-----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, LijyTpqkvSOs0VWahHoRrCjAfjvvCbfwGqb5+MGz/td9j2v03rnUYVF6he9DKckq HZ2qsHU2e4XItWWPthGsVA== 0000950135-96-003693.txt : 19960816 0000950135-96-003693.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950135-96-003693 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IEC FUNDING CORP CENTRAL INDEX KEY: 0000934665 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 043255377 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-87902 FILM NUMBER: 96615282 BUSINESS ADDRESS: STREET 1: 350 LINCOLN PLACE CITY: HINGHAM STATE: MA ZIP: 02043 BUSINESS PHONE: 6177499800 MAIL ADDRESS: STREET 1: 350 LINCOLN PLACE CITY: HINGHAM STATE: MA ZIP: 02043 10-Q 1 IEC FUNDING CORP. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996 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 33-87902 33-87902-01 33-87902-02 IEC FUNDING CORP. NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP ----------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 04-3255377 NEW JERSEY 04-2955646 MASSACHUSETTS 04-2955642 ------------- ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 350 LINCOLN PLACE, HINGHAM, MASSACHUSETTS 02043 ----------------------------------------- ----- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (617) 749-9800 -------------- (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 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. YES X NO --- --- 2 IEC FUNDING CORP. NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP INDEX PAGE NUMBER PART I FINANCIAL INFORMATION Item 1. Financial Statements NORTHEAST ENERGY ASSOCIATES AND NORTH JERSEY ENERGY ASSOCIATES Combined Balance Sheet at December 31, 1995 and June 30, 1996 (Unaudited).......................................... 3 Combined Statement of Operations for the Three Months and Six Months Ended June 30, 1995 and 1996 (Unaudited)..... 4 Combined Statement of Cash Flows for the Six Months Ended June 30, 1995 and 1996 (Unaudited)................ 5 Notes to Financial Statements...................................... 7 IEC FUNDING CORP. Balance Sheet at December 31, 1995 and June 30, 1996 (Unaudited).......................................... 8 Statement of Operations for the Three Months and Six Months Ended June 30, 1995 and 1996 (Unaudited)................................ 9 Statement of Cash Flows for the Six Months Ended June 30, 1995 and 1996.......................................10 Notes to Financial Statements......................................11 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......................12 PART II OTHER INFORMATION..................................................13 SIGNATURES..................................................................14 3 NORTHEAST ENERGY ASSOICATES, A LIMITED PARTNERSHIP AND NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP COMBINED BALANCE SHEET (UNAUDITED)
DECEMBER 31, JUNE 30, 1995 1996 (IN THOUSANDS) ASSETS Current assets Cash and cash equivalents $ 58,277 $ 61,023 Accounts receivable 51,465 38,323 Fuel inventories 4,516 4,837 Prepaid expenses and other current assets 2,913 3,847 --------- --------- Total current assets 117,171 108,030 --------- --------- Cogeneration facilities and carbon dioxide facility (net of accumulated depreciation of $104,157,000 and $116,585,000 at December 31, 1995 and June 30, 1996 respectively) 397,589 385,865 Unamortized financing costs 20,210 18,996 Other fixed assets (net of accumulated depreciation of $371,000 and $426,000 at December 31, 1995 and June 30, 1996, respectively) 485 466 Other assets 3,011 3,425 Restricted cash 78,568 74,470 --------- --------- Total non-current assets 499,863 483,222 --------- --------- Total assets $ 617,034 $ 591,252 ========= ========= LIABILITIES AND PARTNERS' DEFICIT Current liabilities Current portion of loans payable - IEC Funding Corp. $ 25,204 $ 24,640 Accounts payable 14,234 14,765 Other accrued expenses 2,104 3,543 Future obligations under interest rate swap agreements 3,654 2,760 --------- --------- Total current liabilities 45,196 45,708 --------- --------- Loans payable - IEC Funding Corp. 514,362 502,324 Amounts due utilities for energy bank balances 188,053 202,235 --------- --------- Total non-current liabilities 702,415 704,559 --------- --------- Total liabilities 747,611 750,267 --------- --------- Partners' deficit General partner (4,047) (4,333) Limited partners (126,530) (154,682) --------- --------- Total partners' deficit (130,577) (159,015) --------- --------- Commitments and contingencies --------- --------- Total liabilities and partners' deficit $ 617,034 $ 591,252 ========= =========
The accompanying notes are an integral part of these financial statements 4 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
Three months Six months ended ended June 30, June 30, (In Thousands) 1995 1996 1995 1996 Revenue Power sales to utilities $63,967 $53,967 $139,699 $131,540 Steam sales 1,027 949 2,354 2,265 ------- ------- -------- -------- Total revenue 64,994 54,916 142,053 133,805 ------- ------- -------- -------- Costs and expenses Cost of power and steam sales 31,608 30,079 66,609 70,771 Operation and maintenance 5,504 4,167 11,938 10,781 Depreciation 6,214 6,241 12,426 12,483 General and administrative expenses 3,093 3,428 5,701 6,876 ------- ------- -------- -------- Total costs and expenses 46,419 43,915 96,674 100,911 ------- ------- -------- -------- Operating income 18,575 11,001 45,379 32,894 ------- ------- -------- -------- Other expense (income) Amortization of financing costs 423 600 922 1,213 Interest expense 12,187 12,588 25,308 25,152 Interest expense on energy bank liabilities 4,064 4,887 7,870 9,592 Interest income (2,875) (2,848) (5,487) (5,441) ------- ------- -------- -------- Total other expense 13,799 15,227 28,613 30,516 ------- ------- -------- -------- Net income (loss) $ 4,776 $(4,226) $ 16,766 $ 2,378 ======= ======= ======== ========
The accompanying notes are an integral part of these financial statements 5 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP COMBINED STATEMENT OF CASH FLOWS (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (UNAUDITED)
Six months ended June 30, 1995 1996 (IN THOUSANDS) Cash flows from operating activities: Cash received from utilities and other customers $150,597 $152,069 Cash paid to suppliers (80,155) (84,336) Interest paid (27,221) (26,027) Bank commitment fees paid (18) (18) Interest received 3,632 5,559 Cash payments to general partner for operating activities (1,521) (2,566) Cash payments to owners/management (1,785) (1,875) -------- -------- Net cash provided by operating activities 43,529 42,806 -------- -------- Cash flows from investing activities: Net expenditures for facilities (133) (704) Purchase of other fixed assets (36) (36) Increase in restricted cash 1,264 4,098 -------- -------- Net cash provided by investing activities 1,095 3,358 -------- -------- Cash flows from financing activities: Principal payments on debt (10,217) (12,602) Payment of refinancing costs (5,735) - Distributions to partners (43,700) (30,816) -------- -------- Net cash used for financing activities (59,652) (43,418) -------- -------- Net (decrease) increase in cash and cash equivalents (15,028) 2,746 Cash and cash equivalents at beginning of period 76,255 58,277 -------- -------- Cash and cash equivalents at end of period $ 61,227 $ 61,023 ======== ========
Non-cash Investing Activities: Total accrued capitalized facility costs were approximately $1,195,000 at June 30, 1995. 6 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP COMBINED STATEMENT OF CASH FLOWS (CONTINUED) (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (UNAUDITED)
Reconciliation of Net Income to Net Cash Provided by Operating Activities Six months ended June 30, 1995 1996 (In Thousands) Net income $16,766 $ 2,378 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 12,426 12,483 Amortization of financing costs 922 1,213 Changes in assets and liabilities Accounts receivable 1,337 13,142 Fuel inventories 198 (321) Prepaid expenses and other current assets (3,014) (934) Accounts payable 147 531 Other accrued expenses 2,937 1,440 Future obligations under interest rate swap agreements (1,766) (894) Amounts due utilities for energy bank balances 13,946 14,182 Other assets (370) (414) ------- ------- Net cash provided by operating activities $43,529 $42,806 ======= =======
The accompanying notes are an integral part of these financial statements 7 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- 1. Basis of Presentation The accompanying unaudited combined financial statements should be read in conjunction with the audited combined financial statements included in the Annual Report on Form 10-K for the year ended December 31, 1995 for Northeast Energy Associates, A Limited Partnership, and North Jersey Energy Associates, A Limited Partnership (together, the "Partnerships") and IEC Funding Corp. The results of operations for the periods ended June 30, 1996 are unaudited and are not necessarily indicative of the results to be expected for the full year. The unaudited financial information at June 30, 1996 and for the periods ended June 30, 1996 contains all adjustments, consisting only of normal recurring adjustments, considered by management necessary for a fair presentation of the operating results for such period. 2. Reclassification Certain reclassifications were made to the prior year balances in order to conform to current year presentation. These reclassifications had no effect on prior year operating results. 3. Distributions Distributions to the partners may be made only after all required funds and sub-funds have been fully funded as described in the trust indenture. After funding all amounts required under the indenture, the excess cash generated during periods ended June 30 and March 31, 1996 was in excess of approximately $30.5 million and $.3 million, respectively. All conditions under the trust indenture for distributions of such excess cash were satisfied after March 31, 1996 resulting in a distribution of approximately $8.8 million in April and $22.0 million in June to the partners in proportion to their designated interests in the Partnerships. 8 IEC FUNDING CORP. BALANCE SHEET (UNAUDITED) - --------------------------------------------------------------------------------
December 31, June 30, 1995 1996 (In Thousands) ASSETS Current assets Cash $ 1 $ 1 Current portion of notes receivable from Northeast Energy Associates and North Jersey Energy Associates (together, the "Partnerships") 25,204 24,640 -------- -------- Total current assets 25,205 24,641 Notes receivable from the Partnerships 514,362 502,324 -------- -------- Total assets $539,567 $526,965 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of securities payable $ 25,204 $ 24,640 -------- -------- Total current liabilities 25,204 24,640 Securities payable 514,362 502,324 -------- -------- Total liabilities 539,566 526,964 Stockholders' equity Common stock, no par value, 10,000 shares authorized, issued and outstanding 1 1 -------- -------- Total liabilities and stockholders' equity $539,567 $526,965 ======== ========
9 IEC FUNDING CORP. STATEMENT OF OPERATIONS (UNAUDITED) - --------------------------------------------------------------------------------
Three Months Ended Six Months Ended June 30, June 30, 1995 1996 1995 1996 (In Thousands) (In Thousands) Interest income $ 12,988 $ 12,484 $ 25,687 $ 24,968 Interest expense (12,988) (12,484) (25,687) (24,968) -------- -------- -------- -------- $ - $ - $ - $ - ======== ======== ======== ========
10 IEC FUNDING CORP. STATEMENT OF CASH FLOWS (UNAUDITED) - --------------------------------------------------------------------------------
Six months ended June 30, 1995 1996 (In Thousands) Cash Flows from operating activities: Interest received from Partnerships $ 25,829 $ 24,968 Interest paid (25,829) (24,968) -------- -------- Net cash provided by operating activities - - -------- -------- Cash flows from investing activities: Principal payment received from partnerships 10,217 12,602 Principal payment on debt (10,217) (12,602) -------- -------- Net cash provided by investing activities - - -------- -------- Cash flows from financing activities - - -------- -------- Net increase in cash - - -------- -------- Cash at beginning of period 1 1 -------- -------- Cash at end of period $ 1 $ 1 ======== ========
11 IEC FUNDING CORP. NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - -------------------------------------------------------------------------------- BASIS OF PRESENTATION The accompanying unaudited financial statements should be read in conjunction with the audited financial statements included in the Annual Report on Form 10-K for the year ended December 31, 1995 for IEC Funding Corp. (The "Company") and the Partnerships. The unaudited financial information at June 30, 1996 and for the periods ended June 30, 1996 contains all adjustments, consisting only of normal recurring adjustments, considered by management necessary for a fair presentation of the operating results for such period. 12 NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- Total revenue for the second quarter of 1996 of $50.0 million decreased by $10.9 million (17.9%) as compared to the second quarter of 1995. Revenue for the six months ended June 30, 1996 of $124.2 million decreased $10.0 million (7.4%) as compared to the six months ended June 30, 1995. The decrease in revenues for the quarter and the year to date is due primarily to lower generation and availability resulting from scheduled maintenance outages during the second quarter of 1996. The primary maintenance outages occurred at the Bellingham facility where a major inspection and maintenance program was conducted. This second quarter outage (scheduled at five year intervals) was the first of this type in Bellingham since commencement of operations. Also contributing to the decreased revenues were lower rates under the Sayreville power contract. These lower rates are a result of the annual indexing of the percentage increase or decrease in New Jersey fuel prices for 1994 as defined in FERC Form 423. Rates for the Bellingham project increased slightly over the prior year. Cost of Power and Steam Sales as a percentage of gross revenues (gross of increase to energy bank) was 52.9% for the second quarter of 1996 versus 47.3% for the second quarter of 1995. Year to date cost as a percentage of gross revenues was 52.0% in 1996 as compared to 45.7% in 1995. The increased percentage cost on a quarterly basis is the result of fixed demand charges under certain fuel contracts (which remain constant regardless of availability) and higher market prices of spot gas which effect both spot purchases and certain firm contracts. On a year to date basis extended gas service rights exercised by one of North Jersey Energy Associates suppliers (due to lower temperatures) combined with the higher market price of spot gas resulted in increased costs. Operations and Maintenance costs decreased $1.3 million (24.2%) as compared to the second quarter of 1995. The primary cause of the decreased cost is the performance bonus, payable to the O&M contractor, which is directly related to the lower generation experienced during the second quarter of 1996. Offsetting this decrease were expected escalations on O&M contracts and increased water and sewer charges. General and Administrative expenses were $3.4 million for the second quarter of 1996 as compared to $3.1 million for the same period in the prior year. On a year to date basis 1996 costs were $6.9 million as compared to $5.7 million in 1995. Increases include legal and consulting costs related to potential industry restructuring and increased overhead costs. Interest expense increased $.4 million (3.2%) as compared to the second quarter of 1995, and decreased $.2 million on a year to date basis. The second quarter increase is primarily due to adjustments made to the fair market value of swap agreements during the second quarter of 1995. While adjustments to fair market value effect earnings there is no cash effect. Interest on energy bank liabilities has increased, reflecting changes in the underlying amounts accrued for energy bank balances. Interest on debt is decreasing in 1996 as a result of principal payments made during 1995. Principal payments are made semi-annually on June 30, and December 30. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 1996 accounts receivable of $38.3 million decreased $13.1 million as compared to December 31, 1995, reflective of the reduced generation during the second quarter of 1996. Cash flow generated during the period ended June 30, 1996 was more than sufficient to fund all operating expenses as well as fund $37.5 million of interest and principal required for payment on June 30, 1996. An additional debt service reserve funding requirement of $.7 million was also fulfilled. Excess cash of $30.8 million was distributed to the partners. 13 PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities 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 None 14 Pursuant to the requirements of the Securities Exchange Act of 1934, IEC Funding Corp. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. IEC FUNDING CORP. DATE SIGNATURE AND TITLE August 14, 1996 /s/ Maureen P. Herbert - --------------- ----------------------- Maureen P. Herbert Vice President of Finance 15 Pursuant to the requirements of the Securities Exchange Act of 1934, North Jersey Energy Associates, A Limited Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP By: INTERCONTINENTAL ENERGY CORPORATION As General Partner DATE SIGNATURE AND TITLE August 14, 1996 /s/ Maureen P. Herbert - --------------- ---------------------- Maureen P. Herbert Vice President of Finance 16 Pursuant to the requirements of the Securities Exchange Act of 1934, Northeast Energy Associates, A Limited Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP By: INTERCONTINENTAL ENERGY CORPORATION As General Partner DATE SIGNATURE AND TITLE August 14, 1996 /s/ Maureen P. Herbert - --------------- ---------------------- Maureen P. Herbert Vice President of Finance EX-27 2 FINANCIAL DATA SCHEDULE
5 0000934665 IEC FUNDING CORP. 1,000 US DOLLARS 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 1 1 0 526,964 0 0 24,641 0 0 526,965 24,640 502,324 1 0 0 0 526,965 0 24,968 0 0 0 0 24,968 0 0 0 0 0 0 0 0 0
-----END PRIVACY-ENHANCED MESSAGE-----