FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OFTHE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 1999
Commission file Number 0-24240
RIDGEWOOD ELECTRIC POWER TRUST I
(Exact name of registrant as specified in its charter.)
Delaware 22-3105824
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
947 Linwood Avenue, Ridgewood, New Jersey 07450-2939
(Address of principal executive offices) (Zip Code)
(201) 447-9000
Registrant's telephone number, including area code:
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 [ ]
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Ridgewood Electric Power Trust I
Financial Statements
September 30, 1999
Ridgewood Electric Power Trust I
Balance Sheet
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September 30, December 31,
1999 1998
----------- -----------
(unaudited)
Assets:
Investments in power generation projects ..... $ 6,597,471 $ 6,560,616
Cash and cash equivalents .................... 1,603,965 1,138,102
Due from affiliates .......................... 4,915 5,342
Other assets ................................. 8,023 6,822
----------- -----------
Total assets .............................. $ 8,214,374 $ 7,710,882
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Liabilities and Shareholders' Equity:
Liabilities:
Accounts payable and accrued expenses ........ $ 63,399 $ 29,409
Due to affiliates ............................ 44,820 48,670
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Total liabilities ......................... 108,219 78,079
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Shareholders' equity:
Shareholders' equity (105.5 shares issued and
outstanding) ............................. 8,115,253 7,646,634
Managing shareholder's accumulated deficit ... (9,098) (13,831)
----------- -----------
Total shareholders' equity ................ 8,106,155 7,632,803
----------- -----------
Total liabilities and shareholders' equity $ 8,214,374 $ 7,710,882
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See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Statement of Operations (unaudited)
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Nine Months Ended Three Months Ended
----------------------- -----------------------
September 30, September 30,
1999 1998 1999 1998
---------- ---------- ---------- ----------
Revenue:
Income from power
generation projects $1,482,639 $1,228,555 $ 906,038 $ 484,346
Interest income .... 56,482 42,659 15,369 12,592
---------- ---------- ---------- ----------
Total revenue . 1,539,121 1,271,214 921,407 496,938
---------- ---------- ---------- ----------
Expenses:
Accounting and legal
fees .............. 34,008 33,347 8,080 8,044
Management fee ..... 57,248 55,872 25,444 18,624
Miscellaneous ...... 36,732 30,717 7,919 9,111
---------- ---------- ---------- ----------
Total expenses . 127,988 119,936 41,443 35,779
---------- ---------- ---------- ----------
Net income .......... $1,411,133 $1,151,278 $ 879,964 $ 461,159
---------- ---------- ---------- ----------
See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Statement of Changes in Shareholders' Equity (unaudited)
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Managing
Shareholders Shareholder Total
----------- ------------ -----------
Shareholders' equity,
December 31, 1998 ...... $ 7,646,634 $ (13,831) $ 7,632,803
Cash distributions ...... (928,403) (9,378) (937,781)
Net income for the period 1,397,022 14,111 1,411,133
----------- ----------- -----------
Shareholders' equity,
September 30, 1999 ..... $ 8,115,253 $ (9,098) $ 8,106,155
----------- ----------- -----------
See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Statement of Cash Flows (unaudited)
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Nine Months Ended
--------------------------
September 30, 1999 September 30, 1998
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Cash flows from operating activities:
Net income .................................. $ 1,411,133 $ 1,151,278
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Adjustments to reconcile net
income to net cash flows from
operating activities:
Additional investment in power
generation projects ....................... (36,855) (251,569)
Changes in assets and liabilities:
Decrease (increase) in due from
affiliates ............................... 427 (327,905)
(Increase) decrease in other assets ....... (1,201) 63,407
Increase in accounts payable and
accrued expenses ......................... 33,990 33,741
(Decrease) increase in due to affiliates .. (3,850) 166,288
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Total adjustments ....................... (7,489) (316,038)
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Net cash provided by operating activities 1,403,644 835,240
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Cash flows from financing activities:
Cash distributions to shareholders .......... (937,781) (984,673)
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Net cash used in financing activities ... (937,781) (984,673)
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Net increase (decrease) in cash and
cash equivalents ........................... 465,863 (149,433)
Cash and cash equivalents, beginning of year 1,138,102 1,042,568
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Cash and cash equivalents, end of period .... $ 1,603,965 $ 893,135
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See accompanying note to financial statements.
Ridgewood Electric Power Trust I
Note to Financial Statements
(unaudited)
1. General
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments, which consist of normal recurring adjustments,
necessary for the fair representation of the results for the interim periods.
Additional footnote disclosure concerning accounting polices and other matters
are disclosed in Ridgewood Electric Power Trust I's financial statements
included in the 1998 Annual Report on Form 10-K, which should be read in
conjunction with these financial statements. The year-end balance sheet data was
derived from audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. Certain prior year amounts
have been reclassified to conform to the current year presentation.
The results of operations for an interim period should not necessarily be taken
as indicative of the results of operations that may be expected for a twelve
month period.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are generally rounded to the nearest $1,000.
Introduction
The Trust carries its investment in the Projects it owns at fair value and does
not consolidate its financial statements with the financial statements of the
Projects. Revenue is recorded by the Trust as cash distributions are received
from the Projects. Trust revenues may fluctuate from period to period depending
on the operating cash flow generated by the Projects and the amount of cash
retained to fund capital expenditures.
Results of Operations
Total revenue increased 21.1% to $1,539,000 in the first nine months of 1999
from $1,271,000 in the first nine months of 1998 due to a $254,000 increase in
income from the Olinda Project and an increase of $14,000 in interest income.
Total revenue increased 85.3% to $921,000 in the three months ended September
30, 1999 from $497,000 in the same period in 1998 due to a $422,000 increase in
income from the Olinda Project and an increase of $2,000 in interest income. In
the third quarter of 1998, income from the Olinda Project was below normal
levels because the Project's gas supplier was unable to provide landfill gas for
most of August 1998 as the result of failures of the gas compressors. Although
the Trust is continuously monitoring the supplier's performance, there can be no
assurance that this type of failure will not recur.
Total expenses of $128,000 in the first nine months of 1999 and $42,000 in the
three months ended September 30, 1999 were comparable to the $120,000 and
$36,000, respectively, incurred in the same periods in 1998.
Liquidity and Capital Resources
In 1997, the Olinda Project entered into a revolving credit agreement with Fleet
Bank, N.A. (the "Bank") whereby the Bank provided a five year committed line of
credit facility of $750,000 which decreases by $100,000 on each anniversary of
the facility. Outstanding borrowings bear interest at the Bank's prime rate or,
at the Olinda Project's choice, at LIBOR plus 2.5%. The credit agreement
requires the Olinda Projects to maintain a ratio of total debt to tangible net
worth of no more than 1 to 1. The Trust guaranteed the obligations of the Olinda
Project under the credit facility. There were no borrowings outstanding under
this line of credit facility in the first quarter of 1999.
Obligations of the Trust are generally limited to making distributions to
shareholders of available operating cash flow generated by its investments,
payment of the management fee to the Managing Shareholder and payment of certain
accounting and legal services to third parties. The Trust's policy is to make
regular quarterly distributions to shareholders of as much cash as is prudent.
The Trust anticipates that its cash flow during 1999 will be adequate to fund
its obligations.
Year 2000 remediation
Please refer to the Trust's disclosures in its Annual Report on Form 10-K for
the year ended December 31, 1998, at "Item 7 - Management's Discussion and
Analysis," for a discussion of year 2000 issues affecting the Trust. In October
1999, the Managing Shareholder completed its year 2000 remediation program after
having successfully tested and implemented all necessary changes to its
software, including the subscription/investor relations systems and all
subsystems used for preparing internal reports. Costs of remediation did not
materially exceed the estimated amounts.
The Olinda electric generating facilities have been reviewed by an outside
consultant and by personnel from RPMCo, who determined that the project's
electronic control systems do not contain software affected by the Year 2000
problem and do not contain embedded components that contain Year 2000 flaws.
No other material changes to the risks to the Trust described in its Annual
Report on Form 10-K have occurred. The reasonable worst case scenario
anticipated by the Trust continues to be that the Olinda plant will be able to
operate on and after January 1, 2000 but that there may be some short-term
inability of its utility purchaser to accept or transmit electricity and that
the utility purchaser may not be able to pay promptly for the electricity it
does accept. In that event, the Trust's revenues could be materially reduced for
a temporary period and it might have to draw upon its credit line to fund
operating expenses until the utility makes up any payment arrears.
PART II - OTHER INFORMATION
Item 5. Other Information.
Mr. Swanson has transferred 54% of the equity interest in the Managing
Shareholder to family trusts. He has sole dispositive and voting power over the
equity interest transferred to each trust and accordingly continues to be the
beneficial owner as defined in Rule 13d-3 of all of the equity interest in the
Managing Shareholder.
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant as duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RIDGEWOOD ELECTRIC POWER TRUST I
Registrant
November 11, 1999 By /s/ Martin V. Quinn
Date Martin V. Quinn
Senior Vice President and Chief
Financial Officer (signing on behalf of the
Registrant and as principal financial
officer)