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, 1998 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 May 8, 1998.
Common, $1.00 par value............................ 1,000 shares
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 31,1998
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Review Report of Independent Accountants 2
Unaudited Condensed Balance Sheet -
March 31, 1998 and December 31, 1997. 3
Unaudited Condensed Income Statement
Three Months Ended March 31, 1998 and
1997 4
Unaudited Condensed Statement of Cash
Flows - Three Months Ended March 31,
1998 and 1997 5
Notes to the unaudited Condensed
Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
PART II OTHER INFORMATION
Item 1. Legal Proceedings 8
SIGNATURES 9
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, 1998,
and the related condensed statements of income and the condensed
statement of cash flows for the three-month periods ended
March 31, 1998 and 1997. 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,
1997, and the related statements of income and cash flows for the
year then ended, not presented herein, and in our report dated
March 18, 1998, 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,
1997, is fairly stated, in all material respects, in relation to
balance sheet from which it has been extracted.
/s/ Ernst & Young
Chartered Accountants
Douglas, Isle of Man
May 8, 1998
2
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
UNAUDITED CONDENSED BALANCE SHEET
(US Dollars in thousands) March 31, Dec. 31,
1998 1997
Assets
Current assets:
Cash and cash equivalents 1 1
Current portion of serial loan
(Maturity date April 1, 1998) 18,160 18,160
Interest receivable 9,924 4,962
Other assets 24 28
_______ _______
Total current assets 28,109 23,151
Serial loans receivable less current portion (note 2) 112,884 112,842
Terms loans receivable (note 3) 116,400 116,378
Deferred charges and other assets 2,636 2,700
________ _______
Total assets 260,029 255,071
======= =======
Liabilities and stockholders' equity
Current liabilities:
Interest accrued 9,924 4,962
Current portion of serial mortgage notes (note 2)
(due April 1, 1998) 18,160 18,160
Other liabilities 24 28
_______ _______
Total current liabilities 28,108 23,150
Serial mortgage notes (note 4) 114,020 114,020
Term mortgage notes (note 5) 117,900 117,900
_______ _______
Total liabilities 260,028 255,070
_______ _______
Stockholders' equity:
Common stock: 1,000 shares authorized, issued and
outstanding 1 1
___ ___
_______ _______
3
Total liabilities and stockholders' equity 260,029 255,071
======= =======
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 Three months
ended ended
March 31, 1998 March 31, 1997
Income
Interest income 5,026 5,343
Recovery of overheads 15 15
_____ _____
5,041 5,358
Deduct:
Expenses
Interest payable 4,962 5,279
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 ended
March 31, 1998 March 31, 1997
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 (4,958) (5,294)
Accounts payable 4,958 5,294
______ ______
Net cash provided by operating activities NIL NIL
______ ______
Net increase in cash and cash equivalent 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 I- 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 Regulations 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
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(CONTINUED)
Note 2- Serial Loans
The principal balances of the Serial Loans earn interest
at rates ranging from 7.15% to 7.62% and mature over an nine year
period beginning April 1, 1998. 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 7.15% to 7.62% through maturity. The Notes mature over a
nine year period beginning one year from April 1, 1998. 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
PART 11 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.
9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
the behalf by the undersigned, thereunto duly authorized.
CALIFORNIA PETROLEUM
TRANSPORT CORPORATION
Registrant
May 8, 1998 R. Douglas Donaldson
Treasurer
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02089006.AA0