SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
FORM 10-K
[ X ]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1996
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
Indicate by check mark if disclosure of delinquent filer pursuant
to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of 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. [ ]
As of March 31, 1997, there were 100 shares of common stock of
Indiantown Cogeneration Funding Corporation, $1 par value
outstanding.
Indiantown Cogeneration, L.P. Indiantown Cogeneration Funding
Corporation
PART I Page Number
Item 1 Business.........................................1
Item 2 Properties.......................................6
Item 3 Legal Proceedings...............................6
Item 4 Submission of Matters to a Vote of
Security Holders.........................................7
PART II
Item 5 Market for the Registrant's Common Stock
and Related Security Holder Matters........... 7
Item 6 Selected Financial Data........................ 7
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of Operations.......... 8
Item 8 Financial Statements and Supplementary Data... 13
Item 9 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure................ 33
PART III
Item 10 Directors and Executive Officers.............. 33
Item 11 Remuneration of Directors and Officers........ 35
Item 12 Security Ownership of Certain Beneficial
Owners and Management........................... 35
Item 13 Certain Relationships and Related Transactions 36
PART IV
Item 14 Exhibits, Financial Statement Schedules
and Reports on Form 8-K..................... 36
Signatures............................................ 40
PART I
Item 1 BUSINESS
The Partnership
Indiantown Cogeneration, L.P. (the "Partnership") is a
special purpose Delaware limited partnership formed on October 4,
1991. The general partners of the Partnership are Toyan
Enterprises ("Toyan"), a special purpose indirect subsidiary of
PG&E Enterprises ("PG&E Enterprises"), and Palm Power Corporation
("Palm"), a special purpose indirect subsidiary of Bechtel
Enterprises, Inc. ("Bechtel Enterprises"). The sole limited
partner of the Partnership is TIFD III-Y, Inc. ("TIFD"), a
special purpose indirect subsidiary of General Electric Capital
Corporation ("GECC") (Toyan, Palm and TIFD are hereinafter
referred to collectively as the "Partners"). Toyan, Palm and
TIFD own 48%, 12% and 40%, respectively, of the partnership
interests in the Partnership.
Except for matters expressly reserved to the partners in the
Partnership, the Partnership's Board of Control has full and
exclusive power and authority in respect of the management of the
Partnership's business. However, the Board of Control may
delegate such authority to the Chief Executive Officer of the
Partnership or to a third party pursuant to a management services
agreement, and may authorize persons to execute documents on
behalf of the Partnership. Members of the Board of Control are
appointed and may be removed by the partners of the Partnership.
No cash compensation or non-cash compensation was paid in any
prior year or will be paid in the current calendar year to any
members of the Board of Control.
In July 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 connection with the 1994 bond offering described
below under "Management's Discussion and Analysis of Financial
Condition and Results of Operations". Although the Partnership
has agreed to indemnify ICL Funding for certain liabilities, 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 owned by the Partnership in
southwestern Martin County, Florida.
The Facility was developed on behalf of the Partnership by
U.S. Generating Company ("USGen"), a California general
partnership formed in 1989 to develop and manage the construction
and operation of electric power generating facilities throughout
the United States owned by partnerships in which subsidiaries of
PG&E Enterprises and Bechtel Enterprises own equity interests.
The Facility commenced commercial operation under its power
purchase agreement (the "Power Purchase Agreement") with Florida
Power & Light Company ("FPL") on December 22, 1995. The Facility
synchronized with the FPL system on June 30, 1995 and the
Partnership sold to FPL electricity produced by the Facility
during startup and testing. The Partnership's continued
existence is dependent on the ability of the Partnership to
maintain successful commercial operation under the Power Purchase
Agreement. Management of the Partnership is of the opinion that
the assets of the Partnership are realizable at their current
carrying value. The Partnership has no assets other than the
Facility site, contractual arrangements relating to the Facility
(the "Project Contracts") and the stock of ICL Funding.
Certain Project Contracts
Bechtel Power Corporation ("Bechtel Power") designed and
completed construction of the Facility pursuant to a fixed-price
amended and restated turnkey construction contract (the
"Construction Contract"). Bechtel Power's responsibilities under
the Construction Contract included design, engineering,
procurement and construction services, Facility start-up,
training of personnel (in conjunction with U.S. Operating
Services Company ("U.S. Operating") as discussed below) and
performance testing. The Facility achieved Substantial
Completion under the Construction Contract on December 22, 1995,
and Final Completion under the Construction Contract on December
13, 1996.
The Facility supplies (i) electric generating capacity and
energy to FPL pursuant to the Power Purchase Agreement and (ii)
steam to Caulkins Indiantown Citrus Company ("Caulkins") pursuant
to a long-term energy services agreement (the "Energy Services
Agreement").
Payments from FPL pursuant to the Power Purchase Agreement
provide approximately 99% of Partnership revenues. Under and
subject to the terms of the Power Purchase Agreement, FPL is
obligated to purchase electric generating capacity made available
to it and associated energy from the Facility beginning with the
date the Facility achieved commercial operation through December
22, 2025.
Payments by FPL consist of capacity payments and energy
payments. FPL is required to make capacity payments to the
Partnership on a monthly basis for electric generating capacity
made available to FPL during the preceding month regardless of
the amount of electric energy actually purchased. The capacity
payments have two components, an un-escalated fixed capacity
payment and an escalated fixed operation and maintenance payment,
which together are expected by the Partnership to cover all of
the Partnership's fixed costs, including debt service. Energy
payments are made only for the amount of electric energy actually
delivered to FPL. The energy payments made by FPL are expected
by the Partnership to cover the Partnership's variable costs of
electric energy production but will be insufficient to cover the
variable costs of steam production for steam supplied to
Caulkins. The amount of this shortfall is not expected by the
Partnership to have a material adverse effect on its ability to
service its debt.
The Partnership supplies thermal energy to Caulkins in order
for the Facility to meet the operating and efficiency standards
under the Public Utility Regulatory Policy Act of 1978, as
amended, and the Federal Energy Regulatory Commission's ("FERC")
regulations promulgated thereunder (collectively, "PURPA"). The
Facility has been certified as a Qualifying Facility under PURPA.
Under PURPA, Qualifying Facilities are exempt from certain
provisions of the Public Utility Holding Company Act of 1935, as
amended ("PUHCA"), most provisions of the Federal Power Act (the
"FPA"), and, except under certain limited circumstances, rate and
financial regulation under state law. The Energy Services
Agreement with Caulkins requires Caulkins to purchase the lesser
of (i) 525 million pounds of steam per year or (ii) the minimum
quantity of steam per year necessary for the Facility to maintain
its status as a Qualifying Facility under PURPA (currently
estimated by the Partnership not to exceed 525 million pounds per
year). O n January 3, 1997, the Partnership submitted to the
FERC an Application for Recertification as a Qualifying
Cogeneration Facility. The application is pending.
The Partnership entered into a coal purchase agreement (the
"Coal Purchase Agreement") with Costain Coal, Inc. ("Costain
Coal"), pursuant to which Costain Coal supplies all of the
Facility's coal needs, which are estimated to be 1 million tons
of coal per year. The Partnership has no obligation to purchase
a minimum quantity of coal under the Coal Purchase Agreement.
The fuel price escalation provisions in the Coal Purchase
Agreement are substantially the same as those contained in the
Power Purchase Agreement with FPL related to the energy payment.
This mechanism is intended to mitigate any mismatch between the
price the Partnership pays for coal and the energy payments
received from FPL.
Coal ash produced during operation of the Facility is being
disposed of pursuant to the Coal Purchase Agreement and back-up
disposal arrangements with Chambers Waste Systems, Inc. of
Florida ("Chambers"). The Partnership has been informed that
both Costain Coal and Chambers have obtained the permits
necessary to receive such coal ash.
The Partnership entered into a lime purchase agreement (the
"Lime Purchase Agreement") with Chemical Lime Company
("Chemlime"), an Alabama corporation, to supply the lime
requirements of the Facility's dry scrubber and sulfur dioxide
removal system. The initial term of the Lime Purchase Agreement
is 15 years from the commercial operation date. Chemlime is
obligated to provide all of the Facility's lime requirements, but
the Partnership has no obligation to purchase a minimum quantity
of lime.
Pursuant to an operations and maintenance agreement entered
into on September 30, 1992, U.S. Operating, a California
partnership between subsidiaries of Bechtel Enterprises and PG&E
Enterprises, is providing operations and maintenance services to
the Facility.
Competition
Because the Partnership has a long-term contract to sell
electric generating capacity and energy from the Facility to FPL,
it does not expect competitive forces to have a significant
effect on its business. As discussed under "Energy Prices"
below, the cost of power available to FPL from other sources will
affect FPL's dispatch of the Facility and, therefore, the amount
of electric energy FPL purchases from the Partnership. The
Partnership expects that the capacity payments under the Power
Purchase Agreement, which are not affected by the level of FPL's
dispatch of the Facility, will cover all of the Partnership's
fixed costs, including debt service.
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 most 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 Energy Services
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. During 1996,
the Partnership received 30 requests from FPL to decommit the
Facility. The Partner ship elected to operate at minimum load
for the duration of all of those requests, during which period
the energy revenues did not include complete recovery from FPL of
the incremental increase in variable operating costs to operate
the Facility at a lower, less efficient load. 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.
Employees
The Partnership has no employees and does not anticipate
having any employees in the future because, under a management
services agreement, USGen acts as the Partnership's
representative in all aspects of managing construction and
operation of the Facility as directed by the Partnership's Board
of Control. As noted above, U.S. Operating is providing
operations and maintenance services for the Partnership.
Business Strategy and Outlook
The Partnership's overall business plan is to safely produce
clean, reliable energy at competitive prices. The Facility
completed its first full year of operation on December 31, 1996,
and achieved Final Completion under the Construction Contract on
December 13, 1996.
During 1996, the Facility produced 1,862,439 MW-hr of energy
for sale to FPL. Dispatch of the unit by FPL averaged
approximately 77% over the year. The Facility also produced
approximately 340 million pounds of steam for sale to Caulkins
exceeding the minimum requirements to maintain Qualifying
Facility status. Following the resolution of certain equipment
and design issues in early 1996, the Facility ended the year with
a twelve-month rolling average Capacity Billing Factor of 94.46%.
Cash flows during 1996 were sufficient to fund all operating
expenses and debt obligations.
The Partnership anticipates that, barring any unforeseeable
adverse events, the results for 1997 will be similar to the
results for 1996. Dispatch of the unit by FPL during the summer
months is expected to be similar to 1996 levels. Dispatch during
the winter is highly dependent on weather and FPL's cost of
running its oil and gas fired units. Caulkins expects a strong
citrus crop for processing in 1997 and steam demand from Caulkins
is expected to be similar to 1996 levels.
The Facility is planning on four weeks of scheduled outages
during 1997 to perform routine inspections and maintenance. The
primary outage is scheduled for October 1997 during the
off-season for citrus production.
The Partnership is not aware of any reason to expect coal
pricing during 1997 to substantially differ from 1996 levels.
In the absence of any major equipment failures, unit
availability is expected to exceed 1996 levels. If this is
achieved, the Capacity Billing Factor and associated capacity
bonuses would be higher.
Governmental Approvals
The Partnership has obtained all material environmental
permits and approvals required, as of the end of 1996, in order
to continue commercial operation of the Facility. Certain of
such 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.
The air construction permit will continue in effect until the
Title V permit is issued. A permit is expected within the next
two years.
Item 2 PROPERTIES
The Facility is located in a predominantly industrial area in
southwestern Martin County, Florida, on approximately 240 acres
of land owned by the Partnership (the "Site"). Other than the
Facility, the Site, and the pipeline and associated equipment,
the Partnership does not own or lease any material properties.
Item 3 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. The Partnership had been
named as a co-defendant with Bechtel Power in a suit brought by
the spouse of an employee of Bechtel Power who died in an
accident which occurred on the Site. A defense motion for
summary judgment was denied as to Bechtel Power, but the denial
was reversed on appeal on December 26, 1996; no ruling was made
as to the Partnership. On February 21, 1997, the plaintiff
voluntarily dismissed the litigation with prejudice, thus closing
the matter.
The Partnership's steam host, Caulkins, has been named as a
defendant in a lawsuit by various Florida citrus growers. The
plaintiffs allege that Caulkins did not pay the growers the
proper amounts for their crops at various times from 1989 through
1994 and are claiming $10 million in damages. Caulkins, without
admitting the veracity of the plaintiffs' allegations, has
settled with citrus growers not involved in the litigation which
represent over 95% of the fruit processed during the period which
is the subject of the lawsuit and, therefore, over 95% of the
damages alleged. While the Partnership is not and does not
anticipate being involved with this action, a significant
judgment against Caulkins could have an adverse impact on
Caulkins' ability to continue purchasing steam from the
Partnership and, therefore, require the Partnership to take
certain actions, under the Energy Services Agreement with
Caulkins and otherwise, to preserve the Facility's status as a
qualifying facility. Caulkins has informed the Partnership of
its view that the magnitude of the remaining exposure with
respect to this litigation is not material to Caulkins' financial
position. The Partnership does not, and cannot, express any
opinion as to the likelihood or remoteness of a decision being
rendered against Caulkins in this case.
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the security holders
of the Partnership during 1996.
PART II
Item 5 MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SECURITY HOLDER MATTERS
The Partnership is a Delaware limited partnership wholly
owned by Palm, Toyan and TIFD. Beneficial interests in the
Partnership are not available to other persons except with the
consent of the Partners.
There is no established public market for ICL Funding's
common stock. The 100 shares of $1 par common stock are owned by
the Partnership. ICL Funding has not, and does not, intend to
pay dividends on the common stock.
Item 6 SELECTED FINANCIAL DATA
The selected financial data of the Partnership presented
below, which consists primarily of certain summary balance sheet
information of the Partnership as of December 31, 1996, 1995,
1994, 1993 and 1992, should be read in conjunction with Item 7 of
this report, "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS", and with the Partnership's
financial statements appearing elsewhere in this report. The
Partnership, which was in the development stage through December
21, 1995, began construction of the Facility in October 1992 and
declared commercial operation of the Facility on December 22,
1995. The financial statements and supplementary data required
by this item are presented under Item 8.
During the fourth quarter of 1996, the Partnership had
operating revenues of $37.1 million, operating income of $16.8
million and net income of $2.4 million. During the first full
year of commercial operation ending on December 31, 1996, the
Partnership had operating revenues of $158.8 million, operating
income of $67.2 million and net income of $11.8 million.
<TABLE>
<CAPTION>
Indiantown Cogeneration, L.P.
as of December 31,
<S> <C> <C> <C> <C> <C>
1996 1995 1994 1993 1992
Total Assets $753,669,863 $799,451,339 $637,944,198 $344,338,931 $94,315,657
Total
Liabilities 637,472,694 658,649,167 637,944,098 344,338,831 94,315,557
Total Partners'
Capital 116,197,169 140,802,172 100 100 100
Construction
in Progress 0 0 515,298,762 256,643,224 69,854,712
Property, Plant
& Equipment 682,214,731 691,588,155 0 0 0
</TABLE>
Item 7 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. From
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 December 31, 1996, the Partnership had approximately $682.2
million of property, plant and equipment 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 3 and 12 months ended December 31, 1996, the Partnership had
total operating revenues of approximately $37.1 million and
$158.8 million, total operating costs of $20.3 million and $91.6
million, and total net interest expenses of approximately $14.4
million and $55.4 million resulting in net income of $2.4 million
and $11.8 million, respectively. Because the Partnership had
only ten days of operations in 1995, no comparable financial data
is available with which to compare operations in 1996 with any
corresponding prior period.
On September 9, 1994, Costain Group PLC, parent company of
Costain Coal, the Facility's primary fuel supplier, announced
that it was proceeding with the sale of its U.S. coal assets. On
March 17, 1997, Costain Group PLC announced that it completed the
sale of Costain Coal to Rencoal Inc. for $44.7 million. Costain
Coal will remain obligated under the Coal Purchase Agreement. In
light of the terms of the Coal Purchase Agreement compared with
similar coal supply and ash disposal agreements which the
Partnership believes are currently obtainable in the market, the
Partnership currently does not believe that the sale of Costain
Coal will have an adverse effect on the Partnership's ability to
arrange for coal supply and ash disposal services.
Results of Operations
For its first ten days of operation ending December 31, 1995,
the Facility achieved an average Capacity Billing Factor of
99.86%. For the three months ending December 31, 1996, the
Facility achieved an average Capacity Billing Factor of 93.87%.
For its first full year of commercial operation ending December
31, 1996, the Facility achieved an average Capacity Billing
Factor of 93.75%. This resulted in earning full monthly capacity
payments aggregating $28.0 million for the quarter and $111.7
million for the year and bonuses aggregating $1.0 million for the
quarter and $3.3 million for the year. The Capacity Billing
Factor measures the overall availability of the Facility, but
gives a heavier weighting to on-peak availability. During the
year, the Facility was dispatched by FPL and generated 1,865,188
megawatt-hours. The monthly average dispatch rate was 69% and
77% for the fourth quarter of 1996 and the twelve months ended
December 31, 1996, respectively.
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"). Of this amount, $236.6
million of the First Mortgage Bonds bear an average interest rate
of 9.26% and $268.4 million of the First Mortgage Bonds 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 colle ctively 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 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 borrowings through 1996 were $770 million,
of which the $139 million equity loan was repaid by a $140
million equity contribution on December 26, 1995. Table I
illustrates the current application of borrowings (as of December
1996) compared to estimated sources and uses of funds through the
Guaranteed Completion Date (January 21, 1996) found in the
Partnership's Registration Statement (No. 33-82034) filed with
the Securities and Exchange Commission.
TABLE I Sources and Uses of Funds
The following table sets forth the budgeted sources and uses
of funds by the Partnership as of December 31, 1996. Certain
actual uses of funds through the Final Completion Date shown
below under "Uses as of 12/31/96" differ from the budgeted
amounts shown under "Total Funds" because, among other things,
the budget was based upon a Substantial Completion Date of
January 21, 1996 (the Guaranteed Completion Date) instead of the
actual Substantial Completion Date of December 22, 1995.
<TABLE>
<CAPTION>
Estimated Sources and Uses of Funds
(in thousands)
<S> <C> <C> <C>
SOURCES OF FUNDS Total Funds Uses as of 12/31/96 Remaining Funds
First Mortgage Bonds $505,000 $505,000 $ --
1994 Tax-Exempt Bonds 125,010 125,010 --
Equity Contribution
of Partners 140,000 140,000 --
total sources of funds $770,010 $770,010 $8,453(1)
Uses of Funds
CAPITAL COSTS
Engineering, Procurement,
and Construction Costs $438,730 $440,872(3) $(2,142)(2)
Electrical, Potable
Water and Sewer
Interconnection 6,850 6,318 532
Property Acquisition
Costs 8,811 8,579 232
Steam Host Modification 14,500 14,500 --
Development Costs
and Fees 30,442 30,442 --
Mobilization and Spare
Parts 10,618 15,771 (5,153)(2)
General & Administrative
Costs and Fees 13,057 10,636 2,421
Taxes 8,827 4,756 4,071
Startup Consumables 3,584 7,639 (4,055)(2)
Initial Working Capital 3,450 4,916 (1,466)(2)
Fuel Reserve 5,000 5,101 (101)(2)
Title Insurance 3,187 2,751 436
Other Construction-Related
Costs 4,223 3,006 1,217
FPL Delay Damages -- 508 (508)(2)
Contractor Performance
Bonus -- 8,461 (8,461)(2)
Contractor Schedule Bonus -- 6,100 (6,100)(2)
Total capital cost 551,279 570,356 (19,077)
FINANCING COSTS
Initial Bank Financing Interest
and Related Expenses 58,441 50,081 8,360
Termination of Interest
Rate Hedging Agreements (7,046) (7,046) --
First Mortgage Bonds and
Tax-Exempt Bonds Interest
and Related Expenses 84,311 81,698 2,613
Equity Loan Interest and
Related Expenses 33,524 31,798 1,726
Tax-Exempt Bond Debt
Service Reserve Account 12,501(4) 12,501(4) --
total financing costs 181,731 169,032 12,699
total uses of funds $733,010 $739,388 $(6,378)
Owner's Contingency(5) 37,000 22,169(5) 14,831
TOTALS $770,010 $761,557 $ 8,453(1)
<FN>
(1) Pursuant to the Disbursement Agreement, on December 22, 1996,
$8.4 million of the construction funds were deposited in the
Completion Account for the payment of remaining construction
expenses. (2) Overruns in these categories have been funded by
cost underruns in other budget categories where spending is
considered complete or are anticipated to underrun allocated
costs. The reallocation of certain underruns is reflected in the
Owner's Contingency. (3) Of the $8.4 million in the Completion
Account, $900,000 has been withheld pending completion of the
remaining punchlist items. (4) The Debt Service Reserve Letter
of Credit is available to serve as a debt service reserve for the
holders of the First Mortgage Bonds and the Tax-Exempt Bonds.
(5) Subsequent to Final Completion on December 13, 1996, the
project made its first cash distribution of $36.4 million
($22.169 million of completion contingency and $14.2 million of
other income) to the Partners on December 16, 1996, an Interest
Payment Date.
</TABLE>
As of December 31, 1996, the borrowings included all of the
available $125 million of the proceeds of 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 $4.4 million matured and were repaid on June
15, 1996. Series A-2 of the first Mortgage Bonds, in the
aggregate principal amount of $4.4 million, matured and were
repaid on December 16, 1996. The weighted average interest rate
paid by the Partnership on its debt for the 3 and 12 months ended
December 31, 1996, was 9.08% and 9.13%, respectively. The
comparable rate, including the equity loan, was 9.82% and 9.57%
for the respective periods in 1995.
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
December 31, 1996, 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 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 December 31, 1996,
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 December 31, 1996,
no working capital loans have been made to the Partnership under
the working capital loan facility.
Item 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements Page
Independent Public Accountants' Report 14
Consolidated Balance Sheets 15
Consolidated Statements of Operations 17
Consolidated Statements of Changes in Partners'
Capital 18
Consolidated Statements of Cash Flows 19
Notes to Consolidated Financial Statements 20
Report of Independent Public Accountants
To the Partners of Indiantown Cogeneration, L.P.:
We have audited the accompanying consolidated balance sheets
of Indiantown Cogeneration, L.P., (a Delaware limited
partnership), as of December 31, 1996 and 1995, and the related
consolidated statements of operations for the year ended December
31, 1996, and for the period from commercial operation (December
22, 1995) to December 31, 1995, and the related consolidated
statements of changes in partners' capital and cash flows for
each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit 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 Indiantown Cogeneration, L.P. as of December 31, 1996 and
1995, and the results of its operations for the year ended
December 31, 1996, and for the period from commercial operation
(December 22, 1995) to December 31, 1995, and its cash flows for
each of the three years in the period ended December 31, 1996, in
conformity with generally accepted accounting principles.
Washington, D.C.
March 6, 1997
<TABLE>
<CAPTION>
Indiantown Cogeneration, L.P.
Consolidated Balance Sheets
As of December 31, 1996 and December 31, 1995
<S> <C> <C>
ASSETS 1996 1995
CURRENT ASSETS:
Cash and cash equivalents $344,323 $2,666,296
Accounts receivable-trade 14,859,879 6,806,299
Inventories 1,218,356 127,115
Prepaids 560,368 1,844,328
Deposits 193,357 193,357
Investments held by Trustee,
including restricted funds of
$3,673,116 and $958,530
respectively 19,250,140 59,251,661
Total current assets 36,426,423 70,889,056
INVESTMENTS HELD BY TRUSTEE,
restricted funds 12,501,000 12,501,000
DEPOSITS 60,000 60,000
PROPERTY, PLANT & EQUIPMENT:
Land 8,579,399 8,579,399
Electric and steam
generating facilities 694,051,333 683,793,344
Less accumulated depreciation 20,416,001 784,589
Net property, plant &
equipment 682,214,731 691,588,154
FUEL RESERVE 3,591,713 4,662,617
DEFERRED FINANCING COSTS, net
of accumulated amortization of
$41,311,314 and $40,436,799
respectively 18,875,996 19,750,512
Total assets $753,669,863 $799,451,339
<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 December 31, 1996 and December 31, 1995
<S> <C> <C>
LIABILITIES AND
PARTNERS' CAPITAL 1996 1995
CURRENT LIABILITIES:
Accounts payable $6,515,052 $5,885,114
Accrued liabilities 1,987,427 14,740,306
Accrued interest 2,368,950 2,396,324
Current portion - First
Mortgage Bonds 9,701,000 8,795,000
Current portion lease
payable - railcars 248,460 231,158
Total current liabilities 20,820,889 32,047,902
LONG TERM DEBT:
First Mortgage Bonds 486,504,000 496,205,000
Tax Exempt Facility
Revenue Bonds 125,010,000 125,010,000
Lease payable - railcars 5,137,805 5,386,265
Total long term debt 616,651,805 626,601,265
Total liabilities 637,472,694 658,649,167
PARTNERS' CAPITAL:
Toyan Enterprises 55,774,642 67,585,042
Palm Power Corporation 13,943,660 16,896,261
TIFD III-Y, Inc. 46,478,867 56,320,869
Total partners' capital 116,197,169 140,802,172
Total liabilities and
partners' capital 753,669,863 799,451,339
<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 Year Ended December 31, 1996 and for the
Period from Commercial Operations (December 22, 1995) to December
31, 1995
<S> <C> <C>
1996 1995
Operating Revenues:
Electric capacity
and capacity bonus $114,982,519 $ 3,361,877
Electric energy revenue 43,780,095 1,202,983
Steam 83,333 0
Total operating revenues 158,845,947 4,564,860
Cost of Sales:
Fuel and ash 46,841,508 1,253,449
Operating and maintenance 15,035,599 345,258
Depreciation 19,631,413 544,674
Total cost of sales 81,508,520 2,143,381
Gross Profit 77,337,427 2,421,479
Other Operating Expenses:
General and administrative 2,661,431 97,236
Insurance and taxes 7,482,925 222,191
Total other operating
expenses 10,144,356 319,427
Operating Income 67,193,071 2,102,052
Non-Operating Income (Expenses):
Interest expense (59,648,059) (3,522,739)
Interest income 4,245,039 2,222,859
Net non-operating expense (55,403,020) (1,299,880)
Net Income $11,790,051 $ 802,172
<FN>
The accompanying notes are an integral part of these consolidated
statements.
</TABLE>
<TABLE>
<CAPTION>
Indiantown Cogeneration, L. P.
Consolidated Statements of Changes in Partners' Capital
For the Years Ended December 31, 1996, 1995 and 1994
<S> <C> <C> <C> <C>
Toyan Enterprises Palm Power Corporation TIFD III-Y, Inc. Total
Partners' capital,
December 31, 1993 $48 $12 $40 $100
Capital
contributions -- -- -- --
Capital
distributions -- -- -- --
Partners' capital,
December 31, 1994 $ 48 $ 12 $ 40 $ 100
Capital
contributions 67,199,952 16,799,988 55,999,960 139,999,900
Net Income 385,042 96,261 320,869 802,172
Capital
distributions -- -- -- --
Partners' capital,
December 31,
1995 $67,585,042 $16,896,261 $56,320,869 $140,802,172
Capital
contributions -- -- -- --
Net income 5,659,225 1,414,806 4,716,020 11,790,051
Capital
distributions 17,469,625 4,367,407 14,558,022 36,395,054
Partners' capital,
December 31,
1996 $55,774,642 $13,943,660 $46,478,867 $116,197,169
<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 Years Ended December 31, 1996, 1995 and 1994
<S> <C> <C> <C>
1996 1995 1994
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income $11,790,051 802,172 --
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 20,505,928 557,264 --
Increase in accounts and
subscriptions receivable (8,053,580) (4,608,986) --
Increase in inventories
and fuel reserve (20,337) -- --
Decrease in lease payable (231,158) -- --
Decrease in deposits and
prepaids 1,283,960 -- --
(Decrease)increase in accounts
payable, accrued liabilities
and accrued interest (12,150,315) 3,319,893 --
Net cash provided by
operating activities 13,124,549 70,343 --
CASH FLOWS FROM INVESTING
ACTIVITIES:
Cash paid for construction
in progress $ -- $(167,448,352) $(240,823,245)
Purchase of property,
plant & equipment (10,257,989) -- --
Decrease(increase) in
investment held by trustee 40,001,521 33,218,686 (35,770,079)
Net cash provided by (used
in) investing activities 29,743,532 (134,229,666) (276,593,324)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Payment of debt issuance
and financing costs -- (5,287,362) (19,516,976)
Proceeds from bonds -- -- 630,010,000
Proceeds from construction loan -- -- 187,697,000
Proceeds from GECC loan -- 139,000,000 --
Payment of GECC loan -- (139,000,000) (139,000,000)
Payment of construction loan -- -- (273,513,000)
Payment of bonds (8,795,000) -- (113,000,000)
Capital contributions -- 139,999,900 --
Capital distributions (36,395,054) -- --
Net cash provided by (used
in) financing activities (45,190,054) 134,712,538 272,677,024
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS (2,321,973) 553,215 (3,916,300)
Cash and cash equivalents,
beginning of year 2,666,296 2,113,081 6,029,381
Cash and cash equivalents,
end of year $ 344,323 $2,666,296 $2,113,081
SUPPLEMENTAL DISCLOSURE
OF INVESTING ACTIVITIES:
Change in construction
in progress $ -- $515,298,762 $(258,655,538)
Amortization of deferred
financing costs during
construction -- 863,880 16,426,026
Increase in property,
plant & equipment -- (692,115,897) --
(Increase)decrease in
accounts receivable -- (2,197,213) --
Increase in inventories
and fuel reserve -- (4,789,732) --
Increase in deposits & prepaids -- (1,893,328) (5,000)
Increase in accounts payable,
accrued liabilities and
accrued interest -- 11,767,753 1,411,267
Increase in lease payable -- 5,617,423 --
Cash paid for construction
in progress $ -- $(167,448,352) $(240,823,245)
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid for interest $57,349,533 $ 64,443,401 $ 25,910,238
<FN>
The accompanying notes are an integral part of these consolidated statements.
</TABLE>
Indiantown Cogeneration, L.P.
Notes to Consolidated Financial Statements As of December 31,
1996 and 1995
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") in accordance with
the Power Purchase Agreement discussed in Note 6. The Facility
will also supply steam to Caulkins Indiantown Citrus Co.
("Caulkins") for its plant located near the Facility in
accordance with the Energy Services Agreement discussed in Note
6.
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.
The net profits and losses of the Partnership are allocated
to Toyan, Palm and TIFD (collectively, the "Partners") based on
the following ownership percentages:
Toyan 48%
Palm 12%
TIFD 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 commenced in December
1995.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Presentation
The Partnership's financial statements are prepared on the
accrual basis of accounting in accordance with generally accepted
accounting principles. The preparation of financial statements
in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from
those estimates. Cash and Cash Equivalents For the purposes of
reporting cash flows, cash equivalents include short-term
investments with original maturities of three months or less.
Inventories Coal and lime inventories are stated at the lower of
cost or market using the average cost method.
Prepaid Expenses Prepaid expenses of $560,368 as of December 31,
1996, include $481,158 for insurance costs related to
property damage and other general liability policies and
$79,210 for prepayments of the annual administrative fees for
the letters of credit and for the trustee.
Prepaid expenses of $1,844,328 as of December 31, 1995, include
$1,397,579 for insurance costs related to property damage and
other liability policies and $446,749 for prepayments under the
operating and maintenance services contract.
Deposits Deposits are stated at cost and include amounts required
under certain of the Partnership's agreements as described in
Note 3. Investments Held by Trustee The investments held by
the trustee represent bond and equity proceeds 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 the amount of accrued principal and
interest payable. 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, less any residual value. Other property and equipment
are depreciated on a straight-line basis over the estimated
economic or service lives of the respective assets (ranging
from five to seven years). Routine maintenance and repairs
are charged to expense as incurred.
Construction in Progress
At the Commercial Operation Date, the total balance of
construction in progress was transferred to property, plant and
equipment, inventories and fuel reserve. Costs incurred
consisted primarily of purchased equipment, construction-related
labor and materials, net costs of performance testing, interest
during construction and other costs directly associated with the
construction and development of the Facility. Capitalized
interest and overhead are depreciated as part of the basis of the
property using the straight-line method over the useful life of
the Facility, commencing on the Commercial Operation Date.
Capitalized interest consisted of the following components as of
December 31, 1995:
Capitalized interest $105,403,843
Interest income (6,485,216)
Amortization of deferred financing costs 40,407,277
Deferred gain on settlement of interest
rate swaps (7,047,399)
$132,278,505
Fuel Reserve The fuel reserve, carried at cost, represents an
approximate thirty-day supply of coal held for emergency
purposes.
Major Maintenance Reserve
The major maintenance reserve represents an accrual for
anticipated expenditures for scheduled significant maintenance of
the Facility. The accrual is recognized ratably over the
maintenance cycle of the related equipment.
Deferred Financing Costs Financing costs, consisting primarily of
the costs incurred to obtain project financing, are deferred
and amortized using the effective interest rate method over
the term of the related permanent financing. Income Taxes
Under current law, no Federal or state income taxes are paid
directly by the Partnership. All items of income and expense
of the Partnership are allocable to and reportable by the
Partners in their respective income tax returns.
Accordingly, no provision is made in the accompanying
financial statements for Federal or state income taxes.
Reclassifications
Certain 1995 balances have been reclassified to conform to
the 1996 presentation.
New Accounting Pronouncement
In March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed of" ("SFAS No. 121"). SFAS No.
121, which has been adopted for the Partnership's 1996 financial
statements, establishes criteria for recognizing and measuring
impairment losses when recovery of recorded long-lived asset
values is uncertain. The adoption of this pronouncement has not
had an impact the Partnership's financial condition or results of
operations for the year ended 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, and December 31, 1995. The
landscaping has been completed and the Partnership has
applied to Martin 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 and 1995, estimated present values of
this deposit of approximately $60,000 for each year, are included
in deposits in the accompanying balance sheets. The remaining
balance is included in deferred financing costs.
4. BONDS AND NOTES PAYABLE: First Mortgage Bonds
The Partnership and ICL Funding jointly issued $505,000,000
of First Mortgage Bonds (the "First Mortgage Bonds") in a public
issuance registered with the Securities and Exchange Commission.
Proceeds from the issuance were used to repay outstanding
balances of $273,513,000 on a prior construction loan and to
complete the project. The First Mortgage Bonds are secured by a
lien on and security interest in substantially all of the assets
of the Partnership. The First Mortgage Bonds were issued in 10
separate series with interest rates ranging from 7.38 to 9.77
percent and with maturities ranging from 1996 to 2020. Interest
is payable semi-annually on June 15 and December 15 of each year
and commenced on June 15, 1995. Interest cost related to the
First Mortgage Bonds was $47,456,604 and $47,513,881 in 1996 and
1995, respectively.
Tax Exempt Facility Revenue Bonds
On January 5, 1993, in order to finance a portion of the
costs of constructing and equipping the Facility, the Partnership
issued and sold $113,000,000 of Series 1992A and 1992B Industrial
Development Revenue Bonds (the "1992 Bonds") through the Martin
County Industrial Development Authority (the "MCIDA"). The
proceeds from this issuance were invested in an investment
portfolio with Fidelity Investments Institutional Services
Company. On November 22, 1994, the Partnership refunded the 1992
Bonds with proceeds from the issuance of $113,000,000 Series
1994A and of $12,010,000 Series 1994B Tax Exempt Facility
Refunding Revenue Bonds which were issued on December 20, 1994
(the Series 1994A Bonds and the Series 1994B Bonds, collectively,
the "1994 Tax Exempt Bonds").
The 1994 Tax Exempt Bonds were issued by the MCIDA pursuant
to an Amended and Restated Indenture of Trust between the MCIDA
and NationsBank of Florida, N.A. (succeeded by The Bank of New
York Trust Company of Florida, N.A.) as trustee (the "Trustee").
Proceeds from the 1994 Tax Exempt Bonds were loaned to the
Partnership pursuant to the MCIDA Amended and Restated Authority
Loan Agreement dated as of November 1, 1994 (the "Authority
Loan"). The Authority Loan is secured by a lien on and a
security interest in substantially all of the assets of the
Partnership. The 1994 Tax Exempt Bonds, which mature December
15, 2025, carry fixed interest rates of 7.875 percent and 8.05
percent for Series 1994A and 1994B, respectively. Total interest
paid related to the 1994 Tax Exempt Bonds was $9,865,555 and
$10,939,752 for the years ended December 31, 1996 and 1995,
respectively.
Future minimum payments related to outstanding First Mortgage
Bonds and 1994 Tax Exempt Bonds at December 31, 1996 are as
follows (in thousands).
1997 $ 9,701
1998 10,265
1999 9,997
2000 -0-
2001 -0-
Thereafter 591,252
Total $ 621,215
In 1994, with proceeds from the issuance of the First Mortgage
Bonds, an equity loan in the amount of $139,000,000 was paid
in full and the Partnership and TIFD entered into an Amended
and Restated Equity Loan Agreement (the "Equity Loan
Agreement") for a maximum loan of $139,000,000 to be drawn at
the Partnership's request, incorporating the same terms as
the original loan. As of December 22, 1995, the Commercial
Operation Date, the maximum amount of the loan had been drawn
and was outstanding. The Partnership paid $-0- and
$2,813,357 in interest and $-0- and $2,561,428 in commitment
fees during 1996 and 1995, respectively.
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 Partners
contributed approximately $140,000,000 of equity on December
26, 1995. Proceeds were used to repay the $139,000,000
outstanding under the Equity Loan Agreement. The remaining
$1,000,000 was deposited with the Trustee according to the
disbursement agreement among the Partnership, the Trustee and
the other lenders and is included in investments held by
trustee in the accompanying consolidated balance sheet as of
December 31, 1996.
Revolving Credit Agreement
The Revolving Credit Agreement provides for the availability
of funds for the working capital requirements of the Facility.
The interest rate is based upon various short-term indices chosen
at the Partnership's option and is determined separately for each
draw. The loan includes commitment fees, to be paid quarterly,
of .375 percent on the unborrowed portion. Under the original
and new working capital loans, the Partnership paid $57,187 and
$57,031 in commitment fees in 1996 and 1995, respectively. At
December 31, 1996, no working capital loans had been made to the
Partnership under the Revolving Credit Agreement.
FPL Termination Fee Letter of Credit On or before the Commercial
Operation Date, the Partnership was required to provide FPL
with a letter of credit equal to the total termination fee as
defined in the Power Purchase Agreement in each year not to
exceed $50,000,000. Pursuant to the terms of the Letter of
Credit and Reimbursement Agreement, the Partnership had
obtained a commitment for the issuance of this letter of
credit. At commercial operation, December 22, 1995, this
letter of credit replaced the completion letter of credit
outlined below. The initial amount of $13,000,000 was issued
for the first year of operations. FPL Completion Letter of
Credit At financial closing in October 1992, the Partnership
provided to FPL a letter of credit in the amount of
$9,000,000 pursuant to the Power Purchase Agreement. This
letter of credit was terminated in accordance with the
refinancing and a new one was issued with essentially the
same terms. The Power Purchase Agreement requires that the
Partnership pay FPL for each day beyond December 1, 1995,
that the Facility did not achieve commercial operation.
Because the commercial operation date did not occur before
December 1, 1995, commencing December 1, 1995 and until
December 22, 1995, FPL was entitled to draw on the letter of
credit in the amount of $750,000 per calendar month pro-rated
for a partial month. In lieu of drawing on the letter of
credit, the Partnership paid FPL $508,065 in delay damages on
December 22, 1995. Upon issuance of the above FPL
Termination Fee Letter of Credit, the FPL Completion Letter
of Credit was terminated.
FPL QF Letter of Credit Within 60 days after the Commercial
Operation Date, the Partnership must provide a letter of
credit for use in the event of a loss of qualifying facility
status under the Public Utility Regulatory Policies Act of
1978. The initial amount is $500,000 increasing by $500,000
per agreement year to a maximum of $5,000,000. Pursuant to
the terms of the Letter of Credit and Reimbursement
Agreement, the Partnership has obtained a commitment for the
issuance of this letter of credit. The amount will be used
by the Partnership as necessary to maintain or reinstate the
Facility's qualifying facility status. The Partnership may,
in lieu of a letter of credit, make regular cash deposits to
a dedicated account in amounts totaling $500,000 per
agreement year to a maximum of $5,000,000. In February 1996,
the Partnership established a QF account with the trustee.
The balance in this account at December 31, 1996, was
$500,000 and is included in unrestricted investments held by
trustee in the accompanying consolidated bal ance sheet.
Steam Host Letter of Credit At financial closing in October
1992, the Partnership provided Caulkins a letter of credit in
the amount of $10,000,000 pursuant to the Energy Services
Agreement (see Note 6). This letter of credit was terminated
in accordance with the refinancing and a new one was issued
with essentially the same terms. In the event of a default
under the Energy Services Agreement, the Partnership is
required to pay liquidated damages in the amount of
$10,000,000. Failure by the Partnership to pay the damages
within 30 days allows the steam host to draw on the letter of
credit the amount of damages suffered by Caulkins. Debt
Service Reserve Letter of Credit
On November 22, 1994, the Partnership also entered into a
debt service reserve letter of credit and reimbursement agreement
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
are available 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 prior to any drawings on the
debt service reserve letter of credit.
5. PURCHASE AGREEMENTS: Coal Purchase and Transportation
Agreement The Partnership entered into a 30-year purchase
contract with Costain Coal, Inc., commencing from the first day
of the calendar month following the Commercial Operation Date,
for the purchase of the Facility's annual coal requirements at a
price defined in the agreement, as well as for the disposal of
ash residue. The Partnership has no obligation to purchase a
minimum quantity of coal under this agreement.
Lime Purchase Agreement
On May 1, 1992, the Partnership entered into a lime purchase
agreement with Chemical Lime Company of Alabama, Inc. for supply
of the Facility's lime requirements for the Facility's dry
scrubber SO2 removal system. The initial term of the agreement
is 15 years from the Commercial Operation Date and may be
extended for successive 5-year periods. The agreement may be
canceled by either party after January 1, 2000, upon proper
notice. The Partnership has no obligation to purchase a minimum
quantity of lime under the agreement.
6. SALES AND SERVICES AGREEMENTS: Power Purchase Agreement On
May 21, 1990, the Partnership entered into a Power Purchase
Agreement with FPL for sales of the Facility's electric output.
As amended, the agreement is effective for a 30-year period,
commencing with the Commercial Operation Date. The pricing
structure provides for both capacity and energy payments.
Capacity payments remain relatively stable because the
amounts do not vary with dispatch. Price increases are
contractually provided. Capacity payments include a
bonus/penalty payment for specified levels of available capacity.
Energy payments are derived from a contractual formula defined in
the agreement based on the actual cost of domestic coal at
another FPL plant, St. Johns River Power Park.
Energy Services Agreement On September 30, 1992, the Partnership
entered into an energy services agreement with Caulkins.
Commencing on the Commercial Operation Date and continuing
throughout the 15-year term of the agreement, Caulkins is
required to purchase the lesser of 525 million pounds of
steam per year or the minimum quantity of steam per year
necessary for the Facility to maintain its status as a
Qualifying Facility under PURPA. The Facility provided steam
to Caulkins in 1995 during start-up and testing of the
Facility, and declared Commercial Operation with Caulkins on
March 1, 1996. 7. RELATED PARTY TRANSACTIONS: Construction
Contract
The Partnership entered into a construction agreement with
Bechtel Power Corporation ("Bechtel Power"), an affiliate of
Bechtel Enterprises, for the design, engineering, procurement,
construction, start-up and testing of the Facility (the
"Construction Contract"). As of December 31, 1996, the total
contract value was $440,872,879 including change orders to date.
Payments of $439,972,879 have been made to Bechtel Power under
the Construction Contract since inception including $770,096 for
the year ended December 31, 1996. $900,000 of the December 31,
1995, scheduled progress payment under the Construction Contract
was withheld pending completion of certain start-up punchlist
items and is included in accounts payable at December 31, 1996.
The final progress payment of $101,000 will be paid when Bechtel
Power has met specific conditions stated in the Construction
Contract.
Bechtel Power guaranteed that Substantial Completion would
occur on or prior to January 21, 1996, the Guaranteed Completion
Date. Substantial Completion is achieved when the Facility
demonstrates that it has met emissions guarantees and has
achieved 88 percent of guaranteed net electrical output during
required test periods. A schedule bonus for Substantial
Completion prior to the Guaranteed Completion Date is provided in
the Construction Contract. Substantial Completion was declared
as of December 22, 1995 and a $6.1 million schedule bonus was
paid on April 4, 1996. Performance bonuses of $4.5 million were
paid on April 4, 1996, as a portion of the estimate of the total
performance bonuses and a final payment of $3.9 million was made
on September 17, 1996.
Management Services Agreement
The Partnership has a management services agreement with U.S.
Generating Company ("USGen"), a California general partnership,
whose general partners are subsidiaries of PG&E Enterprises and
Bechtel Enterprises. The agreement provides for USGen to provide
day-to-day management and administration of the Partnership's
business relating to the Facility. The agreement will continue
for a term of 34 years. Compensation to USGen under the
agreement includes an annual base fee of $650,000 (adjusted
annually), wages and benefits for employees performing work on
behalf of the Partnership and other costs directly related to the
Partnership. Amounts incurred under this agreement were
$2,769,570 and $3,176,772 in 1996 and 1995, respectively. At
December 31, 1996 and 1995, the Partnership owed USGen $206,916
and $250,173, respectively, which are included in accrued
liabilities in the accompanying consolidated financial
statements.
Operations and Maintenance Agreement
The Partnership has an operations and maintenance agreement
with U.S. Operating Services Company ("U.S. Operating"), a
California general partnership between subsidiaries of Bechtel
Enterprises and PG&E Enterprises, for the operations and
maintenance of the Facility for a period of 30 years.
Thereafter, the agreement will be automatically renewed for
periods of 5 years until terminated by either party with 12
months notice. If targeted plant performance is not reached,
U.S. Operating will pay liquidated damages to the Partnership.
Compensation to U.S. Operating under the agreement includes an
annual base fee of $1.5 million ($900,000 of which is
subordinate to debt service and certain other costs), certain
earned fees and bonuses based on the Facility's performance and
reimbursement for certain costs including payroll, supplies,
spare parts, equipment, certain taxes, licensing fees, insurance
and indirect costs expressed as a percentage of payroll and
personnel costs. The fees are adjusted quarterly by a measure
of inflation as defined in the agreement. Payments of
$7,210,201 and $9,049,410 were made to U.S. Operating in 1996
and 1995, respectively. At December 31, 1996 and 1995, the
Partnership owed U.S. Operating $61,802 and $575,883,
respectively, which are included in accrued liabilities in the
accompanying consolidated financial statements.
Consulting Services In 1996 and 1995, the Partnership paid
engineering consulting fees of $4,521 and $13,279,
respectively, to Bechtel Generating Company, a wholly-owned
subsidiary of Bechtel Enterprises.
Railcar Lease The Partnership entered into a 15 year Car Leasing
Agreement with GE Capital Railcar Services Corporation, an
affiliate of GECC, to furnish and lease 72 pressure
differential hopper railcars to the Partnership for the
transportation of fly ash and lime. The cars were delivered
starting in April 1995, at which time the lease was recorded
as a capital lease. The leased asset of $5,753,375 and
accumulated depreciation of $633,788, is included in
property, plant and equipment at December 31, 1996. Payments
of $629,856, including principal and interest, were made in
1996, and the lease obligation of $5,386,265 at December 31,
1996 is reported as a lease payable in the accompanying
consolidated balance sheets.
Future minimum payments related to the Car Leasing Agreement
at December 31, 1996, are approximately as follows:
1997 248,000
1998 267,000
1999 287,000
2000 309,000
2001 332,000
Thereafter 3,943,000
Total $5,386,000
Development Costs
At the original financial closing in October 1992, the
Partnership paid development fees and reimbursed certain costs,
totaling $14.8 million to PG&E Enterprises, $3.9 million to
Bechtel Enterprises, $11.1 million to GECC and $1.2 million to
USGen, related to the development of the Facility.
Distribution to Partners
On December 16, 1996, as provided in the Partnership Agreement,
Indiantown distributed $36.395 million to the Partners. Funds
distributed were from unused contingency and electric and steam
revenues collected during the first year of commercial operations
and are included in partners' capital on the accompanying
consolidated financial statements.
8. INTERCONNECTION AGREEMENT: On February 24, 1992, the
Partnership entered into an Interconnection Agreement with
FPL to connect the operation of FPL's transmission system to
the Facility, outlining the development, construction,
installation, operation and maintenance responsibilities.
The term of this agreement will expire on December 31, 2026,
and will automatically be extended for a period of two years.
9. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the carrying amounts and
estimated fair values of certain of the Partnership's financial
instruments at December 31, 1996 and 1995.
Financial Liabilities December 31, 1996
Carrying Amount Fair Value
Tax Exempt Bonds $125,010,000 $143,067,534
First Mortgage Bonds $496,205,000 $570,178,669
Financial Liabilities December 31, 1995
Carrying Amount Fair Value
Tax Exempt Bonds $125,010,000 $142,540,118
First Mortgage Bonds $505,000,000 $595,997,030
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 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
Item 10 DIRECTORS AND EXECUTIVE OFFICERS
Indiantown Cogeneration, L.P. Board of Control
The following table sets forth the names, ages and positions
of the members of the Board of Control of the Partnership.
Members of the Board of Control are selected from time to time
by, and serve at the pleasure of, the Partners of the
Partnership.
Name Age Position
Joseph P. Kearney................. 50 Palm Representative
John R. Cooper...................... 49 Palm Representative
P. Chrisman Iribe.................. 45 Toyan Representative
Edward J. Givens.................. 57 Toyan Representative
William D. Strittmatter......... 40 TIFD Representative
Michael J. Tzougrakis........... 55 TIFD Representative
Joseph P. Kearney has been President and Chief Executive Officer
of U.S. Generating Company since it was formed in 1989.
Prior to joining U.S. Generating Company, Mr. Kearney held
senior management positions at the Coastal Corporation from
1984 to 1989. Prior to 1984, Mr. Kearney held positions in
project and technology development and financing with the
Fluor Corporation, Enpex Corporation and System Development
Corporation. From 1974 to 1979, Mr. Kearney served as Chief
of Energy Technology, White House Office of Management &
Budget. He had Executive Office responsibility for
financial, policy, legislative, management and budgetary
proposals by the U.S. Department of Energy and the Nuclear
Regulatory Commission. He holds a Ph.D. in Nuclear
Engineering from Massachusetts Institute of Technology.
John R. Cooper is Senior Vice President of U.S. Generating
Company and has been with U.S. Generating Company since it was
formed in 1989. Prior to joining U.S. Generating Company, he
spent 3 years as chief financial officer with a European oil,
shipping and banking group. Prior to 1986, Mr. Cooper spent 7
years with Bechtel Financing Services, Inc., where his last
position was Vice President and Manager. Mr. Cooper holds an
M.B.A. in Finance from the Kellogg Graduate School of Management
at Northwestern, an M.A. from the Johns Hopkins Nitze School of
Advanced International Studies (SAIS) and a B.A. from Trinity
College, Connecticut.
P. Chrisman Iribe is Executive Vice President of U.S.
Generating Company and has been with U.S. Generating Company
since it was formed in 1989. Prior to joining U.S. Generating
Company, Mr. Iribe was senior vice president for planning, state
relations and public affairs with ANR Pipeline Company, a natural
gas pipeline company and a subsidiary of the Coastal Corporation.
Mr. Iribe holds a B.A. degree in Economics from George Washington
University.
Edward S. Givens is Vice President, Construction Management
of U.S. Generating Company. Mr. Givens, who joined U.S.
Generating Company in 1992, is responsible for construction
management of all projects in which U.S. Generating Company plays
a role. Before joining U.S. Generating Company, Mr. Givens was a
vice president with Bechtel Power and manager of its Houston
office. He worked for Bechtel Power for 19 years. From February
1980 to November 1983, he was project manager for the
515-megawatt Muskogee generating plant designed and built for
Oklahoma Gas and Electric Company. Mr. Givens holds a B.S. in
Chemical Engineering from the University of Texas and is a
licensed professional engineer in Texas.
William D. Strittmatter is a Vice President of GE Capital and
Managing Director and Chief Credit Officer of GE Capital Services
Structured Finance Group, Inc. ("SFG"). He is responsible for
the worldwide credit and risk management function of SFG's
project and structured financing activities in the energy,
infrastructure and industrial sectors. Mr. Strittmatter joined
GE Capital in 1982, and has held various positions in finance,
operations and marketing. He received a BS degree in business
from the Rochester Institute of Technology and earned an MBA from
the Harvard Business School.
Michael J. Tzougrakis is a Managing Director of Structured
Finance Group, Inc. ("SFG"), a unit of GE Capital, and is
currently responsible for technical portfolio, technical
underwriting and construction loan management for SFG. During
his 26 year career with GE Capital, Mr. Tzougrakis has held
management positions with responsibility for operations,
preparation of proposals, project development and Facility
installation and start-up in the United States and abroad. Mr.
Tzougrakis is a graduate of General Electric's Installation and
Service Engineering Program and holds a B.S.E.E. degree from
Pratt Institute.
ICL Funding Corporation Board of Directors
The following table sets forth the names, ages and positions
of the directors and executive officers of ICL Funding .
Directors are elected annually and each elected director holds
office until a successor is elected. Officers are elected from
time to time by vote of the Board of Directors.
Name Age Position
Joseph Kearney 50 Director, President
P. Chrisman Iribe 45 Director, Secretary
Michael J. Tzougrakis 55 Director, Vice President
John R. Cooper 49 Vice President, Chief
Financial Officer and
Principal Accounting
Officer
Item 11 REMUNERATION OF DIRECTORS AND OFFICERS
No cash compensation or non-cash compensation was paid in any
prior year or is currently proposed to be paid in the current
calendar year by ICL Funding or the Partnership to any of the
officers and directors listed above. Accordingly, the Summary
Compensation Table and other tables required under Item 402 of
the Securities and Exchange Commission's Regulation S-K have been
omitted, as presentation of such tables would not be meaningful.
Management services for the Partnership are being performed
by U.S. Generating Company on a cost-plus basis in addition to
the payment of a base fee. Operation and maintenance services
for the Partnership will be performed by U.S. Operating on a
cost-plus basis. In addition to a base fee, U.S. Operating may
earn certain additional fees and bonuses based on specified
performance criteria.
Item 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Partnership interests in the Partnership are held as follows:
Toyan 48% G.P.
Palm 12% G.P.
TIFD 40% L.P.
All of the outstanding shares of common stock of ICL Funding
are owned by the Partnership.
Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership has several material contracts with
affiliated entities. These contracts, which include the
Construction Contract, the Management Services Agreement, the
Operations and Maintenance Agreement and the Railcar Lease, are
described elsewhere in this report, most notably in Note 7 to the
Partnership's consolidated financial statements.
PART IV
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
a) Documents filed as of this Report Page
(1) Consolidated financial statements:
Report of Independent Public Accountants............... 14
Consolidated Balance Sheets As of
December 31, 1996 and December 31, 1995 ................ 15
Consolidated Statements of Operations for the Year Ended
December 31, 1996 and for the Period from Commercial
Operations (December 22, 1995) to December 31, 1995..... 17
Consolidated Statements of Changes
in Partners' Capital For The Years Ended
December 31, 1996, 1995 and 1994........................ 18
Consolidated Statements of Cash Flows For The
Years Ended December 31, 1996, 1995 and 1994............ 19
Notes to Consolidated Financial
Statements.............................................. 20
(2) Consolidated Financial Statement
Schedules............................................... None
b) Reports on Form 8-K:
The Partnership filed a Form 8-K and press release on January 3,
1996 announcing the commencement of commercial operations.
The Partnership filed a Form 8-K on December 23, 1996,
announcing final completion of the Facility and the first cash
distribution made to the Partners on December 16, 1996.
c) 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 co-registrant has duly caused this Form 10-K to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Bethesda, state of Maryland, on March
31, 1997.
INDIANTOWN COGENERATION, L.P.
Date: March 31, 1997 /s/ John R. Cooper
Name: John R. Cooper
Title: Chief Financial Officer,
Principal Accounting Officer
and Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Form 10-K has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Joseph P. Kearney Member of Board of Control, March 31, 1997
Joseph P. Kearney President and Chief
Executive Officer
/s/ P. Chrisman Iribe Member of Board of Control, March 31, 1997
P. Chrisman Iribe Senior Vice President
/s/ John R. Cooper Chief Financial Officer, March 31, 1997
John R. Cooper Principal Accounting
Officer and Senior
Vice President
/s/ Edward S. Givens Member of Board of Control March 31, 1997
Edward S. Givens
/s/ William D. Strittmatter Member of Board of Control March 31, 1997
William D. Strittmatter
/s/ Michael Tzougrakis Member of Board of Control March 31, 1997
Michael J. Tzougrakis
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the co-registrant has duly caused this Form 10-K to be
signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Bethesda, state of Maryland, on
March 31, 1997.
INDIANTOWN COGENERATION
FUNDING CORPORATION
Date: March 31, 1997 /s/ John R. Cooper
Name: John R. Cooper
Title: Chief Financial Officer,
Principal Accounting Officer
and Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Form 10-K has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Joseph P. Kearney Director and President, March 31, 1997
Joseph P. Kearney
/s/ P. Chrisman Iribe Director and Secretary, March 31, 1997
P. Chrisman Iribe
/s/ John R. Cooper Chief Financial Officer, March 31, 1997
John R. Cooper Principal Accounting
Officer and Vice President
/s/ Michael J. Tzougrakis Director and Vice President March 31, 1997
Michael J. Tzougrakis
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ARTICLE>5
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<CAPTION>
Exhibit 27: Financial Data Schedule
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 19,594,463
<SECURITIES> 0
<RECEIVABLES> 14,859,879
<ALLOWANCES> 0
<INVENTORY> 1,218,356
<CURRENT-ASSETS> 36,426,422
<PP&E> 682,214,732
<DEPRECIATION> 20,416,001
<Total Assets> 753,669,863
<CURRENT-LIABILITIES> 20,820,889
<BONDS> 621,215,000
0
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<COMMON> 0
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<TOTAL-LIABILITY-AND-EQUITY> 753,669,863
<SALES> 158,845,947
<TOTAL-REVENUES> 158,845,947
<CGS> 81,508,516
<TOTAL-COSTS> 91,652,872
<Other-Costs> 10,144,356
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59,648,060
<Income-before-taxes> 11,790,054
<INCOME-TAX> 0
<INCOME-CONTINUING> 11,790,054
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,790,054
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
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