CALENERGY COMPANY, INC.
MONEY PURCHASE PENSION PLAN
Financial Statements for the Years Ended
December 31, 1997 and 1996, Supplemental
Schedules for the Year Ended December 31, 1997
and Independent Auditors' Report
CALENERGY COMPANY, INC. MONEY PURCHASE PENSION PLAN
TABLE OF CONTENTS
Page
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits at
December 31, 1997 and 1996 2
Statements of Changes in Net Assets Available for
Benefits for the Years Ended December 31, 1997 and 1996 3
Notes to Financial Statements 4-6
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes
at December 31, 199 7
Item 27d - Schedule of Reportable Transactions for the
Year Ended December 31, 199 8
Supplemental Schedules not listed above are omitted because of the absence of
conditions under which they are required.
Exhibit I - Independent Auditors' Consent 9
INDEPENDENT AUDITORS' REPORT
To the CalEnergy Company, Inc.
Money Purchase Pension Plan Committee
We have audited the accompanying statements of net assets available for
benefits of CalEnergy Company, Inc. Money Purchase Pension Plan (the "Plan")
as of December 31, 1997 and 1996, and the related statements of changes in
net assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December
31, 1997 and 1996, and changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in
the table of contents are presented for the purpose of additional analysis
and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The supplemental schedules are the responsibility of
the Plan's management. Such supplemental schedules have been subjected to
the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects
when considered in relation to the basic financial statements taken as a
whole.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 23, 1998
CALENERGY COMPANY, INC. MONEY PURCHASE PENSION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1997 AND 1996
1997 1996
ASSETS
Investments at fair value:
Dreyfus GNMA Fund $2,050,121 $2,679,930
Capital Preservation Fund 128,618 201,706
Dreyfus New Leaders Fund 196,328 119,110
Dreyfus Strategic Income 3,924 3,537
Dreyfus Disciplined Stock Fund 138,594 69,238
Dreyfus Appreciation Fund 463,393 269,085
CalEnergy Stock 95,442 52,431
Total assets 3,076,420 3,395,037
LIABILITIES
Due to CalEnergy (Note 3) - 120,133
Net assets available for benefits $3,076,420 $3,274,904
The accompanying notes are an integral part of financial statements.
CALENERGY COMPANY, INC. MONEY PURCHASE PENSION PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
Additions:
Interest income $ 10,147 $ 1,515
Dividend income 141,379 214,206
Net appreciation (depreciation) in the
fair value of investments 98,104 (70,150)
Total additions 249,630 145,571
Deductions:
Benefit payments 419,734 308,167
Other distributions (Note 4) 28,380 -
Due to CalEnergy (Note 3) - 120,133
Total deductions 448,114 428,300
Net deductions (198,484) (282,729)
Net assets available for benefits:
Beginning of year 3,274,904 3,557,633
End of year $3,076,420 $3,274,904
The accompanying notes are an integral part of the financial statements.
CALENERGY COMPANY, INC. MONEY PURCHASE PENSION PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
1. DESCRIPTION OF PLAN
The CalEnergy Company, Inc. Money Purchase Pension Plan ("the Plan") is a
money purchase pension plan which was established in 1990 with an
effective date of January 1, 1990. The following description of the Plan
is provided for general information purposes only. Participants should
refer to the Plan Agreement (the "Agreement") for a more complete
description of the Plan's provisions.
General - The Plan is a defined contribution pension plan subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Participation - All employees of CalEnergy Operating Company and
affiliated entities, a wholly owned subsidiary of CalEnergy Company, Inc.
(the "Company"), were previously eligible to participate in the Plan after
satisfying certain length-of-service requirements. By amendment to the Plan
dated September 30, 1996, the employees' right to enter the Plan was
terminated effective June 30, 1996. The Plan operates under the direction
of an administrative committee, appointed by the Company's Board of
Directors, as provided in the Agreement.
Contributions - By amendment to the Plan dated September 30, 1996, the
Company ceased employer contributions and future benefits accruals,
effective for Plan years beginning after December 31, 1995.
Vesting - All participant account balances became 100% vested as of
December 31, 1995, by Amendment to the Plan dated September 30, 1996.
Benefits - Participants are entitled to withdraw their account balances
only upon retirement, death, disability or termination.
Termination - Upon partial or full termination of the Plan, distributions
will be made as specified in the Agreement.
Trustee - The Dreyfus Trust Company ("Dreyfus") is the Plan Trustee and
executes all investment transactions and recordkeeping. All investment
transactions are determined based on the allocation of investments as
directed by the participants. Prior to November 1996, investment
transactions were directed by the administrative committee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared on the accrual basis of accounting in conformity with generally
accepted accounting principles.
Investments - The Plan's investments are stated at fair value. The
Company common stock is valued at the last published sales price at the
end of the Plan year. The Dreyfus Funds and the Capital Preservation Fund
are valued at quoted market prices.
The Company common stock represents shares of 3,315 and 1,557 at December
31, 1997 and 1996, respectively.
Net Appreciation (Depreciation) in the Fair Value of Investments - The
Plan presents in the accompanying statement of changes in net assets, the
net appreciation (depreciation) in the fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation or
depreciation on those investments. Such amounts are based on the
beginning of the year fair value, or cost if purchased during the year.
Administrative Expenses - All costs of Plan administration are paid by the
Company.
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 reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
3. DUE TO CALENERGY
In 1995, the Company's contribution exceeded the Plan's funding
requirement. This amount was repaid to the Company in 1997.
4. OTHER DISTRIBUTIONS
Effective July 1, 1997, the accounts for employees of a subsidiary of the
Company were transferred to a third party in connection with the sale of
that subsidiary on June 30, 1997. Total assets transferred amounted to
$28,380.
5. TAX STATUS
The trust established under the Plan to hold the Plan's assets is
qualified pursuant to the appropriate section of the Internal Revenue Code
and, accordingly, the trust's net investment income is exempt from income
taxes. In December 1996, the Plan obtained a favorable tax determination
letter from the Internal Revenue Service and the Plan sponsor believes
that the Plan continues to qualify and to operate as designed. Therefore,
no provision for income taxes has been included in the Plan's financial
statements.
6. INACTIVE ACCOUNTS
In 1997 and 1996, $381,277 and $176,768, respectively, were allocated to
accounts of persons who have withdrawn from participation in the Plan, but
for which disbursement has not been made. These amounts are included as a
component of net assets available for benefits.
7. FUND INFORMATION
Interest income, dividend income, net appreciation (depreciation) in the
fair value of investments, and benefit payments by fund are as follows for
the years ended December 31, 1997 and 1996:
1997 1996
Interest income:
Capital Preservation Fund $ 10,059 $ 1,478
CalEnergy Common Stock 88 37
Total $ 10,147 $ 1,515
Dividend income:
Dreyfus GNMA Fund $ 134,379 $ 198,899
Dreyfus New Leaders Fund 2,311 8,123
Dreyfus Strategic Income 255 57
Dreyfus Disciplined Stock Fund 742 4,522
Dreyfus Appreciation Fund 3,692 2,605
Total $ 141,379 $ 214,206
Net appreciation (depreciation) in the
fair value of investments:
Dreyfus GNMA Fund $ (20,891) $ (67,694)
Dreyfus New Leaders Fund 23,101 (4,599)
Dreyfus Strategic Income 138 69
Dreyfus Disciplined Stock Fund 22,836 (3,508)
Dreyfus Appreciation Fund 92,212 480
CalEnergy Common Stock (19,292) 5,102
Total $ 98,104 $ (70,150)
Benefit payments:
Capital Preservation Fund $ 126,892 $ -
Dreyfus New Leaders Fund 22,064 -
Dreyfus Appreciation Fund 23,722 -
Dreyfus GNMA Fund 247,056 308,167
$ 419,734 308,167
7. RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by the Dreyfus
Trust Company. The Dreyfus Trust Company is the trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-interest. In
addition, transactions of the CalEnergy stock fund qualify as party-in-
interest.
CALENERGY COMPANY, INC. MONEY PURCHASE PENSION PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1997
Column A Column B Column C Column D Column E
Description of
Investment
Identity of Including Collateral
Issuer, Borrower, Rate of Interest,
Lessor, or Maturity Date, Par
Similar Party or Maturity Value Cost Value
* Dreyfus Trust Company GNMA Fund $ 2,056,616 $ 2,050,121
LaSalle National Trust Capital
Preservation
Fund 128,618 128,618
* Dreyfus Trust Company Appreciation
Fund 420,344 463,393
* Dreyfus Trust Company Strategic
Income 3,898 3,924
* Dreyfus Trust Company Disciplined
Stock Fund 126,110 138,594
* Dreyfus Trust Company New Leaders
Fund 197,228 196,328
* CalEnergy Company, Inc. CalEnergy
Common Stock,
3,315 shares 111,864 95,442
Total Investments $3,044,678 3,076,420
* Party-in-interest
CALENERGY COMPANY, INC. MONEY PURCHASE PENSION PLAN
ITEM 7d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1997
Series Transactions, When Aggregated, Involving an Amount
in Excess of 5 percent of the Current Value of Plan Assets
Column Column Column Column Column Column Column
A B C D E F G
Identity Number Number Dollar Dollar
of Party Description of of Value of Value of Net Gain
Involved of Asset Purchases Sales Purchases Sales or (Loss)
* Dreyfus GNMA Fund 11 74 $115,485 $674,917 $ 6,874
Trust
* Dreyfus Appreciation 31 6 211,767 95,630 12,858
Trust Fund
LaSalle Capital 16 6 92,061 166,380 -
National Preservation
Trust Fund
* Dreyfus New Leaders 19 6 150,696 86,472 (1,632)
Trust Fund
* Party-in-interest
EXHIBIT I
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
333-30395 of CalEnergy Company, Inc. on Form S-8 of our report dated June 23,
1998, appearing in this Annual Report on Form 11-K of CalEnergy Company, Inc.
Money Purchase Pension Plan for the year ended December 31, 1997.
DELOITTE & TOUCHE LLP
Omaha, Nebraska
June 26, 1998