FORM 10-Q
(MarkOne)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 30, 2002
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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: 333-83815
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Caithness Coso Funding Corp.
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(Exact name of registrant as specified in its charter)
Delaware 94-3328762
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Coso Finance Partners California 68-0133679
Coso Energy Developers California 94-3071296
Coso Power Developers California 94-3102796
--------------------- ---------- ----------
(Exact names of Registrants (State or other (I.R.S. Employer
as specified in their charters) jurisdiction of Identification No.)
incorporation or
organization)
565 Fifth Avenue, 29th Floor, New York, New York 10017-2478
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(Address of principal executive offices) (Zip Code)
(212) 921-9099
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former
fiscal year, if changed since last report.)
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. [X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
300 shares in Caithness Coso Funding Corp. as of August 9, 2002
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CAITHNESS COSO FUNDING CORP.
Form 10-Q
For the Quarter Ended June 30, 2002
PART I. FINANCIAL INFORMATION Page No.
ITEM 1. Financial Statements
Caithness Coso Funding Corp.
Unaudited condensed balance sheets at June 30, 2002 and
December 31, 2001 4
Unaudited condensed statements of operations for the three-months
ended June 30, 2002, the three-months ended June 30, 2001 ,
the six-months ended June 30, 2002, and the six-months ended
June 30, 2001 5
Unaudited condensed statements of cash flows for the six-months
ended June 30, 2002, and the six-months ended June 30, 2001 6
Notes to the unaudited condensed financial statements 7
Coso Finance Partners
Unaudited condensed balance sheets at June 30, 2002 and
December 31, 2001 8
Unaudited condensed statements of operations for the three-months
ended June 30, 2002, the three-months ended June 30, 2001,
the six-months ended June 30, 2002, and the six-months
ended June 30, 2001 9
Unaudited condensed statements of cash flows for the six-months
ended June 30, 2002, and the six-months ended June 30, 2001 10
Notes to the unaudited condensed financial statements 11
Coso Energy Developers
Unaudited condensed balance sheets at June 30, 2002 and
December 31, 2001 12
Unaudited condensed statements of operations for the three-months
months ended June 30, 2002, the three-months ended June 30, 2001,
the six-months ended June 30, 2002, and the six-months ended
June 30, 2001 13
Unaudited condensed statements of cash flows for the six-months
ended June 30, 2002, and the six-months ended June 30, 2001 14
Notes to the unaudited condensed financial statements 15
Coso Power Developers
Unaudited condensed balance sheets at June 30, 2002 and
December 31, 2001 16
Unaudited condensed statements of operations for the three-months
months ended June 30, 2002, the three-months ended June 30, 2001,
the six-months ended June 30, 2002, and the six-months ended
June 30, 2001 17
Unaudited condensed statements of cash flows the six-months
ended June 30, 2002, and the six-months ended June 30, 2001 18
Notes to the unaudited condensed financial statements 19
2
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 20
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 29
ITEM 2. Change in Securities and Use of Proceeds 29
ITEM 3. Defaults upon Senior Securities 30
ITEM 4. Submission of Matters to a Vote of Security Holders 30
ITEM 5. Other Information 30
Supplemental condensed combined financial information for the
Coso Partnerships
Unaudited condensed combined balance sheets
at June 30, 2002 and December 31, 2001 31
Unaudited condensed combined statements of operations for the
three-months ended June 30, 2002, the three-months ended
June 30, 2001, the six-months ended June 30, 2002, and the
six-months ended June 30, 2001 32
Unaudited condensed combined statements of cash flows for the
six-months ended June 30, 2002, and the six-months ended
June 30, 2001 33
Notes to the unaudited condensed combined financial statements 34
ITEM 6. Exhibits and Reports on Form 8-K 35
3
CAITHNESS COSO FUNDING CORP.
UNAUDITED CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31, June 30,
2002 2001
(Note)
Assets:
Accrued interest receivable....................... $ 1,224 $ 1,225
Project loan to Coso Finance Partners............. 117,911 122,550
Project loan to Coso Energy Developers............ 93,700 96,250
Project loan to Coso Power Developers............. 82,680 84,200
------- ------
$ 295,515 $ 304,225
======= =======
Liabilities and Stockholders' Equity:
Senior secured notes:
Accrued interest payable....................... $ 1,224 $ 1,225
9.05% notes due 2009........................... 294,291 303,000
------- -------
295,515 304,225
Stockholders' equity................................. - -
------- -------
$ 295,515 $ 304,225
======= =======
Note: The condensed balance sheet at December 31, 2001 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements.
See accompanying notes to the unaudited condensed financial statements
4
CAITHNESS COSO FUNDING CORP.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Interest income................ $ 6,856 $ 5,997 $ 13,710 $ 14,598
Interest expense............... (6,856) (5,997) (13,710) (14,598)
------- ------- -------- --------
Net income............. $ --- $ --- $ --- $ ---
======= ======= ======== ========
See accompanying notes to the unaudited condensed financial statements
5
CAITHNESS COSO FUNDING CORP.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six-Months Six-Months
Ended Ended
June 30, June 30,
2002 2001
Net cash provided by (used in) investing activities....... $ 8,710 $ 11,241
Net cash provided by (used in) financing activities....... (8,710) (11,241)
------- --------
Net change in cash and cash equivalents................... $ --- $ ---
======= ========
Supplemental cash flow disclosure:
Cash paid for interest................................. $ 13,710 $ 14,631
======= ========
See accompanying notes to the unaudited condensed financial statements
6
CAITHNESS COSO FUNDING CORP.
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Organization and Operations
Caithness Coso Funding Corp. (Funding Corp.), which was incorporated on April
22, 1999, is a single-purpose Delaware corporation formed to issue senior
secured notes (Notes) for its own account and as an agent acting on behalf of
Coso Finance Partners (CFP), Coso Energy Developers (CED), and Coso Power
Developers (CPD), collectively, the "Partnerships." The Partnerships are
California general partnerships.
On May 28, 1999, Funding Corp. sold $413,000 of senior secured notes. Pursuant
to separate credit agreements between Funding Corp. and each partnership, the
net proceeds from the offering of $110,000 of 6.80% senior secured notes due
2001 and $303,000 of 9.05% senior secured notes due 2009 were loaned to the
Partnerships, and the Partnerships have jointly and severally guaranteed
repayment on a senior basis. Payment of the Notes is provided for by payments
made by the Partnerships under their respective project loans.
Funding Corp. has no material assets other than the loans, and the accrued
interest thereon, that have been made to the Partnerships. Also, Funding Corp.
does not conduct any business, other than issuing the senior secured notes and
making the loans to the Partnerships.
(2) Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules. Management
believes that the disclosures are adequate to make the information presented not
misleading when read in conjunction with the financial statements and the notes
thereto in the audited financial statements for the year ended December 31,
2001.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year.
7
COSO FINANCE PARTNERS
UNAUDITED CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2002 2001
(Note)
Assets:
Cash and cash equivalents.................................................. $ 1,583 $ 264
Restricted cash and investments............................................ 24,092 21,325
Accounts receivable, net................................................... 10,619 3,454
Prepaid expenses & other assets............................................ 308 650
Amounts due from related parties........................................... 2,838 9,362
Property, plant & equipment, net........................................... 136,002 140,437
Power purchase agreement, net.............................................. 10,519 11,093
Investment in New CLPSI Company, LLC....................................... 4,021 4,005
Deferred financing costs, net.............................................. 2,366 2,524
------- -------
$ 192,348 $ 193,114
======= =======
Liabilities and Partners' Capital:
Accounts payable and accrued liabilities................................... $ 17,014 $ 17,578
Amounts due to related parties............................................. 566 561
Project loans.............................................................. 117,911 122,550
------- --------
135,491 140,689
Partners' capital.......................................................... 56,857 52,425
------- --------
$ 192,348 $ 193,114
======= =======
Note: The condensed balance sheet at December 31, 2001 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements.
See accompanying notes to the unaudited condensed financial statements
8
COSO FINANCE PARTNERS
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Revenue:
Energy revenues................................. $ 10,762 $ 20,103 $ 53,112 $ 26,080
Capacity revenues............................... 3,566 3,689 6,714 3,765
Interest and other income....................... 1,045 1,043 1,519 1,178
------- -------- ------ ------
Total revenue............................ 15,373 24,835 61,345 31,023
Operating expenses:
Plant operating expenses........................ 2,261 2,812 4,568 4,574
Royalty expense................................. 3,419 2,984 5,631 6,754
Depreciation and amortization................... 2,541 2,541 5,077 5,040
------- -------- ------ ------
Total operating expenses................. 8,221 8,337 15,276 16,368
Operating income......................... 7,152 16,498 46,069 14,655
Other expenses:
Interest expense............................... 2,773 2,971 5,548 5,955
Amortization of deferred financing costs....... 79 130 158 260
------- -------- ------ ------
Total other expenses..................... 2,852 3,101 5,706 6,215
Net income............................... $ 4,300 $ 13,397 $ 40,363 $ 8,440
======= ======== ====== ======
See accompanying notes to the unaudited condensed financial statements
9
COSO FINANCE PARTNERS
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six-Months Six-Months
Ended Ended
June 30, June 30,
2002 2001
Net cash provided by (used in) operating activities........... $ 44,724 $ 11,665
Net cash provided by (used in) investing activities........... (2,835) (1,144)
Net cash provided by (used in) financing activities........... (40,570) (8,381)
-------- -------
Net change in cash and cash equivalents....................... $ 1,319 $ (2,140)
======== =======
Supplemental cash flow disclosure:
Cash paid for interest.................................... $ 5,545 $ 5,968
======== =======
See accompanying notes to the unaudited condensed financial statements
10
COSO FINANCE PARTNERS
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Organization and Operation
Coso Finance partners (CFP), a general partnership, is engaged in the operation
of a 80 MW power generation facility located at the China Lake Naval Air Weapons
Station, China Lake California. CFP sells all electricity produced to Southern
California Edison (Edison) under a 24-year power purchase contract expiring in
2011.
(2) Basis of Presentation
The accompanying unaudited condensed combined financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules.
Management believes that the disclosures are adequate to make the information
presented not misleading when read in conjunction with the financial statements
and the notes thereto in the audited financial statements for the year ended
December 31, 2001.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year. CFP has experienced significant quarterly
fluctuations in operating results and it expects that these fluctuations in
energy revenues, expenses and net income will continue.
(3) Accounts Receivable and Revenue Recognition
Due to the uncertainty surrounding Edison's ability to make payment on past due
amounts, collection was not reasonably assured and CFP had not recognized
revenue from Edison for energy delivered during the period November 1, 2000
through March 26, 2001. The provision for doubtful accounts previously recorded
by CFP of $21.6 million for the six-months ended June 30, 2001, has been
reclassified as a reduction of revenue to conform with the 2002 presentation.
On March 1, 2002, Edison reached certain financing milestones and paid CFP for
revenue generated, but not recognized for the period November 1, 2000 through
March 26, 2001. For the six-month period ended June 30, 2002, CFP recognized
revenue for energy delivered from November 1, 2000 through March 26, 2001 of
$37.3 million.
(4) Reclassifications
Certain other reclassifications have been made to the 2001 statements of
operations to conform to the 2002 presentation.
11
COSO ENERGY DEVELOPERS
UNAUDITED CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2002 2001
(Note)
Assets:
Cash and cash equivalents.............................................. $ 391 $ ---
Restricted cash and investments........................................ 8,618 7,368
Accounts receivable, net............................................... 9,113 2,939
Prepaid expenses and other assets...................................... 130 849
Amounts due from related parties....................................... 418 401
Property, plant and equipment, net..................................... 141,219 148,417
Power purchase agreement, net.......................................... 17,901 18,437
Investment in Coso Transmission Line Partners.......................... 2,683 2,738
Investment in New CLPSI Company, LLC................................... 754 789
Deferred financing costs, net.......................................... 1,912 2,040
------- -------
$ 183,139 $ 183,978
======= =======
Liabilities and Partners' Capital:
Accounts payable and accrued liabilities............................... $ 1,393 $ 7,699
Amounts due to related parties......................................... 25,325 27,267
Project loans.......................................................... 93,700 96,250
------- -------
120,418 131,216
Partners' capital...................................................... 62,721 52,762
------- -------
$ 183,139 $ 183,978
======= =======
Note: The condensed balance sheet at December 31, 2001 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements.
See accompanying notes to the unaudited condensed financial statements
12
COSO ENERGY DEVELOPERS
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Revenue:
Energy revenues................................. $ 7,706 $ 18,701 $ 48,135 $ 19,457
Capacity revenues............................... 3,484 3,611 6,535 3,680
Interest and other income....................... 260 1,217 902 1,837
------ ------ ------ ------
Total revenue............................ 11,450 23,529 55,572 24,974
Operating expenses:
Plant operating expenses........................ 2,648 2,847 5,253 5,208
Royalty expense................................. 664 1,158 675 4,026
Depreciation and amortization................... 4,173 3,929 8,232 7,875
------ ------ ------ ------
Total operating expenses................. 7,485 7,934 14,160 17,109
Operating income......................... 3,965 15,595 41,412 7,865
Other expenses:
Interest expense............................... 2,177 2,251 4,357 4,508
Amortization of deferred financing costs. 63 80 127 159
------ ------ ------ ------
Total other expenses..................... 2,240 2,331 4,484 4,667
Net income............................... $ 1,725 $ 13,264 $ 36,928 $ 3,198
====== ====== ====== ======
See accompanying notes to the unaudited condensed financial statements
13
COSO ENERGY DEVELOPERS
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six-Months Six-Months
Ended Ended
June 30, June 30,
2002 2001
Net cash provided by (used in) operating activities........... $ 31,657 $ 9,427
Net cash provided by (used in) investing activities........... (1,747) (4,427)
Net cash provided by (used in) financing activities........... (29,519) (5,885)
------- ------
Net change in cash and cash equivalents....................... $ 391 $ (885)
======= ======
Supplemental cash flow disclosure:
Cash paid for interest.................................... $ 4,355 $ 4,514
======= ======
See accompanying notes to the unaudited condensed financial statements
14
COSO ENERGY DEVELOPERS
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Organization and Operation
Coso Energy Developers (CED), a general partnership, is engaged in the operation
of a 80 MW power generation facility located at the Coso Hot Springs, China Lake
California. CED sells all electricity produced to Southern California Edison
(Edison) under a 30-year power purchase contract expiring in 2019.
(2) Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules. Management
believes that the disclosures are adequate to make the information presented not
misleading when read in conjunction with the financial statements and the notes
thereto in the audited financial statements for the year ended December 31,
2001.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year. CED has experienced significant quarterly
fluctuations in operating results and it expects that these fluctuations in
energy revenues, expenses and net income will continue.
(3) Accounts Receivable and Revenue Recognition
Due to the uncertainty surrounding Edison's ability to make payment on past due
amounts, collection was not reasonably assured and CED had not recognized
revenue from Edison for energy delivered during the period November 1, 2000
through March 26, 2001. The provision for doubtful accounts previously recorded
by CED of $21.8 million for the six-months ended June 30, 2001, has been
reclassified as a reduction of revenue to conform with the 2002 presentation.
On March 1, 2002, Edison reached certain financing milestones and paid CED for
revenue generated, but not recognized for the period November 1, 2000 through
March 26, 2001. For the six-month period ended June 30, 2002, CED recognized
revenue for energy delivered from November 1, 2000 through March 26, 2001 of
$37.1 million.
(4) Reclassifications
Certain other reclassifications have been made to the 2001 statements of
operations to conform to the 2002 presentation.
15
COSO POWER DEVELOPERS
UNAUDITED CONDENSED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2002 2001
(Note)
Assets:
Cash and cash equivalents................................................ $ 131 $ ---
Restricted cash and investments.......................................... 6,299 5,517
Accounts receivable, net................................................. 9,325 3,210
Prepaid expenses and other assets........................................ 336 660
Amounts due from related parties......................................... 6,372 6,139
Property, plant and equipment, net....................................... 118,663 124,665
Power purchase agreement, net............................................ 21,423 22,820
Investment in Coso Transmission Line Partners............................ 3,332 3,398
Investment in New CLPSI Company, LLC..................................... 1,916 1,913
Deferred financing costs, net............................................ 1,627 1,736
------- -------
$ 169,424 $ 170,058
======= =======
Liabilities and Partners' Capital:
Accounts payable and accrued liabilities................................. $ 2,161 $ 15,860
Amounts due to related parties........................................... 2,594 7,778
Project loans............................................................ 82,680 84,200
------- -------
87,435 107,838
Partners' capital........................................................... 81,989 62,220
------- -------
$ 169,424 $ 170,058
======= =======
Note: The condensed balance sheet at December 31, 2001 has been derived from
the audited financial statements at that date but does not include all
of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete
financial statements.
See accompanying notes to the unaudited condensed financial statements
16
COSO POWER DEVELOPERS
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Revenue:
Energy revenues................................. $ 6,266 $ 15,608 $ 47,637 $ 12,985
Capacity revenues............................... 3,505 3,629 6,556 3,698
Interest and other income....................... 169 896 651 1,254
----- ------ ------ ------
Total revenue............................ 9,940 20,133 54,844 17,937
Operating expenses:
Plant operating expenses........................ 2,519 2,875 4,490 4,850
Royalty expense................................. 1,692 2,181 2,749 5,893
Depreciation and amortization................... 3,830 3,831 7,659 7,584
----- ------ ------ ------
Total operating expenses................. 8,041 8,887 14,898 18,327
Operating income (loss).................. 1,899 11,246 39,946 (390)
Other expenses:
Interest expense............................... 1,905 2,062 3,813 4,137
Amortization of deferred financing costs....... 54 193 108 385
----- ------ ------ ------
Total other expenses..................... 1,959 2,255 3,921 4,522
Net income (loss)........................ $ (60) $ 8,991 $ 36,025 $ (4,912)
===== ====== ====== ======
See accompanying notes to the unaudited condensed financial statements
17
COSO POWER DEVELOPERS
UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six-Months Six-Months
Ended Ended
June 30, June 30,
2002 2001
Net cash provided by (used in) operating activities......... $ 18,948 $ 8,423
Net cash provided by (used in) investing activities......... (1,041) 94
Net cash provided by (used in) financing activities......... (17,776) (14,762)
------- -------
Net change in cash and cash equivalents..................... $ 131 $ (6,245)
======= =======
Supplemental cash flow disclosure:
Cash paid for interest.................................. $ 3,810 $ 4,149
======= =======
See accompanying notes to the unaudited condensed financial statements
18
COSO POWER DEVELOPERS
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) Organization and Operation
Coso Power Developers (CPD), a general partnership, is engaged in the operation
of a 80 MW power generation facility located at the Coso Hot Springs, China Lake
California. CPD sells all electricity produced to Southern California Edison
(Edison) under a 20-year power purchase contract expiring in 2010.
(2) Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules. Management
believes that the disclosures are adequate to make the information presented not
misleading when read in conjunction with the financial statements and the notes
thereto in the audited financial statements for the year ended December 31,
2001.
The financial information herein presented reflects all adjustments, consisting
only of normal recurring adjustments, which are, in the opinion of management,
necessary for a fair statement of the results for interim periods presented. The
results for the interim periods are not necessarily indicative of results to be
expected for the full year. CPD has experienced significant quarterly
fluctuations in operating results and it expects that these fluctuations in
energy revenues, expenses and net income will continue.
(3) Accounts Receivable and Revenue Recognition
Due to the uncertainty surrounding Edison's ability to make payment on past due
amounts, collection was not reasonably assured and CPD had not recognized
revenue from Edison for energy delivered during the period November 1, 2000
through March 26, 2001. The provision for doubtful accounts previously recorded
by CPD of $22.7 million for the six-months ended June 30, 2001, has been
reclassified as a reduction of revenue to conform with the 2002 presentation.
On March 1, 2002, Edison reached certain financing milestones and paid CPD for
revenue generated but not recognized for the period November 1, 2000 through
March 26, 2001. For the six-month period ended June 30, 2002, CPD recognized
revenue for energy delivered from November 1, 2000 through March 26, 2001 of
$38.0 million.
(4) Reclassifications
Certain other reclassifications have been made to the 2001 statements of
operations to conform to the 2002 presentation.
19
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Except for historical financial information contained herein, the matters
discussed in this quarterly report may be considered forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, and subject to
the safe harbor created by the Securities Litigation Reform Act of 1995. Such
statements include declarations regarding the intent, belief or current
expectations of Caithness Coso Funding Corp. ("Funding Corp."), Coso Finance
Partners ("the Navy I Partnership"), Coso Energy Developers ("the BLM
Partnership"), and Coso Power Developers ("the Navy II Partnership"),
collectively, (the "Coso Partnerships") and their respective management. Such
statements may be identified by terms such as expected, anticipated, may, will,
believe or other terms or variations of such words. Any such forward-looking
statements are not guarantees of future performance and involve a number of
risks and uncertainties; actual results could differ materially from those
indicated by such forward-looking statements. Among the important factors that
could cause actual results to differ materially from those indicated by such
forward-looking statements, include but are not limited to: (i) risks relating
to the uncertainties in the California energy market, (ii) the financial
viability of Southern California Edison, ("Edison"), (iii) the information is of
a preliminary nature and may be subject to further adjustment, (iv) risks
related to the operation of power plants (v) the impact of avoided cost pricing,
(vi) general operating risks, including resource availability and regulatory
oversight, (vii) the dependence on third parties, (viii) changes in government
regulation, (ix) the effects of competition, (x) the dependence on senior
management, (xi) fluctuations in quarterly results due in part to seasonality,
(xii) affects of September 11, 2001 including U.S. Navy activity, and (xiii)
the alleged manipulation of the California energy market.
General
The Coso Partnerships consist of three 80MW geothermal power plants, which
are referred to as Navy I, BLM and Navy II, and their transmission lines, wells,
gathering systems and other related facilities. The Coso Partnerships are
located near one another at the United States Naval Air Weapons Center at China
Lake, California. The Navy I Partnership owns Navy I and its related facilities.
The BLM Partnership owns BLM and its related facilities. The Navy II Partnership
owns Navy II and its related facilities. Affiliates of Caithness Corporation and
CalEnergy Company, Inc. ("CalEnergy"), which is now known as MidAmerican Energy
Holdings Company, formed the Coso Partnerships in the 1980s to develop,
construct, own and operate the Coso Partnerships. On February 25, 1999 Caithness
Acquisition Company, LLC, (CAC) purchased all of CalEnergy's interests in the
Coso Partnerships for $205.0 million in cash, plus the assumption of CalEnergy's
and its affiliates' share of debt outstanding at the Coso Partnerships which
then totaled approximately $67.0 million.
Each Coso Partnership sells 100% of the electrical energy generated at its
plant to Edison under a long-term Standard Offer No.4 power purchase agreement.
Each power purchase agreement expires after the final maturity date of the 9.05%
Series B Senior Secured Notes issued by Funding Corp.
Each Coso Partnership is entitled to the following payments under its power
purchase agreement:
* Capacity payments for being able to produce electricity at certain levels.
Capacity payments are fixed throughout the life of each power purchase
agreement;
* Capacity bonus payments if the Coso Partnership is able to produce
electricity above a specified higher level. The maximum annual capacity
bonus payment available is also fixed throughout the life of each power
purchase agreement; and
20
* Energy payments which are based on the amount of electricity the Coso
Partnership's plant actually produces.
Energy payments were fixed for the first ten years of firm operation under
each power purchase agreement. After the first ten years of firm operation and
until a Coso Partnership's power purchase agreement expires, Edison makes energy
payments to the Coso Partnership based on Edison's avoided cost of energy.
Edison's avoided cost of energy is Edison's cost to generate electricity if
Edison were to produce it itself or buy it from another power producer rather
than buy it from the Coso Partnerships. The power purchase agreement for the
Navy I Partnership will expire in August 2011, the power purchase agreement for
the BLM Partnership will expire in March 2019, and the power purchase agreement
for the Navy II Partnership will expire in January 2010. The fixed energy price
period expired in August 1997 for the Navy I Partnership, in March 1999 for the
BLM Partnership and in January 2000 for the Navy II Partnership.
Edison entered into an agreement ("Agreement") with the Coso Partnerships
on June 19, 2001 that addressed renewable energy pricing and issues concerning
California's energy crisis. The Agreement, which was amended on November 30,
2001, established May 1, 2002, as the date the Coso Partnerships receive a fixed
avoided cost of energy rate of 5.37 cents per kWh for five (5) years. Subsequent
to the five-year period, Edison will be required to make energy payments to the
Coso Partnerships based on its avoided cost of energy until each partnership's
power purchase agreement expires. Estimates of Edison's future avoided cost of
energy may vary significantly and no one can predict, with accuracy the likely
level of future avoided cost of energy prices.
From January 1, 2002 through April 30th of 2002, the Coso Partnerships
elected to receive from Edison a fixed avoided cost of energy rate of 3.25 cents
per kWh. Starting, May 1, 2002 the Coso Partnerships received 5.37 cents per
kWh, pursuant to the agreement discussed above. The average avoided cost of
energy paid to the Coso Partnerships for the six-month period ended June 30,
2002 was 3.96 cents per kWh compared to 11.62 cents per kWh for the six-months
ended June 30, 2001.
In 1994, the Coso Partnerships implemented a steam-sharing program, under
the Coso Geothermal Exchange Agreement. The purpose of the steam-sharing program
is to enhance the management of the Coso geothermal resource and to optimize the
resource's overall benefits to the Coso Partnerships by transferring steam among
the Coso Partnerships. Under the steam sharing program, the partnership
receiving the steam transfer splits revenue earned from electricity generated
with the partnership that transferred the steam.
The Coso Partnerships are required to make royalty payments to the U.S.
Navy and the Bureau of Land Management. The Navy I Partnership pays a royalty
for Unit I through reimbursement of electricity supplied to the U.S. Navy by
Edison from electricity generated at the Navy I plant. The reimbursement is
based on a pricing formula that is included in the U.S. Navy Contract. This
formula is largely based upon the tariff rates charged by Edison, which have
recently been increased by the California Public Utilities Commission (CPUC),
and is subject to future revision. Discussions with the U.S. Navy are continuing
to re-adjust the formula to reflect recent activity in the local energy market.
In November 2001, a modification to the calculation of the reimbursement pricing
formula was made to the U.S. Navy Contract resulting in a reduction of accrued
royalties of $6.5 million which was agreed to by the U.S. Navy. For Units 2 and
3, the Navy I Partnership's royalty expense paid to the U.S. Navy is a fixed
percentage of electricity sales at 15% of revenue received by the Navy I
Partnership through 2003 and will increase to 20% from 2004 through 2009. In
addition, the Navy I Partnership is required to pay the U.S. Navy $25.0 million
in December 2009, the date their contract expires. The payment is secured by
funds placed on deposit monthly, which funds plus accrued interest will
aggregate $25.0 million. Currently, the monthly amount deposited is
approximately $60,000. The BLM Partnership pays a 10% royalty to the Bureau of
Land Management based on the net value of steam produced. The Navy II
Partnership pays a royalty to the U.S. Navy based on a fixed percentage of
electricity sales to Edison. The royalty rate was 10% of electricity sales
through 1999, and increased to 18% for 2000 through 2004 and will increase to
20% from 2005 through the end of the contract term. The Coso Partnerships also
pay other royalties, at various rates which in the aggregate are not material.
21
Funding Corp is a special purpose corporation and a wholly owned subsidiary
of the Coso Partnerships. It was formed for the purpose of issuing the senior
secured notes on behalf of the Coso Partnerships who have jointly, severally,
and unconditionally guaranteed repayment of the senior secured notes.
On May 28, 1999, Funding Corp. issued $110.0 million of 6.80% senior
secured notes, which were paid off on December 15, 2001, and $303.0 million of
9.05% senior secured notes, which have payments due at various dates through
December 15, 2009. The proceeds from the notes were loaned to the Coso
Partnerships and are payable to Funding Corp. from payments of principal and
interest on the notes. Funding Corp. does not conduct any other material
operations apart from issuing the notes.
Under the depository agreement with the trustee for the notes, the Coso
Partnerships established accounts with a depository and pledged those accounts
as security for the benefit of the holders of the senior secured notes. All
amounts deposited with the depository are, at the direction of the Coso
Partnerships, invested by the depository in permitted investments. All revenues
or other proceeds actually received by the Coso Partnerships are deposited in a
revenue account and withdrawn upon receipt by the depository of a certificate
from the relevant Coso Partnerships detailing the amounts to be paid from funds
in its respective revenue account.
Periodic increases in natural gas prices and imbalances between supply and
demand, among other factors, have at times led to significant increases in
wholesale electricity prices in California. During those periods, Edison had
fixed tariffs with their retail customers that were significantly below the
wholesale prices it paid in California. This resulted in significant
under-recoveries by Edison of its electricity purchase costs. On January 16,
2001 Edison announced that it was temporarily suspending payments for energy
provided, including the energy provided by the Coso Partnerships, pending a
permanent solution to its liquidity crisis. This cash flow shortfall has
adversely affected Edison's liquidity and in turn it did not pay the Coso
Partnerships for energy delivered from November 2000 through March 26, 2001. As
of December 31, 2001, the Coso Partnerships were unable to determine the time
frame during which any future payments would be received. Due to the uncertainty
surrounding Edison's ability to make payment on past due amounts, collection was
not reasonably assured and the Navy I, BLM and Navy II Partnerships did not
recognize revenue from Edison for energy delivered during the period from
November 1, 2000 through March 26, 2001. The provision for doubtful accounts
previously recorded by the Navy I, BLM and Navy II Partnerships of $21.6
million, $21.8 million and $22.7 million, respectively, for the six-months ended
June 30, 2001 has been reclassified as a reduction of revenue to conform with
the 2002 presentation.
Pursuant to a CPUC order, Edison resumed making payments to the Coso
Partnerships beginning with power generated on March 27, 2001. Edison also made
a payment equal to 10% of the unpaid balance for power generated from November
1, 2000 to March 26, 2001, and continued to pay interest on the outstanding
amount at 7% per annum. That payment which was received during the three-months
ended June 30, 2001 was made pursuant to the Agreement between Edison and the
Coso Partnerships described above and was also reclassified as additional
revenue to conform with the 2002 presentation. On March 1, 2002, Edison reached
certain financing milestones and paid the Coso Partnerships in full for energy
generated between November 1, 2000 and March 26, 2001 for which no revenue was
recognized during that period. For the six-month period ended June 30, 2002, the
Navy I, BLM and Navy II Partnerships recognized revenue for energy delivered
from November 1, 2000 through March 26, 2001 of $37.3 million, $37.1 million and
$38.0 million, respectively.
22
Capacity Utilization
For purposes of consistency in financial presentation, the plant capacity
factor for each of the Coso Partnerships is based on a nominal capacity amount
of 80MW (240MW in the aggregate). The Coso Partnerships have a gross operating
capacity that allows for the production of electricity in excess of their
nominal capacity amounts. Utilization of this operating margin is based upon a
number of factors and can be expected to vary throughout the year under normal
operating conditions.
The following data includes the operating capacity factor, capacity and
electricity production (in kWh) for each Coso Partnership on a stand-alone
basis:
Three-Months Ended Six-Months Ended
June 30 June 30
2002 2001 2002 2001
---- ---- ---- ----
Navy I Partnership (stand alone)
Operating capacity factor 102.5% 103.8% 104.5% 106.7%
Capacity (MW) (average) 81.97 83.06 83.62 85.36
kWh produced (000s) 179,014 181,398 363,254 370,820
BLM Partnership (stand alone)
Operating capacity factor 95.3% 108.1% 94.0% 105.2%
Capacity (MW) (average) 76.25 86.49 75.21 84.12
kWh produced (000s) 166,533 188,896 326,694 365,420
Navy II Partnership (stand alone)
Operating capacity factor 94.2% 102.1% 101.6% 104.3%
Capacity (MW) (average) 75.34 81.66 81.25 83.43
kWh produced (000s) 164,552 178,353 352,966 362,420
Total energy production for the BLM Partnership was 166.5 million kWh and
326.7 million kWh for the three and six-months ended June 30, 2002,
respectively, as compared to 188.9 million kWh and 365.4 million kWh for the
same periods in 2001, decreases of 11.9% and 10.6%, respectively. Total energy
production for the Navy II Partnership was 164.6 million kWh for the
three-months ended June 30, 2002 as compared to 178.4 million kWh for the same
period in 2001, a decrease of 7.7%. These decreases in energy production were
primarily due to a decline in low pressure steam which is being remediated
through well maintenance and capital improvements.
Results of Operations for the three and six-months ended June 30, 2002 and 2001
The following discusses the results of operations of the Coso Partnerships
for the three and six-months ended June 30, 2002 and 2001 (dollar amounts in
tables are in thousands, except per kWh data):
23
Revenue
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
$ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh
- --------- - --------- - --------- - ---------
Total Operating Revenues
Navy I Partnership 14,328 8.0 23,792 13.1 59,826 16.5 29,845 8.0
BLM Partnership 11,190 6.7 22,312 11.8 54,670 16.7 23,137 6.3
Navy II Partnership 9,771 5.9 19,237 10.8 54,193 15.4 16,683 4.6
Capacity & Capacity Bonus
Revenues
Navy I Partnership 3,566 2.0 3,689 2.0 6,714 1.8 3,765 1.0
BLM Partnership 3,484 2.1 3,611 1.9 6,535 2.0 3,680 1.0
Navy II Partnership 3,505 2.1 3,629 2.0 6,556 1.9 3,698 1.0
Energy Revenues
Navy I Partnership 10,762 6.0 20,103 11.1 53,112 14.6 26,080 7.0
BLM Partnership 7,706 4.6 18,701 9.9 48,135 14.7 19,457 5.3
Navy II Partnership 6,266 3.8 15,608 8.8 47,637 13.5 12,985 3.6
Total operating revenues for the Navy I, BLM and Navy II Partnerships,
which consist of capacity payments, capacity bonus payments and energy payments,
were $14.3 million, $11.2 million and $9.8 million, respectively, for the
three-months ended June 30, 2002, as compared to $23.8 million, $22.3 million
and $19.2 million, respectively, for the same period in 2001, decreases of
39.9%, 49.8% and 49.0%, respectively. Total energy revenues for the Navy I, BLM
and Navy II Partnerships were $10.8 million, $7.7 million and $6.3 million,
respectively, for the three-months ended June 30, 2002, as compared to $20.1
million, $18.7 million and $15.6 million, respectively, for the same period in
2001, decreases of 46.3%, 58.8% and 59.6%, respectively. Each Coso Partnership's
decrease in capacity, capacity bonus and energy revenues for the three-months
ended June 30, 2002, as compared to the same period in 2001, was primarily due
to a decrease in production and lower average avoided cost of energy of 4.7
cents per kWh paid during the three-months ended June 30, 2002, as compared to
8.1 cents per kWh paid for the three-months ended June 30, 2001. The decreases
were partially offset by Edison's payment to the Navy I, BLM and Navy II
Partnerships on June 21, 2001, of 10% of the amounts due from November 2000
through March 26, 2001, amounting to $4.1 million, $4.1 million and $4.2
million, respectively, which was reclassified as additional revenue during that
same three-months ended 2001, to conform with the 2002 presentation.
Total operating revenues for the Navy I, BLM and Navy II Partnerships,
which consist of capacity payments, capacity bonus payments and energy payments,
were $59.8 million, $54.7 million and $54.2 million, respectively, for the
six-months ended June 30, 2002, as compared to $29.8 million, $23.1 million and
$16.7 million, respectively, for the same period in 2001, increases of $30.0
million, $31.6 million and $37.5 million, respectively. Capacity and capacity
bonus revenues for each of the Navy I, BLM and Navy II Partnerships were $6.7
million, $6.5 million and $6.6 million, respectively, for the six-months ended
June 30, 2002, as compared to $3.8 million, $3.7 million and $3.7 million,
respectively, for the same period in 2001, increases of 76.3%, 75.7% and 78.4%,
respectively. Total energy revenues for the Navy I, BLM and Navy II Partnerships
were $53.1 million, $48.1 million and $47.6 million, respectively, for the
six-months ended June 30, 2002, as compared to $26.1 million, $19.5 million and
$13.0 million, respectively, for the same period in 2001, increases of $27.0
million, $28.6 million and $34.6 million, respectively. Each Coso Partnership's
increase in capacity, capacity bonus and energy revenues for the six-months
ended June 30, 2002, as compared to the same period in 2001, was due to Edison's
payment, on March 1, 2002, for revenue generated but not recognized for the
period from November 1, 2000 through March 26, 2001 discussed above. The Navy I,
BLM and Navy II Partnerships had not recognized revenues of $22.0 million, $21.8
million and $22.7 million, respectively, for the six-months ended June 30, 2001.
Revenues generated but not recognized for the period November 1, 2000 through
March 1, 2002 for the Navy I, BLM and Navy II Partnerships of $37.3 million,
$37.1 million and $38.0 million, respectively, were paid and recognized during
the six-months ended June 30, 2002. These increases were partially offset by
a decreas in production and lower average avoided cost of energy of 4.0 cents
per kWh paid during the six-months ended June 30, 2002 as compared to 11.6 cents
per kWh paid during the same period in 2001.
24
Interest and Other Income
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
$ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh
- --------- - --------- - --------- - ---------
Navy I Partnership 1,045 0.6 1,043 0.6 1,519 0.4 1,178 0.3
BLM Partnership 260 0.2 1,217 0.6 902 0.3 1,837 0.5
Navy II Partnership 169 0.1 896 0.5 651 0.2 1,254 0.3
The Navy I Partnership's interest and other income was $1.5 million for the
six-months ended June 30, 2002, as compared to $1.2 million for the same period
in 2001, an increase of 25.0%. The increase was primarily due to the collection
of $0.8 million of insurance proceeds for lost revenue in 1999 caused by
equipment failure, partially offset by interest on amounts in arrears paid by
Edison for six-month period ended June 30, 2001.
The BLM Partnership's interest and other income was $0.3 million and $0.9
million for the three and six-months ended June 30, 2002, respectively, as
compared to $1.2 million and $1.8 million for the same periods in 2001,
decreases of 75.0% and 50.0%, respectively. The Navy II Partnership's interest
and other income was $0.2 million and $0.7 million for the three and six-months
ended June 30, 2002, respectively, as compared to $0.9 million and $1.3 million
for the same periods in 2001, decreases of 77.8% and 46.2%, respectively. The
decreases for the Navy II and BLM Partnerships three and six-month periods ended
June 30, 2002, as compared to the same periods in 2001, were primarily due to
interest on amounts in arrears that were settled and paid by Edison on March 1,
2002.
Plant Operations
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
$ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh
- --------- - --------- - --------- - ---------
Navy I Partnership 2,261 1.3 2,812 1.6 4,568 1.3 4,574 1.2
BLM Partnership 2,648 1.6 2,847 1.5 5,253 1.6 5,208 1.4
Navy II Partnership 2,519 1.5 2,875 1.6 4,490 1.3 4,850 1.3
The Navy I Partnership's operating expenses, including operating and
general and administrative expenses, were $2.3 million for the three-months
ended June 30, 2002, as compared to $2.8 million for the same period in 2001, a
decrease of 17.9%. The BLM Partnership's operating expenses, including operating
and general and administrative expenses, were $2.6 million for the three-months
ended June 30, 2002, as compared to $2.8 million for the same period in 2001, a
decrease of 7.1%. The Navy II Partnership's operating expenses, including
operating and general and administrative expenses, were $2.5 million and for the
three months ended June 30, 2002, as compared to $2.9 million for the same
periods in 2001, a decrease of 13.8%. These decreases for the three-month period
ended June 30, 2002, as compared to the same period in 2001, were primarily due
to decreases in legal expenses that were incurred in 2001 for Edison's
non-payment of energy delivered during the period from November 1, 2000 through
March 26, 2001 as discussed above. The decrease in legal costs in 2002 were
partially offset by increased repair and maintenance projects that had been
deferred in 2001 for the same reason.
25
The Navy II Partnership's operating expenses, including operating and
general and administrative expenses, was $4.5 million for the six-months ended
June 30, 2002, as compared to $4.9 million for the same period in 2001, a
decrease of 8.2%. The decrease for the six-month period ended June 30, 2002, as
compared to the same period in 2001, was primarily due to a decrease in legal
expenses, that were incurred in 2001 for Edison's non-payment of energy
delivered during the period from November 1, 2000 through March 26, 2001 as
discussed above. The decrease in legal costs in 2002 were partially offset by
increased repair and maintenance projects that had been deferred in 2001 for the
same reason.
Royalty Expense
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
$ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh
- --------- - --------- - --------- - ---------
Navy I Partnership 3,419 1.9 2,984 1.6 5,631 1.6 6,754 1.8
BLM Partnership 664 0.4 1,158 0.6 675 0.2 4,026 1.1
Navy II Partnership 1,692 1.0 2,181 1.2 2,749 0.8 5,893 1.6
The Navy I Partnership's royalty expenses were $3.4 million for the
three-months ended June 30, 2002, as compared to $3.0 million for the same
period in 2001, a increase of 13.3%. The increase in royalty expenses for the
Navy I Partnership for the three-months ended June 30, 2002 , as compared to the
same period in 2001, was primarily due to the increase in Unit 1 royalty expense
resulting from increased tariff rates charged by Edison and used in the revised
royalty reimbursement formula discussed above.
The Navy I Partnership's royalty expenses were $5.6 million for the
six-months ended June 30, 2002, as compared to $6.8 for the same period in 2001,
a decrease of 17.6%. The decrease in royalty expense for the six-month period
ended June 30, 2002, as compared to the same period in 2001, was primarily due
to the decrease in the avoided cost of energy from 11.6 cents per kWh for the
six-months ended June 30, 2001 to 4.0 cents per kWh for the same period in 2002,
partially offset by the increase in the Unit 1 royalty discussed above.
The BLM Partnership's royalty expenses were $0.7 million and $0.7
million for the three and six-months ended June 30, 2002, respectively, as
compared to $1.2 million and $4.0 million for the same periods in 2001,
decreases of 41.7% and 82.5% respectively. The Navy II Partnership's royalty
expenses were $1.7 million and $2.7 million for the three and six-months ended
June 30, 2002, respectively, as compared to $2.2 million and $5.9 million for
the same periods in 2001, decreases of 22.7% and 54.2%, respectively. The
decreases in royalty expense for the three and six-months ended June 30, 2002,
for the BLM and Navy II Partnerships, as compared to the same periods in 2001,
were due to decreases in the avoided cost of energy from 8.1 cents per kWh for
the three-months ended June 30, 2001 to 4.7 cents per kWh for the same period in
2002 and from 11.6 cents per kWh for the six-months ended June 30, 2001 to 4.0
cents per kWh for the same period in 2002.
26
Depreciation and Amortization
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
$ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh
- --------- - --------- - --------- - ---------
Navy I Partnership 2,541 1.4 2,541 1.4 5,077 1.4 5,040 1.4
BLM Partnership 4,173 2.5 3,929 2.1 8,232 2.5 7,875 2.2
Navy II Partnership 3,830 2.3 3,831 2.1 7,659 2.2 7,584 2.1
The BLM Partnership's depreciation and amortization expenses was $4.2 million
for the three-months ended June 30, 2002, as compared to $3.9 million for the
same period in 2001, an increase of 7.7%. The increase is due to an increase in
capitalized assets during that period in 2002.
Interest Expense
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, 2002 June 30, 2001 June 30, 2002 June 30, 2001
$ Cents/kWh $ Cents/kWh $ Cents/kWh $ Cents/kWh
- --------- - --------- - --------- - ---------
Navy I Partnership 2,773 1.5 2,971 1.6 5,548 1.5 5,955 1.6
BLM Partnership 2,177 1.3 2,251 1.2 4,357 1.3 4,508 1.2
Navy II Partnership 1,905 1.2 2,062 1.2 3,813 1.1 4,137 1.1
The Navy I Partnership's interest expense was $2.8 million and $5.5 million
for the three and six-months ended June 30, 2002, respectively, as compared to
$3.0 million and $6.0 million for the same periods in 2001, decreases of 6.7%
and 8.3% respectively. The Navy II Partnership's interest expense was $1.9
million and $3.8 million for the three and six-months ended June 30, 2002,
respectively, as compared to $2.1 million and $4.1 million for the same periods
in 2001, decreases of 9.5% and 7.3% respectively. The decreases in interest
expense for the three and six-month periods ended June 30, 2002, as compared to
the same periods in 2001, were due to reductions in the principal amount of the
project loan from Funding Corp.
Liquidity and Capital Resources
Each of the Navy I Partnership, the BLM Partnership and the Navy II
Partnership derive substantially all of their cash flow from Edison under their
power purchase agreements and from interest income earned on funds on deposit.
As of December 2001, the 6.8% notes were repaid, subsequently leaving the Coso
Partnerships with increased annual cash flow. The Coso Partnerships have used
their cash primarily for capital expenditures for power plant improvements,
resource and operating costs, distributions to partners and payments with
respect to the project debt.
27
The Coso Partnerships ability to meet their obligations as they come due
will depend upon the ability of Edison to meet its obligations under the terms
of the standard offer No. 4 power purchase agreements. Edison's shortfall in
collections, coupled with its near term capital requirements, materially and
adversely affected its liquidity. In resolution of that issue, Edison settled
with the CPUC on October 2, 2001, enabling it to recover in retail electric
rates its historical shortfall in electric purchase costs. Immediately after
this settlement, Edison and each of the Coso Partnerships entered into an
amendment of their respective Agreement (referenced above) pertaining to partial
payment and interest payments relating to Edison's past due obligations for the
period from November 2000 through March 26, 2001. The Agreement, as amended, was
approved by CPUC in January of 2002, and established the fixed energy rates
discussed above and set payment terms for the past due amounts owed to the Coso
Partnerships by Edison. Edison's failure to pay its future obligations may have
a material adverse effect on the Coso Partnerships ability to make debt service
payments to Funding Corp. as they come due under the Funding Corp. notes.
On March 1, 2002, Edison reached certain financing milestones and paid the
Coso Partnerships for revenue generated but not recognized for the period from
November 1, 2000 through March 26, 2001. In the first quarter of 2002, the Navy
I, BLM and Navy II Partnerships recognized revenue for energy delivered during
that period of $37.3 million. $37.1 million and $38.0 million, respectively.
The following table sets forth a summary of each Coso Partnership's cash
flows for the six-months ended June 30, 2002 and June 30, 2001.
Six-Months Six-Months
Ended Ended
June 30, 2002 June 30, 2001
Navy I Partnership (stand alone)
Net cash provided by (used in) operating activities $ 44,722 $ 11,665
Net cash provided by (used in) investing activities (2,835) (1,144)
Net cash provided by (used in) financing activities (40,568) (8,381)
-------- -------
Net change in cash and cash equivalents $ 1,319 $ 2,140
======== =======
BLM Partnership (stand alone)
Net cash provided by (used in) operating activities $ 31,657 $ 9,427
Net cash provided by (used in) investing activities (1,747) (4,427)
Net cash provided by (used in) financing activities (29,519) (5,885)
-------- -------
Net change in cash and cash equivalents $ 391 $ (885)
======== =======
Navy II Partnership (stand alone)
Net cash provided by (used in) operating activities $ 18,948 $ 8,423
Net cash provided by (used in) investing activities (1,041) 94
Net cash provided by (used in) financing activities (17,776) (14,762)
-------- -------
Net change in cash and cash equivalents $ 131 $ (6,245)
======== =======
The Navy I Partnership's cash flows from operating activities increased by
$33.1 million for the six-months ended June 30, 2002, as compared to the same
period in 2001, primarily due to the increase in net income from the cash
received for Edison's payment for revenue generated but not recognized for the
period from November 1, 2000 through March 26, 2001.
Cash used in investing activities at the Navy I Partnership increased by
$1.7 million for the six-months ended June 30, 2002, as compared to the same
period in 2001, primarily due to an increase in restricted cash requirements
associated with the project loan from Funding Corp.
The Navy I Partnership's cash used in financing activities increased by
$32.2 million for the six-months ended June 30, 2002, as compared to the same
period in 2001, due to increased partner distributions paid during that period
in 2002.
28
The BLM Partnership's cash flows from operating activities increased by
$22.2 million for the six-months ended June 30, 2002, as compared to the same
period in 2001, primarily due to the increase in net income from the cash
received for Edison's payment for revenue generated but not recognized for the
period from November 1, 2000 through March 26, 2001.
Cash used in investing activities at the BLM Partnership decreased by $2.7
million for the six-months ended June 30, 2002, as compared to the same period
in 2001, primarily due to a decrease in capital expenditures partially offset by
an increase in restricted cash requirements associated with the project loan
from Funding Corp.
The BLM Partnership's cash used in financing activities increased by $23.6
million for the six-months ended June 30, 2002, as compared to the same period
in 2001, due to increased partner distributions paid during that period in 2002.
The Navy II Partnership's cash flows from operating activities increased by
$10.5 million for the six-months ended June 30, 2002, as compared to the same
period in 2001, primarily due to the increase in net income from the cash
received for Edison's payment for revenue generated but not recognized for the
period from November 1, 2000 through March 26, 2001.
Cash used in investing activities at the Navy II Partnership increased by
$1.1 million for the six-months ended June 30, 2002, as compared to the same
period in 2001, primarily due to an increase in restricted cash requirements
associated with the project loan from Funding Corp.
The Navy II Partnership's cash used in financing activities increased by
$3.0 million for the six-months ended June 30, 2002, as compared to the same
period in 2001, due to increased partner distributions paid during that period
in 2002.
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
General
The Coso Partnerships are currently parties to various items of litigation
relating to day-to-day operations, none of which, if determined adversely, would
be material to the financial condition and results of operations of the Coso
Partnerships, either individually or taken as a whole.
ITEM 2. Change in Securities and Use of Proceeds
None.
ITEM 3. Defaults Upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
None.
ITEM 5. Other Information
Supplemental Condensed Combined Financial Information for the Coso Partnerships
29
The following information presents unaudited condensed combined financial
statements of the Coso Partnerships. These financial statements represent a
combination of the financial statements of Caithness Coso Funding Corp., Coso
Finance Partners, Coso Energy Developers and Coso Power Developers for the
periods indicated. This supplemental financial information is not required by
accounting principles generally accepted in the United States of America and has
been provided to facilitate a more comprehensive understanding of the financial
position, operating results and cash flows of the Coso Partnerships as a whole,
which jointly and severally guarantee the repayment of Caithness Coso Funding
Corp's senior notes. The unaudited condensed combined financial statements
should be read in conjunction with each individual Coso Partnership's financial
statements and their accompanying notes.
The financial information herein presented reflects all adjustments,
consisting only of normal recurring adjustments, which are, in the opinion of
management, necessary for a fair statement of the results for interim periods
presented. The results for the interim periods are not necessarily indicative of
results to be expected for the full year.
30
COSO PARTNERSHIPS
UNAUDITED CONDENSED COMBINED BALANCE SHEETS
(Dollars in thousands)
June 30, December 31,
2002 2001
Assets:
Cash and cash equivalents......................................... $ 2,105 $ 264
Restricted cash and investments................................... 39,009 34,210
Accounts receivable, net.......................................... 29,057 9,603
Prepaid expenses and other assets................................. 774 2,159
Amounts due from related parties.................................. 6,995 6,488
Property, plant and equipment, net................................ 395,884 413,519
Power purchase agreement, net..................................... 49,843 52,350
Investments....................................................... 12,706 12,843
Deferred financing costs, net..................................... 5,905 6,300
------- -------
$ 542,278 $ 537,736
======= =======
Liabilities and Partners' Capital:
Accounts payable and accrued liabilities.......................... $ 21,792 $ 42,362
Amounts due to related parties.................................... 24,628 24,967
Project loans..................................................... 294,291 303,000
------- -------
340,711 370,329
Partners' capital.................................................... 201,567 167,407
------- -------
$ 542,278 $ 537,736
======= =======
See accompanying notes to the unaudited condensed combined financial statements.
31
COSO PARTNERSHIPS
UNAUDITED CONDENSED COMBINED STATEMENTS OF OPERATIONS
(Dollars in thousands)
Three-Months Three-Months Six-Months Six-Months
Ended Ended Ended Ended
June 30, June 30, June 30, June 30,
2002 2001 2002 2001
Revenue:
Energy revenues............................... $ 24,734 $ 54,412 $ 148,884 $ 58,522
Capacity revenues............................. 10,555 10,929 19,805 11,143
Interest and other income..................... 1,474 3,156 3,072 4,269
------ ------ ------- ------
Total revenue.......................... 36,763 68,497 171,761 73,934
Operating expenses:
Plant operating expenses...................... 7,428 8,535 14,311 14,632
Royalty expense............................... 5,775 6,322 9,055 16,673
Depreciation and amortization................. 10,544 10,301 20,968 20,499
------ ------ ------- ------
Total operating expenses............... 23,747 25,158 44,334 51,804
Operating income....................... 13,016 43,339 127,427 22,130
Other expenses:
Interest expense.............................. 6,855 7,284 13,718 14,600
Amortization of deferred financing costs...... 196 403 393 804
------ ------ ------- ------
Total other expenses................... 7,051 7,687 14,111 15,404
Net income............................ $ 5,965 $ 35,652 $ 113,316 $ 6,726
====== ====== ======= ======
See accompanying notes to the unaudited condensed combined financial statements.
32
COSO PARTNERSHIPS
UNAUDITED CONDENSED COMBINED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
Six-Months Six-Months
Ended Ended
June 30, June 30,
2002 2001
Net cash provided by (used in) operating activities... $ 95,329 $ 29,515
Net cash provided by (used in) investing activities... (5,623) (5,477)
Net cash provided by (used in) financing activities... (87,865) (29,028)
-------- --------
Net change in cash and cash equivalents............... $ 1,841 $ (4,990)
======== ========
Supplemental cash flow disclosure:
Cash paid for interest............................. $ 13,710 $ 14,631
======== ========
See accompanying notes to the unaudited condensed combined financial statements.
33
COSO PARTNERSHIPS
NOTES TO THE UNAUDITED CONDENSED COMBINED
FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying unaudited condensed combined financial statements were derived
from the stand alone unaudited condensed financial statements of Caithness Coso
Funding Corp., Coso Finance Partners, Coso Energy Developers and Coso Power
Developers ("the Coso Partnerships"). All intercompany accounts and transactions
were eliminated. This financial information has been provided to facilitate a
more comprehensive understanding of the financial position, operating results
and cash flows of the Coso Partnerships as a whole. The unaudited condensed
combined financial statements should be read in conjunction with each individual
Partnership's unaudited condensed financial statements.
(2) Accounts Receivable and Revenue Recognition
The Coso Partnerships sell all electricity produced to Southern California
Edison (Edison) under long-term power purchase contracts. Due to the uncertainty
surrounding Edison's ability to make payment on past due amounts, collection was
not reasonably assured and the Coso Partnerships had not recognized revenue from
Edison for energy delivered during the period November 1, 2000 through March 26,
2001. The provision for doubtful accounts previously recorded by the Coso
Partnerships of $66.1 million for the six-months ended June 30, 2001, has been
reclassified as a reduction of revenue to conform with the 2002 presentation.
On March 1, 2002, Edison reached certain financing milestones and paid the Coso
Partnerships for revenue generated but not recognized for the period November 1,
2000 through March 26, 2001. For the six-month period ended June 30, 2002, the
Coso Partnerships recognized revenue for energy delivered from November 1, 2000
through March 26, 2001 of $112.4 million.
(3) Reclassifications
Certain other reclassifications have been made to the 2001 statements of
operations to conform to the 2002 presentation.
34
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule--Form SX--Caithness Coso Funding Corp.
27.2 Financial Data Schedule--Form SX--Coso Finance Partners
27.3 Financial Data Schedule--Form SX--Coso Energy Developers
27.4 Financial Data Schedule--Form SX--Coso Power Developers
99.1 Certification of Chief Executive Officer
99.2 Certification of Chief Financial Officer
(b) Reports on Form 8-K
None
EXHIBIT 27.1
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: CAITHNESS COSO FUNDING CORP.
----------------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *_____________
--- --- and is equalified in its entirety by
reference to such financial statements.
*Identify the financial statement(s) to
be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously file period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT NAME:
MULTIPLIER
Do the financials require a multiplier X 1,000 1,000,000,000
other than 1 (one)? --- ----
X Yes No 1,000,000 1,000,000,000,000
--- --- --- ----
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 6 - MOS
-- ---- -- ---
X YEAR YEAR
--- ---
(for annual report filings)
OTHER OTHER
---- ----
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-2001 DEC-31-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-2001 JAN-01-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-2001 JUN-30-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
PERIOD TYPE Year PERIOD TYPE 6 MOS
---- -----
CASH 0 0
SECURITIES 0 0
RECEIVABLES 304,225 295,515
ALLOWANCES 0 0
INVENTORY 0 0
CURRENT ASSETDS 1,225 1,224
PP&E 0 0
DEPRECIATION 0 0
TOTAL ASSETS 304,225 295,515
CURRENT LIABILITIES 1,225 1,224
BONDS 303,000 294,291
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 304,225 295,515
SALES 0 0
TOTAL REVENUES 28,820 13,710
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 0 0
LOSS PROVISION 0 0
INTEREST EXPENSES 28,820 13,710
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 0 0
CHANGES 0 0
NET INCOME 0 0
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
EXHIBIT 27.2
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: COSO FINANCE PARTNERS
---------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *_____________
--- --- and is equalified in its entirety by
reference to such financial statements.
*Identify the financial statement(s) to
be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously file period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT NAME:
MULTIPLIER
Do the financials require a multiplier X 1,000 1,000,000,000
other than 1 (one)? --- ----
X Yes No 1,000,000 1,000,000,000,000
--- --- --- ----
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 6 - MOS
-- ---- -- ----
X YEAR YEAR
--- ---
(for annual report filings)
OTHER OTHER
---- ----
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-2001 DEC-31-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-2001 JAN-01-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-2001 JUN-30-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
PERIOD TYPE Year PERIOD TYPE 6 MOS
---- -----
CASH 264 1,583
SECURITIES 21,325 24,092
RECEIVABLES 12,816 13,457
ALLOWANCES 0 0
INVENTORY 0 0
CURRENT ASSETS 13,730 15,348
PP&E 229,084 229,119
DEPRECIATION 88,647 93,117
TOTAL ASSETS 193,114 192,348
CURRENT LIABILITIES 18,139 17,580
BONDS 122,550 117,911
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 193,114 192,348
SALES 75,419 59,826
TOTAL REVENUES 78,347 61,345
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 51,201 15,276
LOSS PROVISION 0 0
INTEREST EXPENSES 12,437 5,706
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 0 0
CHANGES 0 0
NET INCOME 14,709 40,363
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
EXHIBIT 27.3
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: COSO ENERGY DEVELOPERS
----------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *_____________
--- --- and is equalified in its entirety by
reference to such financial statements.
*Identify the financial statement(s) to
be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously file period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT NAME:
MULTIPLIER
Do the financials require a multiplier X 1,000 1,000,000,000
other than 1 (one)? --- ----
X Yes No 1,000,000 1,000,000,000,000
--- --- --- ----
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 6 - MOS
-- ---- -- ----
X YEAR YEAR
--- ---
(for annual report filings)
OTHER OTHER
---- ----
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-2001 DEC-31-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-2001 JAN-01-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-2001 JUN-30-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
PERIOD TYPE Year PERIOD TYPE 6 MOS
---- -----
CASH 0 391
SECURITIES 7,368 8,618
RECEIVABLES 3,340 9,531
ALLOWANCES 0 0
INVENTORY 0 0
CURRENT ASSETS 4,189 10,052
PP&E 247,203 247,612
DEPRECIATION 98,786 106,393
TOTAL ASSETS 183,978 183,139
CURRENT LIABILITIES 34,966 26,718
BONDS 96,250 93,700
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 183,978 183,139
SALES 65,830 54,670
TOTAL REVENUES 69,596 55,572
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 53,185 14,160
LOSS PROVISION 0 0
INTEREST EXPENSES 9,398 4,484
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 0 0
CHANGES 0 0
NET INCOME 7,013 36,928
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
EXHIBIT 27.4
Form S-X
Commercial and Industrial Companies
Financial Data Schedule Worksheet for: COSO POWER DEVELOPERS
---------------------
Review the following list of tags for Article 5 and fill in the correct data in
the column(s) provided. Generally, only one column of information will be
required, however, two columns are provided if required in the Financial Data
Schedule.
Unless otherwise noted, all tags are required. A response is required for each
item within the schedule. Use the value "0" (zero) if information is immaterial,
inapplicable or unknown. Decimals may not be used to state financial data except
as indicated. Values not provided will be entered as "0" (zero). Missing dates
will be entered as "TO COME". Please be sure to verify all information in the
EDGARized exhibit.
To include a footnote, place a number in parentheses next to the value and
provide the text of each corresponding footnote at the end of the worksheet
form.
Do you wish to include a LEGEND? This schedule contains summary financial
Yes X No information extracted from *_____________
--- --- and is equalified in its entirety by
reference to such financial statements.
*Identify the financial statement(s) to
be referenced in the legend:
RESTATED
Are your financials being "restated" (NO VALUE REQUIRED)
from a previously file period?
Yes X No
--- ---
CIK Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT CIK:
NAME Use this section only for coregistrant
Does this data apply to a coregistrant filings.
Yes X No
--- --- COREGISTRANT NAME:
MULTIPLIER
Do the financials require a multiplier X 1,000 1,000,000,000
other than 1 (one)? --- ----
X Yes No 1,000,000 1,000,000,000,000
--- --- --- ----
CURRENCY CURRENCY OF FINANCIAL DATA:
Is the currency used other than US
Dollars? Use in conjunction with
EXCHANGE RATE tag.
Yes X No
--- ---
PERIOD TYPE - MOS X 6 - MOS
-- ---- -- ----
YEAR YEAR
--- ---
(for annual report filings)
OTHER OTHER
---- ----
FISCAL YEAR END
(example: DEC-31-1997) DEC-31-2001 DEC-31-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD START
(example: JAN-01-1997) JAN-01-2001 JAN-01-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
PERIOD END
(example: SEP-30-1997) DEC-31-2001 JUN-30-2002
----------- -----------
mmm-dd-yyyy mmm-dd-yyyy
EXCHANGE RATE EXCHANGE RATE: EXCHANGE RATE:
Is the exchange rate other than 1
(one)? Value may contain up to 5
decimal places) Use in conjunction
with CURRENCY tag.
Yes X No
--- ---
PERIOD TYPE Year PERIOD TYPE 6 MOS
---- -----
CASH 0 131
SECURITIES 5,517 6,299
RECEIVABLES 9,349 15,697
ALLOWANCES 0 0
INVENTORY 0 0
CURRENT ASSETS 10,009 16,164
PP&E 209,652 209,798
DEPRECIATION 84,987 91,135
TOTAL ASSETS 170,058 169,424
CURRENT LIABILITIES 23,638 4,755
BONDS 84,200 82,680
PREFERRED MANDATORY 0 0
PREFERRED 0 0
COMMON 0 0
OTHER SE 0 0
TOTAL LIABILITY AND EQUITY 170,058 169,424
SALES 59,122 54,193
TOTAL REVENUES 62,005 54,844
CGS 0 0
TOTAL COSTS 0 0
OTHER EXPENSES 57,141 14,898
LOSS PROVISION 0 0
INTEREST EXPENSES 9,247 3,921
INCOME PRETAX 0 0
INCOME TAX 0 0
INCOME CONTINUING 0 0
DISCONTINUED 0 0
EXTRAORDINARY 0 0
CHANGES 0 0
NET INCOME (4,383) 36,025
EPS BASIC 0 0
(Value may contain up to 3 decimal places)
EPS DILUTED 0 0
(Value may contain up to 3 decimal places)
Footnote Text: (Note: Each footnote cannot exceed 256 characters, including spaces)
Exhibit 99.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Caithness Coso Funding Corp. (the
Company) on Form 10-Q for the period ended June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, James
D. Bishop, Sr., Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
Date: August 14, 2002 Caithness Coso Funding Corp
a Deleware Corporation
By:/s/ JAMES D. BISHOP, SR.
-----------------------
James D. Bishop, Sr.
Director, Chairman &
Chief Executive Officer
Exhibit 99.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Caithness Coso Funding Corp.(the
Company)on Form 10-Q for the period ended June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Christopher T. McCallion, Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
Date: August 14, 2002 Caithness Coso Funding Corp
a Deleware Corporation
By: /s/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Accounting Officer)
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.
Date: August 9, 2002 CAITHNESS COSO FUNDING CORP.,
a Delaware corporation
By: /S/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO FINANCE PARTNERS
a California general Partnership
By: New CLOC Company, LLC,
its Managing General Partner
By: /S/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO ENERGY DEVELOPERS
a California general Partnership
By: New CHIP Company, LLC,
its Managing General Partner
By: /S/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)
COSO POWER DEVELOPERS
a California general Partnership
By: New CTC Company, LLC,
its Managing General Partner
By: /S/ CHRISTOPHER T. MCCALLION
----------------------------
Christopher T. McCallion
Executive Vice President &
Chief Financial Officer
(Principal Financial and
Accounting Officer)