Delaware | 1-12079 | 77-0212977 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 — RESULTS OF OPERATIONS AND FINANCIAL CONDITION | ||
ITEM 9.01 — FINANCIAL STATEMENTS AND EXHIBITS | ||
SIGNATURES | ||
EXHIBIT INDEX |
(d) | Exhibits |
Exhibit No. | Description | |
99.1 | Calpine Corporation Press Release dated July 25, 2013.* |
* | Furnished herewith. |
By: | /s/ ZAMIR RAUF | |||
Zamir Rauf | ||||
Executive Vice President and | ||||
Chief Financial Officer | ||||
July 25, 2013 |
Exhibit No. | Description | |
99.1 | Calpine Corporation Press Release dated July 25, 2013.* |
* | Furnished herewith. |
![]() | EXHIBIT 99.1 |
CONTACTS: | NEWS RELEASE |
Media Relations: | Investor Relations: |
Norma F. Dunn | Bryan Kimzey |
713-830-8883 | 713-830-8777 |
norma.dunn@calpine.com | bryan.kimzey@calpine.com |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||||||||||||
Operating Revenues | $ | 1,572 | $ | 879 | 78.8 | % | $ | 2,813 | $ | 2,115 | 33.0 | % | ||||||||||
Commodity Margin | $ | 533 | $ | 609 | (12.5 | )% | $ | 994 | $ | 1,126 | (11.7 | )% | ||||||||||
Adjusted EBITDA | $ | 343 | $ | 403 | (14.9 | )% | $ | 629 | $ | 728 | (13.6 | )% | ||||||||||
Adjusted Free Cash Flow | $ | 38 | $ | 87 | (56.3 | )% | $ | (5 | ) | $ | 60 | (108.3 | )% | |||||||||
Per Share (diluted) | $ | 0.08 | $ | 0.19 | (57.9 | )% | $ | (0.01 | ) | $ | 0.13 | (107.7 | )% | |||||||||
Net Loss1 | $ | (70 | ) | $ | (329 | ) | $ | (195 | ) | $ | (338 | ) | ||||||||||
Per Share (diluted) | $ | (0.16 | ) | $ | (0.69 | ) | $ | (0.43 | ) | $ | (0.71 | ) | ||||||||||
Net Income (Loss), As Adjusted2 | $ | (33 | ) | $ | 14 | $ | (103 | ) | $ | (51 | ) |
Prior Guidance (as of May 2, 2013) | Current Guidance | ||
Adjusted EBITDA | $1,800 - 1,960 | $1,800 - 1,875 | |
Adjusted Free Cash Flow | $615 - 775 | $640 - 715 | |
Per Share Estimate (diluted) | $1.50 | $1.50 |
• | Operations: |
— | Generated approximately 23 million MWh3 of electricity in the second quarter of 2013 |
— | Achieved record-low second quarter fleetwide forced outage factor: 1.6% |
— | Delivered exceptional second quarter fleetwide starting reliability: 99% |
• | Commercial: |
— | Entered into three-year PPA with South Carolina Electric and Gas to provide 200 MW of power from our Columbia Energy Center commencing in January 2014 |
— | Entered into two new resource adequacy contracts with Pacific Gas and Electric Company for our Delta and Sutter Energy Centers for the full capacity of each plant, commencing in January and June 2014, respectively |
— | Entered into two new contracts with Marin Energy Authority to provide up to 10 MW of renewable power from our Geysers assets |
• | Capital Management: |
— | Completed $400 million share repurchase authorization, bringing the cumulative total of shares repurchased to $1 billion, or approximately 11% of our outstanding shares4 |
— | Refinanced our CCFC notes and Corporate Revolver, providing material interest savings and extending maturities |
1 | Reported as net loss attributable to Calpine on our Consolidated Condensed Statements of Operations. |
2 | Refer to Table 1 for further detail of Net Income (Loss), As Adjusted. |
3 | Includes generation from power plants owned but not operated by Calpine and our share of generation from unconsolidated power plants. |
4 | Based upon shares outstanding (including shares held in reserve) as of June 30, 2011, immediately prior to the initial announcement of the repurchase program. |
– | the sale of Broad River and Riverside Energy Centers, partially offset by the acquisition of Bosque Energy Center in the fourth quarter of 2012 |
– | weaker market conditions due to milder weather, an increase in wind generation in Texas and higher natural gas prices primarily in our Texas, North and Southeast segments in the second quarter of 2013 compared to the prior year period and |
– | lower contribution from hedges, partially offset by |
+ | higher regulatory capacity revenue in the North and |
+ | higher revenue from a tolling contract in our West segment that became effective in January 2013. |
– | lower Commodity Margin, as previously discussed, partially offset by |
+ | lower plant operating expense, as previously discussed, and |
+ | lower interest expense associated with a decrease in our annual effective interest rate as a result of the refinancing activities completed during the fourth quarter of 2012 and first half of 2013. |
– | the sale of Broad River and Riverside Energy Centers, partially offset by the acquisition of Bosque Energy Center in the fourth quarter of 2012 |
– | weaker market conditions due to milder weather, an increase in wind generation in Texas and higher natural gas prices primarily in our Texas, North and Southeast segments in the first half of 2013 compared to the prior year period and |
– | lower contribution from hedges, partially offset by |
+ | higher regulatory capacity revenue in the North and |
+ | higher revenue from a tolling contract in our West segment that became effective in January 2013. |
5 | Decrease in plant operating expense excludes changes in major maintenance expense, stock-based compensation expense, non-cash loss on disposition of assets and other costs. See the table titled “Consolidated Adjusted EBITDA Reconciliation” for the actual amounts of these items for the three and six months ended June 30, 2013 and 2012. |
– | lower Commodity Margin, as previously discussed, and |
– | higher depreciation and amortization expense primarily resulting from our acquisition of our Bosque Energy Center, partially offset by |
+ | an increase in various state and foreign jurisdiction income tax benefits and |
+ | lower interest expense associated with a decrease in our annual effective interest rate, as previously discussed. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Net loss attributable to Calpine | $ | (70 | ) | $ | (329 | ) | $ | (195 | ) | $ | (338 | ) | ||||
Debt extinguishment costs(1) | 68 | — | 68 | 12 | ||||||||||||
Unrealized MtM (gain) loss on derivatives(1) (2) | (31 | ) | 343 | 24 | 119 | |||||||||||
Other items (1) (3) | — | — | — | 156 | ||||||||||||
Net Income (Loss), As Adjusted(4) | $ | (33 | ) | $ | 14 | $ | (103 | ) | $ | (51 | ) |
(1) | Shown net of tax, assuming a 0% effective tax rate for these items. |
(2) | In addition to changes in market value on derivatives not designated as hedges, changes in unrealized (gain) loss also includes de-designation of interest rate swap cash flow hedges and related reclassification from AOCI into earnings, hedge ineffectiveness and adjustments to reflect changes in credit default risk exposure. |
(3) | Other items include realized mark-to-market losses associated with the settlement of non-hedged interest rate swaps totaling nil and $156 million for the three and six months ended June 30, 2012. |
(4) | See “Regulation G Reconciliations” for further discussion of Net Income (Loss), As Adjusted. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
2013 | 2012 | Variance | 2013 | 2012 | Variance | |||||||||||||||||||
West | $ | 198 | $ | 210 | $ | (12 | ) | $ | 400 | $ | 418 | $ | (18 | ) | ||||||||||
Texas | 133 | 145 | (12 | ) | 209 | 254 | (45 | ) | ||||||||||||||||
North | 159 | 181 | (22 | ) | 301 | 325 | (24 | ) | ||||||||||||||||
Southeast | 43 | 73 | (30 | ) | 84 | 129 | (45 | ) | ||||||||||||||||
Total | $ | 533 | $ | 609 | $ | (76 | ) | $ | 994 | $ | 1,126 | $ | (132 | ) |
– | lower contribution from hedges, partially offset by |
+ | higher revenue from a tolling contract and |
+ | higher spark spreads on increased generation driven by improved market conditions associated with lower hydroelectric generation, warmer weather and the implementation of the AB32 carbon market. |
– | lower spark spreads resulting from milder weather and an increase in wind generation and |
– | lower generation output resulting from a reversal of coal-to-gas switching due to higher natural gas prices, partially offset by |
+ | higher contribution from hedges and |
+ | the acquisition of Bosque Energy Center in November 2012. |
– | the sale of Riverside Energy Center in December 2012 and |
– | lower spark spreads and lower generation output resulting from a reversal of coal-to-gas switching due to higher natural gas prices, partially offset by |
+ | higher regulatory capacity revenues. |
– | the sale of Broad River Energy Center in December 2012 and |
– | lower spark spreads and lower generation output resulting from milder weather and a reversal of coal-to-gas switching due to higher natural gas prices. |
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Cash and cash equivalents, corporate(1) | $ | 588 | $ | 1,153 | ||||
Cash and cash equivalents, non-corporate | 127 | 131 | ||||||
Total cash and cash equivalents | 715 | 1,284 | ||||||
Restricted cash | 198 | 253 | ||||||
Corporate Revolving Facility availability | 760 | 757 | ||||||
CDHI letter of credit availability(2) | — | — | ||||||
Total current liquidity availability | $ | 1,673 | $ | 2,294 |
(1) | Includes $3 million and $11 million of margin deposits posted with us by our counterparties at June 30, 2013, and December 31, 2012, respectively. |
(2) | As a result of the completion of the sale of Riverside Energy Center, LLC, a wholly owned subsidiary of CDHI, on December 31, 2012, we are required to cash collateralize letters of credit issued in excess of $225 million until replacement collateral is contributed to the CDHI collateral package, which we are in the process of arranging. At June 30, 2013, we had $18 million in outstanding letters of credit issued in excess of $225 million under our CDHI letter of credit facility that were collateralized by cash. We do not believe that this change will have a material impact on our liquidity. |
Six Months Ended June 30, | |||||||
2013 | 2012 | ||||||
Beginning cash and cash equivalents | $ | 1,284 | $ | 1,252 | |||
Net cash used in: | |||||||
Operating activities | (175 | ) | (32 | ) | |||
Investing activities | (281 | ) | (513 | ) | |||
Financing activities | (113 | ) | (120 | ) | |||
Net decrease in cash and cash equivalents | (569 | ) | (665 | ) | |||
Ending cash and cash equivalents | $ | 715 | $ | 587 |
• | Safety Performance: |
— | Maintained top quartile7 safety metrics: 0.97 Total Recordable Incident Rate |
• | Availability Performance: |
— | Maintained impressive fleetwide forced outage factor: 1.6% |
— | Delivered remarkable fleetwide starting reliability: 99% |
• | Geothermal Generation: |
— | Provided approximately 1.5 million MWh of renewable baseload generation during the quarter with a 0.70% forced outage factor year-to-date |
• | Natural Gas-fired Generation: |
— | Corpus Christi Energy Center: 100% starting reliability, 0% forced outage factor |
— | Carville Energy Center: 100% starting reliability, 99.9% availability |
• | Customer-oriented Growth: |
— | Entered into a three-year PPA with South Carolina Electric and Gas Company to provide 200 MW of power from our Columbia Energy Center beginning January 2014 |
— | Entered into two new resource adequacy contracts with Pacific Gas and Electric Company for our Delta and Sutter Energy Centers for the full capacity of each plant which commence in January and June 2014, respectively, and extend through December 2015 and 2016, respectively |
— | Entered into two new PPAs with Marin Energy Authority to provide 3 MW and 10 MW of renewable power in 2014 and 2017-2026, respectively, from our Geysers assets |
Prior Guidance | ||||||
(as of May 2, 2013) | Current Guidance | |||||
Adjusted EBITDA | $ | 1,800 - 1,960 | $ | 1,800 - 1,875 | ||
Less: | ||||||
Operating lease payments | 35 | 35 | ||||
Major maintenance expense and maintenance capital expenditures(1) | 370 | 390 | ||||
Cash interest, net(2) | 755 | 710 | ||||
Cash taxes | 15 | 15 | ||||
Other | 10 | 10 | ||||
Adjusted Free Cash Flow | $ | 615 - 775 | $ | 640 - 715 | ||
Per Share Estimate (diluted) | $ | 1.50 | $ | 1.50 | ||
Growth capital expenditures (net of debt funding) | $ | (250 | ) | $ | (250 | ) |
Debt amortization | $ | (140 | ) | $ | (150 | ) |
(1) | Includes projected major maintenance expense of $230 million and maintenance capital expenditures of $160 million. Capital expenditures exclude major construction and development projects. 2013 figures exclude a non-recurring IT system upgrade. |
(2) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
• | Financial results that may be volatile and may not reflect historical trends due to, among other things, seasonality of demand, fluctuations in prices for commodities such as natural gas and power, changes in U.S. macroeconomic conditions, fluctuations in liquidity and volatility in the energy commodities markets and our ability to hedge risks; |
• | Laws, regulation and market rules in the markets in which we participate and our ability to effectively respond to changes in laws, regulations or market rules or the interpretation thereof including those related to the environment, derivative transactions and market design in the regions in which we operate; |
• | Our ability to manage our liquidity needs and to comply with covenants under our First Lien Notes, Corporate Revolving Facility, First Lien Term Loans, CCFC Term Loans and other existing financing obligations; |
• | Risks associated with the operation, construction and development of power plants including unscheduled outages or delays and plant efficiencies; |
• | Risks related to our geothermal resources, including the adequacy of our steam reserves, unusual or unexpected steam field well and pipeline maintenance requirements, variables associated with the injection of wastewater to the steam reservoir and potential regulations or other requirements related to seismicity concerns that may delay or increase the cost of developing or operating geothermal resources; |
• | The unknown future impact on our business from the Dodd-Frank Act and the rules to be promulgated thereunder; |
• | Competition, including risks associated with marketing and selling power in the evolving energy markets; |
• | The expiration or early termination of our PPAs and the related results on revenues; |
• | Future capacity revenues may not occur at expected levels; |
• | Natural disasters, such as hurricanes, earthquakes and floods, acts of terrorism or cyber attacks that may impact our power plants or the markets our power plants serve and our corporate headquarters; |
• | Disruptions in or limitations on the transportation of natural gas, fuel oil and transmission of power; |
• | Our ability to manage our customer and counterparty exposure and credit risk, including our commodity positions; |
• | Our ability to attract, motivate and retain key employees; |
• | Present and possible future claims, litigation and enforcement actions; and |
• | Other risks identified in this press release and in our 2012 Form 10-K. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions, except share and per share amounts) | ||||||||||||||||
Operating revenues: | ||||||||||||||||
Commodity revenue | $ | 1,539 | $ | 1,177 | $ | 2,847 | $ | 2,389 | ||||||||
Unrealized mark-to-market gain (loss) | 31 | (302 | ) | (40 | ) | (280 | ) | |||||||||
Other revenue | 2 | 4 | 6 | 6 | ||||||||||||
Operating revenues | 1,572 | 879 | 2,813 | 2,115 | ||||||||||||
Operating expenses: | ||||||||||||||||
Fuel and purchased energy expense: | ||||||||||||||||
Commodity expense | 998 | 570 | 1,833 | 1,261 | ||||||||||||
Unrealized mark-to-market (gain) loss | 2 | 44 | (12 | ) | (12 | ) | ||||||||||
Fuel and purchased energy expense | 1,000 | 614 | 1,821 | 1,249 | ||||||||||||
Plant operating expense | 257 | 271 | 484 | 492 | ||||||||||||
Depreciation and amortization expense | 145 | 138 | 291 | 278 | ||||||||||||
Sales, general and other administrative expense | 36 | 35 | 69 | 68 | ||||||||||||
Other operating expenses | 20 | 19 | 38 | 40 | ||||||||||||
Total operating expenses | 1,458 | 1,077 | 2,703 | 2,127 | ||||||||||||
(Income) from unconsolidated investments in power plants | (8 | ) | (5 | ) | (16 | ) | (14 | ) | ||||||||
Income (loss) from operations | 122 | (193 | ) | 126 | 2 | |||||||||||
Interest expense | 170 | 184 | 346 | 369 | ||||||||||||
Loss on interest rate derivatives | — | — | — | 14 | ||||||||||||
Interest (income) | (1 | ) | (2 | ) | (3 | ) | (5 | ) | ||||||||
Debt extinguishment costs | 68 | — | 68 | 12 | ||||||||||||
Other (income) expense, net | 3 | 6 | 8 | 8 | ||||||||||||
Loss before income taxes | (118 | ) | (381 | ) | (293 | ) | (396 | ) | ||||||||
Income tax benefit | (48 | ) | (52 | ) | (98 | ) | (58 | ) | ||||||||
Net loss | (70 | ) | (329 | ) | (195 | ) | (338 | ) | ||||||||
Net income attributable to the noncontrolling interest | — | — | — | — | ||||||||||||
Net loss attributable to Calpine | $ | (70 | ) | $ | (329 | ) | $ | (195 | ) | $ | (338 | ) |
Basic and diluted loss per common share attributable to Calpine: | ||||||||||||||||
Weighted average shares of common stock outstanding (in thousands) | 447,558 | 471,444 | 449,620 | 474,775 | ||||||||||||
Net loss per common share attributable to Calpine — basic and diluted | $ | (0.16 | ) | $ | (0.69 | ) | $ | (0.43 | ) | $ | (0.71 | ) |
June 30, | December 31, | |||||||
2013 | 2012 | |||||||
(in millions, except share and per share amounts) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 715 | $ | 1,284 | ||||
Accounts receivable, net of allowance of $2 and $6 | 726 | 437 | ||||||
Margin deposits and other prepaid expense | 310 | 244 | ||||||
Restricted cash, current | 140 | 193 | ||||||
Derivative assets, current | 601 | 339 | ||||||
Inventory and other current assets | 447 | 335 | ||||||
Total current assets | 2,939 | 2,832 | ||||||
Property, plant and equipment, net | 13,057 | 13,005 | ||||||
Restricted cash, net of current portion | 58 | 60 | ||||||
Investments in power plants | 85 | 81 | ||||||
Long-term derivative assets | 136 | 98 | ||||||
Other assets | 483 | 473 | ||||||
Total assets | $ | 16,758 | $ | 16,549 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 551 | $ | 382 | ||||
Accrued interest payable | 175 | 180 | ||||||
Debt, current portion | 169 | 115 | ||||||
Derivative liabilities, current | 630 | 357 | ||||||
Other current liabilities | 206 | 284 | ||||||
Total current liabilities | 1,731 | 1,318 | ||||||
Debt, net of current portion | 10,851 | 10,635 | ||||||
Deferred income tax liability, non-current | 3 | — | ||||||
Long-term derivative liabilities | 291 | 293 | ||||||
Other long-term liabilities | 298 | 247 | ||||||
Total liabilities | 13,174 | 12,493 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.001 par value per share; authorized 100,000,000 shares, none issued and outstanding | — | — | ||||||
Common stock, $0.001 par value per share; authorized 1,400,000,000 shares, 495,214,960 and 492,495,100 shares issued, respectively, and 441,671,019 and 457,048,970 shares outstanding, respectively | 1 | 1 | ||||||
Treasury stock, at cost, 53,543,941 and 35,446,130 shares, respectively | (962 | ) | (594 | ) | ||||
Additional paid-in capital | 12,370 | 12,335 | ||||||
Accumulated deficit | (7,695 | ) | (7,500 | ) | ||||
Accumulated other comprehensive loss | (191 | ) | (248 | ) | ||||
Total Calpine stockholders’ equity | 3,523 | 3,994 | ||||||
Noncontrolling interest | 61 | 62 | ||||||
Total stockholders’ equity | 3,584 | 4,056 | ||||||
Total liabilities and stockholders’ equity | $ | 16,758 | $ | 16,549 |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (195 | ) | $ | (338 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization expense(1) | 315 | 299 | ||||||
Debt extinguishment costs | 28 | — | ||||||
Deferred income taxes | (15 | ) | (31 | ) | ||||
Loss on disposition of assets | 4 | 4 | ||||||
Unrealized mark-to-market activity, net | 24 | 119 | ||||||
(Income) from unconsolidated investments in power plants | (16 | ) | (14 | ) | ||||
Return on unconsolidated investments in power plants | 16 | 16 | ||||||
Stock-based compensation expense | 20 | 13 | ||||||
Other | (4 | ) | 1 | |||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | (285 | ) | 63 | |||||
Derivative instruments, net | 1 | (111 | ) | |||||
Other assets | (182 | ) | (122 | ) | ||||
Accounts payable and accrued expenses | 67 | (86 | ) | |||||
Settlement of non-hedging interest rate swaps | — | 156 | ||||||
Other liabilities | 47 | (1 | ) | |||||
Net cash used in operating activities | (175 | ) | (32 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (335 | ) | (369 | ) | ||||
Settlement of non-hedging interest rate swaps | — | (156 | ) | |||||
Decrease in restricted cash | 55 | 19 | ||||||
Purchases of deferred transmission credits | — | (12 | ) | |||||
Other | (1 | ) | 5 | |||||
Net cash used in investing activities | $ | (281 | ) | $ | (513 | ) |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Cash flows from financing activities: | ||||||||
Repayment under First Lien Term Loans | $ | (12 | ) | $ | (8 | ) | ||
Borrowings from CCFC Term Loans | 1,197 | — | ||||||
Repayment of CCFC Notes | (1,000 | ) | — | |||||
Borrowings from project financing, notes payable and other | 116 | 226 | ||||||
Repayments of project financing, notes payable and other | (43 | ) | (46 | ) | ||||
Financing costs | (27 | ) | (5 | ) | ||||
Stock repurchases | (362 | ) | (290 | ) | ||||
Proceeds from exercises of stock options | 17 | 3 | ||||||
Other | 1 | — | ||||||
Net cash used in financing activities | (113 | ) | (120 | ) | ||||
Net decrease in cash and cash equivalents | (569 | ) | (665 | ) | ||||
Cash and cash equivalents, beginning of period | 1,284 | 1,252 | ||||||
Cash and cash equivalents, end of period | $ | 715 | $ | 587 | ||||
Cash paid during the period for: | ||||||||
Interest, net of amounts capitalized | $ | 334 | $ | 352 | ||||
Income taxes | $ | 21 | $ | 13 | ||||
Supplemental disclosure of non-cash investing activities: | ||||||||
Change in capital expenditures included in accounts payable | $ | 17 | $ | 3 |
(1) | Includes depreciation and amortization included in fuel and purchased energy expense and interest expense on our Consolidated Condensed Statements of Operations. |
Three Months Ended June 30, 2013 | ||||||||||||||||||||||||
Consolidation | ||||||||||||||||||||||||
And | ||||||||||||||||||||||||
West | Texas | North | Southeast | Elimination | Total | |||||||||||||||||||
Commodity Margin | $ | 198 | $ | 133 | $ | 159 | $ | 43 | $ | — | $ | 533 | ||||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(1) | 19 | 34 | (12 | ) | 7 | (9 | ) | 39 | ||||||||||||||||
Less: | ||||||||||||||||||||||||
Plant operating expense | 88 | 96 | 46 | 35 | (8 | ) | 257 | |||||||||||||||||
Depreciation and amortization expense | 52 | 44 | 32 | 18 | (1 | ) | 145 | |||||||||||||||||
Sales, general and other administrative expense | 3 | 21 | 6 | 7 | (1 | ) | 36 | |||||||||||||||||
Other operating expenses | 11 | 1 | 7 | (1 | ) | 2 | 20 | |||||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (8 | ) | — | — | (8 | ) | ||||||||||||||||
Income (loss) from operations | $ | 63 | $ | 5 | $ | 64 | $ | (9 | ) | $ | (1 | ) | $ | 122 |
Three Months Ended June 30, 2012 | ||||||||||||||||||||||||
Consolidation | ||||||||||||||||||||||||
And | ||||||||||||||||||||||||
West | Texas | North | Southeast | Elimination | Total | |||||||||||||||||||
Commodity Margin(2)(3) | $ | 210 | $ | 145 | $ | 181 | $ | 73 | $ | — | $ | 609 | ||||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(1) | (76 | ) | (217 | ) | (3 | ) | (42 | ) | (6 | ) | (344 | ) | ||||||||||||
Less: | ||||||||||||||||||||||||
Plant operating expense | 112 | 72 | 58 | 36 | (7 | ) | 271 | |||||||||||||||||
Depreciation and amortization expense | 49 | 34 | 34 | 22 | (1 | ) | 138 | |||||||||||||||||
Sales, general and other administrative expense | 6 | 13 | 8 | 7 | 1 | 35 | ||||||||||||||||||
Other operating expenses | 9 | 1 | 6 | 2 | 1 | 19 | ||||||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (5 | ) | — | — | (5 | ) | ||||||||||||||||
Income (loss) from operations | $ | (42 | ) | $ | (192 | ) | $ | 77 | $ | (36 | ) | $ | — | $ | (193 | ) |
Six Months Ended June 30, 2013 | ||||||||||||||||||||||||
Consolidation | ||||||||||||||||||||||||
And | ||||||||||||||||||||||||
West | Texas | North | Southeast | Elimination | Total | |||||||||||||||||||
Commodity Margin | $ | 400 | $ | 209 | $ | 301 | $ | 84 | $ | — | $ | 994 | ||||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(4) | (18 | ) | 23 | (5 | ) | 14 | (16 | ) | (2 | ) | ||||||||||||||
Less: | ||||||||||||||||||||||||
Plant operating expense | 181 | 164 | 90 | 65 | (16 | ) | 484 | |||||||||||||||||
Depreciation and amortization expense | 103 | 87 | 65 | 37 | (1 | ) | 291 | |||||||||||||||||
Sales, general and other administrative expense | 7 | 38 | 12 | 12 | — | 69 | ||||||||||||||||||
Other operating expenses | 20 | 2 | 14 | 1 | 1 | 38 | ||||||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (16 | ) | — | — | (16 | ) | ||||||||||||||||
Income (loss) from operations | $ | 71 | $ | (59 | ) | $ | 131 | $ | (17 | ) | $ | — | $ | 126 |
Six Months Ended June 30, 2012 | ||||||||||||||||||||||||
Consolidation | ||||||||||||||||||||||||
And | ||||||||||||||||||||||||
West | Texas | North | Southeast | Elimination | Total | |||||||||||||||||||
Commodity Margin(2)(3) | $ | 418 | $ | 254 | $ | 325 | $ | 129 | $ | — | $ | 1,126 | ||||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(4) | (40 | ) | (183 | ) | 9 | (32 | ) | (14 | ) | (260 | ) | |||||||||||||
Less: | ||||||||||||||||||||||||
Plant operating expense | 193 | 140 | 103 | 69 | (13 | ) | 492 | |||||||||||||||||
Depreciation and amortization expense | 99 | 69 | 67 | 45 | (2 | ) | 278 | |||||||||||||||||
Sales, general and other administrative expense | 14 | 24 | 14 | 15 | 1 | 68 | ||||||||||||||||||
Other operating expenses | 20 | 3 | 15 | 3 | (1 | ) | 40 | |||||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (14 | ) | — | — | (14 | ) | ||||||||||||||||
Income (loss) from operations | $ | 52 | $ | (165 | ) | $ | 149 | $ | (35 | ) | $ | 1 | $ | 2 |
(1) | Includes $(11) million and $(1) million of lease levelization and $3 million and $3 million of amortization expense for the three months ended June 30, 2013 and 2012, respectively. |
(2) | Our North segment includes Commodity Margin of $24 million and $32 million for the three and six months ended June 30, 2012, related to Riverside Energy Center, LLC, which was sold in December 2012. |
(3) | Our Southeast segment includes Commodity Margin of $13 million and $24 million for the three and six months ended June 30, 2012, related to Broad River Energy Center, which was sold in December 2012. |
(4) | Includes $(27) million and $(9) million of lease levelization and $7 million and $7 million of amortization expense for the six months ended June 30, 2013 and 2012, respectively. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net loss attributable to Calpine | $ | (70 | ) | $ | (329 | ) | $ | (195 | ) | $ | (338 | ) | ||||
Income tax benefit | (48 | ) | (52 | ) | (98 | ) | (58 | ) | ||||||||
Debt extinguishment costs and other (income) expense, net | 71 | 6 | 76 | 20 | ||||||||||||
Loss on interest rate derivatives | — | — | — | 14 | ||||||||||||
Interest expense, net of interest income | 169 | 182 | 343 | 364 | ||||||||||||
Income (loss) from operations | $ | 122 | $ | (193 | ) | $ | 126 | $ | 2 | |||||||
Add: | ||||||||||||||||
Adjustments to reconcile income from operations to Adjusted EBITDA: | ||||||||||||||||
Depreciation and amortization expense, excluding deferred financing costs(1) | 146 | 138 | 292 | 279 | ||||||||||||
Major maintenance expense | 83 | 81 | 149 | 127 | ||||||||||||
Operating lease expense | 8 | 8 | 17 | 17 | ||||||||||||
Unrealized (gain) loss on commodity derivative mark-to-market activity | (29 | ) | 346 | 28 | 268 | |||||||||||
Adjustments to reflect Adjusted EBITDA from unconsolidated investments(2)(3) | 7 | 9 | 13 | 16 | ||||||||||||
Stock-based compensation expense | 12 | 7 | 20 | 13 | ||||||||||||
Loss on dispositions of assets | 2 | 2 | 4 | 4 | ||||||||||||
Acquired contract amortization | 3 | 3 | 7 | 7 | ||||||||||||
Other | (11 | ) | 2 | (27 | ) | (5 | ) | |||||||||
Total Adjusted EBITDA | $ | 343 | $ | 403 | $ | 629 | $ | 728 | ||||||||
Less: | ||||||||||||||||
Operating lease payments | 8 | 8 | 17 | 17 | ||||||||||||
Major maintenance expense and capital expenditures(4) | 105 | 109 | 241 | 255 | ||||||||||||
Cash interest, net(5) | 175 | 190 | 355 | 381 | ||||||||||||
Cash taxes | 14 | 7 | 17 | 11 | ||||||||||||
Other | 3 | 2 | 4 | 4 | ||||||||||||
Adjusted Free Cash Flow(6) | $ | 38 | $ | 87 | $ | (5 | ) | $ | 60 | |||||||
Weighted average shares of common stock outstanding (diluted, in thousands) | 447,558 | 471,444 | 449,620 | 474,775 | ||||||||||||
Adjusted Free Cash Flow Per Share (diluted) | $ | 0.08 | $ | 0.19 | $ | (0.01 | ) | $ | 0.13 |
(1) | Depreciation and amortization expense on our Consolidated Condensed Statements of Operations excludes amortization of other assets. |
(2) | Included on our Consolidated Condensed Statements of Operations in (income) from unconsolidated investments in power plants. |
(3) | Adjustments to reflect Adjusted EBITDA from unconsolidated investments include unrealized (gain) loss on mark-to-market activity of nil for each of the three and six months ended June 30, 2013 and 2012. |
(4) | Includes $85 million and $151 million in major maintenance expense for the three months and six months ended June 30, 2013, respectively, and $20 million and $90 million in maintenance capital expenditure for the three and six months ended June 30, 2013, respectively. Includes $84 million and $131 million in major maintenance expense for the three months and six months ended June 30, 2012, respectively, and $25 million and $124 million in maintenance capital expenditure for the three and six months ended June 30, 2012, respectively. |
(5) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
(6) | Excludes an increase in working capital of $121 million and $304 million for the three months and six months ended June 30, 2013, respectively, and an increase in working capital of $56 million and a decrease in working capital of $20 million for the three months and six months ended June 30, 2012, respectively. Adjusted Free Cash Flow, as reported, excludes changes in working capital, such that it is calculated on the same basis as our guidance. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Commodity Margin | $ | 533 | $ | 609 | $ | 994 | $ | 1,126 | ||||||||
Other revenue | 3 | 3 | 6 | 6 | ||||||||||||
Plant operating expense(1) | (166 | ) | (181 | ) | (320 | ) | (351 | ) | ||||||||
Sales, general and administrative expense(2) | (30 | ) | (30 | ) | (59 | ) | (60 | ) | ||||||||
Other operating expenses(3) | (11 | ) | (10 | ) | (21 | ) | (21 | ) | ||||||||
Adjusted EBITDA from unconsolidated investments in power plants(4) | 14 | 14 | 29 | 30 | ||||||||||||
Other | — | (2 | ) | — | (2 | ) | ||||||||||
Adjusted EBITDA | $ | 343 | $ | 403 | $ | 629 | $ | 728 |
(1) | Shown net of major maintenance expense, stock-based compensation expense, non-cash loss on dispositions of assets and other costs. |
(2) | Shown net of stock-based compensation expense and other costs. |
(3) | Shown net of operating lease expense, amortization and other costs. |
(4) | Amount is composed of income from unconsolidated investments in power plants, as well as adjustments to reflect Adjusted EBITDA from unconsolidated investments. |
Full Year 2013 Range: | Low | High | ||||
(in millions) | ||||||
GAAP Net Income (1) | $ | 162 | $ | 237 | ||
Plus: | ||||||
Debt extinguishment costs | 68 | 68 | ||||
Interest expense, net of interest income | 700 | 700 | ||||
Depreciation and amortization expense | 595 | 595 | ||||
Major maintenance expense | 225 | 225 | ||||
Operating lease expense | 35 | 35 | ||||
Other(2) | 15 | 15 | ||||
Adjusted EBITDA | $ | 1,800 | $ | 1,875 | ||
Less: | ||||||
Operating lease payments | 35 | 35 | ||||
Major maintenance expense and maintenance capital expenditures(3) | 390 | 390 | ||||
Cash interest, net(4) | 710 | 710 | ||||
Cash taxes | 15 | 15 | ||||
Other | 10 | 10 | ||||
Adjusted Free Cash Flow | $ | 640 | $ | 715 | ||
(1) | For purposes of Net Income guidance reconciliation, unrealized mark-to-market adjustments are assumed to be nil. |
(2) | Other includes stock-based compensation expense, adjustments to reflect Adjusted EBITDA from unconsolidated investments, income tax expense and other items. |
(3) | Includes projected major maintenance expense of $230 million and maintenance capital expenditures of $160 million. Capital expenditures exclude major construction and development projects. 2013 figures exclude a non-recurring IT system upgrade. |
(4) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
Three Months Ended June 30 | Six Months Ended June 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Total MWh generated (in thousands)(1) | 22,339 | 26,681 | 46,337 | 54,736 | ||||||||
West | 7,229 | 6,191 | 15,566 | 14,394 | ||||||||
Texas | 7,270 | 9,089 | 15,300 | 18,232 | ||||||||
Southeast | 3,773 | 6,201 | 7,495 | 11,923 | ||||||||
North | 4,067 | 5,200 | 7,976 | 10,187 | ||||||||
Average availability | 88.2 | % | 86.4 | % | 89.2 | % | 88.4 | % | ||||
West | 88.8 | % | 81.6 | % | 88.7 | % | 87.6 | % | ||||
Texas | 83.5 | % | 88.3 | % | 85.4 | % | 87.0 | % | ||||
Southeast | 95.2 | % | 90.8 | % | 94.7 | % | 92.5 | % | ||||
North | 88.2 | % | 85.4 | % | 90.2 | % | 87.3 | % | ||||
Average capacity factor, excluding peakers(1) | 43.4 | % | 51.0 | % | 45.5 | % | 53.0 | % | ||||
West | 52.5 | % | 45.0 | % | 57.0 | % | 52.7 | % | ||||
Texas | 42.8 | % | 59.3 | % | 45.3 | % | 59.6 | % | ||||
Southeast | 33.7 | % | 51.8 | % | 33.7 | % | 50.3 | % | ||||
North | 42.9 | % | 45.6 | % | 43.1 | % | 46.4 | % | ||||
Steam adjusted heat rate (Btu/kWh) | 7,447 | 7,391 | 7,394 | 7,329 | ||||||||
West | 7,414 | 7,366 | 7,345 | 7,233 | ||||||||
Texas | 7,184 | 7,150 | 7,173 | 7,115 | ||||||||
Southeast | 7,429 | 7,309 | 7,349 | 7,291 | ||||||||
North | 8,015 | 7,991 | 7,963 | 7,903 |
(1) | Excludes generation from unconsolidated power plants and power plants owned but not operated by us. |