UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission File Number 0-25430
RIDGEWOOD ELECTRIC POWER TRUST IV
(Exact name of registrant as specified in its charter.)
Delaware, U.S.A. 22-3324608
(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)
Registrant's telephone number, including area code: (201)
447-9000
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
RIDGEWOOD ELECTRIC POWER TRUST IV
BALANCE SHEETS
(Unaudited)
September 30, December 31,
1996 1995
Assets
Cash $ 24,587,994 $ 12,998,463
Interest receivable 100,000 59,464
Investments in
power project
partnerships 13,515,964 353,619
Equipment in storage 469,018 455,182
Other assets ______34,242 ______23,435
Total assets $ 38,707,218 $ 13,890,163
Liabilities and
Shareholders'
Equity
Accounts payable
and accrued
expenses $ 76,644 $ 34,413
Due to affiliate 0 353,619
76,644 388,032
Shareholders' equity
(162.1 shares out-
standing at
12/31/95 and
481.17 at 9/30/96) 38,642,795 13,503,692
Managing share-
holder's accumu-
lated deficit ___(12,221) ____(1,561)
Total shareholders'
equity 38,630,574 13,502,131
Total liabilities
and shareholders'
equity $ 38,707,218 $ 13,890,163
<FN>
See Accompanying Notes to Financial Statements
RIDGEWOOD ELECTRIC POWER TRUST IV
STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS AND QUARTER
ENDED SEPTEMBER 30, 1996 AND THE INTERIM PERIOD
AND QUARTER ENDED SEPTEMBER 30, 1995
(Unaudited)
Period beginning
Nine months
Quarter
February 6, 1995
Quarter
ended
ended
and ended
ended
September 30,
September 30,
September 30,
September 30,
1996
1996
1995
1995
Income from power genera-
tion projects $ 242,057 $ 7,925
$ 0 $ 0
Dividend and interest
income 599,893 223,344
271,368 244,000
Total income 841,950 231,269
271,368 244,000
Management fee 480,550 258,730
0 0
Project due diligence expense 1,734 1,734
50,000 0
Administrative and
other expenses 53,018 12,252
64,566 64,452
Investment fee 626,561 105,630
252,497 151,190
Total expenses 1,161,863 375,925
367,063 215,642
Net income (loss) ($ 319,913) ($ 147,077)
($ 95,695) $ 28,358
<FN>
See Accompanying Notes to Financial Statements
RIDGEWOOD ELECTRIC POWER TRUST IV
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS AND QUARTER ENDED SEPTEMBER 30, 1996 AND
THE INTERIM PERIOD AND QUARTER ENDED SEPTEMBER 30, 1995
(Unaudited)
Period beginning
Nine months
Quarter
February 6, 1995
Quarter
ended
ended
and ended
ended
September 30,
September 30,
September 30,
September 30,
1996
1996
1995
1995
Cash flows from operating
activities:
Net income ($ 319,913) ($ 147,077)
($ 95,695) $ 28,358
Adjustments to
reconcile net income
to cash provided (used)
in operating activities:
Changes in assets &
liabilities:
Decrease (increase)in
receivables (40,536) (40,000)
(122,525) (104,515)
Decrease (increase) in
other assets (10,807) (9,734)
0 9,775
Increase (decrease) in
accounts payable ___(311,388) __ (50,689)
216,714 160,314
Total adjustments (362,731) (100,423)
94,189 65,574
Net cash provided by
(used in) operating
activities other
than investments (682,644) (233,664)
(1,506) 93,932
Purchase of investments
in power generation
partnerships (13,162,345) (266,403)
0 0
Purchase of
operating parts (18,836) (13,836)
(472,084) (472,084)
Net cash provided by
(used in) operating
activities (13,858,825) (527,739)
(473,590) (378,152)
Cash provided by (used by)
financing activities:
Net proceeds from the sale
of Trust shares 26,679,930 3,853,816
10,616,267 5,212,851
Cash distributions to
Shareholders (1,231,574) __(427,156)
______0 ______0
25,448,356 3,426,660
10,616,267 5,212,851
Net increase (decrease)
in cash and cash equivalents 11,584,531 2,898,920
10,142,677 4,834,699
Cash and cash equivalents
- Beginning of period _12,998,463 21,689,074
_____0 5,307,978
Cash and cash equivalents
- End of period $ 24,587,994 $ 24,587,994
$ 10,142,677 $ (10,142,677)
<FN>
See Accompanying Notes to Financial Statements
RIDGEWOOD ELECTRIC POWER TRUST IV
NOTES TO FINANCIAL STATEMENTS
1. Organization and Purpose
Nature of business
Ridgewood Electric Power Trust II (the "Trust") was formed
as a Delaware business trust in September 1994 by Ridgewood
Energy Holding Corporation acting as the Corporate Trustee.
The managing shareholder of the Trust is Ridgewood Power
Corporation. The Trust began offering shares on February 6,
1995. The Trust commenced operations on May 10, 1995. Its
offering ofTrust shares will end on August 15, 1996.
The Trust has been organized to invest in independent power
generation facilities and in the development of these
facilities. These independent power generation facilities
include cogeneration facilities which produce electricity,
thermal energy and other power plants that use various fuel
sources (except nuclear). The power plants will sell
electricity and thermal energy to utilities and industrial
users.
"Business Development Company" election
Effective March 24, 1995, the Trust had elected to be
treated as a "Business Development Company" under the
Investment Company Act of 1940 and registered its shares
under the Securities Exchange Act of 1934. On October 3,
1996, pursuant to authorization from a majority of the
Shareholders, the Trust filed a withdrawal of election to be
a business development company with the Securities and
Exchange Commission, which terminated its status as a
business development company.
2. Summary of Significant Accounting Policies
Investments in project development and power generation
limited partnerships
The Trust holds investments in power generation projects
which are stated at fair value. Due to the illiquidity of
the investments, the fair values of the investments are
assumed to equal cost unless current available information
provides a basis for adjusting the value of the investments.
RIDGEWOOD ELECTRIC POWER TRUST IV
NOTES TO FINANCIAL STATEMENTS
Fair values as of
9/30/96 12/31/95
Power generation limited
partnerships:
Pump Services $ 399,561 $ 353,619
Ridgewood Providence Power
Partners, L.P. 12,850,000 0
TOTALS $ 13,249,561 $ 353,619
Revenue recognition
Income from investments is recorded when received.
Interest and dividend income are recorded as earned.
Offering costs
Costs associated with offering Trust shares (selling
commissions, distribution and offering costs) are reflected
as a reduction of the shareholders' capital contributions.
Cash and cash equivalents
The Trust considers monies invested in a U.S. Treasury Bills
Fund with daily liquidation privileges to be a cash
equivalent.
Electric generating equipment
The Trust owns certain used electric power equipment which
is stated at fair value. Due to the difficulty of
determining the equipment's fair value, the fair value is
assumed to equal cost unless current available information
provides a basis for adjusting the value of the equipment.
Income taxes
No provision is made for income taxes in the accompanying
financial statements as the income or loss of the Trust is
included in the tax returns of the individual shareholders.
Reclassification
Certain items in previously issued financial statements have
been reclassified for comparative purposes.
RIDGEWOOD ELECTRIC POWER TRUST IV
NOTES TO FINANCIAL STATEMENTS
3. Investment in Power Generation Projects
California Pumping Project
On December 31, 1995, the Trust acquired a package of
natural gas fueled diesel engines which drive deep
irrigation well pumps in Ventura County, California from an
affiliated trust. The engines' shaft horsepower-hours are
sold at a discount from the equivalent kilowatt hours of
electricity. The cost of the projects is $317 per
equivalent kilowatt and the Trust receives a distribution of
$0.02 per equivalent kilowatt hour up to 3000 running hours
per year and $0.01 per equivalent kilowatt hour for each
additional running hour per year. The cost of the
investment was $353,619 which was be paid in 1996. The
operator pays for fuel, maintenance, repair and replacement.
Northeast Landfill Power Joint Venture
The Trust, together with Ridgewood Electric Power Trust III,
formed a partnership, Ridgewood Providence Power Partners,
L.P. ("RPLP") to acquire certain of the assets of Northeast
Landfill Power Joint Venture which owns and operates a 12.3
(net) megawatt landfill gas fired electric generation
facility located in Johnston, Rhode Island. This
acquisition was completed on April 16, 1996. The Trust's
investment, including provision of funds to perform post-
acquisition improvements to the plant and increase the
salable electric power pursuant to a new 2 mw power sale
agreement with the same power purchaser, was about $12.9
million for a 64% interest in RPLP. Ridgewood Electric
Power Trust III invested about $7.1 million for a 36%
interest. As part of the acquisition cost, RPLP assumed
three non-recourse notes, totaling $6.3 million payable to
insurance companies, maturing in September 2004, with a 9.6%
interest rate. The monthly installments total about $1.1
million annually.
4. Electric Power Equipment
The Trust purchased, from an affiliated entity, various used
electric power generation equipment to be held for resale
or, in the event a buyer is not found, for use in potential
power generation projects. The equipment is held in
storage.
RIDGEWOOD ELECTRIC POWER TRUST IV
MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Nine months ended September 30, 1996 versus period beginning
February 6, 1995 and ended September 30, 1995
This Quarterly Report on Form 10-Q, like some other
statements made by the Trust from time to time, has forward-
looking statements. These statements discuss business
trends and other matters relating to the Trust's future
results and the business climate. 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.
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.
Results of Operations
No income or expenses were incurred by the Trust prior to
March 31, 1995, because sales in the offering had not
attained the minimum level required for the Trust to begin
operations. The Trust's income of $841,950 for the period
ended September 30, 1996 reflects $600,000 of interest
income along with distributions from the limited
partnerships owning the Northeast Landfill generating
project, located near Providence, Rhode Island, and the
California pumping project described in Note 3 to the
financial statements. The expenses of $1,162,000 for the
nine months just ended primarily reflect the $626,651 one-
time investment fee (equal to 2% of and paid from capital
contributions) and the annual management fee of $480,550
(2.5% of net assets), payable to the Managing Shareholder
for the first time in 1996 with the commencement of business
operations.
The Trust does not consolidate its financial statements with
those of the Projects it owns and does not include the
Projects' revenue, expense and other items in its financial
statements. Revenue from Projects is only recognized as it
is received as distributions by the Trust, and thus revenues
may fluctuate as the result of delays or accelerations of
distributions from Projects.
Liquidity and Capital Resources
As of September 30, 1996, the closing date of its offering
of securities, the Trust had raised approximately $39.9
million of funds from its offering, net of offering fees and
expenses. The Trust has invested approximately $12.9
million in the acquisition of a 64% interest in a landfill
gas electric generation station at Johnston, Rhode Island,
approximately $400,000 in the pump services project and
approximately $500,000 in electric generating equipment.
The Trust currently has approximately $26.5 million
available for additional investments. The Trust believes
that those funds are adequate for the completion of the
Trust's investment program.
The Trust has negotiated to purchase at least a 50% interest
in 19 hydroelectric plants located in Maine and New
Hampshire for a total acquisition cost of $9 million. In
October 1996 the Trust entered into a binding agreement to
purchase a 50% interest in the 14 plants located in Maine.
Closing is conditioned upon receipt of ministerial approvals
from the Federal Energy Regulatory Commission, which are
scheduled to be received in late November 1996. Closing
will occur immediately after receipt. The purchase price
for the Maine plants is approximately $6,500,000, plus or
minus closing adjustments. Purchase of the New Hampshire
plants is subject to resolution of regulatory issues, which
are being addressed currently. The Trust intends to cause
the remaining 50% interest in the Maine and New Hampshire
plants to be purchased by Ridgewood Electric Power Trust V,
a similar investment program sponsored by the Managing
Shareholder, which commenced its offering of shares in
spring 1996.
Certain Industry Trends
The industry trend toward deregulation of the electric power
generating and transmission industries has accelerated after
the adoption of Order 888 by the Federal Energy Regulatory
Commission ("FERC") on April 24, 1996. A number of major
states, including California, have adopted proposals to
allow "retail wheeling," which would allow any qualified
generator to use utility transmission and distribution
networks to sell electricity directly to utility customers.
Other states, such as Massachusetts, New Hampshire and New
York, are preparing their own initiatives. As a result,
profound changes in the industry are occurring, marked by
consolidations of utilities, large scale spin-offs or sales
of generating capacity, reorganizations of power pools and
transmission entities, and attempts by electric utilities to
recover stranded costs and alter power purchase contracts
with independent power producers such as the Trust.
It is too early to predict the effects of these trends and
others on the Trust's business. A critical issue for the
Trust, however, is whether any action will be taken to
modify its existing power purchase contracts or to shift
costs to independent power producers. To date, neither FERC
nor the California or New Hampshire authorities have adopted
measures that would impair power purchase contracts and the
Trust is not aware of any other such action by regulatory
authorities in states where it does business.
It must be remembered, however, that legislative and
regulatory action is unpredictable and that at any time
federal or state legislatures or regulators could adopt
measures that would be materially adverse to the Trust's
business. Further, volatile market conditions could
adversely affect the Trust's operations and the actions of
other industry participants, such as electric utilities,
that affect the Trust.
PART II - OTHER INFORMATION
Item #4 Submission of Matters to a Vote of Security Holders
The Trust conducted a solicitation of written consents from
its Shareholders, beginning September 9, 1996, under
Regulation 14A under the Securities and Exchange Act of
1934, as amended. The solicitation requested Shareholder
approval for the Trust to terminate its election to be a
business development company under the Investment Company
Act of 1940, as amended.
(a) The solicitation was made from September 9, 1996
through the tabulation date, October 2, 1996.
(c) The sole matter voted upon through the consent
solicitation was the proposal to terminate the business
development company election (which included necessary
amendments to the Declaration of Trust). The results of the
vote on the tabulation date were as follows:
Investor Shares (other
than those held by the
Managing Shareholder or
its Affiliates) voted
Consenting to the Conversion Proposal
250.1130
Declining to consent to the Conversion Proposal
8.3162
Consents with questions as to form and not tabulated as
consenting
67.0760
There were no abstentions or broker non-votes.
As of the record date, there were 481.16669 Investor Shares
issued and outstanding, of which 1 share was held by the
Managing Shareholder or its affiliates and which was
ineligible to vote on amendments to the Declaration of
Trust. Accordingly, the holders of more than 50% of the
outstanding Investor Shares eligible to vote on the
amendment to the Declaration of Trust consented. Further,
the Managing Shareholder has voted the one Investor Share
owned of record by it in favor of the proposal.
Accordingly, the holders of more than 50% of all outstanding
Investor Shares as of September 9, 1996 consented to the
Conversion Proposal. The entire proposal thus passed.
Item #6 Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
No reports have been filed on Form 8-K during this
quarter.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly cause this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
RIDGEWOOD ELECTRIC POWER TRUST IV
Registrant
Date: November 12, 1996 By /s/ Thomas R. Brown
Thomas R. Brown
Senior Vice President and
Chief Financial Officer
(signing on behalf of the
Registrant and as
principal financial
officer)