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, 2001 Commission File Number 33-79220
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.)
Suite 569, 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, 2001
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Review Report of Independent Accountants 2
Unaudited Condensed Balance Sheet -
March 31, 2001 and December 31, 2000. 3
Unaudited Condensed Income Statement
Three Months Ended March 31, 2001 and 2000 5
Unaudited Condensed Statement of Cash Flows -
Three Months Ended March 31, 2001 and 2000 6
Notes to Unaudited Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Item 3. Quantitative and Qualitative disclosures about
Market Risk 9
PART II OTHER INFORMATION
Item 1. Legal Proceedings 12
SIGNATURES 12
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, 2001, and
the related condensed statements of income and the condensed
statement of cash flows for the three-month periods ended March 31,
2001 and 2000. 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, 2000,
and the related statements of income and cash flows for the year
then ended, not presented herein, and in our report dated March 30,
2001, 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, 2000, is
fairly stated, in all material respects, in relation to balance
sheet from which it has been derived.
/s/ Ernst & Young
----------------------------
Ernst & Young
Chartered Accountants
Douglas, Isle of Man
May 3, 2001
2
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED BALANCE SHEET
(US DOLLARS IN THOUSANDS) MARCH 31, DEC 31,
2001 2000
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 7,944 3,972
Other assets 59 43
_______ _______
Total current assets 26,164 22,176
Serial loans receivable less current
portion (note 2) 58,908 58,866
Terms loans receivable (note 3) 116,664 116,642
Deferred charges and other assets 1,868 1,932
________ ________
Total assets 203,604 199,616
========= =========
Liabilities and stockholders' equity
Current liabilities:
Interest accrued 7,944 3,972
Current portion of serial mortgage
notes (note 4)
(due April 1, 2000) 18,160 18,160
Other liabilities 59 43
_______ _______
Total current liabilities 26,163 22,175
Serial mortgage notes (note 4) 59,540 59,540
Term mortgage notes (note 5) 117,900 117,900
________ ________
Total liabilities 203,603 199,615
________ ________
Stockholders' equity:
3
Common stock: 1,000 shares authorized,
issued and outstanding 1 1
________ ________
Total liabilities and stockholders' equity 203,604 199,616
========= =========
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, 2001
2000
Income
Interest income 4,036 4,370
Recovery of overheads 15 15
______ ______
4,051 4,385
Deduct:
Expenses
Interest payable 3,972 4,306
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,
2001 2000
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 (3,988) (4,321)
Accounts payable 3,988 4,321
______ ______
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.
Note 2- Serial Loans
The principal balances of the Serial Loans earn interest at rates
ranging from 7.44% to 7.62% and mature over a six year period beginning
April 1, 2001. The loans are reported net of the related discounts which
are amortized over the term of the loans.
7
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 7.44% to
7.62% through maturity. The Notes mature over a six year period beginning
April 1, 2001. 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.
8
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, 2001 is as follows:-
i) Serial Loans
The principal balances of the Serial Loans earn interest at
rates ranging from 7.44% to 7.62% and mature over a six
year period beginning April 1, 2001. 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 7.44% 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
_______
77,700
_______
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.
(a) Quantitative information about market risk (continued)
9
ii) Term 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.
SCHEDULED NO INITIAL ALL INITIAL
PAYMENT DATE 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
________ ________
iii) Serial Mortgage Notes
The Serial Mortgage Notes bear interest at rates ranging
from 7.44% to 7.62% through maturity. The Notes mature
over a six year period beginning one year from April 1,
2001. Interest is payable semi-annually.
The outstanding serial loans have the following
characteristics:
Principal due Interest Maturity Date
on maturity Rate
$ 000
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
________
77,700
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 DATE 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
May 8, 2001 /s/ R. Douglas Donaldson
------------------------------
R. Douglas Donaldson
Principal Financial Officer and
Treasurer
12
02089009.AE5