Second Quarter 2014 Investor Update Conference Call August 1, 2014
Agenda Welcome and Safe Harbor Bryan Kimzey Vice President, Investor Relations CEO Review Thad Hill President, Chief Executive Officer Commercial Operations Review Steve Pruett EVP, Chief Commercial Officer Financial…
Outstanding Start to 2014 ( millions) Delivering Strong Returning Capital to Financial Performance Shareholders Adjusted EBITDA1 Repurchased 5%2 of company since 1Q call Recent Highlights Increased authorization; 566M remaining3…
Putting Our Capital to Work Proven Track Record of Capital Deployment Acquisition1 Organic Growth Debt Repayment / Financing Costs2 2,161 Capital Allocation Driving Share Repurchase Adj. Free Cash Flow4 Per Share Growth 1,490…
Calpines Strategic Advantages in the Current Environment Well Positioned to Respond to Resilient in Increasing Market Volatility Low-Gas Price Setting Market Rules California High ramps Changes to capacity rules Possible return to…
Focused on Best-in-Class Operations Employee Total Reportable Incident Rate Generation in Key Markets (000 MWh)1 Guadalupe Deer Park / Channel 9,912 CA plants EEI Top Quartile2 AZ/OR plants 7,373 1.11 Heavier outages 5,765…
COMMERCIAL OPERATIONS REVIEW 8
Advantages Persist for Natural Gas-Fired Generation in PJM Backwardation in Forward Curves Inconsistent with Fundamentals Financially Disciplined Growth 20 Announcing York 2 Annual On-Peak Spark Spread (/MWh) 15 Peach Bottom…
ERCOT Fundamentals Remain Intact 5% Evidence of Strong Growth1 Mild 2014 Summer Mitigated by Hedges4 May Jun Jul MTD 0 4% ERCOT CDD: 2014 vs 10-Yr Avg. (10) 3% (20) (30) 2% (40) ERCOT CDR (50) 1% Growth Assumption…
Stable California Platform Despite Solar Penetration Value of Solar Declines As Net Peak Load Shifts Todays Largest complex of geothermal 140 penetration level power plants in the world Geysers: 120 Premium, reliable…
Pro Forma Energy Margin1: Positioned to Respond to Favorable Secular Trends Energy Hedge Profile2 Sensitivities Natural Gas Price Sensitivity2 Continued Commercial Progress: Energy as % of Margin1,2 (assuming no change in heat…
FINANCIAL REVIEW 13
Financial Overview ( millions) Continuing to Deliver Solid Results, On Track for Full Year Guidance Second Quarter Adjusted EBITDA1 Drivers 40 413 30 343 15 Recent Highlights (15) Delivering strong 2Q and YTD performance…
Regional Adjusted EBITDA1: 2Q 2014 vs. 2013 ( millions, 000 MWh) West Region Texas Region Adjusted EBITDA1 Generation2 Adjusted EBITDA1 Generation2 9,912 7,229 109 140 6,770 7,373 113 80 2Q13 2Q14 2Q13 2Q14 2Q13 2Q14 2Q13…
Transforming Capital Structure: Inaugural Unsecured Debt Offering Deal Summary No Material Near-Term Maturities1 Refinanced 2.8B of Senior Secured Notes 2,084 2,210 with Senior Unsecured Notes 1,600 1,545 1,550 Reduced interest…
Accretive Deployment of Excess Cash Updated Capital Allocation Outlook 1B allocated since 1Q call 2,230 - 2,330 Incremental 2014 Excess Cash ( millions) Capital Allocation (500) 1,300 - 1,400 140 Returning Capital to…
APPENDIX 18
Selected Operating Statistics 2Q14 2Q13 2Q14 2Q13 1 Total MWh Generated (in thousands) 23,733 22,629 Average Capacity Factor, excl. Peakers 41.7% 43.4% West 6,770 7,229 West 44.0% 52.5% Texas 9,912 7,373 Texas 48.9% 42.8% North…
Regional Adjusted EBITDA1: YTD 2014 vs. 2013 ( millions, 000 MWh) West Region Texas Region Adjusted EBITDA1 Generation2 Adjusted EBITDA1 Generation2 17,177 15,566 15,601 15,803 235 253 173 113 YTD13 YTD14 YTD13 YTD14 YTD13…
Although Calpines fleet can be difficult to model, simplifying techniques may help 1. Estimate annual generation (MWh) based on market outlook relative to disclosed 5. Adjust margin to capture items such as ancillary services and storage…
Capital Structure Chart (pro forma) ( in millions) Corporate Debt Senior Secured Notes1 2,190 First Lien Term Loans 2,814 Unsecured Notes1 2,800 Corporate Revolver Total Corporate Debt 7,804 CCFC Notes Payable & Capital Lease…
Calpine1 Continues to Benefit from Federal NOL Positions Federal NOLs at Dec. 31, 2013: 7.5 billion All are unrestricted 1 Includes CCFC. 23
National Portfolio of Approximately 26,000 MW Geographic Diversity Dispatch Technology As of 8/1/2014 24
Calpine Operating Power Plants As of August 1, 2014 With With Load CPN Peaking Technology Location COD Peaking Type Interest Capacity, Capacity Net West Region Agnews Power Plant Natural Gas Intermediate CA 1990 28 100% 28…
Calpine Operating Power Plants (contd) As of August 1, 2014 With With Load CPN Peaking Technology Location COD Peaking Type Interest Capacity, Capacity Net East Region Auburndale Peaking Energy Center Natural Gas Peaking FL…
Reg G Reconciliation: Commodity Margin ( in millions) Commodity Margin includes our power and steam revenues, sales of purchased power and physical natural gas, capacity revenue, revenue from renewable energy credits, sales of surplus…
Reg G Reconciliation: Commodity Margin (continued) ( in millions) Commodity Margin includes our power and steam revenues, sales of purchased power and physical natural gas, capacity revenue, revenue from renewable energy credits, sales…
Reg G Reconciliation: Adjusted EBITDA and Adjusted Free Cash Flow ( in millions, except share and per share amounts) Adjusted EBITDA represents net income (loss) attributable to Calpine before net income (loss) attributable to the…
Reg G Reconciliation: 2014 Adjusted EBITDA and Adjusted Free Cash Flow Guidance 30
Major Maintenance and Capital Expenditure Guidance ( in millions) 2014E Major maintenance expense 220 A Maintenance capital expenditures 160 B Growth-related capital expenditures1 330 C Guadalupe acquisition2 656 Capital…
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