Exhibit 99.2 Press Release Dated April 27, 2000
NEWS RELEASE
Contact: Calpine (408) 995-5115
Public Relations Katherine Potter ext. 1168
Investor Relations Rick Barraza ext. 1125
CALPINE REPORTS 200% INCREASE IN EARNINGS PER SHARE FOR FIRST QUARTER 2000
SAN JOSE, CALIF. (April 27, 2000)--Calpine Corporation [NYSE:CPN], the nation's
fastest growing independent power company, today announced record financial
results for the quarter ended March 31, 2000.
Net income was $18.1 million for the quarter ended March 31, 2000, representing
a 364% increase over 1999 first quarter net income of $3.9 million. Diluted
earnings per share for the first quarter rose to $0.27 per share, from $0.09 per
share for the same period last year. Revenue for the quarter rose 56% to $235.4
million, from $150.6 million a year ago. Earnings Before Interest, Tax,
Depreciation and Amortization (EBITDA) increased 113% to $108.6 million for the
quarter, compared to $51.1 million a year ago. Total assets at March 31, 2000
were $4.5 billion as compared to $4.0 billion at December 31, 1999.
Earnings for the quarter benefited primarily from Calpine's acquisition of 14
geothermal power plants in May 1999 at The Geysers and its purchase of
Cogeneration Corporation of America in December 1999. In addition, the company's
earnings benefited from continued outstanding plant performance throughout
Calpine's national power portfolio.
"Our strong earnings reflect Calpine's continued success as the nation's
leading independent power company," stated Calpine CEO and President Peter
Cartwright. "We continue to make great strides in advancing our program to
repower America, while turning in another consecutive quarter of exceptional
financial results. By the end of 2004, we expect to have 25,000 megawatts of
clean, cost-competitive generation in place. We're well on our way to achieving
this goal. To date, Calpine has 17,200 megawatts of generation in operation,
under construction or in announced development throughout the U.S.
Highlights of recent activities include:
Development Program - Calpine continues to lead the nation in the development of
modern natural gas-fired energy centers. Calpine currently has more than 13,800
megawatts of generating facilities under construction or in announced
development.
o Calpine announced it has acquired a 50% interest in the Aries Power
Plant, a 600-megawatt natural gas-fired energy center currently under
construction near Pleasant Hill, Mo. The Aries Power Plant marks
Calpine's entry into the Southwest Power Pool--a strategically
important energy market. Construction of the $280 million facility
began in October 1999. Commercial operation for the first 330 megawatts
is expected to begin in June 2001, with the plant entering full
production in January 2002.
o Calpine entered into an agreement to provide the Sacramento Municipal
Utility District (SMUD) with a five-year supply of electricity from its
545-megawatt Sutter Power Plant, currently under construction in Sutter
County, north of Sacramento, Calif. Calpine will provide 150 megawatts
of electricity to SMUD's growing customer base beginning with plant
start-up in the summer of 2001--in time to help offset anticipated
system strains in northern California.
o Expanding its development program into the Pacific Northwest, Calpine
acquired the development rights for the Hermiston Energy Center, a
540-megawatt combined-cycle facility fueled by natural gas. The new
energy center, located in Hermiston, Ore., will have access to the
California-Oregon border and the Mid-Columbia markets.
o Calpine entered the Alabama electric power market with the announcement
of plans to build, own and operate a natural gas-fired cogeneration
facility at Solutia, Inc.'s Decatur, Ala. chemical facility. The
proposed Decatur Energy Center will generate 700 megawatts of
electricity for Solutia's industrial processing and for Alabama's
growing power market. Permitting for the $350 million facility has
commenced. Construction is scheduled to begin in mid-2000, with energy
deliveries slated to begin in the summer of 2002.
o Calpine expanded its operations in the fast-growing Florida energy
market with the development of two new natural gas-fired energy
centers. Calpine will be investing $750 million to build, own and
operate the 1,080-megawatt Blue Heron Energy Center, to be located in
Indian River County outside the City of Vero Beach, and the
540-megawatt Osprey Energy Center, which will be built adjacent to
Calpine's existing Auburndale power facility. In addition, Calpine has
opened a Tampa, Fla. office to manage the company's Southeast
development activities.
o Voters in Oxford, Conn. approved agreements that will allow Calpine to
move ahead with its proposed Towantic Energy Center, a 500-megawatt
natural gas-fired facility under development in Oxford, Conn. During a
townwide referendum, voters approved the sale of town-owned land for
the project, as well as a Tax Stabilization Agreement that will
levelize the property taxes paid to the Town over a 22-year period.
o Calpine has announced plans for its first energy facility in
Mississippi. The Lone Oak Energy Center will be an 800-megawatt natural
gas-fired energy facility to be located in Lowndes County. The facility
represents an investment of $425 million and is expected to enter
production in early 2003.
o Permitting efforts are under way for Calpine's second energy center in
Alabama. Calpine is developing the Hillabee Energy Center, a
700-megawatt natural gas-fired facility to be located in Tallapoosa
County, north of Alexander City. The proposed facility will serve
Southeast wholesale customers beginning in early 2003. Calpine expects
to begin construction in the first quarter of 2001.
o Calpine has partnered with Cleco Midstream Resources to develop the
Acadia Energy Center. The partners plan to build, own and operate the
1,000-megawatt natural gas-fired generating facility near Eunice, La.
Cleco announced the energy center in late 1999. The proposed $500
million facility will be designed to help relieve the
transmission-constrained Southwest Power Pool market. Construction is
slated to begin in mid-2000, with energy deliveries scheduled for June
2002.
o Extending its market presence in the rapidly growing south Texas power
market, Calpine acquired a 78.5% interest in the 500-megawatt Hidalgo
Energy Center--under construction in Edinburg, Texas--for $235 million.
The Hidalgo facility will sell power into ERCOT's wholesale market,
utilizing Calpine's unique system approach. Construction of the
facility began in February 1999, and commercial operation is expected
to begin in June 2000. Calpine will operate and maintain the plant.
o The 540-megawatt Wawayanda Energy Center, under development near
Middletown, N.Y., represents Calpine's flagship project for developing
a strong position in the New York merchant power market. The new
natural gas-fired facility will complement Calpine's existing power
assets on Long Island. Commercial operation will begin in early 2004.
o A 50-megawatt expansion program is under way at Calpine's 117-megawatt
Morris Cogeneration Facility. Calpine is installing a steam turbine at
its Morris, Ill. facility to maximize fuel efficiency, lower operating
costs and increase plant output. In addition, the company has entered
into a power sales agreement to deliver approximately 100 megawatts of
capacity from its Morris plant to Commonwealth Edison Company (COMED).
COMED is currently purchasing 50 megawatts of electricity, and upon
completion of the expansion in June 2000, will take the second
50-megawatt segment.
o Calpine recently unveiled its plans to build, own and operate the
Calgary Energy Centre. The facility will be the first independent power
project announced in the Calgary area, and represents Calpine's first
investment in the Canadian power market. The facility will help
increase security of electricity supply for Alberta and Calgary and
will have the ability to produce an additional 50 megawatts of
electricity during peak power demand periods.
Acquisition Program - Acquiring strategic power and natural gas assets is a key
component of Calpine's growth strategy. In 2000, Calpine announced the
completion of two major acquisitions, significantly strengthening its position
as a low-cost power provider.
o To help fuel its natural gas power program in northern California,
Calpine acquired 90 billion cubic feet of proven, natural gas reserves
from Vintage Petroleum, Inc. for approximately $71.5 million. This
acquisition established Calpine as the largest natural gas producer in
the Sacramento basin.
o Calpine further expanded its northern California gas operations with
the acquisition of the 130-mile Steelhead gas pipeline and the
remaining interest in the Sacramento River Gas System. The new
pipelines have doubled Calpine's existing capacity to deliver gas to
its existing and future power plants in the region.
Capital Program
o Calpine raised $360 million through a private placement of convertible
preferred securities, priced to yield 5-1/2%, with a conversion premium
of 27%. Proceeds from the offering will be used to finance the
company's power plant development and construction program.
o Duff & Phelps Credit Rating Co. (DCR) upgraded Calpine's senior
unsecured debt to investment grade "BBB-" from "BB+" and convertible
preferred securities to "BB" from "BB-". Calpine's rating outlook is
stable. DCR's upgrade was attributed to Calpine's outstanding natural
gas-fired and geothermal plant performance, and the company's unique,
integrated approach that focuses on developing its low-cost generating
portfolio.
About Calpine
Calpine Corporation, the leading independent power company in the United States,
is dedicated to providing customers with clean, reliable and competitively
priced electricity. Calpine is active in 20 states and Alberta, Canada.
Calpine's corporate headquarters are located in San Jose, Calif., with regional
offices in Houston, Texas; Pleasanton, Calif.; and Boston, Mass. Calpine
currently has approximately 17,200 megawatts of capacity in operation, under
construction or in announced development--enough energy to power more than 17
million households. 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, please see our 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 actual costs that 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.
CALPINE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
For the Three Months Ended March 31, 2000
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
-------------------------
2000 1999
-------------------------
Revenue:
Electricity and steam sales ................... $ 193,924 $ 128,026
Oil and gas revenue ........................... 8,575 --
Service contract revenue ...................... 23,129 11,502 (1)
Income from unconsolidated investments in power 9,774 10,812
Interest income on loans to power projects .... -- 303
--------- ---------
Total revenue 235,402 150,643
--------- ---------
Cost of revenue:
Plant operating expense ....................... 40,604 24,055 (2)
Fuel expense .................................. 73,652 53,937
Depreciation expense .......................... 27,818 18,979
Operating lease expense ....................... 10,458 5,593
Production royalties expense .................. 3,707 2,417
Service contract expense ...................... 20,488 10,175 (1)
--------- ---------
Total cost of revenue 176,727 115,156
--------- ---------
Gross profit ................................ 58,675 35,487
Project development expense ...................... 3,755 1,956
General and administrative expense 8,619 9,112 (2)
--------- ---------
Income from operations ...................... 46,301 24,419
Other expense (income):
Interest expense .............................. 17,907 21,027
Interest income ............................... (7,562) (2,778)
Distributions on trust preferred securities ... 6,978 --
Minority interest expense ..................... 217 --
Other income, net ............................. (1,053) (163)
--------- ---------
Income before provision for income taxes .... 29,814 6,333
Provision for income taxes ....................... 11,687 2,483
--------- ---------
Net income .................................. $ 18,127 $ 3,850
========= =========
Basic earnings per common share:
Weighted average shares outstanding ........... 63,337 41,190
Basic earnings per share ...................... $ 0.29 $ 0.09
Diluted earnings per common share:
Weighted average shares outstanding ........... 67,314 43,890
Diluted earnings per share .................... $ 0.27 $ 0.09
Depreciation and amortization $ 29,911 $ 19,455
Interest expense per indenture $ 21,447 $ 23,103
EBITDA $ 108,558 $ 51,138
EBITDA to total interest expense ................. 5.06x 2.21x
- -------
1 Service contract revenue and expense in 1999 have been reclassed to conform
with the 2000 presentation.
2 Certain 1999 expenses have been reclassed from general and administrative
expense to plant operating expense to conform with 2000 presentation.