-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TU1PiSktPqirRsJAV3ml9phrfovmkdgudLAQA46GFCCaC2BLhyw/qHO89hh0BACs W2RWqGkfKM/ICrJcJO6pbg== 0000916457-06-000131.txt : 20061114 0000916457-06-000131.hdr.sgml : 20061114 20061114150721 ACCESSION NUMBER: 0000916457-06-000131 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20060930 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20061114 DATE AS OF CHANGE: 20061114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALPINE CORP CENTRAL INDEX KEY: 0000916457 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 770212977 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12079 FILM NUMBER: 061214322 BUSINESS ADDRESS: STREET 1: 50 WEST SAN FERNANDO ST CITY: SAN JOSE STATE: CA ZIP: 95113 BUSINESS PHONE: 4089955115 MAIL ADDRESS: STREET 1: 50 W SAN FERNANDO STREET 2: SUITE 500 CITY: SAN JOSE STATE: CA ZIP: 95113 8-K 1 september2006.htm

 


UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 14, 2006

CALPINE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

Commission File Number: 1-12079

I.R.S. Employer Identification Number: 77-0212977

 

50 West San Fernando Street

San Jose, California 95113

Telephone: (408) 995-5115

(Address of principal executive offices and telephone number)

 

Not applicable

(Former name or former address if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))

o

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))

 


Index Definitions

 

ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION

 

The information set forth in Item 7.01 below is incorporated by reference in this Item 2.02 as if fully set forth herein.

ITEM 7.01 — REGULATION FD DISCLOSURE

 

On November 14, 2006, Calpine Corporation (“Calpine” or the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) filed their unaudited consolidated Monthly Operating Statement for the month ended September 30, 2006 (the “Monthly Operating Statement”), with the United States Bankruptcy Court for the Southern District of New York (the “U.S. Bankruptcy Court”) in the matter of In re Calpine Corporation, et al., Case No. 05-60200 (BRL). Exhibit 99.1 to this Current Report on Form 8-K contains the unaudited consolidated Monthly Operating Statement as filed with the U.S. Bankruptcy Court.

 

The Monthly Operating Statement is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the U.S. Bankruptcy Court. Certain of the Company’s Canadian subsidiaries were granted relief by the Court of Queen’s Bench of Alberta, Judicial District of Calgary (the “Canadian Court”) under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”). As a result, certain of the Company’s Canadian and other foreign subsidiaries were deconsolidated as of December 20, 2005. Financial information regarding such deconsolidated subsidiaries is not part of the consolidated group included in the Monthly Operating Statement. The financial information in the Monthly Operating Statement is preliminary and unaudited and does not purport to show the financial statements of any of the Debtors in accordance with accounting principles generally accepted in the United States of America (“GAAP”), and therefore may exclude items required by GAAP, such as certain reclassifications, eliminations, accruals, valuations and disclosure items. The Company cautions readers not to place undue reliance upon the Monthly Operating Statement. There can be no assurance that such information is complete and the Monthly Operating Statement may be subject to revision. The Monthly Operating Statement is in a format required by the United States Bankruptcy Code (the “Bankruptcy Code”) and should not be used for investment purposes. The Monthly Operating Statement should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006, and September 30, 2006.

 

These unaudited financial statements have been derived from the books and records of the Company. This information, however, has not been subject to procedures that would typically be applied to financial information presented in accordance with GAAP and, upon the application of such procedures, the Company believes that the financial information could be subject to changes, and these changes could be material. The information furnished in the Monthly Operating Statement includes primarily normal recurring adjustments but does not include all of the adjustments that would typically be made for quarterly financial statements in accordance with GAAP. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

 

Access to documents filed with the U.S. Bankruptcy Court and other general information about the Chapter 11 cases is available at www.kccllc.net/calpine. Certain information regarding the Canadian proceedings under the CCAA, including the reports of the monitor appointed by the Canadian Court, is available at the monitor’s website at www.ey.com/ca/calpinecanada. The content of the foregoing websites is not a part of this Report.

Limitation on Incorporation by Reference

 

The Monthly Operating Statement is being furnished for informational purposes only and is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended. Registration statements or other documents filed with the SEC shall not incorporate the Monthly Operating Statement or any other information set forth in this Report by reference, except as otherwise expressly stated in such filing. This Report will not be deemed an admission as to the materiality of any information that is required to be disclosed solely by Regulation FD.

 

1

Index Definitions

 

Forward-Looking Statements

 

In addition to historical information, this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company uses words such as “believe,” “intend,” “expect,” “anticipate,” “plan,” “may,” “will” and similar expressions to identify forward-looking statements. Such statements include, among others, those concerning the Company’s expected financial performance and strategic and operational plans, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. You are cautioned that any such forward-looking statements are not guarantees of future performance and that a number of risks and uncertainties could cause actual results to differ materially from those anticipated in the forward-looking statements. Such risks and uncertainties include, but are not limited to: (i) the risks and uncertainties associated with the Chapter 11 cases and CCAA proceedings, including impact on operations; (ii) the Company’s ability to attract, retain and motivate key employees and successfully implement new strategies; (iii) the Company’s ability to successfully reorganize and emerge from Chapter 11; (iv) the Company’s ability to attract and retain customers and counterparties; (v) the Company’s ability to implement its business plan; (vi) financial results that may be volatile and may not reflect historical trends; (vii) the Company’s ability to manage liquidity needs and comply with financing obligations; (viii) the direct or indirect effects on the Company’s business of its impaired credit including increased cash collateral requirements; (ix) the expiration or termination of the Company’s PPAs and the related results on revenues; (x) potential volatility in earnings and requirements for cash collateral associated with the use of commodity contracts; (xi) price and supply of natural gas; (xii) risks associated with power project development, acquisition and construction activities; (xiii) risks associated with the operation of power plants, including unscheduled outages of operating plants; (xiv) factors that impact the output of the Company’s geothermal resources and generation facilities, including unusual or unexpected steam field well and pipeline maintenance and variables associated with the waste water injection projects that supply added water to the steam reservoir; (xv) quarterly and seasonal fluctuations of the Company’s results; (xvi) competition; (xvii) risks associated with marketing and selling power from plants in the evolving energy markets; (xviii) present and possible future claims, litigation and enforcement actions; (xix) effects of the application of laws or regulations, including changes in laws or regulations or the interpretation thereof; and (xx) other risks identified in this report and in the Company’s annual and quarterly reports on Forms 10-K and 10-Q. You should also carefully review other reports that the Company files with the SEC. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise.

ITEM 9.01 — FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

 

 

(d)

Exhibits

 

99.1  Calpine Corporation’s Unaudited Monthly Operating Statement for the month ended September 30, 2006.

 

2

Index Definitions

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

CALPINE CORPORATION

 

 

By:    

/s/       Charles B. Clark, Jr.

 

 

Charles B. Clark, Jr.

 

 

Senior Vice President, Corporate Controller and

Chief Accounting Officer

 

 

 

Date:  November 14, 2006

 

 

 

 

3

Index Definitions

 

EXHIBIT INDEX

 

 

Exhibit

Number

 

 

Description

99.1

 

Calpine Corporation’s Unaudited Monthly Operating Statement for the month
ended September 30, 2006.

 

 

4

Index Definitions

 

EXHIBIT 99.1

 

 

UNITED STATES BANKRUPTCY COURT   

 

 

SOUTHERN DISTRICT OF NEW YORK

 

 

 

x

 

In re:

:

Chapter 11

 

:

 

CALPINE CORPORATION, et al.,

:

Case No. 05-60200 BRL

 

:

 

Debtors.

:

(Jointly Administered)

 

:

 

 

x

 

 

MONTHLY OPERATING STATEMENT FOR THE PERIOD

FROM SEPTEMBER 1, 2006, TO SEPTEMBER 30, 2006

 

 

DEBTORS’ ADDRESS:

50 West San Fernando Street, San Jose, California 95113

 

 

 

 

 

MONTHLY DISBURSEMENTS MADE BY CALPINE CORPORATION, ET AL. AND ITS U.S. DEBTOR SUBSIDIARIES (IN THOUSANDS):  



$ 488,667

 

 

 

DEBTORS’ ATTORNEY:

Kirkland & Ellis LLP

 

 

Richard M. Cieri (RC 6062)

 

 

Marc Kieselstein admitted pro hac vice

 

 

David R. Seligman admitted pro hac vice

 

 

Edward O. Sassower (ES 5823)

 

 

Citigroup Center

 

 

153 East 53rd Street

 

 

New York, NY 10022-4611

 

 

 

 

 

MONTHLY OPERATING INCOME (LOSS) (IN THOUSANDS):

$(151,770)

 

 

 

REPORT PREPARER:

CALPINE CORPORATION, et al.

 

 

The undersigned, having reviewed the attached report and being familiar with the Debtors’ financial affairs, verifies under penalty of perjury, that the information contained therein is complete, accurate and truthful to the best of my knowledge.

 

 

/s/       CHARLES B. CLARK, JR.

 

Charles B. Clark, Jr.

 

Senior Vice President, Corporate Controller and
Chief Accounting Officer

DATE:  November 14, 2006

Calpine Corporation

 

 

5

Index

 

DEFINITIONS

 

As used in this Monthly Operating Statement, the following abbreviations contained herein have the meanings set forth below. Additionally, the terms “the Company,” “Calpine,” “we,” “us” and “our” refer to Calpine Corporation and its consolidated subsidiaries, unless the context clearly indicates otherwise. For clarification, such terms will not include the Canadian and other foreign subsidiaries that were deconsolidated as a result of the filings by the Canadian Debtors under the CCAA in the Canadian Court effective December 31, 2005. The term “Calpine Corporation” shall refer only to Calpine Corporation and not to any of its subsidiaries. Unless and as otherwise stated, any references in this Monthly Operating Statement to any agreement means such agreement and all schedules, exhibits and attachments thereto in each case as amended, restated, supplemented or otherwise modified to the date of this Monthly Operating Statement.

 

 

Abbreviation

 

Definition

 

 

 

2005 Form 10-K

 

Calpine Corporation’s Annual Report on Form 10-K for the year ended December 31, 2005, filed with the SEC on May 19, 2006

 

 

 

2006 First Quarter

Form 10-Q

 

Calpine Corporation’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2006, filed with the SEC on July 3, 2006

 

 

 

2006 Second Quarter Form 10-Q

 

Calpine Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006, filed with the SEC on August 14, 2006

 

 

 

2006 Third Quarter Form 10-Q

 

Calpine Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, filed with the SEC on November 9, 2006

 

 

 

2006 Forms 10-Q

 

2006 First Quarter Form 10-Q, 2006 Second Quarter Form 10-Q, and 2006 Third Quarter Form 10-Q

 

 

 

APB

 

Accounting Principles Board 

 

 

 

ASC

 

Aircraft Services Corporation

 

 

 

Bankruptcy Code

 

United States Bankruptcy Code

 

 

 

Calpine Debtor(s)

 

The U.S. Debtors and the Canadian Debtors

 

 

 

Canadian Court

 

The Court of Queen’s Bench of Alberta, Judicial District of Calgary

 

 

 

Canadian Debtor(s)

 

The subsidiaries and affiliates of Calpine Corporation that have been granted creditor protection under the CCAA in the Canadian Court

 

 

 

CCAA

 

Companies’ Creditors Arrangement Act (Canada)

 

 

 

CCFC

 

Calpine Construction Finance Company, L.P.

 

 

 

CES

 

Calpine Energy Services, L.P.

 

 

 

Chapter 11

 

Chapter 11 of the Bankruptcy Code

 

 

6

Index

 

Abbreviation

 

Definition

 

 

 

DIP Facility

 

The Revolving Credit, Term Loan and Guarantee Agreement, dated as of December 22, 2005, as amended on January 26, 2006, and as amended and restated by that certain Amended and Restated Revolving Credit, Term Loan and Guarantee Agreement, dated as of February 23, 2006, among Calpine Corporation, as borrower, the Guarantors party thereto, the Lenders from time to time party thereto, Credit Suisse Securities (USA) LLC and Deutsche Bank Securities Inc., as joint syndication agents, Deutsche Bank Trust Company Americas, as administrative agent for the First Priority Lenders, General Electric Capital Corporation, as Sub-Agent for the Revolving Lenders, Credit Suisse, as administrative agent for the Second Priority Term Lenders, Landesbank Hessen Thuringen Girozentrale, New York Branch, General Electric Capital Corporation and HSH Nordbank AG, New York Branch, as joint documentation agents for the First Priority Lenders and Bayerische Landesbank, General Electric Capital Corporation and Union Bank of California, N.A., as joint documentation agents for the Second Priority Lenders

 

 

 

EITF

 

Emerging Issues Task Force

 

 

 

Exchange Act

 

United States Securities Exchange Act of 1934, as amended

 

 

 

FASB

 

Financial Accounting Standards Board

 

 

 

FERC

 

Federal Energy Regulatory Commission

 

 

 

FIN

 

FASB Interpretation Number

 

 

 

First Priority Notes

 

Calpine Corporation’s 95/8% First Priority Senior Secured Notes Due 2014

 

 

 

GAAP

 

Generally accepted accounting principles in the United States

 

 

 

LSTC

 

Liabilities subject to compromise

 

 

 

Mitsui

 

Mitsui & Co., Ltd.

 

 

 

Non-U.S. Debtor(s)

 

The consolidated subsidiaries and affiliates of Calpine Corporation that are not U.S. Debtor(s)

 

 

 

Petition Date

 

December 20, 2005

 

 

 

PG&E

 

Pacific Gas & Electric Company

 

 

 

PPA(s)

 

Power purchase agreement(s)

 

 

 

SDG&E

 

San Diego Gas & Electric Company

 

 

 

SEC

 

United States Securities and Exchange Commission

 

 

 

Second Priority Debt

 

Calpine Corporation’s Second Priority Senior Secured Floating Rate Notes due 2007, 81/2% Second Priority Senior Secured Notes Due 2010, 83/4% Second Priority Senior Secured Notes Due 2013, 97/8% Second Priority Senior Secured Notes Due 2011, and Senior Secured Term Loans Due 2007

 

 

 

Securities Act

 

United States Securities Act of 1933, as amended

 

 

7

Index

 

Abbreviation

 

Definition

 

 

 

SFAS

 

Statement of Financial Accounting Standards

 

 

 

SOP

 

Statement of Position

 

 

 

The Geysers Assets

 

19 geothermal power plant assets located in northern California

 

 

 

ULC I

 

Calpine Canada Energy Finance ULC

 

 

 

ULC II

 

Calpine Canada Energy Finance II ULC

 

 

 

U.S.

 

United States of America

 

 

 

U.S. Bankruptcy Court

 

United States Bankruptcy Court for the Southern District of New York

 

 

 

U.S. Debtor(s)

 

Calpine Corporation and each of its subsidiaries and affiliates that have filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court, which matters are being jointly administered in the U.S. Bankruptcy Court under the caption In re Calpine Corporation, et al., Case No. 05-60200 (BRL)

 

 

8

Definitions

 

CALPINE CORPORATION

(Debtor-in-Possession)

Index to Consolidated Condensed Financial Statements and Schedules

 

 

 

 

Page

Financial Statements as of and for the Month Ended September 30, 2006:

 

Consolidated Condensed Statement of Operations

10

Consolidated Condensed Balance Sheet

11

Notes to Unaudited Consolidated Condensed Financial Statements

 

 

1.

Chapter 11 Cases and CCAA Proceedings

13

 

2.

Basis of Presentation

15

 

3.

Summary of Significant Accounting Policies

16

 

4.

Recent Accounting Pronouncements

16

 

5.

Cash and Cash Equivalents, Restricted Cash and Margin Deposits

17

 

6.

Rejected Contracts and Related Matters

18

 

7.

Liabilities Subject to Compromise

18

 

8.

DIP Facility

19

 

9.

Reorganization Items

20

Schedules:      

 

 

Schedule I

Schedule of Consolidating Condensed Balance Sheet as of September 30, 2006

21

Schedule II

Schedule of Consolidating Condensed Statement of Operations for the Month
Ended September 30, 2006


23

Schedule III

Schedule of Payroll and Payroll Taxes

25

Schedule IV

Schedule of Federal, State and Local Taxes Collected, Received, Due or Withheld 

26

Schedule V

Schedule of Total Disbursements by Debtor

27

Schedule VI

Insurance Statement

33

Schedule VII

Consolidated Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2006

34

Schedule VIII

Consolidated Condensed Statement of Cash Flows for the Nine Months
Ended September 30, 2006

35

 

 

9

Index Definitions

 

CALPINE CORPORATION

(Debtor-in-Possession)

CASE NO. 05-60200 (Jointly Administered)

CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

(Unaudited)

(in thousands)

For the period from September 1, 2006, through September 30, 2006

 

 

Revenue: 

 

 

 

 

Electricity and steam revenue

 

$

429,362

 

Sales of purchased power and gas for hedging and optimization

 

 

3,293

 

Mark-to-market activities, net

 

 

23,189

 

Other revenue

 

 

5,593

 

Total revenue

 

 

461,437

 

Cost of revenue:

 

 

 

 

Plant operating expense

 

 

75,578

 

Royalty expense

 

 

2,257

 

Transmission purchase expense

 

 

6,077

 

Purchased power and gas expense for hedging and optimization

 

 

(14,150

)

Fuel expense

 

 

288,212

 

Depreciation and amortization expense

 

 

49,008

 

Operating plant impairments

 

 

—

 

Operating lease expense

 

 

5,360

 

Other cost of revenue

 

 

6,060

 

Total cost of revenue

 

 

418,402

 

Gross profit

 

 

43,035

 

Equipment, development project and other impairments

 

 

1,017

 

Project development expense

 

 

1,481

 

Research and development expense

 

 

1,408

 

Sales, general and administrative expense

 

 

21,239

 

Income from operations

 

 

17,890

 

Interest expense

 

 

76,616

 

Interest (income)

 

 

(6,646

)

Minority interest expense

 

 

2,594

 

Other (income) expense, net

 

 

(3,354

)

Income before reorganization items and provision for income taxes

 

 

(51,320

)

Reorganization items

 

 

101,836

 

Income (loss) before provision for income taxes

 

 

(153,156

)

Provision (benefit) for income taxes

 

 

(1,386

)

Net income (loss)

 

$

(151,770

)

 

 

The accompanying notes are an integral part of these

Consolidated Condensed Financial Statements.

 

10

Index Definitions

 

CALPINE CORPORATION

(Debtor-in-Possession)

CASE NO. 05-60200 (Jointly Administered)

CONSOLIDATED CONDENSED BALANCE SHEET

(Unaudited)

(in thousands)

September 30, 2006

 

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets: 

 

 

 

 

Cash and cash equivalents

 

$

988,975

 

Accounts receivable, net

 

 

828,043

 

Margin deposits and other prepaid expense

 

 

341,972

 

Inventories

 

 

180,757

 

Restricted cash

 

 

431,769

 

Current derivative assets

 

 

184,878

 

Current assets held for sale

 

 

367,600

 

Other current assets

 

 

102,592

 

Total current assets

 

 

3,426,586

 

Restricted cash, net of current portion

 

 

191,999

 

Notes receivable, net of current portion

 

 

145,294

 

Project development costs

 

 

26,309

 

Investments

 

 

101,311

 

Deferred financing costs

 

 

157,843

 

Prepaid lease, net of current portion

 

 

184,781

 

Property, plant and equipment, net

 

 

13,889,035

 

Goodwill

 

 

45,160

 

Other intangible assets, net

 

 

51,332

 

Long-term derivative assets

 

 

394,392

 

Other assets

 

 

613,672

 

Total assets

 

$

19,227,714

 

 

 

The accompanying notes are an integral part of these

Consolidated Condensed Financial Statements.

 

11

Index Definitions

 

CONSOLIDATED CONDENSED BALANCE SHEET — (Continued)

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 

$

483,904

 

Accrued payroll and related expense

 

 

37,848

 

Accrued interest payable

 

 

174,542

 

Income taxes payable

 

 

99,073

 

Notes payable and other borrowings, current portion

 

 

149,738

 

Preferred interests, current portion

 

 

8,722

 

Capital lease obligations, current portion

 

 

284,530

 

CCFC financing, current portion

 

 

3,208

 

CalGen financing, current portion

 

 

2,510,827

 

Construction/project financing, current portion

 

 

558,354

 

DIP Facility, current portion

 

 

3,500

 

Current derivative liabilities

 

 

277,880

 

Current liabilities held for sale

 

 

363,780

 

Other current liabilities

 

 

335,580

 

Total current liabilities

 

 

5,291,486

 

Notes payable and other borrowings, net of current portion

 

 

420,719

 

Preferred interests, net of current portion

 

 

574,893

 

Capital lease obligations, net of current portion

 

 

224

 

CCFC financing, net of current portion

 

 

778,663

 

Construction/project financing, net of current portion

 

 

1,474,200

 

DIP Facility, net of current portion

 

 

993,875

 

Deferred income taxes, net of current portion

 

 

405,153

 

Deferred revenue

 

 

109,920

 

Long-term derivative liabilities

 

 

528,159

 

Other liabilities

 

 

156,363

 

Total liabilities not subject to compromise

 

 

10,733,655

 

Liabilities subject to compromise

 

 

15,039,613

 

Commitments and contingencies

 

 

—

 

Minority interests

 

 

270,712

 

Stockholders’ equity (deficit):

 

 

 

 

Common stock

 

 

544

 

Additional paid-in capital

 

 

3,270,575

 

Additional paid-in capital, loaned shares

 

 

185,600

 

Additional paid-in capital, returnable shares

 

 

(185,600

)

Accumulated deficit

 

 

(10,018,700

)

Accumulated other comprehensive loss

 

 

(68,685

)

Total stockholders’ deficit

 

 

(6,816,266

)

Total liabilities and stockholders’ deficit

 

$

19,227,714

 

 

 

The accompanying notes are an integral part of these

Consolidated Condensed Financial Statements.

 

12

Index Definitions

 

CALPINE CORPORATION

(Debtor-in-Possession)

CASE NO. 05-60200 (Jointly Administered)

NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

For the period from September 1, 2006, to September 30, 2006

1.  Chapter 11 Cases and CCAA Proceedings

 

Since the Petition Date, Calpine Corporation and 273 of its wholly owned subsidiaries in the U.S. have filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court. Similarly, since the Petition Date, 12 of Calpine’s Canadian subsidiaries have filed for creditor protection under the CCAA in the Canadian Court. Certain other subsidiaries could file under Chapter 11 in the U.S. or for creditor protection under the CCAA in Canada in the future. The Chapter 11 cases are being jointly administered for procedural purposes only by the U.S. Bankruptcy Court under the case captioned In re Calpine Corporation et al., Case No. 05-60200 (BRL). See Note 2 “Chapter 11 Cases and CCAA Proceedings” in our 2006 Third Quarter Form 10-Q for a summary of our Chapter 11 cases and CCAA proceedings. Described below are the most significant events that were pending or occurred in the Chapter 11 cases during or after the month ended September 30, 2006.

 

On September 13, 2006, the U.S. Bankruptcy Court approved our motion to sell the Dighton Power Plant, a 170-MW natural gas-fired facility located in Dighton, Massachusetts to BG North America, LLC, for approximately $90 million after completing an auction process in the U.S. Bankruptcy Court. Closing of the transaction occurred on October 1, 2006.

 

In addition, on September 13, 2006, the U.S. Bankruptcy Court approved our motion seeking authority to make capital contributions for the continued development of Greenfield Energy Centre, a 1,005-MW, natural gas-fired facility being developed in Ontario, Canada. We expect to make approximately $45 million in capital contributions to the project between such date and December 2006.

 

On September 21, 2006, the U.S. Bankruptcy Court approved our motion to sell a partial ownership interest in Russell City Energy Company, LLC, a proposed 600-MW natural gas-fired facility to be built in Hayward, California, to ASC, an affiliate of General Electric Capital Corporation, after completing an auction process in the U.S. Bankruptcy Court. As part of the transaction, we received approval from the U.S. Bankruptcy Court to transfer the Russell City project assets, which the parties have agreed are valued at approximately $81 million, to a newly formed entity in which we have a 65% ownership interest and ASC has a 35% ownership interest. In exchange for its 35% ownership interest, ASC has agreed to provide approximately $44 million of capital funding and to post an approximately $37 million letter of credit as required under a PPA with PG&E related to the Russell City project. We have the right to reacquire ASC’s 35% interest during the period beginning on the second anniversary and ending on the fifth anniversary of commercial operations of the facility. Exercise of the buyout right requires 180 days prior written notice to ASC and payment of an amount necessary to yield a stipulated pre-tax internal rate of return to ASC, calculated using assumptions specified in the transaction agreements. Closing of the transaction occurred on October 2, 2006.

 

On September 22, 2006, our wholly owned subsidiary, MEP Pleasant Hill, LLC, entered into an asset purchase agreement with Aquila, Inc. to sell substantially all of the assets related to the Aries Project, a 590-MW natural gas-fired facility in Pleasant Hill, Missouri, for approximately $159 million. On October 12, 2006, the U.S. Bankruptcy Court approved an auction process in which qualifying bidders can make competing offers on the transaction. The sale hearing is currently scheduled for December 6, 2006, before the U.S. Bankruptcy Court. Closing of the transaction is subject to certain additional conditions including receipt of any required regulatory approvals.

 

During the course of the Chapter 11 cases, the U.S. Debtors have determined that certain gas transportation and power transmission contracts no longer provide any benefit to the U.S. Debtors or their estates. In certain instances, the U.S. Debtors have given notice to counterparties to these contracts that the U.S. Debtors will no longer accept or pay for service under such contracts. We believe that any claims resulting from the repudiation, rejection, or termination of these contracts will be treated as pre-petition general unsecured claims. Accordingly, we recorded non-cash charges of $87.1 million, $96.6 million and $405.4 million for the one, three and nine months ended September 30, 2006, respectively, as our current estimate of the expected allowed claims related primarily to these contracts. These charges are reported as reorganization items in our Consolidated Condensed Statements of Operation s and are included in liabilities subject to compromise in the Consolidated Condensed Balance Sheet at September 30, 2006.

 

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On October 11, 2006, we closed the sale of our leasehold interest in the Fox Energy Center, a 560-MW natural gas-fired facility located in Kaukauna, Wisconsin, for $16.3 million and the extinguishment of financing obligations of $352.3 million, plus accrued interest.

 

We have identified for potential sale 15 turbines, comprising 14 combustion turbines and one steam turbine. The generating capacities of the turbines range from approximately 45 MW to approximately 180 MW. The U.S. Bankruptcy Court approved our sale of one of the combustion turbines for $16.0 million on October 12, 2006, and on October 25, 2006, approved bidding procedures for the sale of four additional combustion turbines for which the outstanding bid is $48.0 million. The sale hearing for the four turbines is currently scheduled for November 15, 2006.

 

On October 23, 2006, we filed a motion in the U.S. Bankruptcy Court for approval of certain transfers and other agreements relating to the Otay Mesa Energy Center, LLC, a 593-MW natural gas-fired facility currently under development in San Diego County, California. The agreements include a revised 10-year PPA with SDG&E, a sublease agreement which includes options in favor of Calpine and SDG&E, under certain circumstances, to purchase the Otay Mesa Energy Center from the other after 10 years of operations. The motion also seeks, among other things, approval of the transfer of certain facility assets to Otay Mesa Energy Center free and clear of any existing liens and authorization for Calpine to make cash contributions to Otay Mesa Energy Center, a Non-U.S. Debtor, not to exceed $35 million. A hearing on this motion is currently scheduled for November 15, 2006.

 

On October 25, 2006, the U.S. Bankruptcy Court authorized CES to assume a PPA with CCFC and enter into a settlement agreement with CCFC. The settlement agreement, which provided for CES to assume the PPA (allowing CES to reduce potential cure and administrative expense claims against its estate in the amount of approximately $250 million), also allows CCFC and CCFCP to secure a substantial majority of the cash flow from CCFC necessary to service their debt and redeemable preferred shares, respectively, and allows Calpine Corporation to maintain control of and preserve its equity value in CCFC and its subsidiaries.

 

RockGen Energy LLC leases a 460-MW natural gas-fired facility located in Christiana, Wisconsin. On November 2, 2006, we entered into a Forebearance Agreement with the RockGen owner lessors and owner participants, as well as the trustees and other parties to the RockGen sale/leaseback financing and, due to the highly confidential and proprietary information set forth in the Forbearance Agreement, sought and obtained the approval of the U.S. Bankruptcy Court to file the motion to approve the Forbearance Agreement under seal. Following entry of the order approving the request to file under seal, on November 2, 2006, we filed under seal the motion to approve the Forbearance Agreement with the U.S. Bankruptcy Court, which motion will be heard by the U.S. Bankruptcy Court on November 15, 2006. We believe that the Forbearance Agreement will provide a consensual mechanism to maximize the value of the RockGen facility and to minimize claims in the Chapter 11 cases.

 

On November 3, 2006, we entered into an asset purchase agreement with Puget Sound Energy to sell substantially all of the assets of the Goldendale Energy Center, a 271-MW natural gas-fired combined-cycle power plant located in Goldendale, Washington, for approximately $100 million, plus the assumption by Puget Sound Energy of certain liabilities. On November 14, 2006, we filed a motion in the U.S. Bankruptcy Court for approval of an auction process in which qualified bidders can make competing offers for the project. Closing of the transaction is subject to certain additional conditions including receipt of any required regulatory approvals.

 

In addition, in the CCAA proceedings, the Canadian Debtors sought and obtained a stay of proceedings from the Canadian Court in connection with the CCAA filings. Unlike the automatic stay provided under the Bankruptcy Code, there is no provision for an automatic stay under the CCAA. Pursuant to various orders, the most recent dated September 28, 2006, the Canadian Court extended its stay of proceedings through November 14, 2006. On November 6, 2006, the Canadian Debtors filed a motion to further extend the stay of proceedings to March 20, 2007, which is to be considered by the Canadian Court on November 14, 2006.

 

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2.  Basis of Presentation

 

The accompanying consolidated condensed financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and satisfaction of liabilities in the ordinary course of business, and in accordance with SOP 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code.” The consolidated condensed financial statements do not include any adjustments that might be required should we be unable to continue to operate as a going concern. In accordance with SOP 90-7, all pre-petition liabilities subject to compromise have been segregated in the consolidated condensed balance sheets and classified as LSTC, at the estimated amount of allowed claims. Interest expense related to pre-petition LSTC has been reported only to the extent that it will be paid during the pendency of the Chapter 11 cases or is expected to be an allowed c laim. Liabilities not subject to compromise are separately classified as current or noncurrent. Expenses, provisions for losses resulting from reorganization and certain other items directly related to our Chapter 11 cases are reported separately as reorganization items.

 

The Monthly Operating Statement is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the U.S. Bankruptcy Court. Certain of our Canadian subsidiaries were granted relief by the Canadian Court under the CCAA. As a result, certain of our Canadian and other foreign subsidiaries were deconsolidated as of the Petition Date. Financial information regarding such deconsolidated subsidiaries is not included with that of the consolidated group reported in the Monthly Operating Statement. The financial information in the Monthly Operating Statement is preliminary and unaudited and does not purport to show the financial statements of any of the U.S. Debtors in accordance with GAAP, and therefore may exclude items required by GAAP, such as certain reclassifications, eliminations, accruals, valuations and disclosure items. We caution readers not to place undue reliance upon the Monthly Operating Statement. There can be no assurance that such information is complete and the Monthly Operating Statement may be subject to revision. The Monthly Operating Statement is in a format required by the Bankruptcy Code and should not be used for investment purposes. The Monthly Operating Statement should be read in conjunction with the consolidated financial statements and notes thereto included in the 2005 Form 10-K and the 2006 Forms 10-Q.

 

The unaudited financial statements contained in the Monthly Operating Statement have been derived from the books and records of the Company. This information, however, has not been subject to procedures that would typically be applied to financial information presented in accordance with GAAP, and upon the application of such procedures, we believe that the financial information could be subject to changes, and these changes could be material. The information furnished in this Monthly Operating Statement includes primarily normal recurring adjustments but does not include all of the adjustments that would typically be made for financial statements prepared in accordance with GAAP. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

 

Mark-to-Market — Mark-to-market, net activity includes realized settlements of and unrealized mark-to-market gains and losses on both power and gas derivative instruments not designated as cash flow hedges, including those held for trading purposes. Gains and losses due to ineffectiveness on hedging instruments are also included in unrealized mark-to-market gains and losses. Trading activity is presented net in accordance with EITF Issue No. 02-03. Of the total mark-to-market gain of $23.2 million in September 2006, there was a $25.7 million unrealized gain, and we had a realized loss of $2.5 million. The realized loss included a non-cash gain of approximately $6.5 million from amortization of various items.

 

Per agreement among the Company, the Office of the U.S. Trustee and the Committee of Unsecured Creditors, the Statement of Cash Flows will be excluded from Monthly Operating Statements except on a quarterly basis. See Schedule VIII for the Consolidated Condensed Statement of Cash Flows for the nine months ended September 30, 2006.

 

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3.  Summary of Significant Accounting Policies

 

See Note 2 “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in our 2005 Form 10-K and Note 1 “Basis of Presentation and Summary of Significant Accounting Policies” in the Notes to Consolidated Condensed Financial Statements included in each of the 2006 Forms 10-Q for a summary of the accounting policies that we believe are significant to us.

 

4.  Recent Accounting Pronouncements

 

SFAS No. 123-R

 

In December 2004, FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment,” referred to as SFAS No. 123-R, which requires a public company to use the fair value method of accounting for stock-based compensation. We adopted this standard as of January 1, 2006, and applied the modified prospective transition method. The modified prospective approach applies to the unvested portion of all awards granted prior to January 1, 2006, and to all prospective awards. Prior financial statements are not restated under this method.

 

SFAS No. 123-R also requires the cash flows resulting from the tax benefits that occur from estimated tax deductions in excess of the compensation cost recognized be presented as financing cash flows in the statement of cash flows. Prior to adopting this statement, we presented tax benefits from allowable deductions as operating cash flows in our Consolidated Condensed Statement of Cash Flows.

 

As we previously adopted the fair value method of accounting under SFAS No. 123 as amended by SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure” on January 1, 2003, the adoption of SFAS No. 123-R did not have a material impact on our results of operations, cash flows or financial position.

 

SFAS No. 154

 

In May 2005, FASB issued SFAS No. 154, “Accounting Changes and Error Corrections.” This statement replaces APB Opinion No. 20, “Accounting Changes,” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements,” and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS No. 154 applies to all voluntary changes in accounting principle. SFAS No. 154 is effective for fiscal years beginning after December 15, 2005. Adoption of this statement did not materially impact our consolidated results of operations, cash flows or financial position.

 

FASB Interpretation No. 48

 

In June 2006, FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes—An Interpretation of FASB Statement No. 109.” FIN 48 addresses the recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006, with early adoption permitted. We are currently assessing the impact this standard will have on our results of operations, cash flows and financial position.

 

SFAS No. 157

 

In September 2006, FASB issued SFAS No. 157, “Fair Value Measurements.” SFAS No. 157 defines fair value, establishes a framework for measuring fair value in GAAP, and enhances disclosures about fair value measurements. SFAS No. 157 applies when other accounting pronouncements require fair value measurements; it does not require new fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, with early adoption encouraged. We are currently assessing the impact this standard will have on our results of operations, cash flows, and financial position.

 

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SAB No. 108

 

In September 2006, the SEC Staff issued SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.” SAB No. 108 establishes a “dual approach” for quantifying the effects of financial statement errors, which requires the quantification of the effect of financial statement errors on each financial statement, as well as related disclosures. SAB No. 108 permits public companies to initially adopt its provisions either by (i) restating prior financial statements as if the “dual approach” had always been applied or (ii) recording the cumulative effect of initially applying the “dual approach” as adjustments to the carrying values of assets and liabilities as of January 1, 2006, with an offsetting adjustment recorded in the opening balance of retained earnings. Public companies must begin to apply the provisions of SAB No. 108 no later than their annual financial statements for their first fiscal year ending after November 15, 2006. We do not expect the application of the provisions of SAB No. 108 will have a material impact on our results of operations, cash flows or financial condition.

 

5.  Cash and Cash Equivalents, Restricted Cash and Margin Deposits

 

Cash and Cash Equivalents — We have certain project finance facilities and lease agreements that establish segregated cash accounts. These accounts have been pledged as security in favor of the lenders to such project finance facilities, and the use of certain cash balances on deposit in such accounts with our project financed securities is limited to the operations of the respective projects. At September 30, 2006, $675.8 million of the cash and cash equivalents balance was subject to such project finance facilities and lease agreements.

 

Restricted Cash — We are required to maintain cash balances that are restricted by provisions of certain of our debt and lease agreements or by regulatory agencies. These amounts are held by depository banks in order to comply with the contractual provisions requiring reserves for payments such as for debt service, rent, major maintenance and debt repurchases. Funds that can be used to satisfy obligations due during the next twelve months are classified as current restricted cash, with the remainder classified as non-current restricted cash. Restricted cash is generally invested in accounts earning market rates; therefore the carrying value approximates fair value. Such cash is excluded from cash and cash equivalents in the Consolidated Condensed Statements of Cash Flows.

 

The table below represents the components of our consolidated restricted cash as of September 30, 2006, (in thousands):

 

 

 

Current

 

Non-Current

 

Total

 

Debt service

 

$

97,962

 

$

113,681

 

$

211,643

 

Rent reserve

 

 

32,511

 

 

—

 

 

32,511

 

Construction/major maintenance

 

 

83,935

 

 

29,526

 

 

113,461

 

Security/project reserves

 

 

71,061

 

 

32,000

 

 

103,061

 

Collateralized letters of credit and other credit support

 

 

101,632

 

 

—

 

 

101,632

 

Other

 

 

44,668

 

 

16,792

 

 

61,460

 

Total

 

$

431,769

 

$

191,999

 

$

623,768

 

 

Of our restricted cash at September 30, 2006, $269.4 million relates to the assets of the following entities, each an entity with its existence separate from us and our other subsidiaries (in millions).

 

 

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Index Definitions

 

Power Contract Financing, L.L.C.

 

$

134.0

 

Gilroy Energy Center, LLC

 

 

31.3

 

Riverside Energy Center, LLC 

 

 

36.4

 

Rocky Mountain Energy Center, LLC

 

 

38.0

 

Calpine Northbrook Energy Marketing, LLC

 

 

8.5

 

Calpine King City Cogen, LLC

 

 

18.9

 

Calpine Fox LLC

 

 

—

 

Power Contract Financing III, LLC

 

 

2.3

 

 

 

$

269.4

 

 

Margin Deposits — As of September 30, 2006, to support commodity transactions, we had margin deposits with third parties of $194.9 million; we made gas and power prepayments of $89.8 million; and had letters of credit outstanding of $2.9 million. Counterparties had deposited with us $6.9 million as margin deposits at September 30, 2006. Also, counterparties had letters of credit of $7.5 million at September 30, 2006. We use margin deposits, prepayments and letters of credit as credit support for commodity procurement and risk management activities. Future cash collateral requirements may increase based on the extent of our involvement in standard contracts and movements in commodity prices and also based on our credit ratings and general perception of creditworthiness in this market. While we believe that we have adequate liquidity to support our operations at this time, it i s difficult to predict future developments and the amount of credit support that we may need to provide as part of our business operations.

 

6.  Rejected Contracts and Related Matters

 

The U.S. Debtors have assumed certain contracts and unexpired leases related to non-residential real property and have identified certain significant contracts and leases to be rejected or repudiated. See Note 2 of the Notes to Consolidated Condensed Financial Statements included in the 2006 Third Quarter Form 10-Q for a summary of significant developments in connection with these matters.

 

7.  Liabilities Subject to Compromise

 

The claims bar dates—the dates by which claims against the Calpine Debtors (other than Calpine Geysers Company, L.P.) were to be filed with the applicable Bankruptcy Court—were set for August 1, 2006. On September 13, 2006, the U.S. Bankruptcy Court approved our motion to set the claims bar date for claims against Calpine Geysers Company, L.P., one of the Calpine Debtors, for October 31, 2006. Accordingly, not all potential claims against the U.S. Debtors would have been filed as of September 30, 2006. See Note 2 of the Notes to Consolidated Condensed Financial Statements included in the 2006 Third Quarter Form 10-Q for additional information.

 

The amounts of LSTC at September 30, 2006 consisted of the following (in millions):

 

Accounts payable and accrued liabilities

 

$

374.8

 

Terminated derivative liabilities

 

 

538.1

 

Project financing 

 

 

159.1

 

Convertible notes

 

 

1,823.5

 

Second priority senior secured notes(1)

 

 

3,671.9

 

Unsecured senior notes

 

 

1,880.0

 

Notes payable and other liabilities – related party

 

 

1,118.1

 

Provision for allowed claims(2)

 

 

5,474.1

 

Total liabilities subject to compromise

 

$

15,039.6

 

__________

(1)

We have not made, and currently do not propose to make, an affirmative determination whether our Second Priority Debt is fully secured or under-secured. We do, however, believe that there is uncertainty about whether the market value of

 

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Index Definitions

 

the assets securing the obligations owing in respect of the Second Priority Debt is less than, equals or exceeds the amount of these obligations. Accordingly, we have classified the Second Priority Debt as LSTC.

(2)

Consists primarily of estimated allowed claims related to guarantees by Calpine Corporation of repayment of unsecured senior notes (original principal amount of $2,597.2 million) for two wholly owned finance subsidiaries of the Company, ULC I and ULC II. The amounts outstanding to unrelated security holders had been reduced to $1,943.0 million at December 31, 2005, due to repurchases of such senior notes. However, some of the repurchased notes are held by certain of Calpine Corporation’s Canadian subsidiaries and are expected to give rise to allowed claims by these subsidiaries under the above guarantees. Additionally, there is a guarantee by Calpine Corporation of the obligations of its wholly owned subsidiary, Quintana Canada Holdings, LLC, under certain subscription agreements with ULC I, under which claims may be asserted for the same amounts sought under the Calpine Corporation guarantees of the ULC I notes. Although the expected claims are redundant relative to the underlying exposure to unrelated security holders, the Company determined that these duplicative claims were probable of being allowed into the claim pool by the U.S. Bankruptcy Court, although the U.S. Debtors fully reserve their rights in this regard.

 

8.  DIP Facility

 

Pursuant to the DIP Facility, and applicable orders of the U.S. Bankruptcy Court, the DIP Facility lenders have made available to Calpine up to $2 billion comprised of a $1 billion revolving credit facility, a $400 million first priority term loan facility and a $600 million second priority term loan facility. The DIP Facility, which is guaranteed by each of the other U.S. Debtors, will remain in place until the earlier of an effective plan of reorganization or December 20, 2007. The DIP Facility is secured by first priority liens on all of the unencumbered assets of the U.S. Debtors, including The Geysers Assets, and junior liens on all of their encumbered assets. The proceeds of borrowings and letters of credit issued under the DIP Facility will be used, among other things, for working capital and other general corporate purposes. In February 2006, a portion of the borrowings under the revolving loan faci lity were used to fund a portion of the costs in connection with the purchase of the Geysers Assets. In May 2006 and June 2006, a portion of the funds drawn under the term loan facilities, together with approximately $409 million of restricted cash, plus related interest thereon, were used to repay $646.1 million of the First Priority Notes. During the month of September 2006, there were no amounts outstanding under the revolving loan facility, and no additional letters of credit were issued against the revolving credit facility. Accordingly, at September 30, 2006, there was $997.4 million outstanding under the term loan facilities, nothing outstanding under the revolving credit facility and $11.7 million of letters of credit issued against the revolving credit facility.

 

The DIP Facility was amended on September 25, 2006, to increase the portion of the revolving credit facility that may be used for letters of credit to $375 million from $300 million (to allow for $75 million to be issued on behalf of Non-Debtors) grant the administrative agents the authority to extend the time to deliver financial statements, permit guarantees in connection with certain letters of credit, permit investments in Calpine Greenfield Commercial Trust solely to finance the Greenfield LP in an amount not to exceed $45 million, and permit the establishment of a separate account to hold funds constituting “restricted cash” for the benefit of certain project lessors.

 

See Note 22 of the Notes to Consolidated Financial Statements included in the 2005 Form 10-K, Note 6 of the Notes to Consolidated Condensed Financial Statements included in the 2006 First Quarter Form 10-Q, Note 7 of the Notes to Consolidated Condensed Financial Statements included in the 2006 Second Quarter Form 10-Q.

 

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Index Definitions

 

and Note 7 of the Notes to Consolidated Condensed Financial Statements included in the 2006 Third Quarter Form 10-Q for further discussion of the DIP Facility.

 

9.  Reorganization Items

 

Reorganization items represent the direct and incremental costs of being in Chapter 11, such as professional fees, pre-petition liability claim adjustments related to terminated contracts that are probable and can be estimated and charges related to expected allowed claims.

 

The table below lists the significant items recognized within this category for the month ended September 30, 2006 (in millions):

 

Provision for expected allowed claims(1)

 

$

87.1

 

Professional fees

 

 

13.3

 

DIP financing costs

 

 

1.3

 

Other(2)

 

 

0.1

 

Total reorganization items

 

$

101.8

 

__________

(1)

This charge primarily includes repudiation, rejection or termination of contracts or guarantee of obligations.

(2)

This charge includes foreign exchange adjustments on LSTC items denominated in a foreign currency and governed by foreign law and employee severance costs and is net of interest income earned on cash accumulated as a result of our Chapter 11 cases.

 

See Note 4 of the Notes to Consolidated Financial Statements included in our 2005 Form 10-K and Note 3 of the Notes to Consolidated Condensed Financial Statements included in each of our 2006 Forms 10-Q for a discussion of reorganization items.

 

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Index Definitions

 

SCHEDULE I

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

CONSOLIDATING CONDENSED BALANCE SHEET

(Unaudited)

(in thousands)

September 30, 2006

 

 

 

 

U.S. Debtors

 

Non-U.S. Debtors

 

Eliminations

 

Consolidated

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets: 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

758,754

 

$

230,221

 

$

—

 

$

988,975

 

Accounts receivable, net

 

 

739,264

 

 

153,490

 

 

(64,711

)

 

828,043

 

Accounts receivable (payable) from affiliates, net

 

 

38,696,444

 

 

2,450,540

 

 

(41,146,984

)

 

—

 

Margin deposits and other prepaid expense

 

 

298,502

 

 

55,133

 

 

(11,663

)

 

341,972

 

Inventories

 

 

153,981

 

 

26,776

 

 

—

 

 

180,757

 

Restricted cash

 

 

188,448

 

 

243,321

 

 

—

 

 

431,769

 

Current derivative assets

 

 

127,469

 

 

57,409

 

 

—

 

 

184,878

 

Current assets held for sale

 

 

—

 

 

367,600

 

 

—

 

 

367,600

 

Other current assets

 

 

951,164

 

 

56,280

 

 

(904,852

)

 

102,592

 

Total current assets

 

 

41,914,026

 

 

3,640,770

 

 

(42,128,210

)

 

3,426,586

 

Restricted cash, net of current portion

 

 

47,892

 

 

144,107

 

 

—

 

 

191,999

 

Notes receivable, net of current portion

 

 

143,623

 

 

1,671

 

 

—

 

 

145,294

 

Notes receivable from affiliates, net of current portion

 

 

4,259,284

 

 

38,100

 

 

(4,297,384

)

 

—

 

Project development costs

 

 

26,309

 

 

—

 

 

—

 

 

26,309

 

Investments

 

 

11,219,375

 

 

9,905,318

 

 

(21,023,382

)

 

101,311

 

Deferred financing costs

 

 

40,566

 

 

117,277

 

 

—

 

 

157,843

 

Prepaid lease, net of current portion

 

 

184,203

 

 

578

 

 

—

 

 

184,781

 

Property, plant and equipment, net

 

 

7,941,759

 

 

5,948,147

 

 

(871

)

 

13,889,035

 

Goodwill

 

 

45,160

 

 

—

 

 

—

 

 

45,160

 

Other intangible assets, net

 

 

15,724

 

 

35,608

 

 

—

 

 

51,332

 

Long-term derivative assets

 

 

307,278

 

 

87,114

 

 

—

 

 

394,392

 

Other assets

 

 

336,808

 

 

288,415

 

 

(11,551

)

 

613,672

 

Intercompany

 

 

569,357

 

 

22,081

 

 

(591,438

)

 

—

 

Total assets

 

$

67,051,364

 

$

20,229,186

 

$

(68,052,836

)

$

19,227,714

 

 

 

21

Index Definitions

 

CONSOLIDATING CONDENSED BALANCE SHEET — (Continued)

 

 

 

 

U.S. Debtors

 

Non-U.S. Debtors

 

Eliminations

 

Consolidated

 

LIABILITIES AND

STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities: 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

499,385

 

$

1,569,880

 

$

(1,585,360

)

$

483,904

 

Accrued payroll and related expense

 

 

36,781

 

 

1,067

 

 

—

 

 

37,848

 

Accrued interest payable

 

 

353,854

 

 

62,177

 

 

(241,489

)

 

174,542

 

Income taxes payable

 

 

99,073

 

 

—

 

 

—

 

 

99,073

 

Notes payable and other borrowings, current portion

 

 

733,984

 

 

140,233

 

 

(724,479

)

 

149,738

 

Preferred interests, current portion

 

 

—

 

 

8,722

 

 

—

 

 

8,722

 

Capital lease obligations, current portion

 

 

187,309

 

 

99,449

 

 

(2,228

)

 

284,530

 

CCFC financing, current portion

 

 

—

 

 

3,208

 

 

—

 

 

3,208

 

CalGen financing, current portion

 

 

2,510,827

 

 

—

 

 

—

 

 

2,510,827

 

Construction/project financing, current portion

 

 

133,667

 

 

424,687

 

 

—

 

 

558,354

 

DIP Facility, current portion

 

 

3,500

 

 

—

 

 

—

 

 

3,500

 

Current derivative liabilities

 

 

191,807

 

 

86,073

 

 

—

 

 

277,880

 

Current liabilities held for sale

 

 

—

 

 

363,780

 

 

—

 

 

363,780

 

Other current liabilities

 

 

206,451

 

 

140,792

 

 

(11,664

)

 

335,580

 

Total current liabilities

 

 

4,956,638

 

 

2,900,068

 

 

(2,565,220

)

 

5,291,486

 

Notes payable and other borrowings, net of current portion

 

 

4,242,539

 

 

2,030,309

 

 

(5,852,129

)

 

420,719

 

Preferred interests, net of current portion

 

 

—

 

 

574,893

 

 

—

 

 

574,893

 

Capital lease obligations, net of current portion

 

 

317,397

 

 

—

 

 

(317,173

)

 

224

 

CCFC financing, net of current portion

 

 

—

 

 

778,663

 

 

—

 

 

778,663

 

Construction/project financing, net of current portion

 

 

246,154

 

 

1,228,046

 

 

—

 

 

1,474,200

 

DIP Facility, net of current portion

 

 

993,875

 

 

—

 

 

—

 

 

993,875

 

Deferred income taxes, net of current portion

 

 

112,246

 

 

292,907

 

 

—

 

 

405,153

 

Deferred revenue

 

 

100,356

 

 

21,985

 

 

(12,421

)

 

109,920

 

Long-term derivative liabilities

 

 

420,007

 

 

108,152

 

 

—

 

 

528,159

 

Other liabilities

 

 

127,373

 

 

28,994

 

 

(4

)

 

156,363

 

Total liabilities not subject to compromise

 

 

11,516,585

 

 

7,964,017

 

 

(8,746,947

)

 

10,733,655

 

Liabilities subject to compromise

 

 

53,542,813

 

 

432

 

 

(38,503,633

)

 

15,039,613

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interests

 

 

—

 

 

270,712

 

 

—

 

 

270,712

 

Stockholders’ equity (deficit):

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

31,542

 

 

5,100

 

 

(36,098

)

 

544

 

Additional paid-in capital

 

 

25,684,127

 

 

10,551,623

 

 

(32,965,175

)

 

3,270,575

 

Accumulated deficit

 

 

(23,614,069

)

 

1,440,036

 

 

12,155,333

 

 

(10,018,700

)

Accumulated other comprehensive loss

 

 

(109,634

)

 

(2,734

)

 

43,683

 

 

(68,685

)

Total stockholders’ equity (deficit)

 

 

1,991,966

 

 

11,994,025

 

 

(20,802,257

)

 

(6,816,266

)

Total liabilities and stockholders’ equity (deficit)

 

$

67,051,364

 

$

20,229,186

 

$

(68,052,836

)

$

19,227,714

 

 

Calpine Corporation’s consolidated results are comprised of U.S. Debtor and Non-U.S. Debtor entities that have affiliated transactions with other U.S. Debtor and Non-U.S. Debtor entities that must be eliminated in consolidation. Amounts listed under the “Eliminations” heading are required to correctly eliminate transactions between any affiliated entities for consolidated financial statement presentation purposes.

 

22

Index Definitions

 

SCHEDULE II

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

(Unaudited)

(in thousands)

For the Period from September 1, 2006, to September 30, 2006

 

 

 

 

U.S. Debtors

 

Non-U.S. Debtors

 

Eliminations

 

Consolidated

 

Revenue: 

 

 

 

 

 

 

 

 

 

 

 

 

 

Electricity and steam revenue

 

$

558,694

 

$

181,470

 

$

(310,802

)

$

429,362

 

Sales of purchased power and gas for hedging and optimization

 

 

244,536

 

 

10,539

 

 

(251,782

)

 

3,293

 

Mark-to-market activities, net

 

 

5,184

 

 

18,005

 

 

—

 

 

23,189

 

Other revenue

 

 

33,640

 

 

2,587

 

 

(30,634

)

 

5,593

 

Total revenue

 

 

842,054

 

 

212,601

 

 

(593,218

)

 

461,437

 

Cost of revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Plant operating expense

 

 

418,415

 

 

49,339

 

 

(392,176

)

 

75,578

 

Royalty expense

 

 

2,257

 

 

—

 

 

—

 

 

2,257

 

Transmission purchase expense

 

 

2,844

 

 

3,233

 

 

—

 

 

6,077

 

Purchased power and gas expense for hedging and optimization

 

 

(58,042

)

 

(8,473

)

 

52,365

 

 

(14,150

)

Fuel expense

 

 

457,727

 

 

83,895

 

 

(253,410

)

 

288,212

 

Depreciation and amortization expense

 

 

30,696

 

 

18,313

 

 

(1

)

 

49,008

 

Operating plant impairments

 

 

—

 

 

—

 

 

—

 

 

—

 

Operating lease expense

 

 

5,360

 

 

—

 

 

—

 

 

5,360

 

Other cost of revenue

 

 

3,915

 

 

2,145

 

 

—

 

 

6,060

 

Total cost of revenue

 

 

863,172

 

 

148,452

 

 

(593,222

)

 

418,402

 

Gross profit

 

 

(21,118

)

 

64,149

 

 

4

 

 

43,035

 

(Income) loss from unconsolidated investments

 

 

478,612

 

 

(44,008

)

 

(434,604

)

 

—

 

Equipment, development project and other impairments

 

 

599

 

 

418

 

 

—

 

 

1,017

 

Project development expense

 

 

1,091

 

 

390

 

 

—

 

 

1,481

 

Research and development expense

 

 

1,408

 

 

—

 

 

—

 

 

1,408

 

Sales, general and administrative expense

 

 

17,525

 

 

3,714

 

 

—

 

 

21,239

 

Income (loss) from operations

 

 

(520,353

)

 

103,635

 

 

434,608

 

 

17,890

 

Interest expense

 

 

43,028

 

 

37,290

 

 

(3,702

)

 

76,616

 

Interest (income)

 

 

(7,576

)

 

(2,772

)

 

3,702

 

 

(6,646

)

Minority interest expense

 

 

—

 

 

2,594

 

 

—

 

 

2,594

 

Other (income) expense, net

 

 

(2,585

)

 

(772

)

 

3

 

 

(3,354

)

Income (loss) before reorganization items and provision (benefit) for income taxes

 

 

(553,220

)

 

67,295

 

 

434,605

 

 

(51,320

)

 

 

23

Index Definitions

 

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS — (Continued)

 

 

 

 

U.S. Debtors

 

Non-U.S. Debtors

 

Eliminations

 

Consolidated

 

Reorganization items

 

$

101,836

 

$

—

 

$

—

 

$

101,836

 

Income (loss) before provision (benefit) for income taxes

 

 

(655,056

)

 

67,295

 

 

434,605

 

 

(153,156

)

Provision (benefit) for income taxes

 

 

42,438

 

 

(43,824

)

 

—

 

 

(1,386

)

Net income (loss)

 

$

(697,494

)

$

111,119

 

$

434,605

 

$

(151,770

)

 

Calpine Corporation’s consolidated results are comprised of U.S. Debtor and Non-U.S. Debtor entities that have affiliated transactions with other U.S. Debtor and Non-U.S. Debtor entities that must be eliminated in consolidation. Amounts listed under the “Eliminations” heading are required to correctly eliminate transactions between any affiliated entities for consolidated financial statement presentation purposes.

 

24

Index Definitions

 

SCHEDULE III

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

SCHEDULE OF PAYROLL AND PAYROLL TAXES

(in thousands)

For the Period from September 1, 2006, to September 30, 2006

 

 


Gross Wages Paid**

 

Employee Payroll
Taxes Withheld*

 

Employer Payroll
Taxes Remitted*

$17,184

 

$4,276

 

$1,026

 

 

*

Employee Payroll Taxes are withheld each pay period and remitted by the Company, together with the Employer Payroll Taxes, to the appropriate tax authorities.

 

**

Gross Wages were paid by the Company on September 1, 2006; September 8, 2006; September 15, 2006; September 22, 2006; and September 29, 2006.

 

25

Index Definitions

 

SCHEDULE IV

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

SCHEDULE OF FEDERAL, STATE AND LOCAL TAXES

COLLECTED, RECEIVED, DUE OR WITHHELD

(in thousands)

For the Period from September 1, 2006, to September 30, 2006

 

 

 

Amount
Withheld/Accrued

 

Amount
Paid

 

Federal and state income taxes 

 

$

42,438

 

$

39

 

State and local taxes:

 

 

 

 

 

 

 

Property

 

 

5,833

 

 

1,222

 

Sales and use

 

 

(8,515

)

 

1,356

 

Franchise

 

 

113

 

 

113

 

Other

 

 

28

 

 

28

 

Total state and local taxes

 

 

(2,541

)

 

2,719

 

Total taxes

 

$

39,897

 

$

2,758

 

 

 

26

Index Definitions

 

SCHEDULE V

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

TOTAL DISBURSEMENTS BY DEBTOR

For the Month Ended September 30, 2006

(in dollars)

 

 

 

Legal Entity

Case Number

Disbursements

 

Amelia Energy Center, LP

05-60223-BRL

$

—

Anacapa Land Company, LLC

05-60226-BRL

—

 

 

Anderson Springs Energy Company

05-60232-BRL

—

 

Androscoggin Energy, Inc.

05-60239-BRL

—

 

Auburndale Peaker Energy Center, LLC

05-60244-BRL

3,713

 

Augusta Development Company, LLC

05-60248-BRL

—

 

Aviation Funding Corp.

05-60252-BRL

—

 

Baytown Energy Center, LP

05-60255-BRL

39,564

 

Baytown Power GP, LLC

05-60256-BRL

—

 

Baytown Power, LP

05-60258-BRL

—

 

Bellingham Cogen, Inc.

05-60224-BRL

—

 

Bethpage Energy Center 3, LLC

05-60225-BRL

12,472

 

Bethpage Fuel Management Inc.

05-60228-BRL

—

 

Blue Heron Energy Center, LLC

05-60235-BRL

—

 

Blue Spruce Holdings, LLC

05-60238-BRL

—

 

Broad River Energy LLC

05-60242-BRL

120,495

 

Broad River Holdings, LLC

05-60245-BRL

—

 

CalGen Equipment Finance Company, LLC

05-60249-BRL

—

 

CalGen Equipment Finance Holdings, LLC

05-60251-BRL

—

 

CalGen Expansion Company, LLC

05-60253-BRL

—

 

CalGen Finance Corp.

05-60229-BRL

—

 

CalGen Project Equipment Finance Company One, LLC

05-60236-BRL

2,126

 

CalGen Project Equipment Finance Company Three, LLC

05-60259-BRL

10,092

 

CalGen Project Equipment Finance Company Two, LLC

05-60262-BRL

—

 

Calpine Acadia Holdings, LLC

05-60265-BRL

—

 

Calpine Administrative Services Company, Inc.

05-60201-BRL

2,976,115

 

Calpine Agnews, Inc.

05-60268-BRL

—

 

Calpine Amelia Energy Center GP, LLC

05-60270-BRL

—

 

Calpine Amelia Energy Center LP, LLC

05-60272-BRL

—

 

Calpine Auburndale Holdings, LLC

05-60452-BRL

—

 

Calpine Baytown Energy Center GP, LLC

05-60453-BRL

—

 

Calpine Baytown Energy Center LP, LLC

05-60320-BRL

—

 

Calpine Bethpage 3 Pipeline Construction Company, Inc.

05-60330-BRL

—

 

Calpine Bethpage 3, LLC

05-60342-BRL

—

 

Calpine c*Power, Inc.

05-60250-BRL

—

 

Calpine CalGen Holdings, Inc.

05-60352-BRL

—

 

Calpine California Development Company, LLC

05-60355-BRL

—

 

Calpine California Energy Finance, LLC

05-60360-BRL

—

 

Calpine California Equipment Finance Company, LLC

05-60464-BRL

—

 

Calpine Calistoga Holdings, LLC

05-60377-BRL

—

 

Calpine Capital Trust

05-60325-BRL

—

 

 

27

Index Definitions

 

TOTAL DISBURSEMENTS BY DEBTOR (continued)

 

 

Legal Entity

Case Number

Disbursements

 

Calpine Capital Trust II

05-60379-BRL

—

 

Calpine Capital Trust III

05-60384-BRL

—

 

Calpine Capital Trust IV

05-60391-BRL

—

 

Calpine Capital Trust V

05-60221-BRL

—

 

Calpine Central Texas GP, Inc.

05-60329-BRL

—

 

Calpine Central, Inc.

05-60333-BRL

—

 

Calpine Central, L.P.

05-60351-BRL

189,216

 

Calpine Central-Texas, Inc.

05-60338-BRL

—

 

Calpine Channel Energy Center GP, LLC

05-60340-BRL

—

 

Calpine Channel Energy Center LP, LLC

05-60343-BRL

—

 

Calpine Clear Lake Energy GP, LLC

05-60345-BRL

—

 

Calpine Clear Lake Energy, LP

05-60349-BRL

—

 

Calpine Cogeneration Corporation

05-60233-BRL

—

 

Calpine Construction Management Company, Inc.

05-60260-BRL

10,265,055

 

Calpine Corporation

05-60200-BRL

51,762,860

 

Calpine Corpus Christi Energy GP, LLC

05-60247-BRL

—

 

Calpine Corpus Christi Energy, LP

05-60261-BRL

—

 

Calpine Decatur Pipeline, Inc.

05-60263-BRL

—

 

Calpine Decatur Pipeline, L.P.

05-60254-BRL

—

 

Calpine Dighton, Inc.

05-60264-BRL

—

 

Calpine East Fuels, Inc.

05-60257-BRL

—

 

Calpine Eastern Corporation

05-60266-BRL

173,618

 

Calpine Energy Holdings, Inc.

05-60207-BRL

—

 

Calpine Energy Services Holdings, Inc.

05-60208-BRL

—

 

Calpine Energy Services, L.P.

05-60222-BRL

356,557,249

 

Calpine Finance Company

05-60204-BRL

—

 

Calpine Freestone Energy GP, LLC

05-60227-BRL

—

 

Calpine Freestone Energy, LP

05-60230-BRL

—

 

Calpine Freestone, LLC

05-60231-BRL

—

 

Calpine Fuels Corporation

05-60203-BRL

—

 

Calpine Gas Holdings LLC

05-60234-BRL

—

 

Calpine Generating Company, LLC

05-60237-BRL

1,026,895

 

Calpine Geysers Company, LP

06-10939-BRL

3,418

 

Calpine Gilroy 1, Inc.

05-60240-BRL

—

 

Calpine Gilroy 2, Inc.

05-60241-BRL

—

 

Calpine Gilroy Cogen, L.P.

05-60243-BRL

17,723

 

Calpine Global Services Company, Inc.

05-60246-BRL

12,085

 

Calpine Gordonsville GP Holdings, LLC

05-60281-BRL

—

 

Calpine Gordonsville LP Holdings, LLC

05-60282-BRL

—

 

Calpine Gordonsville, LLC

05-60283-BRL

—

 

Calpine Greenleaf Holdings, Inc.

05-60284-BRL

—

 

Calpine Greenleaf, Inc.

05-60285-BRL

29,993

 

Calpine Hidalgo Design, L.P.

06-10039-BRL

—

 

Calpine Hidalgo Energy Center, L.P.

06-10029-BRL

16,569

 

Calpine Hidalgo Holdings, Inc.

06-10027-BRL

—

 

Calpine Hidalgo Power GP, LLC

06-10030-BRL

—

 

Calpine Hidalgo Power, LP

06-10028-BRL

—

 

 

28

Index Definitions

 

TOTAL DISBURSEMENTS BY DEBTOR (continued)

 

 

Legal Entity

Case Number

Disbursements

 

Calpine Hidalgo, Inc.

06-10026-BRL

—

 

Calpine International Holdings, Inc.

05-60205-BRL

—

 

Calpine International, LLC

05-60288-BRL

—

 

Calpine Investment Holdings, LLC

05-60289-BRL

—

 

Calpine Kennedy Airport, Inc.

05-60294-BRL

—

 

Calpine Kennedy Operators Inc.

05-60199-BRL

—

 

Calpine KIA, Inc.

05-60465-BRL

—

 

Calpine Leasing Inc.

05-60297-BRL

—

 

Calpine Long Island, Inc.

05-60298-BRL

—

 

Calpine Lost Pines Operations, Inc.

05-60314-BRL

—

 

Calpine Louisiana Pipeline Company

05-60328-BRL

—

 

Calpine Magic Valley Pipeline, Inc.

05-60331-BRL

—

 

Calpine Monterey Cogeneration, Inc.

05-60341-BRL

36,490

 

Calpine MVP, Inc.

05-60348-BRL

—

 

Calpine NCTP GP, LLC

05-60359-BRL

—

 

Calpine NCTP, LP

05-60406-BRL

—

 

Calpine Northbrook Corporation of Maine, Inc.

05-60409-BRL

—

 

Calpine Northbrook Energy Holdings, LLC

05-60418-BRL

—

 

Calpine Northbrook Energy, LLC

05-60431-BRL

—

 

Calpine Northbrook Holdings Corporation

05-60286-BRL

—

 

Calpine Northbrook Investors, LLC

05-60291-BRL

—

 

Calpine Northbrook Project Holdings, LLC

05-60295-BRL

—

 

Calpine Northbrook Services, LLC

05-60299-BRL

—

 

Calpine Northbrook Southcoast Investors, LLC

05-60304-BRL

—

 

Calpine NTC, LP

05-60308-BRL

—

 

Calpine Oneta Power I, LLC

05-60311-BRL

—

 

Calpine Oneta Power II, LLC

05-60315-BRL

—

 

Calpine Oneta Power, L.P.

05-60318-BRL

31,563

 

Calpine Operating Services Company, Inc.

05-60322-BRL

29,235,541

 

Calpine Operations Management Company, Inc.

05-60206-BRL

—

 

Calpine Pastoria Holdings, LLC

05-60302-BRL

—

 

Calpine Philadelphia, Inc.

05-60305-BRL

89,166

 

Calpine Pittsburg, LLC

05-60307-BRL

6,827

 

Calpine Power Company

05-60202-BRL

1,809

 

Calpine Power Equipment LP

05-60310-BRL

—

 

Calpine Power Management, Inc.

05-60319-BRL

—

 

Calpine Power Management, LP

05-60466-BRL

15

 

Calpine Power Services, Inc.

05-60323-BRL

189,748

 

Calpine Power, Inc.

05-60316-BRL

—

 

Calpine PowerAmerica, Inc.

05-60211-BRL

—

 

Calpine PowerAmerica, LP

05-60212-BRL

408,050

 

Calpine PowerAmerica-CA, LLC

05-60213-BRL

125,192

 

Calpine PowerAmerica-CT, LLC

05-60214-BRL

—

 

Calpine PowerAmerica-MA, LLC

05-60215-BRL

—

 

Calpine PowerAmerica-ME, LLC

05-60216-BRL

—

 

Calpine PowerAmerica-NH, LLC

06-10032-BRL

—

 

Calpine PowerAmerica-NY, LLC

06-10031-BRL

—

 

 

29

Index Definitions

 

TOTAL DISBURSEMENTS BY DEBTOR (continued)

 

 

Legal Entity

Case Number

Disbursements

 

Calpine PowerAmerica-OR, LLC

06-10034-BRL

—

 

Calpine Producer Services, L.P.

05-60217-BRL

12,362,624

 

Calpine Project Holdings, Inc.

05-60324-BRL

—

 

Calpine Pryor, Inc.

05-60326-BRL

—

 

Calpine Rumford I, Inc.

05-60327-BRL

—

 

Calpine Rumford, Inc.

05-60414-BRL

—

 

Calpine Schuylkill, Inc.

05-60416-BRL

—

 

Calpine Siskiyou Geothermal Partners, L.P.

05-60420-BRL

6,455

 

Calpine Sonoran Pipeline LLC

05-60423-BRL

—

 

Calpine Stony Brook Operators, Inc.

05-60424-BRL

—

 

Calpine Stony Brook Power Marketing, LLC

05-60425-BRL

—

 

Calpine Stony Brook, Inc.

05-60426-BRL

—

 

Calpine Sumas, Inc.

05-60427-BRL

—

 

Calpine TCCL Holdings, Inc.

05-60429-BRL

—

 

Calpine Texas Pipeline GP, Inc.

05-60433-BRL

—

 

Calpine Texas Pipeline LP, Inc.

05-60439-BRL

—

 

Calpine Texas Pipeline, L.P.

05-60447-BRL

10,839

 

Calpine Tiverton I, Inc.

05-60450-BRL

—

 

Calpine Tiverton, Inc.

05-60451-BRL

—

 

Calpine ULC I Holding, LLC

05-60454-BRL

—

 

Calpine University Power, Inc.

05-60455-BRL

—

 

Calpine Unrestricted Funding, LLC

05-60456-BRL

—

 

Calpine Unrestricted Holdings, LLC

05-60458-BRL

—

 

Calpine Vapor, Inc.

05-60459-BRL

—

 

Carville Energy LLC

05-60460-BRL

121,889

 

CCFC Development Company, LLC

05-60267-BRL

—

 

CCFC Equipment Finance Company, LLC

05-60269-BRL

—

 

CCFC Project Equipment Finance Company One, LLC

05-60271-BRL

—

 

Celtic Power Corporation

05-60273-BRL

—

 

CES GP, LLC

05-60218-BRL

—

 

CGC Dighton, LLC

05-60274-BRL

—

 

Channel Energy Center, LP

05-60275-BRL

63,165

 

Channel Power GP, LLC

05-60276-BRL

—

 

Channel Power, LP

05-60277-BRL

—

 

Clear Lake Cogeneration Limited Partnership

05-60278-BRL

697,124

 

CogenAmerica Asia Inc.

05-60372-BRL

—

 

CogenAmerica Parlin Supply Corp.

05-60383-BRL

—

 

Columbia Energy LLC

05-60440-BRL

1,614,384

 

Corpus Christi Cogeneration L.P.

05-60441-BRL

263,304

 

CPN 3rd Turbine, Inc.

05-60443-BRL

—

 

CPN Acadia, Inc.

05-60444-BRL

—

 

CPN Berks Generation, Inc.

05-60445-BRL

—

 

CPN Berks, LLC

05-60446-BRL

—

 

CPN Bethpage 3rd Turbine, Inc.

05-60448-BRL

114,315

 

CPN Cascade, Inc.

05-60449-BRL

—

 

CPN Clear Lake, Inc.

05-60287-BRL

—

 

CPN Decatur Pipeline, Inc.

05-60290-BRL

—

 

 

30

Index Definitions

 

TOTAL DISBURSEMENTS BY DEBTOR (continued)

 

 

Legal Entity

Case Number

Disbursements

 

CPN East Fuels, LLC

05-60476-BRL

—

 

CPN Energy Services GP, Inc.

05-60209-BRL

—

 

CPN Energy Services LP, Inc.

05-60210-BRL

—

 

CPN Freestone, LLC

05-60293-BRL

—

 

CPN Funding, Inc.

05-60296-BRL

—

 

CPN Morris, Inc.

05-60301-BRL

—

 

CPN Oxford, Inc.

05-60303-BRL

—

 

CPN Pipeline Company

05-60309-BRL

110,382

 

CPN Pleasant Hill Operating, LLC

05-60312-BRL

—

 

CPN Pleasant Hill, LLC

05-60317-BRL

—

 

CPN Power Services GP, LLC

05-60321-BRL

—

 

CPN Power Services, LP

05-60292-BRL

—

 

CPN Pryor Funding Corporation

05-60300-BRL

6,979

 

CPN Telephone Flat, Inc.

05-60306-BRL

400

 

Decatur Energy Center, LLC

05-60313-BRL

120,034

 

Deer Park Power GP, LLC

05-60363-BRL

—

 

Deer Park Power, LP

05-60370-BRL

—

 

Delta Energy Center, LLC

05-60375-BRL

29,637

 

Dighton Power Associates Limited Partnership

05-60382-BRL

14,483

 

East Altamont Energy Center, LLC

05-60386-BRL

444

 

Fond du Lac Energy Center, LLC

05-60412-BRL

—

 

Fontana Energy Center, LLC

05-60335-BRL

—

 

Freestone Power Generation LP

05-60339-BRL

45,283

 

GEC Bethpage Inc.

05-60347-BRL

—

 

Geothermal Energy Partners, LTD., a California limited partnership

05-60477-BRL

—

 

Geysers Power Company II, LLC

05-60358-BRL

—

 

Geysers Power Company, LLC

06-10197-BRL

2,748,030

 

Geysers Power I Company

05-60389-BRL

—

 

Goldendale Energy Center, LLC

05-60390-BRL

918,501

 

Hammond Energy LLC

05-60393-BRL

—

 

Hillabee Energy Center, LLC

05-60394-BRL

16,364

 

Idlewild Fuel Management Corp.

05-60397-BRL

—

 

JMC Bethpage, Inc.

05-60362-BRL

—

 

KIAC Partners

05-60366-BRL

3,446,763

 

Lake Wales Energy Center, LLC

05-60369-BRL

—

 

Lawrence Energy Center, LLC

05-60371-BRL

—

 

Lone Oak Energy Center, LLC

05-60403-BRL

13,786

 

Los Esteros Critical Energy Facility, LLC

05-60404-BRL

(797,277)

 

Los Medanos Energy Center LLC

05-60405-BRL

62,121

 

Magic Valley Gas Pipeline GP, LLC

05-60407-BRL

—

 

Magic Valley Gas Pipeline, LP

05-60408-BRL

—

 

Magic Valley Pipeline, L.P.

05-60332-BRL

435

 

MEP Pleasant Hill, LLC

05-60334-BRL

297,359

 

Moapa Energy Center, LLC

05-60337-BRL

4,600

 

Mobile Energy L L C

05-60344-BRL

9,362

 

Modoc Power, Inc.

05-60346-BRL

—

 

Morgan Energy Center, LLC

05-60353-BRL

42,349

 

 

31

Index Definitions

 

TOTAL DISBURSEMENTS BY DEBTOR (continued)

 

 

Legal Entity

Case Number

Disbursements

 

Mount Hoffman Geothermal Company, L.P.

05-60361-BRL

—

 

Mt. Vernon Energy LLC

05-60376-BRL

—

 

NewSouth Energy LLC

05-60381-BRL

27,853

 

Nissequogue Cogen Partners

05-60388-BRL

(7,532,388)

 

Northwest Cogeneration, Inc.

05-60336-BRL

—

 

NTC Five, Inc.

05-60463-BRL

—

 

NTC GP, LLC

05-60350-BRL

—

 

Nueces Bay Energy LLC

05-60356-BRL

—

 

O.L.S. Energy-Agnews, Inc.

05-60374-BRL

1,594,094

 

Odyssey Land Acquisition Company

05-60367-BRL

—

 

Pajaro Energy Center, LLC

05-60385-BRL

—

 

Pastoria Energy Center, LLC

05-60387-BRL

—

 

Pastoria Energy Facility L.L.C.

05-60410-BRL

292,362

 

Philadelphia Biogas Supply, Inc.

05-60421-BRL

—

 

Phipps Bend Energy Center, LLC

05-60395-BRL

—

 

Pine Bluff Energy, LLC

05-60396-BRL

323,094

 

Power Investors, L.L.C.

05-60398-BRL

—

 

Power Systems MFG., LLC

05-60399-BRL

6,293,276

 

Quintana Canada Holdings, LLC

05-60400-BRL

—

 

RockGen Energy LLC

05-60401-BRL

207,945

 

Rumford Power Associates Limited Partnership

05-60467-BRL

340

 

Russell City Energy Center, LLC

05-60411-BRL

65,696

 

San Joaquin Valley Energy Center, LLC

05-60413-BRL

—

 

Silverado Geothermal Resources, Inc.

06-10198-BRL

130,137

 

Skipanon Natural Gas, LLC

05-60415-BRL

—

 

South Point Energy Center, LLC

05-60417-BRL

2,191,012

 

South Point Holdings, LLC

05-60419-BRL

—

 

Stony Brook Cogeneration, Inc.

05-60422-BRL

—

 

Stony Brook Fuel Management Corp.

05-60428-BRL

7,888,950

 

Sutter Dryers, Inc.

05-60430-BRL

—

 

TBG Cogen Partners

05-60432-BRL

150,935

 

Texas City Cogeneration, L.P.

05-60434-BRL

1,295,239

 

Texas Cogeneration Company

05-60435-BRL

—

 

Texas Cogeneration Five, Inc.

05-60436-BRL

—

 

Texas Cogeneration One Company

05-60437-BRL

—

 

Thermal Power Company

05-60438-BRL

—

 

Thomassen Turbine Systems America, Inc.

05-60354-BRL

3,000

 

Tiverton Power Associates Limited Partnership

05-60357-BRL

345

 

Towantic Energy, L.L.C.

05-60364-BRL

38,352

 

VEC Holdings, LLC

05-60365-BRL

—

 

Venture Acquisition Company

05-60368-BRL

—

 

Vineyard Energy Center, LLC

05-60373-BRL

—

 

Wawayanda Energy Center, LLC

05-60378-BRL

—

 

Whatcom Cogeneration Partners, L.P.

05-60468-BRL

—

 

Zion Energy LLC

05-60380-BRL

9,258

 

 

 

 

 

TOTAL

 

$

488,667,293

 

 

32

Index Definitions

 

SCHEDULE VI

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

DEBTORS’ STATEMENT REGARDING INSURANCE POLICIES

For the Period from September 1, 2006, to September 30, 2006

All insurance policies are fully paid for the current period, including amounts owed for workers’ compensation and disability insurance.

 

33

Index Definitions

 

SCHEDULE VII

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

(in thousands)

For the Three and Nine Months Ended September 30, 2006

 

 

 

 

Three Months
Ended
September 30,
2006

 

Nine Months
Ended
September 30,
2006

 

Revenue:

 

 

 

 

 

 

 

Electricity and steam revenue

 

$

1,842,575

 

$

4,070,045

 

Sales of purchased power and gas for hedging and optimization

 

 

272,932

 

 

891,092

 

Mark-to-market activities, net

 

 

28,461

 

 

88,151

 

Other revenue

 

 

14,411

 

 

56,657

 

Total revenue

 

 

2,158,379

 

 

5,105,945

 

Cost of revenue:

 

 

 

 

 

 

 

Plant operating expense

 

 

174,552

 

 

519,877

 

Royalty expense

 

 

7,151

 

 

18,411

 

Transmission purchase expense

 

 

18,213

 

 

56,218

 

Purchased power and gas expense for hedging and optimization

 

 

296,385

 

 

857,484

 

Fuel expense

 

 

1,105,248

 

 

2,473,657

 

Depreciation and amortization expense

 

 

121,569

 

 

350,642

 

Operating plant impairments

 

 

7

 

 

52,507

 

Operating lease expense

 

 

11,432

 

 

53,030

 

Other cost of revenue

 

 

14,232

 

 

53,433

 

Total cost of revenue

 

 

1,748,789

 

 

4,435,259

 

Gross profit

 

 

409,590

 

 

670,686

 

(Income) from unconsolidated investments

 

 

—

 

 

—

 

Equipment, development project and other impairments

 

 

(3,462

)

 

64,169

 

Long-term service agreement cancellation charge

 

 

—

 

 

—

 

Project development expense

 

 

5,153

 

 

13,249

 

Research and development expense

 

 

4,184

 

 

11,178

 

Sales, general and administrative expense

 

 

49,026

 

 

147,349

 

Income from operations

 

 

354,689

 

 

434,741

 

Interest expense

 

 

227,724

 

 

819,576

 

Interest (income)

 

 

(19,918

)

 

(59,442

)

Minority interest expense

 

 

7,658

 

 

10,325

 

Loss from repurchase of various issuances of debt

 

 

—

 

 

18,131

 

Other (income) expense, net

 

 

(8,912

)

 

(10,766

)

Loss before reorganization items, benefit for income taxes, discontinued operations and cumulative effect of a change in accounting principle

 

$

148,137

 

$

(343,083

)

Reorganization items

 

 

145,273

 

 

1,098,594

 

Loss before benefit for income taxes, discontinued operations and cumulative effect of a change in accounting principle

 

 

2,864

 

 

(1,441,677

)

(Benefit) for income taxes

 

 

1,202

 

 

(35,632

)

Loss before discontinued operations and cumulative effect of a change in accounting principle

 

 

1,662

 

 

(1,406,045

)

Discontinued operations, net of tax benefit

 

 

—

 

 

—

 

Cumulative effect of a change in accounting principle, net of tax provision of $— and $312

 

 

—

 

 

505

 

Net income (loss)

 

$

1,662

 

$

(1,405,540

)

 

 

34

Index Definitions

 

SCHEDULE VIII

CALPINE CORPORATION

(Debtor-in-Possession)

CASE No. 05-60200 (Jointly Administered)

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

(Unaudited)

(in thousands)

For the Nine Months Ended September 30, 2006

 

 

Cash flows from operating activities:

 

 

 

 

Net loss

 

$

(1,405,540

)

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

437,265

 

Impairment charges

 

 

116,676

 

Deferred income taxes, net

 

 

(35,632

)

(Gain) loss on sale of assets

 

 

1,594

 

Foreign currency transaction loss (gain)

 

 

(1,658

)

(Gain) loss on settlement of notes receivable

 

 

(6,025

)

Loss (gain) on repurchase of debt

 

 

18,131

 

Minority interest expense

 

 

10,325

 

Change in net derivative liability

 

 

31,757

 

Income from unconsolidated investments in power projects

 

 

 

 

Distributions from unconsolidated investments in power projects

 

 

 

 

Stock compensation expense

 

 

5,909

 

Reorganization items

 

 

975,922

 

Other

 

 

170

 

Change in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

154,719

 

Other current assets

 

 

19,992

 

Other assets

 

 

2,349

 

Accounts payable, liabilities subject to compromise and accrued expenses

 

 

(238,203

)

Other liabilities

 

 

78,995

 

Net cash provided by operating activities

 

 

166,746

 

Cash flows from investing activities:

 

 

 

 

Purchases of property, plant and equipment

 

 

(159,319

)

Disposals of property, plant, and equipment

 

 

12,924

 

Purchase of The Geysers Assets

 

 

(266,846

)

Disposals of investments, net of holdbacks

 

 

37,988

 

Advances to joint ventures

 

 

(31,000

)

Project development costs

 

 

 

 

Cash flows from derivatives not designated as hedges

 

 

(95,371

)

Decrease (increase) in restricted cash

 

 

441,953

 

Other

 

 

13,478

 

Net cash used in investing activities

 

 

(46,193

)

 

 

35

Index Definitions

 

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS — (Continued)

(Unaudited)

(in thousands)

 

 

Cash flows from financing activities:

 

 

 

 

Borrowings from notes payable and lines of credit

 

$

—

 

Repayments of notes payable and lines of credit

 

 

(173,616

)

Borrowings from project financing

 

 

121,097

 

Repayments of project financing

 

 

(108,986

)

Repayments on CalGen financing

 

 

—

 

DIP Facility borrowings

 

 

1,150,000

 

Repayments of DIP Facility

 

 

(177,625

)

Proceeds from issuance of convertible senior notes

 

 

—

 

Repurchase of convertible senior notes

 

 

—

 

Repayments and repurchases of senior notes

 

 

(646,105

)

Proceeds from issuance of preferred interests

 

 

—

 

Redemptions of preferred interests

 

 

(9,281

)

Proceeds from Deer Park prepaid commodity contract

 

 

—

 

Financing costs

 

 

(34,428

)

Other

 

 

(20,819

)

Net cash provided by financing activities

 

 

100,237

 

Effect of exchange rate changes on cash and cash equivalents

 

 

—

 

Net increase (decrease) in cash and cash equivalents, including discontinued operations cash

 

 

220,790

 

Change in discontinued operations cash classified as current assets held for sale

 

 

(17,452

)

Net increase (decrease) in cash and cash equivalents

 

 

203,338

 

Cash and cash equivalents, beginning of period

 

 

785,637

 

Cash and cash equivalents, end of period

 

$

988,975

 

 

 

Cash paid during the period for:

 

 

 

 

Interest, net of amounts capitalized

 

$

772,462

 

Income taxes

 

$

234

 

Reorganization items included in operating activities

 

$

77,784

 

Reorganization items included in financing activities

 

$

33,838

 

 

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

Acquisition of the Geysers Assets

 

$

180,607

 

Letter of credit draws under the CalGen financing

 

$

71,458

 

Capital contribution (equipment) to Greenfield Energy Center

 

$

27,854

 

 

 

36

 

 

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