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 Exchange Act of 1934
Date of Report (Date of earliest event reported): April 15, 2004
CALPINE CORPORATION
(A Delaware Corporation)
Commission File Number: 001-12079
I.R.S. Employer Identification No. 77-0212977
50 West San Fernando Street
San Jose, California 95113
Telephone: (408) 995-5115
ITEM 5. OTHER EVENTS
NEWS RELEASE CONTACTS: 408-995-5115
Media Relations: Katherine Potter, Ext. 1168
Investor Relations: Rick Barraza, Ext. 1125
Calpine Agrees to Restructure King City Power Plant Operating Lease
Transactions to Reduce Calpine Debt by $42 Million
(SAN JOSE, Calif.) /PR Newswire - First Call/ April 15, 2004 - As part of
the recently announced Calpine Power Income Fund (CPIF) transaction, Calpine has
agreed to modify the terms of its long-term operating lease for the 120 megawatt
King City Power Plant located in King City, Calif. Upon closing of this
transaction, the company expects to:
o Extend the term of the King City operating lease from 2018 to 2028;
o Restructure the lease's rent payment schedule;
o Receive cash from the sale of securities originally pledged to the
lessor to secure the lessee's obligations under the lease. This will
provide Calpine with cash of approximately $87 million, net of
transactions costs;
o Receive approximately $40 million through the issuance of a 10-year
promissory note by Calpine Canada Power Ltd., a wholly-owned
subsidiary of Calpine, to a CPIF affiliate; and
o Redeem the existing preferred equity interest issued in 2003 by a
Calpine subsidiary in connection with the King City facility.
Together, these transactions will result in a reduction of approximately
$42 million of Calpine debt and are expected to provide the company with
approximately $45 million in net cash proceeds. Closing is contingent upon the
completion of CPIF's transaction, which is expected to close on or about May 19,
2004.
The King City Power Plant is located approximately 100 miles south of
Calpine's San Jose headquarters. The plant supplies electricity under a
long-term contract to Pacific Gas and Electric Company.
Calpine Corporation, celebrating its 20th year in power in 2004, is a
leading North American power company dedicated to providing electric power to
customers from clean, efficient, natural gas-fired and geothermal power
facilities. The company generates power at plants it owns or leases in 21 states
in the United States, three provinces in Canada and in the United Kingdom, and
is building a power plant in Mexico. Calpine is also the world's largest
producer of renewable geothermal energy, and owns or has access to approximately
one trillion cubic feet equivalent of proved natural gas reserves in the United
States and Canada. The company is listed on the S&P 500, and was named FORTUNE's
2004 America's Most Admired Energy Company. Calpine was founded in 1984 and is
publicly traded on the New York Stock Exchange under the symbol CPN. For more
information, visit 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) the timing and extent of deregulation of energy markets and the
rules and regulations adopted on a transitional basis with respect thereto; (ii)
the timing and extent of changes in commodity prices for energy, particularly
natural gas and electricity; (iii) unscheduled outages of operating plants; (iv)
risks associated with marketing and selling power from power plants in the
newly-competitive energy market; (v) the timing and extent of changes in the
capital markets, including the Canadian income fund market; and (vi) other risks
identified from time-to-time in the Company's reports and registration
statements filed with the SEC, including the risk factors identified in its
Annual Report on Form 10-K for the year ended December 31, 2003, which can also
be found on the Company's website at www.calpine.com. All information set forth
in this news release is as of today's date, and the Company undertakes no duty
to update this information.
SIGNATURES
Pursuant to the requirements of the Securities 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.
Senior Vice President and Controller
Chief Accounting Officer
Date: April 16, 2004