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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): October 22, 1999
CALPINE CORPORATION
(A Delaware Corporation)
Commission File Number: 033-73160
I.R.S. Employer Identification No. 77-0212977
50 West San Fernando Street
San Jose, California 95113
Telephone: (408) 995-5115
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ITEM 5. OTHER EVENTS
On October 22, 1999, Calpine Corporation, a Delaware corporation, announced
in a Press Release its financial results for the three and nine months ended
September 30, 1999.
(C) Exhibits.
99.0 Press Release dated October 22, 1999, announcing Calpine Corporation's
financial results for the three and nine months ended September 30,
1999.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALPINE CORPORATION
Date: October 22, 1999 By: /s/ Charles B. Clark , Jr.
-----------------------------------
Charles B. Clark, Jr.
Vice President and Controller
Signing on behalf of the registrant
and as principal accounting officer
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EXHIBIT 99.0
Contact: 408/995-5115
Media Relations: Katherine Potter, X1168
Investor Relations: Rick Barraza, X1125
CALPINE POSTS RECORD EARNINGS FOR THIRD QUARTER 1999
(SAN JOSE, CALIF.) October 22, 1999-San Jose, Calif.-based Calpine
Corporation [NYSE:CPN], one of the nation's fastest growing independent power
companies, announced today record earnings for the three and nine months ended
September 30, 1999.
Net income was $42.9 million for the quarter ended September 30, 1999,
representing an 86% increase compared to net income of $23.1 million for the
third quarter of 1998. Diluted earnings per share after accounting for the
recently completed two-for-one stock split rose 37% to $0.74 per share for the
quarter, from $0.54 per share for the same period in 1998. Revenue for the
quarter increased 42%, from $186.2 million a year ago to $263.6 million.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) increased
28% to $119.1 million for the quarter compared to $93.4 million a year ago.
For the nine months ended September 30, 1999, net income was $64.3 million,
an increase of 103% compared to $31.6 million for the same period in 1998.
Diluted earnings per share rose 61% to $1.21 per share, compared to $0.75 per
share for the nine months of 1998. Revenue for the nine months was $600.2
million, a 57% increase from $382.9 million a year ago. EBITDA for the nine
months rose 43% to $268.2 million, from $187 million in 1998. Total assets as of
September 30, 1999, were $2.7 billion, up 59% from $1.7 billion at December 31,
1998.
Financial results for both the three and nine months ended September 30,
1999 benefited primarily from the acquisition of 14 geothermal power
plants-totaling approximately 700 megawatts-from Pacific Gas and Electric
Company, completed in May 1999. For certain of these facilities, revenue
includes amounts received under a Reliability Must Run contract with the
California Independent System Operator, which is awaiting final Federal Energy
Regulatory Commission approval.
"Calpine has turned in another record quarter of earnings-the 12th
consecutive record quarter since Calpine went public in 1996," said Calpine
President and CEO Peter Cartwright. "We attribute our success to the continued
strong performance from our operating facilities as we continue to advance
Calpine's proven strategy of acquiring and developing clean, efficient power
generating facilities."
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Highlights of recent activities include:
Acquisition Program
Sheridan Energy, Inc. - In September 1999, Calpine further expanded its
fuels capabilities through a $41 million cash tender offer for Houston,
Texas-based Sheridan Energy, Inc., a natural gas exploration and production
company. Sheridan's oil and gas properties are located in northern California
and the Gulf Coast region, including 148 billion cubic feet equivalent of proven
reserves, 90% of which are natural gas. These reserves are located in strategic
markets where Calpine is operating and developing natural gas-fired facilities.
Calpine completed the transaction on October 1.
Pending Acquisition of Cogeneration Corporation of America - Calpine has
reached agreement with Minneapolis, Minn.-based Cogeneration Corporation of
American (CGCA) to acquire 80% of CGCA's common stock for approximately $145
million. NRG Energy, Inc., a wholly owned subsidiary of Northern States Power,
will retain the remaining 20% interest. This acquisition will add 400 net
megawatts of natural gas-fired production in key energy markets. Calpine also
announced plans to refinance approximately $80 million of CGCA corporate level
debt. The proposed acquisition will increase Calpine's natural gas-fired energy
production to 2,476 net megawatts of capacity-representing a 20% increase in
gas-fired production. Calpine expects to close the transaction by January 2000.
Calistoga Geothermal Power Plant - In a move to increase its green power
production, Calpine has purchased the Calistoga geothermal power plant from
Florida Power & Light affiliate FPL Energy and New York-based Caithness
Corporation for approximately $78 million. Located in The Geysers region of
northern California, Calistoga is an 80-megawatt electric generating facility,
which provides electricity to Pacific Gas and Electric Company under a long-term
power sales agreement.
Power Factors, Inc. - Calpine acquired the PowerSuite software technology
from Power Factors, Inc. of Fort Collins, Colo. The software technology will
equip Calpine's operations, asset optimization and power marketing functions
with a real-time information technology tool to help maximize the performance
and profitability of its U.S. power generating fleet.
Development Program
18 Siemens-Westinghouse Combustion Turbines - To help power Calpine's
active development program, the company announced in August that it will
purchase 18 F-class combustion turbines from Orlando, Fla.-based
Siemens-Westinghouse Power Corporation. Beginning in 2002, Siemens-Westinghouse
will deliver six turbines per year to Calpine through 2004. The new turbines
will produce approximately 4,900 additional megawatts of electricity for
Calpine's development portfolio. When combined with the turbines ordered to
date, Calpine will have enough combustion turbines to meet new project
requirements through 2003.
Los Medanos Energy Center - Construction is under way for Calpine's $350
million Los Medanos Energy Center. Calpine acquired development rights to build,
own and operate the 500-megawatt, natural gas-fired cogeneration facility in
September 1999 from Enron North America. Calpine expects to begin energy
deliveries in July 2001.
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Baytown Power Plant - Calpine announced plans to develop an 800-megawatt,
natural gas-fired cogeneration power plant at Bayer Corporation's chemical
facility in Baytown, Texas. The proposed Baytown Power Plant will generate
approximately 700 megawatts of electricity under baseload conditions, and will
have the ability to produce an additional 100 megawatts of "peaking" power
during hot summer months. The Baytown plant will supply Bayer with all of its
electric and steam requirements for 20 years. Excess power will be sold into the
Texas wholesale power market. Construction is scheduled to begin in early 2000,
with the plant entering commercial operation in late 2001.
Corporate Finance
Two-For-One Stock Split and Proposed Offering of Common Stock and
Convertible Securities - Calpine completed a two-for-one split of its common
stock on October 7, 1999. In addition, the company has filed a registration
statement with the Securities and Exchange Commission relating to a proposed
public offering of six million shares of common stock. Calpine has granted the
underwriters an option to purchase up to an additional 900,000 shares of common
stock to cover over-allotments, if any. Calpine also expects to offer
approximately $200.0 million of convertible preferred securities concurrently
with the offering of its common stock.
About Calpine
Calpine Corporation is a national power company dedicated to providing
customers with reliable and competitively priced electricity and thermal energy.
Calpine currently has approximately 9,800 megawatts of capacity in operation,
pending acquisition, under construction or in announced development in 14 states
- - enough energy to power nearly ten million households. Calpine has headquarters
in San Jose, Calif., with regional offices in Houston, Texas; Pleasanton,
Calif.; and Boston, Mass. The company was founded in 1984 and is publicly traded
on the New York Stock Exchange under the symbol CPN. To learn more about
Calpine, visit its website at www.calpine.com
This news release discusses certain matters that may be considered
"forward-looking" statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, including statements regarding the intent, belief or current
expectations of Calpine Corporation ("the Company") and its management.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve a number of risks and
uncertainties that could materially affect actual results such as, but not
limited to,(i) changes in government regulations and anticipated deregulation of
the electric energy industry; (ii) the risk associated with obtaining regulatory
approvals; (iii) commercial operations of new plants that may be delayed because
of various development and construction risks, such as a failure to obtain
financing and the necessary permits to operate or the failure of third-party
contractors to perform their contractual obligations (iv) the assurance that the
Company will develop additional plants, (v) a competitor's development of a
lower-cost generating gas-fired power plant, (vi) the risks associated with
marketing and selling power from power plants in the newly competitive energy
market, or (vii) that the information is of a preliminary nature and may be
subject to further adjustments, (viii) risks associated with power plant
acquisitions or mergers, (ix) the dependence on third parties, (x) the
dependence on senior management. Prospective investors are also referred to the
other risks identified from time to time in the Company's reports and
registration statements filed with the Securities and Exchange Commission.
(Table Follows)
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CALPINE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 1999 and 1998
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1999 1998 1999 1998
-------- -------- -------- --------
Revenue:
Electricity and steam sales ......... $225,443 $168,561 $529,765 $347,359
Service contract revenue ............ 21,846 7,835 35,085 16,363
Income from unconsolidated
investments in power projects ...... 15,842 9,778 34,163 16,631
projects............................ 517 -- 1,226 2,562
-------- -------- -------- --------
Total revenue .................... 263,648 186,174 600,239 382,915
Cost of revenue:
Plant operating expenses ............ 31,696 20,745 81,480 49,583
Fuel expense ........................ 78,807 62,546 194,265 120,382
Depreciation expenses ............... 14,005 21,721 56,294 52,532
Operating lease expense ............. 9,987 4,375 23,539 10,990
Production royalties expense ........ 4,119 2,791 9,745 8,028
Service contract expenses ........... 21,219 4,926 32,680 11,714
-------- -------- -------- --------
Total cost of revenue ............ 159,833 117,104 398,003 253,229
-------- -------- -------- --------
Gross profit ......................... 103,815 69,070 202,236 129,686
Project development expenses ......... 3,419 1,722 7,667 4,841
General and administrative expenses .. 13,291 7,389 34,255 18,431
-------- -------- -------- --------
Income from operations ......... 87,105 59,959 160,314 106,414
Other (income) expense:
Interest expense .................... 23,019 24,348 70,190 65,138
Interest income ..................... (6,473) (3,695) (16,305) (9,389)
Other (income) expense, net ......... (28) 72 (1,263) (834)
-------- -------- -------- --------
Income before provision for
income taxes ...................... 70,587 39,234 107,692 51,499
Provision for income taxes ........... 27,670 15,820 42,215 19,213
-------- -------- -------- --------
Income before extraordinary charge .. 42,917 23,414 65,477 32,286
Extraordinary charge, net of tax
benefit of $--, $233 and $791, $441 -- 339 1,150 641
-------- -------- -------- --------
Net income .................... $ 42,917 $ 23,075 $ 64,327 $ 31,645
======== ======== ======== ========
Basic earnings per common share:
Weighted average shares outstanding . 54,389 40,274 49,799 40,166
Income before extraordinary charge .. $ 0.79 $ 0.58 $ 1.31 $ 0.80
Extraordinary charge ................ -- $ (0.01) $ (0.02) $ (0.01)
Net income .......................... $ 0.79 $ 0.57 $ 1.29 $ 0.79
Diluted earnings per common share:
Weighted average shares outstanding . 57,990 42,344 52,966 42,182
Income before extraordinary charge .. $ 0.74 $ 0.55 $ 1.24 $ 0.77
Extraordinary charge ................ $ -- $ (0.01) $ (0.03) $ (0.02)
Net income .......................... $ 0.74 $ 0.54 $ 1.21 $ 0.75
Depreciation and amortization ........ $ 13,786 $ 33,749 56,443 65,852
Interest expense per indenture ....... $ 26,615 $ 25,976 78,649 69,187
EBITDA ............................... $119,103 $ 93,434 268,239 187,016
EBITDA to total interest expense ..... 4.48x 3.60x 3.41x 2.70x
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