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Share Name | Share Symbol | Market | Type |
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Calpine Corp. | NYSE:CPN | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 15.25 | 0.00 | 01:00:00 |
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[X]
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended March 31, 2018
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Or
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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Page
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ABBREVIATION
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DEFINITION
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2008 Director Plan
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The Amended and Restated Calpine Corporation 2008 Director Incentive Plan
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2008 Equity Plan
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The Amended and Restated Calpine Corporation 2008 Equity Incentive Plan
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2017 Form 10-K
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Calpine Corporation’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on February 16, 2018
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2017 Director Plan
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The Calpine Corporation 2017 Equity Compensation Plan for Non-Employee Directors
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2017 Equity Plan
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The Calpine Corporation 2017 Equity Incentive Plan
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2017 First Lien Term Loan
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The $550 million first lien senior secured term loan, dated December 1, 2016, among Calpine Corporation, as borrower, the lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent and MUFG Union Bank, N.A., as collateral agent, repaid in a series of transactions on March 16, 2017, August 31, 2017, September 29, 2017, October 31, 2017 and November 30, 2017
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2019 First Lien Term Loan
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The $400 million first lien senior secured term loan, dated February 3, 2017, among Calpine Corporation, as borrower, the lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent and MUFG Union Bank, N.A., as collateral agent
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2022 First Lien Notes
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The $750 million aggregate principal amount of 6.0% senior secured notes due 2022, issued October 31, 2013
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2023 First Lien Notes
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The $1.2 billion aggregate principal amount of 7.875% senior secured notes due 2023, issued January 14, 2011, repaid in series of transactions on November 7, 2012, December 2, 2013, December 4, 2014, February 3, 2015, December 7, 2015, December 19, 2016 and March 6, 2017
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2023 First Lien Term Loans
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The $550 million first lien senior secured term loan, dated December 15, 2015, among Calpine Corporation, as borrower, the lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent and Goldman Sachs Credit Partners L.P., as collateral agent and the $562 million first lien senior secured term loan, dated May 31, 2016, among Calpine Corporation, as borrower, the lenders party thereto, Citibank, N.A., as administrative agent and MUFG Union Bank, N.A., as collateral agent
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2023 Senior Unsecured Notes
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The $1.25 billion aggregate principal amount of 5.375% senior unsecured notes due 2023, issued July 22, 2014
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2024 First Lien Notes
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The $490 million aggregate principal amount of 5.875% senior secured notes due 2024, issued October 31, 2013
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2024 First Lien Term Loan
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The $1.6 billion first lien senior secured term loan, dated May 28, 2015 (as amended December 21, 2016), among Calpine Corporation, as borrower, the lenders party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent and Goldman Sachs Credit Partners L.P., as collateral agent
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2024 Senior Unsecured Notes
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The $650 million aggregate principal amount of 5.5% senior unsecured notes due 2024, issued February 3, 2015
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2025 Senior Unsecured Notes
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The $1.55 billion aggregate principal amount of 5.75% senior unsecured notes due 2025, issued July 22, 2014
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ABBREVIATION
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DEFINITION
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2026 First Lien Notes
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Collectively, the $625 million aggregate principal amount of 5.25% senior secured notes due 2026, issued May 31, 2016, and the $560 million aggregate principal amount of 5.25% senior secured notes due 2026, issued on December 15, 2017
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Accounts Receivable Sales Program
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Receivables purchase agreement between Calpine Solutions and Calpine Receivables and the purchase and sale agreement between Calpine Receivables and an unaffiliated financial institution, both which allows for the revolving sale of up to $250 million in certain trade accounts receivables to third parties
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AOCI
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Accumulated Other Comprehensive Income
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Average availability
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Represents the total hours during the period that our plants were in-service or available for service as a percentage of the total hours in the period
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Average capacity factor, excluding peakers
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A measure of total actual power generation as a percent of total potential power generation. It is calculated by dividing (a) total MWh generated by our power plants, excluding peakers, by (b) the product of multiplying (i) the average total MW in operation, excluding peakers, during the period by (ii) the total hours in the period
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Btu
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British thermal unit(s), a measure of heat content
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Calpine Equity Incentive Plans
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Collectively, the Director Plans and the Equity Plans, which provided for grants of equity awards to Calpine non-union employees and non-employee members of Calpine’s Board of Directors
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Calpine Receivables
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Calpine Receivables, LLC, an indirect, wholly-owned subsidiary of Calpine, which was established as bankruptcy remote, special purpose subsidiary and is responsible for administering the Accounts Receivable Sales Program
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Calpine Solutions
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Calpine Energy Solutions, LLC, an indirect, wholly-owned subsidiary of Calpine, which is the third largest supplier of power to commercial and industrial retail customers in the United States with customers in 20 states, including presence in California, Texas, the Mid-Atlantic and the Northeast
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CCFC
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Calpine Construction Finance Company, L.P., an indirect, wholly-owned subsidiary of Calpine
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CCFC Term Loan
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The $1.0 billion first lien senior secured term loan entered into on December 15, 2017 among CCFC as borrower, the lenders party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent
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CCFC Term Loans
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Collectively, the $900 million first lien senior secured term loan and the $300 million first lien senior secured term loan entered into on May 3, 2013, and the $425 million first lien senior secured term loan entered into on February 26, 2014, between CCFC, as borrower, and Goldman Sachs Lending Partners, LLC, as administrative agent and as collateral agent, and the lenders party thereto, repaid on December 15, 2017
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CDHI
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Calpine Development Holdings, Inc., an indirect, wholly-owned subsidiary of Calpine
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CFTC
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Commodities Futures Trading Commission
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Champion Energy
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Champion Energy Marketing, LLC, which owns a retail electric provider that serves residential, governmental, commercial and industrial customers in deregulated electricity markets in 14 states and the District of Columbia, including presence in California, Texas, the Mid-Atlantic and Northeast
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Cogeneration
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Using a portion or all of the steam generated in the power generating process to supply a customer with steam for use in the customer’s operations
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Commodity expense
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The sum of our expenses from fuel and purchased energy expense, commodity transmission and transportation expense, environmental compliance expenses, ancillary retail expense and realized settlements from our marketing, hedging and optimization activities including natural gas and fuel oil transactions hedging future power sales
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ABBREVIATION
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DEFINITION
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Commodity Margin
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Measure of profit reviewed by our chief operating decision maker that includes revenue recognized on our wholesale and retail power sales activity, electric capacity sales, REC sales, steam sales, realized settlements associated with our marketing, hedging, optimization and trading activities, fuel and purchased energy expenses, commodity transmission and transportation expenses, environmental compliance expenses and ancillary retail expense. Commodity Margin is a measure of segment profit or loss under FASB Accounting Standards Codification 280 used by our chief operating decision maker to make decisions about allocating resources to the relevant segments and assessing their performance
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Commodity revenue
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The sum of our revenues recognized on our wholesale and retail power sales activity, electric capacity sales, REC sales, steam sales and realized settlements from our marketing, hedging, optimization and trading activities
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Company
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Calpine Corporation, a Delaware corporation, and its subsidiaries
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Corporate Revolving Facility
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The $1.47 billion aggregate amount revolving credit facility credit agreement, dated as of December 10, 2010, as amended on June 27, 2013, July 30, 2014, February 8, 2016, December 1, 2016, September 15, 2017, October 20, 2017 and March 8, 2018 among Calpine Corporation, the Bank of Tokyo-Mitsubishi UFJ, Ltd., as successor administrative agent, MUFG Union Bank, N.A., as successor collateral agent, the lenders party thereto and the other parties thereto
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Director Plans
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Collectively, the 2008 Director Plan and the 2017 Director Plan
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Equity Plans
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Collectively, the 2008 Equity Plan and the 2017 Equity Plan
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Exchange Act
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U.S. Securities Exchange Act of 1934, as amended
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FASB
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Financial Accounting Standards Board
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FDIC
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U.S. Federal Deposit Insurance Corporation
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FERC
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U.S. Federal Energy Regulatory Commission
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First Lien Notes
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Collectively, the 2022 First Lien Notes, the 2024 First Lien Notes and the 2026 First Lien Notes
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First Lien Term Loans
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Collectively, the 2019 First Lien Term Loan, the 2023 First Lien Term Loans and the 2024 First Lien Term Loan
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Geysers Assets
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Our geothermal power plant assets, including our steam extraction and gathering assets, located in northern California consisting of 13 operating power plants
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Greenfield LP
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Greenfield Energy Centre LP, a 50% partnership interest between certain of our subsidiaries and a third party which operates the Greenfield Energy Centre, a 1,038 MW natural gas-fired, combined-cycle power plant in Ontario, Canada
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Heat Rate(s)
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A measure of the amount of fuel required to produce a unit of power
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IRS
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U.S. Internal Revenue Service
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ISO(s)
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Independent System Operator which is an entity that coordinates, controls and monitors the operation of an electric power system
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ISO-NE
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ISO New England Inc., an independent, nonprofit RTO serving states in the New England area, including Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont
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KWh
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Kilowatt hour(s), a measure of power produced, purchased or sold
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LIBOR
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London Inter-Bank Offered Rate
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Lyondell
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LyondellBasell Industries N.V.
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ABBREVIATION
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DEFINITION
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Market Heat Rate(s)
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The regional power price divided by the corresponding regional natural gas price
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Merger
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Merger of Volt Merger Sub, Inc. with and into Calpine pursuant to the terms of the Merger Agreement, which was consummated on March 8, 2018
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Merger Agreement
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Agreement and Plan of Merger, dated, August 17, 2017, by and among Calpine Corporation, Volt Parent, LP and Volt Merger Sub, Inc.
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MMBtu
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Million Btu
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MW
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Megawatt(s), a measure of plant capacity
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MWh
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Megawatt hour(s), a measure of power produced, purchased or sold
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NOL(s)
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Net operating loss(es)
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North American Power
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North American Power & Gas, LLC, an indirect, wholly-owned subsidiary of Calpine, which was acquired on January 17, 2017 and is a retail energy supplier for homes and small businesses primarily concentrated in the Northeast U.S.
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OCI
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Other Comprehensive Income
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OMEC
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Otay Mesa Energy Center, LLC, an indirect, wholly owned subsidiary that owns the Otay Mesa Energy Center, a 608 MW power plant located in San Diego County, California
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OTC
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Over-the-Counter
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PJM
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PJM Interconnection is a RTO that coordinates the movement of wholesale electricity in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia
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PPA(s)
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Any term power purchase agreement or other contract for a physically settled sale (as distinguished from a financially settled future, option or other derivative or hedge transaction) of any power product, including power, capacity and/or ancillary services, in the form of a bilateral agreement or a written or oral confirmation of a transaction between two parties to a master agreement, including sales related to a tolling transaction in which the purchaser provides the fuel required by us to generate such power and we receive a variable payment to convert the fuel into power and steam
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REC(s)
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Renewable energy credit(s)
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Risk Management Policy
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Calpine’s policy applicable to all employees, contractors, representatives and agents, which defines the risk management framework and corporate governance structure for commodity risk, interest rate risk, currency risk and other risks
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RTO(s)
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Regional Transmission Organization which is an entity that coordinates, controls and monitors the operation of an electric power system and administers the transmission grid on a regional basis
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SDG&E
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San Diego Gas & Electric Company
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SEC
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U.S. Securities and Exchange Commission
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Securities Act
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U.S. Securities Act of 1933, as amended
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Senior Unsecured Notes
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Collectively, the 2023 Senior Unsecured Notes, the 2024 Senior Unsecured Notes and the 2025 Senior Unsecured Notes
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Short Term Credit Facility
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The $300 million aggregate amount credit agreement, dated as of April 11, 2018, among Calpine Corporation, Morgan Stanley Senior Funding, Inc., as administrative agent, and the lenders party thereto
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ABBREVIATION
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DEFINITION
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Spark Spread(s)
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The difference between the sales price of power per MWh and the cost of natural gas to produce it
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Steam Adjusted Heat Rate
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The adjusted Heat Rate for our natural gas-fired power plants, excluding peakers, calculated by dividing (a) the fuel consumed in Btu reduced by the net equivalent Btu in steam exported to a third party by (b) the KWh generated. Steam Adjusted Heat Rate is a measure of fuel efficiency, so the lower our Steam Adjusted Heat Rate, the lower our cost of generation
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U.S. GAAP
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Generally accepted accounting principles in the U.S.
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VAR
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Value-at-risk
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VIE(s)
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Variable interest entity(ies)
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Whitby
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Whitby Cogeneration Limited Partnership, a 50% partnership interest between certain of our subsidiaries and a third party, which operates Whitby, a 50 MW natural gas-fired, simple-cycle cogeneration power plant located in Ontario, Canada
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•
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The effect of the Merger on our customer relationships, operating results and business;
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Financial results that may be volatile and may not reflect historical trends due to, among other things, seasonality of demand, fluctuations in prices for commodities such as natural gas and power, changes in U.S. macroeconomic conditions, fluctuations in liquidity and volatility in the energy commodities markets and our ability and extent to which we hedge risks;
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Laws, regulations and market rules in the wholesale and retail markets in which we participate and our ability to effectively respond to changes in laws, regulations or market rules or the interpretation thereof including those related to the environment, derivative transactions and market design in the regions in which we operate;
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Our ability to manage our liquidity needs, access the capital markets when necessary and comply with covenants under our Senior Unsecured Notes, First Lien Notes, First Lien Term Loans, Corporate Revolving Facility, CCFC Term Loan and other existing financing obligations;
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Risks associated with the operation, construction and development of power plants, including unscheduled outages or delays and plant efficiencies;
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Risks related to our geothermal resources, including the adequacy of our steam reserves, unusual or unexpected steam field well and pipeline maintenance requirements, variables associated with the injection of water to the steam reservoir and potential regulations or other requirements related to seismicity concerns that may delay or increase the cost of developing or operating geothermal resources;
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Competition, including from renewable sources of power, interference by states in competitive power markets through subsidies or similar support for new or existing power plants, and other risks associated with marketing and selling power in the evolving energy markets;
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Structural changes in the supply and demand of power, resulting from the development of new fuels or technologies and demand-side management tools (such as distributed generation, power storage and other technologies);
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The expiration or early termination of our PPAs and the related results on revenues;
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Future capacity revenue may not occur at expected levels;
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Natural disasters, such as hurricanes, earthquakes, droughts, wildfires and floods, acts of terrorism or cyber attacks that may affect our power plants or the markets our power plants or retail operations serve and our corporate offices;
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Disruptions in or limitations on the transportation of natural gas or fuel oil and the transmission of power;
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Our ability to manage our counterparty and customer exposure and credit risk, including our commodity positions;
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Our ability to attract, motivate and retain key employees;
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Present and possible future claims, litigation and enforcement actions that may arise from noncompliance with market rules promulgated by the SEC, CFTC, FERC and other regulatory bodies; and
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Other risks identified in this Report, in our 2017 Form 10-K and in other reports filed by us with the SEC.
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Item 1.
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Financial Statements
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Three Months Ended March 31,
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2018
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2017
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(in millions)
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Operating revenues:
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Commodity revenue
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$
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2,396
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$
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2,063
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Mark-to-market gain (loss)
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(391
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)
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214
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Other revenue
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4
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4
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Operating revenues
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2,009
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2,281
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Operating expenses:
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Fuel and purchased energy expense:
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Commodity expense
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1,790
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1,533
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Mark-to-market (gain) loss
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(20
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)
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159
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Fuel and purchased energy expense
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1,770
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1,692
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Operating and maintenance expense
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275
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282
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Depreciation and amortization expense
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201
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206
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General and other administrative expense
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60
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40
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Other operating expenses
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37
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20
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Total operating expenses
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2,343
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2,240
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(Gain) on sale of assets, net
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—
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(27
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)
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(Income) from unconsolidated subsidiaries
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(6
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)
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(4
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)
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Income (loss) from operations
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(328
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)
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72
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Interest expense
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151
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159
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Debt extinguishment costs
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—
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24
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Other (income) expense, net
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7
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2
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Loss before income taxes
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(486
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)
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(113
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)
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Income tax expense (benefit)
|
108
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|
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(61
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)
|
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Net loss
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(594
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)
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(52
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)
|
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Net income attributable to the noncontrolling interest
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(4
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)
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|
(4
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)
|
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Net loss attributable to Calpine
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$
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(598
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)
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|
$
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(56
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)
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|
Three Months Ended March 31,
|
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2018
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|
2017
|
||||
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(in millions)
|
||||||
Net loss
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$
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(594
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)
|
|
$
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(52
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)
|
Cash flow hedging activities:
|
|
|
|
||||
Gain (loss) on cash flow hedges before reclassification adjustment for cash flow hedges realized in net loss
|
48
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|
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(15
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)
|
||
Reclassification adjustment for loss on cash flow hedges realized in net loss
|
7
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|
|
11
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|
||
Foreign currency translation gain (loss)
|
(6
|
)
|
|
2
|
|
||
Income tax expense
|
(11
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)
|
|
—
|
|
||
Other comprehensive income (loss)
|
38
|
|
|
(2
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)
|
||
Comprehensive loss
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(556
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)
|
|
(54
|
)
|
||
Comprehensive (income) attributable to the noncontrolling interest
|
(6
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)
|
|
(4
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)
|
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Comprehensive loss attributable to Calpine
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$
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(562
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)
|
|
$
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(58
|
)
|
|
|
March 31,
|
|
December 31,
|
||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions, except share and per share amounts)
|
||||||
ASSETS
|
|
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|
||||
Current assets:
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|
|
|
|
||||
Cash and cash equivalents ($38 and $39 attributable to VIEs)
|
|
$
|
215
|
|
|
$
|
284
|
|
Accounts receivable, net of allowance of $15 and $9
|
|
839
|
|
|
970
|
|
||
Inventories
|
|
581
|
|
|
498
|
|
||
Margin deposits and other prepaid expense
|
|
275
|
|
|
203
|
|
||
Restricted cash, current ($64 and $74 attributable to VIEs)
|
|
128
|
|
|
134
|
|
||
Derivative assets, current
|
|
197
|
|
|
174
|
|
||
Other current assets
|
|
46
|
|
|
43
|
|
||
Total current assets
|
|
2,281
|
|
|
2,306
|
|
||
Property, plant and equipment, net ($4,007 and $4,048 attributable to VIEs)
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|
12,623
|
|
|
12,724
|
|
||
Restricted cash, net of current portion ($27 and $24 attributable to VIEs)
|
|
28
|
|
|
25
|
|
||
Investments in unconsolidated subsidiaries
|
|
110
|
|
|
106
|
|
||
Long-term derivative assets
|
|
228
|
|
|
218
|
|
||
Goodwill
|
|
242
|
|
|
242
|
|
||
Intangible assets, net
|
|
485
|
|
|
512
|
|
||
Other assets ($24 and $22 attributable to VIEs)
|
|
280
|
|
|
320
|
|
||
Total assets
|
|
$
|
16,277
|
|
|
$
|
16,453
|
|
LIABILITIES & STOCKHOLDER’S EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
709
|
|
|
$
|
777
|
|
Accrued interest payable
|
|
134
|
|
|
104
|
|
||
Debt, current portion ($177 and $175 attributable to VIEs)
|
|
227
|
|
|
225
|
|
||
Derivative liabilities, current
|
|
338
|
|
|
197
|
|
||
Other current liabilities
|
|
535
|
|
|
571
|
|
||
Total current liabilities
|
|
1,943
|
|
|
1,874
|
|
||
Debt, net of current portion ($2,191 and $2,238 attributable to VIEs)
|
|
11,455
|
|
|
11,180
|
|
||
Long-term derivative liabilities
|
|
178
|
|
|
119
|
|
||
Other long-term liabilities
|
|
254
|
|
|
213
|
|
||
Total liabilities
|
|
13,830
|
|
|
13,386
|
|
||
|
|
|
|
|
||||
Commitments and contingencies (see Note 11)
|
|
|
|
|
||||
Stockholder’s equity:
|
|
|
|
|
||||
Common stock, $0.001 par value per share; authorized 1,400,000,000 shares, 105.15966616429208 and 361,677,891 shares issued, respectively, and 105.15966616429208 and 360,516,091 shares outstanding, respectively
|
|
—
|
|
|
—
|
|
||
Treasury stock, at cost, nil and 1,161,800 shares, respectively
|
|
—
|
|
|
(15
|
)
|
||
Additional paid-in capital
|
|
9,582
|
|
|
9,661
|
|
||
Accumulated deficit
|
|
(7,150
|
)
|
|
(6,552
|
)
|
||
Accumulated other comprehensive loss
|
|
(70
|
)
|
|
(106
|
)
|
||
Total Calpine stockholder’s equity
|
|
2,362
|
|
|
2,988
|
|
||
Noncontrolling interest
|
|
85
|
|
|
79
|
|
||
Total stockholder’s equity
|
|
2,447
|
|
|
3,067
|
|
||
Total liabilities and stockholder’s equity
|
|
$
|
16,277
|
|
|
$
|
16,453
|
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Noncontrolling
Interest
|
|
Total
Stockholder’s
Equity
|
||||||||||||||
Balance, December 31, 2017
|
$
|
—
|
|
|
$
|
(15
|
)
|
|
$
|
9,661
|
|
|
$
|
(6,552
|
)
|
|
$
|
(106
|
)
|
|
$
|
79
|
|
|
$
|
3,067
|
|
Treasury stock transactions
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|||||||
Effects of the Merger
|
—
|
|
|
22
|
|
|
(120
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
|||||||
Contribution from the noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|||||||
Distribution to the noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(598
|
)
|
|
—
|
|
|
4
|
|
|
(594
|
)
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36
|
|
|
2
|
|
|
38
|
|
|||||||
Balance, March 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,582
|
|
|
$
|
(7,150
|
)
|
|
$
|
(70
|
)
|
|
$
|
85
|
|
|
$
|
2,447
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net loss
|
|
$
|
(594
|
)
|
|
$
|
(52
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
(1)
|
|
223
|
|
|
265
|
|
||
Debt extinguishment costs
|
|
—
|
|
|
24
|
|
||
Deferred income taxes
|
|
69
|
|
|
(61
|
)
|
||
Gain on sale of assets, net
|
|
—
|
|
|
(27
|
)
|
||
Mark-to-market activity, net
|
|
369
|
|
|
(55
|
)
|
||
(Income) from unconsolidated subsidiaries
|
|
(6
|
)
|
|
(4
|
)
|
||
Return on investments from unconsolidated subsidiaries
|
|
3
|
|
|
13
|
|
||
Stock-based compensation expense
|
|
57
|
|
|
8
|
|
||
Other
|
|
6
|
|
|
—
|
|
||
Change in operating assets and liabilities, net of effects of acquisitions:
|
|
|
|
|
||||
Accounts receivable
|
|
164
|
|
|
82
|
|
||
Derivative instruments, net
|
|
(150
|
)
|
|
(29
|
)
|
||
Other assets
|
|
(184
|
)
|
|
33
|
|
||
Accounts payable and accrued expenses
|
|
(46
|
)
|
|
(105
|
)
|
||
Other liabilities
|
|
(26
|
)
|
|
20
|
|
||
Net cash (used in) provided by operating activities
|
|
(115
|
)
|
|
112
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of property, plant and equipment
|
|
(114
|
)
|
|
(91
|
)
|
||
Proceeds from sale of Osprey Energy Center
|
|
—
|
|
|
162
|
|
||
Purchase of North American Power, net of cash acquired
|
|
—
|
|
|
(111
|
)
|
||
Other
|
|
(1
|
)
|
|
16
|
|
||
Net cash used in investing activities
|
|
(115
|
)
|
|
(24
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Borrowings under First Lien Term Loans
|
|
—
|
|
|
396
|
|
||
Repayment of CCFC Term Loan, CCFC Term Loans and First Lien Term Loans
|
|
(10
|
)
|
|
(161
|
)
|
||
Repurchase of First Lien Notes
|
|
—
|
|
|
(453
|
)
|
||
Borrowings under Corporate Revolving Facility
|
|
325
|
|
|
25
|
|
||
Repayments of project financing, notes payable and other
|
|
(43
|
)
|
|
(44
|
)
|
||
Distribution to noncontrolling interest holder
|
|
(2
|
)
|
|
(6
|
)
|
||
Financing costs
|
|
(6
|
)
|
|
(26
|
)
|
||
Stock repurchases
|
|
(79
|
)
|
|
—
|
|
||
Shares repurchased for tax withholding on stock-based awards
|
|
(7
|
)
|
|
(6
|
)
|
||
Other
|
|
(20
|
)
|
|
1
|
|
||
Net cash provided by (used in) financing activities
|
|
158
|
|
|
(274
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
|
(72
|
)
|
|
(186
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
|
443
|
|
|
606
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
|
$
|
371
|
|
|
$
|
420
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Cash paid during the period for:
|
|
|
|
|
||||
Interest, net of amounts capitalized
|
|
$
|
110
|
|
|
$
|
141
|
|
Income taxes
|
|
$
|
4
|
|
|
$
|
3
|
|
|
|
|
|
|
||||
Supplemental disclosure of non-cash investing activities:
|
|
|
|
|
||||
Change in capital expenditures included in accounts payable
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
(1)
|
Includes amortization recorded in Commodity revenue and Commodity expense associated with intangible assets and amortization recorded in interest expense associated with debt issuance costs and discounts.
|
1.
|
Basis of Presentation and Summary of Significant Accounting Policies
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Current
|
|
Non-Current
|
|
Total
|
|
Current
|
|
Non-Current
|
|
Total
|
||||||||||||
Debt service
|
$
|
12
|
|
|
$
|
7
|
|
|
$
|
19
|
|
|
$
|
11
|
|
|
$
|
8
|
|
|
$
|
19
|
|
Construction/major maintenance
|
25
|
|
|
18
|
|
|
43
|
|
|
28
|
|
|
16
|
|
|
44
|
|
||||||
Security/project/insurance
|
88
|
|
|
—
|
|
|
88
|
|
|
92
|
|
|
—
|
|
|
92
|
|
||||||
Other
|
3
|
|
|
3
|
|
|
6
|
|
|
3
|
|
|
1
|
|
|
4
|
|
||||||
Total
|
$
|
128
|
|
|
$
|
28
|
|
|
$
|
156
|
|
|
$
|
134
|
|
|
$
|
25
|
|
|
$
|
159
|
|
|
March 31, 2018
|
|
December 31, 2017
|
|
Depreciable Lives
|
|||||||
Buildings, machinery and equipment
|
$
|
16,512
|
|
|
$
|
16,506
|
|
|
3
|
–
|
46
|
Years
|
Geothermal properties
|
1,500
|
|
|
1,494
|
|
|
13
|
–
|
58
|
Years
|
||
Other
|
252
|
|
|
236
|
|
|
3
|
–
|
46
|
Years
|
||
|
18,264
|
|
|
18,236
|
|
|
|
|
|
|
||
Less: Accumulated depreciation
|
6,545
|
|
|
6,383
|
|
|
|
|
|
|
||
|
11,719
|
|
|
11,853
|
|
|
|
|
|
|
||
Land
|
117
|
|
|
117
|
|
|
|
|
|
|
||
Construction in progress
|
787
|
|
|
754
|
|
|
|
|
|
|
||
Property, plant and equipment, net
|
$
|
12,623
|
|
|
$
|
12,724
|
|
|
|
|
|
|
2.
|
Merger
|
3.
|
Revenue from Contracts with Customers
|
|
Wholesale
|
|
|
|
|
|
|
||||||||||||||||
|
West
|
|
Texas
|
|
East
|
|
Retail
|
|
Elimination
|
|
Total
|
||||||||||||
Third Party:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Energy & other products
|
$
|
199
|
|
|
$
|
304
|
|
|
$
|
132
|
|
|
$
|
443
|
|
|
$
|
—
|
|
|
$
|
1,078
|
|
Capacity
|
19
|
|
|
26
|
|
|
149
|
|
|
—
|
|
|
—
|
|
|
194
|
|
||||||
Revenues relating to physical or executory contracts – third party
|
$
|
218
|
|
|
$
|
330
|
|
|
$
|
281
|
|
|
$
|
443
|
|
|
$
|
—
|
|
|
$
|
1,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Affiliate
(1)
:
|
$
|
8
|
|
|
$
|
4
|
|
|
$
|
21
|
|
|
$
|
1
|
|
|
$
|
(34
|
)
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenues relating to leases and derivative instruments
(2)
|
|
|
|
|
|
|
|
|
|
|
$
|
737
|
|
||||||||||
Total operating revenues
|
|
|
|
|
|
|
|
|
|
|
$
|
2,009
|
|
(1)
|
Affiliate energy, other and capacity revenues reflect revenues on transactions between wholesale and retail affiliates excluding affiliate activity related to leases and derivative instruments. All such activity supports retail supply needs from the wholesale business and/or allows for collateral margin netting efficiencies at Calpine Corporation.
|
(2)
|
Revenues relating to contracts accounted for as leases and derivatives include energy and capacity revenues relating to PPAs that we are required to account for as operating leases and physical and financial commodity derivative contracts, primarily relating to power, natural gas and environmental products. For revenue related to derivative instruments, includes revenue recorded in Commodity revenue and mark-to-market gain (loss) on our Consolidated Condensed Statement of Operations.
|
4.
|
Variable Interest Entities and Unconsolidated Investments
|
|
Ownership Interest as of
March 31, 2018
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Greenfield LP
|
50%
|
|
$
|
95
|
|
|
$
|
92
|
|
Whitby
|
50%
|
|
7
|
|
|
6
|
|
||
Calpine Receivables
|
100%
|
|
8
|
|
|
8
|
|
||
Total investments in unconsolidated subsidiaries
|
|
|
$
|
110
|
|
|
$
|
106
|
|
5.
|
Debt
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Senior Unsecured Notes
|
$
|
3,419
|
|
|
$
|
3,417
|
|
First Lien Term Loans
|
2,990
|
|
|
2,995
|
|
||
First Lien Notes
|
2,396
|
|
|
2,396
|
|
||
Project financing, notes payable and other
|
1,461
|
|
|
1,498
|
|
||
CCFC Term Loan
|
980
|
|
|
984
|
|
||
Capital lease obligations
|
111
|
|
|
115
|
|
||
Corporate Revolving Facility
|
325
|
|
|
—
|
|
||
Subtotal
|
11,682
|
|
|
11,405
|
|
||
Less: Current maturities
|
227
|
|
|
225
|
|
||
Total long-term debt
|
$
|
11,455
|
|
|
$
|
11,180
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
2023 Senior Unsecured Notes
|
$
|
1,240
|
|
|
$
|
1,239
|
|
2024 Senior Unsecured Notes
|
644
|
|
|
644
|
|
||
2025 Senior Unsecured Notes
|
1,535
|
|
|
1,534
|
|
||
Total Senior Unsecured Notes
|
$
|
3,419
|
|
|
$
|
3,417
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
2019 First Lien Term Loan
|
$
|
389
|
|
|
$
|
389
|
|
2023 First Lien Term Loans
|
1,063
|
|
|
1,064
|
|
||
2024 First Lien Term Loan
|
1,538
|
|
|
1,542
|
|
||
Total First Lien Term Loans
|
$
|
2,990
|
|
|
$
|
2,995
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
2022 First Lien Notes
|
$
|
742
|
|
|
$
|
741
|
|
2024 First Lien Notes
|
485
|
|
|
485
|
|
||
2026 First Lien Notes
|
1,169
|
|
|
1,170
|
|
||
Total First Lien Notes
|
$
|
2,396
|
|
|
$
|
2,396
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Corporate Revolving Facility
(1)
|
$
|
953
|
|
|
$
|
629
|
|
CDHI
|
235
|
|
|
244
|
|
||
Various project financing facilities
|
181
|
|
|
196
|
|
||
Total
|
$
|
1,369
|
|
|
$
|
1,069
|
|
(1)
|
The Corporate Revolving Facility represents our primary revolving facility.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
||||||||
Senior Unsecured Notes
|
$
|
3,203
|
|
|
$
|
3,419
|
|
|
$
|
3,294
|
|
|
$
|
3,417
|
|
First Lien Term Loans
|
3,047
|
|
|
2,990
|
|
|
3,043
|
|
|
2,995
|
|
||||
First Lien Notes
|
2,398
|
|
|
2,396
|
|
|
2,437
|
|
|
2,396
|
|
||||
Project financing, notes payable and other
(1)
|
1,397
|
|
|
1,372
|
|
|
1,439
|
|
|
1,409
|
|
||||
CCFC Term Loan
|
998
|
|
|
980
|
|
|
1,000
|
|
|
984
|
|
||||
Corporate Revolving Facility
|
325
|
|
|
325
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
11,368
|
|
|
$
|
11,482
|
|
|
$
|
11,213
|
|
|
$
|
11,201
|
|
(1)
|
Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP.
|
6.
|
Assets and Liabilities with Recurring Fair Value Measurements
|
|
Assets and Liabilities with Recurring Fair Value Measures as of March 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
(1)
|
$
|
131
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
131
|
|
Commodity instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity exchange traded derivatives contracts
|
629
|
|
|
—
|
|
|
—
|
|
|
629
|
|
||||
Commodity forward contracts
(2)
|
—
|
|
|
800
|
|
|
263
|
|
|
1,063
|
|
||||
Interest rate hedging instruments
|
—
|
|
|
68
|
|
|
—
|
|
|
68
|
|
||||
Effect of netting and allocation of collateral
(3)(4)
|
(629
|
)
|
|
(678
|
)
|
|
(28
|
)
|
|
(1,335
|
)
|
||||
Total assets
|
$
|
131
|
|
|
$
|
190
|
|
|
$
|
235
|
|
|
$
|
556
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity exchange traded derivatives contracts
|
$
|
733
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
733
|
|
Commodity forward contracts
(2)
|
—
|
|
|
1,184
|
|
|
132
|
|
|
1,316
|
|
||||
Interest rate hedging instruments
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Effect of netting and allocation of collateral
(3)(4)
|
(733
|
)
|
|
(795
|
)
|
|
(26
|
)
|
|
(1,554
|
)
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
410
|
|
|
$
|
106
|
|
|
$
|
516
|
|
|
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
(1)
|
$
|
131
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
131
|
|
Commodity instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity exchange traded derivatives contracts
|
746
|
|
|
—
|
|
|
—
|
|
|
746
|
|
||||
Commodity forward contracts
(2)
|
—
|
|
|
327
|
|
|
265
|
|
|
592
|
|
||||
Interest rate hedging instruments
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||
Effect of netting and allocation of collateral
(3)(4)
|
(746
|
)
|
|
(206
|
)
|
|
(23
|
)
|
|
(975
|
)
|
||||
Total assets
|
$
|
131
|
|
|
$
|
150
|
|
|
$
|
242
|
|
|
$
|
523
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Commodity instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity exchange traded derivatives contracts
|
$
|
790
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
790
|
|
Commodity forward contracts
(2)
|
—
|
|
|
461
|
|
|
68
|
|
|
529
|
|
||||
Interest rate hedging instruments
|
—
|
|
|
34
|
|
|
—
|
|
|
34
|
|
||||
Effect of netting and allocation of collateral
(3)(4)
|
(790
|
)
|
|
(224
|
)
|
|
(23
|
)
|
|
(1,037
|
)
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
271
|
|
|
$
|
45
|
|
|
$
|
316
|
|
(1)
|
At
March 31, 2018
and
December 31, 2017
, we had cash equivalents of
$20 million
and
$21 million
included in cash and cash equivalents and
$111 million
and
$110 million
included in restricted cash, respectively.
|
(2)
|
Includes OTC swaps and options and retail contracts.
|
(3)
|
We offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation; therefore, amounts recognized for the right to reclaim, or the obligation to return, cash collateral are presented net with the corresponding derivative instrument fair values. See Note 7 for further discussion of our derivative instruments subject to master netting arrangements.
|
(4)
|
Cash collateral posted with (received from) counterparties allocated to level 1, level 2 and level 3 derivative instruments totaled
$104 million
,
$117 million
and
$(2) million
, respectively, at
March 31, 2018
. Cash collateral posted with (received from) counterparties allocated to level 1, level 2 and level 3 derivative instruments totaled
$44 million
,
$18 million
and
nil
, respectively, at
December 31, 2017
.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Balance, beginning of period
|
|
$
|
197
|
|
|
$
|
416
|
|
Realized and mark-to-market gains (losses):
|
|
|
|
|
||||
Included in net income (loss):
|
|
|
|
|
||||
Included in operating revenues
(1)
|
|
(57
|
)
|
|
113
|
|
||
Included in fuel and purchased energy expense
(2)
|
|
(2
|
)
|
|
13
|
|
||
Change in collateral
|
|
(2
|
)
|
|
(9
|
)
|
||
Purchases and settlements:
|
|
|
|
|
||||
Purchases
|
|
4
|
|
|
—
|
|
||
Settlements
|
|
(14
|
)
|
|
(26
|
)
|
||
Transfers in and/or out of level 3
(3)
:
|
|
|
|
|
||||
Transfers into level 3
(4)
|
|
6
|
|
|
(7
|
)
|
||
Transfers out of level 3
(5)
|
|
(3
|
)
|
|
(150
|
)
|
||
Balance, end of period
|
|
$
|
129
|
|
|
$
|
350
|
|
Change in unrealized gains (losses) relating to instruments still held at end of period
|
|
$
|
(59
|
)
|
|
$
|
126
|
|
(1)
|
For power contracts and other power-related products, included on our Consolidated Condensed Statements of Operations.
|
(2)
|
For natural gas and power contracts, swaps and options, included on our Consolidated Condensed Statements of Operations.
|
(3)
|
We transfer amounts among levels of the fair value hierarchy as of the end of each period. There were
no
transfers into or out of level 1 for each of the three months ended
March 31, 2018
and
2017
.
|
(4)
|
We had
$6 million
in gains and
$(7) million
in losses transferred out of level 2 into level 3 for the three months ended
March 31, 2018
and
2017
, respectively, due to changes in market liquidity in various power markets.
|
(5)
|
We had
$3 million
and
$150 million
in gains transferred out of level 3 into level 2 for the three months ended
March 31, 2018
and
2017
, respectively, due to changes in market liquidity in various power markets.
|
7.
|
Derivative Instruments
|
Derivative Instruments
|
|
Notional Amounts
|
|
||||||
|
March 31, 2018
|
|
December 31, 2017
|
|
|||||
Power (MWh)
|
|
(147
|
)
|
|
(119
|
)
|
|
||
Natural gas (MMBtu)
|
|
845
|
|
|
405
|
|
|
||
Environmental credits (Tonnes)
|
|
13
|
|
|
12
|
|
|
||
Interest rate hedging instruments
|
|
$
|
4,600
|
|
|
$
|
4,600
|
|
|
|
|
March 31, 2018
|
||||||||||
|
|
Gross Amounts of Assets and (Liabilities)
|
|
Gross Amounts Offset on the Consolidated Condensed Balance Sheets
|
|
Net Amount Presented on the Consolidated Condensed Balance Sheets
(1)
|
||||||
Derivative assets:
|
|
|
|
|
|
|
||||||
Commodity exchange traded derivatives contracts
|
|
$
|
489
|
|
|
$
|
(489
|
)
|
|
$
|
—
|
|
Commodity forward contracts
|
|
816
|
|
|
(643
|
)
|
|
173
|
|
|||
Interest rate hedging instruments
|
|
24
|
|
|
—
|
|
|
24
|
|
|||
Total current derivative assets
(2)
|
|
$
|
1,329
|
|
|
$
|
(1,132
|
)
|
|
$
|
197
|
|
Commodity exchange traded derivatives contracts
|
|
140
|
|
|
(140
|
)
|
|
—
|
|
|||
Commodity forward contracts
|
|
247
|
|
|
(63
|
)
|
|
184
|
|
|||
Interest rate hedging instruments
|
|
44
|
|
|
—
|
|
|
44
|
|
|||
Total long-term derivative assets
(2)
|
|
$
|
431
|
|
|
$
|
(203
|
)
|
|
$
|
228
|
|
Total derivative assets
|
|
$
|
1,760
|
|
|
$
|
(1,335
|
)
|
|
$
|
425
|
|
|
|
|
|
|
|
|
||||||
Derivative (liabilities):
|
|
|
|
|
|
|
||||||
Commodity exchange traded derivatives contracts
|
|
$
|
(561
|
)
|
|
$
|
561
|
|
|
$
|
—
|
|
Commodity forward contracts
|
|
(1,039
|
)
|
|
714
|
|
|
(325
|
)
|
|||
Interest rate hedging instruments
|
|
(13
|
)
|
|
—
|
|
|
(13
|
)
|
|||
Total current derivative (liabilities)
(2)
|
|
$
|
(1,613
|
)
|
|
$
|
1,275
|
|
|
$
|
(338
|
)
|
Commodity exchange traded derivatives contracts
|
|
(172
|
)
|
|
172
|
|
|
—
|
|
|||
Commodity forward contracts
|
|
(277
|
)
|
|
107
|
|
|
(170
|
)
|
|||
Interest rate hedging instruments
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
|||
Total long-term derivative (liabilities)
(2)
|
|
$
|
(457
|
)
|
|
$
|
279
|
|
|
$
|
(178
|
)
|
Total derivative liabilities
|
|
$
|
(2,070
|
)
|
|
$
|
1,554
|
|
|
$
|
(516
|
)
|
Net derivative assets (liabilities)
|
|
$
|
(310
|
)
|
|
$
|
219
|
|
|
$
|
(91
|
)
|
|
|
December 31, 2017
|
||||||||||
|
|
Gross Amounts of Assets and (Liabilities)
|
|
Gross Amounts Offset on the Consolidated Condensed Balance Sheets
|
|
Net Amount Presented on the Consolidated Condensed Balance Sheets
(1)
|
||||||
Derivative assets:
|
|
|
|
|
|
|
||||||
Commodity exchange traded derivatives contracts
|
|
$
|
672
|
|
|
$
|
(672
|
)
|
|
$
|
—
|
|
Commodity forward contracts
|
|
361
|
|
|
(194
|
)
|
|
167
|
|
|||
Interest rate hedging instruments
|
|
7
|
|
|
—
|
|
|
7
|
|
|||
Total current derivative assets
(3)
|
|
$
|
1,040
|
|
|
$
|
(866
|
)
|
|
$
|
174
|
|
Commodity exchange traded derivatives contracts
|
|
74
|
|
|
(74
|
)
|
|
—
|
|
|||
Commodity forward contracts
|
|
231
|
|
|
(32
|
)
|
|
199
|
|
|||
Interest rate hedging instruments
|
|
22
|
|
|
(3
|
)
|
|
19
|
|
|||
Total long-term derivative assets
(3)
|
|
$
|
327
|
|
|
$
|
(109
|
)
|
|
$
|
218
|
|
Total derivative assets
|
|
$
|
1,367
|
|
|
$
|
(975
|
)
|
|
$
|
392
|
|
|
|
|
|
|
|
|
||||||
Derivative (liabilities):
|
|
|
|
|
|
|
||||||
Commodity exchange traded derivatives contracts
|
|
$
|
(702
|
)
|
|
$
|
702
|
|
|
$
|
—
|
|
Commodity forward contracts
|
|
(389
|
)
|
|
209
|
|
|
(180
|
)
|
|||
Interest rate hedging instruments
|
|
(17
|
)
|
|
—
|
|
|
(17
|
)
|
|||
Total current derivative (liabilities)
(3)
|
|
$
|
(1,108
|
)
|
|
$
|
911
|
|
|
$
|
(197
|
)
|
Commodity exchange traded derivatives contracts
|
|
(88
|
)
|
|
88
|
|
|
—
|
|
|||
Commodity forward contracts
|
|
(140
|
)
|
|
35
|
|
|
(105
|
)
|
|||
Interest rate hedging instruments
|
|
(17
|
)
|
|
3
|
|
|
(14
|
)
|
|||
Total long-term derivative (liabilities)
(3)
|
|
$
|
(245
|
)
|
|
$
|
126
|
|
|
$
|
(119
|
)
|
Total derivative liabilities
|
|
$
|
(1,353
|
)
|
|
$
|
1,037
|
|
|
$
|
(316
|
)
|
Net derivative assets (liabilities)
|
|
$
|
14
|
|
|
$
|
62
|
|
|
$
|
76
|
|
(1)
|
At
March 31, 2018
and
December 31, 2017
, we had
$206 million
and
$155 million
of collateral under master netting arrangements that were not offset against our derivative instruments on the Consolidated Condensed Balance Sheets primarily related to initial margin requirements.
|
(2)
|
At
March 31, 2018
, current and long-term derivative assets are shown net of collateral of
$(21) million
and
$(3) million
, respectively, and current and long-term derivative liabilities are shown net of collateral of
$164 million
and
$79 million
, respectively.
|
(3)
|
At
December 31, 2017
, current and long-term derivative assets are shown net of collateral of
$(8) million
and
$(2) million
, respectively, and current and long-term derivative liabilities are shown net of collateral of
$52 million
and
$20 million
, respectively.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||
|
Fair Value
of Derivative
Assets
|
|
Fair Value
of Derivative
Liabilities
|
|
Fair Value
of Derivative
Assets
|
|
Fair Value
of Derivative
Liabilities
|
||||||||
Derivatives designated as cash flow hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Interest rate hedging instruments
|
$
|
67
|
|
|
$
|
21
|
|
|
$
|
26
|
|
|
$
|
31
|
|
Total derivatives designated as cash flow hedging instruments
|
$
|
67
|
|
|
$
|
21
|
|
|
$
|
26
|
|
|
$
|
31
|
|
|
|
|
|
|
|
|
|
||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Commodity instruments
|
$
|
357
|
|
|
$
|
495
|
|
|
$
|
366
|
|
|
$
|
285
|
|
Interest rate hedging instruments
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total derivatives not designated as hedging instruments
|
$
|
358
|
|
|
$
|
495
|
|
|
$
|
366
|
|
|
$
|
285
|
|
Total derivatives
|
$
|
425
|
|
|
$
|
516
|
|
|
$
|
392
|
|
|
$
|
316
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Realized gain (loss)
(1)(2)
|
|
|
|
||||
Commodity derivative instruments
|
$
|
(3
|
)
|
|
$
|
29
|
|
Total realized gain (loss)
|
$
|
(3
|
)
|
|
$
|
29
|
|
|
|
|
|
||||
Mark-to-market gain (loss)
(3)
|
|
|
|
||||
Commodity derivative instruments
|
$
|
(371
|
)
|
|
$
|
55
|
|
Interest rate hedging instruments
|
2
|
|
|
—
|
|
||
Total mark-to-market gain (loss)
|
$
|
(369
|
)
|
|
$
|
55
|
|
Total activity, net
|
$
|
(372
|
)
|
|
$
|
84
|
|
(1)
|
Does not include the realized value associated with derivative instruments that settle through physical delivery.
|
(2)
|
Includes amortization of acquisition date fair value of financial derivative activity related to the acquisition of Champion Energy, Calpine Solutions and North American Power.
|
(3)
|
In addition to changes in market value on derivatives not designated as hedges, changes in mark-to-market gain (loss) also includes hedge ineffectiveness and adjustments to reflect changes in credit default risk exposure.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Realized and mark-to-market gain (loss)
(1)
|
|
|
|
||||
Derivatives contracts included in operating revenues
(2)(3)
|
$
|
(359
|
)
|
|
$
|
223
|
|
Derivatives contracts included in fuel and purchased energy expense
(2)(3)
|
(15
|
)
|
|
(139
|
)
|
||
Interest rate hedging instruments included in interest expense
|
2
|
|
|
—
|
|
||
Total activity, net
|
$
|
(372
|
)
|
|
$
|
84
|
|
(1)
|
In addition to changes in market value on derivatives not designated as hedges, changes in mark-to-market gain (loss) also includes adjustments to reflect changes in credit default risk exposure and hedge ineffectiveness.
|
(2)
|
Does not include the realized value associated with derivative instruments that settle through physical delivery.
|
(3)
|
Includes amortization of acquisition date fair value of financial derivative activity related to the acquisition of Champion Energy, Calpine Solutions and North American Power.
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||||
|
Gain (Loss) Recognized in
OCI (Effective Portion)
|
|
Gain (Loss) Reclassified from
AOCI into Income (Effective Portion)
(3)
|
||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
Affected Line Item on the Consolidated Condensed Statements of Operations
|
||||||||
Interest rate hedging instruments
(1)(2)
|
$
|
54
|
|
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
|
$
|
(11
|
)
|
|
Interest expense
|
Interest rate hedging instruments
(1)(2)
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
Depreciation expense
|
||||
Total
|
$
|
55
|
|
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
$
|
(11
|
)
|
|
|
(1)
|
We did not record any material gain (loss) on hedge ineffectiveness related to our interest rate hedging instruments designated as cash flow hedges during the three months ended
March 31, 2018
and
2017
.
|
(2)
|
We recorded an income tax expense of
$11 million
and
nil
for the three months ended
March 31, 2018
and
2017
, respectively, in AOCI related to our cash flow hedging activities.
|
(3)
|
Cumulative cash flow hedge losses attributable to Calpine, net of tax, remaining in AOCI were
$30 million
and
$72 million
at
March 31, 2018
and
December 31, 2017
, respectively. Cumulative cash flow hedge losses attributable to the noncontrolling interest, net of tax, remaining in AOCI were
$4 million
and
$6 million
at
March 31, 2018
and
December 31, 2017
, respectively.
|
8.
|
Use of Collateral
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Margin deposits
(1)
|
$
|
439
|
|
|
$
|
221
|
|
Natural gas and power prepayments
|
46
|
|
|
23
|
|
||
Total margin deposits and natural gas and power prepayments with our counterparties
(2)
|
$
|
485
|
|
|
$
|
244
|
|
|
|
|
|
||||
Letters of credit issued
|
$
|
1,176
|
|
|
$
|
885
|
|
First priority liens under power and natural gas agreements
|
28
|
|
|
102
|
|
||
First priority liens under interest rate hedging instruments
|
21
|
|
|
31
|
|
||
Total letters of credit and first priority liens with our counterparties
|
$
|
1,225
|
|
|
$
|
1,018
|
|
|
|
|
|
||||
Margin deposits posted with us by our counterparties
(1)(3)
|
$
|
14
|
|
|
$
|
4
|
|
Letters of credit posted with us by our counterparties
|
31
|
|
|
30
|
|
||
Total margin deposits and letters of credit posted with us by our counterparties
|
$
|
45
|
|
|
$
|
34
|
|
(1)
|
We offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation; therefore, amounts recognized for the right to reclaim, or the obligation to return, cash collateral are presented net with the corresponding derivative instrument fair values. See Note 7 for further discussion of our derivative instruments subject to master netting arrangements.
|
(2)
|
At
March 31, 2018
and
December 31, 2017
,
$226 million
and
$64 million
, respectively, were included in current and long-term derivative assets and liabilities,
$250 million
and
$171 million
, respectively, were included in margin deposits and other prepaid expense and
$9 million
and
$9 million
, respectively, were included in other assets on our Consolidated Condensed Balance Sheets.
|
(3)
|
At
March 31, 2018
and
December 31, 2017
,
$7 million
and
$2 million
, respectively, were included in current and long-term derivative assets and liabilities and
$7 million
and
$2 million
, respectively, were included in other current liabilities on our Consolidated Condensed Balance Sheets.
|
9.
|
Income Taxes
|
•
|
a reduction in the U.S. federal corporate tax rate from
35%
to
21%
;
|
•
|
limitation on the deduction of certain interest expense;
|
•
|
full expense deduction for certain business capital expenditures;
|
•
|
limitation on the utilization of NOLs arising after December 31, 2017; and
|
•
|
a system of taxing foreign-sourced income from multinational corporations.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Income tax expense (benefit)
|
$
|
108
|
|
|
$
|
(61
|
)
|
Effective tax rate
|
(22
|
)%
|
|
52
|
%
|
10.
|
Stock-Based Compensation
|
•
|
all restricted stock and restricted stock units were vested and canceled and the holders received a cash payment equal to a share price of
$15.25
per share less any applicable withholding taxes;
|
•
|
all vested and unvested stock options were vested (in the case of unvested stock options) and canceled and the holders of the stock options received a cash payment equal to the intrinsic value based on a share price of
$15.25
per share less any applicable withholding taxes; and
|
•
|
all Performance Share Units (PSUs), including the PSUs awarded in 2015 for the measurement period of January 1, 2015 through December 31, 2017, were vested and canceled in exchange for a cash payment with the payout value based on the greater of target value or actual performance over the truncated period using a share price of
$15.25
per share less any applicable withholding taxes.
|
11.
|
Commitments and Contingencies
|
12.
|
Related Party Transactions
|
13.
|
Segment Information
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||||||
|
Wholesale
|
|
|
|
Consolidation
|
|
|
||||||||||||||||
|
West
|
|
Texas
|
|
East
|
|
Retail
|
|
Elimination
|
|
Total
|
||||||||||||
Total operating revenues
(1)
|
$
|
480
|
|
|
$
|
140
|
|
|
$
|
614
|
|
|
$
|
938
|
|
|
$
|
(163
|
)
|
|
$
|
2,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity Margin
|
$
|
185
|
|
|
$
|
166
|
|
|
$
|
184
|
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
612
|
|
Add: Mark-to-market commodity activity, net and other
(2)
|
13
|
|
|
(547
|
)
|
|
40
|
|
|
128
|
|
|
(7
|
)
|
|
(373
|
)
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating and maintenance expense
|
90
|
|
|
80
|
|
|
71
|
|
|
40
|
|
|
(6
|
)
|
|
275
|
|
||||||
Depreciation and amortization expense
|
67
|
|
|
76
|
|
|
45
|
|
|
13
|
|
|
—
|
|
|
201
|
|
||||||
General and other administrative expense
|
16
|
|
|
25
|
|
|
15
|
|
|
4
|
|
|
—
|
|
|
60
|
|
||||||
Other operating expenses
|
14
|
|
|
16
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
37
|
|
||||||
(Income) from unconsolidated subsidiaries
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Income (loss) from operations
|
11
|
|
|
(578
|
)
|
|
92
|
|
|
148
|
|
|
(1
|
)
|
|
(328
|
)
|
||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
151
|
|
|||||||||||
Other (income) expense, net
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|||||||||||
Loss before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
(486
|
)
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||||||
|
Wholesale
|
|
|
|
Consolidation
|
|
|
||||||||||||||||
|
West
|
|
Texas
|
|
East
|
|
Retail
|
|
Elimination
|
|
Total
|
||||||||||||
Total operating revenues
(1)
|
$
|
519
|
|
|
$
|
608
|
|
|
$
|
416
|
|
|
$
|
960
|
|
|
$
|
(222
|
)
|
|
$
|
2,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Commodity Margin
|
$
|
203
|
|
|
$
|
125
|
|
|
$
|
142
|
|
|
$
|
88
|
|
|
$
|
—
|
|
|
$
|
558
|
|
Add: Mark-to-market commodity activity, net and other
(2)
|
80
|
|
|
43
|
|
|
14
|
|
|
(98
|
)
|
|
(8
|
)
|
|
31
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating and maintenance expense
|
91
|
|
|
81
|
|
|
81
|
|
|
36
|
|
|
(7
|
)
|
|
282
|
|
||||||
Depreciation and amortization expense
|
87
|
|
|
54
|
|
|
48
|
|
|
17
|
|
|
—
|
|
|
206
|
|
||||||
General and other administrative expense
|
12
|
|
|
16
|
|
|
7
|
|
|
5
|
|
|
—
|
|
|
40
|
|
||||||
Other operating expenses
|
9
|
|
|
3
|
|
|
9
|
|
|
—
|
|
|
(1
|
)
|
|
20
|
|
||||||
(Gain) on sale of assets, net
|
—
|
|
|
—
|
|
|
(27
|
)
|
|
—
|
|
|
—
|
|
|
(27
|
)
|
||||||
(Income) from unconsolidated subsidiaries
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||||
Income (loss) from operations
|
84
|
|
|
14
|
|
|
42
|
|
|
(68
|
)
|
|
—
|
|
|
72
|
|
||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
|
159
|
|
|||||||||||
Debt extinguishment costs and other (income) expense, net
|
|
|
|
|
|
|
|
|
|
|
26
|
|
|||||||||||
Loss before income taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
(113
|
)
|
(1)
|
Includes intersegment revenues of
$114 million
and
$61 million
in the West,
$(67) million
and
$72 million
in Texas,
$115 million
and
$88 million
in the East and
$1 million
and
$1 million
in Retail for the three months ended
March 31, 2018
and
2017
, respectively. Intersegment revenues for sales between wholesale and retail operations are executed to manage supply needs for our retail operations from our wholesale fleet or to facilitate margin collateral netting at Calpine Corporation.
|
(2)
|
Includes
$(16) million
and
$(22) million
of lease levelization and
$28 million
and
$60 million
of amortization expense for the three months ended
March 31, 2018
and
2017
, respectively.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operation
s
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Operating revenues:
|
|
|
|
|
|
|
|
|||||||
Commodity revenue
|
$
|
2,396
|
|
|
$
|
2,063
|
|
|
$
|
333
|
|
|
16
|
|
Mark-to-market gain (loss)
|
(391
|
)
|
|
214
|
|
|
(605
|
)
|
|
#
|
|
|||
Other revenue
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|||
Operating revenues
|
2,009
|
|
|
2,281
|
|
|
(272
|
)
|
|
(12
|
)
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|||||||
Fuel and purchased energy expense:
|
|
|
|
|
|
|
|
|||||||
Commodity expense
|
1,790
|
|
|
1,533
|
|
|
(257
|
)
|
|
(17
|
)
|
|||
Mark-to-market (gain) loss
|
(20
|
)
|
|
159
|
|
|
179
|
|
|
#
|
|
|||
Fuel and purchased energy expense
|
1,770
|
|
|
1,692
|
|
|
(78
|
)
|
|
(5
|
)
|
|||
Operating and maintenance expense
|
275
|
|
|
282
|
|
|
7
|
|
|
2
|
|
|||
Depreciation and amortization expense
|
201
|
|
|
206
|
|
|
5
|
|
|
2
|
|
|||
General and other administrative expense
|
60
|
|
|
40
|
|
|
(20
|
)
|
|
(50
|
)
|
|||
Other operating expenses
|
37
|
|
|
20
|
|
|
(17
|
)
|
|
(85
|
)
|
|||
Total operating expenses
|
2,343
|
|
|
2,240
|
|
|
(103
|
)
|
|
(5
|
)
|
|||
(Gain) on sale of assets, net
|
—
|
|
|
(27
|
)
|
|
(27
|
)
|
|
#
|
|
|||
(Income) from unconsolidated subsidiaries
|
(6
|
)
|
|
(4
|
)
|
|
2
|
|
|
50
|
|
|||
Income (loss) from operations
|
(328
|
)
|
|
72
|
|
|
(400
|
)
|
|
#
|
|
|||
Interest expense
|
151
|
|
|
159
|
|
|
8
|
|
|
5
|
|
|||
Debt extinguishment costs
|
—
|
|
|
24
|
|
|
24
|
|
|
#
|
|
|||
Other (income) expense, net
|
7
|
|
|
2
|
|
|
(5
|
)
|
|
#
|
|
|||
Loss before income taxes
|
(486
|
)
|
|
(113
|
)
|
|
(373
|
)
|
|
#
|
|
|||
Income tax expense (benefit)
|
108
|
|
|
(61
|
)
|
|
(169
|
)
|
|
#
|
|
|||
Net loss
|
(594
|
)
|
|
(52
|
)
|
|
(542
|
)
|
|
#
|
|
|||
Net income attributable to the noncontrolling interest
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to Calpine
|
$
|
(598
|
)
|
|
$
|
(56
|
)
|
|
$
|
(542
|
)
|
|
#
|
|
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||
Operating Performance Metrics:
|
|
|
|
|
|
|
|
||||
MWh generated (in thousands)
(1)(2)
|
20,800
|
|
|
20,824
|
|
|
(24
|
)
|
|
—
|
|
Average availability
(2)
|
87.6
|
%
|
|
87.3
|
%
|
|
0.3
|
%
|
|
—
|
|
Average total MW in operation
(1)
|
25,187
|
|
|
25,274
|
|
|
(87
|
)
|
|
—
|
|
Average capacity factor, excluding peakers
|
41.9
|
%
|
|
42.8
|
%
|
|
(0.9
|
)%
|
|
(2
|
)
|
Steam Adjusted Heat Rate
(2)
|
7,325
|
|
|
7,346
|
|
|
21
|
|
|
—
|
|
#
|
Variance of 100% or greater
|
(1)
|
Represents generation and capacity from power plants that we both consolidate and operate and excludes Greenfield LP, Whitby, Freeport Energy Center, 21.5% of Hidalgo Energy Center and 25% each of Freestone Energy Center and Russell City Energy Center.
|
(2)
|
Generation, average availability and Steam Adjusted Heat Rate exclude power plants and units that are inactive.
|
(1)
|
Commodity Margin excludes amortization expense related to contracts recorded at fair value, non-cash GAAP-related adjustments to levelize revenues from tolling agreements, Commodity revenue and Commodity expense attributable to the noncontrolling interest and other unusual items or non-recurring items.
|
West:
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Commodity Margin (in millions)
|
$
|
185
|
|
|
$
|
203
|
|
|
$
|
(18
|
)
|
|
(9
|
)
|
Commodity Margin per MWh generated
|
$
|
36.21
|
|
|
$
|
37.25
|
|
|
$
|
(1.04
|
)
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|||||||
MWh generated (in thousands)
|
5,109
|
|
|
5,449
|
|
|
(340
|
)
|
|
(6
|
)
|
|||
Average availability
|
87.1
|
%
|
|
86.3
|
%
|
|
0.8
|
%
|
|
1
|
|
|||
Average total MW in operation
|
7,425
|
|
|
7,425
|
|
|
—
|
|
|
—
|
|
|||
Average capacity factor, excluding peakers
|
33.5
|
%
|
|
36.3
|
%
|
|
(2.8
|
)%
|
|
(8
|
)
|
|||
Steam Adjusted Heat Rate
|
7,215
|
|
|
7,336
|
|
|
121
|
|
|
2
|
|
Texas:
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Commodity Margin (in millions)
|
$
|
166
|
|
|
$
|
125
|
|
|
$
|
41
|
|
|
33
|
|
Commodity Margin per MWh generated
|
$
|
17.21
|
|
|
$
|
13.30
|
|
|
$
|
3.91
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|||||||
MWh generated (in thousands)
|
9,647
|
|
|
9,398
|
|
|
249
|
|
|
3
|
|
|||
Average availability
|
85.1
|
%
|
|
86.9
|
%
|
|
(1.8
|
)%
|
|
(2
|
)
|
|||
Average total MW in operation
|
8,850
|
|
|
8,924
|
|
|
(74
|
)
|
|
(1
|
)
|
|||
Average capacity factor, excluding peakers
|
49.1
|
%
|
|
48.8
|
%
|
|
0.3
|
%
|
|
1
|
|
|||
Steam Adjusted Heat Rate
|
7,118
|
|
|
7,121
|
|
|
3
|
|
|
—
|
|
East:
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Commodity Margin (in millions)
|
$
|
184
|
|
|
$
|
142
|
|
|
$
|
42
|
|
|
30
|
|
Commodity Margin per MWh generated
|
$
|
30.44
|
|
|
$
|
23.76
|
|
|
$
|
6.68
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|||||||
MWh generated (in thousands)
|
6,044
|
|
|
5,977
|
|
|
67
|
|
|
1
|
|
|||
Average availability
|
90.6
|
%
|
|
88.5
|
%
|
|
2.1
|
%
|
|
2
|
|
|||
Average total MW in operation
|
8,912
|
|
|
8,925
|
|
|
(13
|
)
|
|
—
|
|
|||
Average capacity factor, excluding peakers
|
41.1
|
%
|
|
41.5
|
%
|
|
(0.4
|
)%
|
|
(1
|
)
|
|||
Steam Adjusted Heat Rate
|
7,729
|
|
|
7,718
|
|
|
(11
|
)
|
|
—
|
|
Retail:
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Commodity Margin (in millions)
|
$
|
77
|
|
|
$
|
88
|
|
|
$
|
(11
|
)
|
|
(13
|
)
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents, corporate
(1)
|
$
|
164
|
|
|
$
|
228
|
|
Cash and cash equivalents, non-corporate
|
51
|
|
|
56
|
|
||
Total cash and cash equivalents
|
215
|
|
|
284
|
|
||
Restricted cash
|
156
|
|
|
159
|
|
||
Corporate Revolving Facility availability
(2)
|
192
|
|
|
1,161
|
|
||
CDHI letter of credit facility availability
|
65
|
|
|
56
|
|
||
Total current liquidity availability
(3)(4)
|
$
|
628
|
|
|
$
|
1,660
|
|
(1)
|
Includes $14 million and $4 million of margin deposits posted with us by our counterparties at
March 31, 2018
and
December 31, 2017
, respectively. See Note 8 of the Notes to Consolidated Condensed Financial Statements for further information related to our collateral.
|
(2)
|
Our ability to use availability under our Corporate Revolving Facility is unrestricted. The availability under our Corporate Revolving Facility decreased primarily due to payments associated with the consummation of the Merger on March 8, 2018 and an increase in collateral requirements during the three months ended March 31, 2018 as discussed below.
|
(3)
|
On April 11, 2018, we executed our Short Term Credit Facility which allows us unrestricted access to an additional $300 million in liquidity. See Note 5 of the Notes to Consolidated Condensed Financial Statements for further information related to our Short Term Credit Facility.
|
(4)
|
Our ability to use corporate cash and cash equivalents is unrestricted. See Note 1 of the Notes to Consolidated Condensed Financial Statements for a description of the restrictions on our use of non-corporate cash and cash equivalents and restricted cash. Our $300 million CDHI letter of credit facility is restricted to support certain obligations under PPAs and power transmission and natural gas transportation agreements.
|
•
|
the level of Market Heat Rates;
|
•
|
our continued ability to successfully hedge our Commodity Margin;
|
•
|
changes in U.S. macroeconomic conditions;
|
•
|
maintaining acceptable availability levels for our fleet;
|
•
|
the effect of current and pending environmental regulations in the markets in which we participate;
|
•
|
improving the efficiency and profitability of our operations;
|
•
|
increasing future contractual cash flows; and
|
•
|
our significant counterparties performing under their contracts with us.
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Corporate Revolving Facility
(1)
|
$
|
953
|
|
|
$
|
629
|
|
CDHI
|
235
|
|
|
244
|
|
||
Various project financing facilities
|
181
|
|
|
196
|
|
||
Total
|
$
|
1,369
|
|
|
$
|
1,069
|
|
(1)
|
The Corporate Revolving Facility represents our primary revolving facility.
|
|
2018
|
|
2017
|
||||
Beginning cash and cash equivalents
|
$
|
443
|
|
|
$
|
606
|
|
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
(115
|
)
|
|
112
|
|
||
Investing activities
|
(115
|
)
|
|
(24
|
)
|
||
Financing activities
|
158
|
|
|
(274
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(72
|
)
|
|
(186
|
)
|
||
Ending cash, cash equivalents and restricted cash
|
$
|
371
|
|
|
$
|
420
|
|
•
|
Working capital employed
— Working capital employed increased by $284 million for the three months ended March 31, 2018 compared to the same period in 2017 after adjusting for changes in debt extinguishment costs and mark-to-market related balances which did not impact cash provided by operating activities. This change was primarily due to an increase in net collateral margining requirements on our commodity hedging activities following a meaningful increase in forward commodity prices during the period ended March 31, 2018.
|
•
|
Interest paid
— Cash paid for interest decreased by $31 million to $110 million for the three months ended March 31, 2018, from $141 million for the three months ended March 31, 2017. The decrease was primarily due to our refinancing activities and timing of interest payments.
|
•
|
Acquisitions and Divestitures
—
During the three months ended March 31, 2017, we closed on the acquisition of the retail electric provider North American Power for a net purchase price paid of $111 million and also closed on the sale of Osprey Energy Center receiving net proceeds of $162 million. There were no similar acquisitions or divestitures during the three months ended March 31, 2018.
|
•
|
Capital expenditures
— Capital expenditures for the three months ended March 31, 2018, were $115 million, an increase of $24 million, compared to expenditures of $91 million for the three months ended March 31, 2017. The increase was primarily due to higher expenditures on outages, partially offset by lower expenditures on construction projects during the first quarter of 2018 as compared to the first quarter of 2017.
|
•
|
First Lien Term Loans and First Lien Notes
— During the three months ended March 31, 2017, we received proceeds of $396 million from the issuance of the 2019 First Lien Term Loan which was used, together with cash on hand, to redeem $453 million of the 2023 First Lien Notes. In addition, we used cash on hand to repay $150 million of our outstanding 2017 First Lien Term Loan. There were no similar activities during the first quarter of 2018.
|
•
|
Corporate Revolving Facility
—
During the three months ended March 31, 2018, we borrowed $325 million under our Corporate Revolving Facility, compared to $25 million borrowed under our Corporate Revolving Facility during the three months ended March 31, 2017.
|
•
|
Stock Repurchases
— During the three months ended March 31, 2018, we repurchased $79 million of our equity classified share-based awards on the effective date of the Merger. There was no similar activity during the first quarter of 2017.
|
|
Commodity Instruments
|
|
Interest Rate Hedging Instruments
|
|
Total
|
||||||
Fair value of contracts outstanding at January 1, 2018
|
$
|
81
|
|
|
$
|
(5
|
)
|
|
$
|
76
|
|
Items recognized or otherwise settled during the period
(1)(2)
|
14
|
|
|
5
|
|
|
19
|
|
|||
Fair value attributable to new contracts
(3)
|
(52
|
)
|
|
—
|
|
|
(52
|
)
|
|||
Changes in fair value attributable to price movements
|
(181
|
)
|
|
47
|
|
|
(134
|
)
|
|||
Fair value of contracts outstanding at March 31, 2018
(4)
|
$
|
(138
|
)
|
|
$
|
47
|
|
|
$
|
(91
|
)
|
(1)
|
Commodity contract settlements consist of the realization of previously recognized losses on contracts not designated as hedging instruments of $23 million (represents a portion of Commodity revenue and Commodity expense as reported on our Consolidated Condensed Statements of Operations) and $9 million related to current period losses from other changes in derivative assets and liabilities not reflected in OCI or earnings.
|
(2)
|
Interest rate settlements consist of $4 million related to realized losses from settlements of designated cash flow hedges and $1 million related to realized losses from settlements of undesignated interest rate hedging instruments (represents a portion of interest expense as reported on our Consolidated Condensed Statements of Operations).
|
(3)
|
Fair value attributable to new contracts includes $4 million and nil of fair value related to commodity contracts and interest rate hedging instruments, respectively, which are not reflected in OCI or earnings.
|
(4)
|
Net commodity and interest rate derivative assets and liabilities reported in Notes 6 and 7 of the Notes to Consolidated Condensed Financial Statements.
|
Fair Value Source
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
After 2022
|
|
Total
|
||||||||||
Prices actively quoted
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Prices provided by other external sources
|
|
(163
|
)
|
|
(111
|
)
|
|
7
|
|
|
—
|
|
|
(267
|
)
|
|||||
Prices based on models and other valuation methods
|
|
3
|
|
|
99
|
|
|
20
|
|
|
7
|
|
|
129
|
|
|||||
Total fair value
|
|
$
|
(160
|
)
|
|
$
|
(12
|
)
|
|
$
|
27
|
|
|
$
|
7
|
|
|
$
|
(138
|
)
|
•
|
credit approvals;
|
•
|
routine monitoring of counterparties’ and customer’s credit limits and their overall credit ratings;
|
•
|
limiting our marketing, hedging and optimization activities with high risk counterparties;
|
•
|
margin, collateral, or prepayment arrangements; and
|
•
|
payment netting arrangements, or master netting arrangements that allow for the netting of positive and negative exposures of various contracts associated with a single counterparty.
|
Credit Quality
(Based on Credit Ratings
as of March 31, 2018)
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
After 2022
|
|
Total
|
||||||||||
Investment grade
|
|
$
|
(211
|
)
|
|
$
|
(80
|
)
|
|
$
|
16
|
|
|
$
|
(1
|
)
|
|
$
|
(276
|
)
|
Non-investment grade
|
|
(3
|
)
|
|
3
|
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
No external ratings
(1)
|
|
54
|
|
|
65
|
|
|
16
|
|
|
8
|
|
|
143
|
|
|||||
Total fair value
|
|
$
|
(160
|
)
|
|
$
|
(12
|
)
|
|
$
|
27
|
|
|
$
|
7
|
|
|
$
|
(138
|
)
|
(1)
|
Primarily comprised of the fair value of derivative instruments held with customers that are not rated by third party credit agencies due to the nature and size of the customers.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
(a)
Total Number of
Shares Purchased
(1)
|
|
(b)
Average Price
Paid Per Share
|
|
(c)
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans or Programs
(2)
|
|
(d)
Maximum Dollar Value of Shares That May
Yet Be Purchased
Under the Plans or
Programs (in millions)
(2)
|
||||||
January
|
|
2,035
|
|
|
$
|
15.13
|
|
|
—
|
|
|
$
|
307
|
|
February
|
|
472,433
|
|
|
$
|
15.16
|
|
|
—
|
|
|
$
|
307
|
|
March
|
|
3,243
|
|
|
$
|
15.22
|
|
|
—
|
|
|
$
|
—
|
|
Total
|
|
477,711
|
|
|
$
|
15.16
|
|
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents shares withheld by us to satisfy tax withholding obligations associated with the vesting of restricted stock awarded to employees during the first quarter of 2018.
|
(2)
|
In November 2014, our Board of Directors authorized an increase in the total authorization of our multi-year share repurchase program to $1.0 billion. In connection with the consummation of the Merger on March 8, 2018, all of our shares of common stock previously outstanding were repurchased and retired in accordance with the Merger Agreement.
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
Description
|
|
|
|
|
Fourth Amended and Restated Certificate of Incorporation of Calpine Corporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on From 8-K filed with the SEC on April 13, 2018).
|
|
|
|
|
|
Third Amended and Restated By-Laws of Calpine Corporation (incorporated by reference to Exhibit 3.3 to the Company’s Current Report on From 8-K filed with the SEC on April 13, 2018).
|
|
|
|
|
|
Amended and Restated Limited Partnership Agreement of CPN Management, LP a Delaware Limited Partnership,
dated March 8, 2018.†
|
|
|
|
|
|
Form of Award Agreement of Class B Interest in CPN Management, L.P.†
|
|
|
|
|
|
Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Certification of the Chief Executive Officer and the Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
|
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
*
|
Furnished herewith.
|
†
|
Management contract or compensatory plan, contract or arrangement.
|
CALPINE CORPORATION
|
||
(Registrant)
|
||
|
|
|
By:
|
|
/s/ ZAMIR RAUF
|
|
|
Zamir Rauf
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
1 Year Calpine Chart |
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