California Petroleum Transport Corporation
Quarterly Report on Form 10-Q
Three months ended March 31, 2002
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, 2002 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.)
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 30, 2001
Common, $1.00 par value .........................................1,000 shares
California Petroleum Transport Corporation
Quarterly Report on Form 10-Q
Three months ended March 31, 2002
Index
Part I Financial Information
Item 1 Financial Statements
Review Report of Independent Accountants
Unaudited Condensed Income Statement - Three months ended
March 31, 2002 and 2001
Unaudited Condensed Balance Sheet - March 31, 2002 and
December 31, 2001
Unaudited Condensed Statement of Cash Flows - Three months ended
March 31, 2002 and 2001
Notes to Unaudited Condensed Financial statements
Item 2 Management's Discussion and analysis of Financial Condition and
Results of Operations
Item 3 Quantitative and Qualitative Disclosures about Market Risk
Part II Other Information
Item 1 Legal Proceedings
Signatures
Omitted items are not applicable
California Petroleum Transport Corporation
Quarterly Report on Form 10-Q
Three months ended March 31, 2002
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Review Report of Independent Accountants
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF CALIFORNIA PETROLEUM TRANSPORT
CORPORATION
We have reviewed the accompanying condensed balance sheet of California
Petroleum Transport Corporation as of March 31, 2002 and the related condensed
statements of income and the condensed statement of cash flows for the
three-month periods ended March 31, 2002 and 2001and the condensed statement of
cashflows for the three month periods ended March 31, 2002 and 2001. 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, 2001, and the related statements of income and
cash flows for the year then ended, not presented herein, and in our report
dated March 27, 200, 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, 2001, 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
May 31, 2002
California Petroleum Transport Corporation
Condensed Income Statements for the three months ended March 31, 2002 and 2001
(Unaudited)
(in thousands of US$)
2002 2001
Operating revenues
Interest income 3,585 4,036
Recovery of administrative expenses 16 15
- ------------------------------------------------------------------------------
Net operating revenues 3,601 4,051
- ------------------------------------------------------------------------------
Operating expenses
Administrative expenses 16 15
- ------------------------------------------------------------------------------
Total operating expenses 16 15
- ------------------------------------------------------------------------------
Net operating income before amortisation 3,585 4,036
- ------------------------------------------------------------------------------
Amortisation of deferred charges 64 64
- ------------------------------------------------------------------------------
Net operating income after amortisation 3,521 3,972
- ------------------------------------------------------------------------------
Other expenses
Interest expense 3,521 3,972
- ------------------------------------------------------------------------------
Net other expenses 3,521 3,972
- ------------------------------------------------------------------------------
Net income - -
==============================================================================
See notes to the condensed financial statements.
California Petroleum Transport Corporation
Condensed Balance Sheets as of March 31, 2002 and December 31, 2001
(in thousands of US$)
2002 2001
(Unaudited) (Note 1)
ASSETS
Current assets
Cash and cash equivalents 1 1
Current maturities of serial loans receivable 18,160 18,160
(maturity date April 1, 2002)
Interest income receivable 7,249 3,664
Other accounts receivable 22 10
- --------------------------------------------------------------------------------
Total current assets 25,432 21,835
Serial loans receivable 40,916 40,874
Term loans receivable 116,752 116,730
Deferred charges 1,612 1,676
- --------------------------------------------------------------------------------
Total assets 184,712 181,115
================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of serial mortgage notes 18,160 18,160
(maturity date April 1, 2002)
Accrued interest expense 7,249 3,664
Other accounts payable 22 10
- --------------------------------------------------------------------------------
Total current liabilities 25,431 21,834
Long-term liabilities
Serial mortgage notes 41,380 41,380
Term mortgage notes 117,900 117,900
- --------------------------------------------------------------------------------
Total liabilities 184,711 181,114
Commitments and contingencies - -
Stockholders' equity
Share capital (1,000 shares of $1 authorised, 1 1
issued and outstanding)
Retained earnings - -
- --------------------------------------------------------------------------------
Total stockholders' equity 1 1
- --------------------------------------------------------------------------------
Total liabilities and stockholders' equity 184,712 181,115
================================================================================
See notes to the condensed financial statements.
California Petroleum Transport Corporation
Condensed Statements of Cash Flows for the three months ended March 31, 2002 and
2001 (Unaudited)
(in thousands of US$)
2002 2001
Operating activities
Net income - -
Adjustments to reconcile net income to net cash provided
by operating activities
Amortisation of deferred charges 64 64
Amortisation of issue discount on loans (64) (64)
receivable
Changes in operating assets and liabilities:
Interest income receivable (3,585) (3,972)
Other accounts receivable 12 (16)
Accrued interest expense 3,585 3,972
Other accounts payable (12) 16
- --------------------------------------------------------------------------------
Net cash provided by operating activities - -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase in cash and cash equivalents - -
Cash and cash equivalents at beginning of period 1 1
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period 1 1
================================================================================
See notes to the condensed financial statements.
California Petroleum Transport Corporation
Statements of Changes in Stockholders' Equity for the Three months ended March
31, 2002 and 2001
(Unaudited)
(in thousands of US$, except number of shares)
2002 2001
Number of Shares Outstanding
Balance at beginning of period 1,000 1,000
Shares issued - -
- --------------------------------------------------------------------------------
Balance at end of period 1,000 1,000
- --------------------------------------------------------------------------------
Share Capital
Balance at beginning of period 1 1
Shares issued - -
- --------------------------------------------------------------------------------
Balance at end of period 1 1
- --------------------------------------------------------------------------------
Retained Earnings
Balance at beginning of period - -
Net income - -
- --------------------------------------------------------------------------------
Balance at end of period - -
- --------------------------------------------------------------------------------
Total Stockholders' Equity 1 1
================================================================================
See notes to the condensed financial statements.
California Petroleum Transport Corporation
Notes to the Condensed Financial Statements (Unaudited)
1. GENERAL
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.
The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accountancy
principles for complete financial statements.
2. ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared in accordance with generally
accepted accounting principles in the United States. The preparation of
financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates. The following are the
significant accounting policies adopted by the Company:
Cash and cash equivalents
For the purposes of the consolidated statements of cash flows, all demand
and time deposits and highly liquid, low risk investments with original
maturities of three months or less are considered equivalent to cash.
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 capitalisation of debt issue costs. These
costs are amortised over the term of the Notes to which they relate.
3. SERIAL LOANS
The principal balances of the Serial Loans earn interest at rates ranging
from 7.49% to 7.62% and mature over a five-year period beginning April 1,
2002. The loans are reported net of the related discounts, which are
amortised over the term of the loans.
4. 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 April 1,
2004. The loans are reported net of the related discounts, which are
amortised over the term of the loans.
5. SERIAL MORTGAGE NOTES
The Serial Mortgage Notes bear interest at rates ranging from 7.49% to
7.62% through maturity. The Notes mature over a five-year period beginning
April 1, 2002. Interest is payable semi-annually.
6. 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 April 1, 2004. Interest is
payable semi-annually.
California Petroleum Transport Corporation
Quarterly Report on Form 10-Q
Three months ended March 31, 2002
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, 2002 is
as follows: -
i) Serial Loans
The principal balances of the Serial Loans earn interest at rates ranging
from 7.49% to 7.62% and mature over a five-year period beginning April 1,
2002. The loans are reported net of the related discounts, which are
amortised over the term of the loans.
The outstanding serial loans have the following characteristics:
Maturity date Interest rate Principal amount
($ 000's)
---------------------------------------------------------------------------
April 1, 2002 7.49% 18,160
April 1, 2003 7.55% 18,160
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
---------------------------------------------------------------------------
Total loans 59,540
---------------------------------------------------------------------------
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 April 1,
2004. 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.
Scheduled payment date No initial All initial
charters charters
terminated terminated
($000's) ($000's)
April 1, 2004 3,355 1,700
April 1, 2005 6,542 3,480
April 1, 2006 9,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
-------------------------------------------------------------------------
117,900 117,900
-------------------------------------------------------------------------
California Petroleum Transport Corporation
Quarterly Report on Form 10-Q
Three months ended March 31, 2002
iii) Serial Mortgage Notes
The Serial Mortgage Notes bear interest at rates ranging from 7.49% to
7.62% through maturity. The Notes mature over a five-year period beginning
April 1, 2002. Interest is payable semi-annually. The outstanding serial
loans have the following characteristics:
Maturity date Interest rate Principal amount
---------------------------------------------------------------------------
($ 000's)
April 1, 2002 7.49% 18,160
April 1, 2003 7.55% 18,160
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
---------------------------------------------------------------------------
Total loans 59,540
---------------------------------------------------------------------------
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 April 1, 2004. 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 payment date No initial All initial
charters charters
terminated terminated
---------------------------------------------------------------------------
($000's) ($000's)
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.
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.
California Petroleum Transport Corporation
Quarterly Report on Form 10-Q
Three months ended March 31, 2002
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
\Geraldine St. Louis\
May 30, 2002
Geraldine St. Louis
#020331