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 February 13, 2015.* |
* | Furnished herewith. |
By: | /s/ ZAMIR RAUF | |||
Zamir Rauf | ||||
Executive Vice President and | ||||
Chief Financial Officer | ||||
February 13, 2015 |
Exhibit No. | Description | |
99.1 | Calpine Corporation Press Release dated February 13, 2015.* |
* | Furnished herewith. |
![]() | Exhibit 99.1 |
CONTACTS: | NEWS RELEASE |
Media Relations: | Investor Relations: |
Brett Kerr | Bryan Kimzey |
713-830-8809 | 713-830-8777 |
brett.kerr@calpine.com | bryan.kimzey@calpine.com |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||
2014 | 2013 | % Change | 2014 | 2013 | % Change | ||||||||||||||||
Operating Revenues | $ | 1,939 | $ | 1,438 | 34.8 | % | $ | 8,030 | $ | 6,301 | 27.4 | % | |||||||||
Commodity Margin | $ | 538 | $ | 589 | (8.7 | )% | $ | 2,759 | $ | 2,568 | 7.4 | % | |||||||||
Adjusted EBITDA | $ | 345 | $ | 399 | (13.5 | )% | $ | 1,949 | $ | 1,830 | 6.5 | % | |||||||||
Adjusted Free Cash Flow | $ | 95 | $ | 126 | (24.6 | )% | $ | 830 | $ | 677 | 22.6 | % | |||||||||
Per Share (diluted) | $ | 0.24 | $ | 0.29 | (17.2 | )% | $ | 2.03 | $ | 1.52 | 33.6 | % | |||||||||
Net Income (Loss)1 | $ | 210 | $ | (97 | ) | $ | 946 | $ | 14 | ||||||||||||
Per Share (diluted) | $ | 0.54 | $ | (0.23 | ) | $ | 2.31 | $ | 0.03 | ||||||||||||
Net Income (Loss), As Adjusted2 | $ | (50 | ) | $ | 21 | $ | 309 | $ | 186 |
2015 | |||
Adjusted EBITDA | $1,900 - 2,100 | ||
Adjusted Free Cash Flow | $810 - 1,010 | ||
Per Share Estimate (diluted) | $2.10 - 2.60 |
• | Power and Commercial Operations: |
— | Generated approximately 103 million MWh3 of electricity in 2014 |
— | Achieved goal of forced outage factor below 2% for third consecutive year |
— | Delivered impressive safety performance, including a record-low total recordable incident rate: 0.64 |
• | Portfolio Management: |
— | Completed acquisition of Fore River Energy Center for approximately $530 million, or $655/kW |
— | Entered into agreement to sell our Osprey Energy Center for approximately $166 million, excluding adjustments, upon conclusion of the plant’s existing PPA in January 2017, subject to federal and state approval |
— | Advanced development efforts for our Mankato Power Plant, where our customer has received Minnesota regulatory approval to execute a PPA with us that will facilitate expansion of the plant by 345 MW |
• | Capital Allocation Progress: |
— | Since 2011, completed $2.4 billion of share repurchases, or approximately 25% of shares outstanding4 |
— | Completed approximately $277 million of share repurchases since last earnings release, bringing total repurchases to approximately $1.1 billion in 2014 and $125 million year-to-date in 2015 |
— | Redeemed approximately $120 million of our 7.875% First Lien Notes due 2023 at a price of 103 |
— | Issued $650 million of 5.5% Senior Unsecured Notes due 2024, funding primarily Fore River acquisition and repurchases of higher interest rate debt |
1 | Reported as Net Income (Loss) attributable to Calpine on our Consolidated 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 490.6 million shares outstanding as of 6/30/11, immediately prior to announcement of repurchase program. |
– | the sale of six power plants with a total capacity of 3,498 MW in our East segment on July 3, 2014 |
– | lower regulatory capacity revenue in PJM and |
– | the expiration of a tolling contract associated with our Delta Energy Center in December 2013, partially offset by |
+ | the acquisition of Guadalupe Energy Center in February 2014, as well as the completion of the expansions of our Deer Park and Channel energy centers in June 2014 and |
+ | higher contribution from hedges in our West and Texas segments |
– | lower Commodity Margin, as previously discussed and |
– | higher income tax expense due to higher Net Income1 in 2014 compared to the prior year period, changes in state apportionment and state law changes, partially offset by |
+ | lower interest expense due to a decrease in our annual effective interest rate. |
+ | our Russell City and Los Esteros power plants commencing commercial operations during the third quarter of 2013, the acquisition of Guadalupe Energy Center in February 2014 and the completion of the expansions of our Deer Park and Channel energy centers in June 2014 |
+ | higher contribution from our dual-fueled power plants in the East during the first quarter of 2014 when the relative cost of consuming fuel oil was lower than natural gas and |
+ | stronger market conditions resulting in higher on-peak spark spreads in the West, partially offset by |
– | the sale of six power plants with a total capacity of 3,498 MW in our East segment on July 3, 2014 |
– | the expiration of a tolling contract associated with our Delta Energy Center in December 2013 and our Osprey Energy Center in May 2014, the latter of which was replaced with a new contract in October 2014, and |
– | lower regulatory capacity revenue in PJM during the second half of the year. |
5 | Increase 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 months and years ended December 31, 2014 and 2013. |
+ | higher Commodity Margin, as previously discussed and |
+ | lower interest expense due to a decrease in our annual effective interest rate, partially offset by |
– | higher plant operating expense driven primarily by portfolio changes, higher equipment failure expense related to outages, the reversal in 2013 of previously recognized regulatory fees that did not recur in 2014 and a reclassification in 2014 of shared expenses associated with our Freeport Energy Center. |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income (loss) attributable to Calpine | $ | 210 | $ | (97 | ) | $ | 946 | $ | 14 | |||||||
Impairment losses(1) | — | 16 | 123 | 16 | ||||||||||||
(Gain) on sale of assets, net(1) | — | — | (753 | ) | — | |||||||||||
Debt extinguishment costs(1) | 5 | 76 | 346 | 144 | ||||||||||||
MtM (gain) loss on derivatives(1)(2) | (265 | ) | 26 | (353 | ) | 12 | ||||||||||
Net Income (Loss), As Adjusted(3) | $ | (50 | ) | $ | 21 | $ | 309 | $ | 186 |
(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 mark-to-market (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) | See “Regulation G Reconciliations” for further discussion of Net Income (Loss), As Adjusted. |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2014 | 2013 | Variance | 2014 | 2013 | Variance | |||||||||||||||||||
West | $ | 259 | $ | 283 | $ | (24 | ) | $ | 1,050 | $ | 1,020 | $ | 30 | |||||||||||
Texas | 116 | 95 | 21 | 760 | 632 | 128 | ||||||||||||||||||
East | 163 | 211 | (48 | ) | 949 | 916 | 33 | |||||||||||||||||
Total | $ | 538 | $ | 589 | $ | (51 | ) | $ | 2,759 | $ | 2,568 | $ | 191 |
– | the expiration of a tolling contract associated with our Delta Energy Center in December 2013 and |
– | lower generation resulting from milder weather, partially offset by |
+ | higher contribution from hedges. |
+ | the commencement of commercial operations at our contracted Russell City and Los Esteros power plants in August 2013 and |
+ | higher on-peak spark spreads due to stronger market conditions resulting from warmer weather and lower hydroelectric generation, partially offset by |
– | the expiration of a tolling contract associated with our Delta Energy Center in December 2013 and |
– | lower contribution from hedges. |
+ | the acquisition of Guadalupe Energy Center in February 2014 and the expansions of our Deer Park and Channel energy centers, which were completed in June 2014, and |
+ | higher contribution from hedges. |
+ | the acquisition of Guadalupe Energy Center in February 2014 and the expansions of our Deer Park and Channel energy centers, which were completed in June 2014 |
+ | higher on-peak spark spreads resulting from stronger market conditions in the first quarter of 2014 and |
+ | higher contribution from hedges. |
– | lower regulatory capacity revenues in PJM, partially offset by |
+ | higher spark spreads as a result of favorable market conditions. |
+ | higher margins resulting from stronger market conditions due to colder than normal weather during the first quarter of 2014 |
+ | higher contribution from our dual-fueled plants during the first quarter of 2014 when the relative cost of consuming fuel oil was lower than natural gas and |
+ | higher spark spreads realized by our Mid-Atlantic power plants, which benefited from locationally advantaged natural gas prices in the second half of 2014, partially offset by |
– | lower contribution from hedges |
– | the net effect of the expiration of a previously existing PPA associated with our Osprey Energy Center in May 2014 and a new PPA that began in October 2014 and |
– | lower regulatory capacity revenue in PJM during the second half of the year. |
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
Cash and cash equivalents, corporate(1)(2) | $ | 460 | $ | 649 | ||||
Cash and cash equivalents, non-corporate | 257 | 292 | ||||||
Total cash and cash equivalents | 717 | 941 | ||||||
Restricted cash | 244 | 272 | ||||||
Corporate Revolving Facility availability(3) | 1,277 | 758 | ||||||
CDHI letter of credit facility availability | 86 | 7 | ||||||
Total current liquidity availability | $ | 2,324 | $ | 1,978 |
(1) | Includes $47 million and $5 million of margin deposits posted with us by our counterparties at December 31, 2014 and 2013, respectively. |
(2) | On February 3, 2015, we issued our $650 million 2024 Senior Unsecured Notes and used the proceeds to replenish cash on hand used for the acquisition of Fore River Energy Center in the fourth quarter of 2014, to repurchase approximately $150 million of our 2023 First Lien Notes and for general corporate purposes. |
(3) | On July 30, 2014, we amended our Corporate Revolving Facility to increase the capacity by an additional $500 million to $1.5 billion. |
Year Ended December 31, | |||||||
2014 | 2013 | ||||||
(in millions) | |||||||
Beginning cash and cash equivalents | $ | 941 | $ | 1,284 | |||
Net cash provided by (used in): | |||||||
Operating activities | 854 | 549 | |||||
Investing activities | (84 | ) | (593 | ) | |||
Financing activities | (994 | ) | (299 | ) | |||
Net decrease in cash and cash equivalents | (224 | ) | (343 | ) | |||
Ending cash and cash equivalents | $ | 717 | $ | 941 |
• | Safety Performance: |
— | Maintained top quartile7 safety metrics: 0.64 total recordable incident rate |
• | Availability Performance: |
— | Achieved low fleetwide forced outage factor: 1.9% |
— | Delivered exceptional fleetwide starting reliability: 98.6% |
• | Power Generation: |
— | Provided approximately 6 million MWh of renewable baseload generation from our Geysers geothermal plants for the 14th consecutive year |
— | Guadalupe, Hidalgo and Bethlehem energy centers: 100% starting reliability |
• | Customer-oriented Growth: During 2014, we entered into the following new contracts: |
— | A ten-year PPA, subject to approval by the California Public Utilities Commission (CPUC), with Southern California Edison (SCE) to provide 225 MW of capacity and renewable energy from our Geysers assets commencing in June 2017 |
— | A ten-year PPA with the Sonoma Clean Power Authority to provide 15 MW of renewable power from our Geysers assets commencing in January 2017. The capacity under contract will vary by year, increasing up to a maximum of 50 MW for years 2024 through 2026 |
— | A three-year resource adequacy contract with SCE for our Pastoria Energy Facility commencing in January 2016. The capacity under contract will initially be 238 MW and will increase to 476 MW during the final year of the contract |
— | A two-year resource adequacy contract with SCE for our Delta Energy Center for 500 MW of capacity commencing in January 2017 |
— | A six-year PPA with the City of San Marcos to provide power from our Texas power plant fleet commencing in July 2015 |
— | A two-year PPA with Pedernales Electric Cooperative to provide approximately 70 MW of power from our Texas power plant fleet commencing in August 2016 |
— | A one-year PPA with Guadalupe Valley Electric Cooperative to provide approximately 270 MW of power from our Texas power plant fleet commencing in June 2016 |
— | A five-year PPA with Dairyland Power Cooperative to provide capacity and energy from our RockGen Energy Center commencing in June 2018. The capacity under contract will initially be 135 MW, and then will increase to 235 MW for the final four years of the contract |
— | A PPA with a term of 27 months with Duke Energy Florida, Inc., to provide 515 MW of power and capacity from our Osprey Energy Center, which commenced in October 2014. The capacity under contract increased to 580 MW beginning in January 2015 |
Full Year 2015 | |||
Adjusted EBITDA | $ | 1,900 - 2,100 | |
Less: | |||
Operating lease payments | 35 | ||
Major maintenance expense and maintenance capital expenditures(1) | 395 | ||
Cash interest, net(2) | 630 | ||
Cash taxes | 25 | ||
Other | 5 | ||
Adjusted Free Cash Flow | $ | 810 - 1,010 | |
Per Share Estimate (diluted) | $ | 2.10 - 2.60 | |
Debt amortization(3) | $ | (360 | ) |
Growth capital expenditures (net of debt funding) | $ | (355 | ) |
(1) | Includes projected major maintenance expense of $235 million and maintenance capital expenditures of $160 million in 2015. Capital expenditures exclude major construction and development projects. |
(2) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
(3) | Includes the repurchase of approximately $150 million of our 2023 First Lien Notes in February 2015. |
• | 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 and extent to which we hedge risks; |
• | Laws, regulations 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, access the capital markets when necessary and to comply with covenants under our First Lien Notes, Senior Unsecured 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 water 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; |
• | Competition, including risks associated with marketing and selling power in the evolving energy markets; |
• | Structural changes in the supply and demand of power, resulting from the development of new fuels or technologies and demand-side management tools (such as distributed generation, power storage and other technologies); |
• | 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 that may arise from noncompliance with market rules promulgated by the SEC, CFTC, FERC and other regulatory bodies; and |
• | Other risks identified in this press release and in our 2014 Form 10-K. |
(Unaudited) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
(in millions, except share and per share amounts) | |||||||||||||||
Operating revenues: | |||||||||||||||
Commodity revenue | $ | 1,595 | $ | 1,507 | $ | 7,595 | $ | 6,374 | |||||||
Mark-to-market gain (loss) | 338 | (72 | ) | 419 | (86 | ) | |||||||||
Other revenue | 6 | 3 | 16 | 13 | |||||||||||
Operating revenues | 1,939 | 1,438 | 8,030 | 6,301 | |||||||||||
Operating expenses: | |||||||||||||||
Fuel and purchased energy expense: | |||||||||||||||
Commodity expense | 1,058 | 899 | 4,815 | 3,808 | |||||||||||
Mark-to-market (gain) loss | 75 | (43 | ) | 77 | (72 | ) | |||||||||
Fuel and purchased energy expense | 1,133 | 856 | 4,892 | 3,736 | |||||||||||
Plant operating expense | 215 | 211 | 969 | 895 | |||||||||||
Depreciation and amortization expense | 150 | 152 | 603 | 593 | |||||||||||
Sales, general and other administrative expense | 36 | 34 | 144 | 136 | |||||||||||
Other operating expenses | 22 | 23 | 88 | 81 | |||||||||||
Total operating expenses | 1,556 | 1,276 | 6,696 | 5,441 | |||||||||||
Impairment losses | — | 16 | 123 | 16 | |||||||||||
(Gain) on sale of assets, net | — | — | (753 | ) | — | ||||||||||
(Income) from unconsolidated investments in power plants | (7 | ) | (5 | ) | (25 | ) | (30 | ) | |||||||
Income from operations | 390 | 151 | 1,989 | 874 | |||||||||||
Interest expense | 154 | 174 | 645 | 696 | |||||||||||
Interest (income) | (1 | ) | (1 | ) | (6 | ) | (6 | ) | |||||||
Debt extinguishment costs | 5 | 76 | 346 | 144 | |||||||||||
Other (income) expense, net | 1 | 5 | 21 | 20 | |||||||||||
Income (loss) before income taxes | 231 | (103 | ) | 983 | 20 | ||||||||||
Income tax expense (benefit) | 17 | (10 | ) | 22 | 2 | ||||||||||
Net income (loss) | 214 | (93 | ) | 961 | 18 | ||||||||||
Net income attributable to the noncontrolling interest | (4 | ) | (4 | ) | (15 | ) | (4 | ) | |||||||
Net income (loss) attributable to Calpine | $ | 210 | $ | (97 | ) | $ | 946 | $ | 14 | ||||||
Basic earnings (loss) per common share attributable to Calpine: | |||||||||||||||
Weighted average shares of common stock outstanding (in thousands) | 384,964 | 429,331 | 404,837 | 440,666 | |||||||||||
Net income (loss) per common share attributable to Calpine — basic | $ | 0.55 | $ | (0.23 | ) | $ | 2.34 | $ | 0.03 | ||||||
Diluted earnings (loss) per common share attributable to Calpine: | |||||||||||||||
Weighted average shares of common stock outstanding (in thousands) | 389,425 | 429,331 | 409,360 | 444,773 | |||||||||||
Net income (loss) per common share attributable to Calpine — diluted | $ | 0.54 | $ | (0.23 | ) | $ | 2.31 | $ | 0.03 |
2014 | 2013 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 717 | $ | 941 | |||
Accounts receivable, net of allowance of $4 and $5 | 648 | 552 | |||||
Inventories | 447 | 364 | |||||
Margin deposits and other prepaid expense | 148 | 309 | |||||
Restricted cash, current | 195 | 203 | |||||
Derivative assets, current | 2,058 | 445 | |||||
Other current assets | 7 | 42 | |||||
Total current assets | 4,220 | 2,856 | |||||
Property, plant and equipment, net | 13,190 | 12,995 | |||||
Restricted cash, net of current portion | 49 | 69 | |||||
Investments in power plants | 95 | 93 | |||||
Long-term derivative assets | 439 | 105 | |||||
Other assets | 385 | 441 | |||||
Total assets | $ | 18,378 | $ | 16,559 | |||
LIABILITIES & STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 580 | $ | 462 | |||
Accrued interest payable | 165 | 162 | |||||
Debt, current portion | 199 | 204 | |||||
Derivative liabilities, current | 1,782 | 451 | |||||
Other current liabilities | 473 | 252 | |||||
Total current liabilities | 3,199 | 1,531 | |||||
Debt, net of current portion | 11,083 | 10,908 | |||||
Long-term derivative liabilities | 444 | 243 | |||||
Other long-term liabilities | 221 | 309 | |||||
Total liabilities | 14,947 | 12,991 | |||||
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, 502,287,022 shares issued and 381,921,264 shares outstanding at December 31, 2014, and 497,841,056 shares issued and 429,038,988 shares outstanding at December 31, 2013 | 1 | 1 | |||||
Treasury stock, at cost, 120,365,758 and 68,802,068 shares, respectively | (2,345 | ) | (1,230 | ) | |||
Additional paid-in capital | 12,440 | 12,389 | |||||
Accumulated deficit | (6,540 | ) | (7,486 | ) | |||
Accumulated other comprehensive loss | (178 | ) | (160 | ) | |||
Total Calpine stockholders’ equity | 3,378 | 3,514 | |||||
Noncontrolling interest | 53 | 54 | |||||
Total stockholders’ equity | 3,431 | 3,568 | |||||
Total liabilities and stockholders’ equity | $ | 18,378 | $ | 16,559 |
2014 | 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 961 | $ | 18 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization expense(1) | 649 | 638 | ||||||
Debt extinguishment costs | 36 | 43 | ||||||
Deferred income taxes | 5 | 14 | ||||||
Impairment losses | 123 | 16 | ||||||
(Gain) on sale of assets, net | (753 | ) | — | |||||
Mark-to-market activity, net | (353 | ) | 12 | |||||
(Income) from unconsolidated investments in power plants | (25 | ) | (30 | ) | ||||
Return on unconsolidated investments in power plants | 13 | 25 | ||||||
Stock-based compensation expense | 36 | 36 | ||||||
Other | (4 | ) | 1 | |||||
Change in operating assets and liabilities, net of effects of acquisitions: | ||||||||
Accounts receivable | (87 | ) | (113 | ) | ||||
Derivative instruments, net | (63 | ) | (7 | ) | ||||
Other assets | 151 | (148 | ) | |||||
Accounts payable and accrued expenses | 185 | (1 | ) | |||||
Other liabilities | (20 | ) | 45 | |||||
Net cash provided by operating activities | 854 | 549 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (492 | ) | (575 | ) | ||||
Proceeds from sale of power plants, interests and other | 1,573 | 1 | ||||||
Purchase of Fore River and Guadalupe Energy Centers | (1,197 | ) | — | |||||
(Increase) decrease in restricted cash | 28 | (18 | ) | |||||
Other | 4 | (1 | ) | |||||
Net cash used in investing activities | $ | (84 | ) | $ | (593 | ) |
2014 | 2013 | |||||||
Cash flows from financing activities: | ||||||||
Borrowings under CCFC Term Loans and First Lien Term Loans | $ | 420 | $ | 1,587 | ||||
Repayments of CCFC Term Loans, CCFC Notes and First Lien Term Loans | (45 | ) | (1,031 | ) | ||||
Borrowings under Senior Unsecured Notes | 2,800 | — | ||||||
Borrowings under First Lien Notes | — | 1,234 | ||||||
Repayments of First Lien Notes | (2,920 | ) | (1,550 | ) | ||||
Borrowings from project financing, notes payable and other | 79 | 182 | ||||||
Repayments of project financing, notes payable and other | (178 | ) | (66 | ) | ||||
Distribution to noncontrolling interest holder | (15 | ) | — | |||||
Financing costs | (56 | ) | (53 | ) | ||||
Stock repurchases | (1,100 | ) | (623 | ) | ||||
Proceeds from exercises of stock options | 20 | 20 | ||||||
Other | 1 | 1 | ||||||
Net cash used in financing activities | (994 | ) | (299 | ) | ||||
Net decrease in cash and cash equivalents | (224 | ) | (343 | ) | ||||
Cash and cash equivalents, beginning of period | 941 | 1,284 | ||||||
Cash and cash equivalents, end of period | $ | 717 | $ | 941 | ||||
Cash paid during the period for: | ||||||||
Interest, net of amounts capitalized | $ | 610 | $ | 672 | ||||
Income taxes | $ | 23 | $ | 24 | ||||
Supplemental disclosure of non-cash investing activities: | ||||||||
Change in capital expenditures included in accounts payable | $ | 3 | $ | 27 | ||||
Additions to property, plant and equipment through capital leases | $ | 19 | $ | — |
(1) | Includes depreciation and amortization included in fuel and purchased energy expense and interest expense on our Consolidated Statements of Operations. |
Three Months Ended December 31, 2014 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Commodity Margin(1) | $ | 259 | $ | 116 | $ | 163 | $ | — | $ | 538 | ||||||||||
Add: Mark-to-market commodity activity, net and other(2) | 129 | 68 | 79 | (8 | ) | 268 | ||||||||||||||
Less: | ||||||||||||||||||||
Plant operating expense | 94 | 63 | 65 | (7 | ) | 215 | ||||||||||||||
Depreciation and amortization expense | 62 | 50 | 39 | (1 | ) | 150 | ||||||||||||||
Sales, general and other administrative expense | 13 | 16 | 7 | — | 36 | |||||||||||||||
Other operating expenses | 11 | 1 | 10 | — | 22 | |||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (7 | ) | — | (7 | ) | |||||||||||||
Income from operations | $ | 208 | $ | 54 | $ | 128 | $ | — | $ | 390 |
Three Months Ended December 31, 2013 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Commodity Margin(1) | $ | 283 | $ | 95 | $ | 211 | $ | — | $ | 589 | ||||||||||
Add: Mark-to-market commodity activity, net and other(2) | (48 | ) | 33 | 15 | (7 | ) | (7 | ) | ||||||||||||
Less: | ||||||||||||||||||||
Plant operating expense | 94 | 55 | 71 | (9 | ) | 211 | ||||||||||||||
Depreciation and amortization expense | 63 | 40 | 50 | (1 | ) | 152 | ||||||||||||||
Sales, general and other administrative expense | 13 | 13 | 8 | — | 34 | |||||||||||||||
Other operating expenses | 12 | (1 | ) | 8 | 4 | 23 | ||||||||||||||
Impairment loss | 16 | — | — | — | 16 | |||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (5 | ) | — | (5 | ) | |||||||||||||
Income from operations | $ | 37 | $ | 21 | $ | 94 | $ | (1 | ) | $ | 151 |
Year Ended December 31, 2014 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Commodity Margin(3) | $ | 1,050 | $ | 760 | $ | 949 | $ | — | $ | 2,759 | ||||||||||
Add: Mark-to-market commodity activity, net and other(4) | 220 | 142 | 48 | (31 | ) | 379 | ||||||||||||||
Less: | ||||||||||||||||||||
Plant operating expense | 385 | 313 | 302 | (31 | ) | 969 | ||||||||||||||
Depreciation and amortization expense | 245 | 191 | 168 | (1 | ) | 603 | ||||||||||||||
Sales, general and other administrative expense | 41 | 64 | 39 | — | 144 | |||||||||||||||
Other operating expenses | 50 | 5 | 32 | 1 | 88 | |||||||||||||||
Impairment loss | — | — | 123 | — | 123 | |||||||||||||||
(Gain) on sale of assets, net | — | — | (753 | ) | — | (753 | ) | |||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (25 | ) | — | (25 | ) | |||||||||||||
Income from operations | $ | 549 | $ | 329 | $ | 1,111 | $ | — | $ | 1,989 |
Year Ended December 31, 2013 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Commodity Margin(3) | $ | 1,020 | $ | 632 | $ | 916 | $ | — | $ | 2,568 | ||||||||||
Add: Mark-to-market commodity activity, net and other(4) | (50 | ) | 51 | 27 | (31 | ) | (3 | ) | ||||||||||||
Less: | ||||||||||||||||||||
Plant operating expense | 365 | 269 | 292 | (31 | ) | 895 | ||||||||||||||
Depreciation and amortization expense | 227 | 165 | 203 | (2 | ) | 593 | ||||||||||||||
Sales, general and other administrative expense | 37 | 56 | 42 | 1 | 136 | |||||||||||||||
Other operating expenses | 45 | 3 | 33 | — | 81 | |||||||||||||||
Impairment loss | 16 | — | — | — | 16 | |||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (30 | ) | — | (30 | ) | |||||||||||||
Income from operations | $ | 280 | $ | 190 | $ | 403 | $ | 1 | $ | 874 |
(1) | Our East segment includes Commodity Margin of nil and $30 million for the three months ended December 31, 2014 and 2013, respectively, related to the six power plants in our East segment that were sold in July 2014. |
(2) | Includes $2 million and $(11) million of lease levelization and $3 million and $3 million of amortization expense for the three months ended December 31, 2014 and 2013, respectively. |
(3) | Our East segment includes Commodity Margin of $81 million and $152 million for the years ended December 31, 2014 and 2013, respectively, related to the six power plants in our East segment that were sold in July 2014. |
(4) | Includes $(5) million and $6 million of lease levelization and $14 million and $14 million of amortization expense for the years ended December 31, 2014 and 2013, respectively. |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
2014 | 2013(1) | 2014(2) | 2013(2) | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Net income (loss) attributable to Calpine | $ | 210 | $ | (97 | ) | $ | 946 | $ | 14 | |||||||
Net income attributable to the noncontrolling interest | 4 | 4 | 15 | 4 | ||||||||||||
Income tax expense (benefit) | 17 | (10 | ) | 22 | 2 | |||||||||||
Debt extinguishment costs and other (income) expense, net | 6 | 81 | 367 | 164 | ||||||||||||
Interest expense, net of interest income | 153 | 173 | 639 | 690 | ||||||||||||
Income from operations | $ | 390 | $ | 151 | $ | 1,989 | $ | 874 | ||||||||
Add: | ||||||||||||||||
Adjustments to reconcile income from operations to Adjusted EBITDA: | ||||||||||||||||
Depreciation and amortization expense, excluding deferred financing costs(3) | 149 | 152 | 598 | 593 | ||||||||||||
Major maintenance expense | 45 | 42 | 234 | 224 | ||||||||||||
Operating lease expense | 8 | 9 | 34 | 35 | ||||||||||||
Mark-to-market (gain) loss on commodity derivative activity | (263 | ) | 29 | (342 | ) | 14 | ||||||||||
Impairment losses | — | 16 | 123 | 16 | ||||||||||||
(Gain) on sale of assets, net | — | — | (753 | ) | — | |||||||||||
Adjustments to reflect Adjusted EBITDA from unconsolidated investments and exclude the noncontrolling interest(4) | (1 | ) | 1 | 5 | 14 | |||||||||||
Stock-based compensation expense | 6 | 8 | 36 | 36 | ||||||||||||
(Gain) loss on dispositions of assets | — | (1 | ) | 1 | 4 | |||||||||||
Acquired contract amortization | 3 | 3 | 14 | 14 | ||||||||||||
Other | 8 | (11 | ) | 10 | 6 | |||||||||||
Total Adjusted EBITDA | $ | 345 | $ | 399 | $ | 1,949 | $ | 1,830 | ||||||||
Less: | ||||||||||||||||
Operating lease payments | 8 | 8 | 34 | 34 | ||||||||||||
Major maintenance expense and capital expenditures(5) | 84 | 89 | 410 | 392 | ||||||||||||
Cash interest, net(6) | 155 | 172 | 652 | 700 | ||||||||||||
Cash taxes | 2 | 1 | 18 | 19 | ||||||||||||
Other | 1 | 3 | 5 | 8 | ||||||||||||
Adjusted Free Cash Flow(7) | $ | 95 | $ | 126 | $ | 830 | $ | 677 | ||||||||
Weighted average shares of common stock outstanding (diluted, in thousands) | 389,425 | 429,331 | 409,360 | 444,773 | ||||||||||||
Adjusted Free Cash Flow Per Share (diluted) | $ | 0.24 | $ | 0.29 | $ | 2.03 | $ | 1.52 |
(1) | Adjusted EBITDA related to the six power plants sold in our East segment on July 3, 2014, was $16 million for the three months ended December 31, 2013. |
(2) | Our East segment includes Adjusted EBITDA of $43 million and $88 million for the years ended December 31, 2014 and 2013, respectively, related to the six power plants in our East segment that were sold in July 2014. |
(3) | Depreciation and amortization expense in the income from operations calculation on our Consolidated Statements of Operations excludes amortization of other assets. |
(4) | Adjustments to reflect Adjusted EBITDA from unconsolidated investments include (gain) loss on mark-to-market activity of nil for each of the three months and years ended December 31, 2014 and 2013. |
(5) | Includes $47 million and $242 million in major maintenance expense for the three months and year ended December 31, 2014, respectively, and $37 million and $168 million in maintenance capital expenditure for the three months and year ended December 31, 2014, respectively. Includes $43 million and $228 million in major maintenance expense for the three months and year ended December 31, 2013, respectively, and $46 million and $164 million in maintenance capital expenditure for the three months and year ended December 31, 2013, respectively. |
(6) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
(7) | Excludes a decrease in working capital of $136 million and $118 million for the three months and year ended December 31, 2014, respectively, and a decrease in working capital of $135 million and an increase in working capital of $130 million for the three months and year ended December 31, 2013, 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 December 31, | Year Ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | (in millions) | |||||||||||||||
Commodity Margin | $ | 538 | $ | 589 | $ | 2,759 | $ | 2,568 | ||||||||
Other revenue | 5 | 3 | 15 | 12 | ||||||||||||
Plant operating expense(1) | (166 | ) | (165 | ) | (705 | ) | (645 | ) | ||||||||
Sales, general and administrative expense(2) | (33 | ) | (30 | ) | (126 | ) | (117 | ) | ||||||||
Other operating expenses(3) | (11 | ) | (10 | ) | (47 | ) | (42 | ) | ||||||||
Adjusted EBITDA from unconsolidated investments in power plants | 12 | 14 | 53 | 58 | ||||||||||||
Other | — | (2 | ) | — | (4 | ) | ||||||||||
Adjusted EBITDA | $ | 345 | $ | 399 | $ | 1,949 | $ | 1,830 |
(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. |
Full Year 2015 Range: | Low | High | ||||
(in millions) | ||||||
GAAP Net Income (1) | $ | 295 | $ | 495 | ||
Plus: | ||||||
Interest expense, net of interest income | 630 | 630 | ||||
Depreciation and amortization expense | 630 | 630 | ||||
Major maintenance expense | 230 | 230 | ||||
Operating lease expense | 35 | 35 | ||||
Other(2) | 80 | 80 | ||||
Adjusted EBITDA | $ | 1,900 | $ | 2,100 | ||
Less: | ||||||
Operating lease payments | 35 | 35 | ||||
Major maintenance expense and maintenance capital expenditures(3) | 395 | 395 | ||||
Cash interest, net(4) | 630 | 630 | ||||
Cash taxes | 25 | 25 | ||||
Other | 5 | 5 | ||||
Adjusted Free Cash Flow | $ | 810 | $ | 1,010 | ||
(1) | For purposes of Net Income guidance reconciliation, 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 $235 million and maintenance capital expenditures of $160 million. Capital expenditures exclude major construction and development projects. |
(4) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||
Total MWh generated (in thousands)(1) | 26,106 | 25,585 | 100,617 | 101,610 | ||||||||
West | 8,960 | 10,359 | 34,195 | 36,110 | ||||||||
Texas | 10,388 | 8,119 | 38,678 | 33,343 | ||||||||
East | 6,758 | 7,107 | 27,744 | 32,157 | ||||||||
Average availability | 90.2 | % | 91.2 | % | 90.7 | % | 91.7 | % | ||||
West | 92.4 | % | 92.9 | % | 92.9 | % | 92.2 | % | ||||
Texas | 91.4 | % | 90.6 | % | 90.5 | % | 89.8 | % | ||||
East | 86.9 | % | 90.4 | % | 89.2 | % | 93.0 | % | ||||
Average capacity factor, excluding peakers | 52.3 | % | 48.0 | % | 48.4 | % | 48.7 | % | ||||
West | 57.6 | % | 66.7 | % | 55.4 | % | 62.6 | % | ||||
Texas | 51.2 | % | 47.2 | % | 49.9 | % | 48.9 | % | ||||
East | 47.8 | % | 34.4 | % | 40.0 | % | 38.7 | % | ||||
Steam adjusted heat rate (Btu/kWh) | 7,348 | 7,339 | 7,384 | 7,386 | ||||||||
West | 7,324 | 7,241 | 7,314 | 7,308 | ||||||||
Texas | 7,153 | 7,214 | 7,203 | 7,198 | ||||||||
East | 7,687 | 7,608 | 7,721 | 7,663 |
(1) | Excludes generation from unconsolidated power plants and power plants owned but not operated by us. |
'MSBX&6$R
M4S0F5G;6F*A9&M4GV!$!`0`"`@("`P$!`0````````$1`B$Q01)1,F&!(G&1
MH?_:``P#`0`"$0,1`#\`?XX%,_9AW5:W]>`%4!*(%=>QYZ$I4CI^,NY#>CBY
M2PLLU"XV?+,)7(F))U*8SUTZ$I.K=51>2Q>@2G-"JQ+6M=;?\);;5=W'8EM8
MXNI+M>;Y3\#7G#]DK:B%"RM6)&B%Y@^PKI"T*_CZ3$G%^'K` [>P83J0-.)8
M`P)1A)8\!\Y8!!J2V(35Y\OGH%4DQ9+#JU;L?74\C2@Q4P3&$WY*HS)6<\].
M
&%M1
M.\3;E:I]4&@)$:H"C"+!*?TR`A+"6VW&4/YA\N]UX6'*'V;SW&PTVF