(Mark
One)
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||
[X]
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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For
the quarterly period ended June 30, 2008
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or
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[ ]
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Large accelerated filer |
[X]
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Accelerated filer |
[ ]
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Non-accelerated filer |
[ ] (Do
not check if a smaller reporting company)
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Smaller reporting company |
[ ]
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Page
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PART I — FINANCIAL
INFORMATION
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Item 1. Financial
Statements
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Consolidated
Condensed Balance Sheets at June 30, 2008 and December 31,
2007
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Consolidated
Condensed Statements of Operations for the Three and Six Months Ended
June 30,
2008 and 2007
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Consolidated
Condensed Statements of Comprehensive Income (Loss) and Stockholders’
Equity (Deficit) for the Six Months Ended June 30,
2008
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Consolidated
Condensed Statements of Cash Flows for the Six Months Ended June 30,
2008 and 2007
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Notes
to Consolidated Condensed Financial Statements
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1. Basis of Presentation and Summary of Significant Accounting
Policies
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2. Our Emergence from Chapter 11
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3. Property, Plant and Equipment, Net
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4. Investments
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5. Asset Sales
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6. Comprehensive Income (Loss)
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7. Debt
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8. Fair Value Measurements
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9. Derivative
Instruments and Mark-to-Market Activity
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10. Earnings
(Loss) per Share
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11. Stock-Based
Compensation
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12. Commitments
and Contingencies
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13. Segment
Information
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Item
2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
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Forward-Looking
Information
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Executive
Overview
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Results
of Operations
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Non-GAAP
Financial Measures
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Operating
Performance Metrics
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Liquidity
and Capital Resources
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Financial
Market Risks
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Recent
Accounting Pronouncements
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Item
3. Quantitative and Qualitative Disclosures About Market
Risk
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Item
4. Controls and Procedures
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PART
II — OTHER INFORMATION
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Item
1. Legal Proceedings
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Item
6. Exhibits
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Signatures
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ABBREVIATION
|
DEFINITION
|
|
2007
Form 10-K
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Calpine
Corporation’s Annual Report on Form 10-K for the year ended
December 31, 2007, filed with the SEC on
February 29, 2008
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2014
Convertible Notes
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Calpine
Corporation’s Contingent Convertible Notes Due 2014
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401(k)
Plan
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Calpine
Corporation Retirement Savings Plan
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Acadia
PP
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Acadia
Power Partners, LLC
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AOCI
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Accumulated
Other Comprehensive Income
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ARB
|
Accounting
Research Board
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Auburndale
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Auburndale
Holdings, LLC
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Bankruptcy
Code
|
U.S.
Bankruptcy Code
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|
Bankruptcy
Courts
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The
U.S. Bankruptcy Court and the Canadian Court
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BLM
|
Bureau
of Land Management of the U.S. Department of the
Interior
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Blue
Spruce
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Blue
Spruce Energy Center LLC
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Bridge
Facility
|
Bridge
Loan Agreement, dated as of January 31, 2008, among Calpine
Corporation as borrower, the lenders party thereto, Goldman Sachs Credit
Partners L.P., Credit Suisse, Deutsche Bank Securities Inc. and Morgan
Stanley Senior Funding Inc., as co-documentation agents, and Goldman Sachs
Credit Partners L.P., as administrative agent and collateral
agent
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Btu(s)
|
British
thermal unit(s)
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CAIR
|
Clean
Air Interstate Rule
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CalGen
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Calpine
Generating Company, LLC
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CalGen
First Lien Debt
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Collectively,
$235,000,000 First Priority Secured Floating Rate Notes Due 2009, issued
by CalGen and CalGen Finance; $600,000,000 First Priority Secured
Institutional Terms Loans Due 2009, issued by CalGen; and the CalGen First
Priority Revolving Loans, in each case repaid on March 29,
2007
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CalGen
First Priority Revolving Loans
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$200,000,000
First Priority Revolving Loans issued on or about March 23, 2004,
pursuant to that Amended and Restated Agreement, among CalGen, the
guarantors party thereto, the lenders party thereto, The Bank of Nova
Scotia, as administrative agent, L/C Bank, lead arranger and sole
bookrunner, Bayerische Landesbank, Cayman Islands Branch, as arranger and
co-syndication agent, Credit Lyonnais, New York Branch, as arranger and
co-syndication agent, ING Capital LLC, as arranger and co-syndication
agent, Toronto Dominion (Texas) Inc., as arranger and co-syndication
agent, and Union Bank of California, N.A., as arranger and co-syndication
agent, repaid on March 29, 2007
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CalGen
Second Lien Debt
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Collectively,
$640,000,000 Second Priority Secured Floating Rate Notes Due 2010, issued
by CalGen and CalGen Finance; and $100,000,000 Second Priority Secured
Institutional Term Loans Due 2010 issued by CalGen, in each case repaid on
March 29, 2007
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ABBREVIATION
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DEFINITION
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CalGen
Secured Debt
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Collectively,
the CalGen First Lien Debt, the CalGen Second Lien Debt and the CalGen
Third Lien Debt
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CalGen
Third Lien Debt
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Collectively,
$680,000,000 Third Priority Secured Floating Rate Notes Due 2011, issued
by CalGen and CalGen Finance; and $150,000,000 11 1/2% Third Priority
Secured Notes Due 2011, issued by CalGen and CalGen Finance, in each case
repaid on March 29, 2007
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Calpine
Debtors
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The
U.S. Debtors and the Canadian Debtors
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Calpine
Equity Incentive Plans
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Collectively,
the MEIP and the DEIP, which provide for grants of equity awards to
Calpine employees and non-employee members of Calpine’s Board of
Directors
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Canadian
Court
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The
Court of Queen’s Bench of Alberta, Judicial District of
Calgary
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Canadian
Debtors
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The
subsidiaries and affiliates of Calpine Corporation that have been granted
creditor protection under the CCAA in the Canadian
Court
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Canadian
Effective Date
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February 8,
2008, the date on which the Canadian Court ordered and declared that the
Canadian Debtors’ proceedings under the CCAA were
terminated
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Cash
Collateral Order
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Second
Amended Final Order of the U.S. Bankruptcy Court Authorizing Use of Cash
Collateral and Granting Adequate Protection, dated February 24, 2006
as modified by orders of the U.S. Bankruptcy Court dated June 21,
2006, July 12, 2006, October 25, 2006, November 15, 2006,
December 20, 2006, December 28, 2006, January 17, 2007, and
March 1, 2007
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CCAA
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Companies’
Creditors Arrangement Act (Canada)
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CCFC
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Calpine
Construction Finance Company, L.P.
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CES
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Calpine
Energy Services, L.P.
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Chapter 11
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Chapter 11
of the Bankruptcy Code
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Cleco
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Cleco
Corp.
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Commodity
Collateral Revolver
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Commodity
Collateral Revolving Credit Agreement, dated as of July 8, 2008,
among Calpine Corporation as borrower, Goldman Sachs Credit Partners L.P.,
as payment agent, sole lead arranger and sole bookrunner, and the lenders
from time to time party thereto
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Commodity
Margin
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Non-GAAP
financial measure that includes electricity and steam revenues, hedging
and optimization activities, renewable energy credit revenue, transmission
revenue and expenses, and fuel and purchased energy expense, but excludes
mark-to-market activity and other service revenues
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Company
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Calpine
Corporation, a Delaware corporation, and subsidiaries
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Confirmation
Order
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The
order of the U.S. Bankruptcy Court entitled “Findings of Fact, Conclusions
of Law, and Order Confirming Sixth Amended Joint Plan of Reorganization
Pursuant to Chapter 11 of the Bankruptcy Code,” entered
December 19, 2007, confirming the Plan of Reorganization pursuant to
section 1129 of the Bankruptcy Code
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Convertible
Senior Notes
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Collectively,
Calpine Corporation’s 4% Contingent Convertible Notes Due 2006, 6%
Contingent Convertible Notes Due 2014, 7 3/4% Contingent Convertible
Notes Due 2015 and 4 3/4% Contingent Convertible Senior Notes Due
2023
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Deer
Park
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Deer
Park Energy Center Limited Partnership
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DEIP
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Calpine
Corporation 2008 Director Incentive Plan, which provides for grants of
equity awards to non-employee members of Calpine’s Board of
Directors
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DIP
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Debtor-in-possession
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ABBREVIATION
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DEFINITION
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DIP
Facility
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The
Revolving Credit, Term Loan and Guarantee Agreement, dated as of
March 29, 2007, among the Company, as borrower, certain of the
Company’s subsidiaries, as guarantors, the lenders party thereto, Credit
Suisse, Goldman Sachs Credit Partners L.P. and JPMorgan Chase Bank, N.A.,
as co-syndication agents and co-documentation agents, General Electric
Capital Corporation, as sub-agent, and Credit Suisse, as administrative
agent and collateral agent, with Credit Suisse Securities (USA) LLC,
Goldman Sachs Credit Partners L.P., JPMorgan Securities Inc., and Deutsche
Bank Securities Inc. acting as Joint Lead Arrangers and
Bookrunners
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EAB
|
Environmental
Appeals Board of the U.S. Environmental Protection
Agency
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EBITDA
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Earnings
before interest, taxes, depreciation and amortization
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Effective
Date
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January 31,
2008, the date on which the conditions precedent enumerated in the Plan of
Reorganization were satisfied or waived and the Plan of Reorganization
became effective
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EITF
|
Emerging
Issues Task Force
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Emergence
Date Market Capitalization
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Determined
as Calpine’s Market Capitalization using the 30-day weighted average stock
price following the Effective Date
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EPA
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U.S.
Environmental Protection Agency
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ERISA
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Employee
Retirement Income Security Act
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Exchange
Act
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U.S.
Securities Exchange Act of 1934, as amended
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Exit
Credit Facility
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Credit
Agreement, dated as of January 31, 2008, among Calpine Corporation,
as borrower, the lenders party thereto, General Electric Capital
Corporation, as sub-agent, Goldman Sachs Credit Partners L.P., Credit
Suisse, Deutsche Bank Securities Inc., and Morgan Stanley Senior Funding,
Inc., as co-syndication agents and co-documentation agents, and Goldman
Sachs Credit Partners L.P., as administrative agent and collateral
agent
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Exit
Facilities
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Together,
the Exit Credit Facility and the Bridge Facility
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FASB
|
Financial
Accounting Standards Board
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FIN
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FASB
Interpretation Number
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Fremont
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Fremont
Energy Center, LLC
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FSP
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FASB
Staff Position
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GAAP
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Generally
accepted accounting principles
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Greenfield
LP
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Greenfield
Energy Centre LP
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Harbert
Convertible Fund
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Harbert
Convertible Arbitrage Master Fund, L.P.
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Heat
Rate
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A
measure of the amount of fuel required to produce a unit of
electricity
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Hillabee
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Hillabee
Energy Center, LLC
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IRC | Internal Revenue Code | |
IRS
|
U.S.
Internal Revenue Service
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Knock-in
Facility
|
Letter
of Credit Facility Agreement, dated as of June 25, 2008, among
Calpine Corporation as borrower and Morgan Stanley Capital Services Inc.,
as issuing bank
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KWh
|
Kilowatt
hour(s)
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LIBOR
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London
Inter-Bank Offered Rate
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LSTC
|
Liabilities
subject to compromise
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ABBREVIATION
|
DEFINITION
|
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Market
Capitalization
|
Market
value of Calpine Corporation common stock outstanding, calculated in
accordance with the Calpine Corporation amended and restated certificate
of incorporation
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MEIP
|
Calpine
Corporation 2008 Equity Incentive Plan, which provides for grants of
equity awards to Calpine employees and non-employee members of Calpine’s
Board of Directors
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Metcalf
|
Metcalf
Energy Center, LLC
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MMBtu
|
Million
Btu
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MW
|
Megawatt(s)
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|
MWh
|
Megawatt
hour(s)
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Ninth
Circuit Court of Appeals
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U.S.
Court of Appeals for the Ninth Circuit
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NOL(s)
|
Net
operating loss(es)
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Non-U.S.
Debtor(s)
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The
consolidated subsidiaries and affiliates of Calpine Corporation that are
not U.S. Debtors
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Northern
District Court
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U.S.
District Court for the Northern District of California
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NRG
|
NRG
Energy, Inc.
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NYMEX
|
New
York Mercantile Exchange
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NYSE
|
New
York Stock Exchange
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|
OCI
|
Other
Comprehensive Income
|
|
OMEC
|
Otay
Mesa Energy Center, LLC
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Original
DIP Facility
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The
Revolving Credit, Term Loan and Guarantee Agreement, dated as of
December 22, 2005, as amended on January 26, 2006, and as
amended and restated by that certain Amended and Restated Revolving
Credit, Term Loan and Guarantee Agreement, dated as of February 23,
2006, among Calpine Corporation, as borrower, the Guarantors party
thereto, the Lenders from time to time party thereto, Credit Suisse
Securities (USA) LLC and Deutsche Bank Securities Inc., as joint
syndication agents, Deutsche Bank Trust Company Americas, as
administrative agent for the First Priority Lenders, General Electric
Capital Corporation, as Sub-Agent for the Revolving Lenders, Credit
Suisse, as administrative agent for the Second Priority Term Lenders,
Landesbank Hessen Thuringen Girozentrale, New York Branch, General
Electric Capital Corporation and HSH Nordbank AG, New York Branch, as
joint documentation agents for the First Priority Lenders and Bayerische
Landesbank, General Electric Capital Corporation and Union Bank of
California, N.A., as joint documentation agents for the Second Priority
Lenders
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OTC
|
Over
the Counter
|
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Panda
|
Panda
Energy International, Inc., and related party PLC II,
LLC
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PCAOB
|
Public
Company Accounting Oversight Board
|
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PCF
|
Power
Contract Financing, L.L.C.
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PCF
III
|
Power
Contract Financing III, LLC
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|
Petition
Date
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December 20,
2005
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ABBREVIATION
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DEFINITION
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|
Plan
of Reorganization
|
Debtors’
Sixth Amended Joint Plan of Reorganization Pursuant to Chapter 11 of
the U.S. Bankruptcy Code filed by the U.S. Debtors with the U.S.
Bankruptcy Court on December 19, 2007, as amended, modified or
supplemented through the filing of this Report
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Pomifer
|
Pomifer
Power Funding, LLC, a subsidiary of Arclight Energy Partners Fund I,
L.P.
|
|
PPA(s)
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Any
contract for a physically settled sale (as distinguished from a
financially settled future, option or other derivative or hedge
transaction) of any electric power product, including electric energy,
capacity and/or ancillary services, in the form of a bilateral agreement
or a written or oral confirmation of a transaction between two parties to
a master agreement, including sales related to a tolling transaction in
which part of the consideration provided by the purchaser of an electric
power product is the fuel required by the seller to generate such electric
power
|
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PSD
|
Prevention
of Significant Deterioration Permit
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PSM
|
Power
Systems Manufacturing, LLC
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RockGen
|
RockGen
Energy LLC
|
|
RockGen
Owner Lessors
|
Collectively,
RockGen OL-1, LLC; RockGen OL-2, LLC; RockGen OL-3, LLC and RockGen OL-4,
LLC
|
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Rosetta
|
Rosetta
Resources Inc.
|
|
SAB
|
Staff
Accounting Bulletin
|
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SDG&E
|
San
Diego Gas & Electric Company
|
|
SDNY
Court
|
U.S.
District Court for the Southern District of New York
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SEC
|
U.S.
Securities and Exchange Commission
|
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Second
Circuit Court of Appeals
|
U.S.
Court of Appeals for the Second Circuit
|
|
Second
Priority Debt
|
Collectively,
the Second Priority Notes and Senior Secured Term Loans
Due 2007
|
|
Second
Priority Notes
|
Calpine
Corporation’s Second Priority Senior Secured Floating Rate Notes Due 2007,
8 1/2% Second Priority Senior Secured Notes Due 2010, 8 3/4%
Second Priority Senior Secured Notes Due 2013 and 9 7/8% Second
Priority Senior Secured Notes Due 2011
|
|
Securities
Act
|
U.S.
Securities Act of 1933, as amended
|
|
SFAS
|
Statement
of Financial Accounting Standards
|
|
SO2
|
Sulfur
dioxide
|
|
SOP
90-7
|
Statement
of Position 90-7, “Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code”
|
|
Spark
spread
|
The
spread between the sales price for electricity generated and the cost of
fuel
|
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Unsecured
Senior Notes
|
Collectively,
Calpine Corporation’s 7 5/8% Senior Notes due 2006, 10 1/2%
Senior Notes due 2006, 8 3/4% Senior Notes due 2007, 7 7/8%
Senior Notes due 2008, 7 3/4% Senior Notes due 2009, 8 5/8%
Senior Notes due 2010 and 8 1/2% Senior Notes due
2011
|
|
U.S.
|
United
States of America
|
|
U.S.
Bankruptcy Court
|
U.S.
Bankruptcy Court for the Southern District of New
York
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ABBREVIATION
|
DEFINITION
|
|
U.S.
Debtor(s)
|
Calpine
Corporation and each of its subsidiaries and affiliates that have filed
voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy Code in the U.S. Bankruptcy Court, which matters are being
jointly administered in the U.S. Bankruptcy Court under the caption In re Calpine Corporation, et
al., Case No. 05-60200 (BRL)
|
|
VAR
|
Value-at-risk
|
|
Whitby
|
Whitby
Cogeneration Limited Partnership
|
June 30,
|
December 31,
|
|||||||
2008
|
2007
|
|||||||
(in
millions, except
share
and per share amounts)
|
||||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 370 | $ | 1,915 | ||||
Accounts
receivable, net of allowance of $31 and $54
|
1,443 | 878 | ||||||
Accounts
receivable, related party
|
1 | 226 | ||||||
Materials
and supplies
|
152 | 114 | ||||||
Margin
deposits and other prepaid expense
|
836 | 452 | ||||||
Restricted
cash, current
|
357 | 422 | ||||||
Current
derivative assets
|
5,053 | 731 | ||||||
Current
assets held for sale
|
— | 195 | ||||||
Other
current assets
|
113 | 98 | ||||||
Total
current assets
|
8,325 | 5,031 | ||||||
Property,
plant and equipment, net
|
12,131 | 12,292 | ||||||
Restricted
cash, net of current portion
|
168 | 159 | ||||||
Investments
|
386 | 260 | ||||||
Long-term
derivative assets
|
694 | 290 | ||||||
Other
assets
|
917 | 1,018 | ||||||
Total
assets
|
$ | 22,621 | $ | 19,050 | ||||
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 1,190 | $ | 642 | ||||
Accrued
interest payable
|
101 | 324 | ||||||
Debt,
current portion
|
308 | 1,710 | ||||||
Current
derivative liabilities
|
5,486 | 806 | ||||||
Income
taxes payable
|
49 | 51 | ||||||
Other
current liabilities
|
318 | 571 | ||||||
Total
current liabilities
|
7,452 | 4,104 | ||||||
Debt,
net of current portion
|
10,104 | 9,946 | ||||||
Deferred
income taxes, net of current portion
|
127 | 38 | ||||||
Long-term
derivative liabilities
|
1,029 | 578 | ||||||
Other
long-term liabilities
|
235 | 245 | ||||||
Total
liabilities not subject to compromise
|
18,947 | 14,911 | ||||||
Liabilities
subject to compromise
|
— | 8,788 | ||||||
Commitments
and contingencies (see Note 12)
|
||||||||
Minority
interest
|
3 | 3 | ||||||
Stockholders’
equity (deficit):
|
||||||||
Preferred
stock, $.001 par value per share; authorized 100,000,000 shares, none
issued and outstanding in 2008; authorized 10,000,000 shares, none issued
and outstanding in 2007
|
— | — | ||||||
Common
stock, $.001 par value per share; authorized 1,400,000,000 shares,
423,127,138 shares issued and 423,126,665 shares outstanding in 2008;
authorized 2,000,000,000 shares, 568,314,685 issued and 479,314,685
outstanding in 2007
|
1 | 1 | ||||||
Additional
paid-in capital
|
12,185 | 3,263 | ||||||
Accumulated
deficit
|
(7,724 | ) | (7,685 | ) | ||||
Accumulated
other comprehensive loss
|
(791 | ) | (231 | ) | ||||
Total
stockholders’ equity (deficit)
|
3,671 | (4,652 | ) | |||||
Total
liabilities and stockholders’ equity (deficit)
|
$ | 22,621 | $ | 19,050 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(in
millions, except share and per share amounts)
|
||||||||||||||||
Operating
revenues
|
$ | 2,828 | $ | 2,060 | $ | 4,779 | $ | 3,722 | ||||||||
Cost
of revenue:
|
||||||||||||||||
Fuel
and purchased energy expense
|
2,008 | 1,456 | 3,613 | 2,727 | ||||||||||||
Plant
operating expense
|
206 | 211 | 438 | 379 | ||||||||||||
Depreciation
and amortization expense
|
108 | 118 | 219 | 236 | ||||||||||||
Other
cost of revenue
|
30 | 33 | 62 | 70 | ||||||||||||
Total
cost of revenue
|
2,352 | 1,818 | 4,332 | 3,412 | ||||||||||||
Gross
profit
|
476 | 242 | 447 | 310 | ||||||||||||
Sales,
general and other administrative expense
|
48 | 39 | 96 | 79 | ||||||||||||
Other
operating (income) expense
|
(5 | ) | 3 | — | 12 | |||||||||||
Income
from operations
|
433 | 200 | 351 | 219 | ||||||||||||
Interest
expense
|
206 | 264 | 625 | 564 | ||||||||||||
Interest
(income)
|
(14 | ) | (17 | ) | (27 | ) | (34 | ) | ||||||||
Minority
interest income
|
— | (3 | ) | — | (1 | ) | ||||||||||
Other
(income) expense, net
|
1 | (6 | ) | 11 | (7 | ) | ||||||||||
Income
(loss) before reorganization items and income taxes
|
240 | (38 | ) | (258 | ) | (303 | ) | |||||||||
Reorganization
items
|
18 | 469 | (261 | ) | 574 | |||||||||||
Income
(loss) before income taxes
|
222 | (507 | ) | 3 | (877 | ) | ||||||||||
Provision
(benefit) for income taxes
|
25 | (7 | ) | 20 | 82 | |||||||||||
Net
income (loss)
|
$ | 197 | $ | (500 | ) | $ | (17 | ) | $ | (959 | ) | |||||
Basic
earnings (loss) per common share:
|
||||||||||||||||
Weighted
average shares of common stock outstanding (in thousands)
|
485,004 | 479,175 | 485,002 | 479,155 | ||||||||||||
Net
income (loss)
|
$ | 0.41 | $ | (1.04 | ) | $ | (0.04 | ) | $ | (2.00 | ) | |||||
Diluted
earnings (loss) per common share:
|
||||||||||||||||
Weighted
average shares of common stock outstanding (in thousands)
|
485,732 | 479,175 | 485,002 | 479,155 | ||||||||||||
Net
income (loss)
|
$ | 0.41 | $ | (1.04 | ) | $ | (0.04 | ) | $ | (2.00 | ) |
Accumulated Other
|
||||||||||||||||||||||||
Comprehensive Income(Loss)
|
||||||||||||||||||||||||
Net Unrealized
|
||||||||||||||||||||||||
Gain (Loss) From
|
Total
|
|||||||||||||||||||||||
Additional
|
Foreign
|
Stockholders’
|
||||||||||||||||||||||
Common
|
Paid-In
|
Accumulated
|
Cash Flow
|
Currency
|
Equity
|
|||||||||||||||||||
Stock
|
Capital
|
Deficit
|
Hedges
|
Translation
|
(Deficit)
|
|||||||||||||||||||
(in
millions)
|
||||||||||||||||||||||||
Balance,
December 31, 2007
|
$ | 1 | $ | 3,263 | $ | (7,685 | ) | $ | (241 | ) | $ | 10 | $ | (4,652 | ) | |||||||||
Cancellation
of Calpine Corporation common stock
|
(1 | ) | (3,263 | ) | — | — | — | (3,264 | ) | |||||||||||||||
Issuance
of reorganized Calpine Corporation common stock in accordance with the
Plan of Reorganization
|
1 | 12,166 | — | — | — | 12,167 | ||||||||||||||||||
Stock
compensation expense
|
— | 19 | — | — | — | 19 | ||||||||||||||||||
Cumulative
effect of adjustment from adoption of
SFAS No. 157
|
— | — | (22 | ) | — | — | (22 | ) | ||||||||||||||||
Total
stockholders’ equity before comprehensive income (loss)
items
|
4,248 | |||||||||||||||||||||||
Net
loss
|
— | — | (17 | ) | — | — | (17 | ) | ||||||||||||||||
Loss
on cash flow hedges before reclassification adjustment
|
— | — | — | (572 | ) | — | (572 | ) | ||||||||||||||||
Reclassification
adjustment
|
— | — | — | 22 | — | 22 | ||||||||||||||||||
Foreign
currency translation loss
|
— | — | — | — | (6 | ) | (6 | ) | ||||||||||||||||
Provision
for income taxes
|
— | — | — | (4 | ) | — | (4 | ) | ||||||||||||||||
Total
comprehensive loss
|
(577 | ) | ||||||||||||||||||||||
Balance,
June 30, 2008
|
$ | 1 | $ | 12,185 | $ | (7,724 | ) | $ | (795 | ) | $ | 4 | $ | 3,671 |
Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
(in
millions)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
loss
|
$ | (17 | ) | $ | (959 | ) | ||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization(1)
|
280 | 284 | ||||||
Deferred
income taxes, net
|
85 | 82 | ||||||
Loss
on sale of assets, excluding reorganization items
|
6 | 10 | ||||||
Foreign
currency transaction gain
|
(7 | ) | (6 | ) | ||||
Change
in derivatives
|
(158 | ) | (10 | ) | ||||
Derivative
contracts classified as financing activities
|
(34 | ) | — | |||||
Income
from unconsolidated investments in power projects
|
(13 | ) | — | |||||
Stock
compensation expense
|
19 | (1 | ) | |||||
Reorganization
items
|
(322 | ) | 497 | |||||
Other
|
7 | (3 | ) | |||||
Change
in operating assets and liabilities, net of effects of
acquisitions:
|
||||||||
Accounts
receivable
|
(246 | ) | (232 | ) | ||||
Other
assets
|
(239 | ) | (147 | ) | ||||
Accounts
payable, LSTC and accrued expenses
|
382 | 319 | ||||||
Other
liabilities
|
(329 | ) | (18 | ) | ||||
Net
cash used in operating activities
|
(586 | ) | (184 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Purchases
of property, plant and equipment
|
(79 | ) | (128 | ) | ||||
Disposals
of property, plant and equipment
|
11 | 15 | ||||||
Proceeds
from sale of investments, turbines and power plants
|
398 | 398 | ||||||
Cash
acquired due to reconsolidation of Canadian entities
|
64 | — | ||||||
Contributions
to unconsolidated investments
|
(9 | ) | (68 | ) | ||||
Return
of investment from unconsolidated investments
|
24 | 92 | ||||||
Decrease
in restricted cash
|
56 | 60 | ||||||
Cash
effect of deconsolidation of OMEC
|
— | (29 | ) | |||||
Other
|
4 | 3 | ||||||
Net
cash provided by investing activities
|
469 | 343 |
Six Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from financing activities:
|
||||||||
Repayments
of notes payable and lines of credit
|
$ | (49 | ) | $ | (89 | ) | ||
Borrowings
from project financing
|
356 | 15 | ||||||
Repayments
of project financing
|
(253 | ) | (69 | ) | ||||
Repayments
on CalGen financing
|
— | (224 | ) | |||||
DIP
Facility borrowings
|
— | 614 | ||||||
Repayments
of DIP Facility
|
(113 | ) | (18 | ) | ||||
Borrowings
under Exit Facility
|
3,473 | — | ||||||
Repayments
on Exit Facility
|
(855 | ) | — | |||||
Repayments
on Second Priority Debt
|
(3,672 | ) | — | |||||
Redemptions
of preferred interests
|
(161 | ) | (4 | ) | ||||
Financing
costs
|
(187 | ) | (60 | ) | ||||
Derivative
contracts
|
34 | — | ||||||
Other
|
(1 | ) | 3 | |||||
Net
cash provided by (used in) financing activities
|
(1,428 | ) | 168 | |||||
Net
increase (decrease) in cash and cash equivalents
|
(1,545 | ) | 327 | |||||
Cash
and cash equivalents, beginning of period
|
1,915 | 1,077 | ||||||
Cash
and cash equivalents, end of period
|
$ | 370 | $ | 1,404 | ||||
Cash
paid (received) during the period for:
|
||||||||
Interest,
net of amounts capitalized
|
$ | 163 | $ | 585 | ||||
Income
taxes
|
$ | 15 | $ | 1 | ||||
Reorganization
items included in operating activities, net
|
$ | 109 | $ | 65 | ||||
Reorganization
items included in investing activities, net
|
$ | (414 | ) | $ | (250 | ) | ||
Reorganization
items included in financing activities, net
|
$ | — | $ | 52 | ||||
Supplemental
disclosure of non-cash investing and financing activities:
|
||||||||
Settlement
of LSTC through issuance of reorganized Calpine Corporation common
stock
|
$ | 5,200 | $ | — | ||||
DIP
Facility borrowings converted into exit financing under the Exit
Facilities
|
$ | 3,872 | $ | — | ||||
Settlement
of Convertible Senior Notes and Unsecured Senior Notes with common
stock
|
$ | 3,703 | $ | — | ||||
DIP
Facility borrowings used to extinguish the Original DIP Facility principal
$(989), CalGen Secured Debt principal $(2,309), and operating liabilities
$(88)
|
$ | — | $ | 3,386 | ||||
Project
financing $(159) and operating liabilities $(33) extinguished with sale of
Aries Power Plant
|
$ | — | $ | 192 | ||||
Fair
value of loaned common stock returned
|
$ | — | $ | 123 | ||||
Letter
of credit draws under the CalGen Secured Debt used for operating
activities
|
$ | — | $ | 16 | ||||
Fair
value of Metcalf cooperation agreement, with offsets to notes payable $(6)
and operating liabilities $(6)
|
$ | — | $ | 12 |
(1)
|
Includes
depreciation and amortization that is also recorded in sales, general and
other administrative expense and interest
expense.
|
June 30, 2008
|
December 31, 2007
|
|||||||||||||||||||||||
Current
|
Non-Current
|
Total
|
Current
|
Non-Current
|
Total
|
|||||||||||||||||||
Debt
service
|
$ | 116 | $ | 114 | $ | 230 | $ | 128 | $ | 111 | $ | 239 | ||||||||||||
Rent
reserve
|
20 | — | 20 | 11 | — | 11 | ||||||||||||||||||
Construction/major
maintenance
|
51 | 29 | 80 | 62 | 26 | 88 | ||||||||||||||||||
Security/project
reserves
|
107 | 1 | 108 | 189 | — | 189 | ||||||||||||||||||
Collateralized
letters of credit and other credit support
|
39 | 1 | 40 | 4 | — | 4 | ||||||||||||||||||
Other
|
24 | 23 | 47 | 28 | 22 | 50 | ||||||||||||||||||
Total
|
$ | 357 | $ | 168 | $ | 525 | $ | 422 | $ | 159 | $ | 581 |
December 31, 2007
|
||||||||
As Previously
|
||||||||
Reported
|
As Adjusted
|
|||||||
Current
derivative assets
|
$ | 231 | $ | 731 | ||||
Total
current assets
|
4,531 | 5,031 | ||||||
Long-term
derivative assets
|
222 | 290 | ||||||
Total
assets
|
$ | 18,482 | $ | 19,050 | ||||
Current
derivative liabilities
|
$ | (306 | ) | $ | (806 | ) | ||
Total
current liabilities
|
(3,604 | ) | (4,104 | ) | ||||
Long-term
derivative liabilities
|
(510 | ) | (578 | ) | ||||
Total
liabilities not subject to compromise
|
(14,343 | ) | (14,911 | ) | ||||
Total
liabilities and stockholders’ equity (deficit)
|
$ | (18,482 | ) | $ | (19,050 | ) |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Provision
for expected allowed claims
|
$ | 5 | $ | 230 | $ | (54 | ) | $ | 335 | |||||||
Professional
fees
|
14 | 49 | 76 | 95 | ||||||||||||
Gains
on asset sales, net of equipment impairments
|
— | — | (203 | ) | (250 | ) | ||||||||||
Asset
impairments
|
— | 106 | — | 120 | ||||||||||||
Loss
(gain) on reconsolidation of Canadian Debtors
|
5 | — | (65 | ) | — | |||||||||||
DIP
Facility financing and CalGen Secured Debt repayment costs
|
— | — | (4 | ) | 160 | |||||||||||
Interest
(income) on accumulated cash
|
— | (15 | ) | (7 | ) | (23 | ) | |||||||||
Other
|
(6 | ) | 99 | (4 | ) | 137 | ||||||||||
Total
reorganization items
|
$ | 18 | $ | 469 | $ | (261 | ) | $ | 574 |
Three Months
|
Six Months
|
|||||||
Ended
|
Ended
|
|||||||
June 30, 2007
|
June 30, 2007
|
|||||||
Total
revenue
|
$ | 1,828 | $ | 3,380 | ||||
Total
cost of revenue
|
1,912 | 3,466 | ||||||
Operating
(income) expense
|
(40 | ) | 11 | |||||
Loss
from operations
|
(44 | ) | (97 | ) | ||||
Interest
expense
|
177 | 378 | ||||||
Other
(income) expense, net
|
(15 | ) | 2 | |||||
Reorganization
items
|
382 | 485 | ||||||
Provision
(benefit) for income taxes
|
(25 | ) | 70 | |||||
Net
loss
|
$ | (563 | ) | $ | (1,032 | ) |
Six Months
|
||||
Ended
|
||||
June 30, 2007
|
||||
Net
cash provided by (used in):
|
||||
Operating
activities
|
$
|
(306
|
)
|
|
Investing
activities
|
348
|
|||
Financing
activities
|
309
|
|||
Net
increase in cash and cash equivalents
|
351
|
|||
Cash
and cash equivalents, beginning of period
|
883
|
|||
Cash
and cash equivalents, end of period
|
$
|
1,234
|
||
Net
cash paid for reorganization items included in operating
activities
|
$
|
65
|
||
Net
cash received from reorganization items included in investing
activities
|
$
|
(248
|
)
|
|
Net
cash paid for reorganization items included in financing
activities
|
$
|
52
|
June 30,
|
December 31,
|
|||||||
2008
|
2007
|
|||||||
Buildings,
machinery and equipment
|
$ | 13,459 | $ | 13,439 | ||||
Geothermal
properties
|
958 | 944 | ||||||
Other
|
260 | 259 | ||||||
14,677 | 14,642 | |||||||
Less:
Accumulated depreciation
|
(2,786 | ) | (2,582 | ) | ||||
11,891 | 12,060 | |||||||
Land
|
74 | 77 | ||||||
Construction
in progress
|
166 | 155 | ||||||
Property,
plant and equipment, net
|
$ | 12,131 | $ | 12,292 |
Ownership
|
||||||||||||
Interest as of
|
||||||||||||
June 30,
|
June 30,
|
December 31,
|
||||||||||
2008
|
2008
|
2007
|
||||||||||
Greenfield
LP
|
50%
|
$ | 80 | $ | 114 | |||||||
OMEC
|
100%
|
159 | 146 | |||||||||
RockGen
|
100%
|
138 | — | |||||||||
Whitby
|
50%
|
9 | — | |||||||||
Total
investments
|
$ | 386 | $ | 260 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Net
income (loss)
|
$ | 197 | $ | (500 | ) | $ | (17 | ) | $ | (959 | ) | |||||
Other
comprehensive income (loss):
|
||||||||||||||||
Gain
(loss) on cash flow hedges before reclassification
adjustment
|
(168 | ) | 8 | (572 | ) | (5 | ) | |||||||||
Reclassification
adjustment
|
12 | 19 | 22 | 29 | ||||||||||||
Foreign
currency translation loss
|
— | (11 | ) | (6 | ) | (11 | ) | |||||||||
Provision
for income taxes
|
(4 | ) | (9 | ) | (4 | ) | (9 | ) | ||||||||
Total
comprehensive income (loss)
|
$ | 37 | $ | (493 | ) | $ | (577 | ) | $ | (955 | ) |
June 30,
|
December 31,
|
|||||||
2008
|
2007
|
|||||||
Exit
Credit Facility
|
$ | 6,475 | $ | — | ||||
DIP
Facility
|
— | 3,970 | ||||||
Second
Priority Debt
|
— | 3,672 | ||||||
Construction/project
financing
|
2,050 | 1,944 | ||||||
CCFC
financing
|
779 | 780 | ||||||
Preferred
interests
|
414 | 575 | ||||||
Notes
payable and other borrowings
|
413 | 432 | ||||||
Capital
lease obligations
|
281 | 283 | ||||||
Total
debt(1)
|
10,412 | 11,656 | ||||||
Less:
Current maturities
|
308 | 1,710 | ||||||
Debt,
net of current portion(1)
|
$ | 10,104 | $ | 9,946 |
(1)
|
Our
debt balances at December 31, 2007, do not include $3.7 billion in
debt that was classified as LSTC. These balances were settled upon
our emergence from Chapter 11 on the Effective Date. See
Note 2 of the Notes to Consolidated Condensed Financial Statements
for a further discussion of our emergence from
Chapter 11.
|
|
·
|
The
Exit Credit Facility, comprising (i) approximately $6.0 billion of
senior secured term loans; (ii) a $1.0 billion senior secured
revolving facility; and (iii) the ability to raise up to $2.0 billion
of incremental term loans available on a senior secured basis in order to
refinance secured debt of subsidiaries under an “accordion” provision;
and
|
|
·
|
The
Bridge Facility, which, prior to its repayment as described below,
provided for a $300 million senior secured bridge term
loan.
|
Recurring
Fair Value Measures at Fair Value as of June 30, 2008
|
||||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
(in
millions)
|
||||||||||||||||
Assets:
|
||||||||||||||||
Commodity
derivatives
|
$ |
1,712
|
$
|
777 |
$
|
3,202 |
$
|
5,691 | ||||||||
Interest
rate derivatives
|
—
|
56 |
—
|
56 | ||||||||||||
Total
derivative assets
|
1,712 | 833 | 3,202 | 5,747 | ||||||||||||
Margin
deposits(1)
|
696 |
—
|
—
|
696 | ||||||||||||
Total
|
$
|
2,408 |
$
|
833 |
$
|
3,202 |
$
|
6,443 | ||||||||
Liabilities: | ||||||||||||||||
Commodity
derivatives
|
$ | (1,510 | ) |
$
|
(988 | ) |
$
|
(3,851 | ) |
$
|
(6,349 | ) | ||||
Interest
rate derivatives
|
—
|
(166 | ) |
—
|
(166 | ) | ||||||||||
Total
derivative liabilities
|
(1,510 | ) | (1,154 | ) | (3,851 | ) | (6,515 | ) | ||||||||
Margin
held by us posted by our counterparties(1)
|
(86 | ) |
—
|
—
|
(86 | ) | ||||||||||
Total
|
$
|
(1,596 | ) |
$
|
(1,154 | ) |
$
|
(3,851 | ) |
$
|
(6,601 | ) |
(1)
|
Margin
deposits and margin held by us posted by our counterparties represent cash
collateral paid between us and our counterparties to support our
derivative contracts.
|
Three Months
|
Six Months
|
|||||||
Ended
|
Ended
|
|||||||
June 30, 2008
|
June 30, 2008
|
|||||||
Balance,
beginning of period(1)
|
$ | (560 | ) | $ | (23 | ) | ||
Realized
and unrealized gains (losses):
|
||||||||
Included
in net income (loss)(2)
|
107 | (153 | ) | |||||
Included
in OCI
|
(470 | ) | (955 | ) | ||||
Purchases,
issuances and settlements, net
|
119 | 248 | ||||||
Transfers
in and/or out of level 3(3)
|
155 | 234 | ||||||
Balance,
end of period
|
$ | (649 | ) | $ | (649 | ) | ||
Change
in unrealized gains (losses) relating to instruments still held as of
June 30, 2008(4)
|
$ | 107 | $ | (157 | ) |
(1)
|
Reflects
our portfolio of derivative assets and liabilities as of December 31,
2007, adjusted for the day one loss of $(22) million recognized upon
adoption of SFAS No. 157 on January 1,
2008.
|
(2)
|
Includes
$3 million and $(174) million recorded in operating revenues (for
electricity contracts) and $104 million and $21 million recorded in fuel
and purchased energy expense (for gas contracts) for the three and six
months ended June 30, 2008, respectively, as shown on our
Consolidated Condensed Statements of
Operations.
|
(3)
|
We
transfer amounts among levels of the fair value hierarchy as of the end of
each period.
|
(4)
|
Includes
$3 million and $(201) million recorded in operating revenues (for
electricity contracts) and $104 million and $44 million recorded in fuel
and purchased energy expense (for gas contracts) for the three and six
months ended June 30, 2008, respectively, as shown on our
Consolidated Condensed Statements of
Operations.
|
Total
|
||||||||||||
Interest Rate
|
Commodity
|
Derivative
|
||||||||||
Swaps
|
Instruments
|
Instruments
|
||||||||||
Current
derivative assets
|
$ | 5 | $ | 5,048 | $ | 5,053 | ||||||
Long-term
derivative assets
|
51 | 643 | 694 | |||||||||
Total
derivative assets
|
$ | 56 | $ | 5,691 | $ | 5,747 | ||||||
Current
derivative liabilities
|
$ | 106 | $ | 5,380 | $ | 5,486 | ||||||
Long-term
derivative liabilities
|
60 | 969 | 1,029 | |||||||||
Total
derivative liabilities
|
$ | 166 | $ | 6,349 | $ | 6,515 | ||||||
Net
derivative liabilities
|
$ | (110 | ) | $ | (658 | ) | $ | (768 | ) |
June 30, 2008
|
||||
Margin
deposits
|
$
|
696
|
||
Gas
and power prepayments
|
113
|
|||
Total
margin deposits and gas and power prepayments with our counterparties(1)
|
$
|
809
|
||
Letters
of credit issued
|
$
|
376
|
||
First
priority liens under power and natural
gas agreements
|
421
|
|||
First
priority liens under interest rate swap agreements
|
92
|
|||
Total
letters of credit and first priority liens with our
counterparties
|
$
|
889
|
||
Margin
deposits posted with us by our counterparties(2)
|
$
|
86
|
||
Letters
of credit posted with us by our counterparties
|
6
|
|||
Total
margin deposits and letters of credit posted with us by our
counterparties
|
$
|
92
|
(1)
|
Included
in margin deposits and other prepaid expense and in other assets on our
Consolidated Condensed Balance
Sheet.
|
(2)
|
Included
in other current liabilities on our Consolidated Condensed Balance
Sheet.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Power
contracts included in operating revenues
|
$ | (8 | ) | $ | 147 | $ | (104 | ) | $ | 135 | ||||||
Gas
contracts included in fuel and purchased energy expense
|
32 | (94 | ) | (23 | ) | (141 | ) | |||||||||
Interest
rate swaps included in interest expense
|
12 | 10 | (4 | ) | 9 | |||||||||||
Total
mark-to-market activity
|
$ | 36 | $ | 63 | $ | (131 | ) | $ | 3 |
June 30, 2008
|
||||
Net
derivative liabilities
|
$
|
(768
|
)
|
|
Derivatives
not designated as cash flow hedges and recognized hedge
ineffectiveness
|
13
|
|||
Equity
investment OCI
|
(19
|
)
|
||
Cash
flow hedges terminated prior to maturity
|
(28
|
)
|
||
Cumulative
OCI tax benefit
|
7
|
|||
Accumulated
other comprehensive loss from derivative instruments, net of tax(1)
|
$
|
(795
|
)
|
(1)
|
Amount
represents one portion of our total AOCI balance of $(791)
million.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Natural
gas derivatives
|
$ | 135 | $ | (9 | ) | $ | 113 | $ | (15 | ) | ||||||
Power
derivatives
|
(119 | ) | (7 | ) | (105 | ) | (4 | ) | ||||||||
Interest
rate derivatives
|
(28 | ) | (3 | ) | (30 | ) | (10 | ) | ||||||||
Total
derivatives
|
$ | (12 | ) | $ | (19 | ) | $ | (22 | ) | $ | (29 | ) |
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
||||||||||||||||||||||
Natural
gas derivatives
|
$ | 333 | $ | 154 | $ | 27 | $ | 22 | $ | 21 | $ | — | $ | 557 | ||||||||||||||
Power
derivatives
|
(631 | ) | (509 | ) | (35 | ) | (25 | ) | (23 | ) | — | (1,223 | ) | |||||||||||||||
Interest
rate derivatives
|
(47 | ) | (65 | ) | (12 | ) | 4 | (15 | ) | (1 | ) | (136 | ) | |||||||||||||||
Total
pre-tax AOCI
|
$ | (345 | ) | $ | (420 | ) | $ | (20 | ) | $ | 1 | $ | (17 | ) | $ | (1 | ) | $ | (802 | ) |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
(shares
in thousands)
|
||||||||||||||||
Diluted
weighted average shares calculation:
|
||||||||||||||||
Weighted
average shares outstanding (basic)
|
485,004 | 479,175 | 485,002 | 479,155 | ||||||||||||
Restricted
stock awards
|
723 | — | — | — | ||||||||||||
Employee
stock options
|
5 | — | — | — | ||||||||||||
Weighted
average shares outstanding (diluted)
|
485,732 | 479,175 | 485,002 | 479,155 |
Weighted
|
||||||||||
Average
|
||||||||||
Weighted
|
Remaining
|
Aggregate
|
||||||||
Number of
|
Average
|
Term
|
Intrinsic Value
|
|||||||
Options
|
Exercise Price
|
(in years)
|
(in millions)
|
|||||||
Outstanding
– December 31, 2007
|
—
|
$
|
—
|
|||||||
Granted
|
5,281,300
|
$
|
17.54
|
|||||||
Exercised
|
—
|
$
|
—
|
|||||||
Forfeited
|
577,100
|
$
|
17.12
|
|||||||
Expired
|
—
|
$
|
—
|
|||||||
Outstanding
– June 30, 2008
|
4,704,200
|
$
|
17.59
|
9.5
|
$
|
23
|
||||
Exercisable
– June 30, 2008
|
3,200
|
$
|
17.64
|
0.8
|
$
|
—
|
||||
Vested
and expected to vest – June 30, 2008
|
4,425,194
|
$
|
17.58
|
9.5
|
$
|
22
|
June 30, 2008
|
||||
Expected
term (in years)(1)
|
5.4
– 6.1
|
|||
Risk-free
interest rate(2)
|
2.7
– 3.3
|
%
|
||
Expected
volatility(3)
|
34.8
– 40.9
|
%
|
||
Dividend
yield
|
—
|
|||
Weighted
average grant-date fair value (per option)
|
$
|
7.22
|
(1)
|
Expected
term calculated using the simplified method under SAB 110
“Shared-Based Payment.”
|
(2)
|
Zero
Coupon U.S. Treasury rate based on expected
term.
|
(3)
|
Volatility
calculated using the weighted average implied volatility of our industry
peers’ exchange traded stock
options.
|
Weighted
|
|||||
Number of
|
Average
|
||||
Restricted
|
Grant-Date
|
||||
Stock Awards
|
Fair Value
|
||||
Nonvested
– December 31, 2007
|
—
|
$
|
—
|
||
Granted
|
2,733,352
|
$
|
16.71
|
||
Forfeited
|
608,529
|
$
|
16.50
|
||
Vested
|
1,100
|
$
|
16.80
|
||
Nonvested
– June 30, 2008
|
2,123,723
|
$
|
16.77
|
Three
Months Ended June 30, 2008
|
||||||||||||||||||||||
Consolidation
|
||||||||||||||||||||||
and
|
||||||||||||||||||||||
West
|
Texas
|
Southeast
|
North
|
Other
|
Elimination
|
Total
|
||||||||||||||||
Revenues
from external customers
|
$
|
1,156
|
$
|
1,185
|
$
|
400
|
$
|
170
|
$
|
(83
|
)
|
$
|
—
|
$
|
2,828
|
|||||||
Intersegment
revenues
|
12
|
75
|
59
|
6
|
3
|
(155
|
)
|
—
|
||||||||||||||
Total
revenue
|
$
|
1,168
|
$
|
1,260
|
$
|
459
|
$
|
176
|
$
|
(80
|
)
|
$
|
(155
|
)
|
$
|
2,828
|
||||||
Commodity
margin
|
340
|
258
|
91
|
72
|
24
|
—
|
785
|
|||||||||||||||
Add:
Mark-to-market commodity activity, net and other service revenues(1)
|
4
|
74
|
—
|
—
|
(40
|
)
|
(3
|
)
|
35
|
|||||||||||||
Less:
|
||||||||||||||||||||||
Plant
operating expense
|
95
|
48
|
22
|
24
|
22
|
(5
|
)
|
206
|
||||||||||||||
Depreciation
and amortization
|
44
|
33
|
18
|
13
|
1
|
(1
|
)
|
108
|
||||||||||||||
Other
cost of revenue
|
14
|
—
|
8
|
6
|
2
|
—
|
30
|
|||||||||||||||
Gross
profit (loss)
|
191
|
251
|
43
|
29
|
(41
|
)
|
3
|
476
|
||||||||||||||
Other
operating expense
|
43
|
|||||||||||||||||||||
Income
from operations
|
433
|
|||||||||||||||||||||
Interest
expense, net of interest income
|
192
|
|||||||||||||||||||||
Other
(income) expense, net
|
1
|
|||||||||||||||||||||
Income
before reorganization items and income taxes
|
240
|
|||||||||||||||||||||
Reorganization
items
|
18
|
|||||||||||||||||||||
Income
before income taxes
|
$
|
222
|
Three
Months Ended June 30, 2007
|
||||||||||||||||||||||
Consolidation
|
||||||||||||||||||||||
and
|
||||||||||||||||||||||
West
|
Texas
|
Southeast
|
North
|
Other
|
Elimination
|
Total
|
||||||||||||||||
Revenues
from external customers
|
$
|
806
|
$
|
797
|
$
|
294
|
$
|
147
|
$
|
16
|
$
|
—
|
$
|
2,060
|
||||||||
Intersegment
revenues
|
8
|
1
|
50
|
1
|
2
|
(62
|
)
|
—
|
||||||||||||||
Total
revenue
|
$
|
814
|
$
|
798
|
$
|
344
|
$
|
148
|
$
|
18
|
$
|
(62
|
)
|
$
|
2,060
|
|||||||
Commodity
margin
|
265
|
138
|
65
|
75
|
(8
|
)
|
—
|
535
|
||||||||||||||
Add:
Mark-to-market commodity activity, net and other service revenues(1)
|
3
|
48
|
8
|
—
|
13
|
(3
|
)
|
69
|
||||||||||||||
Less:
|
||||||||||||||||||||||
Plant
operating expense
|
86
|
39
|
31
|
22
|
36
|
(3
|
)
|
211
|
||||||||||||||
Depreciation
and amortization
|
54
|
29
|
19
|
14
|
1
|
1
|
118
|
|||||||||||||||
Other
cost of revenue
|
13
|
—
|
8
|
9
|
4
|
(1
|
)
|
33
|
||||||||||||||
Gross
profit (loss)
|
115
|
118
|
15
|
30
|
(36
|
)
|
—
|
242
|
||||||||||||||
Other
operating expense
|
42
|
|||||||||||||||||||||
Income
from operations
|
200
|
|||||||||||||||||||||
Interest
expense, net of interest income
|
247
|
|||||||||||||||||||||
Other
(income) expense, net
|
(9
|
)
|
||||||||||||||||||||
Loss
before reorganization items and income taxes
|
(38
|
)
|
||||||||||||||||||||
Reorganization
items
|
469
|
|||||||||||||||||||||
Loss
before income taxes
|
$
|
(507
|
)
|
Six
Months Ended June 30, 2008
|
||||||||||||||||||||||
Consolidation
|
||||||||||||||||||||||
and
|
||||||||||||||||||||||
West
|
Texas
|
Southeast
|
North
|
Other
|
Elimination
|
Total
|
||||||||||||||||
Revenues
from external customers
|
$
|
2,118
|
$
|
1,826
|
$
|
657
|
$
|
320
|
$
|
(142
|
)
|
$
|
—
|
$
|
4,779
|
|||||||
Intersegment
revenues
|
21
|
116
|
93
|
11
|
5
|
(246
|
)
|
—
|
||||||||||||||
Total
revenue
|
$
|
2,139
|
$
|
1,942
|
$
|
750
|
$
|
331
|
$
|
(137
|
)
|
$
|
(246
|
)
|
$
|
4,779
|
||||||
Commodity
margin
|
609
|
388
|
128
|
134
|
12
|
—
|
1,271
|
|||||||||||||||
Add:
Mark-to-market commodity activity, net and other service revenues(1)
|
14
|
41
|
1
|
—
|
(155
|
)
|
(6
|
)
|
(105
|
)
|
||||||||||||
Less:
|
||||||||||||||||||||||
Plant
operating expense
|
199
|
110
|
50
|
49
|
37
|
(7
|
)
|
438
|
||||||||||||||
Depreciation
and amortization
|
94
|
63
|
37
|
25
|
2
|
(2
|
)
|
219
|
||||||||||||||
Other
cost of revenue
|
30
|
—
|
16
|
12
|
4
|
—
|
62
|
|||||||||||||||
Gross
profit (loss)
|
300
|
256
|
26
|
48
|
(186
|
)
|
3
|
447
|
||||||||||||||
Other
operating expense
|
96
|
|||||||||||||||||||||
Income
from operations
|
351
|
|||||||||||||||||||||
Interest
expense, net of interest income
|
598
|
|||||||||||||||||||||
Other
(income) expense, net
|
11
|
|||||||||||||||||||||
Loss
before reorganization items and income taxes
|
(258
|
)
|
||||||||||||||||||||
Reorganization
items
|
(261
|
)
|
||||||||||||||||||||
Income
before income taxes
|
$
|
3
|
Six
Months Ended June 30, 2007
|
||||||||||||||||||||||
Consolidation
|
||||||||||||||||||||||
and
|
||||||||||||||||||||||
West
|
Texas
|
Southeast
|
North
|
Other
|
Elimination
|
Total
|
||||||||||||||||
Revenues
from external customers
|
$
|
1,604
|
$
|
1,320
|
$
|
501
|
$
|
299
|
$
|
(2
|
)
|
$
|
—
|
$
|
3,722
|
|||||||
Intersegment
revenues
|
15
|
(2
|
)
|
72
|
2
|
15
|
(102
|
)
|
—
|
|||||||||||||
Total
revenue
|
$
|
1,619
|
$
|
1,318
|
$
|
573
|
$
|
301
|
$
|
13
|
$
|
(102
|
)
|
$
|
3,722
|
|||||||
Commodity
margin
|
495
|
224
|
102
|
138
|
(2
|
)
|
—
|
957
|
||||||||||||||
Add:
Mark-to-market commodity activity, net and other service revenues(1)
|
15
|
52
|
8
|
—
|
(21
|
)
|
(16
|
)
|
38
|
|||||||||||||
Less:
|
||||||||||||||||||||||
Plant
operating expense
|
165
|
68
|
55
|
38
|
58
|
(5
|
)
|
379
|
||||||||||||||
Depreciation
and amortization
|
105
|
60
|
42
|
27
|
2
|
—
|
236
|
|||||||||||||||
Other
cost of revenue
|
22
|
—
|
16
|
17
|
21
|
(6
|
)
|
70
|
||||||||||||||
Gross
profit (loss)
|
218
|
148
|
(3
|
)
|
56
|
(104
|
)
|
(5
|
)
|
310
|
||||||||||||
Other
operating expense
|
91
|
|||||||||||||||||||||
Income
from operations
|
219
|
|||||||||||||||||||||
Interest
expense, net of interest income
|
530
|
|||||||||||||||||||||
Other
(income) expense, net
|
(8
|
)
|
||||||||||||||||||||
Loss
before reorganization items and income taxes
|
(303
|
)
|
||||||||||||||||||||
Reorganization
items
|
574
|
|||||||||||||||||||||
Loss
before income taxes
|
$
|
(877
|
)
|
(1)
|
Mark-to-market
commodity activity, net included in operating revenues and fuel and
purchased energy expense.
|
2008
|
2007
|
$ Change
|
% Change
|
|||||||||||||
Operating
revenues
|
$ | 2,828 | $ | 2,060 | $ | 768 | 37 | % | ||||||||
Cost
of revenue:
|
||||||||||||||||
Fuel
and purchased energy expense
|
2,008 | 1,456 | (552 | ) | (38 | ) | ||||||||||
Plant
operating expense
|
206 | 211 | 5 | 2 | ||||||||||||
Depreciation
and amortization expense
|
108 | 118 | 10 | 8 | ||||||||||||
Other
cost of revenue
|
30 | 33 | 3 | 9 | ||||||||||||
Total
cost of revenue
|
2,352 | 1,818 | (534 | ) | (29 | ) | ||||||||||
Gross
profit
|
476 | 242 | 234 | 97 | ||||||||||||
Sales,
general and other administrative expense
|
48 | 39 | (9 | ) | (23 | ) | ||||||||||
Other
operating (income) expense
|
(5 | ) | 3 | 8 | # | |||||||||||
Income
from operations
|
433 | 200 | 233 | # | ||||||||||||
Interest
expense
|
206 | 264 | 58 | 22 | ||||||||||||
Interest
(income)
|
(14 | ) | (17 | ) | (3 | ) | (18 | ) | ||||||||
Minority
interest income
|
— | (3 | ) | (3 | ) | # | ||||||||||
Other
(income) expense, net
|
1 | (6 | ) | (7 | ) | # | ||||||||||
Income
(loss) before reorganization items and income taxes
|
240 | (38 | ) | 278 | # | |||||||||||
Reorganization
items
|
18 | 469 | 451 | 96 | ||||||||||||
Income
(loss) before income taxes
|
222 | (507 | ) | 729 | # | |||||||||||
Provision
(benefit) for income taxes
|
25 | (7 | ) | (32 | ) | # | ||||||||||
Net
income (loss)
|
$ | 197 | $ | (500 | ) | $ | 697 | # |
#
|
Variance
of 100% or greater
|
2008
|
2007
|
$ Change
|
% Change
|
|||||||||||||
Provision
for expected allowed claims
|
$ | 5 | $ | 230 | $ | 225 | 98 | % | ||||||||
Professional
fees
|
14 | 49 | 35 | 71 | ||||||||||||
Asset
impairments
|
— | 106 | 106 | # | ||||||||||||
Loss
on reconsolidation of Canadian Debtors
|
5 | — | (5 | ) | — | |||||||||||
Interest
(income) on accumulated cash
|
— | (15 | ) | (15 | ) | # | ||||||||||
Other
|
(6 | ) | 99 | 105 | # | |||||||||||
Total
reorganization items
|
$ | 18 | $ | 469 | $ | 451 | 96 |
#
|
Variance
of 100% or greater
|
2008
|
2007
|
$ Change
|
% Change
|
|||||||||||||
Operating
revenues
|
$ | 4,779 | $ | 3,722 | $ | 1,057 | 28 | % | ||||||||
Cost
of revenue:
|
||||||||||||||||
Fuel
and purchased energy expense
|
3,613 | 2,727 | (886 | ) | (32 | ) | ||||||||||
Plant
operating expense
|
438 | 379 | (59 | ) | (16 | ) | ||||||||||
Depreciation
and amortization expense
|
219 | 236 | 17 | 7 | ||||||||||||
Other
cost of revenue
|
62 | 70 | 8 | 11 | ||||||||||||
Total
cost of revenue
|
4,332 | 3,412 | (920 | ) | (27 | ) | ||||||||||
Gross
profit
|
447 | 310 | 137 | 44 | ||||||||||||
Sales,
general and other administrative expense
|
96 | 79 | (17 | ) | (22 | ) | ||||||||||
Other
operating expense
|
— | 12 | 12 | # | ||||||||||||
Income
from operations
|
351 | 219 | 132 | 60 | ||||||||||||
Interest
expense
|
625 | 564 | (61 | ) | (11 | ) | ||||||||||
Interest
(income)
|
(27 | ) | (34 | ) | (7 | ) | (21 | ) | ||||||||
Minority
interest income
|
— | (1 | ) | (1 | ) | # | ||||||||||
Other
(income) expense, net
|
11 | (7 | ) | (18 | ) | # | ||||||||||
Loss
before reorganization items and income taxes
|
(258 | ) | (303 | ) | 45 | 15 | ||||||||||
Reorganization
items
|
(261 | ) | 574 | 835 | # | |||||||||||
Income
(loss) before income taxes
|
3 | (877 | ) | 880 | # | |||||||||||
Provision
for income taxes
|
20 | 82 | 62 | 76 | ||||||||||||
Net
loss
|
$ | (17 | ) | $ | (959 | ) | $ | 942 | 98 |
#
|
Variance
of 100% or greater
|
2008
|
2007
|
$ Change
|
% Change
|
|||||||||||||
Provision
for expected allowed claims
|
$ | (54 | ) | $ | 335 | $ | 389 | # | % | |||||||
Professional
fees
|
76 | 95 | 19 | 20 | ||||||||||||
Gains
on asset sales, net of equipment impairments
|
(203 | ) | (250 | ) | (47 | ) | (19 | ) | ||||||||
Asset
impairments
|
— | 120 | 120 | # | ||||||||||||
Gain
on reconsolidation of Canadian Debtors
|
(65 | ) | — | 65 | — | |||||||||||
DIP
Facility financing and CalGen Secured Debt repayment costs
|
(4 | ) | 160 | 164 | # | |||||||||||
Interest
(income) on accumulated cash
|
(7 | ) | (23 | ) | (16 | ) | (70 | ) | ||||||||
Other
|
(4 | ) | 137 | 141 | # | |||||||||||
Total
reorganization items
|
$ | (261 | ) | $ | 574 | $ | 835 | # |
#
|
Variance
of 100% or greater
|
2008
|
2007
|
|||||||
Operating
revenues
|
$ | 2,828 | $ | 2,060 | ||||
(Less):
Other service revenues
|
(11 | ) | (16 | ) | ||||
(Less):
Fuel and purchased energy expense
|
(2,008 | ) | (1,456 | ) | ||||
Adjustment
to remove: Mark-to-market commodity activity, net(1)
|
(24 | ) | (53 | ) | ||||
Consolidated
commodity margin
|
$ | 785 | $ | 535 |
(1)
|
Included
in operating revenues and fuel and purchased energy
expense.
|
2008
|
2007
|
$ Change
|
% Change
|
|||||||||||||
West
|
$ | 340 | $ | 265 | $ | 75 | 28 | % | ||||||||
Texas
|
258 | 138 | 120 | 87 | ||||||||||||
Southeast
|
91 | 65 | 26 | 40 | ||||||||||||
North
|
72 | 75 | (3 | ) | (4 | ) | ||||||||||
Other
|
24 | (8 | ) | 32 | # | |||||||||||
Consolidated
commodity margin
|
$ | 785 | $ | 535 | $ | 250 | 47 |
#
|
Variance
of 100% or greater
|
2008
|
2007
|
|||||||
Operating
revenues
|
$ | 4,779 | $ | 3,722 | ||||
(Less):
Other service revenues
|
(22 | ) | (44 | ) | ||||
(Less):
Fuel and purchased energy expense
|
(3,613 | ) | (2,727 | ) | ||||
Adjustment
to remove: Mark-to-market commodity activity, net(1)
|
127 | 6 | ||||||
Consolidated
commodity margin
|
$ | 1,271 | $ | 957 |
(1)
|
Included
in operating revenues and fuel and purchased energy
expense.
|
2008
|
2007
|
$ Change
|
% Change
|
|||||||||||||
West
|
$ | 609 | $ | 495 | $ | 114 | 23 | % | ||||||||
Texas
|
388 | 224 | 164 | 73 | ||||||||||||
Southeast
|
128 | 102 | 26 | 25 | ||||||||||||
North
|
134 | 138 | (4 | ) | (3 | ) | ||||||||||
Other
|
12 | (2 | ) | 14 | # | |||||||||||
Consolidated
commodity margin
|
$ | 1,271 | $ | 957 | $ | 314 | 33 |
#
|
Variance
of 100% or greater
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Cash
provided by (used in) operating activities
|
$ | (324 | ) | $ | 48 | $ | (586 | ) | $ | (184 | ) | |||||
Less:
|
||||||||||||||||
Changes
in operating assets and liabilities, excluding the effects of
acquisition
|
(306 | ) | 51 | (432 | ) | (78 | ) | |||||||||
Additional
adjustments to reconcile GAAP net income (loss) to net cash provided by
(used in) operating activities:
|
||||||||||||||||
Depreciation
and amortization(1)
|
125 | 141 | 280 | 284 | ||||||||||||
Deferred
income taxes, net
|
21 | (7 | ) | 85 | 82 | |||||||||||
Change
in derivatives and derivative contracts classified as financing
activities
|
(362 | ) | (73 | ) | (192 | ) | (10 | ) | ||||||||
Reorganization
items
|
3 | 434 | (322 | ) | 497 | |||||||||||
Other
|
(2 | ) | 2 | 12 | — | |||||||||||
GAAP
net income (loss)
|
197 | (500 | ) | (17 | ) | (959 | ) | |||||||||
Add:
|
||||||||||||||||
Adjustments
to reconcile Adjusted EBITDA to net income (loss):
|
||||||||||||||||
Interest
expense, net of interest income
|
192 | 247 | 598 | 530 | ||||||||||||
Depreciation
and amortization expense, excluding deferred financing costs(1)
|
118 | 129 | 240 | 258 | ||||||||||||
Provision
(benefit) for income taxes
|
25 | (7 | ) | 20 | 82 | |||||||||||
Impairment
charges
|
6 | — | 6 | 2 | ||||||||||||
Reorganization
items
|
18 | 469 | (261 | ) | 574 | |||||||||||
Major
maintenance expense
|
42 | 46 | 96 | 74 | ||||||||||||
Losses
on repurchase or extinguishment of debt
|
6 | — | 13 | — | ||||||||||||
Operating
lease expense
|
11 | 13 | 23 | 24 | ||||||||||||
(Gains)
losses on derivatives (non-cash portion)
|
(151 | ) | (65 | ) | 28 | (2 | ) | |||||||||
Other
|
10 | (6 | ) | 22 | (7 | ) | ||||||||||
Adjusted
EBITDA
|
$ | 474 | $ | 326 | $ | 768 | $ | 576 |
(1)
|
Depreciation
and amortization in the GAAP net income (loss) calculation on our
Consolidated Condensed Statements of Operations excludes amortization of
other assets and amounts classified as sales, general and other
administrative expenses.
|
|
·
|
Total MWh
generated. We generate power that we sell to third
parties. The volume in MWh is a direct indicator of our level of
electricity generation activity.
|
|
·
|
Average availability and
average capacity factor, excluding peakers. Availability
represents the percent of total hours during the period that our plants
were available to run after taking into account the downtime associated
|
|
|
with
both scheduled and unscheduled outages. The average capacity factor,
excluding peakers is calculated by dividing (a) total MWh generated
by our power plants (excluding peakers) by the product of multiplying
(b) the weighted average MW in operation during the period by
(c) the total hours in the period. The average capacity factor,
excluding peakers is thus a measure of total actual generation as a
percent of total potential generation. If we elect not to generate during
periods when electricity pricing is too low or gas prices too high to
operate profitably, the average capacity factor, excluding peakers will
reflect that decision as well as both scheduled and unscheduled outages
due to maintenance and repair
requirements.
|
|
·
|
Steam adjusted Heat Rate for
gas-fired fleet of power plants expressed in Btus of fuel consumed per KWh
generated. We calculate the steam adjusted Heat Rate for
our gas-fired power plants (excluding peakers) by dividing (a) fuel
consumed in Btu by (b) KWh generated. We adjust the fuel consumption
in Btu down by the equivalent heat content in steam or other thermal
energy exported to a third party, such as to steam hosts for our
cogeneration facilities. The resultant steam adjusted Heat Rate is a
measure of fuel efficiency, so the lower the steam adjusted Heat Rate, the
lower our cost of generation.
|
|
·
|
Average
realized electric price expressed in dollars per MWh
generated. Our energy trading and
optimization activities are integral to our power generation business and
directly impact our total realized revenues from generation. Accordingly,
we calculate the average realized electric price per MWh generated by
dividing (a) adjusted electricity and steam revenue, which includes
capacity revenues, energy revenues, thermal revenues, the spread on sales
of purchased electricity for hedging, balancing, and optimization activity
by (b) total generated MWh in the
period.
|
|
·
|
Average cost of natural gas
expressed in dollars per MMBtu of fuel consumed. Our
energy trading and optimization activities related to fuel procurement
directly impact our total fuel and purchased energy expense. The fuel
costs for our gas-fired power plants are a function of the price we pay
for fuel purchased and the results of the fuel hedging, balancing, and
optimization activities by CES. Accordingly, we calculate the cost of
natural gas per MMBtu of fuel consumed in our power plants by dividing
(a) adjusted fuel expense which includes the cost of fuel consumed by
our plants and the spread on sales of purchased gas for hedging,
balancing, and optimization activity, by (b) the heat content in
millions of Btu of the fuel we consumed in our power plants for the
period.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2008(1)
|
2007(1)
|
2008(1)
|
2007(1)
|
|||||||||||||
(MWh in thousands)
|
||||||||||||||||
Total
MWh generated
|
21,211 | 21,439 | 42,117 | 41,782 | ||||||||||||
West
|
7,982 | 7,824 | 17,139 | 16,243 | ||||||||||||
Texas
|
9,477 | 7,962 | 17,218 | 15,733 | ||||||||||||
Southeast
|
2,635 | 4,084 | 5,305 | 6,745 | ||||||||||||
North
|
1,117 | 1,569 | 2,455 | 3,061 | ||||||||||||
Average
Availability
|
89.9 | % | 89.9 | % | 87.9 | % | 90.3 | % | ||||||||
West
|
89.6 | % | 86.2 | % | 86.5 | % | 88.0 | % | ||||||||
Texas
|
91.8 | % | 88.0 | % | 86.9 | % | 89.3 | % | ||||||||
Southeast
|
89.3 | % | 95.5 | % | 90.2 | % | 94.5 | % | ||||||||
North
|
87.4 | % | 90.8 | % | 89.7 | % | 88.5 | % | ||||||||
Average
total MW in operation
|
23,113 | 25,091 | 23,113 | 25,223 | ||||||||||||
West
|
7,246 | 7,246 | 7,246 | 7,317 | ||||||||||||
Texas
|
7,251 | 7,274 | 7,251 | 7,274 | ||||||||||||
Southeast
|
6,254 | 7,556 | 6,254 | 7,615 | ||||||||||||
North
|
2,362 | 3,015 | 2,362 | 3,017 | ||||||||||||
Average
MW of peaker facilities
|
2,540 | 3,019 | 2,540 | 3,010 | ||||||||||||
West
|
983 | 983 | 983 | 972 | ||||||||||||
Texas
|
— | — | — | — | ||||||||||||
Southeast
|
963 | 963 | 963 | 963 | ||||||||||||
North
|
594 | 1,073 | 594 | 1,075 | ||||||||||||
Average
capacity factor, excluding peakers
|
46.4 | % | 43.3 | % | 46.3 | % | 42.5 | % | ||||||||
West
|
57.3 | % | 55.1 | % | 61.9 | % | 57.5 | % | ||||||||
Texas
|
59.8 | % | 50.1 | % | 54.4 | % | 49.8 | % | ||||||||
Southeast
|
21.2 | % | 26.8 | % | 21.9 | % | 22.4 | % | ||||||||
North
|
28.0 | % | 35.4 | % | 31.1 | % | 35.0 | % | ||||||||
Steam
adjusted Heat Rate
|
7,268 | 7,182 | 7,215 | 7,147 | ||||||||||||
West
|
7,319 | 7,366 | 7,269 | 7,342 | ||||||||||||
Texas
|
7,144 | 6,780 | 7,057 | 6,733 | ||||||||||||
Southeast
|
7,459 | 7,462 | 7,460 | 7,492 | ||||||||||||
North
|
7,635 | 7,857 | 7,516 | 7,753 | ||||||||||||
Average
realized electric price
|
$ | 99.58 | $ | 71.42 | $ | 87.42 | $ | 67.71 | ||||||||
Average
cost of natural gas per MMBtu
|
$ | 8.74 | $ | 6.67 | $ | 8.14 | $ | 6.52 |
(1)
|
Excludes
plants which have been deconsolidated, sold, are not operated by us or are
no longer in operation as of the date deconsolidated or sold. See
Note 1 and Note 5 of the Notes to Consolidated Condensed
Financial Statements.
|
|
·
|
The
Exit Credit Facility, comprising (i) approximately $6.0 billion of
senior secured term loans; (ii) a $1.0 billion senior secured
revolving facility; and (iii) the ability to raise up to $2.0 billion
of incremental term loans available on a senior secured basis in order to
refinance secured debt of subsidiaries under an “accordion” provision;
and
|
|
·
|
The
Bridge Facility, which, prior to its repayment as described below,
provided for a $300 million senior secured bridge term
loan.
|
2008
|
2007
|
|||||||
Beginning
cash and cash equivalents
|
$ | 1,915 | $ | 1,077 | ||||
Net
cash provided by (used in):
|
||||||||
Operating
activities
|
(586 | ) | (184 | ) | ||||
Investing
activities
|
469 | 343 | ||||||
Financing
activities
|
(1,428 | ) | 168 | |||||
Net
increase (decrease) in cash and cash equivalents
|
(1,545 | ) | 327 | |||||
Ending
cash and cash equivalents
|
$ | 370 | $ | 1,404 |
Asset
|
Transaction Description
|
Closing Date
|
Consideration
|
|||
RockGen
Energy Center
|
Purchase
of investment
|
January 15,
2008
|
$145
million allowed unsecured claim
|
|||
Hillabee
development project
|
Sale
of assets
|
February 14,
2008
|
$156
million
|
|||
Fremont
development project
|
Sale
of assets
|
March 5,
2008
|
$254
million
|
Interest Rate
|
Commodity
|
|||||||||||
Swaps
|
Instruments
|
Total
|
||||||||||
Fair
value of contracts outstanding at January 1, 2008(1)
|
$ | (169 | ) | $ | (216 | ) | $ | (385 | ) | |||
Losses
recognized or otherwise settled during the period(2)
|
31 | 67 | 98 | |||||||||
Fair
value attributable to new contracts
|
(14 | ) | 7 | (7 | ) | |||||||
Changes
in fair value attributable to price movements
|
40 | (534 | ) | (494 | ) | |||||||
Change
in fair value attributable to adoption of SFAS
No. 157
|
2 | 18 | 20 | |||||||||
Fair
value of contracts outstanding at June 30, 2008(3)
|
$ | (110 | ) | $ | (658 | ) | $ | (768 | ) |
(1)
|
Reflects
our portfolio of derivative assets and liabilities as of December 31,
2007, adjusted for the day one loss of $(22) million recognized upon
adoption of SFAS No. 157 on January 1,
2008.
|
(2)
|
Commodity
gains (losses) recognized consist of (i) recognized gains from commodity
cash flow hedges of $20 million (which represents a portion of the
realized value of cash flow hedge activity of $8 million as disclosed in
Note 9 of the Notes to Consolidated Condensed Financial Statements),
(ii) losses related to deferred items of $(19) million, and (iii) losses
related to undesignated derivatives of $(68) million (represents a portion
of operating revenues and fuel and purchased energy expense as reported on
our Consolidated Condensed Statements of
Operations).
|
(3)
|
Net
commodity and interest rate swap derivative liabilities reported in
Notes 8 and 9 of the Notes to Consolidated Condensed Financial
Statements.
|
Fair
Value Source
|
2008
|
2009-2010 | 2011-2012 |
After 2012
|
Total
|
|||||||||||||||
Prices
actively quoted
|
$ | 526 | $ | 5 | $ | — | $ | — | $ | 531 | ||||||||||
Prices
provided by other external sources
|
(760 | ) | (425 | ) | (4 | ) | — | (1,189 | ) | |||||||||||
Total
fair value
|
$ | (234 | ) | $ | (420 | ) | $ | (4 | ) | $ | — | $ | (658 | ) |
Credit
Quality
(Based on Standard & Poor’s Ratings as of June 30,
2008)
|
2008
|
2009-2010 | 2011-2012 |
After 2012
|
Total
|
|||||||||||||||
Investment
grade
|
$ | 68 | $ | 38 | $ | (6 | ) | $ | — | $ | 100 | |||||||||
No
external ratings
|
(302 | ) | (458 | ) | 2 | — | (758 | ) | ||||||||||||
Total
fair value
|
$ | (234 | ) | $ | (420 | ) | $ | (4 | ) | $ | — | $ | (658 | ) |
2008
|
||||
Three
months ended June 30:
|
||||
High
|
$
|
70
|
||
Low
|
$
|
47
|
||
Average
|
$
|
56
|
||
Six
months ended June 30:
|
||||
High
|
$
|
70
|
||
Low
|
$
|
39
|
||
Average
|
$
|
50
|
||
As
of June 30
|
$
|
66
|
Fair Value
|
||||||||||||||||||||||||||||||||
June 30,
|
||||||||||||||||||||||||||||||||
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
2008
|
|||||||||||||||||||||||||
Debt
by Maturity Date:
|
||||||||||||||||||||||||||||||||
Fixed
Rate
|
$ | 107 | $ | 219 | $ | 254 | $ | 128 | $ | 86 | $ | 759 | $ | 1,553 | $ | 1,532 | ||||||||||||||||
Average
Interest Rate
|
6.5 | % | 7.1 | % | 7.8 | % | 9.0 | % | 11.3 | % | 9.2 | % | ||||||||||||||||||||
Variable
Rate
|
$ | 44 | $ | 448 | $ | 83 | $ | 1,724 | $ | 74 | $ | 6,512 | $ | 8,885 | $ | 8,628 | ||||||||||||||||
Average
Interest Rate
|
5.5 | % | 8.5 | % | 6.1 | % | 9.4 | % | 6.7 | % | 7.7 | % | ||||||||||||||||||||
Interest
Rate Derivative Instruments (Notional Value):
|
||||||||||||||||||||||||||||||||
Variable
to Fixed Swaps(1)
|
$ | 7,572 | $ | 7,572 | $ | 7,175 | $ | 4,905 | $ | 3,870 | $ | 66 | n/a | $ | (110 | ) | ||||||||||||||||
Average
Pay Rate
|
4.1 | % | 4.3 | % | 4.4 | % | 4.5 | % | 4.6 | % | 3.5 | % | ||||||||||||||||||||
Average
Receive Rate
|
2.8 | % | 3.4 | % | 3.7 | % | 4.0 | % | 4.2 | % | 4.5 | % |
(1)
|
Includes
interest rate swaps where forecasted issuance of variable rate debt is
deemed probable.
|
Exhibit
|
||
Number
|
Description
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3.1 to the Company’s Current
Report on Form 8-K filed with the SEC on February 1,
2008).
|
|
3.2
|
Amended
and Restated By-Laws of the Company (incorporated by reference to
Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed
with the SEC on February 1, 2008).
|
|
10.1.1
|
Commodity
Collateral Revolving Credit Agreement, dated as of July 8, 2008,
among Calpine Corporation as Borrower, Goldman Sachs Credit Partners L.P.
as Payment Agent, sole Lead Arranger and sole Bookrunner, and the Lenders
from time to time party thereto (incorporated by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K filed with the SEC on
July 14, 2008).
|
|
10.2.1
|
Letter
Agreement and Addendum dated June 30, 2008, between the Company and
Zamir Rauf (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed with the SEC on
July 3, 2008).†
|
|
10.2.2
|
Employment
Agreement, dated June 19, 2006, between the Company and
Gregory L. Doody (incorporated by reference to Exhibit 10.5.15
to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2006, filed with the SEC on March 14,
2007).†
|
|
10.2.3
|
Amendment,
dated July 16, 2008, to Employment Agreement, dated June 19,
2006, between the Company and Gregory L. Doody (incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed with the SEC on July 22, 2008).†
|
|
10.2.4
|
Letter
Agreement re Employment Separation, dated April 7, 2008 (executed
April 11, 2008), between the Company and Charles B. Clark, Jr.
(incorporated by reference to Exhibit 10.3.1 to the Company’s
Quarterly Report on Form 10-Q filed with the SEC on May 12,
2008).†
|
|
10.2.5
|
Consulting
Agreement, effective May 30, 2008, between the Company and Charles B.
Clark, Jr. (incorporated by reference to Exhibit 10.3.2 to the
Company’s Quarterly Report on Form 10-Q filed with the SEC on
May 12, 2008).†
|
|
31.1
|
Certification
of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule
15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
31.2
|
Certification
of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule
15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
|
*
|
Filed
herewith.
|
†
|
Management
contract or compensatory plan or
arrangement.
|
By:
|
/s/ ZAMIR
RAUF
|
|||
Zamir
Rauf
|
||||
Interim
Executive Vice President and
|
||||
Interim
Chief Financial Officer
|
||||
(principal
financial officer)
|
||||
Date: August 8,
2008
|
By:
|
/s/ STEVEN
F. HODKINSON
|
|||
Steven
F. Hodkinson
|
||||
Interim
Corporate Controller
|
||||
(principal
accounting officer)
|
||||
Date: August 8,
2008
|
Exhibit
|
||
Number
|
Description
|
|
3.1
|
Amended
and Restated Certificate of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3.1 to the Company’s Current
Report on Form 8-K filed with the SEC on February 1,
2008).
|
|
3.2
|
Amended
and Restated By-Laws of the Company (incorporated by reference to
Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed
with the SEC on February 1, 2008).
|
|
10.1.1
|
Commodity
Collateral Revolving Credit Agreement, dated as of July 8, 2008,
among Calpine Corporation as Borrower, Goldman Sachs Credit Partners L.P.
as Payment Agent, sole Lead Arranger and sole Bookrunner, and the Lenders
from time to time party thereto (incorporated by reference to Exhibit 10.1
to the Company’s Current Report on Form 8-K filed with the SEC on
July 14, 2008).
|
|
10.2.1
|
Letter
Agreement and Addendum dated June 30, 2008, between the Company and
Zamir Rauf (incorporated by reference to Exhibit 10.1 to the
Company’s Current Report on Form 8-K filed with the SEC on
July 3, 2008).†
|
|
10.2.2
|
Employment
Agreement, dated June 19, 2006, between the Company and
Gregory L. Doody (incorporated by reference to Exhibit 10.5.15
to the Company’s Annual Report on Form 10-K for the year ended
December 31, 2006, filed with the SEC on March 14,
2007).†
|
|
10.2.3
|
Amendment,
dated July 16, 2008, to Employment Agreement, dated June 19,
2006, between the Company and Gregory L. Doody (incorporated by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
filed with the SEC on July 22, 2008).†
|
|
10.2.4
|
Letter
Agreement re Employment Separation, dated April 7, 2008 (executed
April 11, 2008), between the Company and Charles B. Clark, Jr.
(incorporated by reference to Exhibit 10.3.1 to the Company’s
Quarterly Report on Form 10-Q filed with the SEC on May 12,
2008).†
|
|
10.2.5
|
Consulting
Agreement, effective May 30, 2008, between the Company and Charles B.
Clark, Jr. (incorporated by reference to Exhibit 10.3.2 to the
Company’s Quarterly Report on Form 10-Q filed with the SEC on
May 12, 2008).†
|
|
31.1
|
Certification
of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule
15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
31.2
|
Certification
of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule
15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.*
|
|
32.1
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.*
|
*
|
Filed
herewith.
|
†
|
Management
contract or compensatory plan or
arrangement.
|