Fourth Quarter and Full Year 2013 Investor Update Conference Call February 13, 2014
Agenda Welcome and Safe Harbor Bryan Kimzey Vice President, Investor Relations CEO Review Jack Fusco Chief Executive Officer Operations Review Thad Hill President, Chief Operating Officer Financial Review Zamir Rauf EVP,…
Delivering on Our Commitments, Raising 2014 Guidance Achieving Targeted Adj. FCF1 Per Share Growth Recent Highlights 1.85 2.10 Continued focus on best-in-class operations Raised 25% CAGR2 midpoint Record-low forced outage factor:…
Continued Progress: 2014 Goals & Initiatives 2013 Accomplishments 2014 Goals Delivered record operating performance Safety First to Zero: No lost time incidents Premier Operating Effectively executed seasonal hedging…
Competitive Power Markets Prioritizing What Matters: Flexibility and Reliability ISO-NE ISO concerns about generator availability and constrained natural gas supply Reliability: Performance incentives proposed Heavy reliance…
Calpine is a Multi-Faceted Investment: Right Fleet, Right Place, Right Time Regionally diversified portfolio Secular trends favor Enhancing shareholder value focused on competitive natural gas-fired through effective capital wholesale…
OPERATIONS & COMMERCIAL REVIEW 8
Focused on Best-in-Class Operations Improving Operational Performance Generation in Key Markets (000 MWh)1 Maintaining focus on safety and availability Portfolio + Russell City + Bosque Riverside Broad River Changes: + Los Esteros…
Core Organized Market Overview California: Texas: PJM: Positive 2014; Solid fundamentals trump Volatility is here Capacity value key slow regulatory process to stay Potentially record drought offset by Strong 4Q13 load growth Winter…
Energy Margin1: Positioned to Respond to Favorable Secular Trends Energy Hedge Profile2 Sensitivities Natural Gas Price Sensitivity2 Energy Margin1,2 as % of (assuming no change in heat rate) Total Commodity Margin (by year):…
Texas Outlook: Nothing Has Changed Outside of Austin Fundamentals still point to tightening market conditions and increasing volatility Strong Weather-Adj. Load Growth Texas Economy On the Move Conservative Preliminary 6% 25.0% Load…
PJM Outlook: Volatility is Now Reality Capacity Market: Driving Increased Reliance Oil-Fired Generation Matters on Demand Response for Reliability Cost Advantage in Winter, Price Umbrella in Summer 20% 140 Calpine PJM Fleet Spot…
Regional Adjusted EBITDA1: 4Q 2013 vs. 2012 ( millions, 000 MWh) West Region Texas Region Adjusted EBITDA1 Generation2 Adjusted EBITDA1 Generation2 10,359 9,179 8,044 8,503 190 153 48 47 4Q12 4Q13 4Q12 4Q13 4Q12 4Q13 4Q12…
Capital Allocation Aligned with Adj. Free Cash Flow1 Per Share Growth ( millions) Proven Track Record of Calpine Putting Capital to Work Growth Paradigm 1,490 1,274 1,204 Magnitude of Growth Drivers / Levers Fundamental /…
Adjusted FCF1 Per Share: A Comparable Valuation Metric Adj. FCF1 per Share is comparable to: Calpine Targets Superior Total Return 20% Utility earnings per share (EPS) 18% MLP distributable cash flow (DCF) per share 16% REIT…
APPENDIX 19
Regional Adjusted EBITDA1: 2013 vs. 2012 ( millions, 000 MWh) West Region Texas Region Adjusted EBITDA1 Generation2 Adjusted EBITDA1 Generation2 647 676 36,110 37,383 33,390 441 34,597 371 2012 2013 2012 2013 2012 2013 2012…
Selected Operating Statistics 4Q13 4Q12 4Q13 4Q12 1 Plants with no recordable Total MWh Generated (in thousands) 26,134 25,777 Average Capacity Factor, excl. Peakers 48.0% 48.0% injuries and < 2 % FOF for 2013 West 10,359 9,179 West…
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 ( in millions) Corporate Debt Senior Secured Notes 4,989 First Lien Term Loans 2,828 Corporate Revolver Total Corporate Debt 7,817 CCFC Notes Payable & Capital Lease Project Debt Other Obligations…
Calpine1 Continues to Benefit from Federal NOL Positions Federal NOLs at Dec. 31, 2013: 7.5 billion All are unrestricted 1 Includes CCFC. 24
National Portfolio of More Than 28,000 MW Geographic Diversity Dispatch Technology As of 2/13/2014 25
Calpine Operating Power Plants As of February 13, 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 February 13, 2014 With With Load CPN Peaking Technology Location COD Peaking Type Interest Capacity, Capacity Net North Region Bayview Oil Peaking VA 1963 12 100% 12 Bethlehem…
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 31
Major Maintenance and Capital Expenditure Guidance ( in millions) 2013 2014E Major maintenance expense 228 220 A Maintenance capital expenditures1 164 160 B Growth-related capital expenditures2 400 230 C Guadalupe…
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