25.04.03

25.4.2003: Meldung: Calpine Power Income Fund: Strong First Quarter Results

Calpine Power Income Fund Announces Strong First Quarter Results for 2003
Thursday April 24, 11:29 pm ET

CALGARY, Alberta, April 24 -- Calpine Power Income Fund (TSX: CF.UN - News) today announced its results for the first three months ending March 31, 2003.

Based on financial results this past quarter, the Calpine Power Income Fund declared over $12 million of distributable cash, $0.2355 per Trust Unit. In addition, in February, our unitholders received a special distribution of $0.9 million, $0.0165 per Trust Unit, due to the excess cash generated by our assets during 2002.

"During the past eight months since the Fund"s inception, we have maintained our commitment to create an investment opportunity that provides investors with a stable, growing cash flow." said Rohn Crabtree, President and CEO of Calpine Canada Power Ltd, Manager of the Calpine Power Income Fund. "As evidenced by the special distribution, the Fund has been successful in realizing additional value for unitholders. This opportunity to present unitholders with a special distribution is attributable to our ability to optimize the output of these highly efficient plants through the management and operational expertise of our sponsor, Calpine Corporation."

MANAGEMENT"S DISCUSSION AND ANALYSIS

The following discussion and analysis as provided by Management should be read in conjunction with the accompanying unaudited consolidated financial statements of Calpine Power Income Fund (the "Fund") and Calpine Power, L.P. (the "Partnership") for the quarter ended March 31, 2003 (the "Quarter") and the notes thereto as well as the audited consolidated financial statements and the related management discussion and analysis (the "Annual MD&A") contained in the 2002 Annual Report. The risk factors discussed in the Annual MD&A have remained substantially unchanged unless indicated otherwise. All dollar amounts are shown in Canadian dollars unless otherwise specified.

The Fund began operations on August 29, 2002. The commentary that follows describes the Fund"s performance for the Quarter. Management"s expectations for the period in relation to the 2003 fiscal year forecast are included in the Fund"s February 4, 2003 Prospectus.

FIRST QUARTER HIGHLIGHTS

-- The Fund reached a significant milestone, with one of its major
ownership interests, the Calgary Energy Centre, attaining commercial
operations. The Facility was commissioned on time and on budget on
March 31, 2003.
-- Completed planned and additional maintenance at the Island Cogen
Facility, with the plant back in operation on March 28, 2003. As a
result of contractual agreements with Alstom Canada Inc. ("Alstom")
(the maintenance provider), Management foresees no impact on
distributions to the Trust Unitholders as a result of being offline for
this extended period of time.
-- Calpine Canada Power Holding Ltd. ("CPHL") successfully completed the
secondary public offering of Warranted Units on February 13, 2003.
-- The Fund declared Distributable Cash of $12.2 million or $0.2355 per
Trust Unit.
-- The Fund declared and paid a special distribution of $0.9 million or
$0.0165 per Trust Unit to holders of record on January 31, 2003. This
represents Distributable Cash generated in excess of base distributions
from inception of the Fund to December 31, 2002.



The Fund is an unincorporated open-ended trust established under the laws of Alberta. The Fund indirectly owns interests in the Island Cogen Facility located in British Columbia and in the Calgary Energy Facility located in Alberta ("the Facilities"). The Fund also indirectly owns an economic interest in the Whitby Cogen Facility located in Ontario through a participating loan (the "Whitby Loan") that mirrors the cash flow from the facility. These three facilities are modern and environmentally preferred, powered by high- efficiency natural gas-fired turbines and all of the facilities have long-term energy sales agreements. The Fund and the Partnership are administered and managed by the Manager, Calpine Canada Power Ltd., an indirect wholly-owned subsidiary of Calpine Corporation ("Calpine").

SIGNIFICANT TRANSACTIONS

On February 13, 2003, CPHL completed a secondary offering of 17,034,234 Warranted Units of the Calpine Power Income Fund for gross proceeds of $153.3 million to CPHL. Each Warranted Unit consists of one Trust Unit and one-half of one Trust Unit purchase warrant ("Warrant"). Each Warrant entitles the holder to purchase one Trust Unit at a price of $9.00 at any time on or prior to December 30, 2003, after which time the Warrant will be null and void. Assuming the exercise in full of the Warrants, Calpine Corporation will not own or control any of the outstanding Trust Units. However, Calpine Corporation will retain its 30% subordinated interest through its ownership of Class B Subordinated Units and will continue to operate and manage the Calpine Power Income Fund and the Fund assets.

On closing of the Secondary Offering, CPHL sold 17,034,234 Trust Units as part of the Warranted Units, and sold 8,517,118 Trust Units to the Fund. The Fund issued an interest bearing promissory note (the "Fund Promissory Note") to CPHL in consideration for the Trust Units purchased by the Fund. The Fund cancelled the Trust Units it purchased, and will, prior to December 31, 2003, issue up to 8,517,117 Trust Units to satisfy its obligations in respect of Warrants and apply the exercise proceeds to repay any outstanding amount under the Fund Promissory Note. If any Warrants are not exercised prior to December 31, 2003, they will be null and void and the Fund will repay any outstanding amount of the Fund Promissory Note by issuing Trust Units to CPHL.

RESULTS OF OPERATIONS

The Fund reported net earnings of $3.9 million or $0.0749 per Trust Unit for the three months ended March 31, 2003, primarily representing the Fund"s 70% share of the Partnership"s net earnings for that period. Management and administrative expenses of $438 thousand includes $38 thousand of fees payable to the Manager to manage and administer the Fund, in accordance with applicable agreements.

The Partnership reported cash flow from operating activities of $2.1 million and net earnings of $6.2 million for the three months ended March 31, 2003. Revenues were $10.5 million consisting of $5.0 million of liquidating damages from Alstom, $3.0 million from electricity generation, $1.3 million from steam generation in relation to the Island Cogen Facility, and interest of $1.2 million earned on the Whitby Loan and other cash balances. Under the Island Cogeneration Facility Construction Contract with Alstom Canada Inc. ("Alstom"), there exist certain performance guarantees regarding plant availability during the first six years of operation. As a result of an extended maintenance period and plant shutdown in the first quarter of 2003, the actual plant availability for the first year of operations is below the guaranteed availability. Due to this guarantee, Alstom is contractually obligated to pay liquidating damages of $5.0 million, which CLP expects to receive in May 2003.

The Island Cogen Facility resumed operations March 28, 2003. Operating and maintenance expense and depreciation expense attributable to the Island Cogen Facility for the Quarter were $2.4 million and $1.9 million, respectively.

The 225 MW Island Cogen Facility is a combined cycle cogeneration plant located at Duncan Bay, near Campbell River, on Vancouver Island, British Columbia. For the three months ended March 31, 2003, the Island Cogen Facility operated at 34% availability and generated 148,199 MWh. The plant availability during this period was significantly affected by the maintenance and shutdown during the first quarter. However, the financial impact of the maintenance and shutdown is effectively nil as a result of the $5.0 million of liquidating damages payable by Alstom.

Electricity revenue is also recognized pursuant to the Maintenance Agreement, under which Alstom provides capital and operating expense services at no cash cost to the Partnership. As a result, electricity revenues of $1.1 million, operating expenses of $0.3 million and maintenance capital of $0.8 million have been recognized in the consolidated financial statements of the Partnership for the three months ended March 31, 2003.

Steam produced at the Island Cogen Facility is sold to Norske Skog Canada Limited ("Norske Skog"), a global supplier of newsprint and magazine printing papers. For the three months ended March 31, 2003, the Island Cogen Facility produced 185,076 GJ of steam resulting in revenue of $1.3 million.

The Calgary Energy Centre declared its Commercial Operations Date ("COD") on March 31, 2003. As a result, recognition of operations of the Calgary Energy Center will commence in April 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Calgary Energy Facility is a natural gas-fired combined cycle plant located in Calgary, Alberta. The Calgary Energy Facility has a capacity of 300 MW, consisting of 250 MW of base capacity plus 50 MW of peaking capacity. Capital expenditures relating to construction for the three months ended March 31, 2003, were $15.7 million. A cash reserve of $111 million was established in the Partnership on August 29, 2002 to cover the construction costs to complete the Calgary Energy Facility. As at March 31, 2003, the remaining construction reserve balance was $40.5 million.

The Fund had no long-term debt or credit facility as at March 31, 2003. The Fund anticipates obtaining a credit facility for working capital requirements in 2003. Current working capital requirements are funded through cash flows from the Partnership.

Distributable Cash and Distributions

During the first quarter of 2003, Distributable Cash generated by the Fund totaled $12.2 million or $0.2355 per Trust Unit. The Fund pays monthly cash distributions to Unitholders on or about the 20th day of each month following the record date. One hundred percent of Distributable Cash of the Fund is distributed in respect of each year.

The Fund, as the holder of Class A Priority Units in the Partnership, must be paid before Calpine receives distributions on its Class B Subordinated Units. The Class B Subordinated Units represent a 30% economic interest in the Facilities and their entitlement to distributions is subordinated to that of Class A Priority Unitholders until 2022. The initial distribution level of $0.935 per Class A Priority Unit set the target distribution level. This target distribution increases annually by 1%, resulting in a targeted per Trust Unit distribution of $0.938 per Trust Unit for calendar year 2003. Any excess cash above the target is split equally at year-end between the Partnership Class A Priority Units and Class B Subordinated Units, after deducting the management incentive fee. The management incentive fee is equal to 20% of the excess cash.

Under the Calgary Energy Tolling Agreement, as pre-payment for the provision of future tolling services of the Calgary Energy Facility, Calpine Energy Services Canada Partnership ("CESCP"), a wholly-owned partnership of Calpine, pays to the Calgary Energy Centre Limited Partnership a monthly amount equivalent to the fixed charge component of the monthly tolling fee until the COD of the Calgary Energy Facility. Payments under this agreement for the three months ended March 31, 2003, totaled $9.5 million and were recorded as Distributable Cash. The Calgary Energy Tolling Agreement is a 20-year contract, similar in terms to the Island EPA and under which CESCP is required to deliver all fuel required to operate the facility and is, in turn, obligated to pay for all electricity generated or deemed to have been made available.

The Fund declared a cash distribution of $4.1 million or $0.0785 per Trust Unit for the period from March 1 to March 31, 2003. The cash distribution was paid April 21, 2003, to Unitholders of record on March 31, 2003. The Fund also declared a cash distribution of $4.1 million or $0.0785 per Trust Unit for the period April 1 to April 30, 2003. The cash distribution will be paid on May 20, 2003, to Unitholders of record on April 30, 2003.

Tax Treatment of Distributions

For Canadian tax purposes, the taxable amount of distributions to the Fund"s Unitholders in 2002 was 1.89%. The remaining amount of the distributions reduced the adjusted cost base on the Trust Units, thereby providing a significant tax deferral for the Unitholders. The tax deferral arose primarily due to the ability of the Partnership to shelter its taxable income with capital cost allowance claims on the Facilities. As a result, distributions from the Partnership to the Fund were a return of capital rather than an allocation of income. Distributions in 2003 are expected to have similar characteristics to those in 2002, with taxable distributions estimated to be less than 5%. Any Fund acquisitions could serve to extend or reduce the tax-deferred horizon. The Fund recommends that Unitholders consult their tax advisors regarding the tax implications of their investment in Trust Units.

Cash Reserves

Several cash reserves were established in the Partnership to fund significant expenditures and limit potential business risks of the Partnership. A cash reserve of $111 million was established in a segregated account of the Partnership at August 29, 2002 to meet the remaining construction costs of the Calgary Energy Facility. This amount is used to reimburse expenditures incurred by the Manager in connection with the completion of the Calgary Energy Facility. Payments from this segregated account must be authorized by one of the independent trustees of Calpine Commercial Trust (the "Independent CCT Trustees"), after receipt of confirmation from a firm of independent engineers, appointed by the Independent CCT Trustees, that the expenditures were properly incurred by the Manager.

In the event the construction is completed for less than the amount reserved, the unused balance will be paid to the Manager as a special one-time distribution on its Class B Subordinated Units. If the construction completion costs exceed the amount reserved, the Manager will be responsible for such excess costs. Reimbursements during the three months ended March 31, 2003 were $26.2 million. A reserve of $7.0 million was also established to partially fund future maintenance costs. Additionally, a cash deposit of $17.0 million was received from CESCP as security to satisfy its payment obligations under the Calgary Energy Tolling Agreement. This deposit and interest earned on the deposit was returned to CESCP in early April 2003, as a result of the Calgary Energy Facility declaration of COD at March 31, 2003.

CASH RESERVES - CALPINE POWER, L.P.
Restricted cash as at March 31 (thousands) 2003
------------------------------------------------------------------
Construction Reserve $40,529
Security Deposit from CESCP for Calgary
Energy Tolling Agreement 17,269
------------------------------------------------------------------
$57,798
==================================================================



FORECASTS

Forecasts of the Fund and Partnership for the calendar year ending December 31, 2003 were prepared and included in the secondary offering prospectus. The financial results of the Fund and the Partnership for the three months ended March 31, 2003, compare favorably to these forecasts and no significant changes have occurred.

OUTLOOK

The Fund is focused on growing distributions to Unitholders by optimizing the operations of its plants and by pursuing accretive acquisitions. Distributable Cash of the Partnership in 2003 is forecasted to be $70.2 million of which $49.3 million or $0.9478 per Trust Unit is forecasted to be distributed to the Class A Priority Unitholder and $20.9 million to the Class B Subordinated Units.

FORWARD-LOOKING INFORMATION

Certain information in this Management"s Discussion and Analysis is forward-looking and subject to risks and uncertainties. The results or events predicted in this information may differ from actual results or events. Factors which could cause actual results or events to differ materially from current expectations include, among other things, the ability of the Fund and Partnership to successfully implement the Fund"s strategic initiatives and whether such strategic initiatives will yield the expected benefits, the availability and price of energy commodities, regulatory decisions, competitive factors in the power industry, and the prevailing economic conditions in North America. The Fund and the Partnership each disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Calpine Power Income Fund

Calpine Power Income Fund is an unincorporated open-ended trust that invests in electrical power assets. The Fund indirectly owns interests in two power plants in British Columbia and Alberta and has a loan interest in a power plant in Ontario. The Fund is managed by Calpine Canada Power Ltd., which is headquartered in Calgary, Alberta.

The Calpine Power Income Fund units are listed on the Toronto Stock Exchange under the symbol CF.UN. The Fund also has warrants that trade under the symbol CF.WT.

The audited financial statements of the Fund and the Partnership, the Management Discussion and Analysis and Notes to the financial statements can also be accessed on the Fund"s website at www.calpinepif.com and on www.sedar.com.

CALPINE POWER INCOME FUND
CONSOLIDATED BALANCE SHEETS
(thousands)


As at As at
March 31, 2003 December 31, 2002
(unaudited) (audited)
------------------------------------------------------------------------
ASSETS

Current Assets

Cash and Cash Equivalents $25 $10
Distributions Receivable 4,082 5,369
Accounts Receivable 126 --
--------------------------------------------------------------------
4,233 5,379

Investment in Calpine Power, L.P. (Note 2) 488,616 496,567
--------------------------------------------------------------------
$492,849 $501,946
==========================

LIABILITIES AND UNITHOLDERS" EQUITY

Current Liabilities
Accounts Payable $594 $483
Distributions Payable 4,082 4,940
--------------------------------------------------------------------
4,676 5,423
Unitholders" Equity (Note 3) 488,173 496,523
--------------------------------------------------------------------
$492,849 $501,946
==========================


See accompanying notes to the consolidated financial statements


CALPINE POWER INCOME FUND
CONSOLIDATED STATEMENT OF EARNINGS AND UNITHOLDERS" EQUITY
(thousands, except for per Trust Unit amounts)


Three months ended
March 31, 2003
(unaudited)
-----------------------------------------------------------------------
REVENUES

Equity earnings from Calpine Power, L.P. $4,334

EXPENSES

Management and administrative 438
--------------------------------------------------------------------

NET EARNINGS 3,896

UNITHOLDERS" EQUITY, BEGINNING OF PERIOD 496,523

Distributions (12,246)
--------------------------------------------------------------------

UNITHOLDERS" EQUITY, END OF PERIOD $488,173
=============
Net earnings per Trust Unit (Note 3):

Basic earnings per Trust Unit $0.0749
=============

Distributable Cash -- See Note 4

See accompanying notes to the consolidated financial statements


CALPINE POWER INCOME FUND
CONSOLIDATED STATEMENT OF CASH FLOWS
(thousands)


Three months ended
March 31, 2003
(unaudited)
---------------------------------------------------------------------
OPERATING ACTIVITIES

Net earnings $3,896

Adjustment for non-cash item:
Equity earnings from Calpine Power, L.P. (4,334)

Distributions received from Calpine Power, L.P. 13,572

Change in non-cash working capital (15)
---------------------------------------------------------------------
Net cash provided by operating activities 13,119
---------------------------------------------------------------------
INVESTING ACTIVITIES

Net cash used in investing activities --
---------------------------------------------------------------------
FINANCING ACTIVITIES
Distributions paid (13,104)
---------------------------------------------------------------------
Net cash used in financing activities (13,104)
---------------------------------------------------------------------
INCREASE IN CASH $15

Cash at beginning of period 10
---------------------------------------------------------------------
Cash at end of period $25

Represented by:
Cash and Cash Equivalents at March 31, 2003 $25


See accompanying notes to the consolidated financial statements


CALPINE POWER INCOME FUND
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 2003
(Tabular amounts are in thousands except for Trust Units and per Trust Unit
amounts)
(unaudited)



1. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of the Calpine Power Income Fund
(the "Fund") have been prepared by Calpine Canada Power Ltd. (the
"Manager") in accordance with Canadian generally accepted accounting
principles. The accounting policies applied are consistent with those
outlined in the Fund"s annual financial statements for the period ended
December 31, 2002. These consolidated financial statements for the
three months ended March 31, 2003 do not include all disclosures
required in the annual financial statements and should be read in
conjunction with the annual financial statements included in the Fund"s
2002 Annual Report.

2. INVESTMENT IN CALPINE POWER, L.P.

Amount
----------------------------------------------------------------------
As at December 31, 2002 $496,567
Equity earnings from Calpine Power, L.P. 4,334
Distributions received and receivable from
Calpine Power, L.P. (12,285)
-----------------------------------------------------------------------
As at March 31, 2003 $488,616
===========

3. UNITHOLDERS" EQUITY

On February 13, 2003, the Fund and Calpine Canada Power Holdings Ltd.
("CPHL") completed a secondary offering of 17,034,234 Warranted Units
of the Calpine Power Income Fund for gross proceeds of $153.3 million
to CPHL. Each Warranted Unit consists of one Trust Unit and one-half
of one Trust Unit purchase warrant ("Warrant"). Each Warrant entitles
the holder to purchase one Trust Unit at a price of $9.00 at any time
on or prior to December 30, 2003, after which time the Warrant will be
null and void. Assuming the exercise in full of the Warrants, Calpine
Corporation will not own or control any of the outstanding Trust Units.
However, Calpine Corporation will retain its 30% subordinated interest
through its ownership of Class B Subordinated Units and will continue
to operate and manage the Calpine Power Income Fund and the Fund
assets.

On closing of the Secondary Offering, CPHL sold 17,034,234 Trust Units
as part of the Warranted Units, and sold 8,517,118 Trust Units to the
Fund. The Fund issued an interest bearing promissory note (the "Fund
Promissory Note") to CPHL in consideration for the Trust Units
purchased by the Fund. The Fund cancelled the Trust Units it
purchased, and will, prior to December 31, 2003, issue up to 8,517,117
Trust Units to satisfy its obligations in respect of Warrants and apply
the exercise proceeds to repay any outstanding amount under the Fund
Promissory Note. If any Warrants are not exercised prior to
December 31, 2003, they will be null and void and the Fund will repay
any outstanding amount of the Fund Promissory Note by issuing Trust
Units to CPHL.


Number of
Units Amount
--------------------------------------------------------------------------
TRUST UNITS
As at December 31, 2002 52,001,352 $496,523
Net earnings 3,896
Distributions declared (12,246)
Trust Units purchased and cancelled (8,517,118) (78,357)
Trust Units issued on exercise of Warrants 14,522 134
--------------------------------------------------------------------------
As at March 31, 2003 43,498,756 $409,950
=============================
WARRANTS
Issued on Trust Units purchased and
cancelled 8,517,117 $1,703
Exercise of Warrants (14,522) (3)
--------------------------------------------------------------------------
As at March 31, 2003 8,502,595 $1,700
=============================
PROMISSORY NOTE
Issued on Trust Units purchased and cancelled $78,357
Repayment on issue of Warrants (1,703)
Repayment on exercise of Warrants (131)
--------------------------------------------------------------------------
As at March 31, 2003 $76,523
===========
TOTAL UNITHOLDERS" EQUITY $488,173
===========



The Fund Trust Indenture provides that an unlimited number of Trust Units may be authorized and issued. Each Trust Unit is transferable, carries the right to one vote and represents an equal undivided beneficial interest in any distributions from the Fund and in the net assets of the Fund in the event of termination or winding-up of the Fund. All Trust Units are of the same class with equal rights and privileges.

Basic earnings per Trust Unit has been calculated based on a weighted average of 52,001,351 Trust Units outstanding for the period, consisting of 43,498,756 Trust Units outstanding and after giving effect to the exercise of the 8,502,595 outstanding Warrants.

4. DISTRIBUTABLE CASH

Three months ended
March 31, 2003
---------------------------------------------------------------
NET EARNINGS $3,896
Add:
Distributions received and receivable
from Calpine Power, L.P. 12,285
Working capital 399
Less:
Equity earnings from Calpine Power, L.P. (4,334)
---------------------------------------------------------------
DISTRIBUTABLE CASH (1) $12,246
==========

(1) Distributable Cash for the three months ended March 31, 2003 includes
interest of $1.336 million under the Promissory Note, which is equal
to the cash distributions that would have otherwise been payable had
the Warrants been fully exercised.

5. RELATED PARTY TRANSACTIONS

As at March 31, 2003, the Fund had the following balances receivable
from (payable to) related parties in the normal course of business:


Amount
----------------------------------------------------------------
Distributions Receivable from Calpine Power, L.P. $4,082
Distributions Payable to Calpine (667)
Accounts Payable to Calpine Power, L.P. (369)
Accounts Payable to the Manager (87)
----------------------------------------------------------------

During the period ended March 31, 2003, the total amount of
$38 thousand was paid to the Manager for administrative fees under the
administration and management agreements. The balances disclosed above
do not include amounts owing with respect to the Promissory Note as
disclosed in Note 3.

6. SUBSEQUENT EVENT

On April 15, 2003, the Fund announced cash distributions for April 2003
had been set at $0.0785 per Trust Unit. The cash distribution for this
period will be paid on May 20, 2003 to Unitholders of record on
April 30, 2003.


CALPINE POWER, L.P.
CONSOLIDATED BALANCE SHEETS
(thousands)


As at As at
March 31, 2003 December 31, 2002
(unaudited) (audited)
--------------------------------------------------------------------------

ASSETS

Current Assets

Cash and Cash Equivalents $17,271 $14,587
Restricted Cash (Note 2) 57,798 83,873
Accounts Receivable (Note 3) 13,522 4,750
Interest Receivable - Whitby Loan 1,912 1,112
Prepaids 134 513
--------------------------------------------------------------------------
90,637 104,835
--------------------------------------------------------------------------
Deferred Charge - Calgary Energy Tolling
Agreement (Note 4) -- 14,789
Loan to Calpine Canada Whitby Holdings
Company 35,790 35,790
Capital Assets (Note 5) 598,307 578,183
--------------------------------------------------------------------------
$724,734 $733,597

LIABILITIES AND PARTNERS" EQUITY

Current Liabilities

Accounts Payable - Trade $2,813 $799
- Accrued Capital 21,077 23,237
- Other 6,278 5,124
Distributions Payable 4,082 7,977
Deposits Payable (Note 2) 17,269 17,152
--------------------------------------------------------------------------
51,519 54,289

Partners" Equity (Note 6) 673,215 679,308
--------------------------------------------------------------------------
$724,734 $733,597
=============================


See accompanying notes to the consolidated financial statements



CALPINE POWER, L.P.
CONSOLIDATED STATEMENT OF EARNINGS AND PARTNERS" EQUITY
(thousands, except for per Unit amounts)

Three months ended
March 31, 2003
(unaudited)
-----------------------------------------------------------------
REVENUES

Electricity and thermal (Note 3) $9,385

Interest -- Whitby 800
-- Other 356
-----------------------------------------------------------------
10,541
-----------------------------------------------------------------
EXPENSES

Operating and maintenance 2,442
Depreciation 1,899
General and administrative 8
-----------------------------------------------------------------
4,349
-----------------------------------------------------------------
NET EARNINGS 6,192

PARTNERS" EQUITY, BEGINNING OF PERIOD 679,308

Distributions (12,285)
-----------------------------------------------------------------
PARTNERS" EQUITY, END OF PERIOD $673,215

Net earnings per Unit (Note 6)

Class A Priority Unit $0.0834
================
Class B Subordinated Unit $0.0834
================

Distributable Cash and Distributable Cash per Unit - see Note 7


See accompanying notes to the consolidated financial statements


CALPINE POWER, L.P.
CONSOLIDATED STATEMENT OF CASH FLOWS
(thousands)

Three months ended
March 31, 2003
(unaudited)
-------------------------------------------------------------------
OPERATING ACTIVITIES

Net earnings $6,192

Adjustment for non-cash item:
Depreciation 1,899
-------------------------------------------------------------------
8,091
Change in non-cash working capital(6,025)
-------------------------------------------------------------------
Net cash provided by operating activities 2,066
-------------------------------------------------------------------
INVESTING ACTIVITIES

Capital expenditures (16,782)

Receipts under Calgary Energy Tolling Agreement 9,548

Change in non-cash working capital (2,160)
-------------------------------------------------------------------
Net cash used in investing activities (9,394)
-------------------------------------------------------------------
FINANCING ACTIVITIES

Distributions paid (16,180)

Change in non-cash working capital 117
-------------------------------------------------------------------
Net cash used in financing activities (16,063)
-------------------------------------------------------------------
DECREASE IN CASH $(23,391)

Cash at beginning of period 98,460
-------------------------------------------------------------------
Cash at end of period $75,069

Represented by:
Cash and Cash Equivalents $17,271
Restricted Cash (Note 2) 57,798
-------------------------------------------------------------------
Balance as at March 31, 2003 $75,069

SUPPLEMENTARY CASH FLOW INFORMATION

Interest received $356


See accompanying notes to the consolidated financial statements


CALPINE POWER, L.P.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 2003
(Tabular amounts are in thousands except for per Unit amounts)
(unaudited)


1. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements of Calpine Power, L.P. ("CLP" or
the "Partnership") have been prepared by Calpine Canada Power Ltd. (the
"Manager") in accordance with Canadian generally accepted accounting
principles. The accounting policies applied are consistent with those
outlined in Calpine Power, L.P."s annual financial statements for the
period ended December 31, 2002. These consolidated financial
statements for the three months ended March 31, 2003, do not include
all disclosures required in the annual financial statements and should
be read in conjunction with the annual financial statements included in
the 2002 Calpine Power Income Fund (the "Fund") Annual Report.

2. RESTRICTED CASH AND MAINTENANCE RESERVE

Several cash reserves were established in the Partnership to fund
significant expenditures and limit potential business risks of CLP. A
cash reserve of $111.0 million was established in a segregated account
to meet the remaining construction requirements of the Calgary Energy
Facility. The amount is used to reimburse expenditures incurred by the
Manager in connection with the completion of the Calgary Energy
Facility. Payments from this segregated account must be authorized by
one of the independent trustees of Calpine Commercial Trust ("CCT")
after receipt of confirmation from a firm of independent engineers that
the expenditures were properly incurred. If construction completion
costs exceed the amount reserved, the Manager will be responsible for
such excess costs. A cash deposit of $17.0 million was received from
Calpine Energy Services Canada Partnership ("CESCP") as security to
satisfy its payment obligations under the Calgary Energy Tolling
Agreement. This cash deposit and associated interest was due to CESCP
at March 31, 2003 when the Calgary Energy Facility declared its
Commercial Operations Date ("COD").


CASH RESERVES
As at March 31 2003
------------------------------------------------------------
Restricted Cash
Construction Reserve $40,529
Security Deposit from CESCP for Calgary
Energy Tolling Agreement (including interest) 17,269
------------------------------------------------------------
$57,798
===========
Maintenance Reserve $7,110
===========


The maintenance reserve of $7.1 million has been established to
partially fund future maintenance costs and to levelize such costs, as
required.


3. LIQUIDATING DAMAGES

Under the Island Cogeneration Facility Construction Contract with
Alstom Canada Inc. ("Alstom"), there exists certain performance
guarantees regarding plant availability during the first six years of
operation. As a result of an extended maintenance period and plant
shutdown in the first quarter of 2003, the actual plant availability
for the first year of operations is below the guaranteed availability.
Due to this guarantee, Alstom is contractually obligated to pay
liquidating damages of $5.0 million, which CLP expects to receive in
May 2003. The $5.0 million revenue receivable has been included as a
component of electricity and thermal revenues.

4. DEFERRED CHARGE

On August 29, 2002, Calgary Energy Centre Limited Partnership ("CECLP")
and CESCP entered into the Calgary Energy Tolling Agreement, which
governs the sale of electricity from the Calgary Energy Facility and
under which a payment of $27,762,000 was made to CESCP. Under the
Calgary Energy Tolling Agreement, as pre-payment for the provision of
future tolling services, CESCP was required to pay to CECLP a monthly
amount equal to the fixed charge component of the monthly tolling fee
until the COD of the Calgary Energy Facility, which was declared
March 31, 2003. As a result, no further receipts are due with respect
to the deferred charge and the remaining balance of $5,241,000 has been
capitalized as part of capital assets.

5. CAPITAL ASSETS

As at March 31, 2003
---------------------------------------------------------------------
Accumulated Net Book
Cost Depreciation Value
---------------------------------------------------------------------
Land $334 $-- $334
Power generation plants and
equipment 602,622 4,649 597,973
---------------------------------------------------------------------
$602,956 $4,649 $598,307
=========================================

6. PARTNERS" EQUITY

CLP is authorized to issue an unlimited number of Class A Priority
Units and an unlimited number of Class B Subordinated Units. The
holders of Class A Priority Units are entitled to receive the first
$0.078 of Distributable Cash per Class A Priority Unit per month on a
cumulative basis in priority to any payments on the Class B
Subordinated Units. The holders of Class B Subordinated Units are
entitled to receive up to $0.078 of Distributable Cash per Class B
Subordinated Unit per month which amounts cumulate for a fiscal year
(and if unpaid at the end of a fiscal year, this entitlement terminates
for such fiscal year) following the priority payment of Distributable
Cash to the holders of Class A Priority Units. Following these
payments, holders of Class A Priority Units and holders of Class B
Subordinated Units are entitled to share Distributable Cash in excess
of their prior entitlements equally on a class basis, in any fiscal
year.


Class A Units Class B Units Total
---------------------------------------------------------------------
As at December 31, 2002 $496,567 $182,741 $679,308
Net earnings 4,334 1,858 6,192
Distributions declared (12,285) -- (12,285)
---------------------------------------------------------------------
As at March 31, 2003 $488,616 $184,599 $673,215
=========================================

At March 31, 2003, CLP had issued and outstanding a total of 52,001,352
Class A Priority Units and 22,286,294 Class B Subordinated Units.

Class B Subordinated distribution entitlements in arrears for the
period January 1, 2003 to March 31, 2003 were $5.2 million.


7. DISTRIBUTABLE CASH

Three months ended
March 31, 2003
------------------------------------------------------------------
NET EARNINGS $6,192
Add:
Depreciation 1,899
Receipts with respect to Calgary Energy
Tolling Agreement (Note 4) 9,548
Less:
Maintenance capital (1,097)
Working capital (4,257)
------------------------------------------------------------------
DISTRIBUTABLE CASH $12,285
==================
Allocation of Distributable Cash (Note 6)
Class A Priority Units $12,285
Class B Subordinated Units --
------------------------------------------------------------------
$12,285
==================
Per Unit allocation of Distributable
Cash (Note 6)
Class A Priority Units $0.2362
==================
Class B Subordinated Units $--
==================


8. RELATED PARTY TRANSACTIONS

As at March 31, 2003, the Partnership had the following balances
receivable from (payable to) related parties in the normal course of
business:

Amount
------------------------------------------------------------------
Loan and interest receivable from
Calpine Canada Whitby Holdings Company $37,702
Accounts receivable from Calpine Power Income Fund 369
Distributions payable to Calpine Commercial Trust (4,082)
Deposits payable to Calpine (17,269)
Capital reimbursement due to Calpine (12,711)


9. SUBSEQUENT EVENTS

On April 15, 2003, the Partnership announced that cash distributions to
holders of Class A Priority Units for April 2003 had been set at
$0.0785 per Class A Priority Unit. The cash distribution for this
period will be paid on May 20, 2003 to Unitholders of record on
April 30, 2003.

As a result of the Calgary Energy Facility declaring COD on
March 31, 2003, the cash security deposit of $17.0 million plus
accumulated interest of $269,000 was repaid to CESCP on April 1, 2003.


Source: Calpine Power Income Fund
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