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¨ | Definitive Proxy Statement |
¨ | Definitive Additional materials |
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¨ | Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||
2017 | 2016 | % Change | 2017 | 2016 | % Change | ||||||||||||||||
Operating Revenues | $ | 2,586 | $ | 2,355 | 9.8 | % | $ | 6,951 | $ | 5,134 | 35.4 | % | |||||||||
Income from operations | $ | 393 | $ | 462 | (14.9 | )% | $ | 478 | $ | 605 | (21.0 | )% | |||||||||
Cash provided by operating activities | $ | 561 | $ | 542 | 3.5 | % | $ | 807 | $ | 667 | 21.0 | % | |||||||||
Net Income (Loss)1 | $ | 225 | $ | 295 | (23.7 | )% | $ | (47 | ) | $ | 68 | NM | |||||||||
Commodity Margin2 | $ | 864 | $ | 820 | 5.4 | % | $ | 2,069 | $ | 2,057 | 0.6 | % | |||||||||
Adjusted EBITDA2 | $ | 669 | $ | 632 | 5.9 | % | $ | 1,414 | $ | 1,458 | (3.0 | )% | |||||||||
Adjusted Unlevered Free Cash Flow2 | $ | 604 | $ | 549 | 10.0 | % | $ | 1,074 | $ | 1,139 | (5.7 | )% | |||||||||
Adjusted Free Cash Flow2 | $ | 442 | $ | 383 | 15.4 | % | $ | 588 | $ | 643 | (8.6 | )% | |||||||||
Weighted Average Shares Outstanding (diluted) | 359 | 356 | 355 | 356 |
1 | Reported as Net Income (Loss) attributable to Calpine on our Consolidated Condensed Statements of Operations. |
2 | Non-GAAP financial measure, see “Regulation G Reconciliations” for further details. |
+ | increased contribution from our retail hedging activity following the acquisitions of Calpine Energy Solutions in December 2016 and North American Power in January 2017 and |
+ | higher regulatory capacity revenue, partially offset by |
– | the net impact of our portfolio management activities, including the sales of Mankato Power Plant in October 2016 and Osprey Energy Center in January 2017, |
– | lower market spark spreads in the East, |
– | lower fleetwide generation and |
– | the expiration of a PPA associated with our York Energy Center. |
+ | increased contribution from our retail hedging activity following the acquisitions of Calpine Energy Solutions in December 2016 and North American Power in January 2017 and |
+ | higher regulatory capacity revenue, partially offset by |
– | the receipt of a $40 million natural gas transportation billing credit in the second quarter of 2016 that did not recur in 2017, |
– | the net impact of our portfolio management activities, including the sales of Mankato Power Plant in October 2016 and Osprey Energy Center in January 2017, |
– | lower market spark spreads in the East, |
– | lower fleetwide generation and |
– | the expiration of a PPA associated with our York Energy Center. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||
2017 | 2016 | Variance | 2017 | 2016 | Variance | |||||||||||||||||||
West | $ | 327 | $ | 298 | $ | 29 | $ | 792 | $ | 749 | $ | 43 | ||||||||||||
Texas | 201 | 198 | 3 | 516 | 511 | 5 | ||||||||||||||||||
East | 336 | 324 | 12 | 761 | 797 | (36 | ) | |||||||||||||||||
Total | $ | 864 | $ | 820 | $ | 44 | $ | 2,069 | $ | 2,057 | $ | 12 |
+ | increased contribution from the expansion of our retail hedging activity following the acquisition of Calpine Energy Solutions in December 2016 and |
+ | higher realized spark spreads during hours in which we generated, particularly evening peak times, partially offset by |
– | a decrease in generation, primarily due to an extended outage at our Delta Energy Center. |
+ | increased contribution from the expansion of our retail hedging activity following the acquisition of Calpine Energy Solutions in December 2016 and |
+ | higher realized spark spreads during hours in which we generated, particularly evening peak times, partially offset by |
– | the receipt of a $40 million natural gas transportation billing credit in the second quarter of 2016 that did not recur in 2017 and |
– | a decrease in generation, primarily due to an increase in hydroelectric generation in the region and an extended outage at our Delta Energy Center. |
+ | increased contribution from hedges, partially offset by |
– | a decrease in generation resulting from milder weather, including the effect of Hurricane Harvey during the third quarter of 2017, and the retirement of our Clear Lake Power Plant in February 2017. |
+ | increased contribution from hedges, partially offset by |
– | a decrease in generation primarily resulting from higher natural gas prices. |
+ | increased contribution from hedges, including the expansion of retail hedging activity following the acquisitions of Calpine Energy Solutions in December 2016 and North American Power in January 2017 and |
+ | higher regulatory capacity revenue, partially offset by |
– | the net impact of portfolio management activities, including the sales of Mankato Power Plant in October 2016 and Osprey Energy Center in January 2017, |
– | the expiration of a PPA associated with our York Energy Center in May 2017 and |
– | lower market spark spreads. |
– | the net impact of portfolio management activities, including the sales of Mankato Power Plant in October 2016 and Osprey Energy Center in January 2017, |
– | the expiration of a PPA associated with our York Energy Center in May 2017 and |
– | lower market spark spreads, partially offset by |
+ | increased contribution from the expansion of our retail hedging activity following the acquisitions of Calpine Energy Solutions in December 2016 and North American Power in January 2017, |
+ | higher regulatory capacity revenue and |
+ | the positive effect of a new PPA associated with our Morgan Energy Center, which became effective in February 2016. |
September 30, 2017 | December 31, 2016 | ||||||
Cash and cash equivalents, corporate(1) | $ | 346 | $ | 345 | |||
Cash and cash equivalents, non-corporate | 80 | 73 | |||||
Total cash and cash equivalents | 426 | 418 | |||||
Restricted cash | 222 | 188 | |||||
Corporate Revolving Facility availability(2) | 1,316 | 1,255 | |||||
CDHI letter of credit facility availability | 54 | 50 | |||||
Total current liquidity availability(3) | $ | 2,018 | $ | 1,911 |
(1) | Includes $19 million and $16 million of margin deposits posted with us by our counterparties at September 30, 2017, and December 31, 2016, respectively. |
(2) | Our ability to use availability under our Corporate Revolving Facility is unrestricted. |
(3) | Our ability to use corporate cash and cash equivalents is unrestricted. Our $300 million CDHI letter of credit facility is restricted to support certain obligations under PPAs and power transmission and natural gas transportation agreements. |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Beginning cash and cash equivalents | $ | 418 | $ | 906 | |||
Net cash provided by (used in): | |||||||
Operating activities | 807 | 667 | |||||
Investing activities | (195 | ) | (841 | ) | |||
Financing activities | (604 | ) | (171 | ) | |||
Net increase (decrease) in cash and cash equivalents | 8 | (345 | ) | ||||
Ending cash and cash equivalents | $ | 426 | $ | 561 |
• | Risks and uncertainties associated with the Merger, including (i) any event that could give rise to termination of the Merger Agreement or otherwise cause failure of the Merger to close, (ii) failure to obtain requisite stockholder or regulatory approval for the Merger, (iii) the effect of the Merger on our relationships with customers and employees, (iv) the effect of the Merger on our financial results and business and (v) potential termination fees associated with the Merger Agreement and other Merger-related fees and expenses incurred. |
• | 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 wholesale and retail 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 comply with covenants under our Senior Unsecured Notes, First Lien Notes, First Lien Term Loans, Corporate Revolving Facility, 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 from renewable sources of power, interference by states in competitive power markets through subsidies or similar support for new or existing power plants, and other 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 revenue may not occur at expected levels; |
• | Natural disasters, such as hurricanes, earthquakes, droughts, wildfires and floods, acts of terrorism or cyber-attacks that may affect our power plants or the markets our power plants or retail operations serve and our corporate offices; |
• | Disruptions in or limitations on the transportation of natural gas or fuel oil and the transmission of power; |
• | Our ability to manage our counterparty and customer 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, in our Quarterly Report on Form 10Q for the three months ended September 30, 2017, in our Annual Report on Form 10-K for the year ended December 31, 2016, and in other reports filed by us with the SEC. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in millions, except share and per share amounts) | |||||||||||||||
Operating revenues: | |||||||||||||||
Commodity revenue | $ | 2,506 | $ | 2,063 | $ | 6,714 | $ | 5,199 | |||||||
Mark-to-market gain (loss) | 76 | 287 | 224 | (79 | ) | ||||||||||
Other revenue | 4 | 5 | 13 | 14 | |||||||||||
Operating revenues | 2,586 | 2,355 | 6,951 | 5,134 | |||||||||||
Operating expenses: | |||||||||||||||
Fuel and purchased energy expense: | |||||||||||||||
Commodity expense | 1,711 | 1,294 | 4,757 | 3,197 | |||||||||||
Mark-to-market (gain) loss | 10 | 178 | 185 | (57 | ) | ||||||||||
Fuel and purchased energy expense | 1,721 | 1,472 | 4,942 | 3,140 | |||||||||||
Plant operating expense | 228 | 215 | 812 | 741 | |||||||||||
Depreciation and amortization expense | 179 | 161 | 542 | 490 | |||||||||||
Sales, general and other administrative expense | 37 | 33 | 117 | 106 | |||||||||||
Other operating expenses | 23 | 18 | 63 | 55 | |||||||||||
Total operating expenses | 2,188 | 1,899 | 6,476 | 4,532 | |||||||||||
Impairment losses | 12 | — | 41 | 13 | |||||||||||
(Gain) on sale of assets, net | — | — | (27 | ) | — | ||||||||||
(Income) from unconsolidated subsidiaries | (7 | ) | (6 | ) | (17 | ) | (16 | ) | |||||||
Income from operations | 393 | 462 | 478 | 605 | |||||||||||
Interest expense | 156 | 158 | 469 | 472 | |||||||||||
Debt extinguishment costs | 1 | — | 26 | 15 | |||||||||||
Other (income) expense, net | 7 | 7 | 16 | 18 | |||||||||||
Income (loss) before income taxes | 229 | 297 | (33 | ) | 100 | ||||||||||
Income tax expense (benefit) | (2 | ) | (4 | ) | — | 17 | |||||||||
Net income (loss) | 231 | 301 | (33 | ) | 83 | ||||||||||
Net income attributable to the noncontrolling interest | (6 | ) | (6 | ) | (14 | ) | (15 | ) | |||||||
Net income (loss) attributable to Calpine | $ | 225 | $ | 295 | $ | (47 | ) | $ | 68 | ||||||
Basic earnings (loss) per common share attributable to Calpine: | |||||||||||||||
Weighted average shares of common stock outstanding (in thousands) | 355,442 | 354,215 | 355,164 | 353,929 | |||||||||||
Net income (loss) per common share attributable to Calpine — basic | $ | 0.63 | $ | 0.83 | $ | (0.13 | ) | $ | 0.19 | ||||||
Diluted earnings (loss) per common share attributable to Calpine: | |||||||||||||||
Weighted average shares of common stock outstanding (in thousands) | 358,844 | 356,352 | 355,164 | 355,980 | |||||||||||
Net income (loss) per common share attributable to Calpine — diluted | $ | 0.63 | $ | 0.83 | $ | (0.13 | ) | $ | 0.19 |
September 30, | December 31, | |||||||
2017 | 2016 | |||||||
(in millions, except share and per share amounts) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 426 | $ | 418 | ||||
Accounts receivable, net of allowance of $9 and $6 | 935 | 839 | ||||||
Inventories | 409 | 581 | ||||||
Margin deposits and other prepaid expense | 182 | 364 | ||||||
Restricted cash, current | 196 | 173 | ||||||
Derivative assets, current | 206 | 221 | ||||||
Current assets held for sale | — | 210 | ||||||
Other current assets | 34 | 45 | ||||||
Total current assets | 2,388 | 2,851 | ||||||
Property, plant and equipment, net | 12,833 | 13,013 | ||||||
Restricted cash, net of current portion | 26 | 15 | ||||||
Investments in unconsolidated subsidiaries | 106 | 99 | ||||||
Long-term derivative assets | 284 | 300 | ||||||
Goodwill | 243 | 187 | ||||||
Intangible assets, net | 552 | 650 | ||||||
Other assets | 360 | 378 | ||||||
Total assets | $ | 16,792 | $ | 17,493 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 756 | $ | 671 | ||||
Accrued interest payable | 129 | 125 | ||||||
Debt, current portion | 369 | 748 | ||||||
Derivative liabilities, current | 113 | 138 | ||||||
Other current liabilities | 427 | 523 | ||||||
Total current liabilities | 1,794 | 2,205 | ||||||
Debt, net of current portion | 11,281 | 11,431 | ||||||
Long-term derivative liabilities | 103 | 149 | ||||||
Other long-term liabilities | 291 | 369 | ||||||
Total liabilities | 13,469 | 14,154 | ||||||
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, 361,695,622 and 359,627,113 shares issued, respectively, and 360,613,587 and 359,061,764 shares outstanding, respectively | — | — | ||||||
Treasury stock, at cost, 1,082,035 and 565,349 shares, respectively | (13 | ) | (7 | ) | ||||
Additional paid-in capital | 9,652 | 9,625 | ||||||
Accumulated deficit | (6,260 | ) | (6,213 | ) | ||||
Accumulated other comprehensive loss | (135 | ) | (137 | ) | ||||
Total Calpine stockholders’ equity | 3,244 | 3,268 | ||||||
Noncontrolling interest | 79 | 71 | ||||||
Total stockholders’ equity | 3,323 | 3,339 | ||||||
Total liabilities and stockholders’ equity | $ | 16,792 | $ | 17,493 |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
(in million) | ||||||||
Cash flows from operating activities: | ||||||||
Net income (loss) | $ | (33 | ) | $ | 83 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization(1) | 691 | 659 | ||||||
Debt extinguishment costs | 8 | 15 | ||||||
Income taxes | 12 | 15 | ||||||
Impairment losses | 41 | 13 | ||||||
Gain on sale of assets, net | (27 | ) | — | |||||
Mark-to-market activity, net | (40 | ) | 21 | |||||
(Income) from unconsolidated subsidiaries | (17 | ) | (16 | ) | ||||
Return on investments from unconsolidated subsidiaries | 22 | 19 | ||||||
Stock-based compensation expense | 31 | 23 | ||||||
Other | (4 | ) | 1 | |||||
Change in operating assets and liabilities, net of effects of acquisitions: | ||||||||
Accounts receivable | (86 | ) | (168 | ) | ||||
Derivative instruments, net | (10 | ) | (154 | ) | ||||
Other assets | 60 | 1 | ||||||
Accounts payable and accrued expenses | 95 | 53 | ||||||
Other liabilities | 64 | 102 | ||||||
Net cash provided by operating activities | 807 | 667 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (248 | ) | (337 | ) | ||||
Proceeds from sale of Osprey Energy Center | 162 | — | ||||||
Purchase of Granite Ridge Energy Center | — | (526 | ) | |||||
Purchase of North American Power, net of cash acquired | (111 | ) | — | |||||
(Increase) decrease in restricted cash | (33 | ) | 2 | |||||
Other | 35 | 20 | ||||||
Net cash used in investing activities | $ | (195 | ) | $ | (841 | ) |
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
(in millions) | ||||||||
Cash flows from financing activities: | ||||||||
Borrowings under First Lien Term Loans | $ | 396 | $ | 556 | ||||
Repayment of CCFC Term Loans and First Lien Term Loans | (435 | ) | (1,220 | ) | ||||
Repurchase of First Lien Notes | (453 | ) | — | |||||
Borrowings under First Lien Notes | — | 625 | ||||||
Repayments of project financing, notes payable and other | (90 | ) | (98 | ) | ||||
Distribution to noncontrolling interest holder | (8 | ) | — | |||||
Financing costs | (9 | ) | (27 | ) | ||||
Shares repurchased for tax withholding on stock-based awards | (6 | ) | (5 | ) | ||||
Other | 1 | (2 | ) | |||||
Net cash used in financing activities | (604 | ) | (171 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 8 | (345 | ) | |||||
Cash and cash equivalents, beginning of period | 418 | 906 | ||||||
Cash and cash equivalents, end of period | $ | 426 | $ | 561 | ||||
Cash paid during the period for: | ||||||||
Interest, net of amounts capitalized | $ | 412 | $ | 421 | ||||
Income taxes | $ | 10 | $ | 10 | ||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||
Change in capital expenditures included in accounts payable | $ | 14 | $ | (4 | ) | |||
Purchase of King City Cogeneration Plant lease(2) | $ | 15 | $ | — |
(1) | Includes amortization recorded in Commodity revenue and Commodity expense associated with intangible assets and amortization recorded in interest expense associated with debt issuance costs and discounts. |
(2) | On April 3, 2017, we completed the purchase of the King City Cogeneration Plant lease in exchange for a three-year promissory note with a discounted value of $57 million. We recorded a net increase to property, plant and equipment, net on our Consolidated Condensed Balance Sheet of $15 million due to the increased value of the promissory note as compared to the carrying value of the lease. |
Three Months Ended September 30, 2017 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Income from operations | $ | 118 | $ | 117 | $ | 158 | $ | — | $ | 393 | ||||||||||
Add: | ||||||||||||||||||||
Plant operating expense | 83 | 77 | 75 | (7 | ) | 228 | ||||||||||||||
Depreciation and amortization expense | 63 | 61 | 55 | — | 179 | |||||||||||||||
Sales, general and other administrative expense | 10 | 16 | 10 | 1 | 37 | |||||||||||||||
Other operating expenses | 13 | 6 | 6 | (2 | ) | 23 | ||||||||||||||
Impairment losses | — | 12 | — | — | 12 | |||||||||||||||
(Income) from unconsolidated subsidiaries | — | — | (7 | ) | — | (7 | ) | |||||||||||||
Less: Mark-to-market commodity activity, net and other(1) | (40 | ) | 88 | (39 | ) | (8 | ) | 1 | ||||||||||||
Commodity Margin | $ | 327 | $ | 201 | $ | 336 | $ | — | $ | 864 |
Three Months Ended September 30, 2016 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Income from operations | $ | 157 | $ | 175 | $ | 130 | $ | — | $ | 462 | ||||||||||
Add: | ||||||||||||||||||||
Plant operating expense | 79 | 65 | 78 | (7 | ) | 215 | ||||||||||||||
Depreciation and amortization expense | 56 | 53 | 52 | — | 161 | |||||||||||||||
Sales, general and other administrative expense | 9 | 13 | 12 | (1 | ) | 33 | ||||||||||||||
Other operating expenses | 8 | 2 | 7 | 1 | 18 | |||||||||||||||
(Income) from unconsolidated subsidiaries | — | — | (6 | ) | — | (6 | ) | |||||||||||||
Less: Mark-to-market commodity activity, net and other(1) | 11 | 110 | (51 | ) | (7 | ) | 63 | |||||||||||||
Commodity Margin | $ | 298 | $ | 198 | $ | 324 | $ | — | $ | 820 |
Nine Months Ended September 30, 2017 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Income (loss) from operations | $ | 222 | $ | (4 | ) | $ | 260 | $ | — | $ | 478 | |||||||||
Add: | ||||||||||||||||||||
Plant operating expense | 291 | 282 | 260 | (21 | ) | 812 | ||||||||||||||
Depreciation and amortization expense | 189 | 187 | 166 | — | 542 | |||||||||||||||
Sales, general and other administrative expense | 31 | 54 | 31 | 1 | 117 | |||||||||||||||
Other operating expenses | 30 | 12 | 23 | (2 | ) | 63 | ||||||||||||||
Impairment losses | 28 | 13 | — | — | 41 | |||||||||||||||
(Gain) on sale of assets, net | — | — | (27 | ) | — | (27 | ) | |||||||||||||
(Income) from unconsolidated subsidiaries | — | — | (17 | ) | — | (17 | ) | |||||||||||||
Less: Mark-to-market commodity activity, net and other(2) | (1 | ) | 28 | (65 | ) | (22 | ) | (60 | ) | |||||||||||
Commodity Margin | $ | 792 | $ | 516 | $ | 761 | $ | — | $ | 2,069 |
Nine Months Ended September 30, 2016 | ||||||||||||||||||||
Consolidation | ||||||||||||||||||||
And | ||||||||||||||||||||
West | Texas | East | Elimination | Total | ||||||||||||||||
Income from operations | $ | 245 | $ | 74 | $ | 285 | $ | 1 | $ | 605 | ||||||||||
Add: | ||||||||||||||||||||
Plant operating expense | 268 | 236 | 258 | (21 | ) | 741 | ||||||||||||||
Depreciation and amortization expense | 168 | 159 | 163 | — | 490 | |||||||||||||||
Sales, general and other administrative expense | 27 | 43 | 36 | — | 106 | |||||||||||||||
Other operating expenses | 23 | 6 | 27 | (1 | ) | 55 | ||||||||||||||
Impairment losses | 13 | — | — | — | 13 | |||||||||||||||
(Income) from unconsolidated subsidiaries | — | — | (16 | ) | — | (16 | ) | |||||||||||||
Less: Mark-to-market commodity activity, net and other(2) | (5 | ) | 7 | (44 | ) | (21 | ) | (63 | ) | |||||||||||
Commodity Margin | $ | 749 | $ | 511 | $ | 797 | $ | — | $ | 2,057 |
(1) | Includes $33 million and $40 million of lease levelization and $39 million and $25 million of amortization expense for the three months ended September 30, 2017 and 2016, respectively. |
(2) | Includes $(13) million and $(2) million of lease levelization and $143 million and $79 million of amortization expense for the nine months ended September 30, 2017 and 2016, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Commodity Margin | $ | 864 | $ | 820 | $ | 2,069 | $ | 2,057 | ||||||||
Other revenue | 4 | 4 | 12 | 13 | ||||||||||||
Plant operating expense(1) | (175 | ) | (163 | ) | (578 | ) | (524 | ) | ||||||||
Sales, general and administrative expense(2) | (31 | ) | (31 | ) | (101 | ) | (95 | ) | ||||||||
Other operating expenses(3) | (8 | ) | (12 | ) | (33 | ) | (37 | ) | ||||||||
Adjusted EBITDA from unconsolidated investments in power plants | 15 | 14 | 44 | 45 | ||||||||||||
Other | — | — | 1 | (1 | ) | |||||||||||
Adjusted EBITDA | $ | 669 | $ | 632 | $ | 1,414 | $ | 1,458 |
(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. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income (loss) attributable to Calpine | $ | 225 | $ | 295 | $ | (47 | ) | $ | 68 | |||||||
Net income attributable to the noncontrolling interest | 6 | 6 | 14 | 15 | ||||||||||||
Income tax expense (benefit) | (2 | ) | (4 | ) | — | 17 | ||||||||||
Debt extinguishment costs and other (income) expense, net | 8 | 7 | 42 | 33 | ||||||||||||
Interest expense | 156 | 158 | 469 | 472 | ||||||||||||
Income from operations | $ | 393 | $ | 462 | $ | 478 | $ | 605 | ||||||||
Add: | ||||||||||||||||
Adjustments to reconcile income from operations to Adjusted EBITDA: | ||||||||||||||||
Depreciation and amortization expense, excluding deferred financing costs(1) | 178 | 160 | 538 | 499 | ||||||||||||
Major maintenance expense | 38 | 43 | 187 | 186 | ||||||||||||
Operating lease expense | 6 | 6 | 19 | 19 | ||||||||||||
Mark-to-market (gain) loss on commodity derivative activity | (66 | ) | (109 | ) | (39 | ) | 22 | |||||||||
Impairment loss | 12 | — | 41 | — | ||||||||||||
(Gain) on sale of assets, net | — | — | (27 | ) | — | |||||||||||
Adjustments to reflect Adjusted EBITDA from unconsolidated investments and exclude the noncontrolling interest(2) | (4 | ) | (4 | ) | 8 | 8 | ||||||||||
Stock-based compensation expense | 11 | 6 | 31 | 23 | ||||||||||||
Loss on dispositions of assets | 2 | 1 | 4 | 6 | ||||||||||||
Contract amortization | 39 | 25 | 143 | 79 | ||||||||||||
Other | 60 | 42 | 31 | 11 | ||||||||||||
Total Adjusted EBITDA | $ | 669 | $ | 632 | $ | 1,414 | $ | 1,458 | ||||||||
Less: | ||||||||||||||||
Major maintenance expense and capital expenditures(3) | 69 | 84 | 329 | 311 | ||||||||||||
Cash taxes | (7 | ) | (1 | ) | 1 | 7 | ||||||||||
Other | 3 | — | 10 | 1 | ||||||||||||
Adjusted Unlevered Free Cash Flow | $ | 604 | $ | 549 | $ | 1,074 | $ | 1,139 | ||||||||
Less: | ||||||||||||||||
Cash interest, net(4) | 156 | 160 | 467 | 477 | ||||||||||||
Operating lease payments | 6 | 6 | 19 | 19 | ||||||||||||
Adjusted Free Cash Flow(5) | $ | 442 | $ | 383 | $ | 588 | $ | 643 | ||||||||
Weighted Average Shares Outstanding (diluted) | 359 | 356 | 355 | 356 |
(1) | Excludes depreciation and amortization expense attributable to the non-controlling interest. |
(2) | Adjustments to reflect Adjusted EBITDA from unconsolidated investments include (gain) loss on mark-to-market activity of nil for each of the three and nine months ended September 30, 2017 and 2016. |
(3) | Includes $39 million and $190 million in major maintenance expense for the three and nine months ended September 30, 2017, respectively, and $30 million and $139 million in maintenance capital expenditures for the three and nine months ended September 30, 2017, respectively. Includes $45 million and $191 million in major maintenance expenditures for the three and nine months ended September 30, 2016, respectively, and $39 million and $120 million in maintenance capital expenditures for the three and nine months ended September 30, 2016, respectively. |
(4) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
(5) | Adjusted Free Cash Flow, as reported, excludes changes in working capital. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net cash provided by operating activities | $ | 561 | $ | 542 | $ | 807 | $ | 667 | ||||||||
Add: | ||||||||||||||||
Maintenance capital expenditures(1) | (30 | ) | (39 | ) | (139 | ) | (120 | ) | ||||||||
Tax differences | 3 | (7 | ) | (13 | ) | (5 | ) | |||||||||
Adjustments to reflect Adjusted Free Cash Flow from unconsolidated investments and exclude the non-controlling interest | (6 | ) | (3 | ) | (6 | ) | (5 | ) | ||||||||
Capitalized corporate interest | (7 | ) | (5 | ) | (20 | ) | (14 | ) | ||||||||
Changes in working capital(2) | (141 | ) | (150 | ) | (95 | ) | 101 | |||||||||
Other(3) | 62 | 45 | 54 | 19 | ||||||||||||
Adjusted Free Cash Flow | $ | 442 | $ | 383 | $ | 588 | $ | 643 | ||||||||
Add: | ||||||||||||||||
Cash interest, net(4) | 156 | 160 | 467 | 477 | ||||||||||||
Operating lease payments | 6 | 6 | 19 | 19 | ||||||||||||
Adjusted Unlevered Free Cash Flow | $ | 604 | $ | 549 | $ | 1,074 | $ | 1,139 | ||||||||
Net cash used in investing activities | $ | (144 | ) | $ | (165 | ) | $ | (195 | ) | $ | (841 | ) | ||||
Net cash used in financing activities | $ | (285 | ) | $ | (31 | ) | $ | (604 | ) | $ | (171 | ) | ||||
Supplemental disclosure of cash activities: | ||||||||||||||||
Major maintenance expense and maintenance capital expenditures(5) | $ | 69 | $ | 84 | $ | 329 | $ | 311 | ||||||||
Cash taxes | $ | (7 | ) | $ | (1 | ) | $ | 1 | $ | 7 | ||||||
Other | $ | 3 | $ | — | $ | 10 | $ | 1 |
(1) | Maintenance capital expenditures exclude major construction and development projects. |
(2) | Adjustment excludes $(18) million and $20 million in amortization of acquired derivatives contracts for the three months ended September 30, 2017 and 2016, respectively, and $(28) million and $65 million in amortization of acquired derivatives contracts for the nine months ended September 30, 2017 and 2016, respectively. |
(3) | Other primarily represents miscellaneous items excluded from Adjusted Free Cash Flow that are included in cash flow from operations. |
(4) | Includes commitment, letter of credit and other bank fees from both consolidated and unconsolidated investments, net of capitalized interest and interest income. |
(5) | Includes $39 million and $190 million in major maintenance expense for the three and nine months ended September 30, 2017, respectively, and $30 million and $139 million in maintenance capital expenditures for the three and nine months ended September 30, 2017, respectively. Includes $45 million and $191 million in major maintenance expenditures for the three and nine months ended September 30, 2016, respectively, and $39 million and $120 million in maintenance capital expenditures for the three and nine months ended September 30, 2016, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||
Total MWh generated (in thousands)(1)(2) | 28,834 | 33,552 | 71,507 | 84,032 | ||||||||
West | 6,989 | 8,343 | 16,061 | 19,796 | ||||||||
Texas | 12,959 | 13,670 | 33,166 | 37,306 | ||||||||
East | 8,886 | 11,539 | 22,280 | 26,930 | ||||||||
Average availability(2) | 95.1 | % | 97.3 | % | 88.2 | % | 90.9 | % | ||||
West | 93.5 | % | 98.9 | % | 84.1 | % | 91.6 | % | ||||
Texas | 95.7 | % | 97.0 | % | 88.9 | % | 90.8 | % | ||||
East | 95.8 | % | 96.5 | % | 90.5 | % | 90.7 | % | ||||
Average capacity factor, excluding peakers | 57.4 | % | 62.6 | % | 48.3 | % | 53.4 | % | ||||
West | 45.4 | % | 54.5 | % | 35.2 | % | 43.5 | % | ||||
Texas | 66.3 | % | 67.4 | % | 57.2 | % | 61.7 | % | ||||
East | 58.1 | % | 64.3 | % | 50.0 | % | 52.4 | % | ||||
Steam adjusted heat rate (Btu/kWh)(2) | 7,407 | 7,333 | 7,362 | 7,307 | ||||||||
West | 7,351 | 7,213 | 7,383 | 7,276 | ||||||||
Texas | 7,235 | 7,142 | 7,144 | 7,113 | ||||||||
East | 7,714 | 7,660 | 7,692 | 7,614 |
(1) | Excludes generation from unconsolidated power plants and power plants owned but not operated by us. |
(2) | Generation, average availability and steam adjusted heat rate exclude power plants and units that are inactive. |