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): July 24, 2000
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
<PAGE>
ITEM 5. OTHER EVENTS
On July 24, 2000, Calpine Corporation, a Delaware Corporation, announced
second quarter earnings up 176% over 1999. Calpine announced record earnings for
the three and six months ended June 30, 2000, reflecting the company's strong
operating performance and increased power demand in key U.S. markets.
On July 24, 2000, Calpine Corporation announced plans to enter into a
$2.5 billion revolving construction credit facility with a consortium of banks,
including The Bank of Nova Scotia and Credit Suisse First Boston as lead
arrangers. CIBC Inc., ING (U.S.) Capital LLC, Bank of America, TD Securities,
Bayerische Landesbank, and Dresdner Bank will serve as co-arrangers.
On July 24, 2000, Calpine Corporation announced proposed concurrent
public offerings of 10,000,000 shares of common stock and $800 million of senior
notes. Calpine has granted the common stock underwriters an option to purchase
up to an additional 1,500,000 shares of common stock to cover over-allotments,
if any.
(C) Exhibits.
99.0 Press release dated July 24, 2000, announcing second quarter earnings up
176% over 1999.
99.1 Press release dated July 24, 2000, announcing plans to enter into a $2.5
billion revolving construction credit facility with a consortium of banks.
99.2 Press release dated July 24, 2000, announcing proposed concurrent public
offerings of 10,000,000 shares of common stock and $800 million of senior
notes. The common stock underwriters have an option to purchase up to an
additional 1,500,000 shares of common stock.
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
By: /s/ Charles B. Clark, Jr.
---------------------
Charles B. Clark, Jr.
Vice President and Controller
Chief Accounting Officer
July 24, 2000
<PAGE>
EXHIBIT 99.0
NEWS RELEASE Contact: 408/995-5115
Public Relations: Katherine Potter, X1168
Investor Relations: Rick Barraza, X1125
CALPINE SECOND QUARTER EARNINGS UP 176% OVER 1999
Peak Power Demand and Development Program Fuel Strong Results
(SAN JOSE, CALIF.) July 24, 2000 -- Calpine Corporation [NYSE:CPN], the
nation's fastest growing independent power company, announced today record
earnings for the three and six months ended June 30, 2000, reflecting the
company's strong operating performance and increased power demand in key U.S.
markets.
Net income for the quarter ended June 30, 2000 was $51.7 million,
representing a 176% increase compared to net income of $18.7 million before
extraordinary charge for the second quarter of 1999. Diluted earnings per share
rose 131% to $0.37 per share from $0.16 per share before extraordinary charge
for the same period in 1999. Revenue for the quarter increased 85% to $363.7
million, from $196.6 million a year ago. Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA) rose 68% to $150.4 million for the
quarter, compared to $89.5 million a year ago.
For the first half of 2000, net income was $69.8 million, an increase of
209% compared to net income of $22.6 million before extraordinary charge for the
same period in 1999. Diluted earnings per share rose 136% to $0.52 per share,
compared to $0.22 per share before extraordinary charge for the first six months
of 1999. Revenue for the first six months was $599.1 million, an increase of 73%
from $347.2 million a year ago. EBITDA for the first six months rose 73% to
$236.9 million, from $137.1 million in 1999. Total assets as of June 30, 2000
were approximately $5.6 billion, up 40% from $4.0 billion at December 31, 1999.
Earnings for the quarter and first six months benefited primarily from
strong energy prices in certain markets and strategic 1999 acquisitions,
including geothermal steam fields and energy facilities at The Geysers, Calif.
and six gas-fired energy centers. Earnings also benefited from strong operations
of Calpine's power facilities.
"It was a great quarter for Calpine. Our performance validates the
effectiveness of our long-term strategy of acquiring and developing clean,
efficient power generation facilities in key U.S. energy markets," stated
Calpine President and CEO Peter Cartwright. "And we've established a first-mover
advantage in Texas, California and New England, with programs in place for other
key energy markets."
"Increasing demand for electricity - combined with our expanding and
diversified generation base - is fueling Calpine's growth," added Cartwright.
"With recent key acquisitions and development announcements, Calpine is raising
its operating target from 25,000 megawatts to over 40,000 net megawatts of base
load capacity by year-end 2004."
Recent corporate highlights include:
ACQUISITION PROGRAM
Calpine to Acquire SkyGen Energy - Calpine entered into an agreement to
acquire the Northbrook, Ill.-based independent power producer SkyGen Energy LLC.
Upon closing of the transaction, expected in the third quarter of 2000, Calpine
will increase its portfolio by up to 13,500 net megawatts of gas-fired
generation and will acquire 34 General Electric 7 FA gas turbines to power its
newly acquired development projects.
Calpine Announces Panda Energy Alliance - Calpine announced a strategic
alliance with Panda Energy International, Inc. to acquire from Panda the
development rights to build, own and operate the Oneta project - a
1,000-megawatt gas-fired power facility in Coweta, Okla. In addition, Calpine
has acquired from Panda 24 General Electric 7 FA gas turbines and 12 steam
turbines, scheduled for delivery in 2001 and 2002. The alliance also provides
Calpine the exclusive development rights to acquire seven additional projects,
representing more than 9,600 megawatts of gas-fired generation.
Calpine Expands Presence in Florida Power Market - Calpine acquired the
remaining fifty percent interest in the 150-megawatt Auburndale, Fla. gas-fired
cogeneration facility. The company plans to add 100 megawatts of peaking
capacity at the site. Calpine acquired an initial 50 percent interest in the
Auburndale facility in October 1997.
Calpine Adds 74 Megawatts of Generation in Northeast - Calpine acquired the
remaining 50 percent interests in two gas-fired facilities in New York - the
107-megawatt Kennedy International Airport center and 40-megawatt Stony Brook
facility at the State University of New York at Stony Brook. Both facilities
sell electricity and thermal energy under long-term agreements.
DEVELOPMENT PROGRAM
Calpine Increases Gas Turbine Orders - During the second quarter, Calpine
placed orders for 36 Siemens Westinghouse F-class turbines and 21 General
Electric 7FB turbines. When operated in a combined-cycle application, the total
generating capacity of these turbines is over 14,000 megawatts. To date, Calpine
has firm orders for 197 gas turbines - with delivery dates from 2000 through
2004 - representing about 50,000 megawatts of generation.
Calpine to Purchase Fleet of Heat Recovery Steam Generators - Calpine will
purchase 85 heat recovery steam generators (HRSGs) from Nooter/Eriksen to help
power the company's 40,000-megawatt development program. The agreement marks the
company's largest volume HRSG acquisition to date.
Hidalgo and Pasadena Expansion Project Enter Commercial Operation -
Calpine's 500-megawatt Hidalgo Energy Center and 545-megawatt Pasadena expansion
project are helping relieve power shortages in Texas. Both facilities began
operation in June. The Hidalgo unit is located in south Texas in Edinburg.
Calpine's Pasadena facility, located on the Houston ship channel, now has the
capability of generating 785 megawatts of electricity.
Teayawa Energy Center to Help Power Southern California - Calpine is
developing a 600-megawatt gas-fired electricity generating facility near the
town of Thermal in Riverside County, Calif. The $275 million Teayawa Energy
Center will be sited on the Torres Martinez Desert Cahuilla Indians' land
through a long-term lease agreement. Permitting is under way, with commercial
operation expected to begin in late 2003.
Calpine Expands Presence in Alabama Electric Power Market - Development is
under way for the $350 million Morgan Energy Center at BP Amoco's chemical
facility in Decatur, Ala. The proposed facility will generate 660 megawatts of
electricity, in addition to supplying steam for BP Amoco's plant. The project
will also be capable of generating an additional 130 megawatts of peaking
capacity. Permitting is nearing completion. Electricity production is slated to
begin in June 2002.
Calpine Enters Tennessee Power Market - Calpine is developing a
770-megawatt gas-fired, combined-cycle facility in Haywood County, Tenn. The
facility will also have the capability of generating an additional 120 megawatts
of electricity to help meet peak summer power demand. The project is scheduled
to enter commercial operation in mid-2004.
Calpine Acquires 1,000-Megawatt North Texas Power Project - Calpine entered
the north Texas power market with the acquisition of the Freestone Energy
Center. The 1,000-megawatt gas-fired facility will be located in Freestone
County, Texas, about 80 miles southeast of Dallas. Construction is expected to
begin in the third quarter of 2000, with a two-phased commercial start-up
beginning in June 2002.
Calpine Announces Flagship Project in Ohio - Plans are under way to develop
a 540-megawatt natural gas-fired Fremont Energy Center near Fremont, Ohio. The
facility will be designed with the capability of generating 700 megawatts of
electricity to help meet summer power demands. Commercial operation will begin
as early as mid-2003.
Calpine Unveils New Highly Reliable Electricity Product Line - Calpine
launched a new business unit, Calpine c*Power, to serve the rapidly growing
worldwide demand for highly reliable critical power. This new business unit adds
to Calpine's growing line of high-value energy products, including green power,
ancillary services, and firm and peaking power.
CORPORATE FINANCE PROGRAM
Calpine Enters $400 Million Corporate Revolver - The company has entered
into a new $400 million, three-year revolving line of credit led by The Bank of
Nova Scotia, replacing a previous $100 million credit facility. The new facility
will be used for working capital and other general corporate purposes.
Calpine Completes Two-for-One Stock Split - Calpine completed a two-for-one
stock split for stockholders on June 8, 2000.
ABOUT CALPINE
Based in San Jose, Calif., Calpine Corporation is dedicated to providing
customers with reliable and competitively priced electricity. Calpine is focused
on clean, efficient combined-cycle, natural gas-fired generation and is the
nation's largest producer of renewable geothermal energy. Calpine has launched
the largest power development program in the U.S. To date, the company has
approximately 25,700 megawatts of base load capacity and 30,400 megawatts of
peaking capacity in operation, under construction and in announced development
in 27 states and Alberta, Canada. The company was founded in 1984 and is
publicly traded on the New York Stock Exchange under the symbol CPN. For more
information 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) commercial operations of new plants that
may be delayed or prevented 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 (iii) cost estimates are preliminary and actual cost may be higher
than estimated, (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) receipt of regulatory approvals or (vii) the risks associated
with marketing and selling power from power plants in the newly competitive
energy market. 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.
<PAGE>
CALPINE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2000 and 1999
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- ---------------------------
2000 1999 2000 1999
------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Revenue:
Electricity and steam sales.............................. $ 311,670 $ 176,296 $ 505,594 $ 304,322
Service contract revenue (1)............................. 38,717 12,414 61,846 23,865
Income from unconsolidated investments in power projects. 4,843 7,509 14,617 18,321
Interest income on loans to power projects............... - 406 - 709
Other revenue............................................ 8,453 - 17,028 -
---------- ---------- ---------- ----------
Total revenue........................................ 363,683 196,625 599,085 347,217
Cost of revenue:
Plant operating expenses (2)............................. 44,975 27,857 85,579 52,112
Fuel expenses............................................ 104,044 61,521 177,696 115,458
Depreciation expense..................................... 33,846 23,310 61,664 42,289
Production royalties..................................... 5,444 3,209 9,151 5,626
Operating lease expenses................................. 10,672 7,959 21,130 13,552
Service contract expenses (1)............................ 40,623 11,964 61,111 22,088
---------- ---------- ---------- ----------
Total cost of revenue................................ 239,604 135,820 416,331 251,125
---------- ---------- ---------- ----------
Gross profit................................................ 124,079 60,805 182,754 96,092
Project development expenses................................ 5,228 2,292 8,983 4,248
General and administrative expenses (2)..................... 16,335 9,724 24,954 18,636
---------- ---------- ---------- ----------
Income from operations............................... 102,516 48,789 148,817 73,208
Other expense (income):
Interest expense......................................... 14,411 26,144 32,318 47,171
Distributions on trust preferred securities.............. 9,085 - 16,063 -
Interest income ......................................... (5,615) (7,054) (13,177) (9,832)
Minority interest, net................................... 576 - 793 -
Other income............................................. (1,142) (1,073) (2,195) (1,236)
---------- ---------- ---------- ----------
Income before provision for income taxes............. 85,201 30,772 115,015 37,105
Provision for income taxes.................................. 33,495 12,062 45,182 14,545
---------- ---------- ---------- ----------
Income before extraordinary charge.......................... 51,706 18,710 69,833 22,560
Extraordinary charge, net of tax benefit of $0 and $793..... - 1,150 - 1,150
---------- ---------- ---------- ----------
Net income........................................... $ 51,706 $ 17,560 $ 69,833 $ 21,410
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Basic earnings per common share:
Weighted average shares of common stock outstanding...... 127,616 107,692 127,145 95,036
Income before extraordinary charge....................... $ 0.41 $ 0.17 $ 0.55 $ 0.24
Extraordinary charge..................................... $ - $ 0.01 $ - $ 0.01
Net income............................................... $ 0.41 $ 0.16 $ 0.55 $ 0.23
Diluted earnings per common share:
Weighted average shares of common stock outstanding 135,354 114,096 134,991 100,940
Income before extraordinary charge and dilutive effect
of trust preferred securities....................... $ 0.38 $ 0.16 $ 0.52 $ 0.22
Extraordinary charge..................................... $ - $ 0.01 $ - $ 0.01
Dilutive effect of trust preferred securities (3)........ $ 0.01 $ - $ - $ -
Net income............................................... $ 0.37 $ 0.15 $ 0.52 $ 0.21
EBITDA (4).................................................. $ 150,410 $ 89,470 $ 236,899 $ 137,133
</TABLE>
1 Service contract revenue and expenses in 1999 have been reclassed to
conform with 2000 presentation.
2 Certain 1999 expenses have been reclassed from general and administrative
expenses to plant operating expenses to conform with the 2000 presentation.
3 Includes the effect of the assumed conversion of the October 1999 trust
preferred securities. The assumed conversion calculation adds 9,456 shares
of common stock and $2,439 and $4,878 to the three month and six month 2000
net income results, representing the after tax distribution expense on the
October 1999 trust preferred securities avoided upon conversion.
4 EBITDA is defined as net income less income from unconsolidated
investments, plus cash received from unconsolidated investments, plus
provision for tax, plus interest expense, plus one-third of operating lease
expenses, plus depreciation and amortization, plus distributions on trust
preferred securities.
<PAGE>
EXHIBIT 99.1
NEWS RELEASE Contact: 408/995-5115
Public Relations: Katherine Potter, X1168
Investor Relations: Rick Barraza, X1125
CALPINE ANNOUNCES $2.5 BILLION CREDIT FACILITY
TO FINANCE CONSTRUCTION PROGRAM
(SAN JOSE, CALIF.) July 24, 2000 -- Calpine Corporation [NYSE:CPN], the
nation's leading independent power company, today announced plans to enter into
a $2.5 billion revolving construction credit facility with a consortium of
banks, including The Bank of Nova Scotia and Credit Suisse First Boston as lead
arrangers. CIBC Inc., ING (U.S.) Capital LLC, Bank of America, TD Securities,
Bayerische Landesbank, and Dresdner Bank will serve as co-arrangers. The
four-year construction facility will be refinanced in the longer-term capital
markets prior to its maturity. The company expects to finalize the credit
facility during the third quarter of 2000.
"This construction facility further demonstrates Calpine's ability to
execute its long-term program of building competitively-priced generating
facilities in the dynamic U.S. power market," stated Bob Kelly, senior vice
president-finance for Calpine. "We appreciate the confidence this prestigious
consortium has in Calpine's progressive undertaking to repower America's aging
power fleet and meet the growing demand for electricity."
Calpine entered into a similar $1 billion revolving construction credit
facility in November 1999 - an independent power industry first. Portfolio
financing significantly lowers the cost of capital for Calpine and dramatically
decreases the time required to finance individual projects. Moreover, it
provides Calpine with a streamlined financing vehicle that allows the company to
maintain its aggressive development program.
These revolving credit facilities - totaling $3.5 billion - will serve as
the foundation of Calpine's expanding construction program and will be utilized
to finance the construction of a diversified portfolio of modern, natural
gas-fired energy centers.
Based in San Jose, Calif., Calpine Corporation is dedicated to providing
customers with reliable and competitively priced electricity. Calpine is focused
on clean, efficient combined-cycle, natural gas-fired generation and is the
nation's largest producer of renewable geothermal energy. Calpine has launched
the largest power development program in the U.S. To date, the company has
approximately 25,700 megawatts of base load capacity and 30,400 megawatts of
peaking capacity in operation, under construction and announced development in
27 states and Alberta, Canada. The company was founded in 1984 and is publicly
traded on the New York Stock Exchange under the symbol CPN. For more information
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) commercial operations of new plants that
may be delayed or prevented 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 (iii) cost estimates are preliminary and actual cost may be higher
than estimated, (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) receipt of regulatory approvals or (vii) the risks associated
with marketing and selling power from power plants in the newly competitive
energy market. 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.
<PAGE>
EXHIBIT 99.2
NEWS RELEASE Contact: 408/995-5115
Public Relations: Katherine Potter, X1168
Investor Relations: Rick Barraza, X1125
CALPINE ANNOUNCES PROPOSED OFFERINGS OF COMMON STOCK AND SENIOR NOTES
(SAN JOSE, CALIF.) July 24, 2000 -- Calpine Corporation [NYSE:CPN] has
announced proposed concurrent public offerings of 10,000,000 shares of common
stock and $800 million of senior notes. Calpine has granted the common stock
underwriters an option to purchase up to an additional 1,500,000 shares of
common stock to cover over-allotments, if any.
Proceeds from the offerings will be used to finance the construction and
development of additional power generation facilities, to fund recently
announced acquisitions and to refinance existing debt incurred to fund
development and acquisition transactions.
A registration statement relating to the common stock and the senior notes
has been filed with the Securities and Exchange Commission, but has not yet
become effective. Neither the common stock nor the senior notes may be sold, nor
may offers to buy be accepted prior to the time that a registration statement
relating to such securities becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
Based in San Jose, Calif., Calpine Corporation is dedicated to providing
customers with reliable and competitively priced electricity. Calpine is focused
on clean, efficient combined-cycle, natural gas-fired generation and is the
nation's largest producer of renewable geothermal energy. To date, the company
has approximately 25,700 megawatts of base load capacity and 30,400 megawatts of
peaking capacity in operation, under construction and announced development in
27 states and Alberta, Canada. The company was founded in 1984 and is publicly
traded on the New York Stock Exchange under the symbol CPN. For more information
about Calpine, visit its website at www.calpine.com.
Calpine also expects to offer approximately $450 million of convertible
preferred securities of a subsidiary trust concurrently with the offering of its
common stock and senior notes. Such securities will not be registered under the
Securities Act of 1933 and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
