CALIFORNIA PETROLEUM TRANSPORT CORPORATION
FIRST QUARTER
REPORT
2000
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2000
Commission File Number 33-79220
33-56377
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
(exact name of Registrant as specified in its charter)
Delaware 04-3232976
(State of incorporation) (I.R.S. Employer
Identification No.)
Room 6/9, One International Place,
Boston, Massachusetts 02110-2624
- ---------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number,
including area code (617) 951-7727
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,
and (2) has been subject to such filing requirements for the past
90 days.
YES X NO
Number of shares outstanding of each class of Registrant's Common
Stock as of April 30th 2000
Common, $1.00 par value 1,000 shares
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 31, 2000
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Review Report of Independent Accountants 2
Unaudited Condensed Balance Sheet -
March 31, 2000 and December 31, 1999. 3
Unaudited Condensed Income Statement
Three Months Ended March 31, 2000
and 1999 4
Unaudited Condensed Statement of
Cash Flows - Three Months Ended
March 31, 2000 and 1999 5
Notes to Unaudited Condensed
Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8
Item 3. Quantitative and Qualitative
disclosures about Market Risk 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 11
SIGNATURES 11
Omitted items are not applicable
1
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
REVIEW REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
of California Petroleum Transport Corporation
We have reviewed the accompanying condensed balance sheet of
California Petroleum Transport Corporation as of March 31, 2000,
and the related condensed statements of income and the condensed
statement of cash flows for the three-month periods ended March
31, 2000 and 1999. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data, and making
inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit
conducted in accordance with United States generally accepted
auditing standards, which will be performed for the full year
with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the financial statements
referred to above for them to be in conformity with United States
generally accepted accounting principles.
We have previously audited, in accordance with United States
generally accepted auditing standards, the balance sheet of
California Petroleum Transport Corporation as at December 31,
1999, and the related statements of income and cash flows for the
year then ended, not presented herein, and in our report dated
March 30, 2000, we expressed an unqualified opinion on those
financial statements. In our opinion, the information set forth
in the accompanying condensed balance sheet as of December 31,
1999, is fairly stated, in all material respects, in relation to
balance sheet from which it has been derived.
Ernst & Young
Chartered Accountants
Douglas, Isle of Man
2000
2
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED BALANCE SHEET
(US Dollars in thousands) March 31, Dec 31,
2000 1999
ASSETS
Current assets:
Cash and cash equivalents 1 1
Current portion of serial
loan (note 2)
(Maturity date April 1, 2000) 18,160 18,160
Interest receivable 8,612 4,306
Other assets 36 21
_______ _______
Total current assets 26,809 22,488
Serial loans receivable less
current portion (note 2) 76,900 76,858
Terms loans receivable (note 3) 116,576 116,554
Deferred charges and other assets 2,124 2,188
________ ________
Total assets 222,409 218,088
======== ========
Liabilities and stockholders' equity
Current liabilities:
Interest accrued 8,612 4,306
Current portion of serial
mortgage notes (note 4)
(due April 1, 2000) 18,160 18,160
Other liabilities 36 21
_______ _______
Total current liabilities 26,808 22,487
Serial mortgage notes (note 4) 77,700 77,700
Term mortgage notes (note 5) 117,900 117,900
________ ________
Total liabilities 222,408 218,087
======= =======
Stockholders' equity:
3
Common stock: 1,000 shares
authorized, issued and outstanding 1 1
________ ________
Total liabilities and
stockholders' equity 222,409 218,088
========= =========
The accompanying notes are an integral part of this statement
4
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED INCOME STATEMENT
(US Dollars in thousands)
THREE MONTHS
ENDED MARCH 31,
2000 1999
INCOME
Interest income 4,370 4,701
Recovery of overheads 15 15
______ ______
4,385 4,716
Deduct:
Expenses
Interest payable 4,306 4,637
Overheads 15 15
Amortization of debt issue costs 64 64
______ _____
Net result for the period NIL NIL
______ _____
The accompanying notes are an integral part of this statement
5
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
(US Dollars in thousands) Three months Three months
ended March 31, ended March 31,
2000 1999
Cash Flows from Operating Activities:
Net income - -
Adjustments to reconcile net income to
net cash provided by operating
activities:
Recognition of deferred expenses (64) (64)
Recognition of unearned income 64 64
Changes in assets and liabilities
Accounts receivable (4,321) (4,652)
Accounts payable 4,321 4,652
______ ______
Net cash provided by
operating activities NIL NIL
______ ______
Cash flows from investing activities
Serial loans repaid NIL NIL
______ ______
Cash flows from financing activities
Serial notes redeemed NIL NIL
______ ______
Net increase in cash and
cash equivalents NIL NIL
===== =====
Supplementary disclosure of
cash flow information
Interest paid NIL NIL
===== =====
The accompanying notes are an integral part of this statement
6
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1- Business and Summary of Accounting Policies
Organization and history
California Petroleum Transport Corporation was
incorporated under the laws of the state of Delaware on May 18,
1994. The company is a special purpose corporation that has been
organized solely for the purpose of issuing as agent Serial
Mortgage Notes and Term Mortgage Notes as full recourse
obligations of the company and loaning the proceeds of the sale
of the Notes to four vessel owning companies. The Serial
Mortgage Notes and the Term Mortgage Notes were issued on April
5, 1995.
Basis of Presentation
The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with United
States generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair
presentation have been included. The principal accounting
policies used in the preparation of these financial statements
are set out below.
Revenue and expense recognition
Interest receivable on the Serial Loans and on the Term
Loans is accrued on a daily basis. Interest payable on the
Serial Mortgage Notes and on the Term Mortgage Notes is accrued
on a daily basis. General and administrative expenses incurred
by the company are reimbursed by the vessel owning companies.
Deferred charges
Deferred charges represent the capitalization of debt
issue costs. These costs are amortized over the term of the
Notes to which they relate.
7
Note 2- Serial Loans
The principal balances of the Serial Loans earn interest
at rates ranging from 7.35% to 7.62% and mature over a seven year
period beginning April 1, 2000. The loans are reported net of
the related discounts which are amortized over the term of the
loans.
Note 3- Term Loans
The principal balances of the Term Loans earn interest
at a rate of 8.52% per annum and are to be repaid over a twelve
year period beginning nine years from April 1, 1995. The loans
are reported net of the related discounts which are amortized
over the term of the loans.
Note 4- Serial Mortgage Notes
The Serial Mortgage Notes bear interest at rates ranging
from 7.35% to 7.62% through maturity. The Notes mature over a
seven year period beginning April 1, 2000. Interest is payable
semi-annually.
Note 5- Term Mortgage Notes
The Term Mortgages Notes bear interest at a rate of
8.52% per annum. Principal is repayable on the Term Mortgage
Notes in accordance with a twelve year sinking fund schedule
commencing nine years from April 1, 1995. Interest is payable
semi-annually.
Item 2. Management's discussion and analysis of
financial condition and results of operations
N/A
Item 3. Quantitative and Qualitative disclosures
about Market Risk
(a) Quantitative information about market risk
Quantitative information about market risk
instruments at March 31, 2000 is as follows:-
8
i) Serial Loans
The principal balances of the Serial
Loans earn interest at rates ranging
from 7.35% to 7.62% and mature over a
seven year period beginning April 1,
2000. The loans are reported net of the
related discounts which are amortized
over the term of the loans.
The outstanding serial loans have the
following characteristics:
PRINCIPAL INTEREST MATURITY
DUE RATE DATE
$ 000
18,160 7.35% April 1, 2000
18,160 7.44% April 1, 2001
18,160 7.49% April 1, 2002
18,160 7.55% April 1, 2003
12,950 7.57% April 1, 2004
7,740 7.60% April 1, 2005
2,530 7.62% April 1, 2006
_______
95,860
_______
ii) Term Loans
The principal balances of the Term
Loans earn interest at a rate of
8.52% per annum and are to be repaid
over a twelve year period beginning
nine years from April 1, 1995. The
loans are reported net of the
related discounts which are
amortized over the term of the
loans.
The table below provides the final
principal payments on the Term
Loans if none of the Initial
Charters is terminated and if all of
the Initial Charters are terminated
on the earliest termination dates.
9
SCHEDULED NO INITIAL ALL INITIAL
PAYMENT DUE CHARTERS CHARTERS
TERMINATED TERMINATED
$000 $000
April 1, 200 43,355 1,700
April 1, 200 56,542 3,480
April 1, 200 69,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
_______ _______
117,900 117,900
_______ _______
iii) Serial Mortgage Notes
The Serial Mortgage Notes bear interest at
rates ranging from 7.35% to 7.62% through
maturity. The Notes mature over a seven year
period beginning one year from April 1, 2000.
Interest is payable semi-annually.
The outstanding serial loans have the
following characteristics:
PRINCIPAL INTEREST MATURITY
DUE RATE DATE
$ 000
18,160 7.35% April 1, 2000
18,160 7.44% April 1, 2001
18,160 7.49% April 1, 2002
18,160 7.55% April 1, 2003
12,950 7.57% April 1, 2004
7,740 7.60% April 1, 2005
2,530 7.62% April 1, 2006
________
95,860
________
10
iv) Term Mortgage Notes
The Term Mortgage Notes bear interest at a
rate of 8.52% per annum.
Principal is repayable on the Term Mortgage
Notes in accordance with a twelve year sinking
fund schedule commencing nine years from
April 1, 1995. Interest is payable semi-
annually.
The table below provides the scheduled sinking
fund redemption amounts and final principal
payments on the Term Mortgage Notes if none of
the Initial Charters is terminated and if all
of the Initial Charters are terminated on the
earliest termination dates.
SCHEDULED NO INITIAL ALL INITIAL
PAYMENT DUE CHARTERS CHARTERS
TERMINATED TERMINATED
$000 $000
April 1, 2004 3,355 1,700
April 1, 2005 6,542 3,480
April 1, 2006 9,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
_______ ______
117,900 117,900
_______ ______
(b) Qualitative information about market risk
The Corporation was organized solely for the purpose of
issuing, as agent on behalf of certain ship Owners, the Term
Mortgage in Notes and Serial Mortgage Notes as obligations of
California Petroleum and loaning the proceeds of the sale of the
Notes to the Owners to facilitate the funding of the acquisition
of four Vessels from Chevron Transport Corporation.
11
PART II OTHER INFORMATION
Item 1. Legal Proceedings
The company is not party to any legal proceedings the
results of which could, in the opinion of management,
have a material adverse effect upon the company.
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.
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION
Registrant
2000 R. Douglas Donaldson
Principal Financial Officer
and Treasurer
12
02089006.AC2