SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 10-Q
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
Commission File Number 33-82034
INDIANTOWN COGENERATION, L.P. (Exact name of co-registrant as
specified in its charter)
Delaware 52-1722490 (State or other
jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
INDIANTOWN COGENERATION FUNDING CORPORATION (Exact name of
co-registrant as specified in its charter)
Delaware 52-1889595 (State or other
jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
7500 Old Georgetown Road, 13th Floor Bethesda, Maryland 20814-6161
(Registrants' address of principal executive offices)
(301)-718-6800 (Registrants' telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. [ X ] Yes [ ] No
Indiantown Cogeneration, L.P. Indiantown Cogeneration Funding
Corporation
PART I FINANCIAL INFORMATION Page No.
Item 1 Financial Statements: Consolidated Balance Sheets as of
June 30, 1997 (Unaudited) and December 31,
1996......................................................1
Consolidated Statements of Operations for the Six Months Ended
June 30, 1997 (Unaudited) and June 30, 1996
(Unaudited)...............................................3
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1997 (Unaudited) and June 30, 1996
(Unaudited)...............................................4
Notes to Consolidated Financial Statements (Unaudited)
..............................................5
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................8
PART II OTHER INFORMATION
Item 1 Legal
Proceedings..................................................12
Item 5 Other
Information..................................................12
Item 6 Exhibits and Reports on Form
8-K..........................................................14
Signatures...................................................17
PART I FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Indiantown Cogeneration, L.P. Consolidated Balance Sheets As of June
30, 1997 and December 31, 1996
<S> <C> <C>
ASSETS June 30, 1997 December 31, 1996
(Unaudited)
CURRENT ASSETS:
Cash and cash
equivalents $ 323,314 $344,323
Accounts receivable
- -trade 14,250,668 14,859,879
Inventories 568,730 1,218,356
Prepaids 684,065 560,368
Deposits 193,357 193,357
Investments held by
Trustee, including
restricted funds of
$2,758,437 and
$3,673,116,
respectively 16,242,502 19,250,140
Total current
assets 32,262,636 36,426,423
INVESTMENTS HELD BY
TRUSTEE, restricted
funds 12,501,000 12,501,000
DEPOSITS 65,000 60,000
PROPERTY, PLANT
& EQUIPMENT:
Land 8,579,399 8,579,399
Electric and steam
generating
facilities 695,008,572 694,051,333
Less accumulated
depreciation 27,955,011 20,416,001
Net property, plant
& equipment 675,632,960 682,214,731
FUEL RESERVE 3,761,779 3,591,713
DEFERRED FINANCING
COSTS, net of
accumulated amortization
of $41,743,922 and
$41,311,315,
respectively 18,443,389 18,875,996
Total assets $ 742,666,764 $753,669,863
<FN>
The accompanying notes are an integral part of these consolidated
balance sheets.
</TABLE>
<TABLE>
<CAPTION>
Indiantown Cogeneration, L. P.
Consolidated Balance Sheets
As of June 30, 1997 and December 31, 1996
<S> <C> <C>
LIABILITIES AND
ARTNERS' CAPITAL June 30, 1997 December 31, 1996
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $4,300,971 $6,515,052
Accrued liabilities 4,367,103 1,987,427
Accrued interest 2,353,187 2,368,950
Current portion - First
Mortgage Bonds 9,983,000 9,701,000
Current portion lease
payable - railcars 257,591 248,460
Total current liabilities 21,261,852 20,820,889
LONG TERM DEBT:
First Mortgage Bonds 481,372,000 486,504,000
Tax Exempt Facility
Revenue Bonds 125,010,000 125,010,000
Lease payable - railcars 5,006,685 5,137,805
Total long term debt 611,388,685 616,651,805
Total liabilities 632,650,537 637,472,694
PARTNERS' CAPITAL:
Toyan Enterprises 52,807,789 55,774,642
Palm Power Corporation 13,201,948 13,943,660
TIFD III-Y, Inc. 44,006,490 46,478,867
Total partners' capital 110,016,227 116,197,169
Total liabilities and
partners' capital $742,666,764 $753,669,863
<FN>
The accompanying notes are an integral part of these consolidated
balance sheets.
</TABLE>
<TABLE>
<CAPTION>
Indiantown Cogeneration, L.P.
Consolidated Statements of Operations
For the Six Months Ended June 30, 1997 and June 30, 1996
<S> <C> <C>
Six Months Ended Six Months Ended
June 30, 1997 June 30, 1996
Operating Revenues: <Unaudited> <Unaudited>
Electric capacity and
capacity bonus revenue $60,637,466 $57,625,051
Electric energy revenue 15,296,980 21,492,345
Steam revenue 66,667 33,333
Total operating revenues 76,001,113 79,150,729
Cost of Sales:
Fuel and ash 17,720,221 23,628,236
Operating and maintenance 7,721,011 6,666,124
Depreciation 7,779,838 9,987,493
Total cost of sales 33,221,070 40,281,853
Gross Profit 42,780,043 38,868,876
Other Operating Expenses:
General and administrative 1,377,988 1,309,966
Insurance and taxes 3,417,685 3,722,183
Total other operating
expenses 4,795,673 5,032,149
Operating Income 37,984,370 33,836,727
Non-Operating Income
(Expenses):
Interest expense (29,168,844) (29,505,033)
Interest/Other income 1,281,577 2,166,466
Net non-operating expense (27,887,267) (27,338,567)
Net Income $10,097,103 $ 6,498,160
<FN>
The accompanying notes are an integral part of these consolidated
statements.
</TABLE>
<TABLE>
<CAPTION>
Indiantown Cogeneration, L.P.
Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 1997 and 1996
<S> <C> <C>
Six Months Six Months
Ended Ended
June 30, 1997 June 30, 1996
(Unaudited) (Unaudited)
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Income $10,097,103 $ 6,498,160
Adjustments to
reconcile net income
to net cash provided
by operating activities:
Depreciation and
amortization 7,971,617 10,155,178
Decrease (Increase)
in accounts receivable 609,211 (7,503,626)
Decrease in inventories
and fuel reserves 479,560 804,578
(Increase)Decrease in
deposits and prepaids (128,697) 1,341,453
Increase(Decrease) in
accounts payable and
accrued interest 61,572 (8,568,018)
Increase in Major
Maintenance Reserve 88,260 --
(Decrease) in lease
payable (121,989) (114,179)
Net cash provided by
operating activities 19,056,637 2,613,546
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property,
plant & equipment (957,239) (3,844,102)
Decrease in investment
held by trustee 3,007,638 3,413,597
Net cash provided by
(used in) investing
activities 2,050,399 (430,505)
CASH FLOW FROM FINANCING ACTIVITIES:
Capital Distributions (16,278,047) --
Decrease in Bonds
Payable (4,850,000) (4,397,000)
Net cash used in
financing activities (21,128,047) (4,397,000)
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS (21,009) (2,213,959)
CASH and CASH EQUIVALENTS,
beginning of year 344,323 2,666,296
CASH and CASH EQUIVALENTS,
end of period 323,314 452,337
<FN>
The accompanying notes are an integral part of these consolidated
statements.
</TABLE>
Indiantown Cogeneration, L.P.
Notes to Consolidated Financial Statements As of June 30, 1997
(Unaudited)
1. ORGANIZATION AND BUSINESS: Indiantown Cogeneration, L.P. (the
"Partnership") is a special purpose Delaware limited partnership
formed on October 4, 1991. The general partners are Toyan
Enterprises ("Toyan"), a California corporation and a special
purpose indirect subsidiary of PG&E Enterprises, and Palm Power
Corporation ("Palm"), a Delaware corporation and a special
purpose indirect subsidiary of Bechtel Enterprises,
Inc.("Bechtel Enterprises"). The sole limited partner is TIFD
III-Y, Inc. ("TIFD"), a special purpose indirect subsidiary of
General Electric Capital Corporation ("GECC"). During 1994, the
Partnership formed its sole, wholly owned subsidiary, Indiantown
Cogeneration Funding Corporation ("ICL Funding"), to act as
agent for, and co-issuer with, the Partnership in accordance
with the 1994 bond offering discussed in Note 4. ICL Funding
has no separate operations and has only $100 in assets and
capitalization.
The Partnership was formed to develop, construct, and operate an
approximately 330 megawatt (net) pulverized coal-fired cogeneration
facility (the "Facility") located on an approximately 240 acre site
in southwestern Martin County, Florida. The Facility was designed
to produce electricity for sale to Florida Power & Light Company
("FPL") and will also supply steam to Caulkins Indiantown Citrus Co.
("Caulkins") for its plant located near the Facility.
The Partnership is managed by U.S. Generating Company ("USGen")
pursuant to a Management Services Agreement (the "MSA"). The
Facility is operated by U.S. Operating Services Company ("USOSC")
pursuant to an Operation and Maintenance Agreement (the "O&M
Agreement"). USGen and USOSC are general partnerships formed
between affiliates of PG&E Enterprises and Bechtel Enterprises. On
June 26, 1997, PG&E Corporation (parent of PG&E Enterprises) and
Bechtel Enterprises announced that a subsidiary of PG&E Corporation
would acquire Bechtel Enterprises' interests in USGen and USOSC.
This will not affect USGen's obligations under the MSA or USOSC's
obligations under the O&M Agreement. In addition, Toyan and Palm
agreed that, subject to receipt of all necessary approvals, Toyan
(or another affiliated entity) will purchase 16.67% of Palm's
interest in the Partnership, which represents an approximately 2%
ownership percentage. Such transfer will be effective
retroactive to January 1, 1997 upon completion of the transaction.
The net profits and losses of the Partnership are allocated to
Toyan, Palm and TIFD (collectively, the "Partners") based on the
following ownership percentages:
Before Transfer After Transfer
Toyan 48% 50%
Palm 12% 10%
TIFD 40% 40%
All distributions other than liquidating distributions will be made
based on the Partners' percentage interest as shown above, in
accordance with the project documents and at such times and in
such amounts as the Board of Control of the Partnership
determines. The Partners contributed, pursuant to an equity
commitment agreement, approximately $140,000,000 of equity when
commercial operation of the Facility commenced in December 1995.
The Partnership was in the development stage through December
21, 1995 and commenced commercial operations on December 22, 1995
(the "Commercial Operation Date"). The Partnership's continued
existence is dependent on the ability of the Partnership to sustain
successful operations. Management of the Partnership is of the
opinion that the assets of the Partnership are realizable at their
current carrying value.
2. FINANCIAL STATEMENTS: The consolidated balance sheet as of June
30, 1997, and the consolidated statements of operations and cash
flows for the six months ended on June 30, 1997 and 1996, have
been prepared by the Partnership, without audit and in
accordance with the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, these
financial statements include all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the
financial position of the Partnership as of June 30, 1997,
results of operations and cash flows for the six months ended
June 30, 1997 and 1996.
The financial statements and related notes contained herein
should be read in conjunction with the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1996.
Investments Held by Trustee The investments held by trustee
represent bond and equity proceeds and revenue funds held by a
bond trustee/disbursement agent and are carried at cost which
approximates market. The proceeds include $12,501,000 of
restricted tax-exempt debt service reserve required by the
financing documents. The Partnership also maintains restricted
investments in an amount equal to the amount of accrued
principal and interest payables. Property, Plant and Equipment
Property, plant and equipment are recorded at actual cost.
Substantially all property, plant and equipment consist of the
Facility, which is depreciated on a straight-line basis over the
useful life of the Facility, estimated to be 35 years. Other
property and equipment are depreciated on a straight-line basis
over the estimated economic or service lives of the respective
assets (ranging from three to ten years). Routine maintenance
and repairs are charged to expense as incurred.
Equity Contribution Agreement Pursuant to an Equity Contribution
Agreement, dated as of November 1, 1994, between TIFD and
NationsBank of Florida, N.A. (succeeded by The Bank of New York
Trust Company of Florida, N.A.) (the "Trustee"), the Partners
contributed approximately $140,000,000 of equity on December 26,
1995. Proceeds were used to repay the $139,000,000 balance
outstanding under the Equity Loan Agreement. The remaining
$1,000,000 was deposited with the Trustee according to a
disbursement agreement among the Partnership, the Trustee and
the other lenders to the Partnership and is included in
investments held by trustee in the accompanying consolidated
balance sheet as of June 30, 1997 and December 31, 1996.
3. DEPOSITS: In 1991, in accordance with a contract between the
Partnership and Martin County, the Partnership provided Martin
County with a security deposit in the amount of $149,357 to
secure installation and maintenance of required landscaping
materials. This amount is included in current assets as of
December 31, 1996. The landscaping has been completed and the
Partnership has applied to the County for a return of funds in
excess of the required deposit as security for the first year
maintenance.
In 1991, in accordance with the Planned Unit Development Zoning
Agreement between the Partnership and Martin County, the Partnership
deposited $1,000,000 in trust with the Board of County Commissioners
of Martin County (the "PUD Trustee"). Income from this trust will
be used solely for projects benefiting the community of Indiantown.
On July 23, 2025, the PUD Trustee is required to return the deposit
to the Partnership. As of December 31, 1996, the estimated present
value of this deposit of approximately $65,000 has been included in
deposits in the accompanying balance sheets. The remaining balance
has been included in property plant, and equipment as part of total
construction expenses. 4. FAIR VALUE OF FINANCIAL INSTRUMENTS The
following table presents the carrying amounts and estimated fair
values of the Partnership's financial instruments at June 30, 1997.
Statement of Financial Accounting Standards No. 107, "Disclosures
about Fair Value of Financial Instruments", defines the fair market
value of a financial instrument as the amount at which the
instrument could be exchanged in a current transaction between
willing parties.
Carrying Amount Fair Value
Financial Liabilities
Tax-Exempt Bonds $125,010,000 $141,600,968
Taxable Bonds $491,355,000 $568,758,064
For the Tax Exempt Bonds and First Mortgage Bonds, the fair
values of the Partnership's bonds payable are based on the stated
rates of the Tax Exempt Bonds and First Mortgage Bonds and current
market interest rates to estimate market values for the Tax Exempt
Bonds and the First Mortgage Bonds.
The carrying amounts of the Partnership's cash and cash
equivalents, accounts receivable, deposits, prepaid expenses,
investments held by trustee, accounts payable, accrued liabilities
and accrued interest approximate fair value because of the short
maturities of these instruments.
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
Consolidated Financial Statements of the Partnership and the notes
thereto included elsewhere in this report.
General
The Partnership is primarily engaged in the ownership and
operation of a non-utility electric generating facility. Since its
inception, and until December 21, 1995, the Partnership was in the
development stage and had no operating revenues or expenses. On
December 22, 1995 the Facility commenced commercial operation. As
of June 30, 1997, the Partnership had approximately $675.6 million
of property, plant and equipment (net of accumulated depreciation)
consisting primarily of purchased equipment, construction-related
labor and materials, interest during construction, financing costs
and other costs directly associated with the construction of the
Facility. For the six months ended June 30, 1997, the Partnership
had total operating revenues of approximately $76 million, total
operating costs of $38 million, and total net interest expenses of
approximately $27.9 million resulting in net income of approximately
$10 million.
The Partnership has obtained all material environmental permits
and approvals required as of June 30, 1997 for the operation of the
Facility. Certain of these permits and approvals are subject to
periodic renewal. Certain additional permits and approvals will be
required in the future for the continued operation of the Facility.
The Partnership is not presently aware of any technical
circumstances that would prevent the issuance of such permits and
approvals or the renewal of currently existing permits. The
Partnership filed its application for a Title V air permit on May
24, 1996. A permit is expected within two years.
Results of Operations
For the six months ending June 30, 1997 and 1996, the Facility
achieved an average Capacity Billing Factor of 96.59% and 94.28%,
respectively. This resulted in earning monthly capacity payments
aggregating $55.9 million and $55.8 million, and bonuses aggregating
$4.7 million and $1.9 million for the six months ended June 30, 1997
and 1996, respectively. The Capacity Billing Factor measures the
overall availability of the Facility, but gives a heavier weighting
to on-peak availability. During the six months ended June 30, 1997,
the Facility was dispatched by FPL and generated 649,999
megawatt-hours compared with 895,813 megawatt-hours during the same
period in 1996. The 245,814 megawatt-hour decrease was primarily
due to lower dispatch levels by FPL primarily driven by mild
weather. The monthly dispatch rate for the first half of 1997
ranged from 44% to 72%, as compared to a range of 64% to 83% for the
corresponding period in 1996. The difference is primarily
attributable to lower dispatch levels by FPL .
Net income for the six months ended June 30, 1997, was
approximately $10 million compared to the net income of
approximately $6.5 million for the corresponding period in the prior
year. The $3.5 million increase is primarily attributable to a $4.1
million increase in operating income (described below) offset by a
net interest income decrease of $550,000.
Electric Revenues (dollars and KWh's in millions)
For the six months ended
June 30, 1997 June 30, 1996
Dollars 76 79.1
KWhs 650 896
Average Capacity
Billing Factor 96.59% 94.28%
Average Dispatch Rate 57% 74%
For the six months ended June 30, 1997, the Partnership had
total operating revenues of approximately $76 million as compared to
$79.1 million for the corresponding period in the prior year. The
$3.1 million decrease in operating revenue is primarily due to a
$6.2 million decrease in electric revenue resulting from lower
dispatch by FPL and is offset by a $3 million increase in electric
capacity and bonus revenue resulting from higher availability levels
during the six months ended June 30, 1997.
Costs of revenues for the six months ended June 30, 1997, were
approximately $33.2 million on sales of 649,999 MWhs as compared to
$40.3 million on sales of 895,813 MWhs for the corresponding period
in the prior year. This decrease is largely attributable to a $5.9
million decrease in fuel and ash disposal costs resulting from lower
dispatch by FPL.
Total other operating expenses for the six months ended June 30,
1997, were approximately $4.8 million, which is comparable to the
$5.0 million of total other operating expenses for the corresponding
period in the prior year.
Net interest expense for the six months ended June 30, 1997, was
approximately $27.3 million which is comparable to the $27.9 million
of net interest expense for the same period in the prior year.
Liquidity and Capital Resources
On November 22, 1994 the Partnership and ICL Funding issued
first mortgage bonds in an aggregate principal amount of $505
million (the "First Mortgage Bonds"), $236.6 million of which bear
an average interest rate of 9.26% and $268.4 million of which bear
an interest rate of 9.77%. Concurrently with the Partnership's
issuance of its First Mortgage Bonds, the Martin County Industrial
Development Authority issued $113 million of Industrial Development
Refunding Revenue Bonds (Series 1994A) which bear an interest rate
of 7.875% (the "1994A Tax Exempt Bonds"). A second series of tax
exempt bonds (Series 1994B) in the approximate amount of $12
million, which bear an interest rate of 8.05%, were issued by the
Martin County Industrial Development Authority on December 20, 1994
(the "1994B Tax Exempt Bonds" and, together with the 1994A Tax
Exempt Bonds, the "1994 Tax Exempt Bonds"). The First Mortgage
Bonds and the 1994 Tax Exempt Bonds are hereinafter collectively
referred to as the "Bonds."
Certain proceeds from the issuance of the First Mortgage Bonds
were used to repay $421 million of the Partnership's indebtedness
and financing fees and expenses incurred in connection with the
development and construction of the Facility and the balance of the
proceeds were deposited in various restricted funds that are being
administered by an independent disbursement agent pursuant to trust
indentures and a disbursement agreement. Funds administered by such
disbursement agent are invested in specified investments. These
funds together with other funds available to the Partnership were
being used: (i) to finance completion of construction, testing, and
initial operation of the Facility; (ii) to finance construction
interest and contingency; and (iii) to provide for initial working
capital.
The proceeds of the 1994 Tax Exempt Bonds were used to refund
$113 million principal amount of Industrial Development Revenue
Bonds (Series 1992A and Series 1992B) previously issued by the
Martin County Industrial Development Authority for the benefit of
the Partnership, and to fund, in part, a debt service reserve
account for the benefit of the holders of its tax-exempt bonds and
to complete construction of certain portions of the Facility.
The Partnership's total borrowings from inception through June
1997 were $769 million. The equity loan of $139 million was repaid
on December 26, 1995. As of June 30, 1997, the borrowings included
$125 million from the 1994 Tax Exempt Bonds and all of the available
First Mortgage Bond proceeds. Series A-1 of the First Mortgage
Bonds, in the aggregate principal amount of $4,397,000, matured and
were repaid on June 15, 1996. Series A-2 of the First Mortgage
Bonds, in the aggregate principal amount of $4,398,000, matured and
were repaid on December 15, 1996. Series A-3 of the First Mortgage
Bonds, in the aggregate principal amount of $4,850,000, matured and
were repaid on June 15, 1997. The weighted average interest rate
paid by the Partnership on its debt for the six months ended June
30, 1997 and 1996, was 9.18%.
The Partnership, pursuant to certain of the Project Contracts,
is required to post letters of credit which, in the aggregate, will
have a face amount of no more than $65 million. Certain of these
letters of credit have been issued pursuant to a Letter of Credit
and Reimbursement Agreement with Credit Suisse and the remaining
letters of credit will be issued when required under the Project
Contracts, subject to conditions contained in such Letter of Credit
and Reimbursement Agreement. As of June 30, 1997, no drawings have
been made on any of these letters of credit. The Letter of Credit
and Reimbursement Agreement has a term of seven years subject to
extension at the discretion of the banks party thereto.
The Partnership entered into a debt service reserve letter of
credit and reimbursement agreement, dated as of November 1, 1994,
with Banque Nationale de Paris pursuant to which a debt service
reserve letter of credit in the amount of approximately $60 million
was issued. Such agreement has a rolling term of five years,
subject to extension at the discretion of the banks party thereto.
Drawings on the debt service reserve letter of credit became
available on the Commercial Operation Date of the Facility to pay
principal and interest on the First Mortgage Bonds, the 1994 Tax
Exempt Bonds and interest on any loans created by drawings on such
debt service reserve letter of credit. Cash and other investments
held in the debt service reserve account will be drawn on for the
Tax Exempt Bonds prior to any drawings on the debt service reserve
letter of credit. As of June 30, 1997, no drawings have been made
on the debt service reserve letter of credit.
In order to provide for the Partnership's working capital needs,
the Partnership entered into a Revolving Credit Agreement with
Credit Suisse dated as of November 1, 1994. Such Agreement has a
term of seven years subject to extension at the discretion of the
banks party thereto. The revolving credit agreement has a maximum
available amount of $15 million and may be drawn on by the
Partnership from time to time. The interest rate is based upon
various short term indices at the Partnership's option and is
determined separately for each draw. As of June 30, 1997, no
working capital loans have been made to the Partnership under the
working capital loan facility.
PART II OTHER INFORMATION
Item 1 LEGAL PROCEEDINGS
The Partnership is not currently aware of any pending or
threatened litigation that it anticipates would have a material
adverse effect on the Partnership.
Item 5 OTHER INFORMATION
Governmental Approvals
The Partnership has obtained all material environmental permits
and approvals required, as of June 30, 1997, in order to continue
commercial operation of the Facility. Certain of these permits and
approvals are subject to periodic renewal. Certain additional
permits and approvals will be required in the future for the
continued operation of the Facility. The Partnership is not aware
of any technical circumstances that would prevent the issuance of
such permits and approvals or the renewal of currently issued
permits. The Partnership timely filed its application for a Title V
air permit on May 24, 1996. A permit is expected within two years.
Energy Prices
On October 1, 1996, FPL filed with the Florida Public Service
Commission its most recent projections for its 1996-1999 "as
available" energy costs (in this context, "as available" energy
costs reflect actual energy production costs avoided by FPL
resulting from the purchase of energy from the Facility and other
Qualifying Facilities). The projections filed by FPL are lower for
certain periods than the energy prices specified in the Power
Purchase Agreement for energy actually delivered by the Facility.
At other times, the projections exceed the energy prices specified
in the Power Purchase Agreement. Should FPL's "as available"
energy cost projections prove to reflect actual rates, FPL may
elect, pursuant to its dispatch and control rights over the
Facility set forth in the Power Purchase Agreement, to run the
Facility less frequently or at lower loads than if the Facility's
energy prices were lower than the cost of other energy sources
available to FPL. Because capacity payments under the Power
Purchase Agreement are not affected by FPL's dispatch of the
Facility and because capacity payments are expected by the
Partnership to cover all of the Partnership's fixed costs,
including debt service, the Partnership currently expects that, if
the recently filed projections prove to reflect actual rates, such
rates and the resulting dispatch of the Facility will not have a
material adverse effect on the Partnership's ability to service its
debt. To the extent the Facility is not operated by FPL during
Caulkins' processing season (November to June), the Partnership may
elect to run the Facility at a minimum load or shut down the
Facility and run auxiliary boilers to produce steam for Caulkins in
amounts required under the Partnership's steam agreement with
Caulkins. Such operations may result in decreased net operating
income for such periods. The Partnership expects that the
decrease, if any, will not be material. For the six months ended
June 30, 1997, FPL requested to decommit the Facility numerous
times and the Partnership has exercised its rights to operate at
minimum load (100MW) during all but one such decommit order. The
Partnership's election to operate at minimum load has not had a
material impact although energy delivered during such operations is
sold at reduced prices. Based upon FPL's projections, the
Partnership does not expect that, if the recently filed projections
prove to reflect actual rates, its dispatch rate will change
materially during the period covered by such projections.
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
a) Reports on Form 8-K: The Partnership filed a Form 8-K and
press release on January 3, 1996 announcing the commencement of
commercial operation. The Partnership also filed a Form 8-K on
December 30, 1996, announcing Final Completion of the Facility and
the first cash distribution to the Partners.
b) Exhibits:
Exhibit
No. Description
3.1 Certificate of Incorporation of Indiantown Cogeneration Funding
Corporation.*
3.2 By-laws of Indiantown Cogeneration Funding Corporation.*
3.3 Certificate of Limited Partnership of Indiantown Cogeneration,
L.P.*
3.4 Amended and Restated Limited Partnership Agreement of Indiantown
Cogeneration, L.P., among Palm Power Corporation, Toyan Enterprises
and TIFD III-Y Inc.*
3.5 Form of First Amendment to Amended and Restated Limited
Partnership Agreement of Indiantown Cogeneration, L.P.*
4.1 Trust Indenture, dated as of November 1, 1994, among Indiantown
Cogeneration Funding Corporation, Indiantown Cogeneration, L.P., and
NationsBank of Florida, N.A., as Trustee, and First Supplemental
Indenture thereto.**
4.2 Amended and Restated Mortgage, Assignment of Leases, Rents,
Issues and Profits and Security Agreement and Fixture Filing among
Indiantown Cogeneration, L.P., as Mortgagor, and Bankers Trust
Company as Mortgagee, and NationsBank of Florida, N.A., as
Disbursement Agent and, as when and to the extent set forth therein,
as Mortgagee with respect to the Accounts, dated as of November 1,
1994.**
4.3 Assignment and Security Agreement between Indiantown
Cogeneration, L.P., as Debtor, and Bankers Trust Company as Secured
Party, and NationsBank of Florida, N.A., as Disbursement Agent and,
as when, and to the extent set forth therein, a Secured Party with
respect to the Accounts, dated as of November 1, 1994.**
10.1.1 Amended and Restated Indenture of Trust between Martin
County Industrial Development Authority, as Issuer, and NationsBank
of Florida, N.A., as Trustee, dated as of November 1, 1994.**
10.1.2 Amended and Restated Authority Loan Agreement by and between
Martin County Industrial Development Authority and Indiantown
Cogeneration, L.P., dated as of November 1, 1994.**
10.1.3 Letter of Credit and Reimbursement Agreement among
Indiantown Cogeneration, L.P., as Borrower, and the Banks Named
Therein, and Credit Suisse, as Agent, dated as of November 1,
1994.**
10.1.4 Disbursement Agreement, dated as of November 1, 1994, among
Indiantown Cogeneration, L.P., Indiantown Cogeneration Funding
Corporation, NationsBank of Florida, N.A., as Tax-Exempt Trustee,
NationsBank of Florida, N.A., as Trustee, Credit Suisse, as Letter
of Credit Provider, Credit Suisse, as Working Capital Provider,
Banque Nationale de Paris, as Debt Service Reserve Letter of Credit
Provider, Bankers Trust Company, as Collateral Agent, Martin County
Industrial Development Authority, and NationsBank of Florida, N.A.,
as Disbursement Agent.**
10.1.5 Revolving Credit Agreement among Indiantown Cogeneration,
L.P., as Borrower, and the Banks Named Therein, and Credit Suisse,
as Agent, dated as of November 1, 1994.**
10.1.6 Collateral Agency and Intercreditor Agreement, dated as of
November 1, 1994, among NationsBank of Florida, N.A., as Trustee
under the Trust Indenture, dated as of November 1, 1994, NationsBank
of Florida, N.A., as Tax-Exempt Trustee under the Tax Exempt
Indenture, dated as of November 1, 1994, Credit Suisse, as letter of
Credit Provider, Credit Suisse, as Working Capital Provider, Banque
Nationale de Paris, as Debt Service Reserve Letter of Credit
Provider, Indiantown Cogeneration, L.P., Indiantown Cogeneration
Funding Corporation, Martin County Industrial Development Authority,
NationsBank of Florida, N.A., as Disbursement Agent under the
Disbursement Agreement dated as of November 1, 1994, and Bankers
Trust Company, as Collateral Agent.**
10.1.7 Amended and Restated Equity Loan Agreement dated as of
November 1, 1994, between Indiantown Cogeneration, L.P., as the
Borrower, and TIFD III-Y Inc., as the Equity Lender.**
10.1.8 Equity Contribution Agreement, dated as of November 1, 1994,
between TIFD III-Y Inc. and NationsBank of Florida, N.A., as
Disbursement Agent.**
10.1.9 GE Capital Guaranty Agreement, dated as of November 1, 1994,
between General Electric Capital Corporation, as Guarantor, and
NationsBank of Florida, N.A., as Disbursement Agent.**
10.1.11 Debt Service Reserve Letter of Credit and Reimbursement
Agreement among Indiantown Cogeneration, L.P., as Borrower, and the
Banks Named Therein, and Banque Nationale de Paris, as Agent, dated
as of November 1, 1994.**
10.2.18 Amendment No. 2 to Coal Purchase Agreement, dated as of
April 19, 1995.***
10.2.19 Fourth Amendment to Energy Services Agreement, dated as of
January 30, 1996.*****
21 Subsidiaries of Registrant*
27 Financial Data Schedule. (For electronic filing purposes
only.)*****
99 Copy of Registrants' press release dated January 3, 1996.****
* Incorporated by reference from the Registrant Statement on Form
S-1, as amended, file no. 33-82034 filed by the Registrants with
the SEC in July 1994. ** Incorporated by reference from the
quarterly report on Form 10-Q, file no. 33-82034 filed by the
Registrants with the SEC in December 1994. *** Incorporated by
reference from the quarterly report on Form 10-Q, file no. 33-82034
filed by the Registrants with the SEC in May 1995. ****
Incorporated by reference from the current report on Form 8-K, file
no. 33-82034 filed by the Registrants with the SEC in January 1996.
***** Incorporated by reference from the quarterly report on Form
10-Q, file no. 33-82034 filed by the Registrants with the SEC in
May 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized
INDIANTOWN COGENERATION, L.P.
(Co-Registrant)
Date: August 14, 1997 /s/ John Cooper
John R. Cooper
Vice President (Chief Financial
Officer)
INDIANTOWN COGENERATION FUNDING
CORPORATION (Co-Registrant)
Date: August 14, 1997 /s/ John Cooper
John R. Cooper
Vice President (Chief
Financial Officer)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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Exhibit 27: Financial Data Schedule
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
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