a reduction in steam transfer payments to the Navy I partnership of $3.2 million compared to the same period in 1999. 23 Total operating revenues for the Navy II partnership were $9.8 million for the three months ended March 31, 2000, as compared to $24.6 million for the same period in 1999, a decrease of 60.2%. The Navy II partnership's energy revenues were $8.6 million for the three months ended March 31, 2000, as compared to $23.4 million for the same period in 1999, a decrease of 63.2%. The decreases were due to the expiration in January 2000 of the fixed energy price period under the Navy II partnership's power purchase agreement and the receipt of energy payments based on Edison's avoided cost of energy since that time. Until January 11, 2000, the Navy II partnership received approximately 14.6 cents per kWh for energy delivered. Under the avoided cost of energy formula, the Navy II partnership has been receiving an average of approximately 3.25 cents per kWh for energy delivered. Similar decreases are expected in the upcoming quarters as the Navy II partnership experiences the full effect of the expiration of the fixed energy price period. The decrease in revenues due to the reduction in energy price has been partially offset by a reduction in steam transfer payments to the Navy I partnership of $4.1 million compared to the same period in 1999. Interest and Other Income Three Months Ended Three Months Ended March 31, 2000 March 31, 1999 $ cents/kWh $ cents/kWh - --------- - --------- Navy I partnership 323 0.2 1,651 1.3 BLM partnership 5,315 2.9 196 0.1 Navy II partnership 529 0.3 306 0.2 The Navy I partnership's interest and other income were $323,000 for the three months ended March 31, 2000, as compared to $1.7 million for the same period in 1999, a decrease of 81.0%. The decrease for the three months ended March 31, 2000, is attributable to a $1.6 million insurance recovery recorded during the first quarter of 1999 in connection with the shut-down of one of the Navy I partnership's turbine generator unit. The partnership has recovered $500,000 with respect to the insurance and has reserved the remaining $1.1 million pending resolution of the insurance claim. The decrease was partially offset by an increase in interest income due to a larger restricted cash balance during the three months ended March 31, 2000 from that of March 31, 1999. The BLM partnership's interest and other income was $5.3 million for the three months ended March 31, 2000, as compared to $196,000 for the same period in 1999. This increase of $5.1 million was primarily due to a legal settlement of $5 million with Dow Chemical Company ("Dow") paid to the BLM partnership combined with a larger restricted cash balance during the three months ended March 31, 2000 from that of March 31, 1999. The Navy II partnership's interest and other income was $529,000 for the three month period ending March 31, 2000, as compared to $306,000 for the same period in 1999, an increase of 72.9%. The increase resulted from increased interest income due to a larger restricted cash balance required by the senior secured notes during the three months ended March 31, 2000 from that of March 31, 1999. 24 Plant Operations Three Months Ended Three Months Ended March 31, 2000 March 31, 1999 $ cents/kWh $ cents/kWh - --------- - --------- Navy I partnership 2,072 1.0 4,583 3.5 BLM partnership 2,539 1.4 5,643 3.0 Navy II partnership 2,105 1.1 4,488 2.3 The Navy I partnership's operating expenses, including operating and general and administrative expenses, were $2.0 million for the three months ended March 31, 2000, as compared to $4.6 million for the same period in 1999, a decrease of 56.5%. The BLM partnership's operating expenses, including operating and general and administrative expenses, were $2.5 million for the three months ended March 31, 2000, as compared to $5.6 million for the same period in 1999, a decrease of 55.4%. The Navy II partnership's operating expenses, including operating and general and administrative expenses, were $2.1 million for the three months ended March 31, 2000, as compared to $4.5 million for the same period in 1999, a decrease of 53.3%. The decreases for each of the partnerships for the three months ended March 31, 2000, as compared to 1999, were primarily due to reductions in legal expenses as a result of a settlement agreement with Edison that is subject to California Public Utility Commission approval and reductions in operator and management committee fees due to the replacement of the Coso project's prior operator and managing partner. Operating costs were also reduced as compared to the same period in 1999 with the exception of property tax payments for the Navy I and Navy II partnerships. The Coso Partnerships are currently disputing their property tax assessment with the County of Inyo. Royalty Expenses Three Months Ended Three Months Ended March 31, 2000 March 31, 1999 $ cents/kWh $ cents/kWh - --------- - --------- Navy I partnership 1,189 0.6 1,438 1.1 BLM partnership 65 0.0 1,939 1.0 Navy II partnership 1,775 0.9 2,870 1.5 The Navy I partnership's royalty expense was $1.2 million for the three months ended March 31, 2000, as compared to $1.4 million for the same period in 1999, a decrease of 14.3%. This decrease was due to decreased steam sharing revenues over the same period in 1999. The BLM partnership's royalty expense was $65,000 for the three months ended March 31, 2000, as compared to $1.9 million for the same period in 1999, a decrease of 96.6%. This decrease was due to a reduction in BLM partnership's revenue caused by the expiration of the fixed energy price period under the BLM partnership's power purchase agreement in March 1999 and the receipt of energy payments under Edison's avoided cost of energy since that time. The Navy II partnership's royalty expense was $1.8 million for the three months ended March 31, 2000, as compared to $2.9 million for the same period in 1999, a decrease of 37.9%. This decrease was due to a reduction in Navy II partnership revenues caused by the expiration of the fixed energy price period under the Navy II partnership's power purchase agreement in January 2000 and the receipt of energy payments under Edison's avoided cost of energy since that time partially offset by an increase in royalty rate for that same period in 2000. 25 Depreciation and Amortization Three Months Ended Three Months Ended March 31, 2000 March 31, 1999 $ cents/kWh $ cents/kWh - --------- - --------- Navy I partnership 2,353 1.2 2,387 1.9 BLM partnership 3,876 2.1 3,725 2.0 Navy II partnership 3,698 2.0 3,527 1.8 The BLM partnership's depreciation and amortization expense was $3.9 million for the three months ended March 31, 2000, as compared to $3.7 million for the same period in 1999, a increase of 5.4%. The Navy II partnership's depreciation and amortization expense was $3.7 million for the three months ended March 31, 2000, as compared to $3.5 million for the same period in 1999, an increase of 5.7%. These increases were primarily due to an increase in capital improvements. Interest Expense and Other Related Costs Three Months Ended Three Months Ended March 31, 2000 March 31, 1999 $ cents/kWh $ cents/kWh - --------- - --------- Navy I partnership 3,303 1.7 2,293 1.8 BLM partnership 2,388 1.3 1,849 0.9 Navy II partnership 2,546 1.3 2,745 1.4 The Navy I partnership's interest expense and other related costs were $3.3 million for the three months ended March 31, 2000, as compared to $2.3 million for the same period in 1999, an increase of 43.5%. The BLM partnership's interest expense and other related costs were $2.4 million for the three months ended March 31, 2000, as compared to $1.8 million for the same period in 1999, an increase of 33.3%. The Navy II partnership's interest expense and other related costs were $2.5 million for the three months ended March 31, 2000, as compared to $2.7 million for the same period in 1999, a decrease of 7.4%. These changes were due to the allocation of outstanding debt balances resulting from the $413 million senior secured financing which closed on May 28, 1999. 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 development costs, distributions to partners and payments with respect to the project debt. The following table sets forth a summary of each Coso partnership's cash flows for the three months ended March 31, 2000 and March 31, 1999. 26
Three Months Three Months Ended Ended March 31, March 31, 2000 1999 Navy I partnership (stand alone) Net cash provided by operating activities $ 8,624 $ 9,257 Net cash provided by (used in) investing activities 2,445 (935) Net cash provided by (used in) financing activities (5,556) (1,926) ------ ------- Net change in cash and cash equivalents $ 5,513 $ 6,396 ====== ======= BLM partnership (stand alone) Net cash provided by operating activities $ 9,651 $ 16,962 Net cash provided by (used in) investing activities 2,968 (174) Net cash provided by (used in) financing activities (4,105) 227 ------ ------- Net change in cash and cash equivalents $ 8,514 $ 17,015 ====== ======= Navy II partnership (stand alone) Net cash provided by operating activities $ 16,815 $ 18,281 Net cash provided by (used in) investing activities 42,822 (1,344) Net cash provided by (used in) financing activities (43,004) 2,284 ------- ------- Net change in cash and cash equivalents $ 16,633 $ 19,221 ======= =======
The Navy I partnership's cash flows from operating activities decreased by $633,000 for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to a reduction in net income caused by a decrease in steam transfer revenue. The decrease was partially offset by an increase in cash flows caused by decreases in both accounts receivable and intercompany receivables. Cash used in investing activities at the Navy I partnership decreased by $3.4 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to the use of restricted cash, for the repayment of the project loan. The Navy I partnership's cash flows from financing activities decreased by $3.6 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to repayment of the project loan. The BLM partnership's cash flows from operating activities decreased by $7.3 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to a reduction in net income resulting from the expiration of the fixed energy price period under the BLM partnership's power purchase agreement in March 1999 and the receipt of energy payments based on Edison's avoided cost of energy since that time. Cash flows from operating activities also decreased due to increases in both accounts receivable and prepaid expenses. Cash used in investing activities at the BLM partnership decreased by $3.1 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to the use of restricted cash, for the repayment of the project loan. The BLM partnership's cash flows from financing activities decreased by $4.3 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to repayment of the project loan. 27 The Navy II partnership's cash flows from operating activities decreased by $1.5 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to a reduction in net income caused by the expiration in early January 2000 of the fixed energy price period under the Navy II partnership's power purchase agreement and the receipt of energy payments based on Edison's avoided cost of energy since that time. The decrease in cash flows was partially offset by a decrease in accounts receivable. Cash used in investing activities at the Navy II partnership's decreased by $44.2 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to the use of restricted cash for the repayment of the project loan. The Navy II partnership's cash flows from financing activities decreased by $45.3 million for the three months ended March 31, 2000 as compared to March 31, 1999, primarily due to repayment of the project loan. Year 2000 In 1999, the Coso partnership's developed a plan to identify, assess and remediate "Year 2000" issues within each of their significant computer programs and certain machinery and equipment. The Coso partnerships have not experienced disruptions to their financial or operating activities caused by failure of computerized systems from Year 2000 issues. In addition, the Coso partnerships have not experienced disruptions to operations caused by failure of computerized systems of suppliers or customers from Year 2000 issues. Management of the Coso partnerships do not expect Year 2000 issues to have a material adverse effect on their power plant's operations or financial results in 2000. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings Settlement of Litigation In February 2000, the Navy I, Navy II, and BLM partnerships and Edison reached a settlement, subject to the approval of the California Public Utilities Commission of litigation between the Coso Partnerships and Edison as more fully described in the 10-Q for the quarter ended September 30, 1999. The cost of the settlement was allocated among the Coso Partnerships. A portion of that cost was reflected in the purchase accounting applied to the acquisition of CalEnergy's interest in the partnership. 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. 28 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 None ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits 27.1 Financial Data Schedule--Form SX--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 The Coso Partnerships filed current reports on Form 8-K dated February 23, 2000 reporting settlement agreements to resolve litigation proceedings with Edison, Dow and Fuji Electric Company. 29 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 qualified 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 filed period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT NAME: MULTIPLIER X 1,000 1,000,000,000 Do the financials require a multiplier --- --- other than 1 (one)? 1,000,000 1,000,000,000,000 X Yes No --- --- --- --- 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-31-1999 DEC-31-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) JAN-01-1999 JAN-01-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) DEC-31-1999 MAR-31-2000 ----------- ----------- 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-M0S ---- ------ CASH 0 0 SECURITIES 0 0 RECEIVABLES 414,392 369,556 ALLOWANCES 0 0 INVENTORY 0 0 CURRENT ASSETS 1,392 9,221 PP&E 0 0 DEPRECIATION 0 0 TOTAL ASSETS 414,392 369,556 CURRENT LIABILITIES 1,392 9,221 BONDS 413,000 360,335 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 414,392 369,556 SALES 0 0 TOTAL REVENUES 20,491 9,221 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 0 0 LOSS PROVISION 0 0 INTEREST EXPENSE 20,491 9,221 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 qualified 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 filed period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT NAME: MULTIPLIER X 1,000 1,000,000,000 Do the financials require a multiplier --- --- other than 1 (one)? 1,000,000 1,000,000,000,000 X Yes No --- --- --- --- 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-31-1999 DEC-31-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) JAN-01-1999 JAN-01-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) DEC-31-1999 DEC-31-2000 ----------- ----------- 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 7,821 13,334 SECURITIES 25,001 20,051 RECEIVABLES 9,662 5,348 ALLOWANCE 0 0 INVENTORY 0 0 CURRENT ASSETS 17,483 18,728 PP&E 225,157 227,643 DEPRECIATION 71,278 73,325 TOTAL ASSETS 217,712 214,014 CURRENT LIABILITIES 16,800 18,271 BONDS 151,550 145,994 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 217,712 214,013 SALES 55,666 8,980 TOTAL REVENUES 57,442 9,303 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 31,671 5,614 LOSS PROVISION 0 0 INTEREST EXPENSE 13,575 3,303 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 2,375 0 CHANGES 0 0 NET INCOME 9,821 386 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 qualified 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 filed period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT NAME: MULTIPLIER X 1,000 1,000,000,000 Do the financials require a multiplier --- --- other than 1 (one)? 1,000,000 1,000,000,000,000 X Yes No --- --- --- --- 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-31-1999 DEC-31-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) JAN-01-1999 JAN-01-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) DEC-31-1999 DEC-31-2000 ----------- ----------- 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 6,423 14,937 SECURITIES 9,806 5,916 RECEIVABLES 6,856 6,567 ALLOWANCE 0 0 INVENTORY 0 0 CURRENT ASSETS 13,379 21,650 PP&E 237,183 237,144 DEPRECIATION 71,533 74,180 TOTAL ASSETS 216,391 217,772 CURRENT LIABILITIES 29,141 31,000 BONDS 107,900 103,795 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 216,391 217,772 SALES 49,877 7,180 TOTAL REVENUES 50,943 12,495 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 38,534 6,480 LOSS PROVISION 0 0 INTEREST EXPENSE 10,235 2,388 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 1,822 0 CHANGES 0 0 NET INCOME 352 3,627 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 qualified 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 filed period? Yes X No --- --- CIK Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT CIK: NAME Use this section only for coregistrant Does this data apply to a coregistrant filings. Yes No --- --- COREGISTRANT NAME: MULTIPLIER X 1,000 1,000,000,000 Do the financials require a multiplier --- --- other than 1 (one)? 1,000,000 1,000,000,000,000 X Yes No --- --- --- --- 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-31-1999 DEC-31-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD START (example: JAN-01-1997) JAN-01-1999 JAN-01-2000 ----------- ----------- mmm-dd-yyyy mmm-dd-yyyy PERIOD END (example: SEP-30-1997) DEC-31-1999 DEC-31-2000 ----------- ----------- 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: Year CASH 6,020 22,653 SECURITIES 54,338 11,516 RECEIVABLES 27,598 13,138 ALLOWANCE 0 0 INVENTORY 0 0 CURRENT ASSETS 33,618 35,837 PP&E 208,048 208,102 DEPRECIATION 60,526 63,581 TOTAL ASSETS 273,269 228,757 CURRENT LIABILITIES 15,388 13,687 BONDS 153,550 110,546 PREFERRED MANDATORY 0 0 PREFERRED 0 0 COMMON 0 0 OTHER SE 0 0 TOTAL LIABILITY AND EQUITY 273,269 228,757 SALES 113,746 9,788 TOTAL REVENUES 115,920 10,317 CGS 0 0 TOTAL COSTS 0 0 OTHER EXPENSES 43,577 7,578 LOSS PROVISION 0 0 INTEREST EXPENSE 13,991 2,546 INCOME PRETAX 0 0 INCOME TAX 0 0 INCOME CONTINUING 0 0 DISCONTINUED 0 0 EXTRAORDINARY 2,147 0 CHANGES 0 0 NET INCOME 56,205 193 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: May 12, 2000 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) -----END PRIVACY-ENHANCED MESSAGE-----