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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
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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 333-79220
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CALIFORNIA PETROLEUM TRANSPORT CORPORATION
- ---------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 04-3232976
- --------------------------------- ----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Room 6/9, One International Place, Boston, Massachusetts, 02101
- ---------------------------------------------------------------------------
(Address of principal executive offices)
(617) 951-7727
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(Registrant's telephone number, including area code)
Title of each class Name of each exchange
on which registered
None Not applicable
- --------------------------------- ----------------------------------
Securities registered or to be registered pursuant to section 12(g) of the
Act.
None
- ---------------------------------------------------------------------------
(Title of class)
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
---------- ----------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K.
[X]
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. None
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date. 2 shares of
Common Stock, no par value
DOCUMENTS INCORPORATED BY REFERENCE: None
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
FORM 10-K
TABLE OF CONTENTS
PAGE
PART I
Item 1. Business...................................................1
Item 2. Properties.................................................3
Item 3. Legal Proceedings..........................................3
Item 4. Submission of Matters to a Vote of Security Holders........3
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters........................................3
Item 6. Selected Financial Data....................................3
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................3
Item 7(a)
Quantitative and Qualitative disclosures about Market
Risk.......................................................4
Item 8. Financial Statements and Supplementary Data................7
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.......................14
PART III
Item 10. Directors and Executive Officers of the Registrant........14
Item 11. Executive Compensation....................................15
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................15
Item 13. Certain Relationships and Related Transactions............15
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K..................................................16
PART I
ITEM 1. BUSINESS
THE COMPANY
California Petroleum Transport Corporation, ("California Petroleum"), was
incorporated in Delaware in 1995. California Petroleum is a special purpose
corporation that was organized solely for the purpose of issuing, as agent
on behalf of the Owners (see below), the Term Mortgage Notes and Serial
Mortgage Notes (together the "Notes") as obligations of California
Petroleum and loaning the proceeds of the sale of the Notes to the Owners
to facilitate the funding of the acquisition of the four vessels (the
"Vessels") described below from Chevron Transport Corporation (the "Initial
Charterer"). All the shares of California Petroleum are held by The
California Trust, a Massachusetts charitable lead trust formed by JH
Holdings, a Massachusetts corporation, for the benefit of certain
charitable institutions in Massachusetts.
Information about revenues, profits and total assets is provided in the
financial statements included in this report. California Petroleum's only
business segment is that of issuing loans.
California Petroleum has no employees.
THE OWNERS
Each of CalPetro Tankers (Bahamas I) Limited ("CalPetro Bahamas I"),
CalPetro Tankers (Bahamas II) Limited ("Calpetro Bahamas II") and CalPetro
Tankers (Bahamas III) Limited ("CalPetro Bahamas III"), was organized as a
special purpose company under the laws of the Bahamas for the purpose of
acquiring and chartering one of the Vessels. Similarly, CalPetro Tankers
(IOM) Limited ("CalPetro IOM") has been organized as a special purpose
company under the laws of the Isle of Man for the purpose of acquiring and
chartering one of the Vessels. Each of the foregoing companies also is
referred to in this document as an "Owner". Each Owner, either pursuant to
the terms of its Memorandum of Association and/or pursuant to the terms of
the related Mortgage, will engage in no business other than the ownership
and chartering of its Vessel and activities resulting from or incidental to
such ownership and chartering. Each Owner is wholly-owned by California
Tankers Investments Limited, a company organized under the laws of the
Bahamas, which is a wholly-owned subsidiary of CalPetro Holdings Limited,
an Isle of Man company. None of the Owners is owned by or is an affiliate
of California Petroleum and neither of California Petroleum nor any Owner
is owned by or is an affiliate of the Initial Charterer.
THE CHARTERS
Each of the Vessels is currently chartered to the Initial Charterer
pursuant to a charter dated as of the date of the original issuance of the
notes (collectively, the "Charters") and which is due to expire on April 1,
2015. Upon payment of a termination amount, the Initial Charterer has the
right to terminate the charters on any four (in the case of the
double-hulled Vessels) or three (in the case of the single-hulled Vessel),
termination dates, which, for each Vessel, occur at two-year intervals
beginning in 2003, 2004, 2005 or 2006, as the case may be.
THE INTERNATIONAL TANKER MARKET
Two types of operator mainly provide international seaborne oil and
petroleum products transportation services: major oil company captive
fleets (both private and state-owned) and independent shipowner fleets.
Both types of operators transport oil under short-term contracts (including
single-voyage "spot charters") and long-term time charters with oil
companies, oil traders, large oil consumers, petroleum product producers
and government agencies. The oil companies own, or control through
long-term time charters, approximately one third of the current world
tanker capacity, while independent companies own or control the balance of
the fleet. The oil companies use their fleets not only to transport their
own oil, but also to transport oil for third-party charterers in direct
competition with independent owners and operators in the tanker charter
market.
The oil transportation industry has historically been subject to regulation
by national authorities and through international conventions. Over recent
years, however, an environmental protection regime has evolved which could
have a significant impact on the operations of participants in the industry
in the form of increasingly more stringent inspection requirements, closer
monitoring of pollution-related events, and generally higher costs and
potential liabilities for the owners and operators of tankers.
In order to benefit from economies of scale, tanker charterers will
typically charter the largest possible vessel to transport oil or products,
consistent with port and canal dimensional restrictions and optimal cargo
lot sizes. The oil tanker fleet is generally divided into the following
five major types of vessels, based on vessel carrying capacity: (i)
ULCC-size range of approximately 320,000 to 450,000 dwt; (ii) VLCC-size
range of approximately 200,000 to 320,000; (iii) Suezmax-size range of
approximately 120,000 to 200,000 dwt; (iv) Aframax-size range of
approximately 60,000 to 120,000 dwt; and (v) small tankers of less than
approximately 60,000 dwt. ULCCs and VLCCs typically transport crude oil in
long-haul trades, such as from the Arabian Gulf to Rotterdam via the Cape
of Good Hope. Suezmax tankers also engage in long-haul crude oil trades as
well as in medium-haul crude oil trades, such as from West Africa to the
East Coast of the United States. Aframax-size vessels generally engage in
both medium-and short-haul trades of less than 1,500 miles and carry crude
oil or petroleum products. Smaller tankers mostly transport petroleum
products in short-haul to medium-haul trades.
The shipping industry is highly cyclical, experiencing volatility in
profitability, vessel values and charter rates. In particular, freight and
charterhire rates are strongly influenced by the supply and demand for
shipping capacity. After a period of weak freight rates the market for
Suezmax tankers started to strengthen in early 2000, as a result of an
improved supply balance following extensive scrapping of older tonnage in
1999 and early 2000 and increased OPEC production from Spring 2000. The
freight rates continued to strengthen through the year 2000 and remained
firm in early 2001. Towards the second half of 2001 the general slowdown in
the global economy and OPEC quota cuts reduced the demand for Tanker
transportation and Suezmax rates started to decline. The negative trend has
continued into 2002 following further cuts in OPEC production. The average
time charter equivalent market rate earned in 2001 by Suezmaxes trading in
the spot market was estimated at USD 30,700 per day. Corresponding rates in
the first quarter of 2002 are estimated at USD 16,500 per day. Weakening
rates from Autumn 2001 until today has resulted in increased scrapping of
Suezmaxes and VLCCs built in the 1970s.
There is no guarantee that Suezmax rates would be sufficient to meet the
debt service required if the bareboat charters entered into with Chevron
are not extended. Current spot market rates for Suezmax tankers would not
be sufficient to meet the debt service required if the bareboat charters to
Chevron were not extended. However, spot market rates are volatile and
generally linked to global economic development and especially demand for
oil. Declining crude oil demand has prompted OPEC to reduce production
quotas to maintain the crude oil price within its target price band and as
a result, demand for crude oil transportation is currently low in relative
terms.
RISK FACTORS
California Petroleum derives 100% of its revenues from and is dependent on
the Owners, who are foreign corporations as described above. The Owners
derive 100% of their revenues from and are dependent on the Initial
Charterer until such time as the Initial Charterer terminates the Charters.
After the Charters are terminated, the Owners may not be able to arrange
further charters at rates sufficient to meet interest and principal
payments due to California Petroleum on the serial and term loans. Should
the Owners default on payment of interest and principal due to California
Petroleum, the value of collateral to the serial and term loans may be
insufficient to repay the serial and term loans.
It is not considered possible to quantify possible losses to California
Petroleum that may arise due to exposure to these risk factors.
ITEM 2. PROPERTIES
California Petroleum has no property. The serial and term loans granted to
the Owners are collateralised by first preferred mortgages over the
property of the Owners as outlined below. The Owners paid approximately
$80.7 million for each double-hulled Vessel and $40.0 million for the
single-hulled Vessel (in 1995). Other than the Vessels described below the
Owners have no property.
Delivery Approximate
Vessel Construction Registration Date dwt.
- --------------------------------------------------------------------
Samuel Ginn Double-hull Bahamas March 1993 150,000
- --------------------------------------------------------------------
Altair
Voyager 2 Double-hull Bahamas August 1993 130,000
- --------------------------------------------------------------------
Sirius Marshall October
Voyager 1 Double-hull Islands 3 1994 150,000
- --------------------------------------------------------------------
William E. Marshall February
Crain Single-hull Islands 3 1992 150,000
- --------------------------------------------------------------------
1 ex Chevron Mariner (renamed February 2001)
2 ex Condoleeza Rice (renamed April 2001)
3 previously registered in Liberia
ITEM 3. LEGAL PROCEEDINGS
The Company and the Owners are not a party to any material pending legal
proceedings and no such proceedings are known to be contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
(a) There is no established trading market for the Common Stock of the
Registrant.
(b) As of March 25, 2002 with respect to the Common Stock there was one
(1) holder of record of the Registrant's Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
The following selected historical financial and other data for Californian
Petroleum was devised from more detailed information and financial
statements and notes appearing elsewhere in this Annual Report and should
be read in conjunction therewith.
2001 2000 1999 1998 1997
- --------------------------------------------------------------------
$'000 $'000 $'000 $'000 $'000
- --------------------------------------------------------------------
Net operating
revenues 15,210 16,538 17,871 19,191 20,485
- --------------------------------------------------------------------
Net income - - - - -
- --------------------------------------------------------------------
Net income per share - - - - -
- --------------------------------------------------------------------
Dividends per share - - - - -
- --------------------------------------------------------------------
Total assets 181,115 199,616 218,088 236,564 255,071
- --------------------------------------------------------------------
Long term liabilities 159,280 177,440 195,600 213,760 231,920
- --------------------------------------------------------------------
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
BUSINESS STRATEGY
California Petroleum
California Petroleum's strategy has been to issue, as agent on behalf of
the Owners, the Notes and loan the proceeds of the sale of the Notes to the
Owners. California Petroleum's only sources of funds with respect to the
Notes are payments of interest and principal on the related loans from
California Petroleum to each Owner. General and administrative expenses
comprising trustee fees, legal fees, agency fees and other costs incurred
by California Petroleum are billed to the Owners. California Petroleum has
no source of income other than payments to it by the Owners. The net result
for the year is neither a gain nor a loss, the detail relating to such
result is set forth in the Statement of Income included herein.
The Owners
The Owners' strategy has been to acquire the Vessels and charter them to
the Initial Charterer under bareboat charters which are expected to provide
(a) charterhire payments which the Issuer and the Owners expect will be
sufficient to pay, so long as the Initial Charters are in effect (i) the
Owners' obligations under the loans for acquiring the Vessels, (ii)
management fees and technical advisor's fees (iii) recurring fees and
taxes, and (iv) any other costs and expenses incidental to the ownership
and chartering of the Vessels that are to be paid by the Owners, (b)
Termination Payments sufficient to make sinking fund and interest payments
on the Term Mortgage Notes, to the extent allocable to the Vessel for which
the related Initial Charter has been terminated, for at least two years
following any such termination, during which time the Vessel may be sold or
rechartered and (c) that the Vessels will be maintained in accordance with
the good commercial maintenance practices required by the Initial Charters;
and to arrange for vessel management and remarketing services to be
available in case any Initial Charter is terminated by the Initial
Charterer or any Vessel is for any other reason returned to the possession
and use of the Owners.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
No instruments issued by California Petroleum are for trading purposes.
California Petroleum is exposed to business risk inherent in the
international tanker market as outlined in Risk Factors.
Quantitative information about instruments exposed to business risk
inherent in the international tanker market at December 31, 2001 is as
follows:
SERIAL LOANS
The principal balances of the Serial Loans earn interest at rates ranging
from 7.49% to 7.62% and mature over a five-year period beginning April 1,
2002. The loans are reported net of the related discounts, which are
amortized over the term of the loans.
The outstanding serial loans have the following characteristics:
Principal
Maturity Interest due
date rate ($000's)
---------------------------------------------------------------------
April 1, 2002 7.49% 18,160
April 1, 2003 7.55% 18,160
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
-------------------------------------------------------------------
59,540
Information on fair values has not been provided.
The outstanding amount of serial loans as at December 31, 2001 was
$59,540,000.
TERM LOANS
The principal balances of the Term Loans earn interest at a rate of 8.52%
per annum and are to be repaid over a twelve-year period beginning nine
years from April 1, 1995. The loans are reported net of the related
discounts, which are amortized over the term of the loans.
The table below provides the final principal payments on the Term Loans if
none of the Initial Charters is terminated and if all of the Initial
Charters are terminated on the earliest termination dates.
---------------------------------------------------------------------
No All
initial initial
charters charters
Scheduled terminated terminated
payment date $'000 $'000
---------------------------------------------------------------------
April 1, 2004 3,355 1,700
April 1, 2005 6,542 3,480
April 1, 2006 9,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
---------------------------------------------------------------------
117,900 117,900
---------------------------------------------------------------------
Information on fair values has not been provided.
The outstanding amount of term loans at December 31, 2001 was $117,900,000.
SERIAL MORTGAGE NOTES
The Serial Mortgage Notes bear interest at rates ranging from 7.49% to
7.62% through maturity. The Notes mature over a five-year period beginning
one-year from April 1, 2002. Interest is payable semi-annually.
The outstanding serial loans have the following characteristics:
-------------------------------------------------------------------
Maturity Principal
date Interest due
date rate ($000's)
-------------------------------------------------------------------
April 1, 2002 7.49% 18,160
April 1, 2003 7.55% 18,160
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
-------------------------------------------------------------------
59,540
-------------------------------------------------------------------
TERM MORTGAGE NOTES
The Term Mortgage Notes bear interest at a rate of 8.52% per annum. The
Principal is repayable on the Term Mortgage Notes in accordance with a
twelve-year sinking fund schedule commencing nine years from April 1, 1995.
Interest is payable semi-annually.
The table below provides the scheduled sinking fund redemption amounts and
final principal payments on the Term Mortgage Notes if none of the Initial
Charters is terminated and if all of the Initial Charters are terminated on
the earliest termination dates.
---------------------------------------------------------------------
No All
initial initial
charters charters
Scheduled terminated terminated
payment date $'000 $'000
---------------------------------------------------------------------
April 1, 2004 3,355 1,700
April 1, 2005 6,542 3,480
April 1, 2006 9,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
---------------------------------------------------------------------
117,900 117,900
---------------------------------------------------------------------
The Corporation was organized solely for the purpose of issuing, as agent
on behalf of certain ship Owners, the Term Mortgage in Notes and Serial
Mortgage Notes as obligations of California Petroleum and loaning the
proceeds of the sale of the Notes to the Owners to facilitate the funding
of the acquisition of four Vessels from Chevron Transport Corporation.
California Petroleum derives 100% of its revenues from and is dependent on
the Owners, who are foreign corporations as described above. The Owners
derive 100% of their revenues from and are dependent on the Initial
Charterer until such time as the Initial Charterer terminates the Charters.
After the Charters are terminated, the Owners may not be able to arrange
further charters at rates sufficient to meet interest and principal
payments due to California Petroleum on the serial and term loans. Should
the Owners default on payment of interest and principal due to California
Petroleum, the value of collateral to the serial and term loans may be
insufficient to repay the serial and term loans.
California Petroleum monitors its exposure to business risk inherent in the
international tanker market by regular consideration of current charter
rates for Suezmax oil tankers and likely expected termination dates of the
Charters in the light of current charter rates. Should current charter
rates fall below the rates required for the Owners to be able to continue
to meet payments of interest and principal due to California Petroleum, the
Company's policy is to seek additional collateral from the Owners to fully
secure the serial and term loans.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PAGE
Report of Independent Auditors 8
Balance Sheets as of December 31, 2001 and 2000 9
Statements of Operations and Retained Earnings for the Years 10
Ended December 31, 2001, 2000 and 1999
Statements of Cash Flows for the Years Ended 11
December 31, 2001, 2000 and 1999
Notes to Financial Statements 12
REPORT OF INDEPENDENT AUDITORS
TO THE BOARD OF DIRECTORS
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
We have audited the accompanying balance sheets of California Petroleum
Transport Corporation as of December 31, 2001 and 2000 and the related
statements of operations and retained earnings, and cash flows for each of
the three years in the period ended December 31, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of California Petroleum
Transport Corporation at December 31, 2001 and 2000, and the results of its
operations and its cash flows for each of the three years in the period
ended December 31, 2001 in conformity with accounting principles generally
accepted in the United States of America.
Ernst & Young
Chartered Accountants
Douglas, Isle of Man
[------------------------------]
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
BALANCE SHEETS AS OF DECEMBER 31, 2001 AND 2000
(in thousands of US$)
Note 2001 2000
ASSETS
Current assets:
Cash and cash equivalents 1 1
Current portion of serial loans receivable 3 18,160 18,160
Interest receivable 3,664 3,972
Other current assets 10 43
------- -------
TOTAL CURRENT ASSETS 21,835 22,176
Serial loans receivable, less current portion 3 40,874 58,866
Term loans receivable 4 116,730 116,642
Deferred charges and other long-term assets 2(b) 1,676 1,932
------- -------
TOTAL ASSETS 181,115 199,616
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued interest 3,664 3,972
Current portion of serial mortgage notes 5,6 18,160 18,160
Other current liabilities 10 43
------- -------
TOTAL CURRENT LIABILITIES 21,834 22,175
Serial mortgage notes 5,6 41,380 59,540
Term mortgage notes 5,7 117,900 117,900
------- -------
TOTAL LIABILITIES 181,114 199,615
STOCKHOLDERS' EQUITY
Common stock, no par value; 100 shares
authorised, issued and outstanding 1 1
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 181,115 199,616
======= =======
See accompanying Notes to the Financial Statements
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS FOR THE YEARS ENDED
DECEMBER 31, 2001, 2000 AND 1999
(in thousands of US$)
2001 2000 1999
REVENUE
Interest income 15,164 16,478 17,811
Recovery of general and administrative
expenses 46 60 60
------- ------- -------
NET OPERATING REVENUES 15,210 16,538 17,871
EXPENSES
General and administrative expenses 46 60 60
------- ------- -------
NET OPERATING INCOME BEFORE AMORTISATION 15,164 16,478 17,811
Amortisation of debt issue costs (256) (256) (256)
------- ------- -------
NET OPERATING INCOME AFTER AMORTISATION 14,908 16,222 17,555
OTHER INCOME (EXPENSES)
Interest expense (14,908) (16,222) (17,555)
------- ------- -------
NET INCOME - - -
======= ======= =======
RETAINED EARNINGS, BEGINNING OF YEAR - - -
------- ------- -------
RETAINED EARNINGS, END OF YEAR - - -
------- ------- -------
See accompanying Notes to the Financial Statements
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2001,
2000 AND 1999
(in thousands of US$)
2001 2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
NET INCOME - - -
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortisation of deferred debt issue costs 256 256 256
Changes in assets and liabilities:
Decrease (increase) in accounts receivable 341 312 316
(Decrease) increase in accounts payable (341) (312) (316)
------- ------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 256 256 256
------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Term and serial loans repaid 17,904 17,904 17,904
------- ------- -------
NET CASH PROVIDED BY INVESTING
ACTIVITIES 17,904 17,904 17,904
------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Serial notes redeemed (18,160) (18,160) (18,160)
------- ------- -------
NET CASH USED IN FINANCING ACTIVITIES (18,160) (18,160) (18,160)
------- ------- -------
CASH AT BEGINNING OF YEAR 1 1 1
------- ------- -------
CASH AT END OF YEAR 1 1 1
------- ------- -------
See accompanying Notes to Financial Statements
CALIFORNIA PETROLEUM TRANSPORT CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. THE COMPANY
The Company, which is incorporated in Delaware, is a special purpose
corporation that has been organized solely for the purpose of issuing,
as agent on behalf of Calpetro Tankers (Bahamas I) Limited, Calpetro
Tankers (Bahamas II) Limited, Calpetro Tankers (Bahamas III) Limited
and Calpetro Tankers (IOM) Limited (each an "Owner" and, together the
"Owners"), the Serial Mortgage Notes and the Term Mortgage Notes as
full recourse obligations of the Company and loaning the proceeds of
the sale of the Notes to the Owners to facilitate the funding of the
acquisition of four vessels from Chevron Transport Corporation (the
"Initial Charterer").
Basis of Presentation
The financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of
America. These statements reflect the net proceeds from the sale of
the Term Mortgage Notes together with the net proceeds from sale of
the Serial Mortgage Notes having been applied by way of long-term
loans to the Owners to fund the acquisition of the Vessels from the
Initial Charterer.
Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions in determining the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities on
the dates of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results
could differ from those estimates.
2. PRINCIPAL ACCOUNTING POLICIES
The financial statements have been prepared in accordance with United
States generally accepted accounting principles. A summary of the more
important accounting policies, which have been consistently applied,
is set out below.
(a) Revenue and expense recognition
Interest receivable on the Serial Loans and on the Term Loans is
accrued on a daily basis. Interest payable on the Serial Mortgage
Notes and on the Term Mortgage Notes is accrued on a daily basis.
General and administrative expenses incurred by the company are
reimbursed by the Owners.
(b) Deferred charges
Deferred charges represent the capitalization of debt issue costs.
These costs are amortized over the term of the Notes to which they
relate.
(c) Reporting currency
The reporting and functional currency is United States Dollars.
3. SERIAL LOANS
The principal balances of the Serial Loans earn interest at rates
ranging from 7.49% to 7.62% and mature over a five-year period
beginning April 1, 2002. The loans are reported net of the related
discounts, which are amortised over the term of the loans.
4. TERM LOANS
The principal balances of the Term Loans earn interest at a rate of
8.52% per annum and are to be repaid over a twelve-year period
beginning nine years from April 1, 1995. The loans are reported net of
the related discounts, which are amortised over the term of the loans.
5. SERIAL LOANS AND TERM LOANS COLLATERAL
The Term and Serial Loans are collateralised by first preference
mortgages on the Vessels to the Company. The earnings and insurance
relating to the Vessels have been collaterally assigned pursuant to an
Assignment of Earnings and Insurance to the Company, which in turn has
assigned such Assignment of Earnings and Insurance to the Collateral
Trustee. The Initial Charters and Chevron Guarantees relating to the
Vessels have been collaterally assigned pursuant to the Assignment of
Initial Charter and Assignment of Initial Charter Guarantee to the
Company, which in turn has assigned such Assignments to the Collateral
Trustee. The Capital Stock of each of the Owners has been pledged to
the Company pursuant to the Stock Pledge Agreements.
6. SERIAL MORTGAGE NOTES
The Serial Mortgage Notes bear interest at rates ranging from 7.49% to
7.62% through maturity. The Notes mature over a five-year period
beginning April 1, 2002. Interest is payable semi-annually.
The outstanding serial loans have the following characteristics:
-------------------------------------------------------------------
Principal
Maturity Interest due
date rate ($000's)
-------------------------------------------------------------------
April 1, 2002 7.49% 18,160
April 1, 2003 7.55% 18,160
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
-------------------------------------------------------------------
59,540
-------------------------------------------------------------------
7. TERM MORTGAGE NOTES
The Term Mortgage Notes bear interest at a rate of 8.52% per annum.
Principal is repayable on the Term Mortgage Notes in accordance with a
twelve-year sinking fund schedule commencing nine years from April 1,
1995. Interest is payable semi-annually.
The table below provides the scheduled sinking fund redemption amounts
and final principal payments on the Term Mortgage Notes if none of the
Initial Charters is terminated and if all of the Initial Charters are
terminated on the earliest termination dates.
----------------------------------------------------------------------
No All
initial initial
charters charters
Scheduled terminated terminated
payment date $'000 $'000
----------------------------------------------------------------------
April 1, 2004 3,355 1,700
April 1, 2005 6,542 3,480
April 1, 2006 9,526 5,320
April 1, 2007 10,942 6,340
April 1, 2008 10,942 6,880
April 1, 2009 10,942 7,470
April 1, 2010 10,942 8,110
April 1, 2011 10,942 8,800
April 1, 2012 10,942 9,540
April 1, 2013 10,942 10,360
April 1, 2014 10,942 11,240
April 1, 2015 10,941 38,660
----------------------------------------------------------------------
117,900 117,900
----------------------------------------------------------------------
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Company does not have operations nor does it have any employees
involved in management. The following table sets forth the name, age and
principal position with the Company of each of its executive directors.
NAME AGE POSITION WITH THE COMPANY
Nancy D. Smith 34 Director and President
Louise E. Colby 53 Director and Assistant Secretary
R. Douglas Donaldson 60 Treasurer
Officers are appointed by the Board of Directors and will serve until they
resign or are removed by the Board of Directors.
Nancy D. Smith has been a Director and the President of California
Petroleum since 1994. She joined JH Management Corporation, a Massachusetts
business corporation that engages in the management of special purpose
corporations for structured financial transactions in 1993 as its President
and is currently the Vice President of the corporation. From 1991 to 1992,
she was a legal secretary at Ropes & Gray, a law firm in Boston, MA. From
1992 to 1993, she was a personal assistant to Bob Woolf Associates, Inc.
Louise E. Colby has been a Director of the Corporation since 1994. She was
the Secretary and Treasurer in 1994 and has served as an Assistant
Secretary from 1995 to present. She is a former Director, Secretary and
Treasurer of JH Management Corporation beginning in 1989 and currently
serves as its Assistant Treasurer. She has also served as the Trustee of
the Cazenove Street Realty Trust since 1983 and, since 1985, a Trustee of
The 1960 Trust, a charitable trust for the benefit of Harvard University.
R. Douglas Donaldson has been the Treasurer of the Corporation since 1995
He has been President of JH Management Corporation since 1994. He was the
Vice President of a sibling management corporation, JH Holdings
Corporation, from 1994 to early 1999, when he was promoted to President of
that corporation as well. Prior to 1994, he as a bank officer (primarily at
Bank of New England) for over twenty-five years in the field of personal
trust and estate planning. He is also the sole trustee of two charitable
trusts for the benefit of Harvard University.
ITEM 11. EXECUTIVE COMPENSATION
None of the directors or executive officers of the Company receive any
compensation in connection with their respective positions. The Company has
not entered into any affiliate transactions, other than the original agency
agreement for the issuance of the notes.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as of March 22, 2002 with respect
to the ownership by each person or group of persons, known by the
registrant to be a beneficial owner of 5% or more of the Common Stock.
Except as set forth below, the Registrant is not aware of any beneficial
owner of more than 5% of the Common Stock as of close of business on March
22, 2002.
Beneficial Ownership
Name and Number
Class of address of of Percent
Shares Beneficial Owners Shares of Class
--------------- -------------------- ------ --------
Ordinary Shares The California Trust 1,000 100%
c/o JH Holdings
Corporation
P.O. Box 4024
Room 6/9
One International Place
Boston, MA 02101
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Annual Report:
Financial Statements
Report of Ernst & Young, Chartered Accountants, Independent Auditors
Balance Sheets at December 31, 2001 and 2000
Statements of Operations and Retained Earnings for the Years Ended December
31, 2001, 2000 and 1999
Statements of Cash Flows for the Years Ended December 31, 2001, 2000 and
1999
Notes to Financial Statements
(b) Reports on Form 8-K
The Company has not filed any current reports on Form 8-K with the
Securities and Exchange Commission during the last quarter of the fiscal
period covered by this report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
California Petroleum Transport Corporation
--------------------------------------------
(Registrant)
Date March 28, 2002 By /s/ Nancy D. Smith
--------------------------- -------------------------------------
Nancy D. Smith
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date March 28, 2002 By /s/ Nancy D. Smith
--------------------------- -------------------------------------
Nancy D. Smith
President
Date March 28, 2002 By /s/ Nancy D. Smith
--------------------------- -------------------------------------
Nancy D. Smith
Director