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 26, 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
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ITEM 5. OTHER EVENTS
On October 26, 2000, Calpine Corporation announced record earnings for the
three and nine months ended September 30, 2000. In addition, Calpine's Board of
Directors authorized a two-for-one split of its common stock for stockholders of
record as of November 6, 2000.
(C) Exhibits.
99.0 Press release dated October 26, 2000, announcing third quarter 2000
results and two-for-one split 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
October 26, 2000
<PAGE>
EXHIBIT 99.0
NEWS RELEASE Contact: 408/995-5115
Media Relations: Katherine Potter, X1168
Investor Relations: Rick Barraza, X1125
CALPINE POSTS RECORD THIRD QUARTER 2000 EPS OF $0.96
Company Announces Two-for-One Stock Split
(SAN JOSE, CALIF.) October 26, 2000--San Jose, Calif.-based Calpine
Corporation [NYSE:CPN], the nation's fastest growing independent power company,
announced today record earnings for the three and nine months ended September
30, 2000. In addition, Calpine's Board of Directors has authorized a two-for-one
split of its common stock for stockholders of record as of November 6, 2000. The
shares resulting from this split are expected to be distributed after the market
closes on November 14, 2000.
"Calpine has turned in another record quarter of earnings--the 17th
consecutive record quarter since Calpine went public in 1996. We are
anticipating a strong fourth quarter, and our prospects for 2001 and beyond
continue to be excellent," said Calpine President and CEO Peter Cartwright. "We
attribute our success to the continued strong performance from our operating
facilities, strategic acquisitions in high-growth energy sectors and the
execution of an aggressive development program."
"We'll continue to capitalize on our first-mover advantage," added
Cartwright. "By the end of 2004, we expect to be one of the nation's leading and
most profitable power generation companies, with more than 40,000 megawatts of
generation on line in attractive energy markets throughout the U.S."
Net income before extraordinary charge was $147.1 million for the
quarter ended September 30, 2000, representing a 243% increase compared to net
income of $42.9 million for the third quarter of 1999. Diluted earnings per
share before extraordinary charge rose 159% to $0.96 per share for the quarter,
from $0.37 per share for the same period in 1999. Revenue for the quarter
increased 168%, from $253.0 million a year ago to $678.9 million. Earnings
Before Interest, Tax, Depreciation and Amortization (EBITDA) increased 214% to
$325.9 million for the quarter compared to $103.8 million a year ago.
For the nine months ended September 30, 2000, net income before
extraordinary charge was $216.9 million, an increase of 231% compared to $65.5
million for the same period in 1999. Diluted earnings per share before
extraordinary charge rose 145% to $1.52 per share, compared to $0.62 per share
for the nine months of 1999. Revenue for the nine months was $1,278.0 million, a
113% increase from $600.2 million a year ago. EBITDA for the nine months rose
134% to $562.8 million, from $240.9 million in 1999. Total assets as of
September 30, 2000, were $7.2 billion, up 80% from $4.0 billion at December 31,
1999.
Financial results for both the three and nine months ended September
30, 2000 benefited primarily from strong energy prices in certain markets,
commencement of commercial operation of the Pasadena expansion and Hidalgo
projects, 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 throughout Calpine's power
portfolio.
Highlights of recent activities include:
Acquisition Program
Calpine Announces Plans to Acquire EMI Interests in Power Assets -
Calpine entered definitive agreements to acquire strategic power assets from
Energy Management, Inc. (EMI). Calpine will acquire the remaining interest in
three recently constructed combined-cycle power generating facilities located in
New England, totaling 700 megawatts of generation. Prior to the transaction,
Calpine had a net interest of approximately 50 percent in the projects. With the
pending EMI acquisition in place, Calpine has approximately 1,770 megawatts in
operation, under construction and in announced development--representing the
most modern, efficient power generating fleet in New England.
SkyGen Energy Acquisition Provides Strategic Gas-fired Portfolio -
Calpine completed the acquisition of Northbrook, Ill.-based SkyGen Energy LLC,
adding up to 13,500 megawatts of gas-fired generation in operation, under
construction and in development. These include a strong portfolio of
cogeneration facilities with long-term power sales agreements. In addition,
Calpine acquired 34 General Electric 7 FA gas turbines.
Calpine Acquires Oneta Energy Center - Calpine completed the
acquisition of the 1,000-megawatt Oneta Energy Center from Panda Energy
International, Inc. The acquisition was previously announced as part of
Calpine's strategic alliance with Panda, whereby Calpine purchased 24 General
Electric gas turbines and 12 steam turbines, plus the exclusive right to acquire
several gas-fired development projects.
Calpine Acquires Remaining Interest in Agnews - Calpine acquired the
remaining 80 percent interest in the Agnews cogeneration facility, a 29-megawatt
natural gas-fired, combined-cycle facility located in San Jose, Calif. The
acquisition allows Calpine to enhance output and operational efficiency of
Agnews.
Calpine Expands Green Power Portfolio - Calpine purchased the remaining
45 percent equity interest in the Aidlin geothermal facility. Located in The
Geysers region of northern California, Aidlin is a 20-megawatt electric
generating facility, which provides electricity to Pacific Gas and Electric
Company under a long-term power sales agreement. Calpine owns and operates 19 of
the 21 geothermal power plants at The Geysers.
Calpine Acquires Natural Gas Reserves - Calpine added 205 billion cubic
feet of natural gas through strategic acquisitions of proven gas reserves in the
Gulf of Mexico, Canada, Colorado and the onshore Gulf Coast region.
Calpine Announces Acquisition of TriGas Canadian Gas Portfolio -
Calpine announced plans to acquire the Calgary-based oil and gas company, TriGas
Exploration, Inc. The transaction will add 30 million cubic feet of gas
equivalent per day. This strategic acquisition will provide Calpine with gas
reserves to fuel its 250-megawatt Calgary Energy Centre, which is expected to be
in operation by December 2002. This acquisition brings Calpine's total proven
gas reserves to more than 500 billion cubic feet.
Development Program
Calpine Expands Presence in Ohio and ECAR Markets - Calpine entered
into a project development agreement to build, own and operate an 850-megawatt
natural gas-fired generating facility to be located on the Ohio River in
Hamilton Township, Lawrence County, Ohio. The Lawrence Energy Center is
Calpine's second combined-cycle development project in Ohio.
CEC Issues Positive Final Staff Assessment for Metcalf - The Final
Staff Assessment for the California Energy Commission staff found that Calpine's
600-megawatt Metcalf Energy Center will provide substantial benefits to the
local electric system and electric consumers. The Metcalf Energy Center is a
joint development project of Calpine and Bechtel Enterprises Holdings, Inc. The
facility is being proposed for San Jose, Calif., which experienced rolling
blackouts this summer. The local American Lung Association of Santa Clara and
San Benito Counties and the Loma Prieta Chapter of the Sierra Club support the
project. The Utility Reform Network (TURN) also supports Metcalf.
Calpine Announces First Major Bilateral Power Supply Agreement From New
Arizona Plant - Calpine has entered into a five-year power sales agreement with
the Imperial Irrigation District (IID) to deliver 150 megawatts of electricity
from its new South Point Energy Center to IID's southern California electric
customers, beginning May 2002. This is the first major power sale from a new
technology merchant energy center in Arizona. Calpine's 525-megawatt South Point
project, scheduled to be available for the summer of 2001, is nearing 80 percent
completion.
Calpine Secures Long-term Power Agreement with PG&E - Calpine announced
plans to enter into a long-term power supply agreement with Pacific Gas and
Electric Company (PG&E) that would provide competitively priced electricity for
PG&E's northern California customers. Electricity deliveries will begin July 1,
2001 and end December 31, 2003. Calpine plans to supply power to PG&E through
several of its existing generating facilities in northern California, including
its Geysers geothermal facilities and its new natural gas energy centers.
Calpine Signs 20-Year Tolling Pact with Aquila Energy - Calpine signed
a 20-year contract with Aquila Energy for 580 megawatts of the output of the
Acadia Energy Center, currently under construction in Acadia Parish, La. Cleco
Midstream Resources and Calpine each have a 50 percent interest in the
1,000-megawatt combined-cycle plant. Construction on the unit began in July and
is on schedule for completion by June 2002.
Calpine Announces Plans to Enter Long-term Power Sales Agreement with
Seminole - Calpine announced plans to provide Seminole Electric Cooperative,
Inc. with a long-term supply of electricity from Calpine's proposed Osprey
Energy Center. The proposed 540-megawatt combined-cycle Osprey generating
facility will be located in Auburndale, Florida, next to Calpine's existing
Auburndale facility. Under the terms of the planned agreement, Seminole will
have access to all of the output from the Osprey facility for a period of 17
years, beginning with the plant's projected commercial operation date of June
2003.
Calpine Establishes West Desk - Calpine's new west desk trading group,
based in Houston, Texas, oversees the company's western region power and gas
trading, including nearly 5,600 megawatts of generation in operation, under
construction and in announced development. With the west desk in place, Calpine
has established marketing, trading and risk management capabilities for its
entire North American generation base.
Calpine Enters Innovative Energy Marketing Transaction - Calpine
entered into a one-year gas purchase agreement with EOG Resources, Inc. that
links the daily price of natural gas to the price of electricity. In what is
considered an industry first, EOG has agreed to sell 10 million cubic feet of
natural gas per day directly to Calpine.
Calpine c*Power Orders 15 GE Gas Turbines for Critical Power Program -
Calpine's new critical power business unit, Calpine c*Power, has placed a firm
order for 15 General Electric LM6000 gas turbines. The turbines will provide up
to 500 megawatts of highly reliable critical power for its data center
customers.
Finance Program
Calpine Announces $2.5 Billion Revolving Construction Facility -
Calpine 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. 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 fourth
quarter of 2000. To date, 27 banks are committed to participate in the facility.
Calpine Completes $2.3 Billion Capital Market Offerings - Included in
these transactions were the issuance of 11.5 million shares of Calpine common
stock priced at $69.50 per share, $1 billion of senior notes in two tranches:
$250 million of 8-1/4% Senior Notes due 2005 and $750 million of 8-5/8% Senior
Notes due 2010, and $518 million of privately placed convertible preferred
securities priced at 5%.
Calpine Completes $400 Million Financing for Pasadena - Calpine
completed a $400 million leveraged lease financing to provide the term financing
for both Phase I and Phase II of its Pasadena, Texas cogeneration project.
Earnings Conference Call
Calpine will host a conference call to review third quarter 2000
results. The conference call will be held Thursday, October 26, 2000, at 7:30 am
PDT. If you wish to participate, please dial 1-800-388-8975 five minutes before
the start of the conference call. International callers may dial 973-694-2225.
In addition, Calpine will simulcast its third quarter 2000 earnings
call live via the Internet on Thursday, October 26, 2000, at 7:30 am PDT. The
webcast can be accessed and will be available for 30 days on the investor
relation's page of Calpine's website at www.calpine.com.
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 26,800 megawatts of base load capacity and 5,100 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 that are preliminary and which 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 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.
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<TABLE>
CALPINE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2000 and 1999
(in thousands, except per share amounts) (unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ---------------------------
2000 1999 2000 1999
----------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Revenue:
Electricity and steam sales .............................. $ 587,336 $ 225,443 $ 1,092,930 $ 529,765
Service contract revenue (1) ............................. 67,388 11,219 129,234 35,085
Income from unconsolidated investments in power
projects .............................................. 7,224 15,842 21,841 34,163
Interest income on loans to power projects ............... -- 517 -- 1,226
Other revenue ............................................ 16,943 -- 33,972 --
----------- ----------- ----------- -----------
Total revenue ....................................... 678,891 253,021 1,277,977 600,239
Cost of revenue:
Plant operating expenses (2) ............................. 58,692 32,560 144,271 84,673
Fuel expenses ............................................ 185,619 78,807 363,316 194,265
Depreciation expense ..................................... 40,419 14,005 102,083 56,294
Production royalties ..................................... 10,139 4,119 19,290 9,745
Operating lease expenses ................................. 25,230 9,987 46,360 23,539
Service contract expenses (1) ............................ 64,624 10,592 125,734 32,680
----------- ----------- ----------- -----------
Total cost of revenue ............................... 384,723 150,070 801,054 401,196
----------- ----------- ----------- -----------
Gross profit ................................................ 294,168 102,951 476,923 199,043
Project development expenses ................................ 6,091 3,419 15,075 7,667
General and administrative expenses (2) ..................... 25,844 12,427 50,798 31,062
----------- ----------- ----------- -----------
Income from operations ............................... 262,233 87,105 411,050 160,314
Other expense (income):
Interest expense ......................................... 23,679 23,019 55,996 70,190
Distributions on trust preferred securities .............. 12,650 -- 28,713 --
Interest income .......................................... (15,896) (6,473) (29,073) (16,305)
Minority interest, net ................................... 2,390 15 3,182 15
Other income ............................................. (2,515) (43) (4,710) (1,278)
----------- ----------- ----------- -----------
Income before provision for income taxes ............ 241,925 70,587 356,942 107,692
Provision for income taxes .................................. 94,817 27,670 140,000 42,215
----------- ----------- ----------- -----------
Income before extraordinary charge .......................... 147,108 42,917 216,942 65,477
Extraordinary charge, net of tax benefit of $796 in 2000 and
$793 in 1999 ............................................. 1,235 -- 1,235 1,150
----------- ----------- ----------- -----------
Net income .......................................... $ 145,873 $ 42,917 $ 215,707 $ 64,327
=========== =========== =========== ===========
Basic earnings per common share:
Weighted average shares of common stock outstanding ...... 134,399 108,778 129,563 99,598
Income before extraordinary charge ....................... $ 1.09 $ 0.39 $ 1.67 $ 0.66
Extraordinary charge ..................................... $ 0.01 $ -- $ 0.01 $ 0.01
----------- ----------- ----------- -----------
Net income ............................................... $ 1.08 $ 0.39 $ 1.66 $ 0.65
Diluted earnings per common share:
Weighted average shares of common stock outstanding before
dilutive effect of trust preferred securities .......... 142,616 115,980 137,533 105,932
Income before extraordinary charge and dilutive effect of
trust preferred securities ............................. $ 1.03 $ 0.37 $ 1.58 $ 0.62
Dilutive effect of trust preferred securities (3) ........... $ 0.07 $ -- $ 0.06 $ --
----------- ----------- ----------- -----------
Income before extraordinary charge .......................... $ 0.96 $ 0.37 $ 1.52 $ 0.62
Extraordinary charge ........................................ $ 0.01 $ -- $ 0.01 $ 0.01
----------- ----------- ----------- -----------
Net income .................................................. $ 0.95 $ 0.37 $ 1.51 $ 0.61
EBITDA (4) .................................................. $ 325,929 $ 103,754 $ 562,828 $ 240,887
</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 certain trust
preferred securities. For the three and nine months ended September 30,
2000, the assumed conversion calculation adds 19,786 and 15,669 shares of
common stock and $7,696 and $15,373 to the net income results, representing
the after tax distribution expense on certain 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.
