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 11, 2005
CALPINE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of Other Jurisdiction of Incorporation)
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
(Address of principal executive offices and telephone number)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.05 -- COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES
On August 16, 2005, Calpine Corporation (the "Company") issued a press
release announcing that the Company had agreed to sell its 550-megawatt
Ontelaunee Energy Center to LS Power Equity Partners, LP for $225 million,
following approval of the sale by the Executive Committee of the Board of
Directors on August 11, 2005. The Company estimates cash expenditures related to
the sale to be approximately $1.0 million for transaction costs, primarily legal
fees. In connection with the sale, the Company estimates that it will record a
loss on the sale of this asset of approximately $130 million, taking into
account such transaction costs, in the third quarter of 2005 within the results
of discontinued operations. In addition, the Company would record a non-cash
charge related to the write-off of unamortized deferred financing costs if a
portion of the net proceeds is used to repurchase or retire debt, but we cannot
presently estimate the amount of such charge. For more information, see the
press release attached hereto as Exhibit 99.1 and incorporated herein by
reference.
ITEM 9.01 -- FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
99.1. Press release dated August 16, 2005.
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, Controller and
Chief Accounting Officer
Date: August 22, 2005
EXHIBIT INDEX
Exhibit Description
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99.1 Press release
EXHIBIT 99.1
NEWS RELEASE CONTACTS: (408) 995-5115
Media Relations: Bill Highlander, Ext. 1244
Investor Relations: Karen Bunton, Ext. 1121
Calpine to Sell Ontelaunee Energy Center for $225 Million
(SAN JOSE, Calif.) /PR Newswire - First Call/ August 16, 2005 - Calpine
Corporation [NYSE:CPN] has agreed to sell its 550-megawatt Ontelaunee Energy
Center to LS Power Equity Partners, LP (LS Power) for $225 million. The asset
sale is part of Calpine's strategic initiative to reduce debt and optimize its
power plant portfolio. Since launching its strategic initiative in May 2005,
Calpine has completed or announced more than $2 billion of asset sales.
The Ontelaunee sale is the third of four planned power plant sales, which
the company announced in June 2005. Calpine expects to complete the sale in
September, pending regulatory approval and other conditions of closing. Net
proceeds from the sale of Ontelaunee will be used to reduce debt and as
otherwise permitted by the company's indentures.
"By divesting of non-strategic assets like Ontelaunee, we continue to
de-lever our balance sheet and re-focus resources on Calpine's core power
markets," stated Calpine Executive Vice President and CFO Bob Kelly. "At the
same time, by providing LS Power a broad range of operational and power services
for Ontelaunee, Calpine has a great opportunity to expand our energy services
business units."
As part of the transaction, Calpine will continue to operate the plant on
behalf of LS Power for five years, and provide turbine maintenance and parts
services for ten years. Calpine Energy Services, the trading and risk management
subsidiary for Calpine, will supply a variety of energy services, including
power marketing, and scheduling of power and fuel for a six-month term.
The Ontelaunee Energy Center is a natural gas-fired, combined-cycle power
plant located in Ontelaunee Township, Pennsylvania. The plant entered operations
in 2002 and generates electricity for the Pennsylvania-New Jersey-Maryland power
market.
About Calpine
A major power company, Calpine Corporation supplies customers and
communities with electricity from clean, efficient, natural gas-fired and
geothermal power plants. Calpine owns, leases and operates integrated systems of
plants in 21 U.S. states and three Canadian provinces. Its customized products
and services include wholesale and retail electricity, natural gas, gas turbine
components and services, energy management, and a wide range of power plant
engineering, construction and operations services. Calpine was founded in 1984.
It is included in the S&P 500 Index 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)
a competitor's development of lower cost generating gas-fired power plants; (v)
risks associated with marketing and selling power from power plants in the
newly-competitive energy 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, 2004, and in its Quarterly Report on Form 10-Q for
the three months ended June 30, 2005, which can 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.