FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended September 30, 2003
Commission file Number 0-25430
RIDGEWOOD ELECTRIC POWER TRUST IV
(Exact name of registrant as specified in its charter.)
Delaware 22-3324608
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1314 King Street, Wilmington, Delaware 19801
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(Address of principal executive offices) (Zip Code)
(302) 888-7444 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 IV
Consolidated Financial Statements
September 30, 2003
Ridgewood Electric Power Trust IV
Consolidated Balance Sheet (unaudited)
- -----------------------------------------------------------------------------
September 30, December 31,
2003 2002
------------ ------------
Assets:
Cash and cash equivalents ....................... $ 112,262 $ 54,637
Accounts receivable, trade ...................... 1,320,340 1,268,293
Due from affiliates ............................. 340,412 267,586
Insurance claim receivable ...................... -- 258,900
Other assets .................................... 93,814 90,285
------------ ------------
Total current assets ................ 1,866,828 1,939,701
Investments:
Maine Hydro Projects ............................ 4,296,139 4,405,278
Maine Biomass Projects .......................... 4,100,701 3,896,576
Plant and equipment ............................. 16,939,368 16,939,368
Accumulated depreciation ........................ (6,271,009) (5,634,801)
------------ ------------
10,668,359 11,304,567
------------ ------------
Electric power sales contract ................... 8,338,040 8,338,040
Accumulated amortization ........................ (4,142,435) (3,725,557)
------------ ------------
4,195,605 4,612,483
------------ ------------
Spare parts inventory ........................... 724,615 724,615
Restricted cash ................................. 755,228 749,821
------------ ------------
Total assets ............................ $ 26,607,475 $ 27,633,041
------------ ------------
Liabilities and Shareholders' Equity:
Liabilities:
Current maturities of long-term debt ............ $ 1,024,623 $ 955,202
Accounts payable and accrued expenses ........... 536,945 346,389
Due to affiliates ............................... 1,313,448 787,492
------------ ------------
Total current liabilities ................ 2,875,016 2,089,083
Long-term debt, less current portion ............ 90,030 867,223
Minority interest in the Providence Project ..... 5,610,811 5,717,184
Commitments and contingencies
Shareholders' Equity:
Shareholders' equity (476.8875 investor
shares issued and outstanding) ................. 18,256,368 19,175,022
Managing shareholder's accumulated deficit
(1 management share issued and outstanding) .... (224,750) (215,471)
------------ ------------
Total shareholders' equity ............... 18,031,618 18,959,551
------------ ------------
Total liabilities and shareholders' equity $ 26,607,475 $ 27,633,041
------------ ------------
See accompanying notes to consolidated financial statements.
Ridgewood Electric Power Trust IV
Consolidated Statement of Operations (unaudited)
- -----------------------------------------------------------------------------
Nine Months Ended Three Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
----------- ----------- ----------- ------------
Net sales .......... $ 6,119,549 $ 5,561,777 $ 1,965,339 $ 1,904,343
Sublease income .... 415,323 410,247 138,441 136,749
----------- ----------- ----------- -----------
Total revenues ... 6,534,872 5,972,024 2,103,780 2,041,092
Cost of sales ...... 4,820,724 4,814,839 1,614,867 1,578,063
----------- ----------- ----------- -----------
Gross profit ....... 1,714,148 1,157,185 488,913 463,029
General and
administrative
expenses .......... 659,600 682,003 280,411 237,272
Management fee ..... 426,590 468,351 142,197 156,119
----------- ----------- ----------- -----------
Total other
operating
expenses ....... 1,086,190 1,150,354 422,608 393,391
----------- ----------- ----------- -----------
Income from
operations ........ 627,958 6,831 66,305 69,638
----------- ----------- ----------- -----------
Other income
(expense):
Interest income .. 8,001 13,157 3,283 4,202
Interest expense . (108,865) (181,009) (30,627) (56,758)
Other income
(expense), net .. 155,581 191,741 161,010 (6,345)
Income (loss)
from Maine
Hydro Projects . (109,139) 43,723 (319,515) (354,607)
Income (loss) from
Maine Biomass
Projects ........ (95,875) (324,274) (343,037) 587,538
----------- ----------- ----------- -----------
Net other
income (loss) . (150,297) (256,662) (528,886) 174,030
----------- ----------- ----------- -----------
Income (loss) before
minority interest . 477,661 (249,831) (462,581) 243,668
Minority interest in
the earnings of the
Providence Project (442,362) (85,735) (147,880) (41,235)
----------- ----------- ----------- -----------
Net income (loss) .. $ 35,299 $ (335,566) $ (610,461) $ 202,433
----------- ----------- ----------- -----------
See accompanying notes to the consolidated financial statements.
Ridgewood Electric Power Trust IV
Consolidated Statement of Changes in Shareholders' Equity (unaudited)
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Managing
Shareholders Shareholder Total
------------ ------------- -------------
Shareholders' equity,
December 31, 2002 ...... $ 19,175,022 $ (215,471) $ 18,959,551
Cash distributions ...... (953,600) (9,632) (963,232)
Net income for the period 34,946 353 35,299
------------ ------------ ------------
Shareholders' equity,
September 30, 2003 ..... $ 18,256,368 $ (224,750) $ 18,031,618
------------ ------------ ------------
See accompanying notes to consolidated financial statements.
Ridgewood Electric Power Trust IV
Consolidated Statement of Cash Flows (unaudited)
- ------------------------------------------------------------------------------
Nine Months Ended
---------------------------
September 30, September 30,
2003 2002
----------- -----------
Cash flows from operating activities:
Net income (loss) ....................... $ 35,299 $ (335,566)
----------- -----------
Adjustments to reconcile net income
(loss)to net cash flows from
operating activities:
Depreciation and amortization ....... 1,053,086 1,059,436
Minority interest in earnings of
the Providence Project ............. 442,362 85,735
Loss (income) from Maine Hydro
Projects ........................... 109,139 (43,723)
Loss from Maine Biomass Projects .... 95,875 324,274
Changes in assets and liabilities:
Increase in accounts receivable,
trade ............................ (52,047) (632,485)
Increase in due from affiliates ... (72,826) (593,228)
Decrease in insurance claim
receivable ....................... 258,900 --
Increase in other assets .......... (3,529) (35,580)
Increase in accounts payable and
accrued expenses ................. 190,556 186,039
Increase (decrease) in due to
affiliates ....................... 525,956 (37,919)
----------- -----------
Total adjustments ............. 2,547,472 312,549
----------- -----------
Net cash provided by (used in)
operating activities ............... 2,582,771 (23,017)
----------- -----------
Cash flows from investing activities:
Investment in Maine Biomass Projects .... (300,000) (325,000)
Capital expenditures .................... -- (44,239)
----------- -----------
Net cash used in investing activities (300,000) (369,239)
----------- -----------
Cash flows from financing activities:
Payments to reduce long-term debt ....... (707,772) (643,230)
Increase in debt reserve fund ........... (5,407) (8,320)
Cash distributions to minority interest . (548,735) --
Cash distributions to shareholders ...... (963,232) --
----------- -----------
Net cash used in financing activities (2,225,146) (651,550)
----------- -----------
Net increase (decrease) in cash
and cash equivalents ........................ 57,625 (1,043,806)
Cash and cash equivalents, beginning of year . 54,637 1,050,638
----------- -----------
Cash and cash equivalents, end of period ..... $ 112,262 $ 6,832
----------- -----------
See accompanying notes to consolidated financial statements.
Ridgewood Electric Power Trust IV
Notes to Consolidated Financial Statements (unaudited)
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1. General
In the opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments, which consist of normal recurring
adjustments, necessary for the fair presentation of the results for the interim
periods. Additional footnote disclosure concerning accounting policies and other
matters are disclosed in Ridgewood Electric Power Trust IV's (the "Trust")
consolidated financial statements included in the 2002 Annual Report on Form
10-K, which should be read in conjunction with these consolidated financial
statements.
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.
The consolidated financial statements include the accounts of the Trust and the
limited partnerships owning the Providence Project and the California Pumping
project. The Trust uses the equity method of accounting for its investments in
the Maine Hydro Projects and the Maine Biomass Projects, which are owned 50% by
the Trust.
2. Summary Results of Operations for Selected Investments
Summarized financial information for the Maine Hydro Projects, which are
accounted for under the equity method, are as follows:
Balance Sheet
September 30, December 31,
2003 2002
-------------- -----------
Total assets ....... $9,767,466 $9,475,640
---------- ----------
Stockholders' equity $8,592,277 $8,810,554
---------- ----------
Statement of Operations
Nine Months Ended Three Months Ended
September 30, September 30,
2003 2002 2003 2002
--------- --------- ---------- ----------
Revenue ......... $ 2,305,000 $ 2,538,000 $ 171,000 $ 154,000
Operating expense 2,523,000 2,451,000 810,000 864,000
Net income (loss) (218,000) 87,000 (639,000) (710,000)
Summarized financial information for the Maine Biomass Projects, which are
accounted for under the equity method, are as follows:
Balance Sheet
September 30, December 31,
2003 2002
------------- ------------
Total assets ... $ 4,589,414 $ 4,815,288
----------- -----------
Members' deficit $(5,963,123) $(5,771,374)
----------- -----------
Statement of Operations
Nine Months Ended September 30, Three Months Ended September 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenue ......... $ 7,820,000 $ 5,938,000 $ 2,042,000 $ 3,405,000
Cost of sales ... 7,151,000 5,739,000 2,447,000 1,905,000
Other expense ... 861,000 848,000 281,000 325,000
Net income (loss) (192,000) (649,000) (686,000) 1,175,000
3. Summary of Significant Accounting Policies
New Accounting Standards and Disclosures
SFAS 143
In June 2001, the FASB issued SFAS 143, Accounting for Asset Retirement
Obligations, on the accounting for obligations associated with the retirement of
long-lived assets. SFAS 143 requires a liability to be recognized in the
consolidated financial statements for retirement obligations meeting specific
criteria. Measurement of the initial obligation is to approximate fair value,
with an equivalent amount recorded as an increase in the value of the
capitalized asset. The asset will be depreciated in accordance with normal
depreciation policy and the liability will be increased for the time value of
money, with a charge to the income statement, until the obligation is settled.
SFAS 143 is effective for fiscal years beginning after June 15, 2002. The Trust
adopted SFAS 143 effective January 1, 2003, with no material impact on the
consolidated financial statements.
SFAS 145
In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Correction.
SFAS No. 145 eliminates extraordinary accounting treatment for reporting gain or
loss on debt extinguishment, and amends other existing authoritative
pronouncements to make various technical corrections, clarify meanings, or
describe their applicability under changed conditions. The Trust adopted SFAS
145 effective January 1, 2003, with no material impact on the consolidated
financial statements.
SFAS 146
In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with
Exit or Disposal Activities. SFAS No. 146 requires recording costs associated
with exit or disposal activities at their fair values when a liability has been
incurred. The Trust adopted SFAS 146 effective January 1, 2003, with no material
impact on the consolidated financial statements.
FIN 45
In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"),
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees and Indebtedness of Others." FIN 45 elaborates on the
disclosures to be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also requires that a guarantor recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while the provisions of the disclosure
requirements are effective for financial statements of interim or annual reports
ending after December 15, 2002. The Trust adopted the disclosure provisions of
FIN 45 during the fourth quarter of 2002 with no material impact to the
consolidated financial statements.
FIN 46
In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities" ("FIN 46") which changes the criteria by which one
company includes another entity in its consolidated financial statements. FIN 46
requires a variable interest entity to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable interest
entity's activities or entitled to receive a majority of the entity's residual
returns or both. The consolidation requirements of FIN 46 apply immediately to
variable interest entities created after January 31, 2003, and apply in the
first fiscal period ending after March 15, 2004, for variable interest entities
created prior to February 1, 2003. The Trust adopted the disclosure provisions
of FIN 46 effective December 31, 2002, with no material impact to the
consolidated financial statements. The Trust will implement the full provisions
of FIN 46 effective December 15, 2003.
SFAS 149
In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 149 is generally effective for contracts entered into or
modified after June 30, 2003 and for hedging relationships designated after June
30, 2003. The Trust adopted SFAS 149 effective July 1, 2003, with no material
impact on the consolidated financial statements.
SFAS 150
In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS No. 150
establishes standards for classifying and measuring certain financial
instruments with characteristics of both liabilities and equity. The Trust
adopted SFAS 150 effective July 1, 2003, with no material impact on the
consolidated financial statements.
4. Qualification of the Providence Project
On January 17, 2003, the Providence Project received a "Statement of
Qualification" from the Massachusetts Division of Energy Resources ("DOER")
pursuant to the renewable portfolio standards ("RPS") adopted by Massachusetts.
In 1997, Massachusetts enacted the Electric Restructuring Act of 1997 (the
"Restructuring Act"). Among other things, the Restructuring Act requires that
all retail electricity suppliers in Massachusetts (i.e. those entities supplying
electric energy to retail end-use customers in Massachusetts) purchase a minimum
percentage of their electricity supplies from qualified new renewable generation
units powered by one of several renewable fuels, such as solar, biomass or
landfill. Beginning in 2003, each such retail supplier must obtain at least one
(1%) percent of its supply from qualified new renewable generation units. Each
year thereafter, the requirement increases one-half of one percentage point
until 2009, when the requirement equals four (4%) percent of each retail
supplier's sales in that year. Subsequent to 2009, the increase in the
percentage requirement will be determined and set by the DOER.
Now that the Providence Project has been qualified as new renewable generation,
it receives RPS Attributes that it may sell to retail electric suppliers. Retail
electric suppliers may purchase RPS Attributes associated with renewable energy
and not necessarily the energy itself. Thus, electrical energy and RPS
Attributes are separable products and need not be sold or purchased as a bundled
product. Retail electric suppliers in Massachusetts will then use the purchase
of such RPS Attributes to demonstrate compliance with the Restructuring Act and
RPS Regulations.
In the first quarter of 2003, the Providence Project entered into an agreement
governing the sale of all its RPS Attributes to a retail electric supplier. On
February 13, 2003, the Providence Project sold and recorded revenue totaling
$336,750 for the RPS Attributes derived from the power produced in fourth
quarter of 2002.
5. Related Party Transactions
At September 30, 2003 and December 31, 2002, the Trust had outstanding payables
and receivables, with the following affiliates:
Due To Due From
------------------------------------------------
September 30, December 31, September 30, December 31,
2003 2002 2003 2002
-------------------------- ------------------------
Ridgewood Power
Management LLC .............. $ 39,042 $242,077 $ -- $ --
Ridgewood Electric Power
Trust III .................... -- -- 243,160 266,895
Ridgewood Power .............. 484,981 324,981 -- --
Maine Hydro .................. 479,683 199,687 -- --
Maine Biomass ................ 298,309 -- -- 691
Other affiliates ............. 11,433 20,747 97,252 --
From time to time, the Trust records short-term payables and receivables from
other affiliates in the ordinary course of business. The amounts payable and
receivable with the other affiliates do not bear interest.
6. Financial Information by Business Segment
The Trust's business segments were determined based on similarities in economic
characteristics and customer base. The Trust's principal business segments
consist of wholesale and retail.
Common services shared by the business segments are allocated on the basis of
identifiable direct costs, time records or in proportion to amount invested in
projects managed by Ridgewood Management.
The financial data for business segments are as follows:
Wholesale Power Sales
Nine Months Ended Three Months Ended
-------------------------- ------------------------
September 30, September 30, September 30,September 30,
2003 2002 2003 2002
---------- ------------ ----------- ------------
Revenue ................... $6,145,624 $5,423,159 $1,935,937 $1,802,168
Depreciation and
amortization .............. 1,006,075 1,018,844 326,625 348,128
Operating income .......... 1,180,537 413,562 280,899 175,650
Capital expenditures ...... -- 44,239 -- 2,010
Retail Power Sales
Nine Months Ended Three Months Ended
--------------------------- -----------------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
------------ ------------ ------------- -------------
Revenue ............ $ 389,248 $ 548,865 $ 167,843 $ 238,924
Depreciation and
amortization ....... 47,011 40,592 18,561 12,147
Operating income ... (4,881) 146,947 (8,071) 76,668
Capital expenditures -- -- -- --
Corporate
Nine Months Ended Three Months Ended
---------------------------- ----------------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
------------- ------------- ------------- -------------
Revenue ............ $ -- $ -- $ -- $ --
Depreciation and
amortization ....... -- -- -- --
Operating loss ..... (547,698) (553,678) (206,523) (182,680)
Capital expenditures -- -- -- --
Total
Nine Months Ended Three Months Ended
--------------------------- ---------------------------
September 30, September 30, September 30, September 30,
2003 2002 2003 2002
----------- ----------- ------------ ------------
Revenue ............... $6,534,872 $5,972,024 $2,103,780 $2,041,092
Depreciation and
amortization .......... 1,053,086 1,059,436 345,186 360,275
Operating income (loss) 627,958 6,831 66,305 69,638
Capital expenditures .. -- 44,239 -- 2,010
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Dollar amounts in this discussion are rounded to the nearest $1,000.
Introduction
The consolidated financial statements include the accounts of the Trust and the
limited partnerships owning the Providence Project and the California Pumping
project. The Trust uses the equity method of accounting for its investments in
the Maine Hydro Projects and the Maine Biomass Projects, which are owned 50% by
the Trust.
Critical Accounting Policies and Estimates
For a complete discussion of critical accounting policies, refer to "Significant
Accounting Policies" in Item 7 of the Trust's 2002 Form 10-K. There have been no
substantive changes to those policies and estimates.
Results of Operations
Three Months Ended September 30, 2003, Compared to the Three Months Ended
September 30, 2002
Total revenue for the third quarter of 2003 was $2,104,000, compared to
$2,041,000 for the third quarter of 2002. The $63,000 increase in revenue is a
result of a $134,000 increase in revenues from the Providence project partially
offset by a $71,000 decrease in revenues from the California Pumping projects.
The decrease in the California Pumping project's revenue is primarily due to the
higher precipitation experienced in Southern California, thus reducing
operations, in addition to the reduced rates charged to customers as a result of
the change in current market conditions.
Gross profit for the third quarter of 2003 was consistent with the third quarter
of 2002.
General and administrative expenses increased $43,000 in the third quarter of
2003 to $280,000. The management fee decreased from $156,000 in the third
quarter of 2002 to $142,000 for the same period in 2003 as a result of the
Trust's lower net asset balance.
Interest expense was reduced by $26,000 from $57,000 in the third quarter of
2002 to $31,000 in the third quarter of 2003 due to lower borrowings outstanding
at the Providence Project.
Other income increased from an expense of $6,000 in the third quarter of 2002 to
income of $161,000 in the third quarter of 2003. The increase is due to the
$160,000 of insurance proceeds received for the engine failure at the Providence
Project experienced in 2002. As a result of the engine failure, the project's
generation was reduced thus generating fewer renewable energy credits. During
the third quarter of 2003, the project was compensated for its lost 2002
renewable energy revenues.
Equity loss from the Maine Hydro Projects was comparable to the third quarter of
2002.
The equity income from the Maine Biomass Projects decreased $931,000, from
$588,000 in the third quarter of 2002 to a loss of $343,000 in the same period
in 2003. The decrease is primarily attributable to the $2,042,000 in revenues
received from the transfer of renewable energy credits during the third quarter
of 2002. Because the Trust received notification of the approval for
qualification of the Maine Biomass Projects, as well as transferred title in
July 2002, the Trust recognized its share of the renewable energy attribute
revenues, which amounted to $1,113,000 for the first half of 2002, in the third
quarter as well. Unlike power generation revenue, which is invoiced and
recognized in the period generated, renewable attribute revenue is recognized
upon delivery of title and not generation, thus resulting in the possible delay
of revenue recognition of up to several months.
Nine Months Ended September 30, 2003, Compared to the Nine Months Ended
September 30, 2002
Total revenue for the first nine months of 2003 was $6,535,000, compared to
$5,972,000 for the first nine months of 2002. The increase in revenue is
reflective of the lower revenues recorded in 2002 as a result of the failure of
one of the Providence Project's engines, offset by a decrease in the 2003
revenues from the California Pumping projects due to the rainy weather
experienced in Southern California and the reduced rates charged to customers.
In addition, the Providence Project recorded the sale of $337,000 in the first
quarter of 2003 for the transfer of renewable energy credits produced in the
fourth quarter of 2002.
Gross profit increased $557,000 to $1,714,000 for the first nine months of 2003.
The increase is a result of the lower maintenance expenses recorded in the
current year as compared to 2002, when the Providence Project experienced costly
engine repairs due to the failure of one of its engines.
General and administrative expenses decreased $22,000 in the first nine months
of 2003 to $660,000. The management fee decreased from $468,000 in the first
nine months of 2002 to $426,000 for the same period in 2003 as a result of the
Trust's lower net asset balance.
Interest expense decreased $72,000 from $181,000 in the first nine months of
2002 to $109,000 in the first nine months of 2003 due to lower borrowings
outstanding at the Providence Project.
Other income decreased by $36,000 in the first nine months of 2003 primarily due
to the proceeds received from the liquidation of the Santee River Rubber Company
and the sale of obsolete equipment from the California Pumping project in 2002.
Equity income from the Maine Hydro Projects decreased by $153,000, to a loss of
$109,000 for the first nine months of 2003. The decrease is due to the heavier
rainfall experienced in 2002.
The equity loss from the Maine Biomass Projects decreased $228,000, from a loss
of $324,000 for the first nine months of 2002 to $96,000 in the same period in
2003. The decrease in equity loss from the Maine Biomass Projects is primarily
attributable to the $3,716,000 in revenues received from the transfer of
renewable energy credits, compared to $2,181,000 in 2002. Unlike power
generation revenue, which is invoiced and recognized in the period generated,
renewable attribute revenue is recognized upon delivery of title and not
generation, thus resulting in the possible delay of revenue recognition of up to
several months.
Liquidity and Capital Resources
Cash provided by operating activities for the nine months ended September 30,
2003 was $2,583,000 compared to cash used by operating activities of $23,000 for
the nine months ended September 30, 2002. The increase in cash flow from
operating activities is primarily the result of the decrease in accounts
receivable, increase in short-term advances from affiliates, which occur in the
Trust's ordinary course of business, the increase in net income, and the
proceeds received from an insurance claim.
Cash used in investing activities for first nine months of 2003 was $300,000
compared to $369,000 for the first nine months of 2002. The decrease is
primarily due to the $44,000 of capital expenditures invested in the Providence
Project in 2002.
Cash used in financing activities for the first nine months of 2003 was
$2,225,000 compared to $652,000 for the first nine months of 2002. The decrease
in cash flow from financing activities is due to the Trust making distributions
to shareholders of $963,000 and distributions to minority interest of $549,000
in the current year.
On June 26, 2003, Ridgewood Renewable Power LLC, the Managing Shareholder of the
Trust, entered into a $5,000,0000 Revolving Credit and Security Agreement with
Wachovia Bank, National Association. The agreement allows the Managing
Shareholder to obtain loans and letters of credit for the benefit of the trusts
and funds that it manages. The agreement expires on June 30, 2004. As part of
the agreement, the Trust agreed to limitations on its ability to incur
indebtedness and liens and make guarantees.
The Trust has historically financed its operations from cash generated from its
subsidiaries operations. Obligations of the Trust are generally limited to
payment of the management fee to the Managing Shareholder, scheduled long-term
debt payments related to the Providence project and payment of certain
accounting and legal services to third parties. The Trust ceased making
distributions to shareholders in the second quarter of 2000 but resumed making
distributions in the fourth quarter of 2002.
The Trust expects that its cash flows from operations, cash on hand and line of
credit will be sufficient to fund its obligations and any declared distributions
for the next twelve months.
Item 4. Controls and Procedures
Based on their evaluation, as of a date within 90 days of the filing date of
this Form 10-Q, the Trust's Chief Executive Officer and Chief Financial Officer
have concluded that the Trust's disclosure controls and procedures (as defined
in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as
amended) are effective. There have been no significant changes in internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Forward-looking statement advisory
This Quarterly Report on Form 10-Q, as with some other statements made by the
Trust from time to time, contains forward-looking statements. These statements
discuss business trends and other matters relating to the Trust's future results
and the business climate and are found, among other places, in the notes to
financial statements and at Part I, Item 2, Management's Discussion and
Analysis. In order to make these statements, the Trust has had to make
assumptions as to the future. It has also had to make estimates in some cases
about events that have already happened, and to rely on data that may be found
to be inaccurate at a later time. Because these forward-looking statements are
based on assumptions, estimates and changeable data, and because any attempt to
predict the future is subject to other errors, what happens to the Trust in the
future may be materially different from the Trust's statements here.
The Trust therefore warns readers of this document that they should not rely on
these forward-looking statements without considering all of the things that
could make them inaccurate. The Trust's other filings with the Securities and
Exchange Commission and its Confidential Memorandum discuss many (but not all)
of the risks and uncertainties that might affect these forward-looking
statements.
Some of these are changes in political and economic conditions, federal or state
regulatory structures, government taxation, spending and budgetary policies,
government mandates, demand for electricity and thermal energy, the ability of
customers to pay for energy received, supplies of fuel and prices of fuels,
operational status of plant, mechanical breakdowns, availability of labor and
the willingness of electric utilities to perform existing power purchase
agreements in good faith. Some of the cautionary factors that readers should
consider are described in the Trust's most recent Annual Report on Form 10-K.
By making these statements now, the Trust is not making any commitment to revise
these forward-looking statements to reflect events that happen after the date of
this document or to reflect unanticipated future events.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
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.
RIDGEWOOD ELECTRIC POWER TRUST IV
Registrant
January 19, 2004 By /s/ Christopher I. Naunton
Date Christopher I. Naunton
Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)
CERTIFICATION
I, Robert E. Swanson, Chief Executive Officer of Ridgewood Electric Power Trust
IV ("registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the registrant;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure control and procedures to be designed under our supervision,
to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this quarterly report based on such
evaluation; and
c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the
period covered by the report that has materially affected, or is
reasonably likely to materially affect, the issuer's internal control
over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and senior management:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: January 19, 2004
/s/ Robert E. Swanson
- ------------------------------------
Robert E. Swanson
Chief Executive Officer
CERTIFICATION
I, Christopher I. Naunton, Chief Financial Officer of Ridgewood Electric Power
Trust IV ("registrant"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the registrant;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have:
a) designed such disclosure controls and procedures, or caused such
disclosure control and procedures to be designed under our supervision,
to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this quarterly report based on such
evaluation; and
c) disclosed in this quarterly report any change in the registrant's
internal control over financial reporting that occurred during the
period covered by the report that has materially affected, or is
reasonably likely to materially affect, the issuer's internal control
over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and senior management:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: January 19, 2004
/s/ Christopher I. Naunton
- --------------------------------------
Christopher I. Naunton
Chief Financial Officer