-----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, MADloSemqCE4cNm6/8N/6ngjDIsMAxpcxry7jKGdoxFHg3+trFo4uRVe+vbDqxtc F9kh6q3ID+2LdsxI1QvQzA== 0000912057-96-010030.txt : 19960517 0000912057-96-010030.hdr.sgml : 19960517 ACCESSION NUMBER: 0000912057-96-010030 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SITHE INDEPENDENCE FUNDING CORP CENTRAL INDEX KEY: 0000899281 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 133677475 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-59960 FILM NUMBER: 96567911 BUSINESS ADDRESS: STREET 1: 450 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2124509000 MAIL ADDRESS: STREET 1: 450 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SITHE INDEPENDENCE POWER PARTNERS LP CENTRAL INDEX KEY: 0000899322 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 330468704 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-59960-01 FILM NUMBER: 96567912 BUSINESS ADDRESS: STREET 1: 450 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2124509000 MAIL ADDRESS: STREET 2: 450 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended March 31, 1996 Commission File Number 33-59960 SITHE/INDEPENDENCE FUNDING CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 13-3677475 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 450 LEXINGTON AVENUE, NEW YORK, NY 10017 (Address of principal executive offices) (Zip code) (212)-450-9000 (Registrant's telephone number, including area code) SITHE/INDEPENDENCE POWER PARTNERS, L.P. (Exact name of registrant as specified in its charter) DELAWARE 33-0468704 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 450 LEXINGTON AVENUE, NEW YORK, NY 10017 (Address of principal executive offices) (Zip code) (212)-450-9000 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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 SITHE/INDEPENDENCE POWER PARTNERS, L.P. SITHE/INDEPENDENCE FUNDING CORPORATION PAGE NO. PART I FINANCIAL INFORMATION -------- SITHE/INDEPENDENCE POWER PARTNERS, L.P. (a Delaware Limited Partnership) Financial Statements: Consolidated Balance Sheets at March 31, 1996 and December 31, 1995 (Unaudited) 3 Consolidated Statements of Operations for the Three Months Ended March 31, 1996 and 1995 (Unaudited) 4 Consolidated Statement of Partners' Capital for the Three Months Ended March 31, 1996 (Unaudited) 5 Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1996 and 1995 (Unaudited) 6 Notes to Consolidated Financial Statements (Unaudited) 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 -2- SITHE/INDEPENDENCE POWER PARTNERS, L.P. (A DELAWARE LIMITED PARTNERSHIP) CONSOLIDATED BALANCE SHEETS (Unaudited) (IN THOUSANDS)
March 31, December 31, 1996 1995 --------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 186 $ 942 Restricted funds 47,245 56,036 Accounts receivable - trade 49,178 35,321 Fuel inventory and other current assets 5,997 2,862 --------- ------------ TOTAL CURRENT ASSETS 102,606 95,161 PROPERTY, PLANT AND EQUIPMENT, AT COST: Land 5,875 5,875 Electric and steam generating facilities 752,655 750,769 --------- ------------ 758,530 756,644 Accumulated depreciation (23,623) (18,928) --------- ------------ 734,907 737,716 DEBT ISSUANCE COSTS 11,077 11,350 OTHER ASSETS 1,314 1,661 --------- ------------ TOTAL ASSETS $849,904 $845,888 --------- ------------ --------- ------------ LIABILITIES AND PARTNERS' CAPITAL CURRENT LIABILITIES: Trade payables $ 29,905 $ 20,190 Accrued interest 15,395 30,910 Current portion of long-term debt 3,929 11,382 Accrued construction costs and retentions 2,381 16,587 --------- ------------ TOTAL CURRENT LIABILITIES 51,610 79,069 LONG-TERM DEBT: 7.90% secured notes due 2002 138,955 138,957 8.50% secured bonds due 2007 150,839 150,839 9.00% secured bonds due 2013 408,609 408,609 --------- ------------ 698,403 698,405 OTHER LIABILITIES 7,332 5,680 COMMITMENTS AND CONTINGENCIES PARTNERS' CAPITAL 92,559 62,734 --------- ------------ TOTAL LIABILITIES AND PARTNERS' CAPITAL $849,904 $845,888 --------- ------------ --------- ------------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. -3- SITHE/INDEPENDENCE POWER PARTNERS, L.P. (A DELAWARE LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, ------------------------- 1996 1995 -------- -------- REVENUE $113,410 $ 86,986 -------- -------- COST OF SALES Fuel 53,227 47,900 Operations and maintenance 10,333 9,210 Depreciation 4,695 4,705 -------- -------- 68,255 61,815 -------- -------- OPERATING INCOME 45,155 25,171 NON-OPERATING INCOME (EXPENSES): Interest expense (15,802) (16,080) Other income, net 464 186 -------- -------- NET INCOME $ 29,817 $ 9,277 -------- -------- -------- --------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -4- SITHE/INDEPENDENCE POWER PARTNERS, L.P. (A DELAWARE LIMITED PARTNERSHIP) CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (UNAUDITED) (IN THOUSANDS)
UNREALIZED LOSS ON TOTAL GENERAL LIMITED MARKETABLE PARTNERS' PARTNER PARTNERS SECURITIES CAPITAL ------- ------- ---------- ------- BALANCE, JANUARY 1, 1996 $ 3,141 $59,601 $ (8) $62,734 Net income 2,982 26,835 - 29,817 Change in unrealized loss on marketable securities - - 8 8 ------- ------- ------- ------- BALANCE, MARCH 31, 1996 $ 6,123 $86,436 $ - $92,559 ------- ------- ------- ------- ------- ------- ------- -------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. -5- SITHE/INDEPENDENCE POWER PARTNERS, L.P. (A DELAWARE LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
THREE MONTHS ENDED MARCH 31, -------------------- 1996 1995 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 29,817 $ 9,277 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 4,695 4,705 Amortization of deferred financing costs 273 288 Changes in operating assets and liabilities: Accounts receivable - trade (13,857) (22,972) Fuel inventory and other current assets (3,135) (2,386) Other assets 347 - Trade payables and other current liabi1ities 9,715 17,186 Accrued interest payable (15,515) 15,516 Other liabilities 1,652 1,465 -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES 13,992 23,079 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Construction costs (16,092) (23,380) Restricted funds 8,799 393 Investment of funds designated for construction - (40,090) -------- -------- NET CASH USED IN INVESTING ACTIVITIES (7,293) (63,077) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments of long-term debt (7,455) - Capital contribution - 40,000 -------- -------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (7,455) 40,000 -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (756) 2 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 942 4 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 186 $ 6 -------- -------- -------- -------- SUPPLEMENT CASH FLOW INFORMATION Cash payments: Interest (net of amounts capitalized) $ 30,736 $ -
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. -6- SITHE/INDEPENDENCE POWER PARTNERS, L.P. (A DELAWARE LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. THE PARTNERSHIP Sithe/Independence Power Partners, L.P. (the "Partnership"), in which Sithe Energies, Inc. and certain of its direct and indirect wholly owned subsidiaries (the "Partners") hold all the partnership interests, is a Delaware limited partnership that was formed in November 1990 for a term of 50 years to develop, construct and own a gas-fired cogeneration facility with a design capacity of approximately 1,000 megawatts (the "Project") located in the Town of Scriba, County of Oswego, New York. The Partnership commenced commercial operation for financial reporting purposes on December 29, 1994. The majority of the capacity and electric energy generated by the Project is sold to Consolidated Edison Company of New York, Inc. ("Con Edison") and Alcan Aluminum Corporation with the remainder of the electric energy being sold to Niagara Mohawk Power Corporation ("Niagara Mohawk"). 2. BASIS OF PRESENTATION The accompanying consolidated balance sheets at March 31, 1996 and December 31, 1995 and the consolidated statements of operations and cash flows for the three months ended March 31, 1996 and 1995 should be read in conjunction with the audited consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 1995 for the Partnership and its wholly-owned subsidiary, Sithe/Independence Funding Corporation. The results of operations for the three months ended March 31, 1996 are not necessarily indicative of the results to be expected for the full year. The unaudited financial information at March 31, 1996 and for the three months ended March 31, 1996 and 1995 contains all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair presentation of the operating results for such periods. -7- SITHE/INDEPENDENCE POWER PARTNERS, L.P. (A DELAWARE LIMITED PARTNERSHIP) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenue, cost of sales and operating income for the first quarter of 1996 increased by $26.4 million (30%), $6.4 million (10%), and $20.0 million (79%), respectively, over the corresponding quarter of last year, with the increases reflecting higher avoided cost based tariff prices on energy deliveries to Con Edison and Niagara Mohawk, higher plant availability and incremental revenue from selling gas instead of generating electricity at certain times during the first quarter of 1996. Interest expense for the first quarter of 1996 decreased by $.3 million (2%) from the corresponding quarter of last year as a result of lower outstanding amounts of long term debt. Other income, net for the first quarter of 1996 consisted of interest income. Other income, net for the first quarter of 1995 consisted of $.4 million of interest income and $.2 million of realized losses on short-term investments designated for construction. LIQUIDITY AND CAPITAL RESOURCES The Partners have obtained a credit facility under which one or more letters of credit may be issued in connection with their obligations pursuant to certain Project contracts, and, as of March 31, 1996, letters of credit aggregating $17.0 million were outstanding in connection with such obligations. The Partnership secured the Project's debt service obligations with a letter of credit in the amount of $50 million and entered into a secured working capital facility for a maximum available amount of $20 million through January 1997, which may be extended by the parties thereto for additional one-year periods. Amounts outstanding under the working capital facility will accrue interest at the prime commercial lending rate of the reference bank in effect from time to time. To secure the Partnership's obligation to pay interest, principal and other amounts payable in respect of the working capital facility, the working capital provider has been assigned a security interest and lien on all of the collateral in which the holders of the Partnership's long-term debt issued to finance the development and construction of the Project have been assigned a security interest and lien. The Partnership presently believes that funds available from cash on hand, operations, the working capital facility and the debt service letter of credit will be more than sufficient to liquidate Partnership obligations as they come due and to pay 1996 Project debt service. The Partnership is required to fund reserves for debt service and major overhauls from available cash flow after debt service as follows: $32.3 million in 1996, $16.4 million in 1997 and approximately $6 million annually thereafter. -8- Changes in the avoided-cost-based energy component of billings by the Partnership to Con Edison will impact the Partnership's profitability, particularly during the first five years of operation when the price for gas associated with energy deliveries to Con Edison is fixed. -9- PART II -- OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit No. Description of Exhibit ---------- ---------------------- 27 ---- Article 5 Financial Data Schedule of Sithe/Independence Power Partners, L.P. for the quarter ended March 31, 1996. (b) Reports on Form 8-K: No report on Form 8-K was filed during the quarter covered by this report. -10- 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. Sithe/Independence Funding Corporation (REGISTRANT) May 14, 1996 /s/ Richard J. Cronin III --------------------------------------- RICHARD J. CRONIN III CHIEF FINANCIAL OFFICER AND VICE PRESIDENT (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER) Pursuant to the requirements of the Securities Exchange Act of 1934, the co-registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Sithe/Independence Power Partners, L.P. (REGISTRANT) By: Sithe/Independence, Inc. GENERAL PARTNER May 14, 1996 /s/ Richard J. Cronin III -------------------------------------- RICHARD J. CRONIN III CHIEF FINANCIAL OFFICER AND VICE PRESIDENT (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER) -11- EX-27 2 ART. 5 FDS FOR 1ST QUARTER 10-Q
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON PAGES 3 AND 4 OF THE PARTNERSHIP'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000899281 SITHE/INDEPENDENCE FUNDING CORP. 1,000 3-MOS DEC-31-1996 MAR-31-1996 186 0 49,178 0 5,997 102,606 758,530 23,623 849,904 51,610 698,403 0 0 0 92,559 849,904 113,410 113,410 68,255 68,255 0 0 15,802 29,817 0 29,817 0 0 0 29,817 0 0
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