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June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Current | Non-Current | Total | Current | Non-Current | Total | ||||||||||||||||||
Debt service | $ | 34 | $ | 8 | $ | 42 | $ | 28 | $ | 8 | $ | 36 | |||||||||||
Construction/major maintenance | 36 | 9 | 45 | 50 | 2 | 52 | |||||||||||||||||
Security/project/insurance | 75 | 2 | 77 | 136 | — | 136 | |||||||||||||||||
Other | 3 | 1 | 4 | 2 | 2 | 4 | |||||||||||||||||
Total | $ | 148 | $ | 20 | $ | 168 | $ | 216 | $ | 12 | $ | 228 |
June 30, 2016 | December 31, 2015 | Depreciable Lives | |||||||
Buildings, machinery and equipment | $ | 16,712 | $ | 16,294 | 3 – 46 Years | ||||
Geothermal properties | 1,368 | 1,319 | 13 – 58 Years | ||||||
Other | 230 | 208 | 3 – 46 Years | ||||||
18,310 | 17,821 | ||||||||
Less: Accumulated depreciation | 5,652 | 5,377 | |||||||
12,658 | 12,444 | ||||||||
Land | 121 | 120 | |||||||
Construction in progress | 562 | 448 | |||||||
Property, plant and equipment, net | $ | 13,341 | $ | 13,012 |
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Ownership Interest as of June 30, 2016 | June 30, 2016 | December 31, 2015 | |||||||
Greenfield LP | 50% | $ | 67 | $ | 65 | ||||
Whitby | 50% | 7 | 14 | ||||||
Total investments in power plants | $ | 74 | $ | 79 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Greenfield LP | $ | (1 | ) | $ | (4 | ) | $ | (5 | ) | $ | (6 | ) | ||||
Whitby | (2 | ) | (3 | ) | (5 | ) | (6 | ) | ||||||||
Total | $ | (3 | ) | $ | (7 | ) | $ | (10 | ) | $ | (12 | ) |
Six Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
Revenues | $ | 75 | $ | 98 | ||||
Operating expenses | 43 | 66 | ||||||
Income from operations | 32 | 32 | ||||||
Interest expense, net of interest income | 8 | 10 | ||||||
Other (income) expense, net | 3 | (1 | ) | |||||
Net income | $ | 21 | $ | 23 |
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June 30, 2016 | December 31, 2015 | ||||||
Senior Unsecured Notes | $ | 3,409 | $ | 3,406 | |||
First Lien Term Loans | 2,642 | 3,277 | |||||
First Lien Notes | 2,407 | 1,789 | |||||
Project financing, notes payable and other | 1,643 | 1,715 | |||||
CCFC Term Loans | 1,559 | 1,565 | |||||
Capital lease obligations | 181 | 185 | |||||
Subtotal | 11,841 | 11,937 | |||||
Less: Current maturities | 197 | 221 | |||||
Total long-term debt | $ | 11,644 | $ | 11,716 |
June 30, 2016 | December 31, 2015 | ||||||
2023 Senior Unsecured Notes | $ | 1,236 | $ | 1,235 | |||
2024 Senior Unsecured Notes | 642 | 641 | |||||
2025 Senior Unsecured Notes | 1,531 | 1,530 | |||||
Total Senior Unsecured Notes | $ | 3,409 | $ | 3,406 |
June 30, 2016 | December 31, 2015 | ||||||
2019 First Lien Term Loan | $ | — | $ | 795 | |||
2020 First Lien Term Loan | — | 378 | |||||
2022 First Lien Term Loan | 1,565 | 1,571 | |||||
2023 First Lien Term Loan | 531 | 533 | |||||
New 2023 First Lien Term Loan | 546 | — | |||||
Total First Lien Term Loans | $ | 2,642 | $ | 3,277 |
June 30, 2016 | December 31, 2015 | ||||||
2022 First Lien Notes | $ | 738 | $ | 737 | |||
2023 First Lien Notes | 569 | 568 | |||||
2024 First Lien Notes | 484 | 484 | |||||
2026 First Lien Notes | 616 | — | |||||
Total First Lien Notes | $ | 2,407 | $ | 1,789 |
June 30, 2016 | December 31, 2015 | ||||||
Corporate Revolving Facility(1) | $ | 304 | $ | 316 | |||
CDHI | 261 | 241 | |||||
Various project financing facilities | 212 | 198 | |||||
Total | $ | 777 | $ | 755 |
(1) | The Corporate Revolving Facility represents our primary revolving facility. |
June 30, 2016 | December 31, 2015 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
Senior Unsecured Notes | $ | 3,357 | $ | 3,409 | $ | 3,063 | $ | 3,406 | |||||||
First Lien Term Loans | 2,662 | 2,642 | 3,197 | 3,277 | |||||||||||
First Lien Notes | 2,531 | 2,407 | 1,885 | 1,789 | |||||||||||
Project financing, notes payable and other(1) | 1,595 | 1,551 | 1,653 | 1,608 | |||||||||||
CCFC Term Loans | 1,537 | 1,559 | 1,494 | 1,565 | |||||||||||
Total | $ | 11,682 | $ | 11,568 | $ | 11,292 | $ | 11,645 |
(1) | Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP. |
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Assets and Liabilities with Recurring Fair Value Measures as of June 30, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 383 | $ | — | $ | — | $ | 383 | |||||||
Margin deposits | 134 | — | — | 134 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,316 | — | — | 1,316 | |||||||||||
Commodity forward contracts(2) | — | 232 | 43 | 275 | |||||||||||
Interest rate hedging instruments | — | 9 | — | 9 | |||||||||||
Total assets | $ | 1,833 | $ | 241 | $ | 43 | $ | 2,117 | |||||||
Liabilities: | |||||||||||||||
Margin deposits posted with us by our counterparties | $ | 9 | $ | — | $ | — | $ | 9 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,248 | — | — | 1,248 | |||||||||||
Commodity forward contracts(2) | — | 422 | 106 | 528 | |||||||||||
Interest rate hedging instruments | — | 96 | — | 96 | |||||||||||
Total liabilities | $ | 1,257 | $ | 518 | $ | 106 | $ | 1,881 |
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 1,134 | $ | — | $ | — | $ | 1,134 | |||||||
Margin deposits | 89 | — | — | 89 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,736 | — | — | 1,736 | |||||||||||
Commodity forward contracts(2) | — | 220 | 54 | 274 | |||||||||||
Interest rate hedging instruments | — | 1 | — | 1 | |||||||||||
Total assets | $ | 2,959 | $ | 221 | $ | 54 | $ | 3,234 | |||||||
Liabilities: | |||||||||||||||
Margin deposits posted with us by our counterparties | $ | 35 | $ | — | $ | — | $ | 35 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,604 | — | — | 1,604 | |||||||||||
Commodity forward contracts(2) | — | 413 | 100 | 513 | |||||||||||
Interest rate hedging instruments | — | 90 | — | 90 | |||||||||||
Total liabilities | $ | 1,639 | $ | 503 | $ | 100 | $ | 2,242 |
(1) | As of June 30, 2016 and December 31, 2015, we had cash equivalents of $215 million and $906 million included in cash and cash equivalents and $168 million and $228 million included in restricted cash, respectively. |
(2) | Includes OTC swaps and options. |
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||
June 30, 2016 | ||||||||||
Fair Value, Net Asset | Significant Unobservable | |||||||||
(Liability) | Valuation Technique | Input | Range | |||||||
(in millions) | ||||||||||
Power Contracts | $ | (80 | ) | Discounted cash flow | Market price (per MWh) | $9.09 — $104.83/MWh | ||||
Power Congestion Products | $ | 17 | Discounted cash flow | Market price (per MWh) | $(11.47) — $11.76/MWh | |||||
December 31, 2015 | ||||||||||
Fair Value, Net Asset | Significant Unobservable | |||||||||
(Liability) | Valuation Technique | Input | Range | |||||||
(in millions) | ||||||||||
Power Contracts | $ | (54 | ) | Discounted cash flow | Market price (per MWh) | $6.72 — $83.25/MWh | ||||
Power Congestion Products | $ | 8 | Discounted cash flow | Market price (per MWh) | $(11.47) — $12.19/MWh |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Balance, beginning of period | $ | (65 | ) | $ | 203 | $ | (46 | ) | $ | 85 | ||||||
Realized and mark-to-market gains (losses): | ||||||||||||||||
Included in net income (loss): | ||||||||||||||||
Included in operating revenues(1) | (174 | ) | 45 | (181 | ) | 176 | ||||||||||
Included in fuel and purchased energy expense(2) | 165 | — | 155 | 2 | ||||||||||||
Purchases and settlements: | ||||||||||||||||
Purchases | 4 | 2 | 5 | 4 | ||||||||||||
Settlements | (1 | ) | (10 | ) | (4 | ) | (21 | ) | ||||||||
Transfers in and/or out of level 3(3): | ||||||||||||||||
Transfers into level 3(4) | — | — | — | — | ||||||||||||
Transfers out of level 3(5) | 8 | 3 | 8 | (3 | ) | |||||||||||
Balance, end of period | $ | (63 | ) | $ | 243 | $ | (63 | ) | $ | 243 | ||||||
Change in unrealized gains (losses) relating to instruments still held at end of period | $ | (9 | ) | $ | 45 | $ | (26 | ) | $ | 178 |
(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 and six months ended June 30, 2016 and 2015. |
(4) | There were no transfers out of level 2 into level 3 for each of the three and six months ended June 30, 2016 and 2015. |
(5) | We had $(8) million and $(3) million in losses transferred out of level 3 into level 2 for the three months ended June 30, 2016 and 2015, respectively, and $(8) million in losses and $3 million in gains transferred out of level 3 into level 2 for the six months ended June 30, 2016 and 2015, respectively, due to changes in market liquidity in various power markets. |
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Derivative Instruments | Notional Amounts | |||||||
June 30, 2016 | December 31, 2015 | |||||||
Power (MWh) | (48 | ) | (41 | ) | ||||
Natural gas (MMBtu) | 1,038 | 996 | ||||||
Environmental credits (Tonnes) | 18 | 8 | ||||||
Interest rate hedging instruments | $ | 3,798 | (1) | $ | 1,320 |
(1) | We entered into interest rate hedging instruments during the second quarter of 2016 to hedge approximately $2.5 billion of variable rate corporate debt for 2017 through 2019 which effectively places a ceiling on LIBOR at rates varying from 1.44% to 1.8125% for hedged interest payments. See Note 4 for a further discussion of our First Lien Term Loans. |
June 30, 2016 | |||||||||||
Commodity Instruments | Interest Rate Hedging Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | 1,231 | $ | — | $ | 1,231 | |||||
Long-term derivative assets | 360 | 9 | 369 | ||||||||
Total derivative assets | $ | 1,591 | $ | 9 | $ | 1,600 | |||||
Current derivative liabilities | $ | 1,323 | $ | 37 | $ | 1,360 | |||||
Long-term derivative liabilities | 453 | 59 | 512 | ||||||||
Total derivative liabilities | $ | 1,776 | $ | 96 | $ | 1,872 | |||||
Net derivative assets (liabilities) | $ | (185 | ) | $ | (87 | ) | $ | (272 | ) |
December 31, 2015 | |||||||||||
Commodity Instruments | Interest Rate Hedging Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | 1,698 | $ | — | $ | 1,698 | |||||
Long-term derivative assets | 312 | 1 | 313 | ||||||||
Total derivative assets | $ | 2,010 | $ | 1 | $ | 2,011 | |||||
Current derivative liabilities | $ | 1,697 | $ | 37 | $ | 1,734 | |||||
Long-term derivative liabilities | 420 | 53 | 473 | ||||||||
Total derivative liabilities | $ | 2,117 | $ | 90 | $ | 2,207 | |||||
Net derivative assets (liabilities) | $ | (107 | ) | $ | (89 | ) | $ | (196 | ) |
June 30, 2016 | December 31, 2015 | ||||||||||||||
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 | $ | 9 | $ | 96 | $ | 1 | $ | 90 | |||||||
Total derivatives designated as cash flow hedging instruments | $ | 9 | $ | 96 | $ | 1 | $ | 90 | |||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Commodity instruments | $ | 1,591 | $ | 1,776 | $ | 2,010 | $ | 2,117 | |||||||
Total derivatives not designated as hedging instruments | $ | 1,591 | $ | 1,776 | $ | 2,010 | $ | 2,117 | |||||||
Total derivatives | $ | 1,600 | $ | 1,872 | $ | 2,011 | $ | 2,207 |
June 30, 2016 | ||||||||||||||||
Gross Amounts Not Offset on the Consolidated Condensed Balance Sheets | ||||||||||||||||
Gross Amounts Presented on our Consolidated Condensed Balance Sheets | Derivative Asset (Liability) not Offset on the Consolidated Condensed Balance Sheets | Margin/Cash (Received) Posted (1) | Net Amount | |||||||||||||
Derivative assets: | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | 1,316 | $ | (1,237 | ) | $ | (79 | ) | $ | — | ||||||
Commodity forward contracts | 275 | (232 | ) | (2 | ) | 41 | ||||||||||
Interest rate hedging instruments | 9 | — | — | 9 | ||||||||||||
Total derivative assets | $ | 1,600 | $ | (1,469 | ) | $ | (81 | ) | $ | 50 | ||||||
Derivative (liabilities): | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | (1,248 | ) | $ | 1,237 | $ | 11 | $ | — | |||||||
Commodity forward contracts | (528 | ) | 232 | 12 | (284 | ) | ||||||||||
Interest rate hedging instruments | (96 | ) | — | — | (96 | ) | ||||||||||
Total derivative (liabilities) | $ | (1,872 | ) | $ | 1,469 | $ | 23 | $ | (380 | ) | ||||||
Net derivative assets (liabilities) | $ | (272 | ) | $ | — | $ | (58 | ) | $ | (330 | ) |
December 31, 2015 | ||||||||||||||||
Gross Amounts Not Offset on the Consolidated Condensed Balance Sheets | ||||||||||||||||
Gross Amounts Presented on our Consolidated Condensed Balance Sheets | Derivative Asset (Liability) not Offset on the Consolidated Condensed Balance Sheets | Margin/Cash (Received) Posted (1) | Net Amount | |||||||||||||
Derivative assets: | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | 1,736 | $ | (1,602 | ) | $ | (134 | ) | $ | — | ||||||
Commodity forward contracts | 274 | (202 | ) | (3 | ) | 69 | ||||||||||
Interest rate hedging instruments | 1 | — | — | 1 | ||||||||||||
Total derivative assets | $ | 2,011 | $ | (1,804 | ) | $ | (137 | ) | $ | 70 | ||||||
Derivative (liabilities): | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | (1,604 | ) | $ | 1,602 | $ | 2 | $ | — | |||||||
Commodity forward contracts | (513 | ) | 202 | 3 | (308 | ) | ||||||||||
Interest rate hedging instruments | (90 | ) | — | — | (90 | ) | ||||||||||
Total derivative (liabilities) | $ | (2,207 | ) | $ | 1,804 | $ | 5 | $ | (398 | ) | ||||||
Net derivative assets (liabilities) | $ | (196 | ) | $ | — | $ | (132 | ) | $ | (328 | ) |
(1) | Negative balances represent margin deposits posted with us by our counterparties related to our derivative activities that are subject to a master netting arrangement. Positive balances reflect margin deposits and natural gas and power prepayments posted by us with our counterparties related to our derivative activities that are subject to a master netting arrangement. See Note 7 for a further discussion of our collateral. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Realized gain (loss)(1)(2) | |||||||||||||||
Commodity derivative instruments | $ | 63 | $ | 104 | $ | 181 | $ | 163 | |||||||
Total realized gain (loss) | $ | 63 | $ | 104 | $ | 181 | $ | 163 | |||||||
Mark-to-market gain (loss)(3) | |||||||||||||||
Commodity derivative instruments | $ | (36 | ) | $ | (1 | ) | $ | (131 | ) | $ | 69 | ||||
Interest rate hedging instruments | — | — | 1 | 1 | |||||||||||
Total mark-to-market gain (loss) | $ | (36 | ) | $ | (1 | ) | $ | (130 | ) | $ | 70 | ||||
Total activity, net | $ | 27 | $ | 103 | $ | 51 | $ | 233 |
(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 derivative activity related to the acquisition of Champion Energy. |
(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 June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Realized and mark-to-market gain (loss) | |||||||||||||||
Derivatives contracts included in operating revenues(1)(2) | $ | (272 | ) | $ | 115 | $ | (68 | ) | $ | 234 | |||||
Derivatives contracts included in fuel and purchased energy expense(1)(2) | 299 | (12 | ) | 118 | (2 | ) | |||||||||
Interest rate hedging instruments included in interest expense(3) | — | — | 1 | 1 | |||||||||||
Total activity, net | $ | 27 | $ | 103 | $ | 51 | $ | 233 |
(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 derivative activity related to the acquisition of Champion Energy. |
(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 June 30, | Three Months Ended June 30, | ||||||||||||||||
Gain (Loss) Recognized in OCI (Effective Portion) | Gain (Loss) Reclassified from AOCI into Income (Effective Portion)(3) | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | Affected Line Item on the Consolidated Condensed Statements of Operations | |||||||||||||
Interest rate hedging instruments(1)(2) | $ | (6 | ) | $ | 14 | $ | (11 | ) | $ | (12 | ) | Interest expense |
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
Gain (Loss) Recognized in OCI (Effective Portion) | Gain (Loss) Reclassified from AOCI into Income (Effective Portion)(3) | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | Affected Line Item on the Consolidated Condensed Statements of Operations | |||||||||||||
Interest rate hedging instruments(1)(2) | $ | (18 | ) | $ | 8 | $ | (22 | ) | $ | (24 | ) | Interest expense |
(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 and six months ended June 30, 2016 and 2015. |
(2) | We recorded an income tax expense of nil for each of the three and six months ended June 30, 2016 and 2015, 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 $143 million and $127 million at June 30, 2016 and December 31, 2015, respectively. Cumulative cash flow hedge losses attributable to the noncontrolling interest, net of tax, remaining in AOCI were $13 million and $11 million at June 30, 2016 and December 31, 2015, respectively. |
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June 30, 2016 | December 31, 2015 | ||||||
Margin deposits(1) | $ | 134 | $ | 89 | |||
Natural gas and power prepayments | 35 | 34 | |||||
Total margin deposits and natural gas and power prepayments with our counterparties(2) | $ | 169 | $ | 123 | |||
Letters of credit issued | $ | 622 | $ | 600 | |||
First priority liens under power and natural gas agreements(3) | 231 | 382 | |||||
First priority liens under interest rate hedging instruments | 97 | 92 | |||||
Total letters of credit and first priority liens with our counterparties | $ | 950 | $ | 1,074 | |||
Margin deposits posted with us by our counterparties(1)(4) | $ | 9 | $ | 35 | |||
Letters of credit posted with us by our counterparties | 23 | 24 | |||||
Total margin deposits and letters of credit posted with us by our counterparties | $ | 32 | $ | 59 |
(1) | Balances are subject to master netting arrangements and presented on a gross basis on our Consolidated Condensed Balance Sheets. We do not offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation, and we do not offset amounts recognized for the right to reclaim, or the obligation to return, cash collateral with corresponding derivative instrument fair values. See Note 6 for further discussion of our derivative instruments subject to master netting arrangements. |
(2) | At June 30, 2016 and December 31, 2015, $159 million and $101 million, respectively, were included in margin deposits and other prepaid expense and $10 million and $22 million, respectively, were included in other assets on our Consolidated Condensed Balance Sheets. |
(3) | Includes $203 million and $345 million related to first priority liens under power supply contracts associated with our retail hedging activities at June 30, 2016 and December 31, 2015, respectively. |
(4) | Included in other current liabilities on our Consolidated Condensed Balance Sheets. |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income tax expense (benefit) | $ | (14 | ) | $ | 5 | $ | 21 | $ | 4 | ||||||
Effective tax rate | 33 | % | 21 | % | (10 | )% | 31 | % |
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Number of Restricted Stock Awards | Weighted Average Grant-Date Fair Value | |||||
Nonvested — December 31, 2015 | 3,528,270 | $ | 19.91 | |||
Granted | 2,941,831 | $ | 12.40 | |||
Forfeited | 166,018 | $ | 16.32 | |||
Vested | 1,275,797 | $ | 19.01 | |||
Nonvested — June 30, 2016 | 5,028,286 | $ | 15.86 |
Number of Performance Share Units | Weighted Average Grant-Date Fair Value | |||||
Nonvested — December 31, 2015 | 517,906 | $ | 23.36 | |||
Granted | 657,807 | $ | 14.81 | |||
Vested(1) | 3,249 | $ | 23.91 | |||
Nonvested — June 30, 2016 | 1,172,464 | $ | 18.56 |
(1) | In accordance with the applicable performance share unit agreements, performance share units granted to employees who meet the retirement eligibility requirements stipulated in the Equity Plan are fully vested upon the later of the date on which the employee becomes eligible to retire or one-year anniversary of the grant date. |
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Three Months Ended June 30, 2016 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 211 | $ | 530 | $ | 423 | $ | — | $ | 1,164 | |||||||||
Intersegment revenues | 1 | 4 | 4 | (9 | ) | — | |||||||||||||
Total operating revenues | $ | 212 | $ | 534 | $ | 427 | $ | (9 | ) | $ | 1,164 | ||||||||
Commodity Margin | $ | 254 | $ | 160 | $ | 243 | $ | — | $ | 657 | |||||||||
Add: Mark-to-market commodity activity, net and other(1) | (62 | ) | 7 | 28 | (8 | ) | (35 | ) | |||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 98 | 85 | 96 | (8 | ) | 271 | |||||||||||||
Depreciation and amortization expense | 56 | 53 | 53 | — | 162 | ||||||||||||||
Sales, general and other administrative expense | 8 | 14 | 12 | 1 | 35 | ||||||||||||||
Other operating expenses | 7 | 2 | 10 | (2 | ) | 17 | |||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (3 | ) | — | (3 | ) | ||||||||||||
Income from operations | 23 | 13 | 103 | 1 | 140 | ||||||||||||||
Interest expense, net of interest income | 156 | ||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 22 | ||||||||||||||||||
Loss before income taxes | $ | (38 | ) |
Three Months Ended June 30, 2015 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 421 | $ | 570 | $ | 451 | $ | — | $ | 1,442 | |||||||||
Intersegment revenues | — | 5 | 2 | (7 | ) | — | |||||||||||||
Total operating revenues | $ | 421 | $ | 575 | $ | 453 | $ | (7 | ) | $ | 1,442 | ||||||||
Commodity Margin | $ | 240 | $ | 170 | $ | 247 | $ | — | $ | 657 | |||||||||
Add: Mark-to-market commodity activity, net and other(1) | (14 | ) | 10 | 30 | (7 | ) | 19 | ||||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 120 | 82 | 77 | (7 | ) | 272 | |||||||||||||
Depreciation and amortization expense | 65 | 50 | 45 | — | 160 | ||||||||||||||
Sales, general and other administrative expense | 6 | 15 | 9 | — | 30 | ||||||||||||||
Other operating expenses | 10 | 2 | 8 | — | 20 | ||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Income from operations | 25 | 31 | 145 | — | 201 | ||||||||||||||
Interest expense, net of interest income | 157 | ||||||||||||||||||
Debt modification costs and other (income) expense, net | 18 | ||||||||||||||||||
Income before income taxes | $ | 26 |
Six Months Ended June 30, 2016 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 635 | $ | 1,062 | $ | 1,082 | $ | — | $ | 2,779 | |||||||||
Intersegment revenues | 3 | 7 | 7 | (17 | ) | — | |||||||||||||
Total operating revenues | $ | 638 | $ | 1,069 | $ | 1,089 | $ | (17 | ) | $ | 2,779 | ||||||||
Commodity Margin | $ | 451 | $ | 313 | $ | 473 | $ | — | $ | 1,237 | |||||||||
Add: Mark-to-market commodity activity, net and other(2) | (16 | ) | (103 | ) | 7 | (14 | ) | (126 | ) | ||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 189 | 171 | 180 | (14 | ) | 526 | |||||||||||||
Depreciation and amortization expense | 125 | 106 | 111 | — | 342 | ||||||||||||||
Sales, general and other administrative expense | 18 | 30 | 24 | 1 | 73 | ||||||||||||||
Other operating expenses | 15 | 4 | 20 | (2 | ) | 37 | |||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (10 | ) | — | (10 | ) | ||||||||||||
Income (loss) from operations | 88 | (101 | ) | 155 | 1 | 143 | |||||||||||||
Interest expense, net of interest income | 312 | ||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 28 | ||||||||||||||||||
Loss before income taxes | $ | (197 | ) |
Six Months Ended June 30, 2015 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 936 | $ | 1,151 | $ | 1,001 | $ | — | $ | 3,088 | |||||||||
Intersegment revenues | 2 | 8 | 4 | (14 | ) | — | |||||||||||||
Total operating revenues | $ | 938 | $ | 1,159 | $ | 1,005 | $ | (14 | ) | $ | 3,088 | ||||||||
Commodity Margin | $ | 458 | $ | 319 | $ | 415 | $ | — | $ | 1,192 | |||||||||
Add: Mark-to-market commodity activity, net and other(2) | 105 | 51 | (22 | ) | (14 | ) | 120 | ||||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 226 | 171 | 149 | (14 | ) | 532 | |||||||||||||
Depreciation and amortization expense | 132 | 99 | 87 | — | 318 | ||||||||||||||
Sales, general and other administrative expense | 16 | 32 | 19 | — | 67 | ||||||||||||||
Other operating expenses | 20 | 4 | 16 | — | 40 | ||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (12 | ) | — | (12 | ) | ||||||||||||
Income from operations | 169 | 64 | 134 | — | 367 | ||||||||||||||
Interest expense, net of interest income | 310 | ||||||||||||||||||
Debt modification and extinguishment costs and other (income) expense, net | 39 | ||||||||||||||||||
Income before income taxes | $ | 18 |
(1) | Includes $(20) million and $(18) million of lease levelization and $27 million and $3 million of amortization expense for the three months ended June 30, 2016 and 2015, respectively. |
(2) | Includes $(42) million and $(42) million of lease levelization and $54 million and $7 million of amortization expense for the six months ended June 30, 2016 and 2015, respectively. |
|
|
June 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
Current | Non-Current | Total | Current | Non-Current | Total | ||||||||||||||||||
Debt service | $ | 34 | $ | 8 | $ | 42 | $ | 28 | $ | 8 | $ | 36 | |||||||||||
Construction/major maintenance | 36 | 9 | 45 | 50 | 2 | 52 | |||||||||||||||||
Security/project/insurance | 75 | 2 | 77 | 136 | — | 136 | |||||||||||||||||
Other | 3 | 1 | 4 | 2 | 2 | 4 | |||||||||||||||||
Total | $ | 148 | $ | 20 | $ | 168 | $ | 216 | $ | 12 | $ | 228 |
June 30, 2016 | December 31, 2015 | Depreciable Lives | |||||||
Buildings, machinery and equipment | $ | 16,712 | $ | 16,294 | 3 – 46 Years | ||||
Geothermal properties | 1,368 | 1,319 | 13 – 58 Years | ||||||
Other | 230 | 208 | 3 – 46 Years | ||||||
18,310 | 17,821 | ||||||||
Less: Accumulated depreciation | 5,652 | 5,377 | |||||||
12,658 | 12,444 | ||||||||
Land | 121 | 120 | |||||||
Construction in progress | 562 | 448 | |||||||
Property, plant and equipment, net | $ | 13,341 | $ | 13,012 |
|
Ownership Interest as of June 30, 2016 | June 30, 2016 | December 31, 2015 | |||||||
Greenfield LP | 50% | $ | 67 | $ | 65 | ||||
Whitby | 50% | 7 | 14 | ||||||
Total investments in power plants | $ | 74 | $ | 79 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Greenfield LP | $ | (1 | ) | $ | (4 | ) | $ | (5 | ) | $ | (6 | ) | ||||
Whitby | (2 | ) | (3 | ) | (5 | ) | (6 | ) | ||||||||
Total | $ | (3 | ) | $ | (7 | ) | $ | (10 | ) | $ | (12 | ) |
Six Months Ended June 30, | ||||||||
2016 | 2015 | |||||||
Revenues | $ | 75 | $ | 98 | ||||
Operating expenses | 43 | 66 | ||||||
Income from operations | 32 | 32 | ||||||
Interest expense, net of interest income | 8 | 10 | ||||||
Other (income) expense, net | 3 | (1 | ) | |||||
Net income | $ | 21 | $ | 23 |
|
June 30, 2016 | December 31, 2015 | ||||||
Senior Unsecured Notes | $ | 3,409 | $ | 3,406 | |||
First Lien Term Loans | 2,642 | 3,277 | |||||
First Lien Notes | 2,407 | 1,789 | |||||
Project financing, notes payable and other | 1,643 | 1,715 | |||||
CCFC Term Loans | 1,559 | 1,565 | |||||
Capital lease obligations | 181 | 185 | |||||
Subtotal | 11,841 | 11,937 | |||||
Less: Current maturities | 197 | 221 | |||||
Total long-term debt | $ | 11,644 | $ | 11,716 |
June 30, 2016 | December 31, 2015 | ||||||
2023 Senior Unsecured Notes | $ | 1,236 | $ | 1,235 | |||
2024 Senior Unsecured Notes | 642 | 641 | |||||
2025 Senior Unsecured Notes | 1,531 | 1,530 | |||||
Total Senior Unsecured Notes | $ | 3,409 | $ | 3,406 |
June 30, 2016 | December 31, 2015 | ||||||
2019 First Lien Term Loan | $ | — | $ | 795 | |||
2020 First Lien Term Loan | — | 378 | |||||
2022 First Lien Term Loan | 1,565 | 1,571 | |||||
2023 First Lien Term Loan | 531 | 533 | |||||
New 2023 First Lien Term Loan | 546 | — | |||||
Total First Lien Term Loans | $ | 2,642 | $ | 3,277 |
June 30, 2016 | December 31, 2015 | ||||||
2022 First Lien Notes | $ | 738 | $ | 737 | |||
2023 First Lien Notes | 569 | 568 | |||||
2024 First Lien Notes | 484 | 484 | |||||
2026 First Lien Notes | 616 | — | |||||
Total First Lien Notes | $ | 2,407 | $ | 1,789 |
June 30, 2016 | December 31, 2015 | ||||||
Corporate Revolving Facility(1) | $ | 304 | $ | 316 | |||
CDHI | 261 | 241 | |||||
Various project financing facilities | 212 | 198 | |||||
Total | $ | 777 | $ | 755 |
(1) | The Corporate Revolving Facility represents our primary revolving facility. |
June 30, 2016 | December 31, 2015 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
Senior Unsecured Notes | $ | 3,357 | $ | 3,409 | $ | 3,063 | $ | 3,406 | |||||||
First Lien Term Loans | 2,662 | 2,642 | 3,197 | 3,277 | |||||||||||
First Lien Notes | 2,531 | 2,407 | 1,885 | 1,789 | |||||||||||
Project financing, notes payable and other(1) | 1,595 | 1,551 | 1,653 | 1,608 | |||||||||||
CCFC Term Loans | 1,537 | 1,559 | 1,494 | 1,565 | |||||||||||
Total | $ | 11,682 | $ | 11,568 | $ | 11,292 | $ | 11,645 |
(1) | Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP. |
|
Assets and Liabilities with Recurring Fair Value Measures as of June 30, 2016 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 383 | $ | — | $ | — | $ | 383 | |||||||
Margin deposits | 134 | — | — | 134 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,316 | — | — | 1,316 | |||||||||||
Commodity forward contracts(2) | — | 232 | 43 | 275 | |||||||||||
Interest rate hedging instruments | — | 9 | — | 9 | |||||||||||
Total assets | $ | 1,833 | $ | 241 | $ | 43 | $ | 2,117 | |||||||
Liabilities: | |||||||||||||||
Margin deposits posted with us by our counterparties | $ | 9 | $ | — | $ | — | $ | 9 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,248 | — | — | 1,248 | |||||||||||
Commodity forward contracts(2) | — | 422 | 106 | 528 | |||||||||||
Interest rate hedging instruments | — | 96 | — | 96 | |||||||||||
Total liabilities | $ | 1,257 | $ | 518 | $ | 106 | $ | 1,881 |
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2015 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 1,134 | $ | — | $ | — | $ | 1,134 | |||||||
Margin deposits | 89 | — | — | 89 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,736 | — | — | 1,736 | |||||||||||
Commodity forward contracts(2) | — | 220 | 54 | 274 | |||||||||||
Interest rate hedging instruments | — | 1 | — | 1 | |||||||||||
Total assets | $ | 2,959 | $ | 221 | $ | 54 | $ | 3,234 | |||||||
Liabilities: | |||||||||||||||
Margin deposits posted with us by our counterparties | $ | 35 | $ | — | $ | — | $ | 35 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,604 | — | — | 1,604 | |||||||||||
Commodity forward contracts(2) | — | 413 | 100 | 513 | |||||||||||
Interest rate hedging instruments | — | 90 | — | 90 | |||||||||||
Total liabilities | $ | 1,639 | $ | 503 | $ | 100 | $ | 2,242 |
(1) | As of June 30, 2016 and December 31, 2015, we had cash equivalents of $215 million and $906 million included in cash and cash equivalents and $168 million and $228 million included in restricted cash, respectively. |
(2) | Includes OTC swaps and options. |
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||
June 30, 2016 | ||||||||||
Fair Value, Net Asset | Significant Unobservable | |||||||||
(Liability) | Valuation Technique | Input | Range | |||||||
(in millions) | ||||||||||
Power Contracts | $ | (80 | ) | Discounted cash flow | Market price (per MWh) | $9.09 — $104.83/MWh | ||||
Power Congestion Products | $ | 17 | Discounted cash flow | Market price (per MWh) | $(11.47) — $11.76/MWh | |||||
December 31, 2015 | ||||||||||
Fair Value, Net Asset | Significant Unobservable | |||||||||
(Liability) | Valuation Technique | Input | Range | |||||||
(in millions) | ||||||||||
Power Contracts | $ | (54 | ) | Discounted cash flow | Market price (per MWh) | $6.72 — $83.25/MWh | ||||
Power Congestion Products | $ | 8 | Discounted cash flow | Market price (per MWh) | $(11.47) — $12.19/MWh |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Balance, beginning of period | $ | (65 | ) | $ | 203 | $ | (46 | ) | $ | 85 | ||||||
Realized and mark-to-market gains (losses): | ||||||||||||||||
Included in net income (loss): | ||||||||||||||||
Included in operating revenues(1) | (174 | ) | 45 | (181 | ) | 176 | ||||||||||
Included in fuel and purchased energy expense(2) | 165 | — | 155 | 2 | ||||||||||||
Purchases and settlements: | ||||||||||||||||
Purchases | 4 | 2 | 5 | 4 | ||||||||||||
Settlements | (1 | ) | (10 | ) | (4 | ) | (21 | ) | ||||||||
Transfers in and/or out of level 3(3): | ||||||||||||||||
Transfers into level 3(4) | — | — | — | — | ||||||||||||
Transfers out of level 3(5) | 8 | 3 | 8 | (3 | ) | |||||||||||
Balance, end of period | $ | (63 | ) | $ | 243 | $ | (63 | ) | $ | 243 | ||||||
Change in unrealized gains (losses) relating to instruments still held at end of period | $ | (9 | ) | $ | 45 | $ | (26 | ) | $ | 178 |
(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 and six months ended June 30, 2016 and 2015. |
(4) | There were no transfers out of level 2 into level 3 for each of the three and six months ended June 30, 2016 and 2015. |
(5) | We had $(8) million and $(3) million in losses transferred out of level 3 into level 2 for the three months ended June 30, 2016 and 2015, respectively, and $(8) million in losses and $3 million in gains transferred out of level 3 into level 2 for the six months ended June 30, 2016 and 2015, respectively, due to changes in market liquidity in various power markets. |
|
Derivative Instruments | Notional Amounts | |||||||
June 30, 2016 | December 31, 2015 | |||||||
Power (MWh) | (48 | ) | (41 | ) | ||||
Natural gas (MMBtu) | 1,038 | 996 | ||||||
Environmental credits (Tonnes) | 18 | 8 | ||||||
Interest rate hedging instruments | $ | 3,798 | (1) | $ | 1,320 |
(1) | We entered into interest rate hedging instruments during the second quarter of 2016 to hedge approximately $2.5 billion of variable rate corporate debt for 2017 through 2019 which effectively places a ceiling on LIBOR at rates varying from 1.44% to 1.8125% for hedged interest payments. See Note 4 for a further discussion of our First Lien Term Loans. |
June 30, 2016 | |||||||||||
Commodity Instruments | Interest Rate Hedging Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | 1,231 | $ | — | $ | 1,231 | |||||
Long-term derivative assets | 360 | 9 | 369 | ||||||||
Total derivative assets | $ | 1,591 | $ | 9 | $ | 1,600 | |||||
Current derivative liabilities | $ | 1,323 | $ | 37 | $ | 1,360 | |||||
Long-term derivative liabilities | 453 | 59 | 512 | ||||||||
Total derivative liabilities | $ | 1,776 | $ | 96 | $ | 1,872 | |||||
Net derivative assets (liabilities) | $ | (185 | ) | $ | (87 | ) | $ | (272 | ) |
December 31, 2015 | |||||||||||
Commodity Instruments | Interest Rate Hedging Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | 1,698 | $ | — | $ | 1,698 | |||||
Long-term derivative assets | 312 | 1 | 313 | ||||||||
Total derivative assets | $ | 2,010 | $ | 1 | $ | 2,011 | |||||
Current derivative liabilities | $ | 1,697 | $ | 37 | $ | 1,734 | |||||
Long-term derivative liabilities | 420 | 53 | 473 | ||||||||
Total derivative liabilities | $ | 2,117 | $ | 90 | $ | 2,207 | |||||
Net derivative assets (liabilities) | $ | (107 | ) | $ | (89 | ) | $ | (196 | ) |
June 30, 2016 | December 31, 2015 | ||||||||||||||
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 | $ | 9 | $ | 96 | $ | 1 | $ | 90 | |||||||
Total derivatives designated as cash flow hedging instruments | $ | 9 | $ | 96 | $ | 1 | $ | 90 | |||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Commodity instruments | $ | 1,591 | $ | 1,776 | $ | 2,010 | $ | 2,117 | |||||||
Total derivatives not designated as hedging instruments | $ | 1,591 | $ | 1,776 | $ | 2,010 | $ | 2,117 | |||||||
Total derivatives | $ | 1,600 | $ | 1,872 | $ | 2,011 | $ | 2,207 |
June 30, 2016 | ||||||||||||||||
Gross Amounts Not Offset on the Consolidated Condensed Balance Sheets | ||||||||||||||||
Gross Amounts Presented on our Consolidated Condensed Balance Sheets | Derivative Asset (Liability) not Offset on the Consolidated Condensed Balance Sheets | Margin/Cash (Received) Posted (1) | Net Amount | |||||||||||||
Derivative assets: | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | 1,316 | $ | (1,237 | ) | $ | (79 | ) | $ | — | ||||||
Commodity forward contracts | 275 | (232 | ) | (2 | ) | 41 | ||||||||||
Interest rate hedging instruments | 9 | — | — | 9 | ||||||||||||
Total derivative assets | $ | 1,600 | $ | (1,469 | ) | $ | (81 | ) | $ | 50 | ||||||
Derivative (liabilities): | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | (1,248 | ) | $ | 1,237 | $ | 11 | $ | — | |||||||
Commodity forward contracts | (528 | ) | 232 | 12 | (284 | ) | ||||||||||
Interest rate hedging instruments | (96 | ) | — | — | (96 | ) | ||||||||||
Total derivative (liabilities) | $ | (1,872 | ) | $ | 1,469 | $ | 23 | $ | (380 | ) | ||||||
Net derivative assets (liabilities) | $ | (272 | ) | $ | — | $ | (58 | ) | $ | (330 | ) |
December 31, 2015 | ||||||||||||||||
Gross Amounts Not Offset on the Consolidated Condensed Balance Sheets | ||||||||||||||||
Gross Amounts Presented on our Consolidated Condensed Balance Sheets | Derivative Asset (Liability) not Offset on the Consolidated Condensed Balance Sheets | Margin/Cash (Received) Posted (1) | Net Amount | |||||||||||||
Derivative assets: | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | 1,736 | $ | (1,602 | ) | $ | (134 | ) | $ | — | ||||||
Commodity forward contracts | 274 | (202 | ) | (3 | ) | 69 | ||||||||||
Interest rate hedging instruments | 1 | — | — | 1 | ||||||||||||
Total derivative assets | $ | 2,011 | $ | (1,804 | ) | $ | (137 | ) | $ | 70 | ||||||
Derivative (liabilities): | ||||||||||||||||
Commodity exchange traded futures and swaps contracts | $ | (1,604 | ) | $ | 1,602 | $ | 2 | $ | — | |||||||
Commodity forward contracts | (513 | ) | 202 | 3 | (308 | ) | ||||||||||
Interest rate hedging instruments | (90 | ) | — | — | (90 | ) | ||||||||||
Total derivative (liabilities) | $ | (2,207 | ) | $ | 1,804 | $ | 5 | $ | (398 | ) | ||||||
Net derivative assets (liabilities) | $ | (196 | ) | $ | — | $ | (132 | ) | $ | (328 | ) |
(1) | Negative balances represent margin deposits posted with us by our counterparties related to our derivative activities that are subject to a master netting arrangement. Positive balances reflect margin deposits and natural gas and power prepayments posted by us with our counterparties related to our derivative activities that are subject to a master netting arrangement. See Note 7 for a further discussion of our collateral. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Realized gain (loss)(1)(2) | |||||||||||||||
Commodity derivative instruments | $ | 63 | $ | 104 | $ | 181 | $ | 163 | |||||||
Total realized gain (loss) | $ | 63 | $ | 104 | $ | 181 | $ | 163 | |||||||
Mark-to-market gain (loss)(3) | |||||||||||||||
Commodity derivative instruments | $ | (36 | ) | $ | (1 | ) | $ | (131 | ) | $ | 69 | ||||
Interest rate hedging instruments | — | — | 1 | 1 | |||||||||||
Total mark-to-market gain (loss) | $ | (36 | ) | $ | (1 | ) | $ | (130 | ) | $ | 70 | ||||
Total activity, net | $ | 27 | $ | 103 | $ | 51 | $ | 233 |
(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 derivative activity related to the acquisition of Champion Energy. |
(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 June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Realized and mark-to-market gain (loss) | |||||||||||||||
Derivatives contracts included in operating revenues(1)(2) | $ | (272 | ) | $ | 115 | $ | (68 | ) | $ | 234 | |||||
Derivatives contracts included in fuel and purchased energy expense(1)(2) | 299 | (12 | ) | 118 | (2 | ) | |||||||||
Interest rate hedging instruments included in interest expense(3) | — | — | 1 | 1 | |||||||||||
Total activity, net | $ | 27 | $ | 103 | $ | 51 | $ | 233 |
(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 derivative activity related to the acquisition of Champion Energy. |
(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 June 30, | Three Months Ended June 30, | ||||||||||||||||
Gain (Loss) Recognized in OCI (Effective Portion) | Gain (Loss) Reclassified from AOCI into Income (Effective Portion)(3) | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | Affected Line Item on the Consolidated Condensed Statements of Operations | |||||||||||||
Interest rate hedging instruments(1)(2) | $ | (6 | ) | $ | 14 | $ | (11 | ) | $ | (12 | ) | Interest expense |
Six Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
Gain (Loss) Recognized in OCI (Effective Portion) | Gain (Loss) Reclassified from AOCI into Income (Effective Portion)(3) | ||||||||||||||||
2016 | 2015 | 2016 | 2015 | Affected Line Item on the Consolidated Condensed Statements of Operations | |||||||||||||
Interest rate hedging instruments(1)(2) | $ | (18 | ) | $ | 8 | $ | (22 | ) | $ | (24 | ) | Interest expense |
(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 and six months ended June 30, 2016 and 2015. |
(2) | We recorded an income tax expense of nil for each of the three and six months ended June 30, 2016 and 2015, 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 $143 million and $127 million at June 30, 2016 and December 31, 2015, respectively. Cumulative cash flow hedge losses attributable to the noncontrolling interest, net of tax, remaining in AOCI were $13 million and $11 million at June 30, 2016 and December 31, 2015, respectively. |
|
June 30, 2016 | December 31, 2015 | ||||||
Margin deposits(1) | $ | 134 | $ | 89 | |||
Natural gas and power prepayments | 35 | 34 | |||||
Total margin deposits and natural gas and power prepayments with our counterparties(2) | $ | 169 | $ | 123 | |||
Letters of credit issued | $ | 622 | $ | 600 | |||
First priority liens under power and natural gas agreements(3) | 231 | 382 | |||||
First priority liens under interest rate hedging instruments | 97 | 92 | |||||
Total letters of credit and first priority liens with our counterparties | $ | 950 | $ | 1,074 | |||
Margin deposits posted with us by our counterparties(1)(4) | $ | 9 | $ | 35 | |||
Letters of credit posted with us by our counterparties | 23 | 24 | |||||
Total margin deposits and letters of credit posted with us by our counterparties | $ | 32 | $ | 59 |
(1) | Balances are subject to master netting arrangements and presented on a gross basis on our Consolidated Condensed Balance Sheets. We do not offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation, and we do not offset amounts recognized for the right to reclaim, or the obligation to return, cash collateral with corresponding derivative instrument fair values. See Note 6 for further discussion of our derivative instruments subject to master netting arrangements. |
(2) | At June 30, 2016 and December 31, 2015, $159 million and $101 million, respectively, were included in margin deposits and other prepaid expense and $10 million and $22 million, respectively, were included in other assets on our Consolidated Condensed Balance Sheets. |
(3) | Includes $203 million and $345 million related to first priority liens under power supply contracts associated with our retail hedging activities at June 30, 2016 and December 31, 2015, respectively. |
(4) | Included in other current liabilities on our Consolidated Condensed Balance Sheets. |
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Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Income tax expense (benefit) | $ | (14 | ) | $ | 5 | $ | 21 | $ | 4 | ||||||
Effective tax rate | 33 | % | 21 | % | (10 | )% | 31 | % |
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Number of Restricted Stock Awards | Weighted Average Grant-Date Fair Value | |||||
Nonvested — December 31, 2015 | 3,528,270 | $ | 19.91 | |||
Granted | 2,941,831 | $ | 12.40 | |||
Forfeited | 166,018 | $ | 16.32 | |||
Vested | 1,275,797 | $ | 19.01 | |||
Nonvested — June 30, 2016 | 5,028,286 | $ | 15.86 |
Number of Performance Share Units | Weighted Average Grant-Date Fair Value | |||||
Nonvested — December 31, 2015 | 517,906 | $ | 23.36 | |||
Granted | 657,807 | $ | 14.81 | |||
Vested(1) | 3,249 | $ | 23.91 | |||
Nonvested — June 30, 2016 | 1,172,464 | $ | 18.56 |
(1) | In accordance with the applicable performance share unit agreements, performance share units granted to employees who meet the retirement eligibility requirements stipulated in the Equity Plan are fully vested upon the later of the date on which the employee becomes eligible to retire or one-year anniversary of the grant date. |
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Three Months Ended June 30, 2016 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 211 | $ | 530 | $ | 423 | $ | — | $ | 1,164 | |||||||||
Intersegment revenues | 1 | 4 | 4 | (9 | ) | — | |||||||||||||
Total operating revenues | $ | 212 | $ | 534 | $ | 427 | $ | (9 | ) | $ | 1,164 | ||||||||
Commodity Margin | $ | 254 | $ | 160 | $ | 243 | $ | — | $ | 657 | |||||||||
Add: Mark-to-market commodity activity, net and other(1) | (62 | ) | 7 | 28 | (8 | ) | (35 | ) | |||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 98 | 85 | 96 | (8 | ) | 271 | |||||||||||||
Depreciation and amortization expense | 56 | 53 | 53 | — | 162 | ||||||||||||||
Sales, general and other administrative expense | 8 | 14 | 12 | 1 | 35 | ||||||||||||||
Other operating expenses | 7 | 2 | 10 | (2 | ) | 17 | |||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (3 | ) | — | (3 | ) | ||||||||||||
Income from operations | 23 | 13 | 103 | 1 | 140 | ||||||||||||||
Interest expense, net of interest income | 156 | ||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 22 | ||||||||||||||||||
Loss before income taxes | $ | (38 | ) |
Three Months Ended June 30, 2015 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 421 | $ | 570 | $ | 451 | $ | — | $ | 1,442 | |||||||||
Intersegment revenues | — | 5 | 2 | (7 | ) | — | |||||||||||||
Total operating revenues | $ | 421 | $ | 575 | $ | 453 | $ | (7 | ) | $ | 1,442 | ||||||||
Commodity Margin | $ | 240 | $ | 170 | $ | 247 | $ | — | $ | 657 | |||||||||
Add: Mark-to-market commodity activity, net and other(1) | (14 | ) | 10 | 30 | (7 | ) | 19 | ||||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 120 | 82 | 77 | (7 | ) | 272 | |||||||||||||
Depreciation and amortization expense | 65 | 50 | 45 | — | 160 | ||||||||||||||
Sales, general and other administrative expense | 6 | 15 | 9 | — | 30 | ||||||||||||||
Other operating expenses | 10 | 2 | 8 | — | 20 | ||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (7 | ) | — | (7 | ) | ||||||||||||
Income from operations | 25 | 31 | 145 | — | 201 | ||||||||||||||
Interest expense, net of interest income | 157 | ||||||||||||||||||
Debt modification costs and other (income) expense, net | 18 | ||||||||||||||||||
Income before income taxes | $ | 26 |
Six Months Ended June 30, 2016 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 635 | $ | 1,062 | $ | 1,082 | $ | — | $ | 2,779 | |||||||||
Intersegment revenues | 3 | 7 | 7 | (17 | ) | — | |||||||||||||
Total operating revenues | $ | 638 | $ | 1,069 | $ | 1,089 | $ | (17 | ) | $ | 2,779 | ||||||||
Commodity Margin | $ | 451 | $ | 313 | $ | 473 | $ | — | $ | 1,237 | |||||||||
Add: Mark-to-market commodity activity, net and other(2) | (16 | ) | (103 | ) | 7 | (14 | ) | (126 | ) | ||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 189 | 171 | 180 | (14 | ) | 526 | |||||||||||||
Depreciation and amortization expense | 125 | 106 | 111 | — | 342 | ||||||||||||||
Sales, general and other administrative expense | 18 | 30 | 24 | 1 | 73 | ||||||||||||||
Other operating expenses | 15 | 4 | 20 | (2 | ) | 37 | |||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (10 | ) | — | (10 | ) | ||||||||||||
Income (loss) from operations | 88 | (101 | ) | 155 | 1 | 143 | |||||||||||||
Interest expense, net of interest income | 312 | ||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 28 | ||||||||||||||||||
Loss before income taxes | $ | (197 | ) |
Six Months Ended June 30, 2015 | |||||||||||||||||||
West | Texas | East | Consolidation and Elimination | Total | |||||||||||||||
Revenues from external customers | $ | 936 | $ | 1,151 | $ | 1,001 | $ | — | $ | 3,088 | |||||||||
Intersegment revenues | 2 | 8 | 4 | (14 | ) | — | |||||||||||||
Total operating revenues | $ | 938 | $ | 1,159 | $ | 1,005 | $ | (14 | ) | $ | 3,088 | ||||||||
Commodity Margin | $ | 458 | $ | 319 | $ | 415 | $ | — | $ | 1,192 | |||||||||
Add: Mark-to-market commodity activity, net and other(2) | 105 | 51 | (22 | ) | (14 | ) | 120 | ||||||||||||
Less: | |||||||||||||||||||
Plant operating expense | 226 | 171 | 149 | (14 | ) | 532 | |||||||||||||
Depreciation and amortization expense | 132 | 99 | 87 | — | 318 | ||||||||||||||
Sales, general and other administrative expense | 16 | 32 | 19 | — | 67 | ||||||||||||||
Other operating expenses | 20 | 4 | 16 | — | 40 | ||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (12 | ) | — | (12 | ) | ||||||||||||
Income from operations | 169 | 64 | 134 | — | 367 | ||||||||||||||
Interest expense, net of interest income | 310 | ||||||||||||||||||
Debt modification and extinguishment costs and other (income) expense, net | 39 | ||||||||||||||||||
Income before income taxes | $ | 18 |
(1) | Includes $(20) million and $(18) million of lease levelization and $27 million and $3 million of amortization expense for the three months ended June 30, 2016 and 2015, respectively. |
(2) | Includes $(42) million and $(42) million of lease levelization and $54 million and $7 million of amortization expense for the six months ended June 30, 2016 and 2015, respectively. |
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