##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 (Mark One)þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2005oro
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from
                 
to
 Commission file number: 333-117335
 Calpine Generating Company, LLC
 (A Delaware Limited Liability Company)
 CalGen Finance Corp.
 (A Delaware Corporation)
 I.R.S. Employer Identification Nos.  77-0555128
20-1162632
 
 þ o
 o þ




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##### Table of Contents



TABLE OF ADDITIONAL REGISTRANTS
 State of
    
    
    
    I.R.S. EmployerIncorporation
    
    Commission File
    
    IdentificationRegistrant
    
    or Organization
    
    Number
    
    NumberCalGen Expansion Company, LLC
    
    Delaware
    
    333-117335-39
    
    77-0555127Baytown Energy Center, LP
    
    Delaware
    
    333-117335-38
    
    77-0555135Calpine Baytown Energy Center GP, LLC
    
    Delaware
    
    333-117335-37
    
    77-0555133Calpine Baytown Energy Center LP, LLC
    
    Delaware
    
    333-117335-36
    
    77-0555138Baytown Power GP, LLC
    
    Delaware
    
    333-117335-35
    
    86-1056699Baytown Power, LP
    
    Delaware
    
    333-117335-34
    
    86-1056708Carville Energy LLC
    
    Delaware
    
    333-117335-33
    
    36-4309608Channel Energy Center, LP
    
    Delaware
    
    333-117335-32
    
    77-0555137Calpine Channel Energy Center GP, LLC
    
    Delaware
    
    333-117335-31
    
    77-0555139Calpine Channel Energy Center LP, LLC
    
    Delaware
    
    333-117335-09
    
    77-0555140Channel Power GP, LLC
    
    Delaware
    
    333-117335-08
    
    86-1056758Channel Power, LP
    
    Delaware
    
    333-117335-07
    
    86-1056755Columbia Energy LLC
    
    Delaware
    
    333-117335-06
    
    36-4380154Corpus Christi Cogeneration LP
    
    Delaware
    
    333-117335-05
    
    36-4337040Nueces Bay Energy LLC
    
    Delaware
    
    333-117335-04
    
    36-4216016Calpine Northbrook Southcoast Investors, LLC
    
    Delaware
    
    333-117335-03
    
    36-4337045Calpine Corpus Christi Energy GP, LLC
    
    Delaware
    
    333-117335-02
    
    86-1056770Calpine Corpus Christi Energy, LP
    
    Delaware
    
    333-117335-30
    
    86-1056497Decatur Energy Center, LLC
    
    Delaware
    
    333-117335-29
    
    77-0555708Delta Energy Center, LLC
    
    Delaware
    
    333-117335-28
    
    95-4812214CalGen Project Equipment Finance Company Two, LLC
    
    Delaware
    
    333-117335-27
    
    77-0585399Freestone Power Generation LP
    
    Texas
    
    333-117335-26
    
    76-0608559Calpine Freestone, LLC
    
    Delaware
    
    333-117335-25
    
    77-0486738CPN Freestone, LLC
    
    Delaware
    
    333-117335-24
    
    77-0545937Calpine Freestone Energy GP, LLC
    
    Delaware
    
    333-117335-23
    
    86-1056713Calpine Freestone Energy, LP
    
    Delaware
    
    333-117335-22
    
    86-1056720Calpine Power Equipment LP
    
    Texas
    
    333-117335-21
    
    76-0645514Los Medanos Energy Center, LLC
    
    Delaware
    
    333-117335-20
    
    77-0553164CalGen Project Equipment Finance Company One, LLC
    
    Delaware
    
    333-117335-19
    
    77-0556245Morgan Energy Center, LLC
    
    Delaware
    

    333-117335-18
    
    77-0555141Pastoria Energy Facility L.L.C.
    
    Delaware
    
    333-117335-17
    
    77-0581976Calpine Pastoria Holdings, LLC
    
    Delaware
    
    333-117335-16
    
    77-0559247Calpine Oneta Power, L.P.
    
    Delaware
    
    333-117335-15
    
    75-2815392Calpine Oneta Power I, LLC
    
    Delaware
    
    333-117335-14
    
    75-2815390Calpine Oneta Power II, LLC
    
    Delaware
    
    333-117335-13
    
    75-2815394Zion Energy LLC
    
    Delaware
    
    333-117335-12
    
    36-4330312CalGen Project Equipment Finance Company Three LLC
    
    Delaware
    
    333-117335-11
    
    10-0008436CalGen Equipment Finance Holdings, LLC
    
    Delaware
    
    333-117335-10
    
    77-0555519CalGen Equipment Finance Company, LLC
    
    Delaware
    
    333-117335-01
    
    77-0555523




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CALPINE GENERATING COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 REPORT ON FORM 10-Q
For the Quarter Ended June 30, 2005
 INDEX
 PageNo.PART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    4Consolidated Condensed Balance Sheets as of June 30, 2005 and December 31, 2004
    
    
    4Consolidated Condensed Statements of Operations for the Three Months and Six Months Ended June 30, 2005 and 2004
    
    
    5Consolidated Condensed Statements of Cash Flows for the Six Months Ended June 30, 2005 and 2004
    
    
    6Notes to Consolidated Condensed Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    25Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    36Item 4. Controls and Procedures
    
    
    36PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 6. Exhibits
    
    
    37Signatures
    
    
    44Certification of CEO & President Pursuant to Rule 13a-14(a)Certification of EVP & CFO Pursuant to Rule 13a-14(a)Certification of CEO & CFO Pursuant to Section 1350
  3




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 CALPINE GENERATING COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 
 CONSOLIDATED CONDENSED BALANCE SHEETS
June 30, 2005 and December 31, 2004
(Unaudited)
 June 30,
    
    December 31,2005
    
    2004(In thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    40,481
    
    
    $
    64,538Restricted cash, current portion
    
    
    67
    
    
    
    Accounts receivable, net
    
    
    65,498
    
    
    
    59,320Accounts receivable, net  related party
    
    
    50,288
    
    
    
    600Notes receivable, current portion
    
    
    385
    
    
    
    367Inventories
    
    
    21,442
    
    
    
    19,601Current derivative assets
    
    
    9,940
    
    
    
    9,272Prepaid and other current assets
    
    
    6,437
    
    
    
    21,169Total current assets
    
    
    194,538
    
    
    
    174,867Property, plant and equipment, net
    
    
    6,295,337
    
    
    
    6,294,429Notes receivable, net of current portion
    
    
    19,184
    
    
    
    19,381Restricted cash, net of current portion
    
    
    95
    
    
    
    Deferred financing costs, net
    
    
    45,796
    
    
    
    51,496Long-term derivative assets
    
    
    18,512
    
    
    
    26,644Deferred tax asset
    
    
    17,672
    
    
    
    17,672Other assets
    
    
    38,154
    
    
    
    54,245Total assets
    
    $
    6,629,288
    
    
    $
    6,638,734LIABILITIES & MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    127,639
    
    
    $
    99,212Notes payable, current portion
    
    
    171
    
    
    
    168Accrued interest payable
    
    
    59,114
    
    
    
    53,324Deferred tax liability
    
    
    17,672
    
    
    
    17,672Other current liabilities
    
    
    3,655
    
    
    
    2,970Total current liabilities
    
    
    208,251
    
    
    
    173,346Notes payable, net of current portion
    
    
    1,943
    
    
    
    2,109Priority notes and term loans
    
    
    2,396,257
    
    
    
    2,395,332Deferred revenue
    
    
    6,833
    
    
    
    5,671Other liabilities
    
    
    21,397
    
    
    
    20,286Total liabilities
    
    
    2,634,681
    
    
    
    2,596,744Members equity
    
    
    3,994,607
    
    
    
    4,041,990Total liabilities and members equity
    
    $
    6,629,288
    
    
    $
    6,638,734
  4




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CALPINE GENERATING COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the Three Months and Six Months Ended June 30, 2005 and 2004
(Unaudited)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    
    
    
    
    20042005
    
    (Restated)
    
    2005
    
    (Restated)(In thousands)
    
    (In thousands)Revenue:Electricity and steam revenue  related party
    
    $
    362,015
    
    
    $
    341,427
    
    
    $
    707,341
    
    
    $
    513,896Electricity and steam revenue  third-party
    
    
    126,371
    
    
    
    116,303
    
    
    
    234,730
    
    
    
    216,245Total electricity and steam revenue
    
    
    488,386
    
    
    
    457,730
    
    
    
    942,071
    
    
    
    730,141Mark-to-market activity, net
    
    
    (179
    )
    
    
    (2,036
    )
    
    
    (7,464
    )
    
    
    (1,921
    )Sale of purchased power
    
    
    779
    
    
    
    2,562
    
    
    
    5,459
    
    
    
    2,860Other revenue
    
    
    448
    
    
    
    824
    
    
    
    1,648
    
    
    
    1,648Total revenue
    
    
    489,434
    
    
    
    459,080
    
    
    
    941,714
    
    
    
    732,728Cost of revenue:Plant operating expense  related party
    
    
    71,553
    
    
    
    53,068
    
    
    
    115,027
    
    
    
    96,725Fuel expense
    
    
    337,310
    
    
    
    320,084
    
    
    
    678,035
    
    
    
    502,228Purchased power expense
    
    
    2,895
    
    
    
    2,078
    
    
    
    7,313
    
    
    
    2,568Depreciation and amortization expense
    
    
    43,725
    
    
    
    36,853
    
    
    
    84,368
    
    
    
    71,736Total cost of revenue
    
    
    455,483
    
    
    
    412,083
    
    
    
    884,743
    
    
    
    673,257Gross profit
    
    
    33,951
    
    
    
    46,997
    
    
    
    56,971
    
    
    
    59,471Long-term service agreement cancellation charge
    
    
    23,864
    
    
    
    
    
    
    
    23,864
    
    
    
    Sales, general and administrative expense  related party
    
    
    3,519
    
    
    
    2,354
    
    
    
    6,770
    
    
    
    7,035Income from operations
    
    
    6,568
    
    
    
    44,643
    
    
    
    26,337
    
    
    
    52,436Interest expense  related party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,173Interest expense  third party
    
    
    55,308
    
    
    
    38,865
    
    
    
    106,057
    
    
    
    69,639Interest (income)
    
    
    (608
    )
    
    
    (710
    )
    
    
    (1,397
    )
    
    
    (1,495
    )Other expense (income), net
    
    
    610
    
    
    
    236
    
    
    
    1,223
    
    
    
    (415
    )Income (loss) before income taxes
    
    
    (48,742
    )
    
    
    6,252
    
    
    
    (79,546
    )
    
    
    (87,466
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    $
    (48,742
    )
    
    $
    6,252
    
    
    $
    (79,546
    )
    
    $
    (87,466
    )
  5




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CALPINE GENERATING COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 
 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2005 and 2004
(Unaudited)
 Six Months EndedJune 30,20042005
    
    (Restated) (1)(In thousands)Cash flows from operating activities:Net loss
    
    $
    (79,546
    )
    
    $
    (87,466
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    84,368
    
    
    
    71,736Amortization of discount and deferred financing costs
    
    
    6,167
    
    
    
    6,267Write-off of deferred financing costs
    
    
    
    
    
    
    12,457Mark-to-market activities, net
    
    
    7,464
    
    
    
    1,921Long-term service agreement cancellation charge
    
    
    23,864
    
    
    
    Interest on subordinated parent debt
    
    
    
    
    
    
    72,173Change in operating assets and liabilities:Accounts
receivable, net
    
    
    (6,178
    )
    
    
    (15,567
    )Accounts receivable, net  related party
    
    
    (37,418
    )
    
    
    7,423Inventories
    
    
    (1,841
    )
    
    
    (2,067
    )Prepaid and other current assets
    
    
    1,976
    
    
    
    (3,888
    )Other assets
    
    
    5,816
    
    
    
    (6,168
    )Accounts payable
    
    
    30,478
    
    
    
    19,987Accrued interest payable
    
    
    5,790
    
    
    
    49,449Other accrued liabilities
    
    
    2,961
    
    
    
    (1,099
    )Net cash provided by operating activities
    
    
    43,901
    
    
    
    125,158Cash flows from investing activities:(Increase) decrease in restricted cash
    
    
    (162
    )
    
    
    152,290Purchases of derivative asset
    
    
    
    
    
    
    (45,000
    )Purchases of property, plant and equipment
    
    
    (67,630
    )
    
    
    (201,798
    )Net cash used in investing activities
    
    
    (67,792
    )
    
    
    (94,508
    )Cash flows from financing activities:Financing costs
    
    
    
    
    
    
    (58,525
    )Repayment on notes payable
    
    
    (166
    )
    
    
    (162
    )Borrowings from subordinated parent debt
    
    
    
    
    
    
    46,813Repayments of subordinated parent debt
    
    
    
    
    
    
    (238,137
    )Borrowings on project financing
    
    
    
    
    
    
    2,393,900Borrowings on revolver line of credit
    
    
    
    
    
    
    54,500Borrowings from credit facility
    
    
    
    
    
    
    178,995Repayments of credit facility
    
    
    
    
    
    
    (2,379,353
    )Net cash used in financing activities
    
    
    (166
    )
    
    
    (1,969
    )Net (decrease) increase in cash and cash equivalents
    
    
    (24,057
    )
    
    
    28,681Cash and cash equivalents, beginning of period
    
    
    64,538
    
    
    
    39,598Cash and cash equivalents, end of period
    
    $
    40,481
    
    
    $
    68,279
 
 (1)
    
    Only individual line items in cash flows from operating activities have been restated. Cash
flows from operating activities did not change in total and cash flows from investing and
financing activities were unaffected. See Note 3.  6




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CALPINE GENERATING COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
For the Six Months Ended June 30, 2005 and 2004
(Unaudited)
 Six Months EndedJune 30,20042005
    
    (Restated)(In thousands)Supplemental cash flow information:Cash paid during the period for:Interest, net of amounts capitalized
    
    $
    93,425
    
    
    $
    11,153Non-cash transactions:Interest on subordinated parent debt added to principal balance
    
    $
    
    
    
    $
    72,173Capital expenditures included in accounts payable
    
    
    10,814
    
    
    
    44,854Financing costs contributed by parent
    
    
    
    
    
    
    5,407Long term
service agreement cancellation costs contributed by parent
    
    
    30,900
    
    
    
    Acquisition of property, plant and equipment through affiliate transfer
    
    
    7,196
    
    
    
    Disposition of property, plant and equipment through subordinated parent debt
    
    
    
    
    
    
    119,647Conversion of subordinated parent debt to equity
    
    
    
    
    
    
    4,381,619
  7




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 1. Organization and Operations of the Company
   2. Basis of Interim Presentation
     8




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CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 3. Restatement
    Three Months Ended
    
    Six Months EndedJune 30, 2004
    
    June 30, 2004As previously
    
    
    
    
    
    As previouslyRestated
    
    reported(i)
    
    Restated
    
    reported(i)Electricity and steam revenue-related party
    
    $
    341,427
    
    
    $
    348,183
    
    
    $
    513,896
    
    
    $
    520,968Total revenue
    
    
    459,080
    
    
    
    465,836
    
    
    
    732,728
    
    
    
    739,800Gross profit
    
    
    46,997
    
    
    
    53,753
    
    
    
    59,471
    
    
    
    66,543Income from operations
    
    
    44,643
    
    
    
    51,399
    
    
    
    52,436
    
    
    
    59,508Net income (loss)
    
    
    6,252
    
    
    
    13,008
    
    
    
    (87,466
    )
    
    
    (80,394
    )
 
 (i)
    
    The consolidated condensed financial statements for the three months and six months ended
June 30, 2004 are herein restated to correct revenue, gross profit, income from operations and
net income (loss), which had been overstated due to the billing error discussed above. 4. Summary of Significant Accounting Policies
 Principles of Consolidation
 Use of Estimates in Preparation of Financial Statements
 Restricted Cash
 9




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CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
  Effective Tax Rate 
 Revenue Recognition
  New Accounting Pronouncements
 SFAS No. 154
   10




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 FIN 47
  5. Property, Plant and Equipment, Net
  June 30,
    
    December 31,2005
    
    2004Buildings, machinery and equipment
    
    $
    6,273,702
    
    
    $
    5,917,575Less: Accumulated depreciation and amortization
    
    
    (422,178
    )
    
    
    (338,172
    )5,851,524
    
    
    
    5,579,403Land
    
    
    7,854
    
    
    
    7,854Construction in progress
    
    
    435,959
    
    
    
    707,172Property, plant and equipment, net
    
    $
    6,295,337
    
    
    $
    6,294,429
   Buildings, Machinery, and Equipment
 Major Maintenance 
 Impairment Evaluation
  11




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
  6. Notes Payable, Term Loans and Other Financings
  Carrying Amount atFace Amount
    
    Description
    
    Interest Rate
    
    June 30, 2005$
    235.0 million
    
    First Priority Secured Floating Rate Notes Due 2009
    
    LIBOR plus 375 basis points
    
    $
    235.0 million$
    640.0 million
    
    Second Priority Secured Floating Rate Notes Due 2010
    
    LIBOR plus 575 basis points
    
    $
    632.5 million$
    680.0 million
    
    Third Priority Secured Floating Rate Notes Due 2011
    
    LIBOR plus 900 basis points
    
    $
    680.0 million$
    150.0 million
    
    Third Priority Secured Notes Due 2011
    
    11.50%
    
    $
    150.0 million$
    600.0 million
    
    First Priority Secured Term Loans due 2009
    
    LIBOR plus 375 basis points(1)
    
    $
    600.0 million$
    100.0 million
    
    Second Priority Secured Term Loans due 2010
    
    LIBOR plus 575 basis points(2)
    
    $
    98.8 million$
    2,405.0 million
    
    
    
    
    
    
    
    $
    2,396.3 million
 
 (1)
    
    The Company may also elect a Base Rate plus 275 basis points.(2)
    
    The Company may also elect a Base Rate plus 475 basis points.  Other Financings
   12




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
    7. Significant Customers
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    
    
    
    
    20042005
    
    (Restated)
    
    2005
    
    (Restated)Revenues:CES
    
    $
    362,015
    
    
    $
    341,427
    
    
    $
    707,341
    
    
    $
    513,896
  8. Related Party Transactions
      June 30,
    December 31,2005
    
    2004Accounts receivable, net
    
    $
    50,288
    
    
    $
    600
 13




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    
    
    
    
    20042005
    
    (Restated)
    
    2005
    
    (Restated)Revenue
    
    $
    362,015
    
    
    $
    341,427
    
    
    $
    707,341
    
    
    $
    513,896Fuel expense
    
    
    337,310
    
    
    
    320,430
    
    
    
    678,035
    
    
    
    502,305Plant operating expense
    
    
    71,553
    
    
    
    53,068
    
    
    
    115,027
    
    
    
    96,725Sales, general and administrative expense
    
    
    3,519
    
    
    
    2,354
    
    
    
    6,770
    
    
    
    7,035Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    72,173
 9. Derivative Instruments
   June 30,2005Current derivative assets
    
    $
    9,940Long-term derivative assets
    
    
    18,512Total derivative assets
    
    $
    28,452
 10. Commitments and Contingencies
 Commitments
    14




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 Long-TermService
    
    
    
    
    
    
    
    
    
    O&MAgreements
    
    Fuel
    
    Water
    
    Agreements
    
    Leases
    
    Other
    
    TotalJuly through December 2005
    
    $
    4,211
    
    
    $
    8,064
    
    
    $
    1,607
    
    
    $
    609
    
    
    $
    996
    
    
    $
    480
    
    
    $
    15,9672006
    
    
    27,844
    
    
    
    16,066
    
    
    
    3,651
    
    
    
    952
    
    
    
    2,104
    
    
    
    960
    
    
    
    51,5772007
    
    
    34,310
    
    
    
    16,066
    
    
    
    3,799
    
    
    
    882
    
    
    
    2,236
    
    
    
    960
    
    
    
    58,2532008
    
    
    17,510
    
    
    
    16,387
    
    
    
    3,947
    
    
    
    831
    
    
    
    2,726
    
    
    
    846
    
    
    
    42,2472009
    
    
    25,819
    
    
    
    16,540
    
    
    
    4,107
    
    
    
    831
    
    
    
    3,172
    
    
    
    889
    
    
    
    51,3582010 and thereafter
    
    
    214,792
    
    
    
    224,990
    
    
    
    142,069
    
    
    
    10,537
    
    
    
    90,510
    
    
    
    2,941
    
    
    
    685,839Total
    
    $
    324,486
    
    
    $
    298,113
    
    
    $
    159,180
    
    
    $
    14,642
    
    
    $
    101,744
    
    
    $
    7,076
    
    
    $
    905,241
 Litigation
  Estate of Jones, et al. v. Calpine Corporation
 Solutia Bankruptcy
 Panda Energy International, Inc., et al. v. Calpine Corporation, et al.
 15




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
   11. Guarantor Subsidiaries  Supplemental Consolidating Financial Statements
   16




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED BALANCE SHEET
June 30, 2005
(in thousands)
 Calpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    40,456
    
    
    $
    24
    
    
    $
    1
    
    
    $
    
    
    
    $
    40,481Restricted cash, current portion
    
    
    
    
    
    
    
    
    
    
    67
    
    
    
    
    
    
    
    67Accounts receivable, net
    
    
    121
    
    
    
    65,377
    
    
    
    
    
    
    
    
    
    
    
    65,498Accounts receivable, net  related party
    
    
    132,694
    
    
    
    132,476
    
    
    
    
    
    
    
    (214,882
    )
    
    
    50,288Notes receivable, current portion
    
    
    
    
    
    
    385
    
    
    
    
    
    
    
    
    
    
    
    385Inventories
    
    
    
    
    
    
    20,273
    
    
    
    1,169
    
    
    
    
    
    
    
    21,442Current derivative assets
    
    
    9,940
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,940Prepaid and other current assets
    
    
    368
    
    
    
    5,954
    
    
    
    115
    
    
    
    
    
    
    
    6,437Total current assets
    
    
    183,579
    
    
    
    224,489
    
    
    
    1,352
    
    
    
    (214,882
    )
    
    
    194,538Property, plant and equipment, net
    
    
    6
    
    
    
    5,974,386
    
    
    
    320,945
    
    
    
    
    
    
    
    6,295,337Investment in affiliates
    
    
    4,011,197
    
    
    
    
    
    
    
    
    
    
    
    (4,011,197
    )
    
    
    Notes receivable, net of current portion
    
    
    
    
    
    
    19,184
    
    
    
    
    
    
    
    
    
    
    
    19,184Notes receivable  affiliate
    
    
    2,409,575
    
    
    
    
    
    
    
    
    
    
    
    (2,409,575
    )
    
    
    Restricted cash, net of current portion
    
    
    
    
    
    
    
    
    
    
    95
    
    
    
    
    
    
    
    95Deferred financing costs, net
    
    
    45,796
    
    
    
    43,694
    
    
    
    2,102
    
    
    
    (45,796
    )
    
    
    45,796Long-term derivative assets
    
    
    18,512
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,512Deferred tax asset
    
    
    
    
    
    
    16,310
    
    
    
    1,362
    
    
    
    
    
    
    
    17,672Other assets
    
    
    
    
    
    
    38,154
    
    
    
    
    
    
    
    
    
    
    
    38,154Total assets
    
    $
    6,668,665
    
    
    $
    6,316,217
    
    
    $
    325,856
    
    
    $
    (6,681,450
    )
    
    $
    6,629,288LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    51,680
    
    
    $
    75,551
    
    
    $
    408
    
    
    $
    
    
    
    $
    127,639Accounts payable  related party
    
    
    167,007
    
    
    
    
    
    
    
    47,875
    
    
    
    (214,882
    )
    
    
    Notes payable, current portion
    
    
    
    
    
    
    171
    
    
    
    
    
    
    
    
    
    
    
    171Accrued interest payable
    
    
    59,114
    
    
    
    56,550
    
    
    
    2,564
    
    
    
    (59,114
    )
    
    
    59,114Deferred tax liability
    
    
    
    
    
    
    16,310
    
    
    
    1,362
    
    
    
    
    
    
    
    17,672Other current liabilities
    
    
    
    
    
    
    3,463
    
    
    
    192
    
    
    
    
    
    
    
    3,655Total current liabilities
    
    
    277,801
    
    
    
    152,045
    
    
    
    52,401
    
    
    
    (273,996
    )
    
    
    208,251Notes payable, net of current portion
    
    
    
    
    
    
    1,943
    
    
    
    
    
    
    
    
    
    
    
    1,943Priority notes and term loans
    
    
    2,396,257
    
    
    
    2,286,189
    
    
    
    110,068
    
    
    
    (2,396,257
    )
    
    
    2,396,257Deferred revenue
    
    
    
    
    
    
    6,833
    
    
    
    
    
    
    
    
    
    
    
    6,833Other liabilities
    
    
    
    
    
    
    21,397
    
    
    
    
    
    
    
    
    
    
    
    21,397Total liabilities
    
    
    2,674,058
    
    
    
    2,468,407
    
    
    
    162,469
    
    
    
    (2,670,253
    )
    
    
    2,634,681Members equity
    
    
    3,994,607
    
    
    
    3,847,810
    
    
    
    163,387
    
    
    
    (4,011,197
    )
    
    
    3,994,607Total liabilities and members equity
    
    $
    6,668,665
    
    
    $
    6,316,217
    
    
    $
    325,856
    
    
    $
    (6,681,450
    )
    
    $
    6,629,288
 17




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED BALANCE SHEET
December 31, 2004
(in thousands)
 CalpineCalpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedASSETSCurrent assets:Cash and cash equivalents
    
    $
    64,510
    
    
    $
    28
    
    
    $
    
    
    
    $
    
    
    
    $
    64,538Accounts receivable, net
    
    
    
    
    
    
    59,302
    
    
    
    18
    
    
    
    
    
    
    
    59,320Accounts receivable, net  related party
    
    
    62,131
    
    
    
    119,589
    
    
    
    
    
    
    
    (181,120
    )
    
    
    600Notes receivable, current portion
    
    
    
    
    
    
    367
    
    
    
    
    
    
    
    
    
    
    
    367Inventories
    
    
    
    
    
    
    18,456
    
    
    
    1,145
    
    
    
    
    
    
    
    19,601Current derivative assets
    
    
    9,272
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,272Prepaid and other current assets
    
    
    62
    
    
    
    21,019
    
    
    
    88
    
    
    
    
    
    
    
    21,169Total current assets
    
    
    135,975
    
    
    
    218,761
    
    
    
    1,251
    
    
    
    (181,120
    )
    
    
    174,867Property, plant and equipment, net
    
    
    7
    
    
    
    5,969,576
    
    
    
    324,846
    
    
    
    
    
    
    
    6,294,429Investment in affiliates
    
    
    4,051,326
    
    
    
    
    
    
    
    
    
    
    
    (4,051,326
    )
    
    
    Notes receivable, net of current portion
    
    
    
    
    
    
    19,381
    
    
    
    
    
    
    
    
    
    
    
    19,381Notes receivable  affiliate
    
    
    2,397,160
    
    
    
    
    
    
    
    
    
    
    
    (2,397,160
    )
    
    
    Deferred financing costs, net
    
    
    51,496
    
    
    
    49,329
    
    
    
    2,167
    
    
    
    (51,496
    )
    
    
    51,496Long-term derivative assets
    
    
    26,644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,644Deferred tax asset
    
    
    
    
    
    
    16,310
    
    
    
    1,362
    
    
    
    
    
    
    
    17,672Other assets
    
    
    
    
    
    
    54,245
    
    
    
    
    
    
    
    
    
    
    
    54,245Total assets
    
    $
    6,662,608
    
    
    $
    6,327,602
    
    
    $
    329,626
    
    
    $
    (6,681,102
    )
    
    $
    6,638,734LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Accounts payable
    
    $
    31,809
    
    
    $
    66,880
    
    
    $
    523
    
    
    $
    
    
    
    $
    99,212Accounts payable  related party
    
    
    140,153
    
    
    
    
    
    
    
    40,967
    
    
    
    (181,120
    )
    
    
    Notes payable, current portion
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    
    
    
    
    168Accrued interest payable
    
    
    53,324
    
    
    
    51,028
    
    
    
    2,296
    
    
    
    (53,324
    )
    
    
    53,324Deferred tax liability
    
    
    
    
    
    
    16,310
    
    
    
    1,362
    
    
    
    
    
    
    
    17,672Other current liabilities
    
    
    
    
    
    
    2,871
    
    
    
    99
    
    
    
    
    
    
    
    2,970Total current liabilities
    
    
    225,286
    
    
    
    137,257
    
    
    
    45,247
    
    
    
    (234,444
    )
    
    
    173,346Notes payable, net of current portion
    
    
    
    
    
    
    2,109
    
    
    
    
    
    
    
    
    
    
    
    2,109Priority notes and term loans
    
    
    2,395,332
    
    
    
    2,285,307
    
    
    
    110,025
    
    
    
    (2,395,332
    )
    
    
    2,395,332Deferred revenue
    
    
    
    
    
    
    5,671
    
    
    
    
    
    
    
    
    
    
    
    5,671Other liabilities
    
    
    
    
    
    
    20,286
    
    
    
    
    
    
    
    
    
    
    
    20,286Total liabilities
    
    
    2,620,618
    
    
    
    2,450,630
    
    
    
    155,272
    
    
    
    (2,629,776
    )
    
    
    2,596,744Members equity
    
    
    4,041,990
    
    
    
    3,876,972
    
    
    
    174,354
    
    
    
    (4,051,326
    )
    
    
    4,041,990Total liabilities and members equity
    
    $
    6,662,608
    
    
    $
    6,327,602
    
    
    $
    329,626
    
    
    $
    (6,681,102
    )
    
    $
    6,638,734
 18




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the three months ended June 30, 2005
(in thousands)
 CalpineCalpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedRevenue:Electricity and steam revenue  related party
    
    $
    
    
    
    $
    353,372
    
    
    $
    8,643
    
    
    $
    
    
    
    $
    362,015Electricity and steam revenue  third-party
    
    
    
    
    
    
    126,371
    
    
    
    
    
    
    
    
    
    
    
    126,371Total electricity and steam revenue
    
    
    
    
    
    
    479,743
    
    
    
    8,643
    
    
    
    
    
    
    
    488,386Mark-to-market activity, net
    
    
    (179
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (179
    )Sale of purchased power
    
    
    
    
    
    
    779
    
    
    
    
    
    
    
    
    
    
    
    779Other revenue
    
    
    
    
    
    
    448
    
    
    
    
    
    
    
    
    
    
    
    448Total revenue
    
    
    (179
    )
    
    
    480,970
    
    
    
    8,643
    
    
    
    
    
    
    
    489,434Cost of revenue:Plant operating expense  related party
    
    
    
    
    
    
    68,324
    
    
    
    3,229
    
    
    
    
    
    
    
    71,553Fuel expense
    
    
    
    
    
    
    330,471
    
    
    
    6,839
    
    
    
    
    
    
    
    337,310Purchased power expense
    
    
    
    
    
    
    2,895
    
    
    
    
    
    
    
    
    
    
    
    2,895Depreciation and amortization expense
    
    
    
    
    
    
    41,580
    
    
    
    2,145
    
    
    
    
    
    
    
    43,725Total cost of revenue
    
    
    
    
    
    
    443,270
    
    
    
    12,213
    
    
    
    
    
    
    
    455,483Gross profit (loss)
    
    
    (179
    )
    
    
    37,700
    
    
    
    (3,570
    )
    
    
    
    
    
    
    33,951Long-term service agreement cancellation charge
    
    
    
    
    
    
    23,864
    
    
    
    
    
    
    
    
    
    
    
    23,864Sales, general and administrative expense  related party
    
    
    210
    
    
    
    3,148
    
    
    
    161
    
    
    
    
    
    
    
    3,519Income (loss) from operations
    
    
    (389
    )
    
    
    10,688
    
    
    
    (3,731
    )
    
    
    
    
    
    
    6,568Interest expense  third party
    
    
    55,308
    
    
    
    52,584
    
    
    
    2,724
    
    
    
    (55,308
    )
    
    
    55,308Interest (income)
    
    
    (55,436
    )
    
    
    (480
    )
    
    
    
    
    
    
    55,308
    
    
    
    (608
    )Equity loss in subsidiary
    
    
    (48,572
    )
    
    
    
    
    
    
    
    
    
    
    48,572
    
    
    
    Other expense (income), net
    
    
    (91
    )
    
    
    607
    
    
    
    94
    
    
    
    
    
    
    
    610Loss before income taxes
    
    
    (48,742
    )
    
    
    (42,023
    )
    
    
    (6,549
    )
    
    
    48,572
    
    
    
    (48,742
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (48,742
    )
    
    $
    (42,023
    )
    
    $
    (6,549
    )
    
    $
    48,572
    
    
    $
    (48,742
    )
 19




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the six months ended June 30, 2005
(in thousands)
 CalpineCalpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedRevenue:Electricity and steam revenue  related party
    
    $
    
    
    
    $
    683,250
    
    
    $
    24,091
    
    
    $
    
    
    
    $
    707,341Electricity and steam revenue  third-party
    
    
    
    
    
    
    234,730
    
    
    
    
    
    
    
    
    
    
    
    234,730Total electricity and steam revenue
    
    
    
    
    
    
    917,980
    
    
    
    24,091
    
    
    
    
    
    
    
    942,071Mark-to-market activity, net
    
    
    (7,464
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,464
    )Sale of purchased power
    
    
    
    
    
    
    5,459
    
    
    
    
    
    
    
    
    
    
    
    5,459Other revenue
    
    
    
    
    
    
    1,648
    
    
    
    
    
    
    
    
    
    
    
    1,648Total revenue
    
    
    (7,464
    )
    
    
    925,087
    
    
    
    24,091
    
    
    
    
    
    
    
    941,714Cost of revenue:Plant operating expense  related party
    
    
    
    
    
    
    108,032
    
    
    
    6,995
    
    
    
    
    
    
    
    115,027Fuel expense
    
    
    
    
    
    
    659,689
    
    
    
    18,346
    
    
    
    
    
    
    
    678,035Purchased power expense
    
    
    
    
    
    
    7,313
    
    
    
    
    
    
    
    
    
    
    
    7,313Depreciation and amortization expense
    
    
    
    
    
    
    80,422
    
    
    
    3,946
    
    
    
    
    
    
    
    84,368Total cost of revenue
    
    
    
    
    
    
    855,456
    
    
    
    29,287
    
    
    
    
    
    
    
    884,743Gross profit (loss)
    
    
    (7,464
    )
    
    
    69,631
    
    
    
    (5,196
    )
    
    
    
    
    
    
    56,971Long-term service agreement cancellation charge
    
    
    
    
    
    
    23,864
    
    
    
    
    
    
    
    
    
    
    
    23,864Sales, general and administrative expense  related party
    
    
    395
    
    
    
    6,046
    
    
    
    329
    
    
    
    
    
    
    
    6,770Income (loss) from operations
    
    
    (7,859
    )
    
    
    39,721
    
    
    
    (5,525
    )
    
    
    
    
    
    
    26,337Interest expense  third party
    
    
    106,057
    
    
    
    100,799
    
    
    
    5,258
    
    
    
    (106,057
    )
    
    
    106,057Interest (income)
    
    
    (106,494
    )
    
    
    (960
    )
    
    
    
    
    
    
    106,057
    
    
    
    (1,397
    )Equity loss in subsidiary
    
    
    (72,292
    )
    
    
    
    
    
    
    
    
    
    
    72,292
    
    
    
    Other expense (income), net
    
    
    (168
    )
    
    
    1,207
    
    
    
    184
    
    
    
    
    
    
    
    1,223Loss before income taxes
    
    
    (79,546
    )
    
    
    (61,325
    )
    
    
    (10,967
    )
    
    
    72,292
    
    
    
    (79,546
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (79,546
    )
    
    $
    (61,325
    )
    
    $
    (10,967
    )
    
    $
    72,292
    
    
    $
    (79,546
    )
 20




---



##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the three months ended June 30, 2004
(Restated, in thousands)
 CalpineCalpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedRevenue:Electricity and steam revenue  related party
    
    $
    
    
    
    $
    341,427
    
    
    $
    
    
    
    $
    
    
    
    $
    341,427Electricity and steam revenue  third-party
    
    
    
    
    
    
    116,303
    
    
    
    
    
    
    
    
    
    
    
    116,303Total electricity and steam revenue
    
    
    
    
    
    
    457,730
    
    
    
    
    
    
    
    
    
    
    
    457,730Mark-to-market activity, net
    
    
    (2,036
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,036
    )Sale of purchased power
    
    
    
    
    
    
    2,562
    
    
    
    
    
    
    
    
    
    
    
    2,562Other revenue
    
    
    
    
    
    
    824
    
    
    
    
    
    
    
    
    
    
    
    824Total revenue
    
    
    (2,036
    )
    
    
    461,116
    
    
    
    
    
    
    
    
    
    
    
    459,080Cost of revenue:Plant operating expense  related party
    
    
    
    
    
    
    53,068
    
    
    
    
    
    
    
    
    
    
    
    53,068Fuel expense
    
    
    
    
    
    
    320,084
    
    
    
    
    
    
    
    
    
    
    
    320,084Purchased power expense
    
    
    
    
    
    
    2,078
    
    
    
    
    
    
    
    
    
    
    
    2,078Depreciation and amortization expense
    
    
    
    
    
    
    36,853
    
    
    
    
    
    
    
    
    
    
    
    36,853Total cost of revenue
    
    
    
    
    
    
    412,083
    
    
    
    
    
    
    
    
    
    
    
    412,083Gross profit (loss)
    
    
    (2,036
    )
    
    
    49,033
    
    
    
    
    
    
    
    
    
    
    
    46,997Sales, general and administrative expense  related party
    
    
    177
    
    
    
    2,141
    
    
    
    36
    
    
    
    
    
    
    
    2,354Income (loss) from operations
    
    
    (2,213
    )
    
    
    46,892
    
    
    
    (36
    )
    
    
    
    
    
    
    44,643Interest expense  related party
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expense  third party
    
    
    38,865
    
    
    
    38,978
    
    
    
    (113
    )
    
    
    (38,865
    )
    
    
    38,865Interest (income)
    
    
    (38,918
    )
    
    
    (657
    )
    
    
    
    
    
    
    38,865
    
    
    
    (710
    )Equity income in subsidiary
    
    
    8,394
    
    
    
    
    
    
    
    
    
    
    
    (8,394
    )
    
    
    Other expense (income), net
    
    
    (18
    )
    
    
    254
    
    
    
    
    
    
    
    
    
    
    
    236Income before income taxes
    
    
    6,252
    
    
    
    8,317
    
    
    
    77
    
    
    
    (8,394
    )
    
    
    6,252Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    6,252
    
    
    $
    8,317
    
    
    $
    77
    
    
    $
    (8,394
    )
    
    $
    6,252
 21




---



##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
For the six months ended June 30, 2004
(Restated, in thousands)
 CalpineCalpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedRevenue:Electricity and steam revenue  related party
    
    $
    
    
    
    $
    513,896
    
    
    $
    
    
    
    $
    
    
    
    $
    513,896Electricity and steam revenue  third-party
    
    
    
    
    
    
    216,245
    
    
    
    
    
    
    
    
    
    
    
    216,245Total electricity and steam revenue
    
    
    
    
    
    
    730,141
    
    
    
    
    
    
    
    
    
    
    
    730,141Mark-to-market activity, net
    
    
    (1,921
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,921
    )Sale of purchased power
    
    
    
    
    
    
    2,860
    
    
    
    
    
    
    
    
    
    
    
    2,860Other revenue
    
    
    
    
    
    
    1,648
    
    
    
    
    
    
    
    
    
    
    
    1,648Total revenue
    
    
    (1,921
    )
    
    
    734,649
    
    
    
    
    
    
    
    
    
    
    
    732,728Cost of revenue:Plant operating expense  related party
    
    
    
    
    
    
    96,725
    
    
    
    
    
    
    
    
    
    
    
    96,725Fuel expense
    
    
    
    
    
    
    502,228
    
    
    
    
    
    
    
    
    
    
    
    502,228Purchased power expense
    
    
    
    
    
    
    2,568
    
    
    
    
    
    
    
    
    
    
    
    2,568Depreciation and amortization expense
    
    
    
    
    
    
    71,736
    
    
    
    
    
    
    
    
    
    
    
    71,736Total cost of revenue
    
    
    
    
    
    
    673,257
    
    
    
    
    
    
    
    
    
    
    
    673,257Gross profit (loss)
    
    
    (1,921
    )
    
    
    61,392
    
    
    
    
    
    
    
    
    
    
    
    59,471Sales, general and administrative expense  related party
    
    
    289
    
    
    
    5,584
    
    
    
    1,162
    
    
    
    
    
    
    
    7,035Income (loss) from operations
    
    
    (2,210
    )
    
    
    55,808
    
    
    
    (1,162
    )
    
    
    
    
    
    
    52,436Interest expense  related party
    
    
    
    
    
    
    72,026
    
    
    
    147
    
    
    
    
    
    
    
    72,173Interest expense  third party
    
    
    38,865
    
    
    
    69,615
    
    
    
    24
    
    
    
    (38,865
    )
    
    
    69,639Interest (income)
    
    
    (38,931
    )
    
    
    (1,429
    )
    
    
    
    
    
    
    38,865
    
    
    
    (1,495
    )Equity loss in subsidiary
    
    
    (85,340
    )
    
    
    
    
    
    
    
    
    
    
    85,340
    
    
    
    Other (income), net
    
    
    (18
    )
    
    
    (397
    )
    
    
    
    
    
    
    
    
    
    
    (415
    )Loss before income taxes
    
    
    (87,466
    )
    
    
    (84,007
    )
    
    
    (1,333
    )
    
    
    85,340
    
    
    
    (87,466
    )Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    $
    (87,466
    )
    
    $
    (84,007
    )
    
    $
    (1,333
    )
    
    $
    85,340
    
    
    $
    (87,466
    )
 22




---



##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
For the six months ended June 30, 2005
(in thousands)
 CalpineCalpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedCash flows from operating activities:Net loss
    
    $
    (79,546
    )
    
    $
    (61,325
    )
    
    $
    (10,967
    )
    
    $
    72,292
    
    
    $
    (79,546
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    
    
    
    
    80,422
    
    
    
    3,946
    
    
    
    
    
    
    
    84,368Amortization of discount and deferred financing costs
    
    
    6,625
    
    
    
    6,060
    
    
    
    107
    
    
    
    (6,625
    )
    
    
    6,167Mark-to-market activities, net
    
    
    7,464
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,464Long-term
service agreement cancellation charge
    
    
    
    
    
    
    23,864
    
    
    
    
    
    
    
    
    
    
    
    23,864Equity loss in subsidiary
    
    
    72,292
    
    
    
    
    
    
    
    
    
    
    
    (72,292
    )
    
    
    Change in operating assets and liabilities:Accounts receivable
    
    
    (121
    )
    
    
    (6,075
    )
    
    
    18
    
    
    
    
    
    
    
    (6,178
    )Accounts
receivable, net  related party
    
    
    (43,709
    )
    
    
    (617
    )
    
    
    6,908
    
    
    
    
    
    
    
    (37,418
    )Inventories
    
    
    
    
    
    
    (1,817
    )
    
    
    (24
    )
    
    
    
    
    
    
    (1,841
    )Prepaid and other current assets
    
    
    (304
    )
    
    
    2,307
    
    
    
    (27
    )
    
    
    
    
    
    
    1,976Other assets
    
    
    (12,415
    )
    
    
    5,816
    
    
    
    
    
    
    
    12,415
    
    
    
    5,816Accounts payable
    
    
    19,871
    
    
    
    10,722
    
    
    
    (115
    )
    
    
    
    
    
    
    30,478Accrued interest payable
    
    
    5,790
    
    
    
    5,522
    
    
    
    268
    
    
    
    (5,790
    )
    
    
    5,790Other accrued liabilities
    
    
    
    
    
    
    2,868
    
    
    
    93
    
    
    
    
    
    
    
    2,961Net cash provided by (used in) operating activities
    
    
    (24,053
    )
    
    
    67,747
    
    
    
    207
    
    
    
    
    
    
    
    43,901Cash flows from investing activities:Increase in restricted cash
    
    
    
    
    
    
    
    
    
    
    (162
    )
    
    
    
    
    
    
    (162
    )Purchases of property, plant and equipment
    
    
    (1
    )
    
    
    (67,585
    )
    
    
    (44
    )
    
    
    
    
    
    
    (67,630
    )Net cash used in investing activities
    
    
    (1
    )
    
    
    (67,585
    )
    
    
    (206
    )
    
    
    
    
    
    
    (67,792
    )Cash flows from financing activities:Repayments
on notes payable
    
    
    
    
    
    
    (166
    )
    
    
    
    
    
    
    
    
    
    
    (166
    )Net cash used in financing activities
    
    
    
    
    
    
    (166
    )
    
    
    
    
    
    
    
    
    
    
    (166
    )Net increase (decrease) in cash and cash equivalents
    
    
    (24,054
    )
    
    
    (4
    )
    
    
    1
    
    
    
    
    
    
    
    (24,057
    )Cash and cash equivalents, beginning of period
    
    
    64,510
    
    
    
    28
    
    
    
    
    
    
    
    
    
    
    
    64,538Cash and cash equivalents, end of period
    
    $
    40,456
    
    
    $
    24
    
    
    $
    1
    
    
    $
    
    
    
    $
    40,481
 23




---



##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
 SUPPLEMENTAL CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
For the six months ended June 30, 2004
(Restated, in thousands)
 Calpine
    
    
    
    
    
    
    
    
    
    
    
    
    
    GeneratingGenerating
    
    
    
    
    
    
    
    
    
    
    
    
    
    Company,Company,
    
    Subsidiary
    
    Other
    
    Consolidating
    
    LLCLLC
    
    Guarantors
    
    Subsidiaries
    
    Adjustments
    
    ConsolidatedCash flows from operating activities:Net loss
    
    $
    (87,466
    )
    
    $
    (84,007
    )
    
    $
    (1,333
    )
    
    $
    85,340
    
    
    $
    (87,466
    )Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    
    
    
    
    71,736
    
    
    
    
    
    
    
    
    
    
    
    71,736Amortization of discount and deferred financing costs
    
    
    3,375
    
    
    
    6,267
    
    
    
    
    
    
    
    (3,375
    )
    
    
    6,267Write-off of deferred financing costs
    
    
    
    
    
    
    12,457
    
    
    
    
    
    
    
    
    
    
    
    12,457Mark-to-market activities, net
    
    
    1,921
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,921Interest on subordinated parent debt
    
    
    
    
    
    
    72,026
    
    
    
    147
    
    
    
    
    
    
    
    72,173Equity loss in subsidiary
    
    
    85,340
    
    
    
    
    
    
    
    
    
    
    
    (85,340
    )
    
    
    Change in operating assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (15,567
    )
    
    
    
    
    
    
    
    
    
    
    (15,567
    )Accounts
receivable, net  related party
    
    
    111,453
    
    
    
    (104,030
    )
    
    
    
    
    
    
    
    
    
    
    7,423Inventories
    
    
    
    
    
    
    (2,066
    )
    
    
    (1
    )
    
    
    
    
    
    
    (2,067
    )Prepaid and other current assets
    
    
    (25
    )
    
    
    (3,874
    )
    
    
    11
    
    
    
    
    
    
    
    (3,888
    )Other assets
    
    
    (2,442,775
    )
    
    
    (6,168
    )
    
    
    
    
    
    
    2,442,775
    
    
    
    (6,168
    )Accounts payable
    
    
    2,065
    
    
    
    17,922
    
    
    
    
    
    
    
    
    
    
    
    19,987Accrued interest payable
    
    
    49,525
    
    
    
    47,131
    
    
    
    2,318
    
    
    
    (49,525
    )
    
    
    49,449Other accrued liabilities
    
    
    
    
    
    
    (1,104
    )
    
    
    5
    
    
    
    
    
    
    
    (1,099
    )Net cash provided by (used in) operating activities
    
    
    (2,276,587
    )
    
    
    10,723
    
    
    
    1,147
    
    
    
    2,389,875
    
    
    
    125,158Cash flows from investing activities:Increase in restricted cash
    
    
    
    
    
    
    152,290
    
    
    
    
    
    
    
    
    
    
    
    152,290Purchases of derivative asset
    
    
    (45,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,000
    )Purchases of property, plant and equipment
    
    
    (9
    )
    
    
    (174,473
    )
    
    
    (27,316
    )
    
    
    
    
    
    
    (201,798
    )Net cash used in investing activities
    
    
    (45,009
    )
    
    
    (22,183
    )
    
    
    (27,316
    )
    
    
    
    
    
    
    (94,508
    )Cash flows from financing activities:Financing costs
    
    
    (58,525
    )
    
    
    (58,525
    )
    
    
    
    
    
    
    58,525
    
    
    
    (58,525
    )Repayment on notes payable
    
    
    
    
    
    
    (162
    )
    
    
    
    
    
    
    
    
    
    
    (162
    )Borrowings from subordinated parent debt
    
    
    
    
    
    
    29,727
    
    
    
    17,086
    
    
    
    
    
    
    
    46,813Repayments of subordinated parent debt
    
    
    
    
    
    
    (238,137
    )
    
    
    
    
    
    
    
    
    
    
    (238,137
    )Borrowings on project financing
    
    
    2,393,900
    
    
    
    2,384,820
    
    
    
    9,080
    
    
    
    (2,393,900
    )
    
    
    2,393,900Borrowings on revolver line of credit
    
    
    54,500
    
    
    
    54,500
    
    
    
    
    
    
    
    (54,500
    )
    
    
    54,500Borrowings from credit facility
    
    
    
    
    
    
    178,995
    
    
    
    
    
    
    
    
    
    
    
    178,995Repayments of credit facility
    
    
    
    
    
    
    (2,379,353
    )
    
    
    
    
    
    
    
    
    
    
    (2,379,353
    )Net cash provided by (used in) financing activities
    
    
    2,389,875
    
    
    
    (28,135
    )
    
    
    26,166
    
    
    
    (2,389,875
    )
    
    
    (1,969
    )Net increase (decrease) in cash and cash equivalents
    
    
    68,279
    
    
    
    (39,595
    )
    
    
    (3
    )
    
    
    
    
    
    
    28,681Cash and cash equivalents, beginning of period
    
    
    
    
    
    
    39,595
    
    
    
    3
    
    
    
    
    
    
    
    39,598Cash and cash equivalents, end of period
    
    $
    68,279
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    68,279
 24




---



##### Table of Contents



Item 2. Managements Discussion and Analysis (MD&A) of Financial Condition and Results of Operations.
 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. We use 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 our 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 timing and extent of deregulation of
energy markets and the rules and regulations adopted on a transitional basis with respect thereto,
(ii) the timing and extent of changes in commodity prices for energy, particularly natural gas and
electricity, and the impact of related derivatives transactions, (iii) unscheduled outages of
operating plants, (iv) unseasonable weather patterns that reduce demand for power, (v) economic
slowdowns that can adversely affect consumption of power by businesses and consumers, (vi)
uncertainties associated with cost estimates, that actual costs may be higher than estimated, (vii)
development of lower-cost power plants or of a lower cost means of operating a fleet of power
plants by our competitors, (viii) uncertainties associated with estimates of sources and uses of
cash, that actual sources may be lower and actual uses may be higher than estimated, (ix) present
and possible future claims, litigation and enforcement actions, (x) effects of the application of
regulations, including changes in regulations or the interpretation thereof, (xi) risks related to
the ability of Calpine and its affiliates to continue to perform under the various affiliate
agreements including in the Index Based Gas Sale and Power Purchase Agreement (the Index Based
Agreement) and the WECC Fixed Price Gas Sale and Power Purchase Agreement (the Fixed Price
Agreement) with Calpine Energy Services, L.P. (CES), and (xii) other risks identified in this
report. You should also carefully review the risks described in other reports that we file with the
Securities and Exchange Commission, including without limitation our annual report on Form 10-K for
the year ended December 31, 2004 and our Registration Statement on Form S-4 filed on July 13, 2004
and amended on October 19, 2004. We
undertake no obligation to update any forward-looking statements, whether as a result of new
information, future developments or otherwise.
   Restatement
  Executive Overview
  25




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##### Table of Contents



CALPINE GENERATION COMPANY, LLC
 (a wholly-owned subsidiary of Calpine CalGen Holdings, Inc.)
 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
June 30, 2005
(Unaudited)
    Results of Operations
 Three Months Ended June 30, 2005, Compared to Three Months Ended June 30, 2004
  Revenue
 Three Months EndedJune 30,2005
    
    2004
    
    $ Change
    
    % ChangeElectricity and steam revenue  related party
    
    $
    362.0
    
    
    $
    341.4
    
    
    $
    20.6
    
    
    
    6.0
    %Electricity and steam revenue  third-party
    
    
    126.4
    
    
    
    116.3
    
    
    
    10.1
    
    
    
    8.7
    %Mark-to-market activity, net
    
    
    (0.2
    )
    
    
    (2.0
    )
    
    
    1.8
    
    
    
    90.0
    %Sale of purchased power
    
    
    0.8
    
    
    
    2.6
    
    
    
    (1.8
    )
    
    
    (69.2
    )%Other revenue
    
    
    0.4
    
    
    
    0.8
    
    
    
    (0.4
    )
    
    
    (50.0
    )%Total revenue
    
    $
    489.4
    
    
    $
    459.1
    
    
    $
    30.3
    
    
    
    6.6
    %
    26




---



##### Table of Contents



Cost of Revenue
 Three Months EndedJune 30,2005
    
    2004
    
    $ Change
    
    % ChangePlant operating expense
    
    $
    71.6
    
    
    $
    53.1
    
    
    $
    (18.5
    )
    
    
    (34.8
    )%Fuel expense
    
    
    337.3
    
    
    
    320.1
    
    
    
    (17.2
    )
    
    
    (5.4
    )%Purchased power expense
    
    
    2.9
    
    
    
    2.1
    
    
    
    (0.8
    )
    
    
    (38.1
    )%Depreciation and amortization expense
    
    
    43.7
    
    
    
    36.8
    
    
    
    (6.9
    )
    
    
    (18.8
    )%Total cost of revenue
    
    $
    455.5
    
    
    $
    412.1
    
    
    $
    (43.4
    )
    
    
    (10.5
    )%
     Other (Income)/Expenses
 Three Months EndedJune 30,2005
    
    2004
    
    $ Change
    
    % ChangeLong-term service agreement cancellation charge
    
    $
    23.9
    
    
    $
    
    
    
    $
    (23.9
    )
    
    
    (100.0
    )%Sales, general and administrative expense
    
    
    3.5
    
    
    
    2.4
    
    
    
    (1.1
    )
    
    
    (45.8
    )%Interest expense, third-party
    
    
    55.3
    
    
    
    38.9
    
    
    
    (16.4
    )
    
    
    (42.2
    )%Interest (income)
    
    
    (0.6
    )
    
    
    (0.7
    )
    
    
    (0.1
    )
    
    
    (14.3
    )%Other expense (income), net
    
    
    0.6
    
    
    
    0.2
    
    
    
    (0.4
    )
    
    
    (200.0
    )%
   27




---



##### Table of Contents



Six Months Ended June 30, 2005, Compared to Six Months Ended June 30, 2004
  Revenue
 Six Months EndedJune 30,2005
    
    2004
    
    $ Change
    
    % ChangeElectricity and steam revenue  related party
    
    $
    707.3
    
    
    $
    513.9
    
    
    $
    193.4
    
    
    
    37.6
    %Electricity and steam revenue  third-party
    
    
    234.7
    
    
    
    216.2
    
    
    
    18.5
    
    
    
    8.6
    %Mark-to-market activity, net
    
    
    (7.4
    )
    
    
    (1.9
    )
    
    
    (5.5
    )
    
    
    (289.5
    )%Sale of purchased power
    
    
    5.5
    
    
    
    2.9
    
    
    
    2.6
    
    
    
    89.7
    %Other revenue
    
    
    1.6
    
    
    
    1.6
    
    
    
    
    
    
    
    Total revenue
    
    $
    941.7
    
    
    $
    732.7
    
    
    $
    209.0
    
    
    
    28.5
    %
     28




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##### Table of Contents



Cost of Revenue
 Six Months EndedJune 30,2005
    
    2004
    
    $ Change
    
    % ChangePlant operating expense
    
    $
    115.0
    
    
    $
    96.7
    
    
    $
    (18.3
    )
    
    
    (18.9
    )%Fuel expense
    
    
    678.0
    
    
    
    502.2
    
    
    
    (175.8
    )
    
    
    (35.0
    )%Purchased power expense
    
    
    7.3
    
    
    
    2.6
    
    
    
    (4.7
    )
    
    
    (180.8
    )%Depreciation and amortization expense
    
    
    84.4
    
    
    
    71.8
    
    
    
    (12.6
    )
    
    
    (17.5
    )%Total cost of revenue
    
    $
    884.7
    
    
    $
    673.3
    
    
    $
    (211.4
    )
    
    
    (31.4
    )%
     Other (Income)/Expenses
 Six Months EndedJune 30,2005
    
    2004
    
    $ Change
    
    % ChangeLong-term service agreement cancellation charge
    
    $
    23.9
    
    
    $
    
    
    
    $
    (23.9
    )
    
    
    (100.0
    )%Sales, general and administrative expense
    
    
    6.8
    
    
    
    7.0
    
    
    
    0.2
    
    
    
    2.9
    %Interest expense  related party
    
    
    
    
    
    
    72.2
    
    
    
    72.2
    
    
    
    100.0
    %Interest expense  third-party
    
    
    106.1
    
    
    
    69.6
    
    
    
    (36.5
    )
    
    
    (52.4
    )%Interest (income)
    
    
    (1.4
    )
    
    
    (1.5
    )
    
    
    (0.1
    )
    
    
    (6.7
    )%Other expense (income), net
    
    
    1.2
    
    
    
    (0.4
    )
    
    
    (1.6
    )
    
    
    (400.0
    )%
   29




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##### Table of Contents



Liquidity and Capital Resources
        30




---



##### Table of Contents



Cash Flow Activities
 Six Months Ended June 30,2005
    
    2004(In thousands)Beginning cash and cash equivalents
    
    $
    64.5
    
    
    $
    39.6Net cash provided by (used in):Operating activities
    
    
    43.9
    
    
    
    125.2Investing activities
    
    
    (67.8
    )
    
    
    (94.5
    )Financing activities
    
    
    (0.1
    )
    
    
    (2.0
    )Net increase (decrease) in cash and cash equivalents
    
    
    (24.0
    )
    
    
    28.7Ending cash and cash equivalents
    
    $
    40.5
    
    
    $
    68.3
    Revolving Credit Facilities
 Working Capital
 31




---



##### Table of Contents



Credit Considerations
  Capital Expenditures and Sources
 Distributions to Sole Member
 Capital Availability
 Long-term service agreement cancellation 
 Compliance with Covenants
 Performance Indicators
 32




---



##### Table of Contents



Performance Metrics
  Total deliveries of power.
 Average availability and average baseload capacity factor.
 Average heat rate for gas-fired fleet of power plants expressed in Btus of fuel consumed per
KWh generated.
 Average all-in realized electric price expressed in dollars per MWh generated.
 Average cost of natural gas expressed in dollars per millions of Btus of fuel consumed.
 Average spark spread expressed in dollars per MWh generated.
 Average plant operating expense per normalized MWh.
  Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004(In thousands)
    
    (In thousands)Operating Performance Metrics:Total deliveries of power:MWh generated and delivered
    
    
    5,845
    
    
    
    6,562
    
    
    
    12,429
    
    
    
    12,608Average availability
    
    
    84.8
    %
    
    
    90.9
    %
    
    
    87.9
    %
    
    
    90.7
    %Average baseload capacity factor:Average total MW in operation
    
    
    9,065
    
    
    
    8,421
    
    
    
    9,065
    
    
    
    8,227Less: Average MW of pure peakers
    
    
    513
    
    
    
    513
    
    
    
    513
    
    
    
    513Average baseload MW in operation
    
    
    8,552
    
    
    
    7,908
    
    
    
    8,552
    
    
    
    7,714Hours in the period
    
    
    2,184
    
    
    
    2,184
    
    
    
    4,344
    
    
    
    4,368
 33




---



##### Table of Contents



Three Months Ended June 30,
    
    Six Months Ended June 30,2005
    
    2004
    
    2005
    
    2004(In thousands)
    
    (In thousands)Potential baseload generation (MWh)
    
    
    18,678
    
    
    
    17,271
    
    
    
    37,150
    
    
    
    33,696Actual total generation (MWh)
    
    
    5,845
    
    
    
    6,562
    
    
    
    12,429
    
    
    
    12,608Less: Actual pure peakers generation (MWh)
    
    
    5
    
    
    
    10
    
    
    
    5
    
    
    
    10Actual baseload generation (MWh)
    
    
    5,840
    
    
    
    6,552
    
    
    
    12,424
    
    
    
    12,598Average baseload capacity factor
    
    
    31.3
    %
    
    
    37.9
    %
    
    
    33.4
    %
    
    
    37.4
    %Average heat rate for gas-fired power plants (excluding
peakers) (Btus/KWh):Not steam adjusted
    
    
    8,401
    
    
    
    8,041
    
    
    
    8,254
    
    
    
    8,011Steam adjusted
    
    
    7,197
    
    
    
    7,118
    
    
    
    7,120
    
    
    
    7,149Average all-in realized electric price:Electricity and steam revenue
    
    $
    488,386
    
    
    $
    457,730
    
    
    $
    942,071
    
    
    $
    737,213Spread on sales of purchased power for hedging and
optimization
    
    
    (2,116
    )
    
    
    491
    
    
    
    (1,854
    )
    
    
    292Adjusted electricity and steam revenue (in thousands)
    
    $
    486,270
    
    
    $
    458,221
    
    
    $
    940,217
    
    
    $
    737,505MWh generated (in thousands)
    
    
    5,845
    
    
    
    6,562
    
    
    
    12,429
    
    
    
    12,608Average all-in realized electric price per MWh
    
    $
    83.19
    
    
    $
    69.83
    
    
    $
    75.65
    
    
    $
    58.50Average cost of natural gas:Fuel expense
    
    $
    337,310
    
    
    $
    320,084
    
    
    $
    678,035
    
    
    $
    502,228Million Btus (MMBtu) of fuel consumed by
generating plants (in thousands)
    
    
    49,119
    
    
    
    52,689
    
    
    
    102,603
    
    
    
    101,039Average cost of natural gas per MMBtu
    
    $
    6.87
    
    
    $
    6.07
    
    
    $
    6.61
    
    
    $
    4.97MWh generated (in thousands)
    
    
    5,845
    
    
    
    6,562
    
    
    
    12,429
    
    
    
    12,608Average cost of adjusted fuel expense per MWh
    
    $
    57.71
    
    
    $
    48.78
    
    
    $
    54.55
    
    
    $
    39.83Average spark spread:Adjusted electricity and steam revenue (in thousands)
    
    $
    486,270
    
    
    $
    458,221
    
    
    $
    940,217
    
    
    $
    737,505Less: Fuel expense (in thousands)
    
    
    337,310
    
    
    
    320,084
    
    
    
    678,035
    
    
    
    502,228Less: Realized amortization expense on Index
Hedge (in thousands)
    
    
    130
    
    
    
    
    
    
    
    5,741
    
    
    
    Spark spread (in thousands)
    
    $
    148,830
    
    
    $
    138,137
    
    
    $
    256,441
    
    
    $
    235,277MWh generated (in thousands)
    
    
    5,845
    
    
    
    6,562
    
    
    
    12,429
    
    
    
    12,608Average spark spread per MWh
    
    $
    25.46
    
    
    $
    21.05
    
    
    $
    20.63
    
    
    $
    18.66Average POX per normalized MWh (for comparison purposes
we also include POX per actual MWh):Average total consolidated MW in operations
    
    
    9,065
    
    
    
    8,421
    
    
    
    9,065
    
    
    
    8,227Hours in the period
    
    
    2,184
    
    
    
    2,184
    
    
    
    4,344
    
    
    
    4,368Total potential MWh
    
    
    19,798
    
    
    
    18,391
    
    
    
    39,378
    
    
    
    35,937Normalized MWh (at 70% capacity factor)
    
    
    13,859
    
    
    
    12,874
    
    
    
    27,565
    
    
    
    25,156POX
    
    $
    71,553
    
    
    $
    53,068
    
    
    $
    115,027
    
    
    $
    96,725POX per normalized MWh
    
    $
    5.16
    
    
    $
    4.12
    
    
    $
    4.17
    
    
    $
    3.85POX per actual MWh
    
    $
    12.24
    
    
    $
    8.09
    
    
    $
    9.25
    
    
    $
    7.67
 Financial Market Risks
 Debt Financing
  Fair Value2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Thereafter
    
    6/30/2005(1)First Priority Secured Floating Rate Notes Due 2009(2)
    
    $
    
    
    
    $
    
    
    
    $
    1,175
    
    
    $
    2,350
    
    
    $
    231,475
    
    
    $
    
    
    
    $
    235,000Second Priority Secured Floating Rate Notes Due 2010(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,200
    
    
    
    6,400
    
    
    
    622,839
    
    
    
    632,439Third Priority Secured Floating Rate Notes Due 2011(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    680,000
    
    
    
    680,000Total Floating Rate Notes(2)
    
    
    
    
    
    
    
    
    
    
    1,175
    
    
    
    5,550
    
    
    
    237,875
    
    
    
    1,302,839
    
    
    
    1,547,439First Priority Secured Term Loans Due 2009(3)
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    6,000
    
    
    
    591,000
    
    
    
    
    
    
    
    600,000Second Priority Secured Term Loans Due 2010(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    1,000
    
    
    
    97,318
    
    
    
    98,818Total Floating Rate Term Loans(3)
    
    
    
    
    
    
    
    
    
    
    3,000
    
    
    
    6,500
    
    
    
    592,000
    
    
    
    97,318
    
    
    
    698,818
 34




---



##### Table of Contents



Fair Value2005
    
    2006
    
    2007
    
    2008
    
    2009
    
    Thereafter
    
    6/30/2005(1)Grand total variable-rate debt instruments
    
    $
    
    
    
    $
    
    
    
    $
    4,175
    
    
    $
    12,050
    
    
    $
    829,875
    
    
    $
    1,400,157
    
    
    $
    2,246,257
 
 (1)
    
    Fair value equals carrying value, which is the aggregate principal amount subject to variable
rate risk.(2)
    
    Interest rate based on LIBOR plus a spread.(3)
    
    Interest rate based on LIBOR plus a spread; however the Company may elect the Base Rate plus
a spread (see Note 6 of the Notes to Consolidated Condensed Financial Statements). Derivatives
   Fair value of contracts outstanding at December 31, 2004
    
    $
    35,916Amortization during the period, net (1)
    
    
    (5,741
    )Changes in fair value attributable to price movements, net
    
    
    (1,723
    )Fair value of contracts outstanding at June 30, 2005 (2)
    
    $
    28,452
 
 (1)
    
    Non-cash losses from roll-off (amortization) of deferred premium (see discussion in Note 9 to
the financial statements).(2)
    
    Net derivative assets are reported in Note 9 of the Notes to the Consolidated Condensed
Financial Statements.  Fair Value Source
    
    2005
    
    2006-2007
    
    2008-2009
    
    After 2009
    
    TotalPrices actively quoted
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Prices provided by other external sources
    
    
    3,531
    
    
    
    23,202
    
    
    
    
    
    
    
    
    
    
    
    26,733Prices based on models and other valuation methods
    
    
    
    
    
    
    1,719
    
    
    
    
    
    
    
    
    
    
    
    1,719Total fair value
    
    $
    3,531
    
    
    $
    24,921
    
    
    $
    
    
    
    $
    
    
    
    $
    28,452
    35




---



##### Table of Contents



Fair ValueAfter 10% AdverseFair Value
    
    Price ChangeOther mark-to-market activity
    
    $
    28,452
    
    
    $
    27,022
   
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
 Item 4. Controls and Procedures.
 Disclosure
Controls and Procedures
   Changes in Internal Control over Financial Reporting
   36




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 6. Exhibits.
   37




---



##### Table of Contents



EXHIBITS
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Formation of Calpine Generating Company, LLC.*3.2
    
    Certificate of Incorporation of CalGen Finance Corp.*3.3
    
    Certificate of Formation of CalGen Expansion Company, LLC (f/k/a CCFC II Development Company, LLC).*3.4
    
    Certificate of Amendment to Certificate of Formation of CalGen Expansion Company, LLC (f/k/a CCFC II
Development Company, LLC).*3.5
    
    Certificate of Amendment to Certificate of Formation of CalGen Expansion Company, LLC (f/k/a CCFC II
Development Company, LLC).*3.6
    
    Certificate of Limited Partnership of Baytown Energy Center, LP.*3.7
    
    Certificate of Amendment to Certificate of Limited Partnership of Baytown Energy Center, LP.*3.8
    
    Certificate of Formation of Calpine Baytown Energy Center GP, LLC.*3.9
    
    Certificate of Amendment to Certificate of Formation of Calpine Baytown Energy Center GP, LLC.*3.10
    
    Certificate of Formation of Calpine Baytown Energy Center LP, LLC.*3.11
    
    Certificate of Amendment to Certificate of Formation of Calpine Baytown Energy Center LP, LLC.*3.12
    
    Certificate of Formation of Baytown Power GP, LLC.*3.13
    
    Certificate of Amendment to Certificate of Formation of Baytown Power GP, LLC.*3.14
    
    Certificate of Limited Partnership of Baytown Power, LP.*3.15
    
    Certificate of Amendment to Certificate of Limited Partnership of Baytown Power, LP.*3.16
    
    Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret Energy LLC and Bayou Verret LLC).*3.17
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC(f/k/a Bayou Verret Energy
LLC and Bayou Verret LLC).*3.18
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.19
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.20
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.21
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.22
    
    Certificate of Limited Partnership of Channel Energy Center, LP.*3.23
    
    Certificate of Amendment to Certificate of Limited Partnership of Channel Energy Center, LP.*3.24
    
    Certificate of Formation of Calpine Channel Energy Center GP, LLC.*3.25
    
    Certificate of Amendment to Certificate of Formation of Calpine Channel Energy Center GP, LLC.*
 38




---



##### Table of Contents



ExhibitNumber
    
    Description3.26
    
    Certificate of Formation of Calpine Channel Energy Center LP, LLC.*3.27
    
    Certificate of Amendment to Certificate of Formation of Calpine Channel Energy Center LP, LLC.*3.28
    
    Certificate of Formation of Channel Power GP, LLC.*3.29
    
    Certificate of Amendment to Certificate of Formation of Channel Power GP, LLC.*3.30
    
    Certificate of Limited Partnership of Channel Power, LP.*3.31
    
    Certificate of Amendment to Certificate of Limited Partnership of Channel Power, LP.*3.32
    
    Certificate of Formation of Columbia Energy LLC.*3.33
    
    Certificate of Amendment to Certificate of Formation of Columbia Energy LLC.*3.34
    
    Certificate of Amendment to Certificate of Formation of Columbia Energy LLC.*3.35
    
    Certificate of Limited Partnership of Corpus Christi Cogeneration LP.*3.36
    
    Certificate of Amendment to Certificate of Limited Partnership of Corpus Christi Cogeneration LP.*3.37
    
    Certificate of Amendment to Certificate of Limited Partnership of Corpus Christi Cogeneration LP.*3.38
    
    Certificate of Formation of Nueces Bay Energy LLC.*3.39
    
    Certificate of Amendment to Certificate of Formation of Nueces Bay Energy LLC.*3.40
    
    Certificate of Amendment to Certificate of Formation of Nueces Bay Energy LLC.*3.41
    
    Amended and Restated Certificate of Formation of Calpine Northbrook Southcoast Investors, LLC (f/k/a
Skygen Southcoast Investors LLC).*3.42
    
    Certificate of Amendment to Certificate of Formation of Calpine Northbrook Southcoast Investors, LLC
(f/k/a Skygen Southcoast Investors LLC).*3.43
    
    Certificate of Formation of Calpine Corpus Christi Energy GP, LLC.*3.44
    
    Certificate of Amendment to Certificate of Formation of Calpine Corpus Christi Energy GP, LLC.*3.45
    
    Certificate of Limited Partnership of Calpine Corpus Christi Energy, LP.*3.46
    
    Certificate of Amendment to Certificate of Limited Partnership of Calpine Corpus Christi Energy, LP.*3.47
    
    Certificate of Formation of Decatur Energy Center, LLC.*3.48
    
    Certificate of Amendment to Certificate of Formation of Decatur Energy Center, LLC.*3.49
    
    Certificate of Formation of Delta Energy Center, LLC.*3.50
    
    Certificate of Amendment to Certificate of Formation of Delta Energy Center, LLC.*3.51
    
    Certificate of Amendment to Certificate of Formation of Delta Energy Center, LLC.*3.52
    
    Certificate of Formation of CalGen Project Equipment Finance Company Two, LLC (f/k/a CCFC II Project
Equipment Finance Company Two, LLC).*3.53
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company Two,
LLC (f/k/a CCFC II Project Equipment Finance Company Two, LLC).*
 39




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##### Table of Contents



ExhibitNumber
    
    Description3.54
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company Two,
LLC (f/k/a CCFC II Project Equipment Finance Company Two, LLC).*3.55
    
    Amended and Restated Certificate of Limited Partnership of Freestone Power Generation LP.*3.56
    
    Certificate of Formation of Calpine Freestone, LLC.*3.57
    
    Certificate of Formation of CPN Freestone, LLC.*3.58
    
    Certificate of Formation of Calpine Freestone Energy GP, LLC.*3.59
    
    Certificate of Amendment to Certificate of Formation of Calpine Freestone Energy GP, LLC.*3.60
    
    Certificate of Limited Partnership of Calpine Freestone Energy, LP.*3.61
    
    Certificate of Amendment to Certificate of Limited Partnership of Calpine Freestone Energy, LP.*3.62
    
    Amended and Restated Certificate of Limited Partnership of Calpine Power Equipment LP.*3.63
    
    Amended and Restated Certificate of Formation of Los Medanos Energy Center LLC (f/k/a Pittsburg
District Energy Facility, LLC).*3.64
    
    Certificate of Amendment to Certificate of Formation of Los Medanos Energy Center LLC (f/k/a
Pittsburg District Energy Facility, LLC).*3.65
    
    Certificate of Formation of CalGen Project Equipment Finance Company One, LLC (f/k/a CCFC II Project
Equipment Finance Company One, LLC).*3.66
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company One,
LLC (f/k/a CCFC II Project Equipment Finance Company One, LLC).*3.67
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company One,
LLC (f/k/a CCFC II Project Equipment Finance Company One, LLC).*3.68
    
    Certificate of Formation of Morgan Energy Center, LLC.*3.69
    
    Certificate of Amendment to Certificate of Formation of Morgan Energy Center, LLC.*3.70
    
    Certificate of Formation of Pastoria Energy Facility L.L.C.*3.71
    
    Certificate of Amendment to Certificate of Formation of Pastoria Energy Facility L.L.C.*3.72
    
    Certificate of Amendment to Certificate of Formation of Pastoria Energy Facility L.L.C.*3.73
    
    Amended and Restated Certificate of Formation of Calpine Pastoria Holdings, LLC (f/k/a Pastoria
Energy Center, LLC).*3.74
    
    Certificate of Amendment to Certificate of Formation of Calpine Pastoria Holdings, LLC (f/k/a
Pastoria Energy Center, LLC).*3.75
    
    Amended and Restated Certificate of Limited Partnership of Calpine Oneta Power, L.P. (f/k/a Panda
Oneta Power, L.P.).*3.76
    
    Certificate of Amendment to Certificate of Limited Partnership of Calpine Oneta Power, L.P. (f/k/a
Panda Oneta Power, L.P.).*3.77
    
    Amended and Restated Certificate of Formation of Calpine Oneta Power I, LLC (f/k/a Panda Oneta Power
I, LLC).*
 40




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##### Table of Contents



ExhibitNumber
    
    Description3.78
    
    Certificate of Amendment to Certificate of Formation of Calpine Oneta Power I, LLC (f/k/a Panda Oneta
Power I, LLC).*3.79
    
    Amended and Restated Certificate of Formation of Calpine Oneta Power II, LLC (f/k/a Panda Oneta Power
II, LLC).*3.80
    
    Certificate of Amendment to Certificate of Formation of Calpine Oneta Power II, LLC (f/k/a Panda
Oneta Power II, LLC).*3.81
    
    Certificate of Formation of Zion Energy LLC.*3.82
    
    Certificate of Amendment to Certificate of Formation of Zion Energy LLC.*3.83
    
    Certificate of Amendment to Certificate of Formation of Zion Energy LLC.*3.84
    
    Certificate of Formation of CalGen Project Equipment Finance Company Three, LLC (f/k/a CCFC II
Project Equipment Finance Company Three, LLC).*3.85
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company
Three, LLC (f/k/a CCFC II Project Equipment Finance Company Three, LLC).*3.86
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company
Three, LLC (f/k/a CCFC II Project Equipment Finance Company Three, LLC).*3.87
    
    Amended and Restated Certificate of Formation of CalGen Equipment Finance Holdings, LLC (f/k/a CCFC
II Leasing Holdings, LLC and CCFC II Equipment Finance Holdings, LLC).*3.88
    
    Certificate of Amendment to Certificate of Formation of CalGen Equipment Finance Holdings, LLC (f/k/a
CCFC II Leasing Holdings, LLC and CCFC II Equipment Finance Holdings, LLC).*3.89
    
    Certificate of Amendment to Amended and Restated Certificate of Formation of CalGen Equipment Finance
Holdings, LLC (f/k/a CCFC II Leasing Holdings, LLC and CCFC II Equipment Finance Holdings, LLC).*3.90
    
    Amended and Restated Certificate of Formation of CalGen Equipment Finance Company, LLC (f/k/a CCFC II
Leasing Company, LLC and CCFC II Equipment Finance Company, LLC)*3.91
    
    Certificate of Amendment to Certificate of Formation of CalGen Equipment Finance Company, LLC (f/k/a
CCFC II Leasing Company, LLC and CCFC II Equipment Finance Company, LLC).*3.92
    
    Certificate of Amendment to Amended and Restated Certificate of Formation of CalGen Equipment Finance
Company, LLC (f/k/a CCFC II Leasing Company, LLC and CCFC II Equipment Finance Company, LLC).*3.93
    
    Limited Liability Company Operating Agreement of Calpine Generating Company, LLC.*3.94
    
    Bylaws of CalGen Finance Corp.*3.95
    
    Limited Liability Company Operating Agreement of CalGen Expansion Company, LLC.*3.96
    
    Agreement of Limited Partnership of Baytown Energy Center, LP.*3.97
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Baytown Energy Center
GP, LLC.*3.98
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Baytown Energy Center
LP, LLC.*3.99
    
    Limited Liability Company Operating Agreement of Baytown Power GP, LLC.*3.100
    
    Agreement of Limited Partnership of Baytown Power, LP.*
 41




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##### Table of Contents



ExhibitNumber
    
    Description3.101
    
    Amended and Restated Limited Liability Company Operating Agreement of Carville Energy LLC.*3.102
    
    Agreement of Limited Partnership of Channel Energy Center, LP, October 2000.*3.103
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Channel Energy Center
GP, LLC.*3.104
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Channel Energy Center
LP, LLC.*3.105
    
    Limited Liability Company Operating Agreement of Channel Power GP, LLC.*3.106
    
    Agreement of Limited Partnership of Channel Power, LP.*3.107
    
    Amended and Restated Limited Liability Company Operating Agreement of Columbia Energy LLC.*3.108
    
    Amended and Restated Agreement of Limited Partnership of Corpus Christi Cogeneration LP.*3.109
    
    Amended and Restated Limited Liability Company Operating Agreement of Nueces Bay Energy LLC.*3.110
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Northbrook Southcoast
Investors, LLC.*3.111
    
    Limited Liability Company Operating Agreement of Calpine Corpus Christi Energy GP, LLC.*3.112
    
    Agreement of Limited Partnership of Calpine Corpus Christi Energy, LP.*3.113
    
    Amended and Restated Limited Liability Company Operating Agreement of Decatur Energy Center, LLC.*3.114
    
    Amended and Restated Limited Liability Company Operating Agreement of Delta Energy Center, LLC.*3.115
    
    Limited Liability Company Operating Agreement of CalGen Project Equipment Finance Company Two, LLC.*3.116
    
    Second Amended and Restated Agreement of Limited Partnership of Freestone Power Generation LP.*3.117
    
    Limited Liability Company Operating Agreement of Calpine Freestone, LLC.*3.118
    
    Limited Liability Company Operating Agreement of CPN Freestone, LLC.*3.119
    
    Limited Liability Company Operating Agreement of Calpine Freestone Energy GP, LLC.*3.120
    
    Agreement of Limited Partnership of Calpine Freestone Energy, LP.*3.121
    
    Amended and Restated Agreement of Limited Partnership of Calpine Power Equipment LP.*3.122
    
    Amended and Restated Limited Liability Company Operating Agreement of Los Medanos Energy Center LLC.*3.123
    
    Limited Liability Company Operating Agreement of CalGen Project Equipment Finance Company One, LLC.*3.124
    
    Amended and Restated Limited Liability Company Operating Agreement of Morgan Energy Center, LLC.*3.125
    
    Amended and Restated Limited Liability Company Operating Agreement of Pastoria Energy Facility L.L.C.*3.126
    
    Limited Liability Company Operating Agreement of Calpine Pastoria Holdings, LLC.*3.127
    
    Amended and Restated Agreement of Limited Partnership of Calpine Oneta Power, L.P.*3.128
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Oneta Power I, LLC.*3.129
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Oneta Power II, LLC.*
 42




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##### Table of Contents



ExhibitNumber
    
    Description3.130
    
    Limited Liability Company Operating Agreement of Zion Energy LLC.*3.131
    
    Limited Liability Company Operating Agreement of CalGen Project Equipment Finance Company Three, LLC.*3.132
    
    Limited Liability Company Operating Agreement of CalGen Equipment Finance Holdings, LLC.*3.133
    
    Limited Liability Company Operating Agreement of CalGen Equipment Finance Company, LLC.*31.1
    
    Certification of the Chief Executive Officer and President pursuant to Rule 13a-14(a) or
Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a)
or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
    
    Filed herewith*
    
    Incorporated by
reference to the
Registrants
Registration
Statement on Form
S-4 (Registration
No 333-117335),
filed with the SEC on July 13, 2004. 43




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##### Table of Contents



CALPINE GENERATING COMPANY, LLCCALGEN FINANCE CORP.CALGEN EXPANSION COMPANY, LLCBAYTOWN ENERGY CENTER, LPCALPINE BAYTOWN ENERGY CENTER GP, LLCCALPINE BAYTOWN ENERGY CENTER LP, LLCBAYTOWN POWER GP, LLCBAYTOWN POWER, LPCARVILLE ENERGY LLCCHANNEL ENERGY CENTER, LPCALPINE CHANNEL ENERGY CENTER GP, LLCCALPINE CHANNEL ENERGY CENTER LP, LLCCHANNEL POWER GP, LLCCHANNEL POWER, LPCOLUMBIA ENERGY LLCCORPUS CHRISTI COGENERATION LPNUECES BAY ENERGY LLCCALPINE NORTHBROOK SOUTHCOAST INVESTORS, LLCCALPINE CORPUS CHRISTI ENERGY GP, LLCCALPINE CORPUS CHRISTI ENERGY, LPDECATUR ENERGY CENTER, LLCDELTA ENERGY CENTER, LLCCALGEN PROJECT EQUIPMENT FINANCE COMPANY TWO, LLCFREESTONE POWER GENERATION LPCALPINE FREESTONE, LLCCPN FREESTONE, LLCCALPINE FREESTONE ENERGY GP, LLCCALPINE FREESTONE ENERGY, LPCALPINE POWER EQUIPMENT LPLOS MEDANOS ENERGY CENTER, LLCCALGEN PROJECT EQUIPMENT FINANCE COMPANY ONE, LLCMORGAN ENERGY CENTER, LLCPASTORIA ENERGY FACILITY L.L.C.CALPINE PASTORIA HOLDINGS, LLCCALPINE ONETA POWER, L.P.CALPINE ONETA POWER I, LLCCALPINE ONETA POWER II, LLCZION ENERGY LLCCALGEN PROJECT EQUIPMENT FINANCE COMPANY THREE LLCCALGEN EQUIPMENT FINANCE HOLDINGS, LLCCALGEN EQUIPMENT FINANCE COMPANY, LLC
 By:
    
    /s/ ROBERT D. KELLYRobert D. KellyDate: August 15, 2005
    
    
    
    Executive Vice President and Chief FinancialOfficer (Principal Financial Officer)By:
    
    /s/ CHARLES B. CLARK, JR.Charles B. Clark, Jr.Date: August 15, 2005
    
    
    
    Senior Vice President and Corporate Controller(Principal Accounting Officer)
 44




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##### Table of Contents



EXHIBIT
INDEX
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Formation of Calpine Generating Company, LLC.*3.2
    
    Certificate of Incorporation of CalGen Finance Corp.*3.3
    
    Certificate of Formation of CalGen Expansion Company, LLC (f/k/a CCFC II Development Company, LLC).*3.4
    
    Certificate of Amendment to Certificate of Formation of CalGen Expansion Company, LLC (f/k/a CCFC II
Development Company, LLC).*3.5
    
    Certificate of Amendment to Certificate of Formation of CalGen Expansion Company, LLC (f/k/a CCFC II
Development Company, LLC).*3.6
    
    Certificate of Limited Partnership of Baytown Energy Center, LP.*3.7
    
    Certificate of Amendment to Certificate of Limited Partnership of Baytown Energy Center, LP.*3.8
    
    Certificate of Formation of Calpine Baytown Energy Center GP, LLC.*3.9
    
    Certificate of Amendment to Certificate of Formation of Calpine Baytown Energy Center GP, LLC.*3.10
    
    Certificate of Formation of Calpine Baytown Energy Center LP, LLC.*3.11
    
    Certificate of Amendment to Certificate of Formation of Calpine Baytown Energy Center LP, LLC.*3.12
    
    Certificate of Formation of Baytown Power GP, LLC.*3.13
    
    Certificate of Amendment to Certificate of Formation of Baytown Power GP, LLC.*3.14
    
    Certificate of Limited Partnership of Baytown Power, LP.*3.15
    
    Certificate of Amendment to Certificate of Limited Partnership of Baytown Power, LP.*3.16
    
    Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret Energy LLC and Bayou Verret LLC).*3.17
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC(f/k/a Bayou Verret Energy
LLC and Bayou Verret LLC).*3.18
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.19
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.20
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.21
    
    Certificate of Amendment to Certificate of Formation of Carville Energy LLC (f/k/a Bayou Verret
Energy LLC and Bayou Verret LLC).*3.22
    
    Certificate of Limited Partnership of Channel Energy Center, LP.*3.23
    
    Certificate of Amendment to Certificate of Limited Partnership of Channel Energy Center, LP.*3.24
    
    Certificate of Formation of Calpine Channel Energy Center GP, LLC.*3.25
    
    Certificate of Amendment to Certificate of Formation of Calpine Channel Energy Center GP, LLC.*




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##### Table of Contents



ExhibitNumber
    
    Description3.26
    
    Certificate of Formation of Calpine Channel Energy Center LP, LLC.*3.27
    
    Certificate of Amendment to Certificate of Formation of Calpine Channel Energy Center LP, LLC.*3.28
    
    Certificate of Formation of Channel Power GP, LLC.*3.29
    
    Certificate of Amendment to Certificate of Formation of Channel Power GP, LLC.*3.30
    
    Certificate of Limited Partnership of Channel Power, LP.*3.31
    
    Certificate of Amendment to Certificate of Limited Partnership of Channel Power, LP.*3.32
    
    Certificate of Formation of Columbia Energy LLC.*3.33
    
    Certificate of Amendment to Certificate of Formation of Columbia Energy LLC.*3.34
    
    Certificate of Amendment to Certificate of Formation of Columbia Energy LLC.*3.35
    
    Certificate of Limited Partnership of Corpus Christi Cogeneration LP.*3.36
    
    Certificate of Amendment to Certificate of Limited Partnership of Corpus Christi Cogeneration LP.*3.37
    
    Certificate of Amendment to Certificate of Limited Partnership of Corpus Christi Cogeneration LP.*3.38
    
    Certificate of Formation of Nueces Bay Energy LLC.*3.39
    
    Certificate of Amendment to Certificate of Formation of Nueces Bay Energy LLC.*3.40
    
    Certificate of Amendment to Certificate of Formation of Nueces Bay Energy LLC.*3.41
    
    Amended and Restated Certificate of Formation of Calpine Northbrook Southcoast Investors, LLC (f/k/a
Skygen Southcoast Investors LLC).*3.42
    
    Certificate of Amendment to Certificate of Formation of Calpine Northbrook Southcoast Investors, LLC
(f/k/a Skygen Southcoast Investors LLC).*3.43
    
    Certificate of Formation of Calpine Corpus Christi Energy GP, LLC.*3.44
    
    Certificate of Amendment to Certificate of Formation of Calpine Corpus Christi Energy GP, LLC.*3.45
    
    Certificate of Limited Partnership of Calpine Corpus Christi Energy, LP.*3.46
    
    Certificate of Amendment to Certificate of Limited Partnership of Calpine Corpus Christi Energy, LP.*3.47
    
    Certificate of Formation of Decatur Energy Center, LLC.*3.48
    
    Certificate of Amendment to Certificate of Formation of Decatur Energy Center, LLC.*3.49
    
    Certificate of Formation of Delta Energy Center, LLC.*3.50
    
    Certificate of Amendment to Certificate of Formation of Delta Energy Center, LLC.*3.51
    
    Certificate of Amendment to Certificate of Formation of Delta Energy Center, LLC.*3.52
    
    Certificate of Formation of CalGen Project Equipment Finance Company Two, LLC (f/k/a CCFC II Project
Equipment Finance Company Two, LLC).*3.53
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company Two,
LLC (f/k/a CCFC II Project Equipment Finance Company Two, LLC).*




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##### Table of Contents



ExhibitNumber
    
    Description3.54
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company Two,
LLC (f/k/a CCFC II Project Equipment Finance Company Two, LLC).*3.55
    
    Amended and Restated Certificate of Limited Partnership of Freestone Power Generation LP.*3.56
    
    Certificate of Formation of Calpine Freestone, LLC.*3.57
    
    Certificate of Formation of CPN Freestone, LLC.*3.58
    
    Certificate of Formation of Calpine Freestone Energy GP, LLC.*3.59
    
    Certificate of Amendment to Certificate of Formation of Calpine Freestone Energy GP, LLC.*3.60
    
    Certificate of Limited Partnership of Calpine Freestone Energy, LP.*3.61
    
    Certificate of Amendment to Certificate of Limited Partnership of Calpine Freestone Energy, LP.*3.62
    
    Amended and Restated Certificate of Limited Partnership of Calpine Power Equipment LP.*3.63
    
    Amended and Restated Certificate of Formation of Los Medanos Energy Center LLC (f/k/a Pittsburg
District Energy Facility, LLC).*3.64
    
    Certificate of Amendment to Certificate of Formation of Los Medanos Energy Center LLC (f/k/a
Pittsburg District Energy Facility, LLC).*3.65
    
    Certificate of Formation of CalGen Project Equipment Finance Company One, LLC (f/k/a CCFC II Project
Equipment Finance Company One, LLC).*3.66
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company One,
LLC (f/k/a CCFC II Project Equipment Finance Company One, LLC).*3.67
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company One,
LLC (f/k/a CCFC II Project Equipment Finance Company One, LLC).*3.68
    
    Certificate of Formation of Morgan Energy Center, LLC.*3.69
    
    Certificate of Amendment to Certificate of Formation of Morgan Energy Center, LLC.*3.70
    
    Certificate of Formation of Pastoria Energy Facility L.L.C.*3.71
    
    Certificate of Amendment to Certificate of Formation of Pastoria Energy Facility L.L.C.*3.72
    
    Certificate of Amendment to Certificate of Formation of Pastoria Energy Facility L.L.C.*3.73
    
    Amended and Restated Certificate of Formation of Calpine Pastoria Holdings, LLC (f/k/a Pastoria
Energy Center, LLC).*3.74
    
    Certificate of Amendment to Certificate of Formation of Calpine Pastoria Holdings, LLC (f/k/a
Pastoria Energy Center, LLC).*3.75
    
    Amended and Restated Certificate of Limited Partnership of Calpine Oneta Power, L.P. (f/k/a Panda
Oneta Power, L.P.).*3.76
    
    Certificate of Amendment to Certificate of Limited Partnership of Calpine Oneta Power, L.P. (f/k/a
Panda Oneta Power, L.P.).*3.77
    
    Amended and Restated Certificate of Formation of Calpine Oneta Power I, LLC (f/k/a Panda Oneta Power
I, LLC).*




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##### Table of Contents



ExhibitNumber
    
    Description3.78
    
    Certificate of Amendment to Certificate of Formation of Calpine Oneta Power I, LLC (f/k/a Panda Oneta
Power I, LLC).*3.79
    
    Amended and Restated Certificate of Formation of Calpine Oneta Power II, LLC (f/k/a Panda Oneta Power
II, LLC).*3.80
    
    Certificate of Amendment to Certificate of Formation of Calpine Oneta Power II, LLC (f/k/a Panda
Oneta Power II, LLC).*3.81
    
    Certificate of Formation of Zion Energy LLC.*3.82
    
    Certificate of Amendment to Certificate of Formation of Zion Energy LLC.*3.83
    
    Certificate of Amendment to Certificate of Formation of Zion Energy LLC.*3.84
    
    Certificate of Formation of CalGen Project Equipment Finance Company Three, LLC (f/k/a CCFC II
Project Equipment Finance Company Three, LLC).*3.85
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company
Three, LLC (f/k/a CCFC II Project Equipment Finance Company Three, LLC).*3.86
    
    Certificate of Amendment to Certificate of Formation of CalGen Project Equipment Finance Company
Three, LLC (f/k/a CCFC II Project Equipment Finance Company Three, LLC).*3.87
    
    Amended and Restated Certificate of Formation of CalGen Equipment Finance Holdings, LLC (f/k/a CCFC
II Leasing Holdings, LLC and CCFC II Equipment Finance Holdings, LLC).*3.88
    
    Certificate of Amendment to Certificate of Formation of CalGen Equipment Finance Holdings, LLC (f/k/a
CCFC II Leasing Holdings, LLC and CCFC II Equipment Finance Holdings, LLC).*3.89
    
    Certificate of Amendment to Amended and Restated Certificate of Formation of CalGen Equipment Finance
Holdings, LLC (f/k/a CCFC II Leasing Holdings, LLC and CCFC II Equipment Finance Holdings, LLC).*3.90
    
    Amended and Restated Certificate of Formation of CalGen Equipment Finance Company, LLC (f/k/a CCFC II
Leasing Company, LLC and CCFC II Equipment Finance Company, LLC)*3.91
    
    Certificate of Amendment to Certificate of Formation of CalGen Equipment Finance Company, LLC (f/k/a
CCFC II Leasing Company, LLC and CCFC II Equipment Finance Company, LLC).*3.92
    
    Certificate of Amendment to Amended and Restated Certificate of Formation of CalGen Equipment Finance
Company, LLC (f/k/a CCFC II Leasing Company, LLC and CCFC II Equipment Finance Company, LLC).*3.93
    
    Limited Liability Company Operating Agreement of Calpine Generating Company, LLC.*3.94
    
    Bylaws of CalGen Finance Corp.*3.95
    
    Limited Liability Company Operating Agreement of CalGen Expansion Company, LLC.*3.96
    
    Agreement of Limited Partnership of Baytown Energy Center, LP.*3.97
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Baytown Energy Center
GP, LLC.*3.98
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Baytown Energy Center
LP, LLC.*3.99
    
    Limited Liability Company Operating Agreement of Baytown Power GP, LLC.*3.100
    
    Agreement of Limited Partnership of Baytown Power, LP.*




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##### Table of Contents



ExhibitNumber
    
    Description3.101
    
    Amended and Restated Limited Liability Company Operating Agreement of Carville Energy LLC.*3.102
    
    Agreement of Limited Partnership of Channel Energy Center, LP, October 2000.*3.103
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Channel Energy Center
GP, LLC.*3.104
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Channel Energy Center
LP, LLC.*3.105
    
    Limited Liability Company Operating Agreement of Channel Power GP, LLC.*3.106
    
    Agreement of Limited Partnership of Channel Power, LP.*3.107
    
    Amended and Restated Limited Liability Company Operating Agreement of Columbia Energy LLC.*3.108
    
    Amended and Restated Agreement of Limited Partnership of Corpus Christi Cogeneration LP.*3.109
    
    Amended and Restated Limited Liability Company Operating Agreement of Nueces Bay Energy LLC.*3.110
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Northbrook Southcoast
Investors, LLC.*3.111
    
    Limited Liability Company Operating Agreement of Calpine Corpus Christi Energy GP, LLC.*3.112
    
    Agreement of Limited Partnership of Calpine Corpus Christi Energy, LP.*3.113
    
    Amended and Restated Limited Liability Company Operating Agreement of Decatur Energy Center, LLC.*3.114
    
    Amended and Restated Limited Liability Company Operating Agreement of Delta Energy Center, LLC.*3.115
    
    Limited Liability Company Operating Agreement of CalGen Project Equipment Finance Company Two, LLC.*3.116
    
    Second Amended and Restated Agreement of Limited Partnership of Freestone Power Generation LP.*3.117
    
    Limited Liability Company Operating Agreement of Calpine Freestone, LLC.*3.118
    
    Limited Liability Company Operating Agreement of CPN Freestone, LLC.*3.119
    
    Limited Liability Company Operating Agreement of Calpine Freestone Energy GP, LLC.*3.120
    
    Agreement of Limited Partnership of Calpine Freestone Energy, LP.*3.121
    
    Amended and Restated Agreement of Limited Partnership of Calpine Power Equipment LP.*3.122
    
    Amended and Restated Limited Liability Company Operating Agreement of Los Medanos Energy Center LLC.*3.123
    
    Limited Liability Company Operating Agreement of CalGen Project Equipment Finance Company One, LLC.*3.124
    
    Amended and Restated Limited Liability Company Operating Agreement of Morgan Energy Center, LLC.*3.125
    
    Amended and Restated Limited Liability Company Operating Agreement of Pastoria Energy Facility L.L.C.*3.126
    
    Limited Liability Company Operating Agreement of Calpine Pastoria Holdings, LLC.*3.127
    
    Amended and Restated Agreement of Limited Partnership of Calpine Oneta Power, L.P.*3.128
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Oneta Power I, LLC.*3.129
    
    Amended and Restated Limited Liability Company Operating Agreement of Calpine Oneta Power II, LLC.*




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##### Table of Contents



ExhibitNumber
    
    Description3.130
    
    Limited Liability Company Operating Agreement of Zion Energy LLC.*3.131
    
    Limited Liability Company Operating Agreement of CalGen Project Equipment Finance Company Three, LLC.*3.132
    
    Limited Liability Company Operating Agreement of CalGen Equipment Finance Holdings, LLC.*3.133
    
    Limited Liability Company Operating Agreement of CalGen Equipment Finance Company, LLC.*31.1
    
    Certification of the Chief Executive Officer and President pursuant to Rule 13a-14(a) or
Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a)
or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
    
    Filed herewith*
    
    Incorporated by
reference to the
Registrants
Registration
Statement on Form
S-4 (Registration
No 333-117335),
filed with the SEC on July 13, 2004.