SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A AMENDMENT #2 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File number 33-87902 33-87902-01 33-87902-02 IEC Funding Corp. North Jersey Energy Associates, A Limited Partnership Northeast Energy Associates, A Limited Partnership ---------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 04-3255377 New Jersey 04-2955646 Massachusetts 04-2955642 ------------- ---------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 350 Lincoln Place, Hingham, Massachusetts 02043 - ----------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) (617) 749-9800 -------------- (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_____ ------- NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP AND NORTH JERSEY ENERGY ASSOCIATES, A LIMITED PARTNERSHIP MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - -------------------------------------------------------------------------------- Total revenue for the second quarter of 1996 of $54.9 million decreased by $10.1 million (15.5%) as compared to the second quarter of 1995. Revenue for the six months ended June 30, 1996 of $133.8 million decreased $8.2 million (5.8%) as compared to the six months ended June 30, 1995. The decrease in revenues for the quarter and the year to date is due primarily to lower generation and availability resulting from scheduled maintenance outages during the second quarter of 1996. The primary maintenance outages occurred at the Bellingham facility where a major inspection and maintenance program was conducted. This second quarter outage (scheduled at five year intervals) was the first of this type in Bellingham since commencement of operations. Also contributing to the decreased revenues were lower rates under the Sayreville power contract. These lower rates are a result of the annual indexing of the percentage increase or decrease in New Jersey fuel prices for 1994 as defined in FERC Form 423. Rates for the Bellingham project increased slightly over the prior year. Cost of power and steam sales, as a percentage of gross revenues (gross of increase to energy bank) was 52.1% for the second quarter of 1996 versus 46.7% for the second quarter of 1995. Year to date cost as a percentage of gross revenues was 51.1% in 1996 as compared to 45.0% in 1995. The increased percentage cost on a quarterly basis is the result of fixed demand charges under certain fuel contracts (which remain constant regardless of availability) and the higher market prices of spot gas which effect both spot purchases and certain firm contracts. On a year to date basis extended gas service rights exercised by one of North Jersey Energy Associates suppliers (due to lower temperatures) combined with the higher market price of spot gas resulted in increased costs. Operations and maintenance costs decreased $1.3 million (24.2%) as compared to the second quarter of 1995. The primary cause of the decreased cost is the performance bonus, payable to the O&M contractor, which is directly related to the lower generation experienced during the second quarter of 1996. Offsetting this decrease were expected escalations on O&M contracts and increased water and sewer charges. General and administrative expenses were $3.4 million for the second quarter of 1996 as compared to $3.1 million for the same period in the prior year. On a year to date basis 1996 costs were $6.9 million as compared to $5.7 million in 1995. Increases include legal and consulting costs related to potential industry restructuring and increased overhead costs. Interest expense increased $.4 million (3.2%) as compared to the second quarter of 1995, and decreased $.2 million on a year to date basis. The second quarter increase is primarily due to adjustments made to the fair market value of swap agreements during the second quarter of 1995. While adjustments to fair market value effect earnings there is no cash effect. Interest on energy bank liabilities has increased, reflecting changes in the underlying amounts accrued for energy bank balances. Interest on debt is decreasing in 1996 as a result of principal payments made during 1995. Principal payments are made semi-annually on June 30, and December 30. LIQUIDITY AND CAPITAL RESOURCES As of June 30, 1996 accounts receivable of $38.3 million decreased $13.1 million as compared to December 31, 1995, reflective of the reduced generation during the second quarter of 1996. Cash flow generated during the period ended June 30, 1996 was more than sufficient to fund all operating expenses as well as fund $37.5 million of interest and principal required for payment on June 30, 1996. An additional debt service reserve funding requirement of $.7 million was also fulfilled. Excess cash of $30.8 million was distributed to the partners. Pursuant to the requirements of the Securities Exchange Act of 1934, IEC Funding Corp. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. IEC FUNDING CORP. Date Signature and Title November 14, 1996 /s/ Maureen P. Herbert - ------------------------- --------------------------------------- Maureen P. Herbert Vice President of Finance Pursuant to the requirements of the Securities Exchange Act of 1934, North Jersey Energy Associates, A Limited Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NORTH JERSEY ENERGY ASSOCIATES A LIMITED PARTNERSHIP By: INTERCONTINENTAL ENERGY CORPORATION As General Partner Date Signature and Title November 14, 1996 /s/ Maureen P. Herbert - ----------------------- --------------------------------------------- Maureen P. Herbert Vice President of Finance Pursuant to the requirements of the Securities Exchange Act of 1934, Northeast Energy Associates, A Limited Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. NORTHEAST ENERGY ASSOCIATES, A LIMITED PARTNERSHIP By: INTERCONTINENTAL ENERGY CORPORATION As General Partner Date Signature and Title November 14, 1996 /s/ Maureen P. Herbert - ----------------------- --------------------------------------------- Maureen P. Herbert Vice President of Finance