Calpine reports working capital now positive in amended filing

By the OGJ Online Staff

HOUSTON, Feb. 13, 2002 — Independent power producer Calpine Corp. amended its third quarter financial report to include additional information requested by the US Securities and Exchange Commission.

Calpine shares closed down 6.78% to $7.98 in trading on the New York Stock Exchange Wednesday, compared to a 52-week high of $58.04/share. Volume was 19 million shares, compared to average volume of 14.7 million shares.

The San Jose, Calif. company said the supplemental disclosures do not change the earnings, balance sheet, or cash flow results previously reported. However, what the supplementary information does do is paint a clearer picture of company’s income and expenses.

The update reflects discussions between Calpine and the SEC staff, the company said. The comments grew out of a review by the SEC. Calpine reported receiving the SEC letter Feb. 6. At the time, Calpine also reported the SEC’s enforcement division had requested information about alleged selective disclosure to analysts. The company didn’t comment Wednesday on the agency’s selective disclosure inquiry.

The added disclosures in the amended filing elaborate on the company’s treatment of hedges, its dealings with Enron Corp., and breaks out revenue generated by electric generation and oil and gas production. It also includes more tables with a breakdown of expenses associated with electricity production, marketing and oil and gas production and marketing.

In its amended filing, Calpine reported having an existing or future obligation totaling $155.7 million to Enron and its affiliates as of Nov. 29. It said it expects these obligations to be offset by a netting agreement, damages, attorneys’ fees, and other expenses arising from Enron’s default.

The company reported it expected to have positive working capital Dec. 31, 2001, after experiencing an $873 million deficit as of Sept. 30. Among the measures taken were the sale of its Pacific Gas & Electric Co. receivables for about $256.6 million, or a $9 million discount.

Calpine also said it replaced a letter of credit, used to support its trading operations, with direct cash deposits. As a result, the company reported having about $730.8 million in letters of credit outstanding, of which $393.5 million related to risk management activities.

As of Sept. 30, Calpine had deposited $173.3 million in cash as margin deposits with counterparties.

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