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, 2003
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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
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Commission file number 033-79220
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California Petroleum Transport Corporation
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 04-3232976
- ------------------------------ ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
Suite 4350, One International Place, Boston, Massachusetts, 02101-2624
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(Address of principal executive offices)
(617) 951-7690
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(Registrant's telephone number, including area code)
Name of each exchange
Title of each class on which registered
None Not applicable
- -------------------- ------------------------
Securities registered or to be registered pursuant to section 12(g) of the Act.
None
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(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. 1,000 shares of Common Stock,
$1 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 ............................ 4
Item 6. Selected Financial Data ...................................... 4
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................ 4
Item 7(a) Quantitative and Qualitative Disclosures about Market Risk.... 6
Item 8. Financial Statements and Supplementary Data .................. 9
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure ...................................17
Item 9(a) Controls and Procedures.......................................17
PART III
Item 10. Directors and Executive Officers of the Registrant ...........17
Item 11. Executive Compensation .......................................18
Item 12. Security Ownership of Certain Beneficial
Owners and Management ......................................18
Item 13. Certain Relationships and Related Transactions ...............19
Item 14. Principal Accountant Fees and Services........................19
PART IV
Item 15. Exhibits, Financial Statement Schedules
and Reports on Form 8-K ....................................21
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 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 are due to expire on April 1, 2015.
Upon payment of a termination amount (the "Termination Payment"), 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, respectively.
The International Tanker Market
Two types of operators mainly provide international seaborne oil and petroleum
products transportation services: major oil company captive fleets (both private
and state-owned) and independent ship owner 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 deadweight tons (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
charter hire rates are strongly influenced by the supply and demand for shipping
capacity.
The year 2003 started with extremely strong charter rates which were mainly
driven by factors such as the strike in Venezuela which resulted in longer haul
imports, a cold winter in the northern hemisphere resulting in increased demand
for heating oil and increased consumption in the Far East especially China, all
of which have resulted in spot market rates being significantly stronger than in
2002. Suezmax rates have fluctuated over the year ranging from $17,000 per day
to $40,000 per day.
There is no guarantee that Suezmax rates would be sufficient to meet the debt
service required if the bareboat charters entered into with the Initial
Charterer are not extended. Spot market rates are volatile and generally linked
to global economic development and especially demand for oil but also to
political events affecting oil producing countries.
Risk Factors
California Petroleum derives 100% of its cash receipts 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.
- ------ ------------ ------------ ---- ----
Cygnus Voyager(3) Double-hull Bahamas March 1993 150,000
Altair Voyager(2) Double-hull Bahamas August 1993 130,000
Sirius Voyager(1) Double-hull Bahamas(5) October 1994 150,000
Virgo Voyager(4) Single-hull Bahamas(5) February 1992 150,000
- ----------
1 ex Chevron Mariner
2 ex Condoleeza Rice
3 ex Samuel Ginn
4 ex William E. Crain
5 previously registered in Marshall Islands
Item 3. Legal Proceedings
We are not a party to any material pending legal proceedings other than ordinary
routine litigation incidental to our business, to which we are a party or of
which our property is the subject. In the future, we may be subject to legal
proceedings and claims in the ordinary course of business, principally personal
injury and property casualty claims. Those claims, even if lacking merit, could
result in the expenditure by us of significant financial and managerial
resources.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security holders, through the solicitation
of proxies or otherwise, during the fourth quarter of the fiscal year ended
December 31, 2003
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 30, 2004, 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.
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
$'000 $'000 $'000 $'000 $'000
----- ----- ----- ----- -----
Net operating revenues 12,450 13,808 15,210 16,538 17,871
Net income - - - - -
Net income per share - - - - -
Dividends per share - - - - -
Total assets 144,090 162,618 181,115 199,616 218,088
Long term liabilities 124,815 141,120 159,280 177,440 195,600
Cash dividends
declared per share - - - - -
The following table sets forth a summary of quarterly unaudited results of
operations for the years ended December 31, 2003 and 2002.
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
$'000 $'000 $'000 $'000
----- ----- ----- -----
2003
Net operating revenues 3,246 3,116 3,051 3,037
Expenses 3,246 3,116 3,051 3,037
Net income - - - -
2002
Net operating revenues 3,601 3,308 3,326 3,573
Expenses 3,601 3,308 3,326 3,573
Net income - - - -
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
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
Operations and Retained Earnings 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)
charter hire payments which California Petroleum 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.
Liquidity and Capital Resources
California Petroleum is a passive entity, and its activities are limited to
collecting cash from the Owners and making repayments on the Notes. California
Petroleum has no source of liquidity and no capital resources other than the
cash receipts attributable to the Loans.
Critical Accounting Policies
California Petroleum's principal accounting policies are described in Note 2 to
the financial statements included in Item 8 of this Form 10-K. The most critical
accounting policies include:
o Revenue and expense recognition
o Accounting for deferred charges
Recently Issued Accounting Standards
In December 2003, the Financial Accounting Standards Board issued Interpretation
No. 46R, Consolidation of Variable Interest Entities, an Interpretation of ARB
No. 51 ("the Interpretation"), which replaces Interpretation No. 46, issued in
January 2003. The Interpretation addresses the consolidation of business
enterprises (variable interest entities) to which the usual condition (ownership
of a majority voting interest) of consolidation does not apply. This
Interpretation focuses on financial interests that indicate control. It
concludes that in the absence of clear control through voting interests, a
company's exposure (variable interest) to the economic risks and potential
rewards from the variable interest entity's assets and activities are the best
evidence of control. Variable interests are rights and obligations that convey
economic gains or losses from changes in the value of the variable interest
entity's assets and liabilities. Variable interests may arise from financial
instruments, service contracts, and other arrangements. If an enterprise holds a
majority of the variable interests of an entity, it would be considered the
primary beneficiary. The primary beneficiary would be required to include
assets, liabilities, and the results of operations of the variable interests
entity in its financial statements.
An enterprise with a variable interest in an entity to which the provisions of
the original Interpretation have not been applied shall apply the provisions of
the revised Interpretation as follows: a public enterprise that is not a small
business issuer shall apply the Interpretation to all variable interests held
(other than special-purpose entities) no later than the end of the first
reporting period ending after March 15, 2004; a public enterprise that is a
small business issuer shall apply the Interpretation to all variable interests
held (other than special-purpose entities) no later than the end of the first
reporting period ending after December 15, 2004; and a nonpublic enterprise with
a variable interest in an entity that is created after December 31, 2003 shall
apply the Interpretation to that entity immediately, and to all variable
interests held by the beginning of the first annual reporting period beginning
after December 15, 2004.
The Company shall first apply the accounting provisions of the Interpretation
effective January 1, 2005. The Company has begun to evaluate whether the Owners
represent variable interest entities, and whether the Company's variable
interest in the Owners would cause it to be the primary beneficiary. If this is
the case, consolidation of the Owners by the Company is not expected to have a
significant effect on the Company's financial position, results of operations,
or cash flows.
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, 2003 is as follows:
Serial Loans
The principal balances of the Serial Loans earn interest at rates ranging from
7.57% to 7.62% and mature over a three-year period beginning April 1, 2004. 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:
Maturity date Interest rate Principal due
------------- ------------- -------------
($ 000's)
---------
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
---- ------
23,220
The outstanding amount of serial loans as at December 31, 2003 was $23,220,000.
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.
Scheduled No initial All initial
payment charters charters
date terminated terminated
---- ---------- ----------
$'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 outstanding amount of term loans at December 31, 2003 was $117,900,000.
Serial Mortgage Notes
The Serial Mortgage Notes bear interest at rates ranging from 7.57% to 7.62%
through maturity. The Notes mature over a three-year period beginning April 1,
2004. Interest is payable semi-annually.
The outstanding serial notes have the following characteristics:
Maturity date Interest rate Principal due
------------- ------------- -------------
($ 000's)
---------
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
----- ------
23,220
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
are terminated and if all of the Initial Charters are terminated on the earliest
termination dates.
Scheduled No initial All initial
payment charters charters
date terminated terminated
---- ---------- ----------
$'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 8. Financial Statements and Supplementary Data
Page
Report of Ernst & Young, Chartered Accountants, Independent Auditors 10
Balance Sheets as of December 31, 2003 and 2002 11
Statements of Operations and Retained Earnings for the Years Ended
December 31, 2003, 2002 and 2001 12
Statements of Cash Flows for the Years Ended
December 31, 2003, 2002 and 2001 13
Notes to Financial Statements 14
Report of Ernst & Young, Chartered Accountants, Independent Auditors
To the Board of Directors and Stockholder
California Petroleum Transport Corporation
We have audited the accompanying balance sheets of California Petroleum
Transport Corporation as of December 31, 2003 and 2002, and the related
statements of operations and retained earnings, and cash flows for each of the
three years in the period ended December 31, 2003. 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, 2003 and 2002, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
2003, in conformity with accounting principles generally accepted in the United
States of America.
Ernst & Young
Chartered Accountants
Douglas, Isle of Man
April 13, 2004
California Petroleum Transport Corporation
Balance Sheets as of December 31, 2003 and 2002
(in thousands of US$)
Note 2003 2002
ASSETS
Current assets:
Cash and cash equivalents 1 1
Current portion of serial loans receivable 4 12,950 18,160
Current portion of term loans receivable 5 3,355 -
Interest receivable 2,944 3,322
Other current assets 25 15
- --------------------------------------------------------------------------
Total current assets 19,275 21,498
Serial loans receivable, less current portion 4 10,100 22,882
Term loans receivable, less current portion 5 113,551 116,818
Deferred charges and other long-term assets 2(b) 1,164 1,420
- --------------------------------------------------------------------------
Total assets 144,090 162,618
==========================================================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accrued interest 2,944 3,322
Current portion of serial mortgage notes 6,7 12,950 18,160
Current portion of term mortgage notes 6,8 3,355 -
Other current liabilities 25 15
- --------------------------------------------------------------------------
Total current liabilities 19,274 21,497
Serial mortgage notes, less current portion 6,7 10,270 23,220
Term mortgage notes, less current portion 6,8 114,545 117,900
- --------------------------------------------------------------------------
Total liabilities 144,089 162,617
Stockholder's equity
Common stock, $1 par value; 1,000 shares
authorised, issued and outstanding 1 1
- --------------------------------------------------------------------------
Total liabilities and stockholder's equity 144,090 162,618
==========================================================================
See accompanying Notes to the Financial Statements
California Petroleum Transport Corporation Statements of Operations and Retained
Earnings for the years ended December 31, 2003, 2002 and 2001
(in thousands of US$)
2003 2002 2001
Revenue
Interest income 12,369 13,772 15,164
Fees reimbursed by related parties 81 36 46
- --------------------------------------------------------------------------
Net operating revenues 12,450 13,808 15,210
- --------------------------------------------------------------------------
Expenses
General and administrative expenses (81) (36) (46)
Amortisation of debt issue costs (256) (256) (256)
Interest expense (12,113) (13,516) (14,908)
- --------------------------------------------------------------------------
(12,450) (13,808) (15,210)
- --------------------------------------------------------------------------
Net income - - -
Retained earnings, beginning of period - - -
- --------------------------------------------------------------------------
Retained earnings, end of period - - -
==========================================================================
See accompanying Notes to the Financial Statements
California Petroleum Transport Corporation
Statements of Cash Flows for the years ended December 31, 2003, 2002 and 2001
(in thousands of US$)
2003 2002 2001
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 operating assets and liabilities:
Decrease in interest receivable 378 342 308
Decrease (increase) on other current assets (10) (5) 33
Decrease in accrued interest (378) (342) (308)
(Decrease) increase in other current liabilities 10 5 (33)
- --------------------------------------------------------------------------------
Net cash provided by operating activities 256 256 256
- --------------------------------------------------------------------------------
Cash flows from investing activities
Collections on serial loans receivable 17,904 17,904 17,904
- --------------------------------------------------------------------------------
Net cash provided by investing activities 17,904 17,904 17,904
- --------------------------------------------------------------------------------
Cash flows from financing activities
Repayments of serial mortgage notes (18,160) (18,160) (18,160)
- --------------------------------------------------------------------------------
Net cash used in financing activities (18,160) (18,160) (18,160)
- --------------------------------------------------------------------------------
Net change in cash and cash equivalents - - -
Cash and cash equivalents at beginning of period 1 1 1
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of period 1 1 1
================================================================================
Supplemental disclosure of cash flow information:
Interest paid 12,492 13,858 15,213
================================================================================
See accompanying Notes to Financial Statements
California Petroleum Transport Corporation
Notes to Financial Statements
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
California Petroleum Transport Corporation (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 (together, "the 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 (the "Vessels") from Chevron Transport Corporation (the "Initial
Charterer").
The Owners have chartered the Vessels to the Initial Charterer under
bareboat charters that are expected to provide sufficient payments to cover
the Owners' obligations under the loans from the Company. The Initial
Charterer can terminate a charter at specified dates prior to the
expiration of the charter, provided it notify the Owner at least 12 months
prior to such termination and make a Termination Payment. The Owners' only
source of funds with respect to the loans from the Company is payments from
the Initial Charterer, including Termination Payments. The Owners do not
have any other source of capital for payment of the loans.
The Company's only source of funds with respect to the Notes are payments
of principal and interest on the loans to the Owners. The Company does not
have any other source of capital for payment of the Notes.
The financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP). 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.
2. PRINCIPAL ACCOUNTING POLICIES
(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. The Owners reimburse the
Company for general and administrative expenses incurred on their behalf.
(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 the United States dollar.
(d) Cash and cash equivalents
For the purpose of the statement of cash flows, all demand and time
deposits and highly liquid, low risk investments with original maturities
of three months or less are considered equivalent to cash.
(e) Use of estimates
The preparation of financial statements in accordance with GAAP requires
the Company 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.
3. RECENTLY ISSUED ACCOUNTING STANDARDS
In December 2003, the Financial Accounting Standards Board issued
Interpretation No. 46R, Consolidation of Variable Interest Entities, an
Interpretation of ARB No. 51("the Interpretation"), which replaces
Interpretation No. 46, issued in January 2003. The Interpretation addresses
the consolidation of business enterprises (variable interest entities) to
which the usual condition (ownership of a majority voting interest) of
consolidation does not apply. This Interpretation focuses on financial
interests that indicate control. It concludes that in the absence of clear
control through voting interests, a company's exposure (variable interest)
to the economic risks and potential rewards from the variable interest
entity's assets and activities are the best evidence of control. Variable
interests are rights and obligations that convey economic gains or losses
from changes in the value of the variable interest entity's assets and
liabilities. Variable interests may arise from financial instruments,
service contracts, and other arrangements. If an enterprise holds a
majority of the variable interests of an entity, it would be considered the
primary beneficiary. The primary beneficiary would be required to include
assets, liabilities, and the results of operations of the variable
interests entity in its financial statements.
An enterprise with a variable interest in an entity to which the provisions
of the original Interpretation have not been applied shall apply the
provisions of the revised Interpretation as follows: a public enterprise
that is not a small business issuer shall apply the Interpretation to all
variable interests held (other than special-purpose entities) no later than
the end of the first reporting period ending after March 15, 2004; a public
enterprise that is a small business issuer shall apply the Interpretation
to all variable interests held (other than special-purpose entities) no
later than the end of the first reporting period ending after December 15,
2004; and a nonpublic enterprise with a variable interest in an entity that
is created after December 31, 2003 shall apply the Interpretation to that
entity immediately, and to all variable interests held by the beginning of
the first annual reporting period beginning after December 15, 2004.
The Company shall first apply the accounting provisions of the
Interpretation effective January 1, 2005. The Company has begun to evaluate
whether the Owners represent variable interest entities, and whether the
Company's variable interest in the Owners would cause it to be the primary
beneficiary. If this is the case, consolidation of the Owners by the
Company is not expected to have a significant effect on the Company's
financial position, results of operations, or cash flows.
4. SERIAL LOANS
The principal balances of the Serial Loans earn interest at rates ranging
from 7.57% to 7.62% and mature over a three-year period beginning April 1,
2004. The loans are reported net of the related discounts, which are
amortised over the term of the loans.
5. 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.
6. SERIAL LOANS AND TERM LOANS COLLATERAL
The Serial and Term 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 JP Morgan Chase (formerly Chemical
Trust Company of California) as the Collateral Trustee. The Initial
Charters and Chevron Guarantees (where the obligations of the Initial
Charterer are guaranteed by Chevron Corporation) 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.
7. SERIAL MORTGAGE NOTES
The Serial Mortgage Notes bear interest at rates ranging from 7.57% to
7.62% through maturity. The Notes mature over a three-year period beginning
April 1, 2004. Interest is payable semi-annually.
The outstanding serial notes have the following characteristics:
Maturity date Interest rate Principal due
------------- ------------- -------------
($ 000's)
---------
April 1, 2004 7.57% 12,950
April 1, 2005 7.60% 7,740
April 1, 2006 7.62% 2,530
---- ------
23,220
The Serial Mortgage Notes include certain covenants such as restriction on
the payment of dividends and making additional loans or advances to
affiliates. At December 31, 2003 and 2002, the Company was in compliance
with these covenants.
8. 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.
Scheduled No initial All initial
payment charters charters
date terminated terminated
- ---- ---------- ----------
$'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 Term Mortgage Notes include certain covenants such as restriction on the
payment of dividends and making additional loans or advances to affiliates. At
December 31, 2003 and 2002, the Company was in compliance with these covenants.
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
No changes were made to, nor was there any disagreement with the Company's
independent auditors regarding, the Company's accounting or financial
disclosure.
Item 9a. Controls and Procedures
The Company's management, with the participation of the Company's manager
Frontline Ltd, including the Company's President and Treasurer, has evaluated
the effectiveness of the Company's disclosure controls and procedures as of
December 31, 2003. Based on that evaluation, the Company's President and
Treasurer concluded that the Company's disclosure controls and procedures were
effective as of December 31, 2003.
Changes in Internal Controls
There were no material changes in the Company's internal control over financial
reporting during the fourth quarter of 2003.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Company does not have any employees involved in management. The following
table sets forth the name, age and principal position with the Company of each
of its directors and executive officers.
Name Age Position with the Company
- ---- --- -------------------------
Nancy D. Smith 36 Director and President
Geraldine St-Louis 28 Vice President
Louise E. Colby 55 Director and Assistant Secretary
R. Douglas Donaldson 62 Treasurer
Dimitris P.Spiliakos 26 Secretary
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 JH Management 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.
Geraldine St-Louis has been the Vice President of the Company since March 2001.
She joined JH Management Corporation in March 2001 as the vice president. From
1999 to 2001, she was an Executive Secretary in the Health Systems Group at
Harvard University School of Public Health, specialising in the field of health
studies in Third World countries.
Louise E. Colby has been a Director of the Company 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 Company 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 was 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.
Dimitris P. Spiliakos has been the Secretary of the Company since September
2002. He is currently a corporate paralegal at the law offices of Ropes & Gray
in Boston. From 1999 to 2001, he worked as a corporate paralegal at Hutchins,
Wheeler & Dittmar, a law firm in Boston.
The Company's equity is neither listed nor publicly traded. The equity is held
by one beneficial holder, The California Trust. The Owners obligations toward
their bondholders are set out in detail in covenants contained in the Indenture
for their Notes. For the above stated reasons, the Company has not adopted a
business code of ethics or appointed a financial expert.
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 30, 2004 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 30, 2004.
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 4350, One International Place
Boston
MA 02101
The Company does not have an equity compensation plan.
Item 13. Certain Relationships and Related Transactions
Not applicable.
Item 14. Principal Accountant Fees and Services
We have engaged Ernst & Young as our principal accountant. The following table
summarizes fees we have paid Ernst & Young for independent auditing, tax and
related services for each of the last two fiscal years (in dollars and in
thousands):
2003 2002
---- ----
Audit fees (1) 17,500 17,500
Audit-related fees (2) n/a n/a
Tax fees (3) n/a n/a
All other fees (4) n/a n/a
1) Audit fees represent amounts billed for each of the years presented
for professional services rendered in connection with (i) the audit of
our annual financial statements, (ii) the review of our quarterly
financial statements or (iii) those services normally provided in
connection with statutory and regulatory filings or engagements
including comfort letters, consents and other services related to SEC
matters. This information is presented as of the latest practicable
date for this annual report on Form 10-K.
2) Audit-related fees represent amounts we were billed in each of the
years presented for assurance and related services that are reasonably
related to the performance of the annual audit or quarterly reviews.
This category primarily includes services relating to internal control
assessments and accounting-related consulting.
3) Tax fees represent amounts we were billed in each of the years
presented for professional services rendered in connection with tax
compliance, tax advice, and tax planning.
4) All other fees represent amounts we were billed in each of the years
presented for services not classifiable under the other categories
listed in the table above. Ernst and Young rendered no such services
during the last two years.
The Company's Board of Directors has assigned responsibility for the engagement
of the auditors to the Company's manager.
PART IV
Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) The following documents are filed as part of this Annual Report under Item
8. Financial Statements and Supplementary Data:
Financial Statements
Report of Ernst & Young, Chartered Accountants, Independent Auditors
Balance Sheets at December 31, 2003 and 2002
Statements of Operations and Retained Earnings for the Years Ended December 31,
2003, 2002 and 2001
Statements of Cash Flows for the Years Ended December 31, 2003, 2002 and 2001
Notes to Financial Statements
(b) Exhibits and Reports on Form 8-K
(i) Exhibits
3.1 Certificate of Incorporation of California Petroleum Transport
Corporation (filed as Exhibit 3.1 to Registrant's Registration
Statement on Form S-1, Commission File Number 33-79220, and
incorporated herein by reference)*
3.2 Bylaws of California Petroleum Transport Corporation (filed as Exhibit
3.2 to Registrant's Registration Statement on Form S-1, Commission
File Number 33-79220, and incorporated herein by reference)*
3.3 Certificate of Incorporation and Memorandum of Association of CalPetro
Tankers (Bahamas I) Limited (filed as Exhibit 3.3 to Registrant's
Registration Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)*
3.4 Articles of Association of CalPetro Tankers (Bahamas I) Limited (filed
as Exhibit 3.4 to Registrant's Registration Statement on Form F-1,
Commission File Number 33-79220, and incorporated herein by
reference)*
3.5 Certificate of Incorporation and Memorandum of Association of CalPetro
Tankers (Bahamas II) Limited (filed as Exhibit 3.5 to Registrant's
Registration Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference)*
3.6 Articles of Association of CalPetro Tankers (Bahamas II) Limited
(filed as Exhibit 3.6 to Registrant's Registration Statement on Form
F-1, Commission File Number 33-79220, and incorporated herein by
reference).
3.7 Certificate of Incorporation of CalPetro Tankers (IOM) Limited (filed
as Exhibit 3.7 to Registrant's Registration Statement on Form F-1,
Commission File Number 33-79220, and incorporated herein by
reference).
3.8 Memorandum and Articles of Association of CalPetro Tankers (IOM)
Limited (filed as Exhibit 3.8 to Registrant's Registration Statement
on Form F-1, Commission File Number 33-79220, and incorporated herein
by reference).
3.9 Certificate of Incorporation and Memorandum of Association of CalPetro
Tankers (Bahamas III) Limited (filed as Exhibit 3.9 to Registrant's
Registration Statement on Form F-1, Commission File Number 33-79220,
and incorporated herein by reference).
3.10 Articles of Association of CalPetro Tankers (Bahamas III) Limited
(filed as Exhibit 3.10 to Registrant's Registration Statement on Form
F-1, Commission File Number 33-79220, and incorporated herein by
reference).
4.1 Form of Serial Indenture between California Petroleum Transport
Company and Chemical Trust Company of California, as Indenture Trustee
(filed as Exhibit 4.1 to Registrant's Registration Statement on Form
S-3, Commission File Number 33-56377, and incorporated herein by
reference)
10.1 Form of Vessel Purchase Agreement between CalPetro Tankers (Bahamas I)
Limited, CalPetro Tankers (Bahamas II) Limited, ,CalPetro Tankers
(IOM) Limited, CalPetro Tankers (Bahamas III) Limited, and Chevron
Transport Corporation (including the form of Assignment of such Vessel
Purchase Agreement to California Petroleum Transport Corporation by
CalPetro Tankers (Bahamas I) Limited, CalPetro Tankers (Bahamas II)
Limited, CalPetro Tankers (IOM) Limited, CalPetro Tankers (Bahamas
III) Limited) (filed as Exhibit 10.3 to Registrant's Registration
Statement on Form S-3, Commission File Number 33-56377, and
incorporated herein by reference)
10.2 Form of Bareboat Charter between CalPetro Tankers (Bahamas I) Limited,
CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers (IOM) Limited,
CalPetro Tankers (Bahamas III) Limited and Chevron Transport
Corporation (filed as Exhibit 10.2 to Registrant's Registration
Statement on Form S-3, Commission File Number 33-56377, and
incorporated herein by reference).
10.3 Form of Assignment of Initial Charter Guarantee by CalPetro Tankers
(Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro
Tankers (IOM) Limited, CalPetro Tankers (Bahamas III) Limited to
California Petroleum Transport Corporation (including the form of
Collateral Assignment of such Initial Charter Guarantee to Chemical
Trust Company of California, as Collateral Trustee by California
Petroleum Transport Corporation) (filed as Exhibit 4.08 to
Registrant's Registration Statement on Form S-3, Commission File
Number 33-56377, and incorporated herein by reference).
10.4 Form of Assignment of Earnings and Insurances from CalPetro Tankers
(Bahamas I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro
Tankers (IOM) Limited, CalPetro Tankers (Bahamas III) Limited to
California Petroleum Transport Corporation (filed as Exhibit 4.09 to
Registrant's Registration Statement on Form S-3, Commission File
Number 33-56377, and incorporated herein by reference).
10.5 Form of Assignment of Initial Charter from CalPetro Tankers (Bahamas
I) Limited, CalPetro Tankers (Bahamas II) Limited, CalPetro Tankers
(IOM) Limited, CalPetro Tankers (Bahamas III) Limited to California
Petroleum Transport Corporation (including the form of Collateral
Assignment of such Initial Charter to Chemical Trust Company of
California, as Collateral Trustee by California Petroleum Transport
Corporation) (filed as Exhibit 4.10 to Registrant's Registration
Statement on Form S-3, Commission File Number 33-56377, and
incorporated herein by reference).
10.6 Form of Management Agreement between P.D. Gram & Co., and [CalPetro
Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited]
[CalPetro Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III)
Limited] (filed as Exhibit 4.10 to Registrant's Registration Statement
on Form S-3, Commission File Number 33-56377, and incorporated herein
by reference).
10.7 Form of Assignment of Management Agreement from [CalPetro Tankers
(Bahamas I) Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro
Tankers (IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] to
California Petroleum Transport Corporation (filed as Exhibit 4.11 to
Registrant's Registration Statement on Form S-3, Commission File
Number 33-56377, and incorporated herein by reference).
10.87 Form of Serial Loan Agreement between California Petroleum Transport
Corporation and [CalPetro Tankers (Bahamas I) Limited] [CalPetro
Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro (Bahamas III) Limited] (filed as Exhibit 4.12 to
Registrant's Registration Statement on Form S-3, Commission File
Number 33-56377, and incorporated herein by reference).
10.9 Form of Term Loan Agreement between California Petroleum Transport
Corporation and [CalPetro Tankers (Bahamas I) Limited] [CalPetro
Tankers (Bahamas II) Limited] [CalPetro Tankers (IOM) Limited]
[CalPetro (Bahamas III) Limited] (filed as Exhibit 4.13 to
Registrant's Registration Statement on Form S-3, Commission File
Number 33-56377, and incorporated herein by reference).
10.10 Form of Collateral Agreement between California Petroleum Transport
Corporation, the Indenture Trustee under the Serial Indenture, the
Indenture Trustee under the Term Indenture and Chemical Trust Company
of California, as Collateral Trustee (filed as Exhibit 4.14 to
Registrant's Registration Statement on Form S-3, Commission File
Number 33-56377, and incorporated herein by reference).
10.11 Form of Issue of One Debenture From [CalPetro Tankers (Bahamas I)
Limited] [CalPetro Tankers (Bahamas II) Limited] [CalPetro Tankers
(IOM) Limited] [CalPetro Tankers (Bahamas III) Limited] to California
Petroleum Transport Corporation (filed as Exhibit 4.15 to Registrant's
Registration Statement on Form S-3, Commission File Number 33-56377,
and incorporated herein by reference).
10.12 Form of First Preferred Ship Mortgage by [CalPetro Tankers (Bahamas
III) Limited] [CalPetro Tankers (IOM) Limited] to California Petroleum
Transport Corporation (including the form of assignment of such
Mortgage to Chemical Trust Company of California, as Collateral
Trustee by California Petroleum Transport Corporation) (filed as
Exhibit 4.3 to Registrant's Registration Statement on Form S-3,
Commission File Number 33-56377, and incorporated herein by
reference).
10.13 Form of Bahamian Statutory Ship Mortgage and Deed of Covenants by
[CalPetro Tankers (Bahamas I) Limited] [CalPetro Tankers (Bahamas II)
Limited] to California Petroleum Transport Corporation (including the
form of assignment of such Mortgage to Chemical Trust Company of
California, as Collateral Trustee by California Petroleum Transport
Corporation) (filed as Exhibit 4.4 to Registrant's Registration
Statement on Form S-3, Commission File Number 33-56377, and
incorporated herein by reference).
10.14 Form of Bermudian Statutory Ship Mortgage and Deed of Covenants by
CalPetro Tankers (IOM) Limited to California Petroleum Transport
Corporation (including the form of assignment of such Mortgage to
Chemical Trust Company of California, as Collateral Trustee by
California Petroleum Transport Corporation) (filed as Exhibit 4.5 to
Registrant's Registration Statement on Form S-3, Commission File
Number 33-56377, and incorporated herein by reference).
31.1 Certification of Principal Executive Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended
31.2 Certification of Principal Financial Officer pursuant to Rule
13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as
amended
32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
32.1 Certification of Principal Financial Officer pursuant to 18 U.S.C.
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
(ii) Reports on Form 8-K
The Company has not filed any current reports on Form 8-K with the SEC 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 April 8, 2004 By /s/ Nancy D. Smith
------------ President
------------------
(Signature)
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 April 8, 2004 By /s/ Nancy D. Smith
------------ Director and President
--------------------------
(Signature)
Date April 8, 2004 By /s/ R. Douglas Donaldson
------------- Director and Treasurer
---------------------------
(Signature)
Exhibit 31.1
CERTIFICATION
I, Nancy D Smith, certify that:
1. I have reviewed this Form 10-K of California Petroleum Transport
Corporation;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: April 8, 2004
By /s/ Nancy D. Smith
President
-------------------
(Signature)
Exhibit 31.2
CERTIFICATION
I, R Douglas Donaldson, certify that:
1. I have reviewed this Form 10-K of California Petroleum Transport
Corporation;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this
report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or
caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this
report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the
design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial
information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting. Date: April 8, 2004
By /s/ R. Douglas Donaldson
Treasurer
------------------------
(Signature)
Exhibit 32.1
PRINCIPAL EXECUTIVE OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Annual Report of California Petroleum Transport
Corporation (the "Company") on Form 10-K for the year ended December 31, 2003 as
filed with the Securities and Exchange Commission (the "SEC") on or about the
date hereof (the "Report"), I, Nancy D Smith, Director and President 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:
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
A signed original of this written statement has been provided to the Company and
will be retained by the Company and furnished to the SEC or its staff upon
request.
Date: April 8, 2004
By /s/ Nancy D. Smith
President
------------------
(Signature)
Exhibit 32.2
PRINCIPAL FINANCIAL OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
In connection with the Annual Report of California Petroleum Transport
Corporation (the "Company") on Form 10-K for the year ended December 31, 2003 as
filed with the Securities and Exchange Commission (the "SEC") on or about the
date hereof (the "Report"), I, R Douglas Donaldson, Treasurer 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:
The Report fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934; and
The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
A signed original of this written statement has been provided to the Company and
will be retained by the Company and furnished to the SEC or its staff upon
request.
Date: April 8, 2004
By /s/ R. Douglas Donaldson
Treasurer
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(Signature)
02089.0006 #478423