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Basis of Presentation and Summary of Significant Accounting Policies | 9 Months Ended
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Sep. 30, 2014
Accounting Policies [Abstract] |
Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies We are a wholesale power generation company engaged in the ownership and operation of primarily natural gas-fired and geothermal power plants in North America. We have a significant presence in major competitive wholesale power markets in California, Texas and the Mid-Atlantic region of the U.S. We sell wholesale power, steam, capacity, renewable energy credits and ancillary services to our customers, which include utilities, independent electric system operators, industrial and agricultural companies, retail power providers, municipalities, power marketers and others. We purchase primarily natural gas and some fuel oil as fuel for our power plants and engage in related natural gas transportation and storage transactions. We purchase electric transmission rights to deliver power to our customers. Additionally, consistent with our Risk Management Policy, we enter into natural gas and power physical and financial contracts to hedge certain business risks and optimize our portfolio of power plants. Basis of Interim Presentation — The accompanying unaudited, interim Consolidated Condensed Financial Statements of Calpine Corporation, a Delaware corporation, and consolidated subsidiaries have been prepared pursuant to the rules and regulations of the SEC. In the opinion of management, the Consolidated Condensed Financial Statements include the normal, recurring adjustments necessary for a fair statement of the information required to be set forth therein. Certain information and note disclosures, normally included in financial statements prepared in accordance with U.S. GAAP, have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, these financial statements should be read in conjunction with our audited Consolidated Financial Statements for the year ended December 31, 2013, included in our 2013 Form 10-K. The results for interim periods are not necessarily indicative of the results for the entire year primarily due to acquisitions and disposals of assets, seasonal fluctuations in our revenues, timing of major maintenance expense, variations resulting from the application of the method to calculate the provision for income tax for interim periods, volatility of commodity prices and mark-to-market gains and losses from commodity and interest rate derivative contracts. Use of Estimates in Preparation of Financial Statements — The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures included in our Consolidated Condensed Financial Statements. Actual results could differ from those estimates. Reclassifications — We have reclassified certain prior year amounts for comparative purposes. These reclassifications did not have a material impact on our financial condition, results of operations or cash flows. Cash and Cash Equivalents — We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. We have certain project finance facilities and lease agreements that require us to establish and maintain segregated cash accounts, which have been pledged as security in favor of the lenders under such project finance facilities, and the use of certain cash balances on deposit in such accounts is limited, at least temporarily, to the operations of the respective projects. At September 30, 2014 and December 31, 2013, we had cash and cash equivalents of $229 million and $292 million, respectively, that were subject to such project finance facilities and lease agreements. Restricted Cash — Certain of our debt agreements, lease agreements or other operating agreements require us to establish and maintain segregated cash accounts, the use of which is restricted. These amounts are held by depository banks in order to comply with the contractual provisions requiring reserves for payments such as for debt service, rent, major maintenance and debt repurchases or with applicable regulatory requirements. Funds that can be used to satisfy obligations due during the next 12 months are classified as current restricted cash, with the remainder classified as non-current restricted cash. Restricted cash is generally invested in accounts earning market rates; therefore, the carrying value approximates fair value. Such cash is excluded from cash and cash equivalents on our Consolidated Condensed Balance Sheets and Statements of Cash Flows. The table below represents the components of our restricted cash as of September 30, 2014 and December 31, 2013 (in millions):
| September 30, 2014 |  | December 31, 2013
| Current |  | Non-Current |  | Total |  | Current |  | Non-Current |  | Total
Debt service | $ | 22 |  |  | $ | 25 |  |  | $ | 47 |  |  | $ | 11 |  |  | $ | 41 |  |  | $ | 52 |
Rent reserve | 4 |  |  | — |  |  | 4 |  |  | 3 |  |  | — |  |  | 3 |
Construction/major maintenance | 69 |  |  | 12 |  |  | 81 |  |  | 35 |  |  | 20 |  |  | 55 |
Security/project/insurance | 149 |  |  | 3 |  |  | 152 |  |  | 151 |  |  | 6 |  |  | 157 |
Other | — |  |  | 2 |  |  | 2 |  |  | 3 |  |  | 2 |  |  | 5 |
Total | $ | 244 |  |  | $ | 42 |  |  | $ | 286 |  |  | $ | 203 |  |  | $ | 69 |  |  | $ | 272 |
Property, Plant and Equipment, Net — At September 30, 2014 and December 31, 2013, the components of property, plant and equipment are stated at cost less accumulated depreciation as follows (in millions):
| September 30, 2014 |  | December 31, 2013 |  | Depreciable Lives
Buildings, machinery and equipment | $ | 15,528 |  |  | $ | 15,838 |  |  | 3 – 47 Years
Geothermal properties | 1,295 |  |  | 1,265 |  |  | 13 – 59 Years
Other | 171 |  |  | 164 |  |  | 3 – 47 Years
| 16,994 |  |  | 17,267 |  |  |
Less: Accumulated depreciation | 4,840 |  |  | 4,897 |  |  |
| 12,154 |  |  | 12,370 |  |  |
Land | 109 |  |  | 103 |  |  |
Construction in progress | 402 |  |  | 522 |  |  |
Property, plant and equipment, net | $ | 12,665 |  |  | $ | 12,995 |  |  |
Impairment — In August 2014, we executed a term sheet with Duke Energy Florida, Inc. related to our Osprey Energy Center for a new PPA with a term of up to 27 months, after which Duke Energy Florida, Inc. would purchase our Osprey Energy Center. Although a definitive asset sale agreement is still being negotiated, and any such agreement would be subject to regulatory approval, we conducted an impairment review of our Osprey Energy Center during the third quarter of 2014. We estimated fair value of our Osprey Energy Center under a modified market approach using the discounted cash flows under the PPA and the sale proceeds to be received, which incorporated a market participant's fair value of the power plant. We recorded an impairment loss of approximately $123 million which was recorded as a separate line item on our Consolidated Condensed Statements of Operations for the three and nine months ended September 30, 2014. Capitalized Interest — The total amount of interest capitalized was $3 million and $9 million for the three months ended September 30, 2014 and 2013, respectively, and $15 million and $33 million for the nine months ended September 30, 2014 and 2013, respectively. Treasury Stock — During the nine months ended September 30, 2014, we repurchased common stock with a value of $767 million and withheld shares with a value of $14 million to satisfy tax withholding obligations associated with the vesting of restricted stock awarded to employees and net share employee stock option exercises under the Equity Plan. New Accounting Standards and Disclosure Requirements Income Taxes — In July 2013, the FASB issued Accounting Standards Update 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. The provisions of the standard require an unrecognized tax benefit to be presented as a reduction to a deferred tax asset in the financial statements for an NOL carryforward, a similar tax loss, or a tax credit carryforward except in circumstances when the carryforward or tax loss is not available at the reporting date under the tax laws of the applicable jurisdiction to settle any additional income taxes or the tax law does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purposes. When those circumstances exist, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. We adopted Accounting Standards Update 2013-11 in the first quarter of 2014 which did not have a material impact on our financial condition, results of operations or cash flows. Financial Reporting of Discontinued Operations — In April 2014, the FASB issued Accounting Standards Update 2014-08, “Presentation of Financial Statements and Property, Plant, and Equipment”. The update limits discontinued operations reporting to disposals that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. The standard also requires new disclosures related to components reported as discontinued operations, as well as components of an entity that were sold and do not meet the criteria for discontinued operations reporting. The new financial statement presentation provisions relating to this standard are prospective and effective for interim and annual periods beginning after December 15, 2014, with early adoption permitted. We do not anticipate a material impact on our financial condition, results of operations or cash flows as a result of adopting this standard. Revenue Recognition — In May 2014, the FASB issued Accounting Standards Update 2014-09, “Revenue from Contracts with Customers”. The comprehensive new revenue recognition standard will supersede all existing revenue recognition guidance. The core principle of the standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard creates a five-step model for revenue recognition that requires companies to exercise judgment when considering contract terms and relevant facts and circumstances. The five-step model includes (1) identifying the contract, (2) identifying the separate performance obligations in the contract, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations and (5) recognizing revenue when each performance obligation has been satisfied. The standard also requires expanded disclosures surrounding revenue recognition. The standard is effective for fiscal periods beginning after December 15, 2016, including interim periods within that reporting period and allows for either full retrospective or modified retrospective adoption with early adoption being prohibited. We are currently assessing the future impact this standard may have on our financial condition, results of operations or cash flows. Going Concern — In August 2014, the FASB issued Accounting Standards Update 2014-15, “Presentation of Financial Statements — Going Concern”. This standard requires an entity’s management to assess the entity’s ability to continue as a going concern every reporting period including interim periods and requires additional disclosures if conditions or events raise substantial doubt about an entity’s ability to continue as a going concern. The standard is effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter with early adoption permitted. We do not anticipate a material impact on our financial condition, results of operations or cash flows as a result of adopting this standard.

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- Definition The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. + References No definition available. + Details
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