-----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, O0yTZVid1ZrN+LV9sUR4sY36rfn4tQiZDBOJ3WiiUdczhS/mJy6nqnbTxC4wrRP+ WrZ7fEcGUqgBE3rspRk/RA== 0001047469-99-012262.txt : 19990331 0001047469-99-012262.hdr.sgml : 19990331 ACCESSION NUMBER: 0001047469-99-012262 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981009 ITEM INFORMATION: FILED AS OF DATE: 19990330 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COGENERATION CORP OF AMERICA CENTRAL INDEX KEY: 0000795185 STANDARD INDUSTRIAL CLASSIFICATION: COGENERATION SERVICES & SMALL POWER PRODUCERS [4991] IRS NUMBER: 592076187 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-09208 FILM NUMBER: 99577609 BUSINESS ADDRESS: STREET 1: ONE CARLSON PARKWAY STREET 2: SUITE 240 CITY: MINNEAPOLIS STATE: MN ZIP: 55447-4454 BUSINESS PHONE: 6127457900 MAIL ADDRESS: STREET 1: ONE CARLSON PARKWAY STREET 2: SUITE 240 CITY: MINNEAPOLIS STATE: MN ZIP: 55447-4454 FORMER COMPANY: FORMER CONFORMED NAME: NRG GENERATING U S INC DATE OF NAME CHANGE: 19960507 FORMER COMPANY: FORMER CONFORMED NAME: O BRIEN ENVIRONMENTAL ENERGY INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: OBRIEN ENERGY SYSTEMS INC DATE OF NAME CHANGE: 19910804 8-K/A 1 8-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K/A AMENDMENT NO. 1 TO FORM 8-K FILED OCTOBER 26, 1998 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): October 9, 1998 Cogeneration Corporation of America - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 1-9208 59-2076187 (State or other (Commission File Number) (IRS Employer jurisdiction of incorporation) Identification Number) One Carlson Parkway, Suite 240, Minneapolis, Minnesota 55447-4454 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (612) 745-7900 - ------------------------------------------------------------------------------ (Former name or former address, if changed since last report) On October 9, 1998, CogenAmerica Pryor, Inc. ("CogenAmerica Pryor"), a wholly-owned subsidiary of Cogeneration Corporation of America ("CogenAmerica"), acquired from Mid-Continent Power Company, LLC ("MCPC LLC") the entire interest in a 110 MW cogeneration project located in the Mid-America Industrial Park, in Pryor, Oklahoma (the "Pryor Project"). This Amendment No. 1 on Form 8-K/A ("Amendment No. 1") amends and supersedes "Item 7. Financial Statements, Pro Forma Financial Information and Exhibits" of the Current Report on Form 8-K dated October 9, 1998 and filed by CogenAmerica on October 26, 1998. This Amendment No. 1 is filed to furnish financial statements and combined pro forma financial information related to the acquisition of the Pryor Project. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Financial Statements. 2 PRYOR PROJECT STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED AND STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES SEPTEMBER 30, 1998 3 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Cogeneration Corporation of America We have audited the accompanying statement of assets acquired and liabilities assumed of the Pryor Project ("Successor") as of September 30, 1998 and December 31, 1997 and the related statement of revenues and direct operating expenses of the Successor for the nine months ended September 30, 1998 and the statement of revenues and direct operating expenses of the Pryor Project ("Predecessor") for the year ended December 31, 1997. These financial statements are the responsibility of the Pryor Project's management. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of assets acquired and liabilities assumed and the statement of revenues and direct operating expenses are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in these statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of these statements. We believe that our audit provides a reasonable basis for our opinion. The accompanying statements were prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission for the inclusion in a current report on Form 8-K of Cogeneration Corporation of America as described in Note 2 and are not intended to be a complete presentation of the Pryor Project's assets and liabilities or revenues and expenses. In our opinion, such statements referred to above present fairly, in all material respects, the assets acquired and liabilities assumed of the Successor as of September 30, 1998 and December 31, 1997 and the revenues and direct operating expenses of the Successor for the nine months ended September 30, 1998 and the revenues and direct operating expenses of the Predecessor for the year ended December 31, 1997, as described in Note 2, in conformity with generally accepted accounting principles. PricewaterhouseCoopers LLP Minneapolis, Minnesota December 15, 1998 4 PRYOR PROJECT STATEMENT OF REVENUES AND DIRECT OPERATING EXPENSES (IN THOUSANDS)
SUCCESSOR PREDECESSOR --------- ----------- NINE MONTHS ENDED YEAR ENDED SEPTEMBER 30, DECEMBER 31, 1998 1997 Revenues $ 12,446 $ 10,139 Cost of revenues: Fuel, production and transmission costs 7,991 6,280 Operation and maintenance 2,140 3,693 Depreciation 616 1,164 ---------- ----------- 10,747 11,137 ---------- ----------- Gross profit 1,699 (998) Selling, general and administrative expenses 793 1,328 ---------- ----------- Revenues in excess of (less than) direct operating expenses $ 906 $ (2,326) ---------- ----------- ---------- -----------
The accompanying notes are an integral part of this statement. PRYOR PROJECT STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED (IN THOUSANDS)
SUCCESSOR ------------------------------ SEPTEMBER 30, DECEMBER 31, 1998 1997 ASSETS ACQUIRED Current assets: Accounts receivable $ 311 $ 842 Other current assets 36 16 ---------- ----------- Total current assets 347 858 Property, plant and equipment net of accumulated depreciation of $616 and $0, respectively 16,447 15,906 Deposits 124 ---------- ----------- Total assets acquired $ 16,794 $ 16,888 ---------- ----------- ---------- ----------- LIABILITIES ASSUMED Current liabilities: Accounts payable $ 1,348 $ 778 Accrued expenses 130 25 Current portion of capital lease obligations 19 9 ---------- ----------- Total current liabilities 1,497 812 Capital lease obligations 22 17 ---------- ----------- Total liabilities assumed $ 1,519 $ 829 ---------- ----------- ---------- ----------- Net assets $ 15,275 $ 16,059 ---------- ----------- ---------- -----------
The accompanying notes are an integral part of this statement. PRYOR PROJECT NOTES TO FINANCIAL STATEMENTS (IN THOUSANDS) 1. BUSINESS DESCRIPTION The Pryor Project (the "Project") is a steam and electric generating facility at the Mid-America Industrial Park in Mayes County, Oklahoma, consisting of several gas and steam turbines that have an aggregate rated capacity of 130 megawatts. The Project generates and sells electric power, steam, compressed air and softened water under contracts to utilities and industrial and commercial users. The Project may also sell excess electric capacity and energy on a merchant basis. At September 30, 1998, the Project was owned by Oklahoma Loan Acquisition Corporation ("OLAC"), which was a wholly-owned subsidiary of Mid-Continent Power Company L.L.C. ("MCPC L.L.C.") OLAC acquired the Project from Mid-Continent Power Company, Inc. ("MCPC") on December 31, 1997 pursuant to MCPC's bankruptcy reorganization plan (see Note 3). On October 9, 1998, CogenAmerica Pryor, Inc. ("Cogen Pryor"), a wholly owned subsidiary of Cogeneration Corporation of America ("CogenAmerica"), acquired the Project by purchasing all of the capital stock of OLAC (see Note 6). Pursuant to a 10-year contract commencing January 1, 1998, the Project provides 110 megawatts of standby capacity with a maximum dispatch of 1,500 hours per year to Oklahoma Gas and Electric (OG&E). OG&E pays the Project a monthly capacity charge for assured delivery of energy during term of the contract and an energy charge for dispatched electricity. Upon 6 months advance notice, OG&E may extend the contract for an additional five years. MCPC also has contracts with six customers in the Mid-America Industrial Park for the sale of steam, compressed air and softened water. The contracts vary in length and have varying expiration dates. During 1997, MCPC provided standby capacity and electric energy to Public Service of Oklahoma ("PSO"). This agreement expired on December 31, 1997, however, the Project continues to supply excess electric power to PSO. 2. BASIS OF PRESENTATION The statement of assets acquired and liabilities assumed and statement of revenues and direct operating expenses have been prepared for inclusion in a Current Report on Form 8-K of CogenAmerica to be filed with the Securities Exchange Commission. The accompanying statements have been prepared in accordance with generally accepted accounting principles and were derived from the historical accounting records of OLAC and MCPC. The statements are intended to present the business of the Project acquired by Cogen Pryor. OLAC's acquisition of the Project from MCPC on December 31, 1997 was accounted for by the purchase method (see Note 3). The purchase price was assigned to the assets acquired and liabilities assumed based on their fair values at the acquisition date. The fair value of the net assets acquired exceeded the purchase price and such excess was allocated to reduce the value assigned to property, plant and equipment. The statement of assets acquired and liabilities assumed includes all assets and liabilities of OLAC as of the statement dates, except cash, income taxes and obligations payable to OLAC's parent and affiliates thereof (the "excluded obligations"). Pursuant to the stock acquisition agreement, immediately prior to Cogen Pryor's acquisition of OLAC the excluded obligations were repaid to the extent of available cash and the unpaid amount was contributed to OLAC's capital. The statement of revenues and direct operating expenses includes the revenues and expenses of the Project directly attributable to the generation and sale of electric power, steam, compressed air and softened water. The statement for the nine months ended September 30, 1998 was derived from the accounting records of OLAC and does not include interest income, interest expense or income taxes. Depreciation in the amount of $616 included in cost of revenues for the nine months ended September 30, 1998 is based on OLAC's successor cost basis in the Project determined by purchase accounting. The statement for the year ended December 31, 1997 was derived from the accounting records of MCPC and does not include interest income, interest expense, income taxes (MCPC was a subchapter S corporation) or any revenues, expenses, costs or income incidental to MCPC's bankruptcy filing and reorganization plan. Depreciation in the amount of $1,163 included in cost of revenues for the year ended December 31, 1997 is based on MCPC's predecessor cost basis in the Project. 3. MCPC BANKRUPTCY CHAPTER 11 BANKRUPTCY FILING On June 18, 1997 ("Petition Date"), MCPC filed a petition with the United States Bankruptcy Court for the Northern District of Oklahoma ("Bankruptcy Court") for protection under Chapter 11 of the Federal Bankruptcy Code. Upon filing of the voluntary petition for relief, MCPC, as debtor-in-possession, was authorized to operate its business for the benefit of claim holders and interest holders, and no trustee was appointed. All debts of MCPC as of the Petition Date were stayed by the bankruptcy petition and subject to compromise pursuant to such proceedings. MCPC operated its business and managed its assets in the ordinary course as debtor-in-possession, and was required to obtain court approval for transactions outside the ordinary course of business. PLAN OF REORGANIZATION MCPC filed with the Bankruptcy Court the First Amended Plan of Reorganization on September 18, 1997, as amended and restated by the Second Amended Plan of Reorganization (the "Plan") filed on October 24, 1997. The Bankruptcy Court approved the Plan on October 24, 1997 and it became effective and was executed in two phases on December 23, 1997 and December 31, 1997. The Plan contemplated (i) the sale of the cogeneration facility, certain assumed pre- and post-petition contracts related to the Project, and all other assets of MCPC to OLAC in satisfaction of OLAC's secured claim in the amount of $15,000 and (ii) satisfaction of all other creditor claims according to the creditor classes and payment amounts detailed in the Plan. The cash requirements of the Plan would be funded by the unencumbered cash held by MCPC, with any deficiency funded by OLAC. Upon payment and satisfaction of all creditor claims and transfer of the assets and contracts to OLAC, MCPC would be dissolved. On December 23, 1997 OLAC advanced $2,231 to MCPC and MCPC paid all pre-petition and substantially all post-petition liabilities (excluding OLAC's claims) presented for payment as of that date. On December 31, 1997, MCPC sold all of its assets (excluding cash required to fund remaining creditor claims) and assigned certain assumed pre- and post-petition contracts to OLAC in satisfaction of OLAC's secured claim. MCPC was subsequently dissolved in January 1998. As a result of the plan of reorganization, OLAC assumed all post-petition liabilities of MCPC presented for payment subsequent to December 23, 1997. On December 31, 1997 OLAC acquired MCPC's assets and the assumed contracts. OLAC accounted for the transactions underlying the Plan by the purchase method of accounting. The purchase price of $16,227 was determined from the carrying amount of OLAC's claims and costs related to the Plan. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GOING CONCERN CONSIDERATIONS The accompanying statement of assets acquired and liabilities assumed and statement of revenues and direct operating expenses of the Project have been prepared on a going concern basis, which contemplates the realization of assets and the liquidation of liabilities in the ordinary course of business. As described in Note 3 above, MCPC filed for reorganization under Chapter 11 of the Unites States Bankruptcy Code on June 18, 1997 and consummated the plan on December 31, 1997. The financial statements do not include any adjustments relating to recoverability and classification of reported asset amounts or the amounts and classification of liabilities that resulted from the ultimate resolution of the Plan. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at cost and are depreciated by the straight line method over the estimated useful life of the related asset or, for leasehold improvements, over the term of the lease, if shorter. Pursuant to purchase accounting, a new cost basis was established on December 31, 1997 following consummation of the Plan (see Note 3). The estimated useful life of the facility at January 1, 1998 and 1997 was 21 and 22 years, respectively. SIGNIFICANT CUSTOMERS AND CONCENTRATION OF CREDIT RISK In the nine months ended September 30, 1998, and year ended December 31, 1997, sales to a certain customer totaled 30%, and 47% of revenues, respectively. In the nine months ended September 30, 1998, sales to another customer totaled 53% of revenues. In the year ended December 31, 1997, sales to two additional customers totaled 23% and 10% of revenues, respectively. FAIR VALUE OF FINANCIAL INSTRUMENTS The Project's financial instruments primarily consist of short-term trade receivables and payables whose carrying amounts approximate fair value. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 5. LEASES Future minimum lease payments under noncancelable operating and capital leases for the three months ending December 31, 1998 and the years thereafter are as follows:
PERIOD CAPITAL OPERATING TOTAL - --------------------------------------------------------------- ----------------- ---------------- ----------------- Three months ended December 31, 1998.............. $ 5 $ 6 $ 11 1999.............................................. 20 22 42 2000.............................................. 16 20 36 2001.............................................. 4 20 24 2002.............................................. 20 20 -------- ------- ------ Total minimum lease payments...................... 45 $ 88 $ 133 ------- ------ ------- ------ Less amounts representing interest................ (4) -------- Present value of minimum lease payments........... 41 Less current maturities........................... (19) -------- Long-term capital lease obligations............... $ 22 -------- --------
6. RELATED PARTY TRANSACTIONS NRG Oklahoma Operations, Inc.("NRG Oklahoma") provided services to the Project pursuant to an operation and management consulting agreement commencing January 1, 1998. Such services totaled $425 for the nine months ended September 30, 1998, and are included in operation and maintenance expense. The operation and management consulting agreement was terminated effective October 9, 1998 in connection with CogenAmerica Pryor's acquisition of the Project (see Note 7). NRG Oklahoma is a subsidiary of NRG Energy, Inc., which owns 50% of the capital stock of MCPC L.L.C. 7. SUBSEQUENT EVENTS On October 9, 1998, Cogen Pryor acquired all of the issued and outstanding capital stock of OLAC from MCPC L.L.C. for a cash purchase price of $23,830, financed through borrowings from NRG Energy, Inc. The facility will continue to generate and sell electric power, steam, compressed air and softened water with Cogen Pryor assuming all of the electric power and steam contracts of the Project. (b) Pro Forma Financial Information. PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The following unaudited pro forma financial information relates to the Company's October 9, 1998 acquisition of the capital stock of Oklahoma Loan Acquisition Corporation ("OLAC"), a wholly owned subsidiary of MCPC LLC. The transaction will be accounted for as a purchase business combination. The pro forma amounts have been prepared based on certain purchase accounting and other pro forma adjustments as described in the accompanying notes to the pro forma consolidated financial statements. The pro forma adjustments were applied to the historical consolidated financial statements of the Company and the historical statements of the Pryor Project. The historical statements of the Pryor Project consist of a statement of assets acquired and liabilities assumed and the related statements of revenues and direct operating expenses. Such statements were derived from the accounting records of OLAC and Mid-Continent Power Company, Inc. as described in Note 2 to the audited statements of the Pryor Project. The unaudited pro forma balance sheet at September 30, 1998 reflects the historical financial position of the Company and historical assets acquired and liabilities assumed of the Pryor Project as if the acquisition had occurred as of the balance sheet date. The unaudited pro forma statements of operations for the nine months ended September 30, 1998 and year ended December 31, 1997 reflect the historical results of operations of the Company and the historical revenues and direct operating expenses of the Pryor Project with pro forma acquisition adjustments as if the acquisition had occurred on January 1, 1998 and January 1, 1997, respectively. The pro forma adjustments are described in the accompanying notes and give effect to events that are (a) directly attributable to the acquisition, (b) factually supportable, and (c) in the case of certain statement of operations adjustment, expected to have a continuing impact. The unaudited pro forma financial statements should be read in connection with the Company's historical financial statements and related footnotes and the historical financial statements and related footnotes of the Pryor Project. The unaudited pro forma financial information presented herein is for information purposes. Such information does not purport to represent what the Company's and the Pryor Project's financial position or results of operations as of the dates presented would have been had the acquisition occurred on such date or at the beginning of the period indicated or to project the Company's and the Pryor Project's financial position or results of operations for any future date or period. COGENERATION CORPORATION OF AMERICA PRO FORMA CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 1998 (IN THOUSANDS) (UNAUDITED)
ACQUIRED ASSETS AND LIABILITIES ----------- ACTUAL ACTUAL PRO FORMA PRO FORMA COGENAMERICA PRYOR PROJECT ADJUSTMENTS CONSOLIDATED ASSETS Current Assets: Cash and cash equivalents $ 3,417 $ 3,417 Restricted cash and cash equivalents 11,178 11,178 Accounts receivable, net 13,155 $ 311 $ 390 (a) 13,856 Receivables from related parties 146 146 Notes receivable, current 3 3 Inventories 2,368 2,368 Other current assets 729 36 765 -------------- ------------- ----------- ------------- Total current assets 30,996 347 390 31,733 Property, plant and equipment, net 123,518 16,447 16,451 (a) 156,416 Property under construction 92,853 92,853 Project development costs 731 (689) (b) 42 Investments in equity affiliates 17,638 17,638 Deferred financing costs, net 6,008 167 (c) 6,175 Deferred tax assets 7,996 (7,200) (a) 796 Other assets 516 516 -------------- ------------- ----------- ------------- Total assets $ 280,256 $ 16,794 $ 9,119 $ 306,169 -------------- ------------- ----------- ------------- -------------- ------------- ----------- ------------- LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of loans and payables due NRG Energy Inc. $ 2,041 $ - $ 50 (c) $ 2,091 Current portion of non-recourse long-term debt 9,339 19 9,358 Current portion of recourse long-term debt 408 408 Short term borrowings 2,594 2,594 Accounts payable 17,279 1,348 282 (a) 18,909 Prepetition liabilities 797 797 Other current liabilities 2,765 130 115 (b) 3,010 -------------- ------------- ----------- ------------- Total current liabilities 35,223 1,497 447 37,167 Loans due NRG Energy, Inc. 4,439 23,947 (a) 28,386 Nonrecourse long-term debt 212,463 22 212,485 Recourse long-term debt 25,000 25,000 -------------- ------------- ----------- ------------- Total liabilities 277,125 $ 1,519 $ 24,394 303,038 ------------- ----------- ------------- ----------- Stockholders' equity: Preferred stock New common stock 68 68 Additional paid-in capital 65,715 65,715 Retained earnings (accumulated deficit) (62,332) (62,332) Accumulated other comprehensive income (loss) (320) (320) -------------- ------------- Total stockholder's equity 3,131 3,131 -------------- ------------- Total liabilities and stockholders' equity $ 280,256 $ 306,169 -------------- ------------- -------------- -------------
See accompanying notes to pro forma consolidated financial statements. COGENERATION CORPORATION OF AMERICA PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
REVENUES AND DIRECT OPERATING EXPENSES ------------- ACTUAL ACTUAL PRO FORMA PRO FORMA COGENAMERICA PRYOR PROJECT ADJUSTMENTS CONSOLIDATED Energy revenues $ 32,954 $ 12,446 $ 45,400 Equipment sales and service 14,571 14,571 Rental Revenues 2,208 2,208 -------------- ------------- ----------- ------------- 49,733 12,446 62,179 -------------- ------------- ----------- ------------- Cost of energy revenues 11,905 10,747 $ 197 (d) 22,849 Cost of equipment sales and services 12,697 12,697 Cost of rental revenues 1,759 1,759 -------------- ------------- ----------- ------------- 26,361 10,747 197 37,305 -------------- ------------- ----------- ------------- Gross profit 23,372 1,699 (197) 24,874 Selling, general and administrative expenses 5,923 793 (45) (e) 6,671 Provision for impaired assets - - -------------- ------------- ----------- ------------- Income (loss) from operations 17,449 906 (152) 18,203 Interest and other income 684 684 Equity in earnings of affiliates 4,241 4,241 Interest and debt expense (10,543) (2,160) (f) (12,703) -------------- ------------- ----------- ------------- Income (loss) before income taxes 11,831 906 (2,312) 10,425 Provision for income taxes (benefit) 4,571 (562) (g) 4,009 -------------- ------------- ----------- ------------- Net income (loss) $ 7,260 $ 906 $ (1,750) $ 6,416 -------------- ------------- ----------- ------------- -------------- ------------- ----------- ------------- Earnings per share: Basic $ 1.06 $ 0.94 Diluted $ 1.04 $ 0.92 Weighted average share outstanding: Basic 6,837 6,837 Diluted 6,983 6,983
COGENERATION CORPORATION OF AMERICA PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)
REVENUES AND DIRECT OPERATING EXPENSES -------- ACTUAL ACTUAL PRO FORMA PRO FORMA COGENAMERICA PRYOR PROJECT ADJUSTMENTS CONSOLIDATED Energy revenues $ 43,210 $ 10,139 $ 53,349 Equipment sales and service 19,415 19,415 Rental Revenues 2,179 2,179 -------------- ------------- ----------- ------------- 64,804 10,139 74,943 -------------- ------------- ----------- ------------- Cost of energy revenues 14,841 11,137 $ 575 (d) 26,553 Cost of equipment sales and services 17,037 17,037 Cost of rental revenues 1,817 1,817 -------------- ------------- ----------- ------------- 33,695 11,137 575 45,407 -------------- ------------- ----------- ------------- Gross profit 31,109 (998) (575) 29,536 Selling, general and administrative expenses 9,479 1,328 (120) (e) 10,687 Provision for impaired assets 5,274 5,274 -------------- ------------- ----------- ------------- Income (loss) from operations 16,356 (2,326) (455) 13,575 Interest and other income 1,310 1,310 Interest and debt expense (14,768) (2,881) (f) (17,649) -------------- ------------- ----------- ------------- Income (loss) before income taxes 2,898 (2,326) (3,336) (2,764) Provision for income taxes (benefit) (20,454) (2,265) (g) (22,719) -------------- ------------- ----------- ------------- Net income (loss) $ 23,352 $ (2,326) $ (1,071) $ 19,955 -------------- ------------- ----------- ------------- -------------- ------------- ----------- ------------- Earnings per share: Basic $ 3.59 $ 3.06 Diluted $ 3.48 $ 2.97 Weighted average share outstanding: Basic 6,511 6,511 Diluted 6,275 6,725
COGENERATION CORPORATION OF AMERICA NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS) (Unaudited) The following adjustments are related to the acquisition by CogenAmerica Pryor, Inc., a wholly owned subsidiary of Cogeneration Corporation of America, of the outstanding capital stock of Oklahoma Loan Acquisition Corporation. 1. UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET ADJUSTMENTS (a) To record the October 9, 1998 acquisition of OLAC's outstanding capital stock for a purchase price of $24,634, comprised of the purchase price of $23,830 paid to MCPC LLC and transaction costs of $804. To finance the acquisition, CogenAmerica issued a note payable to NRG Energy, Inc. at the closing in the amount of $23,947. The note amount is comprised of the cash purchase price due at closing of $21,330, the purchase price deposit in the amount of $2,500 payable upon entering into the stock purchase agreement on September 10, 1998 and which was financed by a note issued to NRG Energy, Inc.(the "deposit loan"), accrued interest on the deposit loan through the closing date in the amount of $17 and loan fees in the amount of $100. The $24,634 purchase price has been allocated as follows:
(THOUSANDS) ASSETS ACQUIRED (LIABILITIES ASSUMED) VALUATION ------------------------------------- --------- Accounts receivable $ 701 Other current assets 36 Property, plant and equipment 32,898 Accounts payable (1,630) Other current liabilities (130) Nonrecourse long-term debt (41) Deferred taxes (7,200) ----------- $ 24,634 ----------- -----------
(b) To reclass and accrue transaction costs incurred in connection with the acquisition. (c) To record financing costs associated with the note issued to NRG Energy, Inc. to finance the acquisition. 2. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS (d) To record additional depreciation on property, plant and equipment acquired based on the straight line method and an estimated useful life of 20 years ($622 and $575 for the nine months ended September 30, 1998 and the year ended December 31, 1997, respectively) and to eliminate costs that will not continue following the acquisition for an operation and management consulting contract that was terminated pursuant to the acquisition ($425 and $0 for the nine months ended September 30, 1998 and the year ended December 31, 1997, respectively). (e) To eliminate compensation costs that will not continue following the acquisition. Such costs will be subsequently reimbursed by NRG Energy, Inc. (f) To record interest expense at 11.75% on the note issued to NRG Energy, Inc. to finance the acquisition and amortization of related financing costs. (g) To record pro forma income tax benefit related to the operating results of the acquired business at the statutory effective rate of 40%. (c) Exhibits.
Exhibit Number Description - ----- ----------- 2.1 Stock Purchase Agreement dated September 10, 1998 between the Company and MCPC LLC filed as Exhibit 2.1 to the Current Report on Form 8-K dated October 9, 1998 and filed with the Commission on October 26, 1998, and incorporated herein by reference. 23 Consent of PricewaterhouseCoopers LLP.
Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COGENERATION CORPORATION OF AMERICA By: /s/ Timothy P. Hunstad -------------------------------------------- Name: Timothy P. Hunstad Title: Vice President and Chief Financial Officer Date: March 26, 1999 EXHIBIT INDEX
Exhibit Number Description - ----- ----------- 2.1 Stock Purchase Agreement dated September 10, 1998 between the Company and MCPC LLC filed as Exhibit 2.1 to the Current Report on Form 8-K dated October 9, 1998 and filed with the Commission on October 26, 1998, and incorporated herein by reference. 23 Consent of PricewaterhouseCoopers LLP.
EX-23 2 EXHIBIT 23 Exhibit 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 333-38603) of Cogeneration Corporation of America of our report dated December 15, 1998 appearing in this Form 8-K. /s/ PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP Minneapolis, Minnesota March 25, 1999 -----END PRIVACY-ENHANCED MESSAGE-----