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 September 30, 2001
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 333-89725
AES Eastern Energy, L.P.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Exact name of registrant as specified in its charter)
Delaware 54-1920088
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1001 N. 19th Street, Arlington, Va. 22209
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (703) 522-1315
N/A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Former name, former address and former fiscal year, if changed since last
report.
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 [ ]
Registrant is a wholly owned subsidiary of The AES Corporation. Registrant meets
the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and
is filing this Quarterly Report on Form 10-Q with the reduced disclosure format
authorized by General Instruction H.
TABLE OF CONTENTS
PART I
Page
Item 1. Condensed Consolidated Financial Statements (Unaudited)
AES EASTERN ENERGY, L.P.
Condensed Consolidated Financial Statements:
Consolidated Statements of Income for the three months ended
September 30, 2001 and September 30, 2000.............................. 3
Consolidated Statements of Income for the nine months ended
September 30, 2001 and September 30, 2000.............................. 4
Consolidated Balance Sheets as of September 30, 2001 and December 31, 2000. 5
Consolidated Statements of Cash Flows for the nine months ended
September 30, 2001 and September 30, 2000.............................. 6
Statement of Changes in Partners' Capital for the nine months ended
September 30, 2001..................................................... 7
Notes to Condensed Consolidated Financial Statements..................... 8
AES NY, L.L.C. (General Partner of AES Eastern Energy, L.P.)*
Condensed Consolidated Financial Statements:
Consolidated Balance Sheets as of September 30, 2001 and December 31, 2000
Notes to Condensed Consolidated Balance Sheets........................... 12
* The condensed consolidated balance sheets of AES NY, L.L.C. contained in this
Quarterly Report on Form 10-Q should be considered only in connection with
its status as the general partner of AES Eastern Energy, L.P.
Item 2. Discussion and Analysis of Results of Operations and
Financial Condition
(a) Results of Operations......................................... 17
(b) Liquidity and Capital Resources............................... 17
PART II
Item 1. Legal Proceedings.................................................. 20
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits...................................................... 20
(b) Reports on Form 8-K........................................... 20
Signature................................................................... 21
2
PART 1 - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
AES Eastern Energy, L.P.
Condensed Consolidated Statements of Income
Three months ended September 30, 2001 2000
---- ----
(Thousands)
Operating Revenues
Energy $95,500 $86,571
Capacity 6,449 7,957
Transmission congestion contract (13,724) -
Other 432 2,691
--------- --------
Total operating revenues 88,657 97,219
Operating Expenses
Fuel 36,566 35,042
Operations and maintenance 4,692 4,496
General and administrative 13,658 14,489
Depreciation and amortization 8,658 7,789
--------- --------
Total Operating Expenses 63,574 61,816
--------- --------
Operating Income 25,083 35,403
Other Income/(Expense)
Interest expense (14,386) (11,784)
Interest income 805 933
Gain on derivative valuation 320 -
-------- --------
Net Income $11,822 $24,552
========= ========
The notes are an integral part of the condensed consolidated financial
statements.
3
Item 1. Condensed Consolidated Financial Statements (Unaudited) (Cont'd)
AES Eastern Energy, L.P.
Condensed Consolidated Statements of Income
Nine months ended September 30, 2001 2000
---- ----
(Thousands)
Operating Revenues
Energy $270,771 $239,432
Capacity 20,985 23,659
Transmission congestion contract (26,168) -
Other 4,155 3,837
--------- --------
Total operating revenues 269,743 266,928
Operating Expenses
Fuel 101,630 94,756
Operations and maintenance 15,940 12,903
General and administrative 40,441 42,290
Depreciation and amortization 24,964 23,647
--------- --------
Total Operating Expenses 182,975 173,596
--------- --------
Operating Income 86,768 93,332
Other Income/(Expense)
Interest expense (44,009) (42,782)
Interest income 3,025 2,022
Gain on derivative valuation 87 -
-------- --------
Net Income $45,871 $52,572
========= ========
The notes are an integral part of the condensed consolidated financial
statements.
4
Item 1. Condensed Consolidated Financial Statements (Unaudited) (Cont'd)
AES Eastern Energy, L.P.
Condensed Consolidated Balance Sheets
Sept. 30, Dec. 31,
2001 2000
-------- -------
ASSETS (Thousands)
Current Assets
Restricted cash:
Operating- cash and cash equivalents $ 4,260 $ 9,924
Revenue Account 53,927 73,141
Accounts receivable - trade 29,723 33,799
Accounts receivable - affiliates 865 571
Accounts receivable - other 4,807 2,170
Inventory 23,326 23,308
Prepaid expenses 11,486 6,152
---------- ----------
Total Current Assets 128,394 149,065
---------- ----------
Property, Plant, Equipment and Related Assets
Land 6,884 6,877
Electric generation assets (net of accumulated
depreciation of $56,079 and $36,749) 736,954 740,909
Other intangible assets (net of accumulated
amortization of $17,909 and $12,273) 227,998 232,480
---------- ----------
Total property, plant, equipment and
related assets 971,836 980,266
---------- ---------
Other Assets
Derivative valuation 12,805 -
Transmission congestion contract - 24,851
Rent reserve account 31,243 30,978
---------- ----------
Total Assets $1,144,278 $1,185,160
========== ==========
LIABILITIES
Current Liabilities
Accounts payable $ 2,333 $ 1,432
Lease financing - current 6,223 1,813
Environmental remediation 750 1,000
Accrued interest expense 14,235 29,472
Due to The AES Corporation 6,237 8,604
Other accrued expenses 28,656 17,524
Other liabilities and accrued expenses 4,468 5,020
---------- ----------
Total Current Liabilities 62,902 64,865
---------- ----------
Long-term liabilities
Lease financing - long term 639,326 645,549
Environmental remediation 11,386 11,240
Defined benefit plan obligation 17,250 18,781
Derivative valuation Liability 10,028 -
Transmission congestion contract 1,357 -
Other liabilities 838 3,267
--------- ----------
Total Long-term Liabilities 680,185 678,837
--------- ----------
Total Liabilities 743,087 743,702
Commitments and Contingencies (Note 2)
PARTNERS' CAPITAL 401,191 441,458
---------- ----------
Total Liabilities and Partners' Capital $1,144,278 $1,185,160
========== ==========
The notes are an integral part of the condensed consolidated financial
statements.
5
Item 1. Condensed Consolidated Financial Statements (Unaudited) (Cont'd)
AES Eastern Energy, L.P.
Condensed Consolidated Statements of Cash Flows
Nine months Nine months
ended ended
Sept. 30, 2001 Sept. 30, 2000
-------------- --------------
(Thousands)
Operating Activities
Net income $45,871 $52,572
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 24,966 23,647
Interest income accrued in the rent reserve account (265) (1,077)
Transmission congestion contract loss 26,168 -
Net cash payments from transmission contract 40 -
Gain on derivative valuation (87) -
Net deferred benefit plan cost (1,531) -
Changes in current assets and liabilities
Accounts receivable 1,145 (8,984)
Prepaid expenses (5,334) 141
Inventory (18) 1,186
Accounts payable 901 2,212
Accrued interest expense (15,237) (27,977)
Due to The AES Corporation (2,367) 3,007
Other accrued expenses 11,132 60
Other liabilities (3,085) 2,733
-------- --------
Net Cash Provided by Operating Activities 82,299 47,520
-------- --------
Investing Activities
Payments for capital additions (15,382) (7,042)
Decrease(increase)in restricted cash 24,878 (5,478)
-------- --------
Net Cash Provided by (Used In) Investing Activities 9,496 (12,520)
-------- --------
Financing Activities
Payments for Deferred financing (1,154) -
Principal payments on lease obligations (1,813) -
Additional paid in capital contributed from parent 9,372 -
Dividends paid (98,200) (35,000)
-------- --------
Net Cash Used in Financing Activities (91,795) (35,000)
-------- --------
Net Change in Cash and Cash Equivalents - -
Cash and Cash Equivalents, Beginning of Period - -
-------- --------
Cash and Cash Equivalents, End of Period - -
======== ========
Supplemental Disclosures of Cash Flow Information:
Interest paid $59,246 $70,759
========= ==========
The notes are an integral part of the condensed consolidated financial
statements.
6
Item 1. Condensed Consolidated Financial Statements (Unaudited) (Cont'd)
AES Eastern Energy, L.P.
Consolidated Statement of Changes in Partners' Capital
Nine months ended September 30, 2001
(Thousands)
General Limited
Partner Partner Total
------- ------- --------
Balance, December 31, 2000 $4,414 $437,044 $441,458
Additional paid in capital 94 9,278 9,372
Net income 459 45,412 45,871
Distributions paid (982) (97,218) (98,200)
Accumulated other comprehensive income 27 2,663 2,690
------- --------- ---------
Balance, September 30, 2001 $4,012 $397,179 $401,191
======= ========= =========
The notes are an integral part of the condensed consolidated financial
statements.
7
Item 1. Condensed Consolidated Financial Statements (Unaudited) (Cont'd)
Notes to the Condensed Consolidated Financial Statements
Note 1. Unaudited Condensed Consolidated Financial Statements
The accompanying unaudited condensed consolidated financial statements of AES
Eastern Energy, L.P. (the Partnership) reflect all adjustments which are
necessary, in the opinion of management, for a fair presentation of the
Partnership's consolidated results for the interim periods. All such adjustments
are of a normal recurring nature. The unaudited condensed consolidated financial
statements should be read in conjunction with the Partnership's consolidated
financial statements and notes contained therein, as of December 31, 2000 and
the period then ended, which are set forth in the Partnership's Annual Report on
Form 10-K for the year ended December 31, 2000.
Note 2. Commitments and Contingencies
Coal Purchases - In connection with the acquisition of the Partnership's four
coal - fired electric generating stations (the Plants), the Partnership assumed
from New York State Electric & Gas Corporation (NYSEG) an agreement to purchase
the coal required by the Somerset and Cayuga Plants. Each year either party can
request renegotiation of the price of one-third of the coal supplied pursuant to
this agreement. During 2001 the coal suppliers were committed to sell and the
Partnership was committed to purchase all three lots of coal for the Somerset
Plant as well as 70% of the anticipated coal purchases for the Cayuga Plant. The
supplier requested renegotiation during 2001 for the 2002 lot but the parties
failed to reach agreement. Therefore, the parties have current commitments with
respect to only two lots in 2002 and 50% of the anticipated coal purchases at
the Cayuga Plant. Either party may request renegotiation during 2002 on another
lot, and a request could be made to renegotiate the lot for which an agreement
was not reached in the prior year. Therefore, the current commitment for 2003 is
two lots plus 50% of the estimated coal usage for the Cayuga Plant. The
termination date for the contract is the end of 2003. No later than June 30,
2003, the parties shall meet to determine if the agreement is to be extended
under mutually agreeable terms and conditions. If the agreement were not
extended, the Partnership would seek a new coal supplier. As of the acquisition
date of the Plants, the contract prices for the coal purchased through 2002 were
above the market price, and the Partnership recorded a purchase accounting
liability for approximately $15.7 million related to the fulfillment of its
obligation to purchase coal under this agreement. As of September 30, 2001, the
remaining liability was approximately $4.1 million.
Based on the commitments for 2002 and 2003, the Partnership has expected coal
purchases ranging between $32.6 and $38.8 million and between $20.7 and $24.7
million, respectively.
As of September 30, 2001, the remaining anticipated coal purchases for the year
ending December 31, 2001 were between $10.0 and $11.5 million.
Transmission Agreements - On August 3, 1998, AES NY, L.L.C., the general partner
of the Partnership (the General Partner), entered into an agreement for the
purpose of transferring certain rights and obligations from NYSEG to the General
Partner under an existing transmission agreement among Niagara Mohawk Power
Corporation (NIMO), the New York Power Authority, NYSEG, and Rochester Gas &
Electric Corporation, and an existing transmission agreement between NYSEG and
NIMO. This agreement provides for the assignment of rights to transmit energy
from the Somerset Plant and other sources to remote load areas and other
delivery points, and was assumed by the Partnership on the date of acquisition
of the Plants. In accordance with its plan, as of the acquisition date, the
Partnership discontinued using this service. The Partnership did not transmit
over these lines but was required to pay the monthly fees until the effective
cancellation date, November 19, 1999. These fees aggregated approximately $3.4
million over the six months ended December 31, 1999, and were recorded as a
purchase accounting liability. Because the Partnership did not use the lines
during this period, the Partnership received no economic benefit subsequent to
the acquisition.
The Partnership was informed by NIMO that the Partnership would be responsible
for the monthly fees of $500,640 under the existing transmission agreement to
the originally scheduled termination date of October 1, 2004. On October 5,
1999, the Partnership filed a complaint against NIMO alleging that the
Partnership has a right to non-firm transmission service upon six months prior
notice without payment of $500,640 in monthly fees subsequent to the
cancellation date of November 19, 1999.
8
On March 9, 2000, a settlement was reached between the Partnership and NIMO,
which was approved by the Federal Energy Regulatory Commission (FERC) on May 10,
2000. According to the settlement, the Partnership will continue to pay NIMO a
fixed rate of $500,640 per month during the period of November 20, 1999 to
October 1, 2004, and in turn, will receive a form of transmission service
commencing on May 1, 2000, which the Partnership believes will provide an
economic benefit over the period of May 1, 2000 to October 1, 2004.
The Partnership shall have the right under a Remote Load Wheeling Agreement
(RLWA) to transmit 298 MW over firm transmission lines from the Somerset Plant.
The Partnership shall have the right to designate alternate points of delivery
on NIMO's transmission system provided that the Partnership shall not be
entitled to receive any transmission service charge credit on the NIMO system.
This final settlement became effective November 1, 2000.
On November 1, 2000, the effective date of the final settlement, the
transmission contract was classified as an energy-trading contract as defined in
Emerging Issues Task Force No. 98-10, Accounting for Contracts Involved in
Energy Trading and Risk Management Activities. From January 1, 2001 the contract
was accounted for as a derivative under SFAS No. 133. The transmission contract
was entered into because it provided a reasonable settlement for resolving a
FERC issue. The agreement is essentially a swap between the congestion component
of the locational prices posted daily by the New York ISO in western New York
and the more heavily populated areas in eastern New York. The agreement is a
financially settled contract since there is no requirement to flow power under
this agreement. The agreement generates gains or losses from exposure to shifts
or changes in market prices. The Partnership recorded a loss of approximately
$26.2 million in the first nine months of 2001 related to this contract (see
Note 3).
Environmental - The Partnership has recorded a liability for environmental
remediation associated with the acquisition of the Plants. On an ongoing basis,
the Partnership monitors its compliance with environmental laws. Because of the
uncertainties associated with environmental compliance and remediation
activities, future costs of compliance or remediation could be higher or lower
than the amount currently accrued.
The Partnership received an information request letter dated October 12, 1999
from the New York Attorney General, which sought detailed operating and
maintenance history for the Westover and Greenidge Plants. On January 13, 2000,
the Partnership received a subpoena from New York State Department of
Environmental Conservation (DEC) seeking similar operating and maintenance
history from the Plants. The Partnership has provided materials responding to
the request from the Attorney General and the DEC. This information was sought
in connection with the Attorney General's and the DEC's investigations of
several electricity generating stations in New York that are suspected of
undertaking modifications in the past without undergoing an air permitting
review. The Partnership is unable to estimate the impact, if any, of these
investigations on its financial condition or results of future operations.
On April 14, 2000, the Partnership received a request for information pursuant
to Section 114 of the Clean Air Act from the U.S. Environmental Protection
Agency (EPA) seeking detailed operating and maintenance history data for the
Cayuga and Somerset Plants. The EPA has commenced an industry-wide investigation
of coal-fired electric power generators to determine compliance with
environmental requirements under the Clean Air Act associated with repairs,
maintenance, modifications and operational changes made to coal-fired facilities
over the years. The EPA's focus is on whether the changes were subject to new
source review or new source performance standards, and whether best available
control technology was or should have been used. The Partnership has provided
the requested documentation and the EPA is currently evaluating the materials.
The Partnership is unable to estimate the impact, if any, of this investigation
on its financial condition or results of future operations.
By letter dated May 25, 2000, the DEC issued a Notice of Violation (NOV) to
NYSEG for violations of the Clean Air Act and the Environmental Conservation Law
at the Greenidge and Westover Plants related to NYSEG's alleged failure to
obtain an air permitting review for repairs and improvements made during the
1980s and 1990s, which was prior to the acquisition of the Plants by the
Partnership. Pursuant to the purchase agreement relating to the acquisition of
the Plants from NYSEG, the Partnership agreed to assume responsibility for
environmental liabilities that arose while NYSEG owned the Plants. On September
12, 2000, the Partnership agreed with NYSEG that the Partnership will assume the
defense of and responsibility for the NOV, subject to a reservation of its right
to assert applicable exceptions to its contractual undertaking to assume
preexisting environmental liabilities. The financial and operational effect of
this NOV is still being discussed with the DEC.
9
The Partnership is unable to estimate the effect of this NOV on its financial
condition or results of future operations. It is possible that the DEC NOV and
other potential enforcement actions arising out of the Attorney General, DEC,
and EPA investigations may result in penalties and the potential requirement to
install additional air pollution control equipment and could require the
Partnership to make substantial expenditures.
Nitrogen Oxide and Sulfur Dioxide Emission Allowances - The Plants emit nitrogen
oxide (NOX) and sulfur dioxide (SO2) as a result of burning coal to produce
electricity. The Plants have been allocated allowances by the DEC to emit NOX
during the ozone season, which runs from May 1 to September 30. Each NOX
allowance authorizes the emission of one ton of NOX during the ozone season. The
Plants are also subject to SO2 emission allowance requirements imposed by the
EPA. Each SO2 allowance authorizes the emission of one ton of SO2 during the
calendar year. All of the Plants are currently subject to SO2 allowance
requirements, and are required to hold sufficient allowances to emit SO2. Both
NOX and SO2 allowances may be bought, sold, or traded. If NOX and/or SO2
emissions exceed the allowance amounts allocated to the Plants, then the
Partnership may need to purchase additional allowances on the open market or
otherwise reduce its production of electricity to stay within the allocated
amounts. The Plants were net sellers of NOX allowances in 2000 and are also
expected to have a surplus of NOX allowances in 2001. The Plants were self-
sufficient with respect to SO2 allowances in 2000, and it is expected that the
Plants will be self-sufficient for 2001.
On October 16, 2001 AES Greenidge was awarded a Federal Clean Coal Grant that
will fund 50% of the capital costs and 30% of the operations and maintenance
costs for backend technology. This technology will include a single bed, in-duct
Selective Catalytic Reduction (SCR) unit in combination with low-NOX combustion
technology, on Greenidge Unit 4 firing on coal and biomass. It will also include
a Circulating Dry Scrubber (CDS) for SO2, Mercury and Acid Gas removal. AES
Greenidge's share of the costs for the 54 month project will be approximately
$9.8 million.
Note 3. New Accounting Pronouncements
On January 1, 2001, the Partnership adopted SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, which, as amended, established
new accounting and reporting standards for derivative instruments and hedging
activities. The adoption of SFAS No. 133 on January 1, 2001, resulted in a
cumulative reduction of Other Comprehensive Income (OCI) in Partner's Capital of
$66.3 million.
The Partnership utilizes derivative financial instruments to hedge commodity
price risk. The Partnership utilizes electric derivative instruments, including
swaps and forwards, to hedge the risk related to forecasted electricity sales
over the next four years. The majority of the Partnership's electric derivatives
are designated and qualify as cash flow hedges. No hedges were derecognized or
discontinued during the nine months ended September 30, 2001. No significant
amounts of hedge ineffectiveness were recognized in earnings during the nine
months ended September 30, 2001.
Gains and losses on derivatives reported in accumulated other comprehensive
income are reclassified into earnings when the hedged forecasted sale occurs.
Approximately, $5.9 million of other comprehensive income is expected to be
recognized as an addition to earnings over the next twelve months. Amounts
recorded in other comprehensive income during the nine months ended September
30, 2001, were as follows (in millions):
Transition adjustment on January 1, 2001 $66.3
Reclassified to earnings (6.0)
Change in fair value (57.6)
------
Balance, September 30, 2001 $ 2.7
======
In June 2001, the FASB issued SFAS No. 142, entitled, Goodwill and Other
Intangible Assets. This standard eliminates the amortization of goodwill, and
requires goodwill to be reviewed periodically for impairment. This standard also
requires the useful lives of previously recognized periods to be adjusted
accordingly. This standard is effective for fiscal years beginning after
December 15, 2001, for all goodwill and other intangible assets recognized on
the Partnership's balance sheet at that date, regardless of when the assets were
initially recognized. The Partnership has not determined the effects of this
standard on its financial reporting.
10
In July 2001, the FASB issued SFAS No. 143, entitled Accounting for Asset
Retirement Obligations. This standard is effective for fiscal years beginning
after June 15, 2002, and provides accounting requirements for asset retirement
obligations associated with tangible long-lived assets. The Partnership has not
determined the effects of this standard on its financial reporting.
In August 2001, the FASB issued SFAS No. 144, "Accounting for Impairment or
Disposal of Long-Lived Assets." The provisions of this statement are effective
for financial statements issued for fiscal years beginning after December 15,
2001, and address reporting for the impairment or disposal of long-lived assets.
SFAS No. 144 provides guidance for developing estimates of future cash flows
used to test assets for recoverability and requires that assets to be disposed
of to be classified as held for sale when certain criteria are met. The
statement also extends the reporting of discontinued operations to all
components of an entity and provides guidance for recognition of a liability for
obligations associated with disposal activity. The Partnership believes that the
initial adoption of the provision of SFAS No. 144 will not have any material
impact on its financial position or results of operations.
Note 4. Credit Facility
At March 9, 2001, the Partnership's $20 million Credit Suisse First Boston
working capital credit facility was terminated. In April 2001, the Partnership
entered into a $35 million secured revolving working capital and letter of
credit facility with Union Bank of California, N.A. This facility has a term of
approximately twenty-one months. The Partnership can borrow up to $35 million
for working capital purposes under this facility. In addition, the Partnership
can have letters of credit issued under this facility up to $25 million,
provided that the total amount of working capital borrowings and letters of
credit issuances may not exceed the $35 million limit on the entire facility.
Since the new facility was signed there has been one draw for $7 million on July
13, 2001 at an interest rate of 8.125%. The draw was repaid on July 31, 2001.
Note 5. Reclassifications
Certain 2000 amounts have been reclassified on the condensed consolidated
financial statements to conform with the 2001 presentation.
11
Item 1. Condensed Consolidated Financial Statements (Unaudited) (Cont'd)
AES NY, L.L.C.
Condensed Consolidated Balance Sheets
Sept. 30,2001 Dec. 31, 2000
------------- -------------
(Thousands)
ASSETS
Current Assets
Restricted cash:
Operating - cash and cash equivalents $5,508 $12,207
Revenue account 53,927 73,141
Accounts receivable - trade 29,893 34,976
Accounts receivable - affiliates 3,801 2,651
Accounts receivable - other 5,191 2,430
Inventory 24,027 25,151
Prepaid expenses 11,601 6,244
---------- ----------
Total Current Assets 133,948 156,800
Property, Plant, Equipment and Related Assets
Land 7,334 7,327
Electric generation assets(net of accumulated
depreciation of $59,968 and $39,390) 738,221 743,029
Other intangible assets (net of accumulated
amortization of $17,909 and $12,273) 227,998 232,480
---------- ----------
Total property, plant, equipment
and related assets 973,553 982,836
Other Assets
Derivative valuation asset 12,805 -
Transmission congestion contract - 24,851
Rent reserve account 31,243 30,978
----------- -----------
Total Assets $1,151,549 $1,195,465
=========== ============
LIABILITIES AND MEMBER'S EQUITY
Current Liabilities
Accounts payable $ 2,412 $1,457
Lease financing - Current 6,223 1,813
Environmental remediation 1,500 2,000
Accrued interest expense 14,235 29,472
Due to The AES Corporation 6,466 8,746
Other accrued expenses 27,077 18,912
Other liabilities and accrued expenses 4,468 5,020
---------- ----------
Total Current Liabilities 64,381 67,420
Long-term liabilities
Derivative valuation liability 10,028 -
Lease financing - long-term 639,326 645,549
Environmental remediation 13,163 12,801
Transmission Congestion contract 1,357
Defined benefit plan obligation 17,032 18,592
Other liabilities 838 3,267
---------- ----------
Total Long-term Liabilities 681,744 680,209
---------- ----------
Total Liabilities 746,125 747,629
Commitments and Contingencies (Note 3)
Minority Interest 398,707 443,358
Member's Equity 4,027 4,478
Accumulated other comprehensive income 2,690 -
----------- ----------
Total Liabilities and Member's Equity $1,151,549 $1,195,465
=========== ===========
The notes are an integral part of the condensed consolidated financial
statements.
12
Item 1. Condensed Consolidated Financial Statements (Unaudited) (Cont'd)
Note 1. Condensed Consolidated Balance Sheets
The accompanying unaudited condensed consolidated balance sheets of AES NY,
L.L.C. (the Company) reflect all adjustments which are necessary, in the opinion
of management, for a fair presentation of the Company's consolidated financial
position for the interim periods. All such adjustments are of a normal recurring
nature. The unaudited condensed consolidated balance sheets should be read in
conjunction with the Company's consolidated balance sheet and notes contained
therein, as of December 31, 2000 which are set forth in the Annual Report on
Form 10-K of AES Eastern Energy, L.P.(AEE)for the year ended December 31, 2000.
Note 2. Plants Placed on Long-Term Cold Standby
During the fourth quarter of 2000, AES Creative Resources, L.P. (ACR) placed its
AES Hickling and AES Jennison plants (ACR Plants) on long-term cold standby. The
long-term cold standby designation means that these plants require more than 14
days to be brought on-line. The Company is currently evaluating the future of
these plants.
Note 3. Commitments and Contingencies
Coal Purchases - In connection with the acquisition by AEE of its four
coal-fired electric generating stations (the AEE Plants), AEE assumed from New
York State Electric & Gas Corporation (NYSEG) an agreement to purchase the coal
required by the AEE Somerset and Cayuga plants. Each year either party can
request renegotiation of the price of one-third of the coal supplied pursuant to
this agreement. During 2001 the coal suppliers were committed to sell and AEE
was committed to purchase all three lots of coal for the Somerset Plant as well
as 70% of the anticipated coal purchases for the Cayuga Plant. The supplier
requested renegotiation during 2001 for the 2002 lot but the parties failed to
reach agreement. Therefore, the parties have current commitments with respect to
only two lots in 2002 and 50% of the anticipated coal purchases at the Cayuga
Plant. Either party may request renegotiation during 2002 on another lot, and a
request could be made to renegotiate the lot for which an agreement was not
reached in the prior year. Therefore, the current commitment for 2003 is two
lots plus 50% of the estimated coal usage for Cayuga. The termination date for
the contract is the end of 2003. No later than June 30, 2003, the parties shall
meet to determine if the agreement is to be extended under mutually agreeable
terms and conditions. If the agreement were not extended, AEE would seek a new
coal supplier. As of the acquisition date of the Plants, the contract prices for
the coal purchased through 2002 were above the market price, and AEE recorded a
purchase accounting liability for approximately $15.7 million related to the
fulfillment of its obligation to purchase coal under this agreement. As of
September 30, 2001, the remaining liability was approximately $4.1 million.
Based on the commitments for 2002 and 2003, AEE has expected coal purchases
ranging between $32.6 and $38.8 million and between $20.7 and $24.7 million,
respectively.
As of September 30, 2001, the remaining anticipated coal purchases for the year
ending December 31, 2001 was between $10.0 and $11.5 million.
Transmission Agreements - On August 3, 1998, the Company entered into an
agreement for the purpose of transferring certain rights and obligations from
NYSEG to the Company under an existing transmission agreement among Niagara
Mohawk Power Corporation (NIMO), the New York Power Authority, NYSEG, and
Rochester Gas & Electric Corporation, and an existing transmission agreement
between NYSEG and NIMO. This agreement provides for the assignment of rights to
transmit energy from the Somerset Plant and other sources to remote load areas
and other delivery points, and was assumed by AEE on the date of acquisition of
the Plants. In accordance with its plan, as of the acquisition date, AEE
discontinued using this service. AEE did not transmit over these lines but was
required to pay the monthly fees until the effective cancellation date, November
19, 1999. These fees aggregated approximately $3.4 million over the six months
ended December 31, 1999, and were recorded as a purchase accounting liability.
Because AEE did not use the lines during this period, AEE received no economic
benefit subsequent to the acquisition.
AEE was informed by NIMO that AEE would be responsible for the monthly fees of
$500,640 under the existing transmission agreement to the originally scheduled
termination date of October 1, 2004. On October 5, 1999, AEE filed a complaint
against NIMO alleging that AEE has a right to non-firm transmission service upon
six months prior notice without payment of $500,640 in monthly fees subsequent
to the cancellation date of November 19, 1999. On March 9, 2000, a settlement
was reached between AEE and NIMO, which was approved by the Federal Energy
Regulatory Commission (FERC) on May 10, 2000.
13
According to the settlement, AEE will continue to pay NIMO a fixed rate of
$500,640 per month during the period of November 20, 1999 to October 1, 2004
and, in turn, will receive a form of transmission service commencing on May 1,
2000, which AEE believes will provide an economic benefit over the period of May
1, 2000 to October 1, 2004. AEE shall have the right under a Remote Load
Wheeling Agreement (RLWA) to transmit 298 MW over firm transmission lines from
the Somerset Plant.
AEE shall have the right to designate alternate points of delivery on NIMO's
transmission system provided that AEE shall not be entitled to receive any
transmission service charge credit on the NIMO system. This final settlement
became effective November 1, 2000.
On November 1, 2000, the effective date of the final settlement, the
transmission contract was classified as an energy-trading contract as defined in
Emerging Issues Task Force No. 98-10, Accounting for Contracts Involved in
Energy Trading and Risk Management Activities. From January 1, 2001 the contract
was accounted for as a derivative under SFAS No.133. The transmission contract
was entered into because it provided a reasonable settlement for resolving a
FERC issue. The agreement is essentially a swap between the congestion component
of the locational prices posted daily by the New York ISO in western New York
and the more heavily populated areas in eastern New York. The agreement is a
financially settled contract since there is no requirement to flow power under
this agreement. The agreement generates gains or losses from exposure to shifts
or changes in market prices. AEE recorded a loss of approximately $26.2 million
in the first nine months of 2001 related to this contract.
Environmental - The Company has recorded a liability for environmental
remediation associated with the acquisition of the AEE Plants and the ACR Plants
(see Note 3). On an ongoing basis, the Company monitors its compliance with
environmental laws. Because of the uncertainties associated with environmental
compliance and remediation activities, future costs of compliance or remediation
could be higher or lower than the amount currently accrued.
AEE received an information request letter dated October 12, 1999 from the New
York Attorney General, which sought detailed operating and maintenance history
for the Westover and Greenidge Plants. On January 13, 2000, the Company received
a subpoena from the New York State Department of Environmental Conservation
(DEC) seeking similar operating and maintenance history from the AEE and ACR
Plants. The Company has provided materials responding to the requests from the
Attorney General and the DEC. This information was sought in connection with the
Attorney General's and the DEC's investigations of several electricity
generating stations in New York that are suspected of undertaking modifications
in the past without undergoing an air permitting review. The Company is unable
to estimate the impact, if any, of these investigations on its financial
condition or results of operations.
On April 14, 2000, AEE received a request for information pursuant to Section
114 of the Clean Air Act from the U.S. Environmental Protection Agency (EPA)
seeking detailed operating and maintenance history data for the Cayuga and
Somerset Plants. The EPA has commenced an industry-wide investigation of
coal-fired electric power generators to determine compliance with environmental
requirements under the Clean Air Act associated with repairs, maintenance,
modifications and operational changes made to coal-fired facilities over the
years. The EPA's focus is on whether the changes were subject to new source
review or new source performance standards, and whether best available control
technology was or should have been used. AEE has provided the requested
documentation and the EPA is currently evaluating the materials. AEE is unable
to estimate the impact, if any, of this investigation on its financial condition
or results of future operations.
By letter dated May 25, 2000, the DEC issued a Notice of Violation (NOV) to
NYSEG for violations of the Clean Air Act and the Environmental Conservation Law
at the Greenidge and Westover Plants related to NYSEG's alleged failure to
obtain an air permitting review for repairs and improvements made during the
1980s and 1990s, which was prior to the acquisition of the Plants by AEE.
Pursuant to the purchase agreement relating to the acquisition of the Plants
from NYSEG, AEE agreed to assume responsibility for environmental liabilities
that arose while NYSEG owned the Plants. On September 12, 2000, AEE agreed with
NYSEG that AEE will assume the defense of and responsibility for the NOV,
subject to a reservation of its right to assert applicable exceptions to its
contractual undertaking to assume preexisting environmental liabilities. The
financial and operational effect of this NOV is still being discussed with the
DEC.
The Company is unable to estimate the effect of this NOV on its financial
condition or results of future operations. It is possible that the DEC NOV and
other potential enforcement actions arising out of the Attorney General, DEC,
and EPA investigations may result in penalties and the potential requirement to
install additional air pollution control equipment and could require AEE to make
substantial expenditures.
14
Nitrogen Oxide and Sulfur Dioxide Emission Allowances - The AEE Plants and the
ACR Plants emit nitrogen oxide (NOX) and sulfur dioxide (SO2) as a result of
burning coal to produce electricity. The six Plants have been allocated
allowances by the DEC to emit NOX during the ozone season, which runs from May 1
to September 30. Each NOX allowance authorizes the emission of one ton of NOX
during the ozone season. The six Plants are also subject to SO2 emission
allowance requirements imposed by the EPA. Each SO2 allowance authorizes the
emission of one ton of SO2 during the calendar year. All of the Plants are
currently subject to SO2 allowance requirements, and are required to hold
sufficient allowances to emit SO2. Both NOX and SO2 allowances may be bought,
sold, or traded. If NOX and/or SO2 emissions exceed the allowance amounts
allocated to the six Plants, then the Company may need to purchase additional
allowances on the open market or otherwise reduce its production of electricity
to stay within the allocated amounts. The Plants were net sellers of NOX
allowances in 2000 and are also expected to have a surplus of NOX allowances in
2001. The Plants were self- sufficient with respect to SO2 allowances in 2000,
and it is expected that the Plants will be self-sufficient for 2001.
On October 16, 2001 AES Greenidge was awarded a Federal Clean Coal Grant that
will fund 50% of the capital costs for backend technology and 30% of the
operations and maintenance costs for a test and demonstration period. This
technology will include a single bed, in-duct Selective Catalytic Reduction
(SCR) unit in combination with low-NOX combustion technology, on Greenidge Unit
4 firing on coal and biomass. It will also include a Circulating Dry Scrubber
(CDS) for SO2, Mercury and Acid Gas removal. AES Greenidge's share of the costs
for the 54 month project will be approximately $9.8 million.
In October 1999, ACR entered into a consent order with the DEC to resolve
alleged violations of the water quality standards in the groundwater
downgradient of an ash disposal site. The consent order included a suspended
$5,000 civil penalty and a requirement to submit a work plan to initiate closure
of the landfill by October 8, 2000. The consent order also called for a site
investigation, which was carried out and indicated that there is a possibility
that some groundwater remediation at the site may be required. Further
compliance with this order included a Closure Investigation Report which was
submitted to the DEC in the spring of 2000, and a Closure Plan which was
submitted to the Department of Environmental Conservation in January 2001.
The latest part of the consent order is being implemented during the fall of
2001. This part consists of covering the site and commencing the long term
monitoring of the site per the Closure Plan. AEE2, L.L.C., a subsidiary of AEE
will contribute one-half of the costs to close the landfill, which are
anticipated to be approximately $1.5 million, as well as one-half of the
additional costs for long term groundwater monitoring. While the actual closure
costs may exceed the $1.5 million, which is included in the environmental
remediation liability, management does not expect any added closure costs to be
material.
Note 4. New Accounting Pronouncements
On January 1, 2001, the Company adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which, as amended, established new
accounting and reporting standards for derivative instruments and hedging
activities. The adoption of SFAS No. 133 on January 1, 2001, resulted in a
cumulative reduction of Other Comprehensive Income (OCI) in member's equity of
$66.3 million.
AEE utilizes derivative financial instruments to hedge commodity price risk. AEE
utilizes electric derivative instruments, including swaps and forwards, to hedge
the risk related to forecasted electricity sales over the next four years. The
majority of AEE's electric derivatives are designated and qualify as cash flow
hedges. No hedges were derecognized or discontinued during the nine months ended
September 30, 2001. No significant amounts of hedge ineffectiveness were
recognized in earnings during the nine months ended September 30, 2001.
Gains and losses on derivatives reported in accumulated other comprehensive
income are reclassified into earnings when the hedged forecasted sale occurs.
Approximately, $5.9 million of other comprehensive income is expected to be
recognized as an addition to earnings over the next twelve months. Amounts
recorded in other comprehensive income during the nine months ended September
30, 2001, were as follows (in millions):
Transition adjustment on January 1, 2001 $66.3
Reclassified to earnings (6.0)
Change in fair value (57.6)
------
Balance, September 30, 2001 $2.7
======
15
In June 2001, the FASB issued SFAS No. 142, entitled, Goodwill and Other
Intangible Assets. This standard eliminates the amortization of goodwill, and
requires goodwill to be reviewed periodically for impairment. This standard also
requires the useful lives of previously recognized periods to be adjusted
accordingly. This standard is effective for fiscal years beginning after
December 15, 2001, for all goodwill and other intangible assets recognized on
the Company's balance sheet at that date, regardless of when the assets were
initially recognized. The Company has not determined the effects of this
standard on its financial reporting.
In July 2001, the FASB issued SFAS No. 143, entitled Accounting for Asset
Retirement Obligations. This standard is effective for fiscal years beginning
after June 15, 2002, and provides accounting requirements for asset retirement
obligations associated with tangible long-lived assets. The Company has not
determined the effects of this standard on its financial reporting.
In August 2001, the FASB issued SFAS No. 144, "Accounting for Impairment or
Disposal of Long-Lived Assets." The provisions of this statement are effective
for financial statements issued for fiscal years beginning after December 15,
2001, and address reporting for the impairment or disposal of long-lived assets.
SFAS No. 144 provides guidance for developing estimates of future cash flows
used to test assets for recoverability and requires that assets to be disposed
of be classified as held for sale when certain criteria are met. The statement
also extends the reporting of discontinued operations to all components of an
entity and provides guidance for recognition of a liability for obligations
associated with disposal activity. The Company believes that the initial
adoption of provisions of SFAS No. 144 will not have any material impact on its
financial position or results of operations.
Note 5. Credit Facility
At March 9, 2001, AEE's $20 million Credit Suisse First Boston working capital
credit facility was terminated. In April 2001, AEE entered into a $35 million
secured revolving working capital and letter of credit facility with Union Bank
of California, N.A. This facility has a term of approximately twenty-one months.
AEE can borrow up to $35 million for working capital purposes under this
facility. In addition, AEE can have letters of credit issued under this facility
up to $25 million, provided that the total amount of working capital borrowings
and letters of credit issuances may not exceed the $35 million limit on the
entire facility. Since the new facility was signed there has been one draw for
$7 million on July 13, 2001 at an interest rate of 8.125%. The draw was repaid
on July 31, 2001.
16
Item 2. Discussion and analysis of results of operations and financial
condition
Results of Operations for the three months ended September 30, 2001
- --------------------------------------------------------------------
Energy Revenues for the three months ended September 30, 2001, were $95.5
million, compared to $86.6 million for the comparable period of the prior
calendar year, an increase of 10.3%. The increase in Energy Revenues is
primarily due to higher market prices and higher operating levels. Capacity
Revenues for the three months ended September 30, 2001, were $6.4 million,
compared to $8.0 million for the comparable period of the prior calendar year, a
decrease of 20.0%. The decrease in capacity revenue is primarily due to the
expiration of a long term capacity contract in April 2001. Capacity sales on the
open market for the remainder of the 2001 period were at lower rates.
Transmission Congestion Contract Losses for the three months ended September 30,
2001 were $13.7 million. This agreement is essentially a swap between the
congestion component of the locational prices posted by the New York ISO in
western New York and the more populated areas in eastern New York. The
Transmission contract was entered into because it provided a reasonable
settlement for resolving a FERC dispute between the Partnership and Niagara
Mohawk Power Corporation.
Operating Expenses for the three months ended September 30, 2001, were $63.6
million, compared to $61.8 million for the comparable period of the prior
calendar year, an increase of 2.9%. The increase in Operating Expenses is
primarily due to higher operating levels, which necessitated greater coal usage,
greater coal purchases on the spot market and higher operating and maintenance
expenditures.
Other Income/Expenses for the three months ended September 30, 2001 were net
expenses of $13.3 million, compared to net expenses of $10.9 million for the
comparable period of the prior calendar year, an increase of 22.0%.
Results of Operations for the nine months ended September 30, 2001
- -------------------------------------------------------------------
Energy Revenues for the nine months ended September 30, 2001, were $270.8
million, compared to $239.4 million for the comparable period of the prior
calendar year, an increase of 13.1%. The increase in Energy Revenues is
primarily due to higher market prices and higher operating levels. Capacity
Revenues for the nine months ended September 30, 2001, were $21.0 million,
compared to $23.7 million for the comparable period of the prior calendar year,
a decrease of 11.4%. The decrease in capacity revenue is primarily due to the
expiration of a long term capacity contract in April 2001. Capacity sales on the
open market for the remainder of the 2001 period were at lower rates.
Transmission Congestion Contract Losses for the nine months ended September 30,
2001 were $26.2 million. This agreement is essentially a swap between the
congestion component of the locational prices posted by the New York ISO in
western New York and the more populated areas in eastern New York. The
Transmission contract was entered into because it provided a reasonable
settlement for resolving a FERC dispute between the Partnership and Niagara
Mohawk Power Corporation.
Operating Expenses for the nine months ended September 30, 2001, were $183.0
million, compared to $173.6 million for the comparable period of the prior
calendar year, an increase of 5.4%. The increase in Operating Expenses is
primarily due to higher operating levels, which necessitated greater coal usage,
greater coal purchases on the spot market and higher operating and maintenance
expenditures.
Other Income/Expenses for the nine months ended September 30, 2001 were net
expenses of $40.9 million, compared to net expenses of $40.8 million for the
comparable period of the prior calendar year, an increase of 0.2%.
Liquidity and Capital Resources
- ----------------------------------
Net working capital at September 30, 2001 and December 31, 2000 was $65.5
million and $84.2 million, respectively.
Cash flow from our operations during the first half of 2001 was sufficient to
cover the aggregate rental payments under the leases on the Somerset Generating
Station and the Cayuga Generating Station due July 2, 2001. We believe that cash
flow from our operations will be sufficient to cover aggregate rental payments
on each rent payment date thereafter.
17
We are obligated to make payments under the Coal Hauling Agreement with Somerset
Railroad Corporation (SRC), an affiliated company, in an amount sufficient, when
added with funds available from other sources, to enable SRC to pay, when due,
all of its operating expenses and other expenses, including interest on and
principal of outstanding indebtedness. As of September 30, 2001 and 2000, we had
recorded $3.6 million and $3.7 million, respectively, as operating expenses and
other accrued liabilities under this agreement. On August 14, 2000, SRC entered
into a $26 million credit facility with Fortis Capital Corp. which replaced in
its entirety a credit facility for the same amount previously provided to SRC by
an affiliate of CIBC World Markets. The new credit facility provided by Fortis
Capital Corp. consists of a 14-year term note (maturing on May 6, 2014), with
principal and interest payments due quarterly. The current interest rate on the
loans under this credit facility is equal to a Base Rate plus 0.625% for the
Base Rate loans and LIBOR plus 1.375% for LIBOR loans. The principal amount of
SRC's outstanding indebtedness under this credit facility was approximately
$23.7 million as of September 30, 2001.
At March 9, 2001, our $20 million Credit Suisse First Boston working capital
credit facility was terminated. In April 2001, we entered into a $35 million
secured revolving working capital and letter of credit facility with Union Bank
of California, N.A. This facility has a term of approximately twenty-one months.
We can borrow up to $35 million for working capital purposes under this
facility. In addition, we can have letters of credit issued under this facility
up to $25 million, provided that the total amount of working capital borrowings
and letters of credit issuances may not exceed the $35 million limit on the
entire facility. Since the new facility was signed there has been one draw for
$7 million on July 13, 2001 at an interest rate of 8.125%. The draw was repaid
on July 31, 2001.
Investing Activities
During the first nine months of 2001, we incurred approximately $15.3 million in
capital expenditures. These expenditures were primarily for the installation of
a selective catalytic reduction system at the Cayuga Generating Station and
other necessary expenditures under our life extension program. We have budgeted
capital expenditures to be $18.2 million in 2001, $12.3 million in 2002, $15.0
million in 2003, $10.0 million for 2004 and a total of $335 million for the
remaining years through 2032. These amounts include approximately $11.4 million
to install a selective catalytic reduction system to reduce NOX emissions at the
Cayuga Generating Station. In addition to capital requirements associated with
the ownership and operation of our electricity generating stations, we will have
significant fixed charge obligations in the future, principally with respect to
the leases.
On October 16, 2001 AES Greenidge was awarded a Federal Clean Coal Grant that
will fund 50% of the capital costs for backend technology and 30% of the
operations and maintenance costs for a test and demonstration period. This
technology will include a single bed, in-duct Selective Catalytic Reduction
(SCR) unit in combination with low-NOX combustion technology, on Greenidge Unit
4 firing on coal and biomass. It will also include a Circulating Dry Scrubber
(CDS) for SO2, Mercury and Acid Gas removal. AES Greenidge's share of the costs
for the 54 month project will be approximately $9.8 million.
New Accounting Pronouncements
On January 1, 2001, we adopted SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which as amended, established new
accounting and reporting standards for derivative instruments and hedging
activities. As of September 30, 2001, we have recorded $12.8 million of
derivative assets in other assets and $10.0 million of derivative liabilities in
other liabilities. Although most of the our financial instruments qualify for
hedge accounting which permits changes in the value of the financial instruments
to offset the related changes in the hedged item, the adoption of SFAS No. 133
will result in more variation to our results of operations.
Financing Activities
The pass through trust certificates accrued additional interest at a rate of
0.50% per annum from November 10, 1999 until March 27, 2000, when we completed
an exchange offer for the pass through trust certificates. The additional
interest accrued as a result of our failure to complete the exchange offer on or
prior to November 10, 1999. This additional interest was approximately $1
million with the amount due through December 31, 1999 being paid in April 2000.
The remaining additional interest was paid on the scheduled rent payment date,
July 3, 2000.
18
Cash flow from operations in excess of the aggregate rental payments under our
leases is permitted, if certain criteria are met, to be paid in the form of a
dividend to AES NY, LLC. On January 11, 2001 and March July 12, 2001, we made a
dividend payments of $32.5 million and $65.7 million, respectively.
Forward-looking Statements
Certain statements contained in this Form 10-Q are forward-looking statements as
that term is defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements speak only as of the date hereof.
Forward-looking statements can be identified by the use of forward-looking
terminology such as "believe," "expects," "may," "intends," "will," "should" or
"anticipates" or the negative forms or other variations of these terms or
comparable terminology, or by discussions of strategy. Future results covered by
the forward-looking statements may not be achieved. Forward-looking statements
are subject to risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed or implied by such
forward-looking statements. The most significant risks, uncertainties and other
factors are discussed under the heading "Business (a)General Development of
Business" in our Annual Report on Form 10-K, and you are urged to read this
section and carefully consider such factors.
19
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
See Note 3 to our Condensed Consolidated Financial Statements in Part I.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.19 Amended and Restated Deposit and Disbursement Agreement
among AEE, Union Bank of California, N.A., as Agent
under the Working Capital Facility, as Working Capital
Provider, and Bankers Trust Company, as Depositary
Agent, et al., dated as of April 10, 2001.
10.20 [Reserved]
10.23a Second Amendment to Kintigh A-1 Participation Agreement
and Appendix A dated as of April 10, 2001
10.23b Schedule identifying substantially identical agreements
to Second Amendment constituting Exhibit 10.23a hereto
10.24a Second Amendment to Milliken A-1 Participation
Agreement and Appendix A dated as of April 10, 2001
10.24b Schedule identifying substantially identical agreements
to Second Amendment constituting Exhibit 10.24a hereto
10.25a $35,000,000 Credit Agreement dated as of April 10, 2001
among AEE and Union Bank of California, N.A., as Agent
10.25b Amendment No. 1 and Waiver dated as of August 31, 2001
to $35,000,000 Credit Agreement dated as of April 10,
2001 among AEE and Union Bank of California, N.A., as
Agent
(b) Reports on Form 8-K
None
20
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.
AES EASTERN ENERGY, L.P.
By: AES NY, L.L.C., as General Partner
By:/s/ Daniel J. Rothaupt
---------------------------------
Daniel J. Rothaupt
President
By:/s/ Amy Conley
---------------------------------
Amy Conley
Vice President
(principal financial officer)
Date: November 14, 2001
21