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): August 5, 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
On August 5, 2004, Calpine Corporation ("Calpine") issued the press release
attached hereto as Exhibit 99.1 reporting a new credit facility entered into by
its wholly owned subsidiary, Calpine Energy Management, L.P. ("CEM").
CEM's assets are expected to be primarily gas and power contracts and
short-term receivables under those contracts. Its liabilities are expected to be
primarily short-term payables under those contracts. CEM does not and is not
permitted to guarantee, secure, or otherwise assume responsibility for any debt
or other obligations of Calpine or any of its other affiliates. Calpine and its
other affiliates do not guarantee, secure, or otherwise assume responsibility
for any debt or other obligations of CEM. The assets, liabilities, revenues and
expenses of CEM will be kept separate and distinct from those of Calpine and its
other affiliates. CEM is required to strictly observe all necessary, appropriate
and customary corporate formalities in its dealings with Calpine and its other
affiliates and to make all decisions with respect to its business and daily
operations independently.
Exhibits.
99.1 Press release dated August 5, 2004, announcing Calpine Corporation's
new $250 million letter of credit facility to increase working
capital.
EXHIBIT 99.1
NEWS RELEASE CONTACTS: (408) 995-5115
Media Relations: Bill Highlander, Ext. 1244
Katherine Potter, Ext. 1168
Investor Relations: Rick Barraza, Ext. 1125
Calpine Finalizes Agreement to Enhance Credit
for Short-Term Natural Gas and Power Transactions
New $250 Million Letter of Credit Facility to Increase Working Capital
(SAN JOSE, Calif.) /PR Newswire - First Call/ Aug. 5, 2004 - Calpine
Corporation [NYSE:CPN] today announced that it has implemented a new credit
enhancement structure that it expects will improve spark spreads for the company
and increase working capital at its wholly-owned subsidiary, Calpine Energy
Services.
As part of this innovative new structure, Calpine created a new entity,
Calpine Energy Management (CEM), to facilitate short-term gas and power
purchases and sales transactions ranging from the hourly market up to one
forward month. CEM has entered into a $250 million letter of credit facility
with Deutsche Bank (rated Aa3/AA-) that expires in October 2005. Deutsche Bank
will guarantee CEM's power and gas obligations by issuing letters of credit.
Receivables generated through power sales will serve as collateral to support
the letters of credit.
"With Calpine's years of experience in the energy market, together with
Deutsche Bank's financial services capabilities, Calpine Energy Management can
create short-term contracts with AA- credit to better meet our customers' and
suppliers' needs," stated Calpine Chief Financial Officer Bob Kelly. "This
facility will also enable Calpine to increase working capital by matching our
payments for gas purchases with the receipt of cash from the sale of power.
Equally important, it will enhance our margins through an expansion of our power
and gas customer base."
About Calpine
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 plants.
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. Calpine is
also the world's largest producer of renewable geothermal energy, and owns or
controls approximately one trillion cubic feet equivalent of proved natural gas
reserves in the United States and Canada. The company, founded in 1984, is
listed on the S&P 500 and was named FORTUNE's 2004 Most Admired Energy Company.
Calpine 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) risks associated with marketing and selling
power from power plants in the newly-competitive energy market; and (iv) 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 and in its
Quarterly Report on Form 10-Q for the quarter ended March 31, 2004, 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: August 13, 2004