UNITED STATES SECURITIES AND EXCHANGE COMMISSION | ||
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Commission | Exact name of registrants as specified in their charters, | IRS Employer | |||||
333-52397 | ESI TRACTEBEL ACQUISITION CORP. | 65-0827005 | |||||
333-52397-01 | NORTHEAST ENERGY, LP | 65-0811248 | |||||
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CAUTIONARY STATEMENTS AND RISK FACTORS THAT MAY AFFECT FUTURE RESULTS | |
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PART I - FINANCIAL INFORMATION |
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NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES |
March 31, | December 31, | |||||||||||||
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Current assets: | ||||||||||||||
Cash and cash equivalents | $ | 113,230 | $ | 51,104 | ||||||||||
Accounts receivable | 64,235 | 45,860 | ||||||||||||
Due from related party | 7,956 | 3,812 | ||||||||||||
Spare parts inventories | 3,400 | 3,379 | ||||||||||||
Fuel inventories | 1,756 | 5,559 | ||||||||||||
Prepaid expenses and other current assets | 10,400 | 10,084 | ||||||||||||
Total current assets | 200,977 | 119,798 | ||||||||||||
Non-current assets: | ||||||||||||||
Deferred debt issuance costs (net of accumulated amortization of $4,375 and $4,240, respectively) | 2,585 | 2,720 | ||||||||||||
Land | 4,712 | 4,712 | ||||||||||||
Cogeneration facilities and carbon dioxide facility (net of accumulated depreciation of $151,012 and $146,344, respectively) | 369,507 | 373,857 | ||||||||||||
Power purchase agreements (net of accumulated amortization of $398,680 and $382,336, respectively) | 543,721 | 532,608 | ||||||||||||
Other assets | 10,000 | 42,873 | ||||||||||||
Total non-current assets | 930,525 | 956,770 | ||||||||||||
TOTAL ASSETS | $ | 1,131,502 | $ | 1,076,568 | ||||||||||
LIABILITIES AND PARTNERS' EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Current portion of notes payable - the Funding Corp. | $ | 45,348 | $ | 45,348 | ||||||||||
Current portion of notes payable - the Acquisition Corp. | 8,800 | 8,800 | ||||||||||||
Current portion of notes payable - affiliate | 32,752 | 2,869 | ||||||||||||
Accrued interest payable | 12,198 | - | ||||||||||||
Accounts payable | 1,056 | 3,726 | ||||||||||||
Due to related parties | 38,618 | 29,370 | ||||||||||||
Other accrued expenses | 16,184 | 15,654 | ||||||||||||
Total current liabilities | 154,956 | 105,767 | ||||||||||||
Non-current liabilities: | ||||||||||||||
Deferred revenue | 510 | - | ||||||||||||
Notes payable - the Funding Corp. | 278,302 | 278,302 | ||||||||||||
Notes payable - the Acquisition Corp. | 184,800 | 184,800 | ||||||||||||
Note payable - affiliate | 20,714 | 20,714 | ||||||||||||
Energy bank and other liabilities | 73,789 | 84,541 | ||||||||||||
Lease payable | 740 | 740 | ||||||||||||
Total non-current liabilities | 558,855 | 569,097 | ||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||
Partners' equity: | ||||||||||||||
General partners | 8,216 | 7,896 | ||||||||||||
Limited partners | 409,475 | 393,808 | ||||||||||||
Total partners' equity | 417,691 | 401,704 | ||||||||||||
TOTAL LIABILITIES AND PARTNERS' EQUITY | $ | 1,131,502 | $ | 1,076,568 | ||||||||||
This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the combined Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (2004 Form 10-K) for NE LP and Subsidiaries. |
NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES |
Three Months Ended | |||||||||||||||||||
2005 | 2004 | ||||||||||||||||||
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COSTS AND EXPENSES (INCOME): | |||||||||||||||||||
Fuel | 18,773 | 32,638 | |||||||||||||||||
Operations and maintenance | 3,237 | 3,433 | |||||||||||||||||
Depreciation and amortization | 21,031 | 20,096 | |||||||||||||||||
General and administrative | 2,115 | 1,954 | |||||||||||||||||
Net gain on restructuring of contracts | (19,487 | ) | (103,176 | ) | |||||||||||||||
Total costs and expenses/(income) | 25,669 | (45,055 | ) | ||||||||||||||||
OPERATING INCOME | 30,201 | 164,171 | |||||||||||||||||
OTHER EXPENSE (INCOME): | |||||||||||||||||||
Amortization of debt issuance costs | 135 | 143 | |||||||||||||||||
Interest expense | 14,271 | 15,784 | |||||||||||||||||
Interest income | (193 | ) | (90 | ) | |||||||||||||||
Other expense | - | 842 | |||||||||||||||||
Total other expense - net | 14,213 | 16,679 | |||||||||||||||||
NET INCOME | $ | 15,988 | $ | 147,492 | |||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
Three Months Ended | ||||||||||||||||||
2005 | 2004 | |||||||||||||||||
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| 62,444 |
| 55,180 | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||
Capital expenditures | (318 | ) | - | |||||||||||||||
Net cash used in investing activities | (318 | ) | - | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||
Distributions to partners | - | (5,000 | ) | |||||||||||||||
Net cash used in financing activities | - | (5,000 | ) | |||||||||||||||
Net increase in cash and cash equivalents | 62,126 | 50,180 | ||||||||||||||||
Cash and cash equivalents at beginning of period | 51,104 | 58,907 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 113,230 | $ | 109,087 | ||||||||||||||
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES: | ||||||||||||||||||
Assumption of liability by partners | $ | 29,883 | $ | - |
This report should be read in conjunction with the Notes to Condensed Consolidated Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2004 Form 10-K for NE LP and Subsidiaries. |
NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND |
March 31, | December 31, | ||||||||||||
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Current assets: | |||||||||||||
Cash and cash equivalents | $ | 113,148 | $ | 51,071 | |||||||||
Accounts receivable | 64,235 | 45,853 | |||||||||||
Due from related party | 7,929 | 3,812 | |||||||||||
Spare parts inventories | 3,400 | 3,379 | |||||||||||
Fuel inventories | 1,756 | 5,559 | |||||||||||
Prepaid expenses and other current assets | 10,400 | 10,084 | |||||||||||
Total current assets | 200,868 | 119,758 | |||||||||||
Non-current assets: | |||||||||||||
Land | 4,712 | 4,712 | |||||||||||
Cogeneration facilities and carbon dioxide facility (net of accumulated depreciation of $151,012 and $146,344, respectively) | 369,507 | 373,857 | |||||||||||
Power purchase agreements (net of accumulated amortization of $398,680 and $382,336, respectively) | 543,721 | 532,608 | |||||||||||
Other assets | 10,000 | 42,873 | |||||||||||
Total non-current assets | 927,940 | 954,050 | |||||||||||
TOTAL ASSETS | $ | 1,128,808 | $ | 1,073,808 | |||||||||
LIABILITIES AND PARTNERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Current portion of notes payable - the Funding Corp. | $ | 45,348 | $ | 45,348 | |||||||||
Accrued interest payable | 7,735 | - | |||||||||||
Accounts payable | 1,056 | 3,726 | |||||||||||
Due to related parties | 38,536 | 29,346 | |||||||||||
Other accrued expenses | 16,184 | 15,654 | |||||||||||
Total current liabilities | 108,859 | 94,074 | |||||||||||
Non-current liabilities: | |||||||||||||
Deferred revenue | 510 | - | |||||||||||
Notes payable - the Funding Corp. | 278,302 | 278,302 | |||||||||||
Energy bank and other liabilities | 73,637 | 84,389 | |||||||||||
Lease payable | 740 | 740 | |||||||||||
Total non-current liabilities | 353,189 | 363,431 | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Partners' equity: | |||||||||||||
General partners | 6,668 | 6,163 | |||||||||||
Limited partners | 660,092 | 610,140 | |||||||||||
Total partners' equity | 666,760 | 616,303 | |||||||||||
TOTAL LIABILITIES AND PARTNERS' EQUITY | $ | 1,128,808 | $ | 1,073,808 | |||||||||
This report should be read in conjunction with the Notes to Condensed Combined Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2004 Form 10-K for NEA and NJEA. |
NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND |
Three Months Ended | ||||||||||||||||||||
2005 | 2004 | |||||||||||||||||||
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COSTS AND EXPENSES (INCOME): | ||||||||||||||||||||
Fuel | 18,773 | 32,638 | ||||||||||||||||||
Operations and maintenance | 3,237 | 3,433 | ||||||||||||||||||
Depreciation and amortization | 21,031 | 20,096 | ||||||||||||||||||
General and administrative | 2,115 | 1,954 | ||||||||||||||||||
Net gain on restructuring of contracts | (19,487 | ) | (103,176 | ) | ||||||||||||||||
Total costs and expenses/(income) | 25,669 | (45,055 | ) | |||||||||||||||||
OPERATING INCOME | 30,189 | 164,221 | ||||||||||||||||||
OTHER EXPENSE (INCOME): | ||||||||||||||||||||
Interest expense | 9,808 | 11,230 | ||||||||||||||||||
Interest income | (193 | ) | (90 | ) | ||||||||||||||||
Other expense | - | 842 | ||||||||||||||||||
Total other expense - net | 9,615 | 11,982 | ||||||||||||||||||
NET INCOME | $ | 20,574 | $ | 152,239 | ||||||||||||||||
CONDENSED COMBINED STATEMENTS OF CASH FLOWS |
Three Months Ended | ||||||||||||||||||
2005 | 2004 | |||||||||||||||||
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| 62,395 |
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CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||
Capital expenditures | (318 | ) | - | |||||||||||||||
Net cash used in investing activities | (318 | ) | - | |||||||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||
Distributions to partners | - | (5,000 | ) | |||||||||||||||
Net cash used in financing activities | - | (5,000 | ) | |||||||||||||||
Net increase in cash and cash equivalents | 62,077 | 50,174 | ||||||||||||||||
Cash and cash equivalents at beginning of period | 51,071 | 58,092 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 113,148 | $ | 108,266 | ||||||||||||||
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES: | ||||||||||||||||||
Assumption of liability by parent company | $ | 29,883 | $ | - |
This report should be read in conjunction with the Notes to Condensed Combined Financial Statements herein and the Notes to Consolidated and Combined Financial Statements appearing in the 2004 Form 10-K for NEA and NJEA. |
ESI TRACTEBEL FUNDING CORP. |
March 31, | December 31, | |||||||||||
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Current assets: | ||||||||||||
Cash | $ | 1 | $ | 1 | ||||||||
Interest receivable from the Partnerships | 7,735 | - | ||||||||||
Current portion of notes receivable from the Partnerships | 45,348 | 45,348 | ||||||||||
Total current assets | 53,084 | 45,349 | ||||||||||
Notes receivable from the Partnerships | 278,302 | 278,302 | ||||||||||
TOTAL ASSETS | $ | 331,386 | $ | 323,651 | ||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Current portion of debt securities payable | $ | 45,348 | $ | 45,348 | ||||||||
Accrued interest payable | 7,735 | - | ||||||||||
Total current liabilities | 53,083 | 45,348 | ||||||||||
Debt securities payable | 278,302 | 278,302 | ||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||
Stockholders' equity: | ||||||||||||
Common stock, no par value, 10,000 shares authorized, issued and outstanding | 1 | 1 | ||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 331,386 | $ | 323,651 | ||||||||
CONDENSED STATEMENTS OF OPERATIONS |
Three Months Ended | |||||||||||||||||
2005 | 2004 | ||||||||||||||||
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Interest expense | (7,735 | ) | (8,400 | ) | |||||||||||||
NET INCOME | $ | - | $ | - | |||||||||||||
These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2004 Form 10-K for the Funding Corp. |
ESI TRACTEBEL ACQUISITION CORP. |
March 31, | December 31, | ||||||||||||
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Current assets: | |||||||||||||
Interest receivable from NE LP | $ | 3,867 | $ | - | |||||||||
Current portion of note receivable from NE LP | 8,800 | 8,800 | |||||||||||
Total current assets | 12,667 | 8,800 | |||||||||||
Non-current assets: | |||||||||||||
Due from NE LP | 152 | 152 | |||||||||||
Note receivable from NE LP | 184,800 | 184,800 | |||||||||||
Total non-current assets | 184,952 | 184,952 | |||||||||||
TOTAL ASSETS | $ | 197,619 | $ | 193,752 | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
Current liabilities: | |||||||||||||
Income taxes payable | $ | 32 | $ | 31 | |||||||||
Current portion of debt securities payable | 8,800 | 8,800 | |||||||||||
Accrued interest payable | 3,867 | - | |||||||||||
Total current liabilities | 12,699 | 8,831 | |||||||||||
Non-current liabilities: | |||||||||||||
Debt securities payable | 184,800 | 184,800 | |||||||||||
Other | 56 | 59 | |||||||||||
Total non-current liabilities | 184,856 | 184,859 | |||||||||||
TOTAL LIABILITIES | 197,555 | 193,690 | |||||||||||
COMMITMENTS AND CONTINGENCIES | |||||||||||||
Stockholders' equity: | |||||||||||||
Common stock, $.10 par value, 100 shares authorized, 20 shares issued and outstanding | - | - | |||||||||||
Retained earnings | 64 | 62 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 197,619 | $ | 193,752 | |||||||||
CONDENSED STATEMENTS OF OPERATIONS |
Three Months Ended | |||||||||||||||||
2005 | 2004 | ||||||||||||||||
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Interest expense | (3,864 | ) | (4,040 | ) | |||||||||||||
Income before income taxes | 3 | 3 | |||||||||||||||
Income tax expense | (1 | ) | (1 | ) | |||||||||||||
NET INCOME | $ | 2 | $ | 2 | |||||||||||||
These reports should be read in conjunction with the Notes to Condensed Financial Statements herein and the Notes to Financial Statements appearing in the 2004 Form 10-K for the Acquisition Corp. |
NORTHEAST ENERGY, LP (A PARTNERSHIP) AND SUBSIDIARIES |
The accompanying Condensed Consolidated Financial Statements, Condensed Combined Financial Statements and Condensed Financial Statements should be read in conjunction with the 2004 Form 10-K for the registrants. In the opinion of the registrants' management, all adjustments (consisting of normal recurring accruals) considered necessary for fair financial statement presentation have been made. Certain other amounts included in the prior year's consolidated and combined financial statements have been reclassified to conform to the current year's presentation. The Funding Corp. and the Acquisition Corp. had no cash transactions for the three months ended March 31, 2005 and 2004 and therefore have not presented a statement of cash flows. The results of operations for an interim period may not give a true indication of results for the year. |
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NEA | NJEA | Combined | ||||||||||||||||||||||||||
GP | LP | Total | GP | LP | Total | GP | LP | Total | ||||||||||||||||||||
(Thousands of Dollars) | ||||||||||||||||||||||||||||
Balances, December 31, 2004 | $ | 2,509 | $ | 248,504 | $ | 251,013 | $ | 3,654 | $ | 361,636 | $ | 365,290 | $ | 6,163 | $ | 610,140 | $ | 616,303 | ||||||||||
Balances, March 31, 2005 | $ | 3,197 | $ | 316,601 | $ | 319,798 | $ | 3,471 | $ | 343,491 | $ | 346,962 | $ | 6,668 | $ | 660,092 | $ | 666,760 |
NEA received approximately a $29.9 million non-cash contribution from NE LP related to costs associated with the execution of the amended and restated power purchase agreement, as described in Note 5 below, in the first quarter of 2005. Affiliates of NE LP's partners paid these costs in the form of loans in the same amount to NE LP due December 31, 2005. These loans were repaid with interest in April 2005 from funds otherwise available for NE LP partnership distributions. |
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Three Months Ended | ||||||||||||||||
2005 | 2004 | |||||||||||||||
(Thousands of Dollars) | ||||||||||||||||
NE LP | $ | 15,988 | $ | 146,995 | ||||||||||||
The Partnerships | $ | 20,574 | $ | 151,742 |
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NE LP AND THE PARTNERSHIPS |
2005 | 2006 - 07 | 2008 - 09 | Thereafter | Total | ||||||||||||||
CONTRACTUAL OBLIGATIONS | ||||||||||||||||||
The Partnerships: | ||||||||||||||||||
Funding Corp. debt(a) | $ | 75,228 | $ | 152,691 | $ | 132,295 | $ | 70,002 | $ | 430,216 | ||||||||
Operating leases | 204 | 582 | 630 | 765 | 2,181 | |||||||||||||
Other long-term obligations: | ||||||||||||||||||
Energy bank liability | - | 65,531 | - | - | 65,531 | |||||||||||||
Administrative agreement(b) | 450 | 1,200 | 1,200 | 5,400 | 8,250 | |||||||||||||
O&M agreement(b) | 1,125 | 3,000 | 3,000 | 10,500 | 17,625 | |||||||||||||
Fuel management agreement(b) | 675 | 1,800 | 1,800 | 12,600 | 16,875 | |||||||||||||
Steam sales termination agreement(c) | 3,113 | 8,302 | - | - | 11,415 | |||||||||||||
Natural gas, including transportation and storage | 15,845 | 41,963 | 38,779 | 105,416 | 202,003 | |||||||||||||
Total Partnerships | 96,640 | 275,069 | 177,704 | 204,683 | 754,096 | |||||||||||||
NE LP: | ||||||||||||||||||
Acquisition Corp. debt(a) | 24,093 | 62,973 | 69,582 | 112,538 | 269,186 | |||||||||||||
Affiliate debt(a) | 34,647 | 9,528 | 9,528 | 7,146 | 60,849 | |||||||||||||
Total NE LP | 58,740 | 72,501 | 79,110 | 119,684 | 330,035 | |||||||||||||
Total contractual obligations | $ | 155,380 | $ | 347,570 | $ | 256,814 | $ | 324,367 | $ | 1,084,131 | ||||||||
(a) | Includes principal and interest. | |||||||||||||||||
(b) | Represents the minimum obligation under the terms of the agreement. The minimum obligation is subject to an annual inflation factor adjustment, which is excluded from the minimum obligation included in the table. | |||||||||||||||||
(c) | Represents the gross amount due under the agreement. Approximately $0.8 million is reimbursed by the New Jersey utility annually under the terms of the amended and restated power purchase agreement. |
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Trading and Managed Hedges | Non-Managed Hedges and Hedges in | Total | |||||||||
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March 31, 2005 | $ | 332 | $ | - | $ | 332 | |||||
Average for the period ended March 31, 2005 | $ | 286 | $ | 2,628 | $ | 1,984 | |||||
(a) | Non-managed hedges are employed to reduce the market risk exposure to physical assets which are not marked to market. The VaR figures for the non-managed hedges and hedges in OCI category do not represent the economic exposure to commodity price movements. |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | |
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PART II - OTHER INFORMATION |
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Exhibit | Description | ||
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SIGNATURES |
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NORTHEAST ENERGY, LP | ||||
Date: May 13, 2005 | ||||
MARK R. SORENSEN | ||||
Mark R. Sorensen |