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): October 6, 2005
CALPINE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State or 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
The disclosure in Item 8.01 below relating to the estimated loss on sale of
the Ontelaunee Energy Center ("Ontelaunee"), which Calpine Corporation (the
"Company") expects to recognize in the third quarter of 2005, is incorporated by
reference herein. This updates our previous estimate of the expected loss as
reported on Form 8-K filed August 22, 2005.
ITEM 2.06 -- MATERIAL IMPAIRMENTS
The disclosure in Item 8.01 below relating to the expected loss on the sale
of Ontelaunee that the Company expects to recognize in the third quarter of
2005, is incorporated by reference herein.
ITEM 8.01 -- OTHER EVENTS
On October 7, 2005, the Company issued the press release attached hereto as
Exhibit 99.1. Subsequent to issuing this press release, the Company has refined
its estimated loss from the sale of Ontelaunee from approximately $129 million,
as disclosed in the press release, to approximately $137.2 million. The change
is primarily associated with greater operating margin recorded by Ontelaunee
than previously forecasted since July 1, 2005, the effective date of the sale.
Under the terms of the sales agreement, Ontelaunee's operating margin subsequent
to June 30, 2005, creates a downward adjustment in the purchase price. However,
the increased loss on sale is offset by the favorable impact of the increased
operating margin, thus resulting in no change to net income from discontinued
operations.
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 October 7, 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: October 13, 2005
EXHIBIT INDEX
Exhibit Description
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99.1 Press release dated October 7, 2005
================================================================================
EXHIBIT 99.1
NEWS RELEASE CONTACTS: (408) 995-5115
Media Relations: Katherine Potter, Ext. 1168
Investor Relations: Karen Bunton, Ext. 1121
Calpine Completes Sale of Ontelaunee Energy Center for $225 Million
(SAN JOSE, Calif.) /PR Newswire - First Call/ Oct. 7, 2005 - Calpine
Corporation [NYSE:CPN] has completed the sale of its 550-megawatt Ontelaunee
Energy Center to LS Power Equity Partners (LS Power) for $225 million, less
transaction costs. The previously announced 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 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. Net proceeds from the sale of Ontelaunee
will be used in accordance with the company's indentures. The company expects to
record a non-cash loss on the sale of Ontelaunee of approximately $129 million
in the quarter ended September 30, 2005.
"The Ontelaunee sale provides Calpine with the resources to concentrate our
activities in Calpine's core markets to further optimize our power operations,"
stated Calpine Executive Vice President and Chief Financial Officer Bob Kelly.
"The sale also provides Calpine with the opportunity to expand our energy
services business, providing LS Power a broad range of operational and power
services for Ontelaunee."
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 coordination
of power and fuel scheduling, for a six-month term.
The Ontelaunee Energy Center is a natural gas-fired, combined-cycle power
plant located in Ontelaunee Township, Pa. 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, and is building a plant
in Mexico. 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.