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, 1999

                         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 30,  2000,  there  were 100  shares of  common  stock of  Indiantown
Cogeneration Funding Corporation, $1 par value outstanding.



<PAGE>


                          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...............................         8

                                PART II

Item 5     Market for the Registrant's Common
           Stock and Related Security Holder Matters.........         8

Item 6     Selected Financial Data...........................         9

Item 7     Management's Discussion and Analysis of
           Financial Condition and Results of Operations.....        10

Item 7A    Qualtitative and Quantitative Disclosures
           About Market Risk.................................        14


Item 8     Financial Statements and Supplementary Data........       15

Item 9     Changes in and Disagreements with Accountants
           on Accounting and Financial Disclosure.............       37


                                    PART III


Item 10    Directors and Executive Officers...................       37

Item 11    Remuneration of Directors and Officers.............       38

Item 12    Security Ownership of Certain Beneficial Owners
       and Management.........................................       38


Item 13    Certain Relationships and Related Transactions.....       39


                                    PART IV


Item 14    Exhibits, Financial Statement Schedules and
           Reports on Form 8-K................................       39



           Signatures.........................................       43



<PAGE>


Item 1         BUSINESS


The Partnership


       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.


        The  original  general  partners  were Toyan  Enterprises  ("Toyan"),  a
California corporation and a wholly owned special purpose indirect subsidiary of
PG&E Generating  Company,  LLC 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
19.9%  limited  partner  interest in the  Partnership.  On  September  20, 1999,
Thaleia acquired another 20.0% limited partnership interest from TIFD and TIFD's
membership  on the Board of Control.  On November  19, 1999,  Thaleia  purchased
TIFD's remaining limited partner interest in the Partnership from TIFD.


        The net profits and losses of the  Partnership  are  allocated to Toyan,
Palm, TIFD and IPILP and Thaleia  (collectively,  the  "Partners")  based on the
following ownership percentages:

<TABLE>
<CAPTION>
<S>                       <C>             <C>                     <C>            <C>                   <C>

                            As of               As of              As of               As of                As of
                          August 21,         October 20,          June 4,           September 20,        November24,
                             1998               1998               1999                 1999                1999
                             ----               ----               ----                 ----                ----

        Toyan               30.05%             30.05%              30.05%              30.05%               30.05%
        Palm                 10%                10%*                10%*                10%*                 10%*
        IPILP              19.95%**           19.95%**             19.95%              19.95%               19.95%
        TIFD                 40%                 40%               20.1%                .1%                   0%
        Thaleia               --                 --                19.9%*              39.9%*                40%*
</TABLE>
[FN]

 *Now beneficially owned by Cogentrix.


                                      1
<PAGE>

        ** 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.
</FN>
        The   changes   in   ownership   were  the   subject   of   notices   of
        self-recertification of Qualifying Facility status


filed by the Partnership with the Federal Energy Regulatory Commission on August
20, 1998, November 16, 1998, June 4, 1999,  September 21, 1999, and November 24,
1999.

        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  original  partners  contributed,
pursuant to an equity commitment agreement, approximately $140,000,000 of equity
when commercial operation of the Facility commenced in December 1995.


        The  Partnership  is managed by PG&E  Generating  Company  ("PG&E Gen"),
formerly known as U.S.  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").  PG&E
Gen and PG&E OSC are general  partnerships  indirectly  owned by PG&E Generating
Company LLC.

        The Partnership  began  construction of the Facility in October 1992 and
was in the development  phase through the commencement of commercial  operation.
The Facility commenced  commercial  operation under its power purchase agreement
(the "Power  Purchase  Agreement"  or "PPA") with 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.
The  Partnership  has  filed  a  complaint  against  FPL  with  respect  to  the
interpretation  of a certain provision of the Power Purchase  Agreement.  Please
see "Item 3 Legal  Proceedings"  below.  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,  the
Facility site,  contractual  arrangements relating to the Facility (the "Project
Contracts") and the stock of ICL Funding.


Certain Project Contracts

        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

                                       2
<PAGE>



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  FERC's  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).


        The  Partnership  has a coal  purchase  agreement  (the  "Coal  Purchase
Agreement") with Lodestar Energy, Inc.  ("Lodestar")  pursuant to which Lodestar
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
escalation  of the fuel price  component  of the energy  price  contained in the
Power  Purchase  Agreement  with FPL. This mechanism is intended to mitigate any
mismatch between the price the Partnership pays for coal and the energy payments
received from FPL.


        During  1997,  coal ash  produced  during  operation of the Facility was
disposed  of  pursuant  to the Coal  Purchase  Agreement  and  back-up  disposal
arrangements with Chambers Waste Systems, Inc. of Florida ("Chambers"). In 1998,
the  Partnership  entered  into  agreements  with  Lodestar  and VFL  Technology
Corporation ("VFL") for ash disposal at alternative sites. These agreements will
reduce  the  cost of ash  disposal.  The  Partnership  has  been  informed  that
Lodestar,  Chambers, and VFL 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.

Competition


        Since  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

                                       3
<PAGE>

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


       In October 1999, FPL filed with the Florida Public Service Commission its
projections for its 2000-2001 "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. Since 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 filed
projections prove to reflect actual rates, such rates and the resulting dispatch
of the Facility  will not have a material  adverse  effect on the  Partnership's
ability to service its debt.  To the extent the  Facility is not operated by FPL
during Caulkins' processing season (November to June), the Partnership may elect
to run the  Facility  at a  minimum  load  or shut  down  the  Facility  and run
auxiliary  boilers to produce steam for Caulkins in amounts  required  under the
Partnership's  steam  agreement  with  Caulkins.  Such  operations may result in
decreased net operating  income for such periods.  The Partnership  expects that
the  decrease,  if any,  will not be material.  For the year ended  December 31,
1999, FPL requested the Partnership to decommit the Facility  numerous times and
the  Partnership  has typically  exercised its rights to operate at minimum load
(100MW) during such decommit requests.  The Partnership's election to operate at
minimum load has not had a material  impact on the  Partnership or its financial
condition  although energy  delivered  during such operations is sold at reduced
prices.

Employees

        The  Partnership  has no employees  and does not  anticipate  having any
employees in the future because, under a management services agreement, PG&E Gen
acts as the Partnership's representative in all aspects of managing operation of
the Facility as directed by the Partnership's  Board of Control. As noted above,
PG&E OSC 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  commenced  commercial
operation on December 22, 1995 and  completed  its fourth full year of operation
on December 31, 1999.


        During 1999, the Facility produced 1,745,760 MW-hr of energy for sale to
FPL compared to  1,485,0089  MW-hr in 1998.  This  increase was due primarily to
FPL's higher dispatch of the Facility.  Dispatch of the Facility by FPL averaged
approximately 65.41% over the year compared to 55.58% for 1998.

        The Facility produced approximately 390 million pounds of steam for sale
to Caulkins in 1999 compared to approximately 370 million pounds in 1998 thereby
exceeding the minimum  requirements to

                                       4
<PAGE>

maintain  Qualifying  Facility status.  The 20  million-pound  increase in steam
deliveries was due primarily to higher production of juice by Caulkins in 1999.

        The Facility ended the year with a twelve-month rolling average Capacity
Billing  Factor of 100.636% in 1999 and 101.038% in 1998.  The Capacity  Billing
Factor measures the overall  availability  of the Facility,  but gives a heavier
weighting to on-peak  availability.  Cash flows during 1999 were  sufficient  to
fund all operating expenses and debt repayment obligations.


Forward Looking Statements

       When used in this report,  words or phrases which are  predictions  of or
indicate  future  events  and  trends  are  subject  to a number  of  risks  and
uncertainties  which could cause actual results to differ  materially from those
projected.  Given such  uncertainties,  readers are cautioned not to place undue
reliance  on such  statements.  The  Partnership  undertakes  no  obligation  to
publicly  update or revise any forward  looking  statement to reflect current or
future events or circumstances.


        The Partnership  anticipates  that,  barring any  unforeseeable  adverse
events or a negative  outcome in the litigation  described in Item 3 below,  the
results for 2000 will be similar to the  results for 1999.  Dispatch of the unit
by FPL during  the  summer  months is  expected  to be  similar to 1999  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 2000 and steam demand from  Caulkins is expected to be similar to
1999 levels.


        The Facility is planning on four weeks of scheduled  outages during 2000
to perform routine inspections and maintenance.  The primary outage is scheduled
for October 2000 during the off-season for citrus production.

        The Partnership is not aware of any reason to expect coal pricing during
2000 to substantially differ from 1999 levels.

        In the absence of any major  equipment  failures,  unit  availability is
expected to be  comparable  to 1999 levels.  If this is  achieved,  the Capacity
Billing Factor and associated capacity bonuses would be similar.

        The Partnership  believes that its current  financial  resources will be
adequate to cover operating expenses and debt repayment obligations in 2000.

Governmental Approvals


        The  Partnership  has obtained all  material  environmental  permits and
approvals  required,  as of December 31, 1999,  in order to continue  commercial
operation of the Facility. Certain of these permits and approvals are subject to
periodic renewal.  Certain  additional permits and approvals will be required in
the future for the continued  operation of the Facility.  The Partnership is not
aware of any  technical  circumstances  that would  prevent the issuance of such
permits  and  approvals  or  the  renewal  of  currently  issued  permits.   The
Partnership  timely  filed its  application  for a Title V air permit on May 24,
1996. The permit was issued on October 11, 1999.

        On  December  22,  1999,  the  Partnership   submitted  to  the  Florida
Department of Environmental  Protection  ("DEP") a request for amendments to the
Site Certification and an application for modifications of the Site Certificate.
The  amendments to the Site  Certification  are being  provided to

                                       5
<PAGE>

inform  DEP of certain  changes to the  Facility's  design  and  operation.  The
requests will not require  changes to the  Conditions of  Certification  for the
Facility and do not involve significant environmental impacts that would require
new  environmental  permits or approvals.  Also submitted was an application for
modifications of the Site Certificate, which describes other proposed changes to
the Facility design and operations.  The  modifications  will require changes to
the Conditions of Certification. The requests include modifications to allow the
additions of a carbon  dioxide plant and a chilled  water plant,  changes in the
cooling water storage pond elevation,  and modifications of the operation of the
pulverized coal-fired boiler to increase the electric generation output.

        The DEP has proposed to modify the conditions of the Site  Certification
to allow  emergency  discharge of cooling  water and process water to conform to
NPDES Permit Number FL0183750, which was issued on January 19, 2000.


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 make-up
water pipeline and associated  equipment,  the Partnership does not own or lease
any material properties.

Item 3         LEGAL PROCEEDINGS


Dispute with FPL

        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
stems 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 sales  agreement.  In its complaint,  the Partnership  charges 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.

        The complaint alleges that FPL took the position that if the Facility is
off-line for any reason,  then FPL is under no  obligation to allow the Facility
to reconnect to FPL's system. The original complaint asserted, however, that the
Partnership  specifically and successfully negotiated for a contractual right to
operate  the  Facility  up to 100 MW  ("Minimum  Load") in order to enable it to
cogenerate  sufficient steam to maintain its Qualifying  Facility status.  While
FPL has not disputed that the Partnership  may maintain  Minimum Load operations
if the  Facility  is  delivering  power when FPL  requests  the  Partnership  to
decommit  the  Facility,  the  complaint  states that FPL has  claimed  absolute
discretion  to deny the  Partnership  permission  to reconnect the Facility with
FPL's system.

        Since the loss of Qualifying  Facility  status may result in an event of
default under the Power Purchase Agreement,  the Partnership must take action to
address this matter.  The Partnership is investigating  various  alternatives to
mitigate its QF risk. These are described under "QF Mitigation Options" below.


        The complaint asserts causes of action for (i) FPL's breach of the Power
Purchase  Agreement,  (ii) FPL's anticipatory  repudiation of the Power Purchase
Agreement,  (iii) breach of the implied covenant of good faith, fair dealing and
commercial  reasonableness  and (iv) a declaratory  judgment by the court of

                                       6
<PAGE>

the rights of the parties under the Power Purchase  Agreement.  The  Partnership
seeks (a) a  declaratory  ruling that FPL's  actions  constitute a breach of the
terms of the Power Purchase  Agreement and that the Partnership has the absolute
right to operate the  Facility at Minimum  Load (except for reasons of safety or
system security) at the rates provided for in the Power Purchase Agreement,  (b)
injunctive  relief  preventing  FPL from further  violating  the Power  Purchase
Agreement,  (c) compensatory  damages and (d) other relief as the court may deem
appropriate.


        On April 14,  1999,  FPL filed a  responsive  pleading to the  complaint
including a motion to dismiss two of the four  counts  raised in the  complaint,
raising  certain  affirmative  defenses  and  seeking  declaration  that FPL has
unfettered  dispatch  rights under the Power  Purchase  Agreement.  On April 23,
1999,  FPL filed answer to the counts which were not challenged in the motion to
dismiss.  On May 13, 1999, the Partnership filed its response to FPL's motion to
dismiss and request for declaratory judgement. On May 18, 1999, the Court denied
FPL's  Motion to  Dismiss  in its  entirety.  The  Partnership  filed an amended
complaint  which was accepted on June 17,  1999.  The amended  complaint  simply
consolidated the  Partnership's  claims for breach of contract and breach of the
implied  obligation  of good  faith and fair  dealing  which  was,  in part,  in
response to a recent  federal  court  decision.  FPL moved to dismiss the entire
amended  complaint and the  Partnership  filed its  opposition  papers August 2,
1999.  The Court  granted FPL's motion to dismiss only with respect to the first
count of the  complaint.  The  Partnership  has amended its complaint to address
issues  raised  by the Court in its  decision  to  dismiss  this  count.  FPL is
expected  to file a new  motion to dismiss  the  amended  complaint.  The second
amended  complaint  which was filed on March 21, 2000, is attached as an exhibit
to the Report.  The Court has also ordered a mediation session.  In addition,  a
trial period has been established by the Court in April 2001.


        This summary of the Partnership's  complaint against FPL is qualified in
its  entirety  by the  complaint,  which  was  filed  with the  court in  docket
99-317-CIV-ORL-19C.  This summary does not, nor does it purport to,  include all
of the  material  statements  and  claims  made in the  complaint,  and has been
provided solely for the reader's convenience. This summary is not intended to be
relied upon for any purpose without reference to the complaint.

        OTHER INFORMATION

QF Mitigation Options

       If the court rules against the  Partnership in the  litigation  with FPL,
the  Facility  could  lose its QF  status,  unless  the  Partnership  is able to
implement  mitigating  action.  Loss of QF  status  would  result in an event of
default  under the Power  Purchase  Agreement  and the  indenture for the Bonds.
Unless cured, such events of default would have a material adverse effect on the
Partnership's business, results of operation and financial condition.


        To  mitigate  the risk of a possible  adverse  ruling by the Court,  the
Partnership  has  analyzed  the  feasibility  of various  options.  The analyses
included the following:


o  providing steam to Caulkins for refrigeration
o  constructing  a liquid  carbon  dioxide  production  facility  to  which  the
   Facility would supply steam
o  installing  distilled water production  equipment to which the Facility would
   supply steam
o  providing steam for a facility to dry chicken manure at a nearby farm for use
   as a fertilizer
o  providing steam to Caulkins to dry orange peels for use in cattle feed
o  providing steam to Caulkins for wash-water cooling



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<PAGE>

o  providing  steam or chilled water for water  temperature  control at a nearby
   fish farm
o  constructing  a cold storage food  distribution  center to which the Facility
   would supply chilled water
o  providing chilled water to a nearby hen house for cooling
o  constructing a lumber kiln to dry wood using steam provided by the Facility
o  providing chilled water to a nearby flour mill for temperature control


        The analyses  included an  evaluation  as to whether the steam usage for
these  alternatives would qualify for QF purposes and to determine each option's
feasibility  - whether the option can increase  steam  production on a schedule,
which may include  regulatory  approval,  that would  assure  maintenance  of QF
status at an acceptable cost to the  Partnership.  The Partnership has completed
its  initial  analyses of the  options,  but has not yet  determined  whether to
implement  any option.  The  Partnership  has,  however,  commenced  the lengthy
process of amending its Site  Certification  to allow for a chilled  water plant
and a carbon dioxide facility. The Partnership may defer a decision to implement
any option until a judgment is made in the litigation with FPL. If any option is
implemented,  the Partnership may, subject to the terms of the indenture for
the Bonds, finance  such option with senior  secured debt ranking pari passu
with the Bonds.

        No assurance can be given that of any option under  consideration or any
other option will finally be determined  to be feasible or that,  even if one or
more  options  are  determined  to be  feasible,  that  such  option(s)  will be
implemented or will result in assuring the maintenance of QF status.

        Notwithstanding  the 18-day period,  in March of 1999,  during which FPL
prevented   the  Facility  from   reconnecting   to  FPL's  system  and  thereby
cogenerating  qualifying steam, the Partnership  cogenerated steam totaling 6.1%
of  electrical  output in 1999 thereby  exceeding  the  statutorily  required 5%
threshold.


Property Tax Matter


        The  Partnership  was  contacted  in 1998  by the  local  Martin  County
property appraiser  concerning the proper qualification of some of its pollution
control  equipment,  which equipment receives reduced valuation for property tax
purposes.  After review by the  Partnership,  and  discussion  directly with the
appraiser's  office,  the Partnership  provided the appraiser with all requested
information. The appraiser has not taken any further action on this matter.


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 1999.

                                     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,  Thaleia  and IPILP.  Beneficial  interests  in the  Partnership  are not
available to other persons except with the consent of the Partners.



                                       8
<PAGE>


        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 paid, 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  consolidated  balance  sheet  information  of the
Partnership as of December 31, 1999, 1998, 1997, 1996, and 1995,  should be read
in conjunction with Item 7 of this report,  "Management's Discussion an 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.

     The following is a summary of the quarterly  results of operations  for the
years ended December 31, 1995, 1996, 1997, 1998 and 1999.

<TABLE>
<CAPTION>

                                                                     Three Months Ended (unaudited)

<S>                               <C>                   <C>             <C>                  <C>                   <C>

                                   March 31             June 30          September 30        December 31           Total
                                   --------             -------          ------------        -----------           -----
                                                                       (in thousands)
1995

Operating revenues                      (a)                 (a)                (a)             $4,565              $4,565
Gross Profit                            (a)                 (a)                (a)              2,421               2,421
Net income                              (a)                 (a)                (a)                802                 802

1996

Operating revenues                  $38,767             $40,384            $42,571            $37,124            $158,846
Gross Profit                         20,314              18,555             19,272             19,197              77,338
Net income                            4,005               2,493              2,894              2,398              11,790

1997

Operating revenues                  $37,879             $38,936            $43,907            $41,795            $162,517
Gross Profit                         20,173              22,607             22,419             19,124              84,323
Net income                            3,950               6,147              6,074              1,837              18,008

1998

Operating revenues                  $37,144             $41,466            $43,296            $37,277            $159,183
Gross profit                         21,672              22,636             23,342             21,415              89,065
Net income before
   cumulative change in
   accounting principle               5,181               6,014              6,438              4,541              21,174
Net income                            5,181               6,014              6,438              3,722              21,355

1999


Operating revenues                  $35,751             $40,457            $45,600            $41,462            $163,270
Gross profit                         23,190              21,743             22,313             21,235              88,481
Net income                            6,517               5,108              5,794              4,995              22,414
</TABLE>



                                       9
<PAGE>

(a)  Data not available as Commercial Operations commenced on December 22, 1995.

<TABLE>
<CAPTION>


                          Indiantown Cogeneration, L.P.
                               as of December 31,

<S>                                   <C>             <C>                 <C>                <C>               <C>
                                           1999              1998              1997               1996              1995
                                           ----              ----              ----               ----              ----

Total Assets                         $694,852,029     $708,139,691        $735,468,011      $753,669,863       $799,451,339
Long-Term Debt                        583,994,031      595,835,699         606,119,747       616,651,805        626,601,265
Total Liabilities                     606,607,479      616,339,161         629,342,447       637,472,694        658,649,167
Capital Distributions                  25,970,000       35,680,000          28,080,382        36,395,054                 --
Total Partners' Capital                88,244,550       91,800,530         106,125,564       116,197,169        140,802,172
Construction in  Progress                      --               --                  --                --                 --

Property, Plant & Equipment, Net

                                      641,449,055      654,188,458         668,464,373       682,214,731        691,588,155
Operating Revenues                    163,270,119      159,183,399         162,517,435       158,845,947          4,564,860
Net Income                             22,414,021       21,354,967          18,008,777        11,790,051            802,172


</TABLE>

Item 7         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS

General

Year ended December 31, 1999 Compared to the Year Ended December 31,1998
------------------------------------------------------------------------


        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, 1999 and 1998 the Partnership  had  approximately
$641.1  million  and  $654.2  million,  respectively,  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.  This decrease
is due primarily to  depreciation  of $15.2  million,  offset by $2.5 million of
capital improvements.

        For the three  months ended  December 31, 1999 and 1998 the  Partnership
had total operating  revenues of approximately  $41.5 million and $37.3 million,
respectively. This $4.2 million increase was due primarily to higher dispatch by
FPL resulting in increased energy revenues. For the three months ending December
31, 1999 and 1998, the  Partnership  had total  operating costs of $22.9 million
and $18.8 million respectively.  This $4.1 million increase was due primarily to
increased  variable  costs  associated  with higher  dispatch by FPL.  Total net
interest expense was approximately $13.6 million and $14.0 million for the three
months ended  December 31, 1999 and 1998,  respectively.  This  decrease was due
primarily to the maturity of Series A-7 of the First  Mortgage Bonds on June 15,
1999 and Series A-8 of the First Mortgage Bonds on December 15, 1999. Net income
was approximately  $5.0 million and $3.7 million for three months ended December
31, 1999 and 1998, respectively. This increase was due primarily to decreases in
net interest expense of $0.4 million,  a decrease in insurance  expenses of $.03

                                       10
<PAGE>

million and a write off of start up cost of $0.8  million in the 3 months  ended
December 31, 1998. (Please see Note 2.)

        For the years ended  December  31, 1999 and 1998,  the  Partnership  had
total  operating  revenues of $163.3 million and $159.2  million,  respectively.
This increase was  attributable  primarily to increased  energy revenues of $3.9
million and by increased  capacity bonus and capacity  revenues of $0.2 million.
The  increased  revenues  from  capacity  are  due  primarily  to the  quarterly
escalations  on the Fixed O&M  component.  The higher  energy  revenues  are due
primarily to greater  dispatch  levels by FPL. Total  operating costs were $85.5
million  and $80.6  million  for the years  ended  December  31,  1999 and 1998,
respectively.  This increase was due primarily to an increase of $3.6 million in
fuel and ash costs,  both resulting from higher  dispatch by FPL and an increase
of $1.0 million in  operations  and  maintenance  expenses.  For the years ended
December  31, 1999 and 1998,  the total net interest  expense was  approximately
$55.4 million and $56.4 million, respectively. The decrease was primarily due to
a $0.8 million  reduction in bond interest expense due to the maturity of Series
A-7 of the First  Mortgage  Bonds on June 15,  1999 and  Series A-8 of the First
Mortgage  Bonds on December 15,  1999, a reduction in LOC fees of $0.4  million,
and a reduction in interest income of $0.2 million. Net income was $22.4 million
and $21.4  million  for the twelve  months  ended  December  31,  1999 and 1998,
respectively.  This $1.0 million  increase  was  primarily  attributable  to the
increased  revenues of $4.1 million and the effect in 1998 for the  write-off of
$0.8 million for start-up costs,  offset by a $4.9 million increase in operating
costs and a $1.0 million decrease in net interest expense.

Year ended December 31, 1998 Compared to the Year Ended December 31,1997
------------------------------------------------------------------------

        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, 1998 and 1997 the Partnership  had  approximately
$654.2  million  and  $668.5  million,  respectively,  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.  This decrease
is due primarily to  depreciation  of $14.8 million and start-up  costs expensed
according to the American Institute of Certified Public  Accountant's  Statement
of  Position  98-5,  "Reporting  on the Costs of Start-Up  Activities,"  of $0.8
million, offset by $1.4 million of capital improvements.

        For the three months ended December 31, 1998 and 1997,  the  Partnership
had total operating  revenues of approximately  $37.3 million and $41.8 million,
respectively.  This $4.5 million decrease was due primarily to lower dispatch by
FPL resulting in decreased energy revenues. For the three months ending December
31, 1998 and 1997, the  Partnership  had total  operating costs of $18.8 million
and $25.0 million respectively.  This $6.2 million decrease was due primarily to
decreased  variable costs associated with lower dispatch by FPL and savings from
the new ash disposal  agreements.  Total net interest expense was  approximately
$14.0 million and $15.0 million for the three months ended December 31, 1998 and
1997,  respectively.  This  decrease was due primarily to the maturity of Series
A-5 of the First  Mortgage  Bonds on June 15,  1998 and  Series A-6 of the First
Mortgage Bonds on December 15, 1998. Net income was  approximately  $3.7 million
and  $1.8  million  for  three   months  ended   December  31,  1998  and  1997,
respectively.  This  increase was due  primarily  to decreases in operating  and
maintenance  expenses of $2.5 million and net  interest  expense of $0.4 million
offset by increases in depreciation of $0.4 million,  year 2000 expenses,  taxes
of approximately $0.6 million and $0.8 million of start-up costs.

        For the years ended  December  31, 1998 and 1997,  the  Partnership  had
total  operating  revenues of $159.2 million and $162.5  million,  respectively.
This decrease was  attributable  primarily to decreased  energy revenues of $4.5
million  offset by  increased  capacity  bonus  and  capacity  revenues  of $1.2
million.  The

                                       11
<PAGE>

increased  revenues from capacity is due primarily to a higher Capacity  Billing
Factor under the PPA resulting from improved plant performance. The lower energy
revenues are due primarily to reduced  dispatch  levels.  Total  operating costs
were $80.6 million and $87.7  million for the years ended  December 31, 1998 and
1997,  respectively.  This  decrease  was due  primarily  to a reduction of $7.3
million in fuel and ash costs  resulting  from lower dispatch by FPL and savings
from  the new ash  disposal  agreements,  and a  decrease  of  $0.8  million  in
operations and maintenance  expenses offset by increases in support services for
operations,  environmental  and  safety  initiatives  and for year 2000  related
costs.  For the years ended  December 31, 1998 and 1997,  the total net interest
expense was  approximately  $56.4 million and $56.8 million,  respectively.  The
decrease was primarily due to a $0.7 million  reduction in bond interest expense
offset by a reduction in interest income and an increase in working capital loan
interest.  Net income was $21.4  million and $18.0 million for the twelve months
ended December 31, 1998 and 1997,  respectively.  This $3.4 million increase was
primarily attributable to the decreased revenues of $3.3 million, start-up costs
of $0.8 million, offset by a $7.1 million decrease in operating costs and a $0.4
million decrease in net interest expense.


Results of Operations


Year ended December 31, 1999 Compared to the Year Ended December 31, 1998
-------------------------------------------------------------------------

        For the years ending  December 31, 1999 and 1998, the Facility  achieved
an average  Capacity  Billing Factor of 100.64% and 101.28%  respectively.  This
decrease was primarily attributable to minor mechanical problems.  This resulted
in earning full monthly  capacity  payments  aggregating  $112.4 million for the
year in 1999 and $112.2 million for the year in 1998.  Bonuses  aggregated $11.2
million for the year in both 1999 and 1998.  During 1999 and 1998,  the Facility
was  dispatched  by FPL and  generated  1,745,760  megawatt-hours  and 1,485,008
megawatt-hours, respectively. The monthly average dispatch rate requested by FPL
was 65.4% and 51.6% for the twelve  months  ended  December  31,  1999 and 1998,
respectively.

        For the years ending  December 31, 1998 and 1997, the Facility  achieved
an average  Capacity  Billing  Factor of 101.28%  and 98.29%  respectively.  The
increase  was  primarily  attributable  to better  mechanical  operations.  This
resulted in earning full monthly capacity  payments  aggregating  $112.2 million
for the year in 1998 and $112.0 million for the year in 1997. Bonuses aggregated
$11.2 million for the year in 1998 and $10.3 million for the year in 1997. These
increases were due primarily to a higher Capacity  Billing Factor resulting from
better plant  performance.  During 1998 and 1997, the Facility was dispatched by
FPL  and  generated   1,485,008   megawatt-hours  and  1,668,959   megawatt-hour
respectively.  The  monthly  average  dispatch  rate was 51.6% and 67.5% for the
twelve  months  ended  December  31,  1998 and 1997,  respectively.  The reduced
dispatch levels were primarily the result of moderate winter weather.


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 9.05% and $268.4 million of the First Mortgage
Bonds bear an interest rate of 9.77%. Concurrent with the Partnership's issuance
of its First Mortgage Bonds, the Martin County Industrial  Development Authority
issued $113 million of Industrial  Development  Refunding  Revenue Bonds (Series
1994A) which bear an interest rate of 7.875% (the "1994A Tax Exempt  Bonds").  A
second series of tax exempt bonds (Series  1994B) in the  approximate  amount of
$12  million,  which bear an interest  rate of 8.05%,  were issued by the Martin
County  Industrial  Development  Authority  on December 20, 1994 (the "1994B Tax
Exempt  Bonds"  and,  together  with the 1994A Tax Exempt  Bonds,  the "1994 Tax
Exempt  Bonds").  The First  Mortgage  Bonds and the 1994 Tax  Exempt  Bonds are
hereinafter collectively referred to as the "Bonds."


                                       12
<PAGE>


        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. 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  construction-related  contingencies;  and
(iii) to provide for initial working capital.


        The  proceeds  of the 1994 Tax  Exempt  Bonds  were used to refund  $113
million principal amount of Industrial  Development  Revenue Bonds (Series 1992A
and Series 1992B) previously issued by the Martin County Industrial  Development
Authority  for the  benefit of the  Partnership,  and to fund,  in part,  a debt
service reserve  account for the benefit of the holders of its tax-exempt  bonds
and to complete construction of certain portions of the Facility.


         The Partnership's total borrowings from inception through December 1999
were $769  million.  The equity loan of $139  million was repaid on December 26,
1995. As of December 31, 1999, the outstanding  borrowings included $125 million
from the 1994 Tax Exempt  Bonds and all of the  available  First  Mortgage  Bond
proceeds. The First Mortgage Bonds have matured as follows:

<TABLE>
<CAPTION>
<S>    <C>                <C>                             <C>
       Series             Aggregate Principal Amount      Date Matured and Payed


       A-1                      $4,397,000                    June 15, 1996
       A-2                       4,398,000                    December 15, 1996
       A-3                       4,850,000                    June 15, 1997
       A-4                       4,851,000                    December 15, 1997
       A-5                       5,132,000                    June 15, 1998
       A-6                       5,133,000                    December 15, 1998
       A-7                       4,998,000                    June 15, 1999
       A-8                       4,999,000                    December 15, 1999

</TABLE>

       The weighted  average  interest rate paid by the  Partnership on its debt
for the  years  ended  December  31,  1999  and  1998,  was  9.182%  and  9.174%
respectively.


        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  First  Boston 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,  1999,  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.  This  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

                                       13
<PAGE>

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, 1999,  no drawings  have been made on the
debt service  reserve letter of credit.  On January 11, 1999, in accordance with
the Partnership's financing documents, the debt service reserve letter of credit
was reduced to approximately $30 million,  which, together with cash in the debt
service  reserve  account,  represents the maximum  remaining  semi-annual  debt
service on the First Mortgage Bonds and the 1994 Tax Exempt Bonds.

        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.  This  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. During 1999,  working capital loans were made to the Partnership under the
working capital loan facility. All working capital loans were repaid in a timely
manner.

Year 2000


         The Partnership  successfully  transitioned  into the Year 2000 without
any  Y2K-related  service  disruptions.  There  is,  however,  a risk  that some
computer-related problems might not manifest themselves for a period of time and
that supplier or business partner Y2K-related  problems may materialize and have
an adverse impact on the  Partnership's  operations.  Through December 31, 1999,
the Partnership spent approximately  $450,000 on year 2000 related projects. The
Partnership  currently  does not believe  that it will need to incur any further
costs for year 2000 efforts.


Item 7A Qualitative and Quantitative Disclosures About Market Risk

        The only  material  market risk to which the  Partnership  is exposed is
interest  rate risk.  The  Partnership's  exposure to market risk for changes in
interest rates relates  primarily to the  opportunity  costs of long-term  fixed
rate obligations in a falling interest rate environment.


        The table  below  presents  principal,  interest  and  related  weighted
average interest rates by year of maturity (in thousands).

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
<S>                            <C>          <C>         <C>         <C>         <C>        <C>              <C>       <C>
DEBT (all fixed rate)           2000        2001        2002        2003        2004       Thereafter       Total     Fair Value
                                ----        ----        ----        ----        ----       ----------       -----     ----------
Tax Exempt Bonds:
Principal                          $0.0        $0.0        $0.0        $0.0        $0.0        $125,010     $125,010     $127,510

Interest                         $9,865      $9,865      $9,865      $9,865      $9,865        $185,557     $234,882
Average Interest Rate             7.89%       7.89%       7.89%       7.89%       7.89%           7.89%

First Mortgage Bonds:
Principal                       $11,533     $11,141     $11,460     $14,566     $16,785        $400,756     $466,240     $465,188
Interest                        $44,276     $43,217     $42,178     $41,045     $39,645        $320,686     $531,047
Average Interest Rate             9.55%       9.56%       9.57%       9.58%       9.59%           9.67%
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                       14
<PAGE>



Item 8         FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA        Page


        Index to Financial Statements
        -----------------------------

        Report of Independent Public Accountants                    16

        Consolidated Balance Sheets                                 17

        Consolidated Statements of Operations                       19

        Consolidated Statements of Changes in Partners' Capital     20

        Consolidated Statements of Cash Flows                       22

        Notes to Consolidated Financial Statements                  23


















                                       15


<PAGE>



                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Indiantown Cogeneration, L.P.:

        We  have  audited  the  accompanying   consolidated  balance  sheets  of
Indiantown   Cogeneration,   L.P.,   (a  Delaware   limited   partnership)   and
subsidiaries,  as of December 31, 1999, and 1998,  and the related  consolidated
statements of operations,  changes in partners'  capital and cash flows for each
of the three  years in the period  ended  December  31,  1999.  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 auditing standards  generally
accepted in the United States.  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. and  subsidiaries  as of December 31,  1999,  and 1998,  and the results of
their  operations and their cash flows for each of the three years in the period
ended in conformity with accounting  principles generally accepted in the United
States.

As explained in Note 2 to the financial statements,  the Partnership changed its
method of accounting for costs of start-up activities in 1998.

                               ARTHUR ANDERSEN LLP

Vienna, Virginia
January 14, 2000


                                       16
<PAGE>


<TABLE>
<CAPTION>


                  Indiantown Cogeneration, L.P.
                   Consolidated Balance Sheets
          As of December 31, 1999 and December 31, 1998
          ---------------------------------------------
<S>                                                                 <C>                <C>

                             ASSETS                                      1999               1998
--------------------------------------------------------------      ---------------     --------------
CURRENT ASSETS:
  Cash and cash equivalents                                         $  2,416,997        $  2,419,089
  Accounts receivable-trade                                           13,471,985          12,369,594
  Inventories                                                          1,146,017             940,125
  Prepaid expenses                                                       807,372             736,700
  Deposits                                                                44,450              44,000
  Investments held by Trustee, including restricted funds
        of $2,752,669 and $2,718,549 respectively                      3,283,909           2,770,774
                                                                    -----------        -------------
               Total current assets                                   21,170,730          19,280,282
                                                                    ------------       -------------
INVESTMENTS HELD BY TRUSTEE,
     restricted funds                                                 14,501,877          14,001,428
                                                                    ------------       -------------

DEPOSITS                                                                  80,000              75,000

PROPERTY, PLANT & EQUIPMENT:
     Land                                                              8,582,363           8,582,363
     Electric and steam generating facilities                        698,401,089         695,929,380
     Less accumulated depreciation                                   (65,534,397)        (50,323,285)
                                                                   -------------        -------------
         Net property, plant & equipment                             641,449,055         654,188,458
                                                                   -------------        -------------

FUEL RESERVE                                                           1,318,099           3,428,403
                                                                   -------------        -------------

DEFERRED FINANCING COSTS, net of accumulated amortization of
    $43,854,648 and $43,020,796 respectively                          16,332,268          17,166,120
                                                                   -------------        ------------

         Total assets                                              $ 694,852,029        $708,139,691
                                                                   =============        ============
</TABLE>

The  accompanying  notes  are an  integral  part of these  consolidated  balance
sheets.

                                       17

<PAGE>

<TABLE>
<CAPTION>


                          Indiantown Cogeneration, L.P.
                           Consolidated Balance Sheets
                  As of December 31, 1999 and December 31, 1998
                  ---------------------------------------------
<S>                                                          <C>                       <C>
LIABILITIES AND PARTNERS' CAPITAL                                 1999                      1998
----------------------------------------------------         ------------------        ------------------
CURRENT LIABILITIES:
     Accounts payable and accrued liabilities                   $ 7,584,406               $ 7,405,610
     Accrued interest                                             2,267,017                 2,302,048
     Current portion - First Mortgage Bonds                      11,533,135                 9,997,000
     Current portion lease payable - railcars                       308,534                   287,048

                                                          ------------------        ------------------
               Total current liabilities                         21,693,092                19,991,706
                                                          ------------------        ------------------
LONG TERM DEBT:
     First Mortgage Bonds                                       454,708,865               466,242,000
     Tax Exempt Facility Revenue Bonds                          125,010,000               125,010,000
     Lease payable - railcars                                     4,275,166                 4,583,699
                                                          ------------------        ------------------
               Total long term debt                             583,994,031               595,835,699
                                                          ------------------        ------------------

     Scheduled major overhaul                                       920,356                   511,756
               Total liabilities                                606,607,479               616,339,161
                                                          ------------------        ------------------
PARTNERS' CAPITAL:
    Toyan Enterprises                                            26,517,489                27,586,061
    Palm Power Corporation                                        8,824,455                 9,180,053
    TIFD III-Y, Inc.                                                      -                36,720,211
    Indiantown Project Investment Partnership                    17,604,787                18,314,205
    Thaleia, Inc.                                                35,297,819                         -
                                                          ------------------        ------------------
               Total partners' capital                           88,244,550                91,800,530
                                                          ------------------        ------------------

               Total liabilities and partners'
               capital                                         $694,852,029              $708,139,691
                                                          ==================        ==================

</TABLE>



The  accompanying  notes  are an  integral  part of these  consolidated  balance
sheets.


                                       18
<PAGE>
<TABLE>
<CAPTION>


                         Indiantown Cogeneration, L.P.
                      Consolidated Statements of Operations
                 For the Years Ended December 31, 1998, 1997 and 1996
                 ----------------------------------------------------
<S>                                                   <C>                    <C>                    <C>
                                                            1999                   1998                    1997
                                                            ----                   ----                    ----
Operating Revenues:

     Electric capacity and capacity bonus             $  123,682,957         $  123,461,237         $  122,285,655
     Electric energy revenue                              39,461,349             35,549,353             40,098,446
     Steam                                                   125,813                172,809                133,334
                                                       -------------         --------------         --------------
         Total operating revenues                        163,270,119            159,183,399            162,517,435
                                                       -------------         --------------         --------------

Cost of Sales:

     Fuel and ash                                         39,794,007             36,220,511             43,505,182
     Operating and maintenance                            19,767,743             18,807,227             19,600,378
     Depreciation                                         15,227,631             15,091,155             15,088,413
                                                          ----------             ----------             ----------
         Total cost of sales                              74,789,381             70,118,893             78,193,973
                                                          ----------             ----------             ----------

Gross Profit                                              88,480,738             89,064,506             84,323,462
                                                          ----------             ----------             ----------

Other Operating Expenses:

     General and administrative                            4,501,136              3,826,290              2,830,813
     Insurance and taxes                                   6,212,453              6,689,843              6,705,113
                                                           ---------              ---------              ---------
         Total other operating expenses                   10,713,589             10,516,133              9,535,926
                                                          ----------             ----------              ---------

Operating Income                                          77,767,149             78,548,373             74,787,536
                                                          ----------             ----------             ----------

Non-Operating Income (Expense):

     Interest expense                                   (57,475,271)           (58,868,345)           (59,390,569)
     Interest income
                                                          2,122,142              2,493,655              2,611,810
                                                        -----------            -----------            -----------
         Net non-operating expense                      (55,353,129)           (56,374,690)           (56,778,759)
                                                        ------------           ------------           ------------

     Income before cumulative effect of change
     in accounting principle                             22,414,020             22,173,683            18,008,777

     Cumulative effect of a change in
     accounting for costs of start-up activities                  -               (818,716)                    -
                                                     --------------           -------------         -------------
Net Income                                           $   22,414,020           $ 21,354,967          $ 18,008,777
                                                     ==============           =============         =============
</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                       19
<PAGE>
<TABLE>
<CAPTION>

                         Indiantown Cogeneration, L. P.
             Consolidated Statements of Changes in Partners' Capital
              For the Years Ended December 31, 1999, 1998 and 1997
             -------------------------------------------------------

<S>                                <C>             <C>             <C>           <C>           <C>            <C>
                                     Toyan          Palm Power      TIDF III-Y,
                                   Enterprises     Corporation        Inc.          IPILP      Thaleia, LLC      Total

Partners' capital,
   December 31, 1996               $55,774,642     $13,943,660     $46,478,867       -               -        $116,197,169
     Net income (1/1/97 -
       9/19/97)                      7,390,612       1,847,654       6,158,843       -               -          15,397,109

     Capital distributions

       (1/1/97 - 9/19/97)          (7,813,463)     (1,953,365)     (6,511,218)       -               -         (16,278,046)
                                   -----------     -----------     -----------     ------       -----------    ------------

Partners' capital,
   September 19, 1997               55,351,791      13,837,949      46,126,492       -               -         115,316,232

     Transfer Palm Power 1/6
       Interest to Toyan             2,306,325     (2,306,325)               -       -               -                  -
      Net income (9/20/97 -
12/31/97                             1,305,835         261,166       1,044,667       -               -           2,611,668

     Capital distributions
     (9/20/97 - 12/31/97)          (5,901,168)     (1,180,234)     (4,720,934)       -               -         (11,802,336)
                                   -----------     -----------     -----------    -------        -----------    ------------

Partners' capital,
     December 31, 1997              53,062,783      10,612,556      42,450,225       -               -         106,125,564

     Net Income (1/1/98 -
       8/21/98)                      7,228,833       1,445,767       5,783,066                                  14,457,666

Capital Distributions (1/1/98 -
        8/21/98)                  (13,240,000)     (2,648,000)    (10,592,000)       -               -         (26,480,000)
                                  ------------     -----------    ------------    ---------      ----------    -------------

  Partners' capital
      August 21, 1998               47,051,616       9,410,323      37,641,291       -               -          94,103,230

     Transfer Toyan 19.95%
        interest to IPILP         (18,773,594)               -               -    18,773,594         -                   -
     Net Income (8/22/98
        through 12/31/98)            2,072,639         689,730       2,758,920     1,376,011         -           6,897,300

Capital Distributions (8/22/98 -
12/31/98)                           (2,764,600)       (920,000)     (3,680,000)   (1,835,400)        -          (9,200,000)
                                   -----------       ---------     -----------     -----------    ---------    ------------
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 -
        6/11/99)                     3,139,325       1,044,700       4,178,802       2,084,177       -          10,447,004
Partners' capital

       June 11, 1999               $30,725,386     $10,224,753     $40,899,013     $20,398,382       -        $102,247,534
     Transfer TIFD 19.90%
        interest to Thaleia, LLC
                                             -               -    (20,347,259)               -   20,347,259        -
     Net Income (6/12/99 -
        9/20/99)                     1,915,912         637,575       1,281,525       1,271,961    1,268,773      6,375,746

                                       20

<PAGE>

     Capital distributions
       (6/12/99 - 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 20.00%
        interest to Thaleia, LLC             -               -    (18,370,656)               -   18,370,656              -
     Net Income (9/21/99 -
        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 0.10%
        interest to Thaleia, LLC             -               -        (95,765)               -       95,765              -
     Net Income (11/25/99 -
        12/31/99)                      504,512         167,891               -         334,942      671,564      1,678,909

     Capital distributions
       (11/25/99 - 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
                                   ===========      ==========       ===========   ===========  ===========    ============

</TABLE>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.





                                       21

<PAGE>
<TABLE>
<CAPTION>

                          Indiantown Cogeneration, L.P
                      Consolidated Statements of Cash Flows
              For the Years Ended December 31, 1998, 1997 and 1996
              ----------------------------------------------------
<S>                                                                                   <C>              <C>             <C>
                                                                                        1999             1998            1997
                                                                                        ----             ----            ----
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                       $ 22,414,020     $ 21,354,967    $ 18,008,777
         Adjustments to reconcile net income to net cash
            provided by operating activities:
              Cumulative effect of a change in accounting principle                              -          818,716               -
               Depreciation and amortization                                            15,681,507       15,666,912      15,950,248
               (Increase)  Decrease in accounts receivable-trade                       (1,102,391)        2,113,496         376,789
               Decrease (Increase) in inventories and fuel reserve                       1,904,412        (890,538)       1,332,079
               (Increase) Decrease in deposits and prepaid expenses                       (76,122)          428,029       (470,004)
               Increase (Decrease) in accounts payable, accrued
                  liabilities, accrued interest and scheduled major overhaul              552,186        (2,471,228)     1,819,213
                                                                                        ----------       ----------      ----------
                       Net cash provided by operating activities                        39,373,612       37,020,354      37,017,102
                                                                                        ----------       ----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
        Purchase of property, plant & equipment                                        (2,108,071)      (1,361,673)     (1,338,055)
        (Increase) Decrease in investments held by trustee                             (1,013,585)        9,738,087       5,240,851
                                                                                       -----------        ---------       ---------
                       Net cash (used in) provided by investing activities             (3,121,656)        8,376,414       3,902,796
                                                                                       -----------        ---------       ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
        Decrease in lease payable--railcars                                              (287,048)        (267,058)       (248,460)
        Payment of bonds                                                               (9,997,000)     (10,265,000)     (9,701,000)
        Capital distributions                                                         (25,970,000)     (35,680,000)    (28,080,382)
                                                                                      ------------     ------------    ------------
              Net cash used in financing activities                                   (36,254,048)     (46,212,058)    (38,029,842)
                                                                                      ------------     ------------    ------------

(DECREASE) INCREASE IN CASH AND CASH
        EQUIVALENTS                                                                        (2,092)        (815,290)       2,890,056
Cash and cash equivalents, beginning of year                                             2,419,089        3,234,379         344,323
                                                                                        ----------       ----------      ----------
Cash and cash equivalents, end of year                                                  $2,416,997       $2,419,089      $3,234,379
                                                                                        ==========       ==========      ==========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW
        INFORMATION:

              Cash paid for interest                                                  $ 55,039,501     $ 55,879,716    $ 56,665,646
                                                                                      ============     ============    ============
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.




                                       22
<PAGE>

                          Indiantown Cogeneration, L.P.
                   Notes to Consolidated Financial Statements
                        As of December 31, 1999 and 1998


        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.

        The  original  general  partners  were Toyan  Enterprises  ("Toyan"),  a
        California  corporation  and a  wholly-owned  special  purpose  indirect
        subsidiary of  PG&EGenerating  Company,  LLC 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 19.9% limited partner interest in the  Partnership.  On September
        20, 1999, Thaleia acquired another 20% limited partnership interest from
        TIFD and TIFD's  membership  on the Board of Control.  On  November  24,
        1999, Thaleia purchased TIFD's remaining limited partner interest in the
        Partnership from TIFD.

        The net profits and losses of the  Partnership  are  allocated to Toyan,
        Palm, TIFD and IPILP and Thaleia (collectively, the "Partners") based on
        the following ownership percentages:


                                       23
<PAGE>
<TABLE>
<CAPTION>
<S>                        <C>                <C>                 <C>               <C>                   <C>
                             As of              As of               As of              As of                As of
                           August 21,         October 20,          June 4,          September 20,         November 24,
                            1998                 1998               1999                1999                  1999
                            ----                 ----               ----                ----                  ----
        Toyan               30.05%             30.05%              30.05%              30.05%               30.05%
        Palm                 10%                10%*                10%*                10%*                 10%*
        IPILP              19.95%**           19.95%**             19.95%              19.95%               19.95%
        TIFD                 40%                 40%               20.1%                .1%                   0%
        Thaleia               -                   -                19.9%               39.9%                40.0%
</TABLE>
[FN]

        * 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.
</FN>


The changes in ownership were the subject of notices of  self-recertification of
Qualifying  Facility  status filed by the  Partnership  with the Federal  Energy
Regulatory  Commission  on August 20, 1998,  November  16,  1998,  June 4, 1999,
September 21, 1999, and November 24, 1999.

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&EGenerating Company ("PG&EGen"), formerly known
as U.S.  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").  PG&EGen and PG&E OSC
are  general  partnerships  wholly-owned  by  PG&EGenerating  Company,  LLC,  an
indirect wholly-owned subsidiary of PG&E Corporation.

The  Partnership  commenced  commercial  operations  on  December  22, 1995 (the
"Commercial Operation Date").

 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.

The accompanying  consolidated  financial statements include the accounts of the
Partnership  and ICL Funding.  All significant  intercompany  balances have been
eliminated in consolidation.


                                       24
<PAGE>

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 $807,372 as of December  31,  1999,  include  $500,000  for
operation  and  maintenance  funding,  $243,135 for  insurance  costs related to
property damage and other general liability policies and $64,237 for prepayments
of the annual administrative fees for the letters of credit and for the trustee.

Prepaid  expenses of $736,700 as of December  31,  1998,  include  $500,000  for
operations  and  maintenance  funding,  $167,634 for insurance  costs related to
property damage and other liability  policies and $69,066 for prepayments of the
annual administrative fees for the letters of credit and for the trustee.

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. 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  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 $2.0 million is also
held long term assets in the  accompanying  balance  sheet at December  31, 1999
(see Note 4).

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.


                                       25
<PAGE>

The  Financial   Accounting   Standards  Board  issued  Statement  of  Financial
Accounting  Standards  ("SFAS")  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.  In the
opinion  of  Management  of the  Partnership,  there  has been no  impact on the
Partnership's  financial  condition or results of operations  in 1999,  1998, or
1997.

Fuel Reserve

The fuel reserve,  carried at cost, represents an approximate fifteen-day supply
of coal held for emergency purposes.

Scheduled  Major Overhaul

The  Partnership's  depreciation  is based on the plant  being  considered  as a
single  property  unit.   Certain  components  within  the  plant  will  require
replacement  or overhaul  several times within the estimated  life of the plant.
Scheduled major overhaul represents an accrual for anticipated  expenditures for
scheduled  significant  replacement  and  overhaul  costs of the  facility.  The
expense is recognized  ratably over the scheduled  overhaul cycle of the related
equipment.

It is anticipated that the Securities and Exchange Commission ("SEC") will issue
a ruling in March 2000 that will change the allowed  methods of  accounting  for
scheduled major  overhauls.  In this ruling,  the SEC will announce that it will
not accept  the  accrue in advance  method of  accounting  for  scheduled  major
overhauls  currently used by the Partnership.  Since the Partnership's  partners
are  required  to file with the SEC,  the  Partnership  will need to change  its
method of accounting for scheduled major overhaul to the as incurred method. The
SEC's  anticipated  ruling will allow  companies  to  recognize  the change as a
cumulative  effect of a change in accounting  principle in the year of adoption.
Under the ruling,  all companies would be required to reflect this change by the
end of the first  quarter  of 2000.  As such,  the  Partnership  will  reflect a
cumulative effect of a change in accounting principle, which will be an increase
in net  income of  $920,536  in its  financial  statements  for the year  ending
December 31, 2000.

Revenue Recognition

Revenues from the sale of electricity are recorded based on output delivered and
capacity provided at rates as specified under contract terms.

Organization Costs

The Partnerships  adopted the American Institute of Certified Public Accountants
issued  Statement  of  Position  98-5,  "Reporting  on  the  Costs  of  Start-up
Activities"  ("SOP  98-5")  during 1998 which  resulted in the  write-off of all
organization  costs reflected on the  accompanying  balance sheet. The amount of
start-up costs  previously  capitalized,  and  written-off in 1998,  amounted to
$818,716.


                                       26
<PAGE>

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  consolidated  financial
statements for Federal or state income taxes.

New Accounting Pronouncement

In June 1998,  the Financial  Accounting  Standards  Board isssued SFAS No. 133,
"Accounting  for Derivative  Instruments and Hedging  Activities"  ("SFAS 133").
SFAS  133  established   accounting  and  reporting   standards  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts,  and for hedging activities.  It requires that entities recognize all
derivative  instruments  as either  assets or  liabilities  in the  statement of
financial  position  and measure  those  instruments  at fair value.  If certain
conditions are met, a derivative may be  specifically  designated as (a) a hedge
of the exposure to changes in the fair value of a recognized  asset or liability
or an unrecognized  firm commitment,  or (b) a hedge of the exposure to variable
cash flows of a forecasted  transaction.  The  Partnership has also entered into
certain other  contracts that may meet the definition of derivative  instruments
under SFAS 133. The  Partnership  is  evaluating  all contracts to determine the
impact on its financial  statements.  SFAS 133, as amended, is effective for the
Partnership in fiscal year 2001.

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.  In January 1998, the  Partnership  received a refund of
funds  in  excess  of the  required  deposit  as  security  for the  first  year
maintenance  as set forth in the  contract  between the  Partnership  and Martin
County.  The remaining  deposit in the amount of $39,804 was included in current
assets as of December 31, 1997. These funds were returned in September 1998 when
the  Partnership  submitted a surety bond for the refund  amount.  In July 1999,
Martin County Growth Management Environmental Division authorized release of the
funds securing the landscaping.

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,  1999 and 1998,
estimated  present values of this deposit of $80,000 and $75,000,  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.


                                       27
<PAGE>

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 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   $45,138,915,
$46,014,161, and $46,800,091 in 1999, 1998, and 1997 respectively.

Future  minimum  payments  related to  outstanding  First  Mortgage Bonds and at
December 31, 1999 are as follows (in thousands):

                2000                      $  11,533
                2001                         11,141
                2002                         11,460
                2003                         14,566
                2004                         16,785
                Thereafter                  400,757
                                           ---------
                Total                      $466,242
                                           =========

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

                                       28
<PAGE>


December 31, 1999,  1998 and 1997.  The Tax Exempt Bonds and the First  Mortgage
Bonds are equal in seniority.

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

The Revolving  Credit  Agreement  provides for the availability of funds for the
working capital  requirements of the  Partnership.  It has a term of seven years
from November 1, 1994,  subject to extension at the discretion of the bank party
thereto.  The interest rate is based upon various  short-term  indices chosen at
the Partnership's option and is determined separately for each draw. This credit
facility includes commitment fees, to be paid quarterly,  of .375 percent on the
unborrowed  portion.  The face amount of the original  working capital letter of
credit was increased in November 1994 from $10,000,000 to $15,000,000. Under the
original  and new  working  capital  credit  facilities,  the  Partnership  paid
$52,836,  $54,274  and  $57,031  in  commitment  fees in 1999,  1998  and  1997,
respectively.  At December 31, 1997, no draws for working  capital had been made
to the Partnership  under the Revolving  Credit  Agreement.  One working capitol
loan was made in May and two in June of 1998.  They were repaid in July of 1998.
Another was made in November 1998 and repaid in December, 1998. In 1999, working
capital  loans  were  made in May and June and  repaid in July and  August,  and
November and repaid in December.


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  outlined  below.  The initial amount of $13,000,000 was issued
for the first year of  operations  and  increased to  $40,000,000  in January of
1999.  During  1999,  1998 and 1997 no draws were made on this letter of credit.
Commitment fees of $704,555,  $643,076 and $572,819, were paid on this letter of
credit in 1999, 1998 and 1997, 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 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

                                       29
<PAGE>

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  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, 1999 and 1998,  was
$2,000,000  and  $1,500,000,   respectively,  and  is  included  in  noncurrent,
restricted investments held by trustee in the accompanying  consolidated balance
sheets.

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 1994 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 for the
amount of damages suffered by Caulkins.  As of December 31, 1999, 1998 and 1997,
no draws had been made on this letter of credit.  Commitment  fees of  $143,011,
$156,315,  and  $178,862  were paid  relating  to this letter of credit in 1999,
1998, and 1997, respectively.

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, 1999, 1998 and 1997, no draws had been made
on this letter of credit.  Commitment  fees of  $488,281,  $877,901 and $875,496
were paid on this letter of credit in 1999,  1998, 1997 and ,  respectively.  On
January 11,  1999,  pursuant to the  Disbursement  Agreement,  the Debt  Service
Reserve Letter of Credit was reduced to approximately $30 million.

5.   PURCHASE AGREEMENTS:

Coal Purchase and Transportation Agreement

The Partnership  entered into a 30-year purchase  contract with Lodestar Energy,
Inc.  (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.

In 1997, the Partnership  entered into an arrangement with Lodestar and the coal
transporter  to  compensate  the  Partnership  for reduced FPL revenues when the
facility

                                       30
<PAGE>

runs at minimum load during decommit periods.  In exchange for the Partnership's
continued purchase and transportation of coal during these periods, Lodestar and
the coal  transporter  each pay the  Partnership  a portion of the  foregone FPL
revenues.

On June 8, 1998, the Partnership  entered into a 3-year  agreement with Lodestar
which  established  an  arrangement  for  the  Partnership  disposal  of  ash at
alternative  locations.  The  partnership  also  entered an  agreement  with VFL
Technology Corporation for the disposal of ash.

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 sulfur dioxide 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.  Either  party may cancel the
agreement  after January 1, 2000,  upon proper notice.  The  Partnership  has no
obligation to purchase a minimum quantity of lime under the agreement. The price
of lime was  renegotiated in 1999 for a three year period  beginning  January 1,
2000.

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.  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 QF under
PURPA.  The facility  declared  Commercial  Operation  with Caulkins on March 1,
1996.

7.   COMMITMENTS AND CONTINGENCIES

On March 19, 1999,  Indiantown  Cogeneration,  L.P. (the "Partnership")  filed a
complaint  against  Florida Power & Light  Company  ("FPL") in the United States
District Court for the Middle
                                       31
<PAGE>

District of Florida. The lawsuit resulted from a course of action pursued by FPL
on March 10, 1999,  in which FPL  purported to exercise its dispatch and control
rights  under the power sales  agreement  and  disconnected  its system from the
Partnership.  The Partnership  believed this act violated the terms of the power
sales 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 QF under the Public Utility
Regulatory Policies Act of 1978.

On March 28, 1999, FPL reconnected  the facility to FPL's system.  FPL had moved
to dismiss the entire amended  complaint and ICLP filed its opposition papers on
August 2, 1999.  The Court has ordered a mediation  session and set a trial date
in April 2001. If the facility was unable to maintain its QF status, it would be
in default under the PPA.  Management  and legal counsel  believe that it is too
early in the  proceedings  to predict  the outcome of the case and any impact on
the net income.













                                       32
<PAGE>

8. RELATED PARTY TRANSACTIONS:

Management Services Agreement

The Partnership has a Management  Services  Agreement with PG&EGen, a California
general  partnership and a wholly owned indirect  subsidiary of PG&EGenLLC,  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 PG&EGen 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 $4,120,468,  $2,800,644,  and
$1,981,174  in 1999,  1998 and 1997,  were  made to  PG&EGen,  respectively.  At
December 31, 1999 and 1998, the Partnership  owed PG&EGen $432,068 and $420,605,
respectively,  which  are  included  in  accounts  payable  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
PG&EGenLLC,  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,  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 $9,790,473,  $9,605,917,  and $9,708,409
were made to PG&E OSC in 1999, 1998 and 1997, respectively. At December 31, 1999
and 1998,  the  Partnership  owed PG&E OSC $836,346  and $646,888  respectively,
which is included in accounts payable 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 $1,784,463 is included in property,  plant and
equipment at December 31, 1999.  Payments of $629,856,  including  principal and
interest,  were  made in  1999,  1998  and  1997  and the  lease  obligation  of
approximately $4,583,700,  $4,870,747 and $5,137,805 at December 31, 1999, 1998,
and 1997,  respectively,  is  reported  as a lease  payable in the  accompanying
consolidated balance sheets.


                                       33
<PAGE>

        Future minimum payments related to the Car Leasing Agreement at December
31, 1999 are approximately as follows:
<TABLE>
<CAPTION>
<S>    <C>                                     <C>

       2000                                     $ 629,856
       2001                                       629,856
       2002                                       629,856
       2003                                       629,856
       2004                                       629,856
       Thereafter                               3,374,623
                                                ---------
          Total minimum lease payments          6,523,903
       Interest portion of lease payment       (1,940,203)
                                               ----------

       Present value of future minimum
       lease payments                           4,583,700
       Current portion                           (308,534)
                                               -----------
       Long-term portion                      $ 4,275,166
                                              ============

</TABLE>


Distribution to Partners

On June 15 and  December  15, 1999,  as provided in the  Partnership  Agreement,
Indiantown   distributed   approximately   $16.8   million  and  $9.2   million,
respectively,  to the Partners. An additional $1.8 million of distributable cash
was retained for capital  projects and is included in cash and cash  equivalents
as of December 31, 1999, on the accompanying  consolidated  balance sheet. Funds
distributed  were from electric and steam revenues  collected  during the fourth
and third full years of commercial operations.

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, 1999 and
1998:
<TABLE>
<CAPTION>
<S>      <C>                                      <C>                                <C>

                                                   December 31, 1999
          Financial Liabilities                     Carrying Amount                    Fair Value
          ---------------------                    -----------------                   ----------

        1994 Tax Exempt Bonds                        $125,010,000                     $127,510,200
        First Mortgage Bonds                         $466,242,000                     $465,188,912


                                                   December 31, 1998
          Financial Liabilities                     Carrying Amount                    Fair Value
          ---------------------                    -----------------                   ----------

        1994 Tax Exempt Bonds                        $125,010,000                     $146,749,907
        First Mortgage Bonds                         $476,239,000                     $564,777,850

</TABLE>


For the 1994 Tax Exempt Bonds and First Mortgage  Bonds,  the fair values of the
Partnership's bonds payable are based on the stated rates of the 1994 Tax Exempt
Bonds and First  Mortgage

                                       34
<PAGE>


Bonds and current market  interest rates to estimate  market values for the 1994
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.










                                       35
<PAGE>


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
report  dated  January  14,  2000 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, 1999 or performed
any audit procedures subsequent to the date of our report.


/s/  ARTHUR ANDERSEN LLP
------------------------


Vienna, VA
March 30, 2000





























                                       36
<PAGE>

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.
<TABLE>
<CAPTION>
<S>   <C>                                            <C>                 <C>
                        Name                          Age                        Position
                        ----                          ---                        --------
     Thomas J. Bonner.................                 45                Palm Representative and
                                                                          Thaleia Representative
     Thomas F. Schwartz ............                   38                Palm Representative and
                                                                          Thaleia Representative
     P. Chrisman Iribe..................               48                  IPILP Representative
     Sanford L. Hartman..........                      46                  IPILP Representative

</TABLE>

          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 Group 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 PG&EGenerating  Company and has been
with  PG&EGenerating  Company,  LLC ("PG&EGenLLC")  since it was formed in 1989.
Prior to joining  PG&EGenLLC,  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  PG&EGenLLC's legal group in 1990 and became
its General  Counsel in April  1999.  Prior to joining  PG&EGenLLC,  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.  Hartman has a BA in Political Science
from Drew University and a JD from Temple University.




                                       37
<PAGE>

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.
<TABLE>
<CAPTION>
<S>                               <C>                    <C>

           Name                     Age                      Position
           ----                     ---                      --------
        P. Chrisman Iribe           47                   Director, President
        Sanford L. Hartman          46                   Director
        John R. Cooper              51                   Vice President, Chief
                                                         Financial Officer and
                                                         Principal Accounting
                                                         Officer
</TABLE>

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 PG&EGen
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, 1999, 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.




                                       38
<PAGE>

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............     16

                  Consolidated Balance Sheets as of
                  December 31, 1999 and December 31, 1998 ............     17

                  Consolidated Statements of Operations for the
                  years ended December 31, 1999, 1998 and 1997........     19

                  Consolidated Statements of Changes
                  in Partners' Capital for the years ended
                  December 31, 1999, 1998 and 1997....................     20

                  Consolidated Statements of Cash Flows for the
                  years ended December 31, 1999, 1998 and 1997.......      22

                  Notes to Consolidated Financial
                  Statements.........................................      23

               (2)    Consolidated Financial Statement
                      Schedules......................................    None

        b) Reports on Form 8-K:                                          None






                                       39
<PAGE>






        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.**


                                       40
<PAGE>

        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.****

99.1    Copy of Registrant's complaint against FPL filed March 19, 1999.*****

99.2    Copy of Registrant's  Second Amended  Complaint against FPL filed
        March 21, 2000.

[FN]
--------------------------
*  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

                                       41
<PAGE>

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.
*****  Incorporated by reference from the current report on Form 8-K file no.
33-82034 filed by the Registrants with the SEC in March 1999.

</FN>















                                       42

<PAGE>




                                    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 30, 2000.

                                            INDIANTOWN COGENERATION, L.P.


Date:  March 30, 2000                       /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,       March 30, 2000
----------------------
P. Chrisman Iribe            President and Secretary

/s/ John R. Cooper           Chief Financial Officer,          March 30, 2000
----------------------
John R. Cooper                 Principal Accounting
                               Officer and Senior
                               Vice President

/s/ Thomas J. Bonner         Member of Board of Control        March 30, 2000
--------------------
Thomas J. Bonner

/s/ Thomas F. Schwartz       Member of Board of Control        March 30, 2000
----------------------
Thomas F. Schwartz

/s/ Sanford L. Hartman       Member of Board of Control        March 30, 2000
----------------------       and Senior Vice President
Sanford L. Hartman





                                       43


<PAGE>



                                    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 30, 1999.

                                            INDIANTOWN COGENERATION
                                            FUNDING CORPORATION

Date:  March 30, 2000                       /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           March 30, 2000
----------------------
P. Chrisman Iribe

/s/ John R. Cooper              Chief Financial Officer,         March 30, 2000
----------------------            Principal Accounting
John R. Cooper                    Officer and Vice President




                                       44