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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): February 3, 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 February 3, 2000, Calpine Corporation, a Delaware corporation, announced
in a Press Release its financial results for the three and twelve months ended
December 31, 1999.
(C) Exhibits.
99.0 Press Release dated February 3, 2000 announcing financial results for
the three and twelve months ended December 31, 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
By: /s/ Charles B. Clark, Jr.
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Charles B. Clark, Jr.
Vice President and Controller
Chief Accounting Officer
February 8, 2000
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EXHIBIT 99.0
NEWS RELEASE CONTACTS: 408/995-5115
Media Relations: Katherine Potter, X1168
Investor Relations: Rick Barraza, X1125
CALPINE REPORTS Earnings Per Share Up 59% FOR 1999
(SAN JOSE, CALIF.) February 3, 2000-Calpine Corporation [NYSE:CPN], one of
the nation's fastest growing power companies, today reported record financial
results for the quarter and year ended December 31, 1999.
Net income for the year ended December 31, 1999 was $95.1 million,
representing a 108% increase over 1998 net income of $45.7 million. Diluted
earnings per share rose 59% to $1.73 per share, from $1.09 in 1998. Revenue for
the year increased 52% to $847.7 million, from $555.9 million a year ago.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was $392.2
million for 1999, up 54% from $255.3 million in 1998. Total assets at December
31, 1999 were $3.9 billion as compared to $1.7 billion at December 31, 1998.
For the quarter ended December 31, 1999, net income was $30.8 million, an
increase of 120% compared to $14.0 million for the fourth quarter 1998. Diluted
earnings per share for the quarter were $0.48 per share, up 45% from $0.33 per
share for the same period in 1998. Revenue for the quarter increased 43% to
$247.5 million compared to $173.0 million for the same period a year ago. EBITDA
for the fourth quarter was $123.9 million, up 81% from $68.3 million in 1998.
The increase in earnings for both the quarter and year ended December 31,
1999 was primarily the result of the company's 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 was recently approved by the
Federal Energy Regulatory Commission.
"Calpine entered the ranks as one of the nation's most profitable power
companies in 1999, reflecting the strength of our organization and the company's
outstanding plant performance," stated Calpine President and Chief Executive
Officer Peter Cartwright. "Calpine's stock rose 407% in 1999-the highest
increase amongst leading energy and power companies."
"Our goal remains clear and consistent: develop, acquire, own and operate
clean, efficient and reliable electric generating facilities to meet increasing
demand and replace America's aging power fleet," continued Cartwright. "In 1999,
we revised our five-year power portfolio target to 25,000 megawatts by year-end
2004. Today, we're well on our way to achieving this goal with 14,000 megawatts
in operation, under construction or in announced development."
- more -
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Highlights for 1999 include:
Acquisition Program - Calpine became the world's largest geothermal power
provider in 1999 and significantly strengthened its gas-fired operations and
fuels capabilities.
* Acquired 15 power plants and related steam fields at The Geysers of
northern California, adding 770 megawatts.
* Increased Calpine's gas-fired portfolio by 20% with the acquisition of
Cogeneration Corporation of America.
* Purchased Sheridan Energy, adding strategic natural gas reserves in
northern California and Gulf Coast states and in-house fuels capabilities.
Calpine leads the U.S. power industry with the largest construction and
development program. Today, 10 projects are in construction totaling 4,376 net
megawatts and 11 facilities are in announced development, which will add 6,278
net megawatts of generation by 2003.
Construction Program - In 1999, Calpine began construction of six new energy
facilities.
* Initiated construction for 730-megawatt Magic Valley Generating Station in
south Texas.
* Announced 540-megawatt gas-fired facility in Westbrook Maine; construction
underway; energy deliveries slated for January 2001.
* Received California Energy Commission License for 545-megawatt Sutter Power
Plant-first new power plant under construction in California's deregulated
power industry; five-year contract in place with Sacramento Municipal
Utility District; commercial operation scheduled for summer 2001.
* Commenced construction for 545-megawatt natural gas-fired facility on Fort
Mojave Indian Reservation in Arizona; South Point Power Plant to enter
commercial operation in early 2001.
* Entered joint venture with Lower Colorado River Authority to develop
545-megawatt Lost Pines 1 Power Plant currently under construction in
Bastrop County, Texas.
* Initiated construction for Los Medanos Energy Center, a 500-megawatt
natural gas-fired cogeneration facility in Pittsburg, Calif. at USS-POSCO's
steel facility.
* Completed $265 million financing for 545-megawatt Pasadena Power Plant
expansion in Texas; construction is underway; start-up scheduled for June
2000.
Development Program - Calpine announced six new strategic development
opportunities in 1999.
* Introduced 600-megawatt Metcalf Energy Center in San Jose, Calif.; plant to
provide needed generation to Bay Area in 2003.
* Announced partnership with Pinnacle West Capital Corporation to develop
545-megawatt natural gas-fired facility at Arizona Public Service's West
Phoenix Power Station.
* Entered Pennsylvania power market; announced plans for 545-megawatt natural
gas-fired facility in Ontelaunee Township.
* Launched 800-megawatt cogeneration plant at Bayer Corporation's chemical
facility in Baytown, Texas; final stages of permitting; start-up slated for
late 2001.
* Initiated development of 560-megawatt Channel Energy Center at
Lyondell-Citgo's Houston, Texas refinery.
* Launched Towantic Energy Center, a 500-megawatt natural gas-fired facility
to be located in Oxford, Conn.
* Increased number of gas turbines on order to 69, providing Calpine with a
distinct competitive advantage in building its 25,000-megawatt power
portfolio.
- more -
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Operations/Enhancement Program - Calpine's value-added approach to power
generation provides unique opportunities to maximize efficiencies and
profitability.
* Amended power purchase agreement with Pacific Gas and Electric Company for
the electric output of Gilroy, Calif. natural gas-fired plant, providing
Calpine earlier access to California's deregulated power market.
* Acquired PowerSuite, a fully integrated, real-time business management
system, to enhance Calpine's power generation capabilities.
Finance Program - In 1999, Calpine raised approximately $3 billion to fund
continued growth.
* Completed successful capital offerings, raising nearly $1.5 billion.
* Secured $1 billion revolving credit facility to fund construction-the first
deal of its kind and magnitude in the industry.
* Completed two-for-one stock split.
* Achieved BB+ credit rating by all 3 major rating agencies.
About Calpine Corporation
Calpine Corporation is a leading U.S. power company dedicated to providing
customers with reliable and competitively priced electricity. Calpine currently
has interests in approximately 14,000 megawatts of capacity in operation, under
construction or in announced development in 18 states-enough energy to power
approximately 14 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) 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 or (vi) 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.
(Table Follows)
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CALPINE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three and Twelve Months Ended December 31, 1999 and 1998
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------ ------------------
1999 1998 1999 1998
-------- -------- -------- --------
Revenue:
Electricity and steam sales ............. $230,560 $160,538 $760,325 $507,897
Service contract revenue from
related parties......................... 8,688 3,886 43,773 20,249
Income from unconsolidated investments
in power projects ..................... 2,430 8,609 36,593 25,240
Interest income on loans to power
projects............................... -- -- 1,226 2,562
Other revenue ........................... 5,818 -- 5,818 --
-------- -------- -------- --------
Total revenue ........................ 247,496 173,033 847,735 555,948
Cost of revenue:
Plant operating expenses ................ 36,854 24,903 118,334 74,486
Fuel expenses ........................... 74,469 61,211 268,734 181,593
Depreciation ............................ 26,518 21,456 82,812 73,988
Production royalties .................... 4,022 2,686 13,767 10,714
Operating lease expenses ................ 10,055 6,139 33,594 17,129
Service contract expenses ............... 7,556 5,703 40,236 17,417
-------- -------- -------- --------
Total cost of revenue ................ 159,474 122,098 557,477 375,327
Gross profit ............................. 88,022 50,935 290,258 180,621
Project development expenses ............. 3,045 2,324 10,712 7,165
General and administrative expenses ...... 18,789 8,349 53,044 26,780
-------- -------- -------- --------
Income from operations ............... 66,188 40,262 226,502 146,676
Other expense (income):
Interest expense ......................... 20,972 21,588 91,162 86,726
Distributions on trust preferred
securities ............................. 2,565 -- 2,565 --
Interest income .......................... (7,801) (2,959) (24,106) (12,348)
Other income, net ........................ (72) (241) (1,335) (1,075)
Income before provision for
-------- -------- -------- --------
income taxes ....................... 50,524 21,874 158,216 73,373
Provision for income taxes ............... 19,758 7,841 61,973 27,054
-------- -------- -------- --------
Income before extraordinary charge ... 30,766 14,033 96,243 46,319
Extraordinary charge net of tax
benefit of $--, $--, $793 and $441 . -- -- 1,150 641
-------- -------- -------- --------
Net income ........................... $ 30,766 $ 14,033 $ 95,093 $ 45,678
======== ======== ======== ========
Basic earnings per common share:
Weighted average shares outstanding ..... 59,888 40,314 52,328 40,242
Income before extraordinary charge ...... $ 0.51 $ 0.35 $ 1.84 $ 1.15
Extraordinary charge .................... $ -- $ -- $ (0.02)$ (0.01)
Net income .............................. $ 0.51 $ 0.35 $ 1.82 $ 1.14
Diluted earnings per common share:
Weighted average shares outstanding ..... 63,716 42,610 55,661 42,328
Income before extraordinary charge ...... $ 0.48 $ 0.33 $ 1.73 $ 1.09
Extraordinary charge .................... $ -- $ -- $ (0.02)$ (0.01)
Net income .............................. $ 0.48 $ 0.33 $ 1.71 $ 1.08
Depreciation and amortization ........... $ 26,597 $ 17,061 $ 83,040 $ 82,913
Interest expense per indenture .......... $ 24,754 $ 23,828 $103,403 $ 93,015
EBITDA .................................. $123,921 $ 68,290 $392,160 $255,306
EBITDA to total interest expense ........ 5.01x 2.87x 3.79x 2.74x
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