Indiantown Cogeneration, L.P. and Subsidiary
Consolidated Balance Sheets
As of December 31, 2001 and 2000
LIABILITIES AND PARTNERS' CAPITAL 2001 2000
- ------------------------------------------------------------------ ----------------- -----------------
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 11,474,326 $ 9,325,173
Accrued interest 2,324,178 2,370,686
Current portion - First Mortgage Bonds 11,460,407 11,140,896
Current portion of lease payable - railcars 358,575 331,628
----------------- -----------------
Total current liabilities 25,617,486 23,168,383
----------------- -----------------
LONG TERM DEBT:
First Mortgage Bonds 432,107,562 443,567,969
Tax Exempt Facility Revenue Bonds 125,010,000 125,010,000
Lease payable - railcars 3,584,963 3,943,538
----------------- -----------------
Total long term debt 560,702,525 572,521,507
----------------- -----------------
Total liabilities 586,320,011 595,689,890
----------------- -----------------
COMMITMENTS AND CONTINGENCIES (NOTE 7)
PARTNERS' CAPITAL:
Toyan Enterprises 26,706,773 25,536,395
Palm Power Corporation 8,887,444 8,497,967
Indiantown Project Investment, L.P. Partnership 17,730,450 16,953,444
Thaleia, LLC 35,549,777 33,991,869
----------------- -----------------
Total partners' capital 88,874,444 84,979,675
----------------- -----------------
Total liabilities and partners' capital $ 675,194,455 $ 680,669,565
================= =================
The accompanying notes are an integral part of these consolidated financial statements.
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Indiantown Cogeneration, L.P. and Subsidiary
Consolidated Statements of Operations
For the Years Ended December 31, 2001, 2000 and 1999
2001 2000 1999
----------------------- --------------------- ---------------------
----------------------- --------------------- ---------------------
Operating Revenues:
Electric capacity and capacity bonus $122,202,351 $124,029,498 $123,682,957
Electric energy revenue 52,901,962 53,652,475 39,461,349
Steam 327,778 108,418 125,813
------------------- ------------------ ------------------
Total operating revenues 175,432,091 177,790,391 163,270,119
------------------- ------------------ ------------------
Cost of Sales:
Fuel and ash 56,320,761 55,910,214 39,794,007
Operating and maintenance 21,654,029 19,353,798 19,767,743
Depreciation 15,187,033 15,003,258 15,227,631
Loss on disposal of assets 609,097 155,780 --
------------------- ------------------ ------------------
Total cost of sales 93,770,920 90,423,050 74,789,381
------------------- ------------------ ------------------
Gross Profit 81,661,171 87,367,341 88,480,738
------------------- ------------------ ------------------
Other Operating Expenses:
General and administrative 4,450,258 5,179,313 4,501,136
Insurance and taxes 7,155,260 6,475,006 6,212,453
------------------- ------------------ ------------------
Total other operating expenses 11,605,518 11,654,319 10,713,589
------------------- ------------------ ------------------
Operating Income 70,055,653 75,713,022 77,767,149
------------------- ------------------ ------------------
Non-Operating Income (Expense):
Interest expense (55,528,078) (56,905,787) (57,475,271)
Interest income 1,767,194 2,407,354 2,122,142
------------------- ------------------ ------------------
Net non-operating expense (53,760,884) (54,498,433) (55,353,129)
------------------- ------------------ ------------------
Income before cumulative effect of a change in accounting
principles 16,294,769 21,214,589 22,414,020
Cumulative effect of a change in accounting
for scheduled major overhaul costs (Note 2) -- 920,536 --
------------------- ------------------ ------------------
Net Income $ 16,294,769 $ 22,135,125 $ 22,414,020
=================== ================== ==================
The accompanying notes are an integral part of these consolidated financial statements.
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Indiantown Cogeneration, L. P. and Subsidiary
Consolidated Statements of Changes in Partners' Capital
For the Years Ended December 31, 2001, 2000 and 1999
Toyan Palm Power Total Partners'
Enterprises Corporation TIFD III-Y, Inc. IPILP Thaleia, LLC Capital
--------------- ------------ --------------- ------------- ----------- -------------
Partners' capital, December 31, 1998 $27,586,061 $9,180,053 $36,720,211 $18,314,205 $ -- $91,800,530
Net Income (1/1/99 through 6/4/99) 3,139,325 1,044,700 4,178,802 2,084,177 -- 10,447,004
--------------- ------------ --------------- ------------- ----------- -------------
Partners' capital, June 4, 1999 $30,725,386 $10,224,753 $40,899,013 $20,398,382 $ -- $102,247,534
Transfer TIFD III-Y, Inc. 19.90% interest to
Thaleia, LLC -- -- (20,347,259) -- 20,347,259 --
Net Income (6/5/99 through 9/20/99) 1,915,912 637,575 1,281,525 1,271,961 1,268,773 6,375,746
Capital distributions (6/5/99
through 9/20/99) (5,039,385) (1,677,000) (3,370,770) (3,345,615) (3,337,230) (16,770,000)
--------------- ------------ --------------- ------------- ----------- -------------
Partners' capital, September 20, 1999 $27,601,913 $9,185,328 $18,462,509 $18,324,728 $18,278,802 $91,853,280
Transfer TIFD III-Y, Inc. 20.00% interest to
Thaleia, LLC -- -- (18,370,656) -- 18,370,656 --
Net Income (9/21/99 through 11/24/99) 1,175,664 391,236 3,912 780,517 1,561,032 3,912,361
--------------- ------------ --------------- ------------- ----------- --------------
Partners' capital, November 24, 1999 $28,777,577 $9,576,564 $ 95,765 $19,105,245 $38,210,490 $95,765,641
Transfer TIFD III-Y, Inc. 0.10% interest to
Thaleia, LLC -- -- (95,765) -- 95,765 --
Net Income (11/25/99 through 12/31/99) 504,512 167,891 -- 334,942 671,564 1,678,909
Capital distributions (11/25/99 through
12/31/99) (2,764,600) (920,000) -- (1,835,400) (3,680,000) (9,200,000)
--------------- ------------ -------------- ------------- ----------- ------------
Partners' capital, December 31, 1999 $26,517,489 $8,824,455 $ -- $17,604,787 $35,297,819 $88,244,550
=============== ============ =============== ============= =========== ===========
Net Income 6,651,606 2,213,512 -- 4,415,957 8,854,050 22,135,125
Capital distributions (7,632,700) (2,540,000) -- (5,067,300) (10,160,000) (25,400,000)
--------------- ------------ --------------- ------------- ------------ ------------
Partners' capital, December 31, 2000 $25,536,395 $8,497,967 $ -- $16,953,444 $33,991,869 $84,979,675
=============== ============ =============== =========== =========== =============
Net Income 4,896,578 1,629,477 -- 3,250,806 6,517,908 16,294,769
Capital distributions (3,726,200) (1,240,000) -- (2,473,800) (4,960,000) (12,400,000)
--------------- ------------ --------------- ------------- ----------- --------------
Partners' capital, December 31, 2001 $26,706,773 $8,887,444 $ -- $17,730,450 $35,549,777 $88,874,444
=============== ============ =============== ============= =========== ==============
The accompanying notes are an integral part of these consolidated financial statements.
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Indiantown Cogeneration, L.P. and Subsidiary
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2001, 2000, and 1999
2001 2000 1999
------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $16,294,769 $22,135,125 $22,414,020
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of a change in accounting principles -- (920,536) --
Depreciation and amortization 16,011,589 15,827,822 15,681,507
Loss on disposal of assets 609,097 155,780 --
Effect of changes in assets and liabilities:
Increase in accounts receivable-trade (589,889) (381,500) (1,102,391)
(Increase) decrease in inventories and fuel reserve (1,279,926) (574,774) 1,904,412
Increase in deposits and prepaid expenses (193,705) (72,231) (76,122)
Increase in accounts payable and accrued
liabilities and accrued interest 2,102,645 1,844,616 552,186
----------- ----------- ----------
Net cash provided by operating activities 32,954,580 38,014,302 39,373,612
----------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant&equipment, net of disposals (2,585,658) (2,064,741) (2,108,071)
Increase in investments held by Trustee (6,986,397) (302,934) (1,013,585)
----------- --------- -----------
Net cash used in investing activities (9,572,055) (2,367,675) (3,121,656)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment on capital lease obligation - railcars (331,628) (308,534) (287,048)
Borrowings under revolving credit agreement 3,697,173 12,835,436 14,568,378
Repayments under revolving credit agreement (3,697,173) (12,835,436) (14,568,378)
Payment on First Mortgage Bonds (11,140,896) (11,533,135) (9,997,000)
Capital distributions (12,400,000) (25,400,000) (25,970,000)
------------ ------------ ------------
Net cash used in financing activities (23,872,524) (37,241,669) (36,254,048)
------------ ------------ ------------
CHANGE IN CASH AND CASH EQUIVALENTS (489,999) (1,595,042) (2,092)
Cash and cash equivalents, beginning of year 821,955 2,416,997 2,419,089
------------ ------------ ------------
Cash and cash equivalents, end of year $ 331,956 $ 821,955 $ 2,416,997
============ =========== ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $53,082,539 $54,141,427 $55,039,501
=========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements.
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Indiantown Cogeneration, L.P. and Subsidiary
Notes to Consolidated Financial Statements
As of December 31, 2001 and 2000
1. ORGANIZATION AND BUSINESS:
Indiantown Cogeneration, L.P. (the "Partnership") is a special purpose Delaware limited partnership formed on October 4, 1991. 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 produces electricity for sale to Florida Power&Light Company ("FPL") and supplies steam to Caulkins Indiantown Citrus Co. ("Caulkins") for its plant located near the Facility. In September 2001, Caulkins sold its processing plant to Louis Dreyfus Citrus, Inc. ("LDC").
The original general partners were Toyan Enterprises ("Toyan"), a California corporation and a wholly owned special purpose indirect subsidiary of PG&E National Energy Group, Inc. ("NEG, Inc.") and Palm Power Corporation ("Palm"), a Delaware corporation and a special purpose indirect subsidiary of Bechtel Enterprises, Inc. ("Bechtel Enterprises"). The sole limited partner was 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.
In 1998, Toyan consummated transactions with DCC Project Finance Twelve, Inc. ("PFT"), whereby PFT, through a new partnership (Indiantown Project Investment, L.P. ("IPILP")) with Toyan, became a new general partner in the Partnership. Toyan is the sole general partner of IPILP. Prior to the PFT transaction, Toyan converted some of its general partnership interest into a limited partnership interest such that Toyan now directly holds only a limited partnership interest in the Partnership. In addition, Bechtel Generating Company, Inc. ("Bechtel Generating"), sold all of the stock of Palm to a wholly owned indirect subsidiary of Cogentrix Energy, Inc. ("Cogentrix"). Palm holds a 10% general partner interest in the Partnership.
On June 4, 1999, Thaleia, LLC ("Thaleia"), a wholly owned subsidiary of Palm and indirect wholly owned subsidiary of Cogentrix, acquired from TIFD a 19.90% limited partner interest in the Partnership. On September 20, 1999, Thaleia acquired another 20.00% limited partnership interest from TIFD and TIFD's membership on the Board of Control of the Partnership. On November 24, 1999, Thaleia purchased TIFD's remaining limited partnership interest in the Partnership from TIFD.
23
The net income of the Partnership is allocated to Toyan, Palm, TIFD and IPILP and Thaleia (collectively, the "Partners") based on the following ownership percentages:
Toyan 30.05%
Palm 10.00%*
IPILP 19.95%**
Thaleia 40.00%
* Now beneficially owned by Cogentrix.
** PFT’s beneficial ownership in the Partnership through IPILP was
equal to 10% as of August 21, 1998, and 15% as of November 23, 1998.
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 Partnership is managed by PG&E National Energy Group Company ("NEG"), formerly known as PG&E Generating Company pursuant to a Management Services Agreement (the "MSA"). The Facility is operated by PG&E Operating Services Company ("PG&E OSC"), formerly known as U.S. Operating Services Company, pursuant to an Operation and Maintenance Agreement (the "O&M Agreement"). NEG and PG&E OSC are general partnerships indirectly wholly owned by NEG, Inc., an indirect wholly owned subsidiary of PG&E Corporation (see Note 8).
The Partnership commenced commercial operations on December 22, 1995 (the "Commercial Operation Date").
NEG, Inc. is a wholly-owned indirect subsidiary of PG&E Corporation. Because the California energy markets situation has caused financial difficulties for Pacific Gas and Electric Company, a wholly owned subsidiary of PG&E Corporation, PG&E Corporation's credit ratings were downgraded to below investment grade in January 2001, which caused PG&E Corporation to default on outstanding commercial paper and bank borrowings. In January 2001, certain corporate actions were taken to insulate the assets of NEG and its direct and indirect subsidiaries from an effort to substantively consolidate those assets in any insolvency or bankruptcy proceeding of PG&E Corporation. In March 2001, PG&E Corporation refinanced all of its outstanding commercial paper and bank borrowings, and Standard&Poor's subsequently removed its below investment grade credit rating since PG&E Corporation no longer had rated securities outstanding. Management of NEG believes that NEG and its direct and indirect subsidiaries as described above, including the Partnership, would not be substantively consolidated with PG&E Corporation in any insolvency or bankruptcy proceeding involving PG&E Corporation.
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Presentation
The Partnership's consolidated financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.
The accompanying consolidated financial statements include the accounts of the Partnership and ICL Funding. All significant intercompany balances have been eliminated in consolidation.
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.
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 value. All funds are invested in either Nations Treasury Fund-Class A or other permitted investments for longer periods. The Partnership also maintains restricted investments covering a portion of the partnership's debt as required by the financing documents. The proceeds include $12,501,000 of restricted tax-exempt debt service reserve required by the financing documents and are classified as a noncurrent asset on the accompanying consolidated balance sheets. The Partnership maintains restricted investments covering a portion of debt principal and interest payable, as required by the financing documents. These investments are classified as current assets in the accompanying consolidated balance sheets. A qualifying facility ("QF") reserve of $3,000,000 is also held as a non-current asset (see Note 4).
25
Property, Plant and Equipment
Property, plant and equipment, which consist primarily of the Facility, are recorded at actual cost. The Facility is depreciated on a straight-line basis over 35 years with a residual value on the Facility approximating 25 percent of the gross Facility costs.
Other property, plant 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.
The Financial Accounting Standards Board ("FASB") 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 establishes criteria for recognizing and measuring impairment losses when recovery of recorded long-lived asset values is uncertain. During 2001, the Partnership assessed for possible impairment of the facility when Lodestar Energy, Inc., ("Lodestar") the Partnership's coal supplier, announced it had filed for bankruptcy (see Note 5). In the opinion of management of the Partnership and based on its impairment analysis, there has been no impairment of the facility and thus no impact on the Partnership's financial condition or results of operations in 2001.
Fuel Reserve
The fuel reserve, carried at cost, represents an approximate twenty-five day supply of coal held for emergency purposes.
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.
Scheduled Major Overhauls
In fiscal year 2000, the Securities and Exchange Commission ("SEC") issued a ruling that changed the allowable methods of accounting for scheduled major overhaul to the as incurred method rather than the accrue in advance method which had been used by the Partnership. The SEC's ruling allows companies to recognize the change as a cumulative effect of a change in accounting principle in the year of adoption. As such, the Partnership reflected a cumulative effect of a change in accounting principle in the year of adoption. The Partnership reflected a cumulative effect of a change in accounting principle of $920,536 in the accompanying financial statements. Since no scheduled major overhaul expenses were incurred in 2000, the effect of adopting this new accounting principle was a reduction of operating and maintenance costs of $424,000.
26
Revenue Recognition
Revenues from the sale of electricity are recorded based on output delivered and capacity provided at rates as specified under contract terms in the periods to which they pertain.
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 consolidated financial statements for Federal or state income taxes.
Derivative Financial Instruments
The Partnership adopted SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities"("SFAS No. 133"), as amended by SFAS Nos. 137 and 138, on January 1, 2001. This standard requires the Partnership to recognize all derivatives, as defined in the statements listed above, on the balance sheet at fair value. Derivatives, or any portion thereof, that are not effective hedges must be adjusted to fair value through income. If derivatives are effective hedges, depending on the nature of the hedges, changes in the fair value of derivatives either will offset the change in fair value of the hedged assets, liabilities, or firm commitments through earnings, or will be recognized in other comprehensive income, a component of partners' capital, until the hedged items are recognized in earnings. The Partnership has certain derivative commodity contracts for the physical delivery of purchase and sale quantities transacted in the normal course of business. Since these activities qualify as normal purchase and sale activities, the Partnership has not recorded the value of the related contracts on its balance sheet, as permitted under the standards.
In December 2001, the FASB approved an interpretation issued by the Derivatives Implementation Group ("DIG") that changes the definition of normal purchases and sales for certain power contracts. Based on the Partnership's current analysis, the power contract with FPL is a derivative, but qualifies as a normal purchase and sales exemption, thus is exempt from the requirements of SFAS No. 133 and is not reflected on the balance sheet at fair value. The FASB has also approved another DIG interpretation that disallows normal purchases and sales treatment for commodity contracts (other than power contracts) that contain volumetric variability or optionality. Certain of our derivative commodity contracts may no longer be exempt from the requirements of SFAS No. 133. We are evaluating the impact of the implementation guidance on our financial statements, and will implement this guidance, as appropriate, by the effective date of April 1, 2002.
New Accounting Pronouncements
In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"). SFAS No. 144 supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of", but retains its fundamental provisions for recognizing and measuring impairment of long-lived assets to be held and used. This Statement also requires that all long-lived assets to be disposed of by sale are carried at the lower of carrying amount or fair value less cost to sell, and that depreciation should cease to be recorded on such assets. SFAS No. 144 standardizes the accounting and presentation requirements for all long-lived assets to be disposed of by sale, superceding previous guidance for discontinued operations of business segments. This Standard is effective for fiscal years beginning after December 15, 2001. The Partnership anticipates that implementation of this standard will have no impact on its financial statements. The Partnership will apply this guidance prospectively.
27
3. DEPOSITS:
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, 2001 and 2000, estimated present values of this deposit of $171,737 and $159,365, respectively, are included in deposits in the accompanying consolidated balance sheets. The remaining balance is included in property, plant and equipment as part of total capitalized construction expenses.
4. BONDS AND NOTES PAYABLE:
First Mortgage Bonds
In November 22, 1994, 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 SEC. 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 fixed 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. Interest expense related to the First Mortgage Bonds was $43,176,476, $44,275,872, and $45,138,915, in 2001, 2000, and 1999 respectively.
Tax Exempt Facility Revenue Bonds
The proceeds from the issuance of $113,000,000 of Series 1992A and 1992B Industrial Development Revenue Bonds (the "1992 Bonds") through the Martin County Industrial Development Authority (the "MCIDA") 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 for each of the years ended December 31, 2001, 2000, and 1999. The Tax Exempt Bonds and the First Mortgage Bonds are equal in seniority.
28
Future minimum payments related to outstanding First Mortgage Bonds and 1994 Tax Exempt Bonds as of December 31, 2001 are as follows:
2002 $ 11,460,407
2003 14,566,086
2004 16,785,152
2005 16,257,206
2006 18,224,203
Thereafter 491,284,915
--------------------
Total $568,577,969
====================
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 to the Partnership. On June 15, 1998, the funds were released and subsequently distributed in accordance with the Disbursement Agreement.
Revolving Credit Agreement
In November 2001, the Revolving Credit Agreement was terminated. The Revolving Credit Agreement provided for the availability of funds for the working capital requirements of the Facility. It had a term of seven years from November 1, 1994. The interest rate was based upon various short-term indices chosen at the Partnership's option and was determined separately for each draw. The weighted average interest rate for the borrowings were approximately 5.52%, 7.98% and 6.58% during 2001, 2000 and 1999, respectively. The credit facility included commitment fees, to be paid quarterly, of 0.375 percent on the unborrowed portion. The face amount of the original working capital letter of credit was increased in November 1994 from $10 million to $15 million. Under the original and new working capital credit facilities, the Partnership paid $53,170, $52,919 and $52,836 in commitment fees in 2001, 2000 and 1999, respectively. All borrowings made under this agreement were repaid in the year borrowed. As of December 31, 2001, 2000, and 1999, no borrowings were outstanding. The Partnership incurred interest expense of $17,148, $84,574 and $78,343 in 2001, 2000 and 1999, respectively, related to the aforementioned borrowings.
29
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 obtained a commitment for the issuance of this letter of credit. At the Commercial Operation Date, this letter of credit replaced the completion letter of credit. The initial amount of $13,000,000 was issued for the first year of operations and increased to $40,000,000 in January 1999 and then to $50,000,000 in January 2000. During 2001, 2000, and 1999 no draws were made on this letter of credit. Commitment fees of $697,049, $689,092, and $704,555 were paid on this letter of credit in 2001, 2000, and 1999, respectively.
FPL QF Letter of Credit
Within 60 days after the Commercial Operation Date, the Partnership was required to provide a letter of credit for use in the event of a loss of Qualifying Facility ("QF") status under the Public Utility Regulatory Policies Act of 1978 ("PURPA"). The initial amount was $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 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 of $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 as of December 31, 2001 and 2000, was $3,000,000 and $2,500,000, respectively, and is included in noncurrent, restricted funds held by trustee in the accompanying consolidated balance sheets.
Steam Host Letter of Credit
At financial closing in October 1992, the Partnership provided LDC 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 1994 and a new one was issued with essentially the same terms. In the event of a default under the Energy Services Agreement (see Note 6), 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 for the amount of damages suffered by LDC. As of December 31, 2001, 2000, and 1999, no draws had been made on this letter of credit. Commitment fees of $139,409, $137,818 and $143,011 were paid relating to this letter of credit in 2001, 2000, and 1999, respectively.
30
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 $60,000,000 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. As of December 31, 2001, 2000, and 1999, no draws had been made on this letter of credit. Commitment fees of $409,611, $410,733, and $488,281 were paid on this letter of credit in 2001, 2000, and 1999, respectively. On January 11, 1999, pursuant to the Disbursement Agreement, the Debt Service Reserve Letter of Credit was reduced to $29,925,906. The Partnership is currently working with BNP Paribas to extend this letter of credit.
5. PURCHASE AGREEMENTS:
Coal Purchase and Transportation Agreement
The Partnership entered into a 30-year purchase contract with Lodestar (formerly known as 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.
On June 8, 1998, the Partnership entered into a three-year agreement with Lodestar, which established an arrangement for the Partnership's disposal of ash at alternative locations. The Partnership also entered a three-year agreement with VFL Technology Corporation for the disposal of ash with similar terms, which terminated in 2002.
Lodestar Energy, Inc. and its parent Lodestar Holding, Inc. filed for voluntary Chapter 11 bankruptcy on April 26, 2001. On October 16, 2001 the Partnership and Lodestar agreed to and executed Amendment No. 3 to the Coal Purchase Agreement. The principal change effected in the Agreement by the Amendment is an increase from $26.632 to $34.00 per ton in the base coal price with a 2% additional increase in the base price effective October 16, 2002. The Amendment also includes market price reopener provisions, beginning October 16, 2003, and a revision to Section 10.2 of the Agreement whereby the Partnership shall provide to Lodestar for disposal no less than fifty (50) percent and no more than seventy-five (75) percent of the Ash Residue produced annually at the Facility.
Lime Purchase Agreement
On May 1, 1992, the Partnership entered into a lime purchase agreement with Chemical Lime Company of Alabama, Inc. ("Chemlime") for supply of the Facility's lime requirements for the Facility's dry scrubber sulfur dioxide removal system. The Partnership has no obligation to purchase a minimum quantity of lime under the agreement. The initial term of the agreement is 15 years from the Commercial Operation Date and may be extended for a successive 5-year period. Either party may cancel the agreement after January 1, 2000, upon proper notice. The price of lime was renegotiated in 1999 for a three-year period beginning January 1, 2000. Chemlime notified the Partnership of its intention to cancel the agreement effective in the first quarter of 2002. The Partnership renegotiated the price of lime with Chemlime beginning February 1, 2002.
31
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 or penalty payment if actual capacity is in excess of or below 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 Indiantown Citrus Company ("Caulkins"). In September 2001, Caulkins sold its processing plant to Louis Dreyfus Citrus, Inc. ("LDC"). Commencing on the Commercial Operation Date and continuing throughout the 15-year term of the agreement, LDC 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 declared Commercial Operation with LDC on March 1, 1996.
7. COMMITMENTS AND CONTINGENCIES
On March 19, 1999, the Partnership filed a complaint against FPL in the United States District Court for the Middle District of Florida. The lawsuit stemmed from a course of action pursued by FPL beginning in the Spring of 1997, in which FPL purported to exercise its dispatch and control rights under the Power Purchase Agreement in a manner which the Partnership believes violated the terms of the power purchase agreement. In its complaint, the Partnership charged that such conduct was deliberately calculated to cause the Partnership to be unable to meet the requirements to maintain the Facility's status as a Qualifying Facility under the Public Utility Regulatory Policies Act of 1978.
On December 19, 2000, FPL and the Partnership participated in a mediation conference with respect to the pending litigations described herein. As a result of this conference, FPL and the Partnership executed two Settlement Agreements intended to resolve all pending litigation. Only the Settlement Agreement for the pending federal court litigation requires amendment of the power sales agreement. The amendment must be approved by the Florida Public Service Commission, and certain conditions set forth in the Indenture for the Bonds, including confirmation of the Bonds' investment grade rating, must be met for it to become effective.
32
An outline of the business terms set forth in the Settlement Agreement provides that if the Facility is off-line for any reason, the Partnership shall have the right, upon up to 6 hours notice and subject only to safety and system reliability issues, to reconnect to FPL's system and produce up to 100 MW. The Settlement Agreement provides that if this occurs when FPL has decommitted the Facility, the Partnership will be paid FPL's actual "as available" energy rates for the first 360 of such hours each year (in this context, "as available" energy costs reflect actual energy production costs avoided by FPL resulting from the production or purchase of energy from the Facility and other sources). If fewer than 360 hours are used in any year, FPL may carry the balance forward, not to exceed a total of 1440 hours in any year. If the hours accumulated exercising this reconnection right exceed FPL's balance, the Partnership will be paid for energy produced during those hours at the energy rates set forth under the power sales agreement.
Management of the Partnership believes that this resolution provides the Partnership with the flexibility it requires to maintain its Qualifying Facility status without materially adversely affecting the Project.
On May 17, 2001, the Partnership and FPL executed an amendment to the power purchase agreement to implement the Settlement Agreement relating to the litigation pending in federal court. The amendment was filed for approval by the Florida Public Service Commission ("FPSC") on June 7, 2001. At a public meeting on July 24, 2001, the FPSC voted to approve the amendment. On August 8, 2001, the FPSC issued its order on Proposed Agency Plan ("PAA"), in which it proposed to approve the amendment. The PAA order provided a 21-day period in which an affected party could have protested the proposed approval. No protest was filed; however, on October 11, 2001, the FPSC issued an amended order clarifying the PAA. At that time, the FPSC's action was subject to an appeal period, which expired on November 12, 2001, without appeal. In addition, the conditions set forth in the Indenture for the Bonds have been met.
On December 12, 2000, FPL filed a complaint against the Partnership in the Circuit Court of the 19th Judicial District in and for Martin County, Florida. In its complaint, FPL alleged that the Partnership breached the power sales agreement by failing to include certain payments from its coal supplier and its coal transporter in the Partnership's calculation of its fuel costs which are included in the calculation of the actual energy costs under the power sales agreement. The power sales agreement requires a sharing of actual energy costs between FPL and the Partnership to the extent the actual costs differ (either upward or downward) from a formula contained in the agreement. FPL sought unspecified damages and declaratory relief including a finding that the Partnership breached the power sales agreement. A Settlement Agreement was executed on October 17, 2001, and provides that the Partnership will include, among other things, in future calculations of its actual energy costs all costs, credits, rebates, discounts, and allowances/concessions from all past, current or future vendors of fuel, fuel transportation, ash, and lime. The Partnership made a one-time payment of $1,289,579 to FPL in November 2001, which constituted a settlement of all issues and claims with respect to, and permanently closes, FPL's audits for calendar years 1996, 1997, 1998, 1999, and 2000.
33
8. RELATED PARTY TRANSACTIONS:
Management Services Agreement
The Partnership has a Management Services Agreement with NEG, a California general partnership and a wholly owned indirect subsidiary of NEG, Inc., for the day-to-day management and administration of the Partnership's business relating to the Facility. The agreement commenced on September 30, 1992 and will continue through August 31, 2026. Compensation to NEG 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. Payments of $4,167,428, $4,324,042, and $4,120,468, in 2001, 2000, and 1999 were made to NEG, respectively. As of December 31, 2001 and 2000, the Partnership owed NEG $315,730 and $437,925, respectively, which are included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.
Operations and Maintenance Agreement
The Partnership has an Operation and Maintenance Agreement with PG&E OSC, a California general partnership and a wholly owned indirect subsidiary of NEG, Inc., for the operations and maintenance of the Facility for a period of 30 years (starting September 30, 1992). 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 on a monthly basis, PG&E OSC will pay liquidated damages to the Partnership. Compensation to PG&E OSC 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 $9,326,634, $9,921,638, and $9,790,473 were made to PG&E OSC in 2001, 2000, and 1999, respectively. As of December 31, 2001 and 2000, the Partnership owed PG&E OSC $320,402 and $201,840, respectively, which is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.
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 $2,551,580 and $2,168,022, respectively is included in property, plant and equipment as of December 31, 2001 and 2000. Payments of $629,856, including principal and interest, were made in 2001, 2000, and 1999.
34
Future minimum payments related to the Car Leasing Agreement as of December 31, 2001 are as follows:
2002 $629,856
2003 629,856
2004 629,856
2005 629,856
2006 629,856
-----------
Thereafter 2,114,911
-----------
Total minimum lease payments 5,264,191
Interest portion of lease payable (1,320,653)
-----------
Present value of future
minimum lease payments 3,943,538
Current portion (358,575)
-----------
Long-term portion $3,584,963
===========
Distribution to Partners
On June 15, 2001, as provided in the Partnership Agreement, the Partnership distributed approximately $12.4 million to the Partners.
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 as of December 31, 2001 and 2000.
December 31, 2001
- -------------------------------------------------------------------------------------------------
Financial Liabilities Carrying Amount Fair Value
--------------------- --------------- ----------
Tax Exempt Bonds $125,010,000 $130,409,212
First Mortgage Bonds $443,567,970 $447,410,766
December 31, 2000
- -------------------------------------------------------------------------------------------------
Financial Liabilities Carrying Amount Fair Value
--------------------- --------------- ----------
Tax Exempt Bonds $125,010,000 $127,510,200
First Mortgage Bonds $454,708,865 $492,483,915
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.
35
The carrying amounts of the Partnership's cash and cash equivalents, accounts receivable, deposits, prepaid expenses, investments held by trustee, accounts payable and accrued liabilities and accrued interest approximate fair value, due to their short-term nature.
36
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our report dated January 23, 2002 in this Form 10-K included in Registration Statement File No. 33-82034. It should be noted that we have not audited any financial statements of the company subsequent to December 31, 2001 or performed any audit procedures subsequent to the date of our report.
/S/ ARTHUR ANDERSEN LLP
Vienna, VA
April 1, 2002
Item 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.37
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
---- --- --------
Thomas J. Bonner................. 47 Palm Representative and
Thaleia Representative
Thomas F. Schwartz .............. 40 Palm Representative and
Thaleia Representative
P. Chrisman Iribe................ 50 IPILP Representative
Sanford L. Hartman............... 48 IPILP Representative
Thomas J. Bonner is Vice President - Asset Management for Cogentrix Energy, Inc. and has been with Cogentrix since 1987. Prior to joining Cogentrix Energy, Inc., Mr. Bonner spent five years as a utilities manager in an integrated fiber and chemical production facility. Mr. Bonner holds a B.S. from the U.S. Naval Academy, and an M.B.A. from Old Dominion University.
Thomas F. Schwartz is Senior Vice President and Chief Financial Officer of Cogentrix Energy, Inc. He is responsible for the areas of corporate finance and tax planning. Mr. Schwartz joined Cogentrix Energy, Inc. in 1991, and has held various positions in accounting and finance. Prior to joining Cogentrix Energy, Inc., Mr. Schwartz was Audit Manager with Arthur Andersen, LLP. Mr. Schwartz holds a B.A. degree in accounting from the University of North Carolina - Charlotte.
P. Chrisman Iribe is President of NEG and has been with NEG since it was formed in 1989. Prior to joining NEG, 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.
Sanford L. Hartman joined NEG's legal group in 1990 and became its General Counsel in April 1999. Prior to joining NEG, Hartman was counsel to Long Lake Energy Corporation, an independent power producer with headquarters in New York City and was an attorney with Bishop, Cook, Purcell&Reynolds, a Washington, D.C., law firm. Mr. Hartman has a BA in Political Science from Drew University and a JD from Temple University.
38
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
---- --- --------
P. Chrisman Iribe 50 Director, President
Sanford L. Hartman 48 Director
John R. Cooper 54 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 NEG 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 PG&E OSC on a cost-plus basis. In addition to a base fee, PG&E OSC 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, as of December 31, 2001, are held as follows:
Toyan 30.05% L.P.
IPILP 19.95% G.P.
Palm 10.00% G.P.
Thaleia 40.00% 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 8 to the Partnership's consolidated financial statements.
39
PART IV
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
Page
----
a) Documents filed as of this Report
(1) Consolidated financial statements:
Report of Independent Public Accountants............... 18
Consolidated Balance Sheets as of
December 31, 2001 and 2000 ............................ 19
Consolidated Statements of Operations for the years
ended December 31, 2001, 2000 and 1999................ 21
Consolidated Statements of Changes
in Partners' Capital for the years ended
December 31, 2001, 2000 and 1999...................... 22
Consolidated Statements of Cash Flows for the
years ended December 31, 2001, 2000 and 1999......... 23
Notes to Consolidated Financial
Statements........................................... 24
(2) Consolidated Financial Statement
Schedules............................................
None
b) Reports on Form 8-K:
None
| | The Partnership filed a Report on Form 8-K on October 9, 2001 announcing Lodestar’s decision to reject the coal purchase agreement. This report was amended by a report on form 8-K/A, filed on October 12, 2001. |
| | The Partnership filed a Report on Form 8-K on October 22, 2001 announcing the deferral of a hearing on Lodestar Energy, Inc.‘s motion filed with the Bankruptcy Court seeking to reject the Coal Purchase Agreement. |
| | The Partnership filed a Report on Form 8-K on November 9, 2001 announcing the Amendment No. 3 to the Coal Purchase Agreement. |
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.*
3.6 Dana Amendment to Amended and Restated Limited Partnership Agreement
of Indiantown Cogeneration, L.P.*****
40
3.7 Cogentrix Amendment to Amended and Restated Limited Partnership
Agreement of Indiantown Cogeneration, L.P.*****
3.8 Third 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.**
41
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.****
10.2.20 Third Amendment to the Agreement for the Purchase of Firm Capacity and
Energy, dated as of May 17, 2001.******
10.2.21 Third Amendment to Coal Purchase Agreement, dated as of November 2,
2001.*******
21 Subsidiaries of Registrant*
99 Copy of Registrants' press release dated January 3, 1996.****
99.1 Confirmation of Receipt of Assurances from Arthur Andersen LLP dated
April 1, 2002.
___________________________
* 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 August 1999.
****** Incorporated by reference from the current report on Form 8-K file no. 33-82034 filed by the
Registrants with the SEC in January 2001.
******* Incorporated by reference from the current report on Form 8-K file no. 33-82034 filed by the
Registrants with the SEC in November 2001.
42
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 April 1, 2002.
INDIANTOWN COGENERATION, L.P.
Date: April 1, 2002 /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/ P. Chrisman Iribe Member of Board of Control, April 1, 2002
- ---------------------- President and Secretary
P. Chrisman Iribe
/s/ John R. Cooper Chief Financial Officer, April 1, 2002
- ---------------------- Principal Accounting
John R. Cooper Officer and Senior
Vice President
/s/ Thomas J. Bonner Member of Board of Control April 1, 2002
- --------------------
Thomas J. Bonner
/s/ Thomas F. Schwartz Member of Board of Control April 1, 2002
- ----------------------
Thomas F. Schwartz
/s/ Sanford L. Hartman Member of Board of Control April 1, 2002
- ---------------------- and Senior Vice President
Sanford L. Hartman
43
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 April 1, 2002.
INDIANTOWN COGENERATION
FUNDING CORPORATION
Date: April 1, 2002 /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/ P. Chrisman Iribe Director and President April 1, 2002
- ----------------------
P. Chrisman Iribe
/s/ John R. Cooper Chief Financial Officer, April 1, 2002
- ---------------------- Principal Accounting
John R. Cooper Officer and Vice President
44
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.*
3.9 Dana Amendment to Amended and Restated Limited Partnership
Agreement of Indiantown Cogeneration, L.P.*****
3.10 Cogentrix Amendment to Amended and Restated Limited Partnership
Agreement of Indiantown Cogeneration, L.P.*****
3.11 Third 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.**
45
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.***
10.2.22 Fourth Amendment to Energy Services Agreement, dated as of January
30, 1996.****
10.2.23 Third Amendment to the Agreement for the Purchase of Firm Capacity
and Energy, dated as of May 17, 2001.******
10.2.24 Third Amendment to Coal Purchase Agreement, dated as of November 2,
2001.*******
46
