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As of December 31, 2012 | Ownership Interest | Property, Plant & Equipment | Accumulated Depreciation | Construction in Progress | |||||||||||
(in millions, except percentages) | |||||||||||||||
Freestone Energy Center | 75.0 | % | $ | 392 | $ | (124 | ) | $ | 1 | ||||||
Hidalgo Energy Center | 78.5 | % | $ | 252 | $ | (86 | ) | $ | — |
• | financial institutions and trading companies; |
• | regulated utilities, municipalities, cooperatives, ISOs and other retail power suppliers; and |
• | oil, natural gas, chemical and other energy-related industrial companies. |
2012 | 2011 | ||||||||||||||||||||||
Current | Non-Current | Total | Current | Non-Current | Total | ||||||||||||||||||
Debt service(1) | $ | 11 | $ | 41 | $ | 52 | $ | 11 | $ | 42 | $ | 53 | |||||||||||
Construction/major maintenance | 32 | 14 | 46 | 33 | 10 | 43 | |||||||||||||||||
Security/project/insurance | 101 | 3 | 104 | 79 | — | 79 | |||||||||||||||||
Other | 49 | 2 | 51 | 16 | 3 | 19 | |||||||||||||||||
Total | $ | 193 | $ | 60 | $ | 253 | $ | 139 | $ | 55 | $ | 194 |
(1) | At both December 31, 2012 and 2011, amounts restricted for debt service included approximately $25 million of repurchase agreements with a financial institution containing maturity dates greater than one year. |
• | power and steam revenue consisting of fixed and variable capacity payments, which are not related to generation including capacity payments received from PJM capacity auctions, variable payments for power and steam, which are related to generation, host steam and RECs from our Geysers Assets, other revenues such as RMR Contracts, resource adequacy and certain ancillary service revenues and realized settlements from our marketing, hedging and optimization activities; |
• | unrealized revenues from derivative instruments as a result of our marketing, hedging and optimization activities; and |
• | other service revenues. |
2013 | $ | 548 | |
2014 | 446 | ||
2015 | 455 | ||
2016 | 397 | ||
2017 | 359 | ||
Thereafter | 2,078 | ||
Total | $ | 4,283 | |
• | quantitative information about the unobservable inputs used in a fair value measurement that is categorized within level 3 of the fair value hierarchy; |
• | for those fair value measurements categorized within level 3 of the fair value hierarchy, both the valuation processes used and the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs, if any; and |
• | the categorization by level of the fair value hierarchy for items that are not measured at fair value in the statement of financial position but for which the fair value is required to be disclosed. |
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2010 | ||||
Operating revenues | $ | 7,931 | ||
Net loss attributable to Calpine | $ | (83 | ) | |
Basic loss per common share attributable to Calpine | $ | (0.17 | ) | |
Diluted loss per common share attributable to Calpine | $ | (0.17 | ) |
Broad River: debt extinguishment costs | $ | 30 | |
South Point: impairment loss | 95 | ||
Total loss recorded for this transaction | $ | 125 |
2010 | ||||
Operating revenues | $ | 92 | ||
Gain on disposal of discontinued operations | 209 | |||
Income from discontinued operations before taxes | 43 | |||
Less: Income tax expense | 59 | |||
Discontinued operations, net of tax | $ | 193 |
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2012 | 2011 | Depreciable Lives | |||||||
Buildings, machinery and equipment | $ | 14,774 | $ | 15,074 | 3 – 47 Years | ||||
Geothermal properties | 1,243 | 1,163 | 13 – 59 Years | ||||||
Other | 142 | 156 | 3 – 47 Years | ||||||
16,159 | 16,393 | ||||||||
Less: Accumulated depreciation | 4,390 | 4,158 | |||||||
11,769 | 12,235 | ||||||||
Land | 98 | 91 | |||||||
Construction in progress | 1,138 | 693 | |||||||
Property, plant and equipment, net | $ | 13,005 | $ | 13,019 |
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5. | Variable Interest Entities and Unconsolidated Investments |
• | perform an ongoing reassessment each reporting period of whether we are the primary beneficiary of our VIEs; and |
• | evaluate if an entity is a VIE and whether we are the primary beneficiary whenever any changes in facts and circumstances occur such that the holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of a VIE that most significantly impact the VIE’s economic performance or when there are other changes in the powers held by individual variable interest holders. |
Ownership Interest as of December 31, 2012 | 2012 | 2011 | |||||||
Greenfield LP | 50% | $ | 69 | $ | 72 | ||||
Whitby | 50% | 12 | 8 | ||||||
Total investments | $ | 81 | $ | 80 |
(Income) from Unconsolidated Investments in Power Plants | Distributions | ||||||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||||||
Greenfield LP | $ | (17 | ) | $ | (12 | ) | $ | (8 | ) | $ | 22 | $ | 2 | $ | 6 | ||||||||
Whitby | (11 | ) | (9 | ) | (8 | ) | 7 | 4 | 5 | ||||||||||||||
Total | $ | (28 | ) | $ | (21 | ) | $ | (16 | ) | $ | 29 | $ | 6 | $ | 11 |
2012 | 2011 | ||||||
Assets: | |||||||
Cash and cash equivalents | $ | 64 | $ | 76 | |||
Current assets | 30 | 37 | |||||
Property, plant and equipment, net | 648 | 656 | |||||
Other assets | 4 | 3 | |||||
Total assets | $ | 746 | $ | 772 | |||
Liabilities: | |||||||
Current maturities of long-term debt | $ | 25 | $ | 24 | |||
Current liabilities | 36 | 47 | |||||
Long-term debt | 423 | 438 | |||||
Long-term derivative liabilities | 84 | 85 | |||||
Total liabilities | 568 | 594 | |||||
Member’s interest | 178 | 178 | |||||
Total liabilities and member’s interest | $ | 746 | $ | 772 |
2012 | 2011 | 2010 | |||||||||
Revenues | $ | 247 | $ | 277 | $ | 228 | |||||
Operating expenses | 171 | 208 | 183 | ||||||||
Income from operations | 76 | 69 | 45 | ||||||||
Interest expense, net of interest income | 27 | 30 | 27 | ||||||||
Other (income) expense, net | (2 | ) | 2 | — | |||||||
Net income | $ | 51 | $ | 37 | $ | 18 |
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Debt |
2012 | 2011 | ||||||
First Lien Notes(1) | $ | 5,303 | $ | 5,892 | |||
First Lien Term Loans(1) | 2,463 | 1,646 | |||||
Project financing, notes payable and other(1) | 1,789 | 1,691 | |||||
CCFC Notes | 978 | 972 | |||||
Capital lease obligations | 217 | 224 | |||||
Total debt | 10,750 | 10,425 | |||||
Less: Current maturities | 115 | 104 | |||||
Debt, net of current portion | $ | 10,635 | $ | 10,321 |
(1) | During the fourth quarter of 2012, we redeemed 10% of the aggregate principal amount of our First Lien Notes and repaid project debt with proceeds received from the issuance of our 2019 First Lien Term Loan. |
2013 | $ | 115 | |
2014 | 188 | ||
2015 | 153 | ||
2016 | 1,162 | ||
2017 | 1,597 | ||
Thereafter | 7,580 | ||
Total debt | 10,795 | ||
Less: Discount | 45 | ||
Total | $ | 10,750 |
Outstanding at December 31, | Weighted Average Effective Interest Rates(1) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
2017 First Lien Notes | $ | 1,080 | $ | 1,200 | 7.5 | % | 7.5 | % | |||||
2019 First Lien Notes | 360 | 400 | 8.2 | 8.2 | |||||||||
2020 First Lien Notes | 983 | 1,092 | 8.1 | 8.1 | |||||||||
2021 First Lien Notes | 1,800 | 2,000 | 7.7 | 7.7 | |||||||||
2023 First Lien Notes | 1,080 | 1,200 | 8.0 | 8.0 | |||||||||
Total First Lien Notes | $ | 5,303 | $ | 5,892 |
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount. |
• | incur or guarantee additional first lien indebtedness; |
• | enter into certain types of commodity hedge agreements that can be secured by first lien collateral; |
• | enter into sale and leaseback transactions; |
• | create or incur liens; and |
• | consolidate, merge or transfer all or substantially all of our assets and the assets of our restricted subsidiaries on a combined basis. |
Outstanding at December 31, | Weighted Average Effective Interest Rates(1) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
2018 First Lien Term Loans | $ | 1,630 | $ | 1,646 | 4.7 | % | 4.7 | % | |||||
2019 First Lien Term Loan | 833 | — | 4.7 | — | |||||||||
Total First Lien Term Loans | $ | 2,463 | $ | 1,646 |
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount. |
Outstanding at December 31, | Weighted Average Effective Interest Rates(1) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
Russell City Project Debt due 2023 | $ | 507 | $ | 244 | 3.6 | % | 4.1 | % | |||||
Steamboat due 2017 | 428 | 437 | 6.8 | 6.6 | |||||||||
OMEC due 2019 | 345 | 355 | 6.8 | 6.8 | |||||||||
Los Esteros Project Debt due 2023 | 209 | 83 | 3.5 | 3.8 | |||||||||
Pasadena(2) | 160 | 185 | 8.9 | 8.8 | |||||||||
Bethpage Energy Center 3 due 2020-2025(3) | 93 | 98 | 7.0 | 7.0 | |||||||||
Gilroy note payable due 2014 | 33 | 49 | 10.8 | 10.6 | |||||||||
Calpine BRSP due 2014(4) | — | 232 | — | 5.7 | |||||||||
Other | 14 | 8 | — | — | |||||||||
Total | $ | 1,789 | $ | 1,691 |
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount or premium. |
(2) | Represents a sale-leaseback transaction that is accounted for as financing transaction under U.S. GAAP. |
(3) | Represents a weighted average of first and second lien loans for the weighted average effective interest rates. |
(4) | During the fourth quarter of 2012, we repaid the Calpine BRSP project debt with proceeds received from the issuance of our 2019 First Lien Term Loan. |
Sale-Leaseback Transactions(1) | Capital Lease | Total | |||||||||
2013 | $ | 37 | $ | 42 | $ | 79 | |||||
2014 | 25 | 43 | 68 | ||||||||
2015 | 25 | 38 | 63 | ||||||||
2016 | 25 | 41 | 66 | ||||||||
2017 | 17 | 38 | 55 | ||||||||
Thereafter | 127 | 161 | 288 | ||||||||
Total minimum lease payments | 256 | 363 | 619 | ||||||||
Less: Amount representing interest | 96 | 146 | 242 | ||||||||
Present value of net minimum lease payments | $ | 160 | $ | 217 | $ | 377 |
(1) | Amounts are accounted for as financing transactions under U.S. GAAP and are included in our project financing, notes payable and other amounts above. |
2012 | 2011 | ||||||
Corporate Revolving Facility | $ | 243 | $ | 440 | |||
CDHI | 253 | 193 | |||||
Various project financing facilities | 130 | 130 | |||||
Total | $ | 626 | $ | 763 |
2012 | 2011 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
First Lien Notes | $ | 5,863 | $ | 5,303 | $ | 6,219 | $ | 5,892 | |||||||
First Lien Term Loans | 2,489 | 2,463 | 1,615 | 1,646 | |||||||||||
Project financing, notes payable and other(1) | 1,599 | 1,629 | 1,467 | 1,504 | |||||||||||
CCFC Notes | 1,075 | 978 | 1,070 | 972 | |||||||||||
Total | $ | 11,026 | $ | 10,373 | $ | 10,371 | $ | 10,014 |
(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 December 31, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 1,502 | $ | — | $ | — | $ | 1,502 | |||||||
Margin deposits | 196 | — | — | 196 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 385 | — | — | 385 | |||||||||||
Commodity forward contracts(2) | — | 24 | 24 | 48 | |||||||||||
Interest rate swaps | — | 4 | — | 4 | |||||||||||
Total assets | $ | 2,083 | $ | 28 | $ | 24 | $ | 2,135 | |||||||
Liabilities: | |||||||||||||||
Margin deposits held by us posted by our counterparties | $ | 11 | $ | — | $ | — | $ | 11 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 424 | — | — | 424 | |||||||||||
Commodity forward contracts(2) | — | 18 | 8 | 26 | |||||||||||
Interest rate swaps | — | 200 | — | 200 | |||||||||||
Total liabilities | $ | 435 | $ | 218 | $ | 8 | $ | 661 |
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2011 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 1,415 | $ | — | $ | — | $ | 1,415 | |||||||
Margin deposits | 140 | — | — | 140 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,043 | — | — | 1,043 | |||||||||||
Commodity forward contracts(2) | — | 74 | 37 | 111 | |||||||||||
Interest rate swaps | — | 10 | — | 10 | |||||||||||
Total assets | $ | 2,598 | $ | 84 | $ | 37 | $ | 2,719 | |||||||
Liabilities: | |||||||||||||||
Margin deposits held by us posted by our counterparties | $ | 34 | $ | — | $ | — | $ | 34 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 899 | — | — | 899 | |||||||||||
Commodity forward contracts(2) | — | 184 | 20 | 204 | |||||||||||
Interest rate swaps | — | 320 | — | 320 | |||||||||||
Total liabilities | $ | 933 | $ | 504 | $ | 20 | $ | 1,457 |
(1) | As of December 31, 2012 and 2011, we had cash equivalents of $1,274 million and $1,249 million included in cash and cash equivalents and $228 million and $166 million included in restricted cash, respectively. |
(2) | Includes OTC swaps and options. |
2012 | 2011 | 2010 | |||||||||
Balance, beginning of period | $ | 17 | $ | 30 | $ | 38 | |||||
Realized and unrealized gains (losses): | |||||||||||
Included in net income: | |||||||||||
Included in operating revenues(1) | 8 | 5 | 7 | ||||||||
Included in fuel and purchased energy expense(2) | — | — | — | ||||||||
Included in OCI | — | 2 | 2 | ||||||||
Purchases, issuances and settlements: | |||||||||||
Purchases | 3 | — | — | ||||||||
Issuances | (1 | ) | — | — | |||||||
Settlements | (11 | ) | (18 | ) | (20 | ) | |||||
Transfers in and/or out of level 3(3): | |||||||||||
Transfers into level 3(4) | — | (2 | ) | — | |||||||
Transfers out of level 3(5) | — | — | 3 | ||||||||
Balance, end of period | $ | 16 | $ | 17 | $ | 30 | |||||
Change in unrealized gains relating to instruments still held at end of period | $ | 8 | $ | 5 | $ | 7 |
(1) | For power contracts and Heat Rate swaps and options, included on our Consolidated Statements of Operations. |
(2) | For natural gas contracts, swaps and options, included on our Consolidated Statements of Operations. |
(3) | We transfer amounts among levels of the fair value hierarchy as of the end of each period. There were no significant transfers into/out of level 1 during the years ended December 31, 2012, 2011 and 2010. |
(4) | There were no significant transfers into level 3 for the years ended December 31, 2012 and 2010. We had $2 million in losses transferred out of level 2 into level 3 for the year ended December 31, 2011 due to changes in market liquidity in various power and natural gas markets. |
(5) | We had no significant transfers out of level 3 for the years ended December 31, 2012 and 2011. There were $3 million in losses transferred out of level 3 into level 2 for the year ended December 31, 2010 due to changes in market liquidity in various power markets. |
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||
December 31, 2012 | ||||||||||
Fair Value, Net Asset | Significant Unobservable | |||||||||
(Liability) | Valuation Technique | Input | Range | |||||||
(in millions) | ||||||||||
Physical Power | $ | 11 | Discounted cash flow | Market price (per MWh) | $23.75 — $53.82/MWh |
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Derivative Instruments | Notional Amounts | |||||||
2012 | 2011 | |||||||
Power (MWh) | (16 | ) | (21 | ) | ||||
Natural gas (MMBtu) | 66 | (200 | ) | |||||
Interest rate swaps(1) | $ | 1,602 | $ | 5,639 |
(1) | Approximately $4.1 billion at December 31, 2011 was related to hedges of our First Lien Credit Facility’s variable rate debt that was converted to fixed rate debt. On March 26, 2012, we terminated the interest rate swaps formerly hedging our First Lien Credit Facility. |
December 31, 2012 | |||||||||||
Interest Rate Swaps | Commodity Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | — | $ | 339 | $ | 339 | |||||
Long-term derivative assets | 4 | 94 | 98 | ||||||||
Total derivative assets | $ | 4 | $ | 433 | $ | 437 | |||||
Current derivative liabilities | $ | 40 | $ | 317 | $ | 357 | |||||
Long-term derivative liabilities | 160 | 133 | 293 | ||||||||
Total derivative liabilities | $ | 200 | $ | 450 | $ | 650 | |||||
Net derivative assets (liabilities) | $ | (196 | ) | $ | (17 | ) | $ | (213 | ) |
December 31, 2011 | |||||||||||
Interest Rate Swaps | Commodity Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | — | $ | 1,051 | $ | 1,051 | |||||
Long-term derivative assets | 10 | 103 | 113 | ||||||||
Total derivative assets | $ | 10 | $ | 1,154 | $ | 1,164 | |||||
Current derivative liabilities | $ | 166 | $ | 978 | $ | 1,144 | |||||
Long-term derivative liabilities | 154 | 125 | 279 | ||||||||
Total derivative liabilities | $ | 320 | $ | 1,103 | $ | 1,423 | |||||
Net derivative assets (liabilities) | $ | (310 | ) | $ | 51 | $ | (259 | ) |
December 31, 2012 | December 31, 2011 | ||||||||||||||
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(1): | |||||||||||||||
Interest rate swaps | $ | 4 | $ | 184 | $ | 10 | $ | 149 | |||||||
Commodity instruments | — | — | 51 | 18 | |||||||||||
Total derivatives designated as cash flow hedging instruments | $ | 4 | $ | 184 | $ | 61 | $ | 167 | |||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Interest rate swaps | $ | — | $ | 16 | $ | — | $ | 171 | |||||||
Commodity instruments | 433 | 450 | 1,103 | 1,085 | |||||||||||
Total derivatives not designated as hedging instruments | $ | 433 | $ | 466 | $ | 1,103 | $ | 1,256 | |||||||
Total derivatives | $ | 437 | $ | 650 | $ | 1,164 | $ | 1,423 |
(1) | Includes accumulated fair value of derivative instruments as of the date hedge accounting was discontinued, net of amortized fair value for settlement periods which have transpired. |
2012 | 2011 | 2010 | |||||||||
Realized gain (loss)(1) | |||||||||||
Interest rate swaps | $ | (157 | ) | $ | (193 | ) | $ | (31 | ) | ||
Commodity derivative instruments | 387 | 143 | 114 | ||||||||
Total realized gain (loss) | $ | 230 | $ | (50 | ) | $ | 83 | ||||
Unrealized gain (loss)(2) | |||||||||||
Interest rate swaps | $ | 154 | $ | 55 | $ | (199 | ) | ||||
Commodity derivative instruments | (82 | ) | (25 | ) | 143 | ||||||
Total unrealized gain (loss) | $ | 72 | $ | 30 | $ | (56 | ) | ||||
Total mark-to-market activity, net | $ | 302 | $ | (20 | ) | $ | 27 |
(1) | Does not include the realized value associated with derivative instruments that settle through physical delivery. |
(2) | In addition to changes in market value on derivatives not designated as hedges, changes in unrealized gain (loss) also includes de-designation of interest rate swap cash flow hedges and related reclassification from AOCI into earnings, hedge ineffectiveness and adjustments to reflect changes in credit default risk exposure. |
2012 | 2011 | 2010 | |||||||||
Realized and unrealized gain (loss) | |||||||||||
Derivatives contracts included in operating revenues | $ | 187 | $ | (20 | ) | $ | (19 | ) | |||
Derivatives contracts included in fuel and purchased energy expense | 118 | 138 | 276 | ||||||||
Interest rate swaps included in interest expense | 11 | 7 | (7 | ) | |||||||
Loss on interest rate derivatives | (14 | ) | (145 | ) | (223 | ) | |||||
Total mark-to-market activity, net | $ | 302 | $ | (20 | ) | $ | 27 |
Gains (Loss) Recognized in OCI (Effective Portion) | Gain (Loss) Reclassified from AOCI into Income (Effective Portion)(1) | Gain (Loss) Reclassified from AOCI into Income (Ineffective Portion) | |||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Interest rate swaps | $ | (43 | ) | $ | (23 | ) | $ | (32 | ) | (2) | $ | (138 | ) | (2) | $ | — | $ | (1 | ) | ||||
Commodity derivative instruments | (38 | ) | (71 | ) | 52 | (3) | 163 | (3) | 2 | (2 | ) | ||||||||||||
Total | $ | (81 | ) | $ | (94 | ) | $ | 20 | $ | 25 | $ | 2 | $ | (3 | ) |
(1) | Cumulative cash flow hedge losses, net of tax, remaining in AOCI were $242 million and $172 million at December 31, 2012 and 2011, respectively. |
(2) | Reclassification of losses from OCI to earnings consisted of $32 million from the reclassification of interest rate contracts due to settlement for each of the years ended December 31, 2012 and 2011, $15 million in losses from terminated interest rate contracts due to the repayment of project debt in 2011, and $91 million in losses from existing interest rate contracts reclassified from OCI into earnings due to the refinancing of variable rate First Lien Credit Facility term loans for the year ended December 31, 2011. |
(3) | Included in Commodity revenue and Commodity expense on our Consolidated Statements of Operations. |
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2012 | 2011 | ||||||
Margin deposits(1) | $ | 196 | $ | 140 | |||
Natural gas and power prepayments | 35 | 42 | |||||
Total margin deposits and natural gas and power prepayments with our counterparties(2) | $ | 231 | $ | 182 | |||
Letters of credit issued | $ | 484 | $ | 581 | |||
First priority liens under power and natural gas agreements | 14 | 1 | |||||
First priority liens under interest rate swap agreements | 206 | 318 | |||||
Total letters of credit and first priority liens with our counterparties | $ | 704 | $ | 900 | |||
Margin deposits held by us posted by our counterparties(1)(3) | $ | 11 | $ | 34 | |||
Letters of credit posted with us by our counterparties | 1 | — | |||||
Total margin deposits and letters of credit posted with us by our counterparties | $ | 12 | $ | 34 |
(1) | Balances are subject to master netting arrangements and presented on a gross basis on our Consolidated 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. |
(2) | At December 31, 2012 and 2011, $211 million and $162 million, respectively, were included in margin deposits and other prepaid expense and $20 million and $20 million, respectively, were included in other assets on our Consolidated Balance Sheets. |
(3) | Included in other current liabilities on our Consolidated Balance Sheets. |
|
2012 | 2011 | 2010 | |||||||||
U.S. | $ | 194 | $ | (232 | ) | $ | (226 | ) | |||
International | 24 | 20 | (4 | ) | |||||||
Total | $ | 218 | $ | (212 | ) | $ | (230 | ) |
2012 | 2011 | 2010 | |||||||||||
Current: | |||||||||||||
Federal | $ | (12 | ) | $ | (16 | ) | $ | (1 | ) | ||||
State | 16 | 12 | 10 | ||||||||||
Foreign | 14 | 3 | 3 | ||||||||||
Total current | 18 | (1 | ) | 12 | |||||||||
Deferred: | |||||||||||||
Federal | 11 | (33 | ) | (70 | ) | ||||||||
State | (5 | ) | 9 | — | |||||||||
Foreign | (5 | ) | 3 | (10 | ) | ||||||||
Total deferred | 1 | (21 | ) | (80 | ) | ||||||||
Total income tax expense (benefit) | $ | 19 | $ | (22 | ) | $ | (68 | ) | (1 | ) |
(1) | Includes approximately $13 million in intraperiod tax expense related to a prior period with an offsetting benefit in OCI. |
2012 | 2011 | 2010 | ||||||
Federal statutory tax expense (benefit) rate | 35.0 | % | (35.0 | )% | (35.0 | )% | ||
State tax expense, net of federal benefit | 3.2 | 6.5 | 2.8 | |||||
Depletion in excess of basis | (0.2 | ) | — | (1.3 | ) | |||
Preferred interest expense | 2.0 | 0.4 | 0.5 | |||||
Federal refunds | (4.7 | ) | — | — | ||||
Valuation allowances against future tax benefits | (32.3 | ) | 56.7 | 33.6 | ||||
Valuation allowances related to reconsolidation of CCFC | — | (36.0 | ) | — | ||||
Valuation allowances related to foreign taxes | (8.2 | ) | — | — | ||||
Foreign taxes | 3.7 | (0.9 | ) | 9.9 | ||||
Non-deductible reorganization items | 0.1 | 0.5 | 0.3 | |||||
Intraperiod allocation | 4.6 | 19.9 | (40.1 | ) | ||||
Bankruptcy settlement | — | (15.7 | ) | — | ||||
Change in unrecognized tax benefits | 5.1 | (6.6 | ) | 0.6 | ||||
Permanent differences and other items | 0.4 | (0.2 | ) | (0.9 | ) | |||
Effective income tax expense (benefit) rate | 8.7 | % | (10.4 | )% | (29.6 | )% |
2012 | 2011 | ||||||
Deferred tax assets: | |||||||
NOL and credit carryforwards | $ | 3,073 | $ | 3,290 | |||
Taxes related to risk management activities and derivatives | 90 | 58 | |||||
Reorganization items and impairments | 315 | 318 | |||||
Foreign capital losses | 25 | 24 | |||||
Other differences | 60 | 26 | |||||
Deferred tax assets before valuation allowance | 3,563 | 3,716 | |||||
Valuation allowance | (2,222 | ) | (2,336 | ) | |||
Total deferred tax assets | 1,341 | 1,380 | |||||
Deferred tax liabilities: property, plant and equipment | (1,316 | ) | (1,364 | ) | |||
Net deferred tax asset | 25 | 16 | |||||
Less: Current portion deferred tax liability | (3 | ) | (2 | ) | |||
Less: Non-current deferred tax asset | 28 | 18 | |||||
Deferred income tax liability, non-current | $ | — | $ | — |
2012 | 2011 | 2010 | |||||||||
Intraperiod tax allocation expense (benefit) included in continuing operations | $ | 9 | $ | 42 | $ | (86 | ) | ||||
Intraperiod tax allocation expense included in discountinued operations | $ | — | $ | — | $ | 59 | |||||
Intraperiod tax allocation expense (benefit) included in OCI | $ | (9 | ) | $ | (45 | ) | $ | 27 |
2012 | 2011 | 2010 | |||||||||
Balance, beginning of period | $ | (74 | ) | $ | (88 | ) | $ | (98 | ) | ||
Increases related to prior year tax positions | (19 | ) | — | (1 | ) | ||||||
Decreases related to prior year tax positions | 1 | 1 | 11 | ||||||||
Decrease related to lapse of statute of limitations | — | 13 | — | ||||||||
Balance, end of period | $ | (92 | ) | $ | (74 | ) | $ | (88 | ) |
|
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||
Outstanding — December 31, 2011 | 17,665,902 | $ | 17.32 | 4.8 | $ | 26 | ||||||
Granted | 898,115 | $ | 15.35 | |||||||||
Exercised | 348,500 | $ | 14.94 | |||||||||
Forfeited | 187,716 | $ | 13.42 | |||||||||
Expired | 165,300 | $ | 17.77 | |||||||||
Outstanding — December 31, 2012 | 17,862,501 | $ | 17.30 | 4.0 | $ | 42 | ||||||
Exercisable — December 31, 2012 | 10,251,149 | $ | 19.16 | 3.6 | $ | 12 | ||||||
Vested and expected to vest – December 31, 2012 | 17,588,775 | $ | 17.34 | 3.9 | $ | 41 |
2012 | 2011 | 2010 | ||||||||||
Expected term (in years)(1) | 6.5 | 6.5 | 4.0 – 6.5 | |||||||||
Risk-free interest rate(2) | 1.2 – 1.6 | % | 1.7 – 3.2 | % | 1.3 – 3.3 | % | ||||||
Expected volatility(3) | 27.0 – 30.5 | % | 31.2 – 44.9 | % | 31.4 – 37.6 | % | ||||||
Dividend yield(4) | — | — | — | |||||||||
Weighted average grant-date fair value (per option) | $ | 5.18 | $ | 5.49 | $ | 1.98 |
(1) | Expected term calculated using the simplified method prescribed by the SEC due to the lack of sufficient historical exercise data to provide a reasonable basis to estimate the expected term. |
(2) | Zero Coupon U.S. Treasury rate or equivalent based on expected term. |
(3) | Volatility calculated using the implied volatility of our exchange traded stock options. |
(4) | We have never paid cash dividends on our common stock, and it is not anticipated that any cash dividends will be paid on our common stock in the near future. |
Number of Restricted Stock Awards | Weighted Average Grant-Date Fair Value | |||||
Nonvested — December 31, 2011 | 3,510,358 | $ | 12.10 | |||
Granted | 1,991,894 | $ | 15.97 | |||
Forfeited | 297,166 | $ | 13.70 | |||
Vested | 1,071,049 | $ | 10.17 | |||
Nonvested — December 31, 2012 | 4,134,037 | $ | 14.33 |
|
|
Shares Issued | Shares Held in Treasury | Shares Held in Reserve | Total | ||||||||
Balance, December 31, 2009 | 443,325,827 | (327,572 | ) | 44,747,044 | 487,745,299 | ||||||
Resolution of claims | 488,612 | — | (488,612 | ) | — | ||||||
Shares issued under Calpine Equity Incentive Plans | 1,068,917 | (120,586 | ) | — | 948,331 | ||||||
Balance, December 31, 2010 | 444,883,356 | (448,158 | ) | 44,258,432 | 488,693,630 | ||||||
Resolution of claims | 44,258,432 | — | (44,258,432 | ) | — | ||||||
Shares issued under Calpine Equity Incentive Plans | 1,327,027 | (139,846 | ) | — | 1,187,181 | ||||||
Share repurchase program | — | (8,137,073 | ) | — | (8,137,073 | ) | |||||
Balance, December 31, 2011 | 490,468,815 | (8,725,077 | ) | — | 481,743,738 | ||||||
Shares issued under Calpine Equity Incentive Plans | 2,026,285 | (284,376 | ) | — | 1,741,909 | ||||||
Share repurchase program | — | (26,436,677 | ) | — | (26,436,677 | ) | |||||
Balance, December 31, 2012 | 492,495,100 | (35,446,130 | ) | — | 457,048,970 |
|
Initial Year | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | ||||||||||||||||||||||
Land and other operating leases | various | $ | 14 | $ | 14 | $ | 14 | $ | 15 | $ | 15 | $ | 228 | $ | 300 | ||||||||||||||
Power plant operating leases: | |||||||||||||||||||||||||||||
Greenleaf | 1998 | $ | 7 | $ | 3 | $ | — | $ | — | $ | — | $ | — | $ | 10 | ||||||||||||||
KIAC | 2000 | 24 | 24 | 23 | 22 | 22 | 52 | 167 | |||||||||||||||||||||
Total power plant leases | $ | 31 | $ | 27 | $ | 23 | $ | 22 | $ | 22 | $ | 52 | $ | 177 | |||||||||||||||
Total leases | $ | 45 | $ | 41 | $ | 37 | $ | 37 | $ | 37 | $ | 280 | $ | 477 |
2013 | $ | 12 | |
2014 | 12 | ||
2015 | 12 | ||
2016 | 12 | ||
2017 | 12 | ||
Thereafter | 31 | ||
Total | $ | 91 |
Guarantee Commitments | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | |||||||||||||||||||||
Guarantee of subsidiary debt(1) | $ | 47 | $ | 36 | $ | 37 | $ | 36 | $ | 26 | $ | 209 | $ | 391 | ||||||||||||||
Standby letters of credit(2)(4) | 536 | 41 | — | — | 19 | 30 | 626 | |||||||||||||||||||||
Surety bonds(3)(4)(5) | — | — | — | — | — | 4 | 4 | |||||||||||||||||||||
Guarantee of subsidiary operating lease payments(4) | 7 | 3 | — | — | — | — | 10 | |||||||||||||||||||||
Total | $ | 590 | $ | 80 | $ | 37 | $ | 36 | $ | 45 | $ | 243 | $ | 1,031 |
(1) | Represents Calpine Corporation guarantees of certain power plant capital leases and related interest. All guaranteed capital leases are recorded on our Consolidated Balance Sheets. |
(2) | The standby letters of credit disclosed above represent those disclosed in Note 6. |
(3) | The majority of surety bonds do not have expiration or cancellation dates. |
(4) | These are contingent off balance sheet obligations. |
(5) | As of December 31, 2012, $3 million of cash collateral is outstanding related to these bonds. |
|
Segment and Significant Customer Information |
Year Ended December 31, 2012 | |||||||||||||||||||||||
West | Texas | North | Southeast | Consolidation and Elimination | Total | ||||||||||||||||||
Revenues from external customers | $ | 1,668 | $ | 1,857 | $ | 1,280 | $ | 673 | $ | — | $ | 5,478 | |||||||||||
Intersegment revenues | 10 | 61 | 14 | 80 | (165 | ) | — | ||||||||||||||||
Total operating revenues | $ | 1,678 | $ | 1,918 | $ | 1,294 | $ | 753 | $ | (165 | ) | $ | 5,478 | ||||||||||
Commodity Margin (1)(2) | $ | 994 | $ | 570 | $ | 729 | $ | 245 | $ | — | $ | 2,538 | |||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(3) | (93 | ) | 87 | (14 | ) | (33 | ) | (31 | ) | (84 | ) | ||||||||||||
Less: | |||||||||||||||||||||||
Plant operating expense | 368 | 247 | 206 | 131 | (30 | ) | 922 | ||||||||||||||||
Depreciation and amortization expense | 203 | 142 | 134 | 85 | (2 | ) | 562 | ||||||||||||||||
Sales, general and other administrative expense | 36 | 47 | 28 | 29 | — | 140 | |||||||||||||||||
Other operating expenses | 42 | 5 | 29 | 5 | (3 | ) | 78 | ||||||||||||||||
(Gain) on sale of assets, net | — | — | (7 | ) | (215 | ) | — | (222 | ) | ||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (28 | ) | — | — | (28 | ) | |||||||||||||||
Income from operations | 252 | 216 | 353 | 177 | 4 | 1,002 | |||||||||||||||||
Interest expense, net of interest income | 725 | ||||||||||||||||||||||
Loss on interest rate derivatives | 14 | ||||||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 45 | ||||||||||||||||||||||
Income before income taxes and discontinued operations | $ | 218 |
Year Ended December 31, 2011 | |||||||||||||||||||||||
West | Texas | North | Southeast | Consolidation and Elimination | Total | ||||||||||||||||||
Revenues from external customers | $ | 2,372 | $ | 2,306 | $ | 1,336 | $ | 786 | $ | — | $ | 6,800 | |||||||||||
Intersegment revenues | 12 | 23 | 7 | 135 | (177 | ) | — | ||||||||||||||||
Total operating revenues | $ | 2,384 | $ | 2,329 | $ | 1,343 | $ | 921 | $ | (177 | ) | $ | 6,800 | ||||||||||
Commodity Margin(1)(2) | $ | 1,061 | $ | 469 | $ | 704 | $ | 240 | $ | — | $ | 2,474 | |||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(3) | 113 | (102 | ) | (13 | ) | 1 | (32 | ) | (33 | ) | |||||||||||||
Less: | |||||||||||||||||||||||
Plant operating expense | 380 | 235 | 177 | 141 | (29 | ) | 904 | ||||||||||||||||
Depreciation and amortization expense | 192 | 135 | 138 | 90 | (5 | ) | 550 | ||||||||||||||||
Sales, general and other administrative expense | 43 | 43 | 24 | 22 | (1 | ) | 131 | ||||||||||||||||
Other operating expenses | 41 | 3 | 30 | 5 | (2 | ) | 77 | ||||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (21 | ) | — | — | (21 | ) | |||||||||||||||
Income (loss) from operations | 518 | (49 | ) | 343 | (17 | ) | 5 | 800 | |||||||||||||||
Interest expense, net of interest income | 751 | ||||||||||||||||||||||
Loss on interest rate derivatives | 145 | ||||||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 115 | ||||||||||||||||||||||
Loss before income taxes and discontinued operations | $ | (211 | ) |
Year Ended December 31, 2010 | |||||||||||||||||||||||
West | Texas | North | Southeast | Consolidation and Elimination | Total | ||||||||||||||||||
Revenues from external customers | $ | 2,525 | $ | 2,162 | $ | 978 | $ | 880 | $ | — | $ | 6,545 | |||||||||||
Intersegment revenues | 12 | 22 | 6 | 138 | (178 | ) | — | ||||||||||||||||
Total operating revenues | $ | 2,537 | $ | 2,184 | $ | 984 | $ | 1,018 | $ | (178 | ) | $ | 6,545 | ||||||||||
Commodity Margin(1)(2) | $ | 1,080 | $ | 504 | $ | 535 | $ | 272 | $ | — | $ | 2,391 | |||||||||||
Add: Unrealized mark-to-market commodity activity, net and other | 69 | 89 | 21 | 22 | (30 | ) | 171 | ||||||||||||||||
Less: | |||||||||||||||||||||||
Plant operating expense | 351 | 285 | 138 | 123 | (29 | ) | 868 | ||||||||||||||||
Depreciation and amortization expense | 207 | 150 | 111 | 109 | (7 | ) | 570 | ||||||||||||||||
Sales, general and other administrative expense | 55 | 38 | 45 | 12 | 1 | 151 | |||||||||||||||||
Other operating expenses | 59 | 2 | 28 | 4 | (2 | ) | 91 | ||||||||||||||||
Impairment losses | 97 | — | — | 19 | — | 116 | |||||||||||||||||
(Gain) on sale of assets, net | — | (119 | ) | — | — | — | (119 | ) | |||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (16 | ) | — | — | (16 | ) | |||||||||||||||
Income from operations | 380 | 237 | 250 | 27 | 7 | 901 | |||||||||||||||||
Interest expense, net of interest income | 802 | ||||||||||||||||||||||
Loss on interest rate derivatives | 223 | ||||||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 106 | ||||||||||||||||||||||
Loss before income taxes and discontinued operations | $ | (230 | ) |
(1) | Our North segment includes Commodity Margin related to Riverside Energy Center, LLC of $73 million , $70 million and $73 million for the years ended December 31, 2012, 2011 and 2010, respectively. |
(2) | Our Southeast segment includes Commodity Margin related to Broad River of $52 million, $51 million and $55 million for the years ended December 31, 2012, 2011 and 2010, respectively. |
(3) | Includes $1 million and $12 million of lease levelization and $14 million and $8 million of amortization expense for the years ended December 31, 2012 and 2011, respectively, related to contracts that became effective in 2011. |
|
Quarter Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
(in millions, except per share amounts) | |||||||||||||||
2012 | |||||||||||||||
Operating revenues | $ | 1,367 | $ | 1,996 | $ | 879 | $ | 1,236 | |||||||
Income (loss) from operations | $ | 295 | $ | 705 | $ | (193 | ) | $ | 195 | ||||||
Net income (loss) attributable to Calpine | $ | 100 | $ | 437 | $ | (329 | ) | $ | (9 | ) | |||||
Net income (loss) per common share attributable to Calpine — Basic | $ | 0.22 | $ | 0.95 | $ | (0.69 | ) | $ | (0.02 | ) | |||||
Net income (loss) per common share attributable to Calpine — Diluted | $ | 0.22 | $ | 0.94 | $ | (0.69 | ) | $ | (0.02 | ) | |||||
2011 | |||||||||||||||
Operating revenues | $ | 1,459 | $ | 2,209 | $ | 1,633 | $ | 1,499 | |||||||
Income from operations | $ | 196 | $ | 403 | $ | 183 | $ | 18 | |||||||
Net income (loss) attributable to Calpine | $ | (13 | ) | $ | 190 | $ | (70 | ) | $ | (297 | ) | ||||
Net income (loss) per common share attributable to Calpine — Basic | $ | (0.03 | ) | $ | 0.39 | $ | (0.14 | ) | $ | (0.61 | ) | ||||
Net income (loss) per common share attributable to Calpine — Diluted | $ | (0.03 | ) | $ | 0.39 | $ | (0.14 | ) | $ | (0.61 | ) |
|
Description | Balance at Beginning of Year | Charged to Expense | Charged to Other Accounts | Deductions(1) | Balance at End of Year | ||||||||||||||
(in millions) | |||||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 13 | $ | (1 | ) | $ | (1 | ) | $ | (5 | ) | $ | 6 | ||||||
Deferred tax asset valuation allowance | 2,336 | (114 | ) | — | — | 2,222 | |||||||||||||
Year ended December 31, 2011 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 2 | $ | 7 | $ | 4 | $ | — | $ | 13 | |||||||||
Deferred tax asset valuation allowance | 2,386 | (50 | ) | — | — | 2,336 | |||||||||||||
Year ended December 31, 2010 | |||||||||||||||||||
Allowance for doubtful accounts | $ | 14 | $ | (12 | ) | $ | — | $ | — | $ | 2 | ||||||||
Deferred tax asset valuation allowance | 2,572 | (186 | ) | — | — | 2,386 |
(1) | Represents write-offs of accounts considered to be uncollectible and previously reserved. |
|
• | perform an ongoing reassessment each reporting period of whether we are the primary beneficiary of our VIEs; and |
• | evaluate if an entity is a VIE and whether we are the primary beneficiary whenever any changes in facts and circumstances occur such that the holders of the equity investment at risk, as a group, lose the power from voting rights or similar rights of those investments to direct the activities of a VIE that most significantly impact the VIE’s economic performance or when there are other changes in the powers held by individual variable interest holders. |
• | financial institutions and trading companies; |
• | regulated utilities, municipalities, cooperatives, ISOs and other retail power suppliers; and |
• | oil, natural gas, chemical and other energy-related industrial companies. |
• | power and steam revenue consisting of fixed and variable capacity payments, which are not related to generation including capacity payments received from PJM capacity auctions, variable payments for power and steam, which are related to generation, host steam and RECs from our Geysers Assets, other revenues such as RMR Contracts, resource adequacy and certain ancillary service revenues and realized settlements from our marketing, hedging and optimization activities; |
• | unrealized revenues from derivative instruments as a result of our marketing, hedging and optimization activities; and |
• | other service revenues. |
|
As of December 31, 2012 | Ownership Interest | Property, Plant & Equipment | Accumulated Depreciation | Construction in Progress | |||||||||||
(in millions, except percentages) | |||||||||||||||
Freestone Energy Center | 75.0 | % | $ | 392 | $ | (124 | ) | $ | 1 | ||||||
Hidalgo Energy Center | 78.5 | % | $ | 252 | $ | (86 | ) | $ | — |
2012 | 2011 | ||||||||||||||||||||||
Current | Non-Current | Total | Current | Non-Current | Total | ||||||||||||||||||
Debt service(1) | $ | 11 | $ | 41 | $ | 52 | $ | 11 | $ | 42 | $ | 53 | |||||||||||
Construction/major maintenance | 32 | 14 | 46 | 33 | 10 | 43 | |||||||||||||||||
Security/project/insurance | 101 | 3 | 104 | 79 | — | 79 | |||||||||||||||||
Other | 49 | 2 | 51 | 16 | 3 | 19 | |||||||||||||||||
Total | $ | 193 | $ | 60 | $ | 253 | $ | 139 | $ | 55 | $ | 194 |
(1) | At both December 31, 2012 and 2011, amounts restricted for debt service included approximately $25 million of repurchase agreements with a financial institution containing maturity dates greater than one year. |
2013 | $ | 548 | |
2014 | 446 | ||
2015 | 455 | ||
2016 | 397 | ||
2017 | 359 | ||
Thereafter | 2,078 | ||
Total | $ | 4,283 | |
Initial Year | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | ||||||||||||||||||||||
Land and other operating leases | various | $ | 14 | $ | 14 | $ | 14 | $ | 15 | $ | 15 | $ | 228 | $ | 300 | ||||||||||||||
Power plant operating leases: | |||||||||||||||||||||||||||||
Greenleaf | 1998 | $ | 7 | $ | 3 | $ | — | $ | — | $ | — | $ | — | $ | 10 | ||||||||||||||
KIAC | 2000 | 24 | 24 | 23 | 22 | 22 | 52 | 167 | |||||||||||||||||||||
Total power plant leases | $ | 31 | $ | 27 | $ | 23 | $ | 22 | $ | 22 | $ | 52 | $ | 177 | |||||||||||||||
Total leases | $ | 45 | $ | 41 | $ | 37 | $ | 37 | $ | 37 | $ | 280 | $ | 477 |
|
2010 | ||||
Operating revenues | $ | 7,931 | ||
Net loss attributable to Calpine | $ | (83 | ) | |
Basic loss per common share attributable to Calpine | $ | (0.17 | ) | |
Diluted loss per common share attributable to Calpine | $ | (0.17 | ) |
2010 | ||||
Operating revenues | $ | 92 | ||
Gain on disposal of discontinued operations | 209 | |||
Income from discontinued operations before taxes | 43 | |||
Less: Income tax expense | 59 | |||
Discontinued operations, net of tax | $ | 193 |
Broad River: debt extinguishment costs | $ | 30 | |
South Point: impairment loss | 95 | ||
Total loss recorded for this transaction | $ | 125 |
|
2012 | 2011 | Depreciable Lives | |||||||
Buildings, machinery and equipment | $ | 14,774 | $ | 15,074 | 3 – 47 Years | ||||
Geothermal properties | 1,243 | 1,163 | 13 – 59 Years | ||||||
Other | 142 | 156 | 3 – 47 Years | ||||||
16,159 | 16,393 | ||||||||
Less: Accumulated depreciation | 4,390 | 4,158 | |||||||
11,769 | 12,235 | ||||||||
Land | 98 | 91 | |||||||
Construction in progress | 1,138 | 693 | |||||||
Property, plant and equipment, net | $ | 13,005 | $ | 13,019 |
|
2012 | 2011 | ||||||
Assets: | |||||||
Cash and cash equivalents | $ | 64 | $ | 76 | |||
Current assets | 30 | 37 | |||||
Property, plant and equipment, net | 648 | 656 | |||||
Other assets | 4 | 3 | |||||
Total assets | $ | 746 | $ | 772 | |||
Liabilities: | |||||||
Current maturities of long-term debt | $ | 25 | $ | 24 | |||
Current liabilities | 36 | 47 | |||||
Long-term debt | 423 | 438 | |||||
Long-term derivative liabilities | 84 | 85 | |||||
Total liabilities | 568 | 594 | |||||
Member’s interest | 178 | 178 | |||||
Total liabilities and member’s interest | $ | 746 | $ | 772 |
2012 | 2011 | 2010 | |||||||||
Revenues | $ | 247 | $ | 277 | $ | 228 | |||||
Operating expenses | 171 | 208 | 183 | ||||||||
Income from operations | 76 | 69 | 45 | ||||||||
Interest expense, net of interest income | 27 | 30 | 27 | ||||||||
Other (income) expense, net | (2 | ) | 2 | — | |||||||
Net income | $ | 51 | $ | 37 | $ | 18 |
Ownership Interest as of December 31, 2012 | 2012 | 2011 | |||||||
Greenfield LP | 50% | $ | 69 | $ | 72 | ||||
Whitby | 50% | 12 | 8 | ||||||
Total investments | $ | 81 | $ | 80 |
(Income) from Unconsolidated Investments in Power Plants | Distributions | ||||||||||||||||||||||
2012 | 2011 | 2010 | 2012 | 2011 | 2010 | ||||||||||||||||||
Greenfield LP | $ | (17 | ) | $ | (12 | ) | $ | (8 | ) | $ | 22 | $ | 2 | $ | 6 | ||||||||
Whitby | (11 | ) | (9 | ) | (8 | ) | 7 | 4 | 5 | ||||||||||||||
Total | $ | (28 | ) | $ | (21 | ) | $ | (16 | ) | $ | 29 | $ | 6 | $ | 11 |
|
2012 | 2011 | ||||||
First Lien Notes(1) | $ | 5,303 | $ | 5,892 | |||
First Lien Term Loans(1) | 2,463 | 1,646 | |||||
Project financing, notes payable and other(1) | 1,789 | 1,691 | |||||
CCFC Notes | 978 | 972 | |||||
Capital lease obligations | 217 | 224 | |||||
Total debt | 10,750 | 10,425 | |||||
Less: Current maturities | 115 | 104 | |||||
Debt, net of current portion | $ | 10,635 | $ | 10,321 |
(1) | During the fourth quarter of 2012, we redeemed 10% of the aggregate principal amount of our First Lien Notes and repaid project debt with proceeds received from the issuance of our 2019 First Lien Term Loan. |
2013 | $ | 115 | |
2014 | 188 | ||
2015 | 153 | ||
2016 | 1,162 | ||
2017 | 1,597 | ||
Thereafter | 7,580 | ||
Total debt | 10,795 | ||
Less: Discount | 45 | ||
Total | $ | 10,750 |
Outstanding at December 31, | Weighted Average Effective Interest Rates(1) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
2017 First Lien Notes | $ | 1,080 | $ | 1,200 | 7.5 | % | 7.5 | % | |||||
2019 First Lien Notes | 360 | 400 | 8.2 | 8.2 | |||||||||
2020 First Lien Notes | 983 | 1,092 | 8.1 | 8.1 | |||||||||
2021 First Lien Notes | 1,800 | 2,000 | 7.7 | 7.7 | |||||||||
2023 First Lien Notes | 1,080 | 1,200 | 8.0 | 8.0 | |||||||||
Total First Lien Notes | $ | 5,303 | $ | 5,892 |
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount. |
Outstanding at December 31, | Weighted Average Effective Interest Rates(1) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
2018 First Lien Term Loans | $ | 1,630 | $ | 1,646 | 4.7 | % | 4.7 | % | |||||
2019 First Lien Term Loan | 833 | — | 4.7 | — | |||||||||
Total First Lien Term Loans | $ | 2,463 | $ | 1,646 |
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount. |
Outstanding at December 31, | Weighted Average Effective Interest Rates(1) | ||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||
Russell City Project Debt due 2023 | $ | 507 | $ | 244 | 3.6 | % | 4.1 | % | |||||
Steamboat due 2017 | 428 | 437 | 6.8 | 6.6 | |||||||||
OMEC due 2019 | 345 | 355 | 6.8 | 6.8 | |||||||||
Los Esteros Project Debt due 2023 | 209 | 83 | 3.5 | 3.8 | |||||||||
Pasadena(2) | 160 | 185 | 8.9 | 8.8 | |||||||||
Bethpage Energy Center 3 due 2020-2025(3) | 93 | 98 | 7.0 | 7.0 | |||||||||
Gilroy note payable due 2014 | 33 | 49 | 10.8 | 10.6 | |||||||||
Calpine BRSP due 2014(4) | — | 232 | — | 5.7 | |||||||||
Other | 14 | 8 | — | — | |||||||||
Total | $ | 1,789 | $ | 1,691 |
(1) | Our weighted average interest rate calculation includes the amortization of deferred financing costs and debt discount or premium. |
(2) | Represents a sale-leaseback transaction that is accounted for as financing transaction under U.S. GAAP. |
(3) | Represents a weighted average of first and second lien loans for the weighted average effective interest rates. |
(4) | During the fourth quarter of 2012, we repaid the Calpine BRSP project debt with proceeds received from the issuance of our 2019 First Lien Term Loan. |
Sale-Leaseback Transactions(1) | Capital Lease | Total | |||||||||
2013 | $ | 37 | $ | 42 | $ | 79 | |||||
2014 | 25 | 43 | 68 | ||||||||
2015 | 25 | 38 | 63 | ||||||||
2016 | 25 | 41 | 66 | ||||||||
2017 | 17 | 38 | 55 | ||||||||
Thereafter | 127 | 161 | 288 | ||||||||
Total minimum lease payments | 256 | 363 | 619 | ||||||||
Less: Amount representing interest | 96 | 146 | 242 | ||||||||
Present value of net minimum lease payments | $ | 160 | $ | 217 | $ | 377 |
(1) | Amounts are accounted for as financing transactions under U.S. GAAP and are included in our project financing, notes payable and other amounts above. |
2012 | 2011 | ||||||
Corporate Revolving Facility | $ | 243 | $ | 440 | |||
CDHI | 253 | 193 | |||||
Various project financing facilities | 130 | 130 | |||||
Total | $ | 626 | $ | 763 |
2012 | 2011 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
First Lien Notes | $ | 5,863 | $ | 5,303 | $ | 6,219 | $ | 5,892 | |||||||
First Lien Term Loans | 2,489 | 2,463 | 1,615 | 1,646 | |||||||||||
Project financing, notes payable and other(1) | 1,599 | 1,629 | 1,467 | 1,504 | |||||||||||
CCFC Notes | 1,075 | 978 | 1,070 | 972 | |||||||||||
Total | $ | 11,026 | $ | 10,373 | $ | 10,371 | $ | 10,014 |
(1) | Excludes a lease that is accounted for as a failed sale-leaseback transaction under U.S. GAAP. |
|
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||
December 31, 2012 | ||||||||||
Fair Value, Net Asset | Significant Unobservable | |||||||||
(Liability) | Valuation Technique | Input | Range | |||||||
(in millions) | ||||||||||
Physical Power | $ | 11 | Discounted cash flow | Market price (per MWh) | $23.75 — $53.82/MWh |
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2012 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 1,502 | $ | — | $ | — | $ | 1,502 | |||||||
Margin deposits | 196 | — | — | 196 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 385 | — | — | 385 | |||||||||||
Commodity forward contracts(2) | — | 24 | 24 | 48 | |||||||||||
Interest rate swaps | — | 4 | — | 4 | |||||||||||
Total assets | $ | 2,083 | $ | 28 | $ | 24 | $ | 2,135 | |||||||
Liabilities: | |||||||||||||||
Margin deposits held by us posted by our counterparties | $ | 11 | $ | — | $ | — | $ | 11 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 424 | — | — | 424 | |||||||||||
Commodity forward contracts(2) | — | 18 | 8 | 26 | |||||||||||
Interest rate swaps | — | 200 | — | 200 | |||||||||||
Total liabilities | $ | 435 | $ | 218 | $ | 8 | $ | 661 |
Assets and Liabilities with Recurring Fair Value Measures as of December 31, 2011 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | |||||||||||||||
Assets: | |||||||||||||||
Cash equivalents(1) | $ | 1,415 | $ | — | $ | — | $ | 1,415 | |||||||
Margin deposits | 140 | — | — | 140 | |||||||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 1,043 | — | — | 1,043 | |||||||||||
Commodity forward contracts(2) | — | 74 | 37 | 111 | |||||||||||
Interest rate swaps | — | 10 | — | 10 | |||||||||||
Total assets | $ | 2,598 | $ | 84 | $ | 37 | $ | 2,719 | |||||||
Liabilities: | |||||||||||||||
Margin deposits held by us posted by our counterparties | $ | 34 | $ | — | $ | — | $ | 34 | |||||||
Commodity instruments: | |||||||||||||||
Commodity exchange traded futures and swaps contracts | 899 | — | — | 899 | |||||||||||
Commodity forward contracts(2) | — | 184 | 20 | 204 | |||||||||||
Interest rate swaps | — | 320 | — | 320 | |||||||||||
Total liabilities | $ | 933 | $ | 504 | $ | 20 | $ | 1,457 |
(1) | As of December 31, 2012 and 2011, we had cash equivalents of $1,274 million and $1,249 million included in cash and cash equivalents and $228 million and $166 million included in restricted cash, respectively. |
(2) | Includes OTC swaps and options. |
2012 | 2011 | 2010 | |||||||||
Balance, beginning of period | $ | 17 | $ | 30 | $ | 38 | |||||
Realized and unrealized gains (losses): | |||||||||||
Included in net income: | |||||||||||
Included in operating revenues(1) | 8 | 5 | 7 | ||||||||
Included in fuel and purchased energy expense(2) | — | — | — | ||||||||
Included in OCI | — | 2 | 2 | ||||||||
Purchases, issuances and settlements: | |||||||||||
Purchases | 3 | — | — | ||||||||
Issuances | (1 | ) | — | — | |||||||
Settlements | (11 | ) | (18 | ) | (20 | ) | |||||
Transfers in and/or out of level 3(3): | |||||||||||
Transfers into level 3(4) | — | (2 | ) | — | |||||||
Transfers out of level 3(5) | — | — | 3 | ||||||||
Balance, end of period | $ | 16 | $ | 17 | $ | 30 | |||||
Change in unrealized gains relating to instruments still held at end of period | $ | 8 | $ | 5 | $ | 7 |
(1) | For power contracts and Heat Rate swaps and options, included on our Consolidated Statements of Operations. |
(2) | For natural gas contracts, swaps and options, included on our Consolidated Statements of Operations. |
(3) | We transfer amounts among levels of the fair value hierarchy as of the end of each period. There were no significant transfers into/out of level 1 during the years ended December 31, 2012, 2011 and 2010. |
(4) | There were no significant transfers into level 3 for the years ended December 31, 2012 and 2010. We had $2 million in losses transferred out of level 2 into level 3 for the year ended December 31, 2011 due to changes in market liquidity in various power and natural gas markets. |
(5) | We had no significant transfers out of level 3 for the years ended December 31, 2012 and 2011. There were $3 million in losses transferred out of level 3 into level 2 for the year ended December 31, 2010 due to changes in market liquidity in various power markets. |
|
Derivative Instruments | Notional Amounts | |||||||
2012 | 2011 | |||||||
Power (MWh) | (16 | ) | (21 | ) | ||||
Natural gas (MMBtu) | 66 | (200 | ) | |||||
Interest rate swaps(1) | $ | 1,602 | $ | 5,639 |
(1) | Approximately $4.1 billion at December 31, 2011 was related to hedges of our First Lien Credit Facility’s variable rate debt that was converted to fixed rate debt. On March 26, 2012, we terminated the interest rate swaps formerly hedging our First Lien Credit Facility |
December 31, 2012 | |||||||||||
Interest Rate Swaps | Commodity Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | — | $ | 339 | $ | 339 | |||||
Long-term derivative assets | 4 | 94 | 98 | ||||||||
Total derivative assets | $ | 4 | $ | 433 | $ | 437 | |||||
Current derivative liabilities | $ | 40 | $ | 317 | $ | 357 | |||||
Long-term derivative liabilities | 160 | 133 | 293 | ||||||||
Total derivative liabilities | $ | 200 | $ | 450 | $ | 650 | |||||
Net derivative assets (liabilities) | $ | (196 | ) | $ | (17 | ) | $ | (213 | ) |
December 31, 2011 | |||||||||||
Interest Rate Swaps | Commodity Instruments | Total Derivative Instruments | |||||||||
Balance Sheet Presentation | |||||||||||
Current derivative assets | $ | — | $ | 1,051 | $ | 1,051 | |||||
Long-term derivative assets | 10 | 103 | 113 | ||||||||
Total derivative assets | $ | 10 | $ | 1,154 | $ | 1,164 | |||||
Current derivative liabilities | $ | 166 | $ | 978 | $ | 1,144 | |||||
Long-term derivative liabilities | 154 | 125 | 279 | ||||||||
Total derivative liabilities | $ | 320 | $ | 1,103 | $ | 1,423 | |||||
Net derivative assets (liabilities) | $ | (310 | ) | $ | 51 | $ | (259 | ) |
December 31, 2012 | December 31, 2011 | ||||||||||||||
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(1): | |||||||||||||||
Interest rate swaps | $ | 4 | $ | 184 | $ | 10 | $ | 149 | |||||||
Commodity instruments | — | — | 51 | 18 | |||||||||||
Total derivatives designated as cash flow hedging instruments | $ | 4 | $ | 184 | $ | 61 | $ | 167 | |||||||
Derivatives not designated as hedging instruments: | |||||||||||||||
Interest rate swaps | $ | — | $ | 16 | $ | — | $ | 171 | |||||||
Commodity instruments | 433 | 450 | 1,103 | 1,085 | |||||||||||
Total derivatives not designated as hedging instruments | $ | 433 | $ | 466 | $ | 1,103 | $ | 1,256 | |||||||
Total derivatives | $ | 437 | $ | 650 | $ | 1,164 | $ | 1,423 |
(1) | Includes accumulated fair value of derivative instruments as of the date hedge accounting was discontinued, net of amortized fair value for settlement periods which have transpired. |
2012 | 2011 | 2010 | |||||||||
Realized gain (loss)(1) | |||||||||||
Interest rate swaps | $ | (157 | ) | $ | (193 | ) | $ | (31 | ) | ||
Commodity derivative instruments | 387 | 143 | 114 | ||||||||
Total realized gain (loss) | $ | 230 | $ | (50 | ) | $ | 83 | ||||
Unrealized gain (loss)(2) | |||||||||||
Interest rate swaps | $ | 154 | $ | 55 | $ | (199 | ) | ||||
Commodity derivative instruments | (82 | ) | (25 | ) | 143 | ||||||
Total unrealized gain (loss) | $ | 72 | $ | 30 | $ | (56 | ) | ||||
Total mark-to-market activity, net | $ | 302 | $ | (20 | ) | $ | 27 |
(1) | Does not include the realized value associated with derivative instruments that settle through physical delivery. |
(2) | In addition to changes in market value on derivatives not designated as hedges, changes in unrealized gain (loss) also includes de-designation of interest rate swap cash flow hedges and related reclassification from AOCI into earnings, hedge ineffectiveness and adjustments to reflect changes in credit default risk exposure. |
2012 | 2011 | 2010 | |||||||||
Realized and unrealized gain (loss) | |||||||||||
Derivatives contracts included in operating revenues | $ | 187 | $ | (20 | ) | $ | (19 | ) | |||
Derivatives contracts included in fuel and purchased energy expense | 118 | 138 | 276 | ||||||||
Interest rate swaps included in interest expense | 11 | 7 | (7 | ) | |||||||
Loss on interest rate derivatives | (14 | ) | (145 | ) | (223 | ) | |||||
Total mark-to-market activity, net | $ | 302 | $ | (20 | ) | $ | 27 |
Gains (Loss) Recognized in OCI (Effective Portion) | Gain (Loss) Reclassified from AOCI into Income (Effective Portion)(1) | Gain (Loss) Reclassified from AOCI into Income (Ineffective Portion) | |||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Interest rate swaps | $ | (43 | ) | $ | (23 | ) | $ | (32 | ) | (2) | $ | (138 | ) | (2) | $ | — | $ | (1 | ) | ||||
Commodity derivative instruments | (38 | ) | (71 | ) | 52 | (3) | 163 | (3) | 2 | (2 | ) | ||||||||||||
Total | $ | (81 | ) | $ | (94 | ) | $ | 20 | $ | 25 | $ | 2 | $ | (3 | ) |
(1) | Cumulative cash flow hedge losses, net of tax, remaining in AOCI were $242 million and $172 million at December 31, 2012 and 2011, respectively. |
(2) | Reclassification of losses from OCI to earnings consisted of $32 million from the reclassification of interest rate contracts due to settlement for each of the years ended December 31, 2012 and 2011, $15 million in losses from terminated interest rate contracts due to the repayment of project debt in 2011, and $91 million in losses from existing interest rate contracts reclassified from OCI into earnings due to the refinancing of variable rate First Lien Credit Facility term loans for the year ended December 31, 2011. |
(3) | Included in Commodity revenue and Commodity expense on our Consolidated Statements of Operations. |
|
2012 | 2011 | ||||||
Margin deposits(1) | $ | 196 | $ | 140 | |||
Natural gas and power prepayments | 35 | 42 | |||||
Total margin deposits and natural gas and power prepayments with our counterparties(2) | $ | 231 | $ | 182 | |||
Letters of credit issued | $ | 484 | $ | 581 | |||
First priority liens under power and natural gas agreements | 14 | 1 | |||||
First priority liens under interest rate swap agreements | 206 | 318 | |||||
Total letters of credit and first priority liens with our counterparties | $ | 704 | $ | 900 | |||
Margin deposits held by us posted by our counterparties(1)(3) | $ | 11 | $ | 34 | |||
Letters of credit posted with us by our counterparties | 1 | — | |||||
Total margin deposits and letters of credit posted with us by our counterparties | $ | 12 | $ | 34 |
(1) | Balances are subject to master netting arrangements and presented on a gross basis on our Consolidated 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. |
(2) | At December 31, 2012 and 2011, $211 million and $162 million, respectively, were included in margin deposits and other prepaid expense and $20 million and $20 million, respectively, were included in other assets on our Consolidated Balance Sheets. |
(3) | Included in other current liabilities on our Consolidated Balance Sheets. |
|
2012 | 2011 | 2010 | |||||||||
U.S. | $ | 194 | $ | (232 | ) | $ | (226 | ) | |||
International | 24 | 20 | (4 | ) | |||||||
Total | $ | 218 | $ | (212 | ) | $ | (230 | ) |
2012 | 2011 | 2010 | |||||||||||
Current: | |||||||||||||
Federal | $ | (12 | ) | $ | (16 | ) | $ | (1 | ) | ||||
State | 16 | 12 | 10 | ||||||||||
Foreign | 14 | 3 | 3 | ||||||||||
Total current | 18 | (1 | ) | 12 | |||||||||
Deferred: | |||||||||||||
Federal | 11 | (33 | ) | (70 | ) | ||||||||
State | (5 | ) | 9 | — | |||||||||
Foreign | (5 | ) | 3 | (10 | ) | ||||||||
Total deferred | 1 | (21 | ) | (80 | ) | ||||||||
Total income tax expense (benefit) | $ | 19 | $ | (22 | ) | $ | (68 | ) | (1 | ) |
(1) | Includes approximately $13 million in intraperiod tax expense related to a prior period with an offsetting benefit in OCI. |
2012 | 2011 | 2010 | ||||||
Federal statutory tax expense (benefit) rate | 35.0 | % | (35.0 | )% | (35.0 | )% | ||
State tax expense, net of federal benefit | 3.2 | 6.5 | 2.8 | |||||
Depletion in excess of basis | (0.2 | ) | — | (1.3 | ) | |||
Preferred interest expense | 2.0 | 0.4 | 0.5 | |||||
Federal refunds | (4.7 | ) | — | — | ||||
Valuation allowances against future tax benefits | (32.3 | ) | 56.7 | 33.6 | ||||
Valuation allowances related to reconsolidation of CCFC | — | (36.0 | ) | — | ||||
Valuation allowances related to foreign taxes | (8.2 | ) | — | — | ||||
Foreign taxes | 3.7 | (0.9 | ) | 9.9 | ||||
Non-deductible reorganization items | 0.1 | 0.5 | 0.3 | |||||
Intraperiod allocation | 4.6 | 19.9 | (40.1 | ) | ||||
Bankruptcy settlement | — | (15.7 | ) | — | ||||
Change in unrecognized tax benefits | 5.1 | (6.6 | ) | 0.6 | ||||
Permanent differences and other items | 0.4 | (0.2 | ) | (0.9 | ) | |||
Effective income tax expense (benefit) rate | 8.7 | % | (10.4 | )% | (29.6 | )% |
2012 | 2011 | ||||||
Deferred tax assets: | |||||||
NOL and credit carryforwards | $ | 3,073 | $ | 3,290 | |||
Taxes related to risk management activities and derivatives | 90 | 58 | |||||
Reorganization items and impairments | 315 | 318 | |||||
Foreign capital losses | 25 | 24 | |||||
Other differences | 60 | 26 | |||||
Deferred tax assets before valuation allowance | 3,563 | 3,716 | |||||
Valuation allowance | (2,222 | ) | (2,336 | ) | |||
Total deferred tax assets | 1,341 | 1,380 | |||||
Deferred tax liabilities: property, plant and equipment | (1,316 | ) | (1,364 | ) | |||
Net deferred tax asset | 25 | 16 | |||||
Less: Current portion deferred tax liability | (3 | ) | (2 | ) | |||
Less: Non-current deferred tax asset | 28 | 18 | |||||
Deferred income tax liability, non-current | $ | — | $ | — |
2012 | 2011 | 2010 | |||||||||
Intraperiod tax allocation expense (benefit) included in continuing operations | $ | 9 | $ | 42 | $ | (86 | ) | ||||
Intraperiod tax allocation expense included in discountinued operations | $ | — | $ | — | $ | 59 | |||||
Intraperiod tax allocation expense (benefit) included in OCI | $ | (9 | ) | $ | (45 | ) | $ | 27 |
2012 | 2011 | 2010 | |||||||||
Balance, beginning of period | $ | (74 | ) | $ | (88 | ) | $ | (98 | ) | ||
Increases related to prior year tax positions | (19 | ) | — | (1 | ) | ||||||
Decreases related to prior year tax positions | 1 | 1 | 11 | ||||||||
Decrease related to lapse of statute of limitations | — | 13 | — | ||||||||
Balance, end of period | $ | (92 | ) | $ | (74 | ) | $ | (88 | ) |
|
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||
Outstanding — December 31, 2011 | 17,665,902 | $ | 17.32 | 4.8 | $ | 26 | ||||||
Granted | 898,115 | $ | 15.35 | |||||||||
Exercised | 348,500 | $ | 14.94 | |||||||||
Forfeited | 187,716 | $ | 13.42 | |||||||||
Expired | 165,300 | $ | 17.77 | |||||||||
Outstanding — December 31, 2012 | 17,862,501 | $ | 17.30 | 4.0 | $ | 42 | ||||||
Exercisable — December 31, 2012 | 10,251,149 | $ | 19.16 | 3.6 | $ | 12 | ||||||
Vested and expected to vest – December 31, 2012 | 17,588,775 | $ | 17.34 | 3.9 | $ | 41 |
2012 | 2011 | 2010 | ||||||||||
Expected term (in years)(1) | 6.5 | 6.5 | 4.0 – 6.5 | |||||||||
Risk-free interest rate(2) | 1.2 – 1.6 | % | 1.7 – 3.2 | % | 1.3 – 3.3 | % | ||||||
Expected volatility(3) | 27.0 – 30.5 | % | 31.2 – 44.9 | % | 31.4 – 37.6 | % | ||||||
Dividend yield(4) | — | — | — | |||||||||
Weighted average grant-date fair value (per option) | $ | 5.18 | $ | 5.49 | $ | 1.98 |
(1) | Expected term calculated using the simplified method prescribed by the SEC due to the lack of sufficient historical exercise data to provide a reasonable basis to estimate the expected term. |
(2) | Zero Coupon U.S. Treasury rate or equivalent based on expected term. |
(3) | Volatility calculated using the implied volatility of our exchange traded stock options. |
(4) | We have never paid cash dividends on our common stock, and it is not anticipated that any cash dividends will be paid on our common stock in the near future |
Number of Restricted Stock Awards | Weighted Average Grant-Date Fair Value | |||||
Nonvested — December 31, 2011 | 3,510,358 | $ | 12.10 | |||
Granted | 1,991,894 | $ | 15.97 | |||
Forfeited | 297,166 | $ | 13.70 | |||
Vested | 1,071,049 | $ | 10.17 | |||
Nonvested — December 31, 2012 | 4,134,037 | $ | 14.33 |
|
Shares Issued | Shares Held in Treasury | Shares Held in Reserve | Total | ||||||||
Balance, December 31, 2009 | 443,325,827 | (327,572 | ) | 44,747,044 | 487,745,299 | ||||||
Resolution of claims | 488,612 | — | (488,612 | ) | — | ||||||
Shares issued under Calpine Equity Incentive Plans | 1,068,917 | (120,586 | ) | — | 948,331 | ||||||
Balance, December 31, 2010 | 444,883,356 | (448,158 | ) | 44,258,432 | 488,693,630 | ||||||
Resolution of claims | 44,258,432 | — | (44,258,432 | ) | — | ||||||
Shares issued under Calpine Equity Incentive Plans | 1,327,027 | (139,846 | ) | — | 1,187,181 | ||||||
Share repurchase program | — | (8,137,073 | ) | — | (8,137,073 | ) | |||||
Balance, December 31, 2011 | 490,468,815 | (8,725,077 | ) | — | 481,743,738 | ||||||
Shares issued under Calpine Equity Incentive Plans | 2,026,285 | (284,376 | ) | — | 1,741,909 | ||||||
Share repurchase program | — | (26,436,677 | ) | — | (26,436,677 | ) | |||||
Balance, December 31, 2012 | 492,495,100 | (35,446,130 | ) | — | 457,048,970 |
|
2013 | $ | 548 | |
2014 | 446 | ||
2015 | 455 | ||
2016 | 397 | ||
2017 | 359 | ||
Thereafter | 2,078 | ||
Total | $ | 4,283 | |
Initial Year | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | ||||||||||||||||||||||
Land and other operating leases | various | $ | 14 | $ | 14 | $ | 14 | $ | 15 | $ | 15 | $ | 228 | $ | 300 | ||||||||||||||
Power plant operating leases: | |||||||||||||||||||||||||||||
Greenleaf | 1998 | $ | 7 | $ | 3 | $ | — | $ | — | $ | — | $ | — | $ | 10 | ||||||||||||||
KIAC | 2000 | 24 | 24 | 23 | 22 | 22 | 52 | 167 | |||||||||||||||||||||
Total power plant leases | $ | 31 | $ | 27 | $ | 23 | $ | 22 | $ | 22 | $ | 52 | $ | 177 | |||||||||||||||
Total leases | $ | 45 | $ | 41 | $ | 37 | $ | 37 | $ | 37 | $ | 280 | $ | 477 |
2013 | $ | 12 | |
2014 | 12 | ||
2015 | 12 | ||
2016 | 12 | ||
2017 | 12 | ||
Thereafter | 31 | ||
Total | $ | 91 |
Guarantee Commitments | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | |||||||||||||||||||||
Guarantee of subsidiary debt(1) | $ | 47 | $ | 36 | $ | 37 | $ | 36 | $ | 26 | $ | 209 | $ | 391 | ||||||||||||||
Standby letters of credit(2)(4) | 536 | 41 | — | — | 19 | 30 | 626 | |||||||||||||||||||||
Surety bonds(3)(4)(5) | — | — | — | — | — | 4 | 4 | |||||||||||||||||||||
Guarantee of subsidiary operating lease payments(4) | 7 | 3 | — | — | — | — | 10 | |||||||||||||||||||||
Total | $ | 590 | $ | 80 | $ | 37 | $ | 36 | $ | 45 | $ | 243 | $ | 1,031 |
(1) | Represents Calpine Corporation guarantees of certain power plant capital leases and related interest. All guaranteed capital leases are recorded on our Consolidated Balance Sheets. |
(2) | The standby letters of credit disclosed above represent those disclosed in Note 6. |
(3) | The majority of surety bonds do not have expiration or cancellation dates. |
(4) | These are contingent off balance sheet obligations. |
(5) | As of December 31, 2012, $3 million of cash collateral is outstanding related to these bonds. |
|
Year Ended December 31, 2012 | |||||||||||||||||||||||
West | Texas | North | Southeast | Consolidation and Elimination | Total | ||||||||||||||||||
Revenues from external customers | $ | 1,668 | $ | 1,857 | $ | 1,280 | $ | 673 | $ | — | $ | 5,478 | |||||||||||
Intersegment revenues | 10 | 61 | 14 | 80 | (165 | ) | — | ||||||||||||||||
Total operating revenues | $ | 1,678 | $ | 1,918 | $ | 1,294 | $ | 753 | $ | (165 | ) | $ | 5,478 | ||||||||||
Commodity Margin (1)(2) | $ | 994 | $ | 570 | $ | 729 | $ | 245 | $ | — | $ | 2,538 | |||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(3) | (93 | ) | 87 | (14 | ) | (33 | ) | (31 | ) | (84 | ) | ||||||||||||
Less: | |||||||||||||||||||||||
Plant operating expense | 368 | 247 | 206 | 131 | (30 | ) | 922 | ||||||||||||||||
Depreciation and amortization expense | 203 | 142 | 134 | 85 | (2 | ) | 562 | ||||||||||||||||
Sales, general and other administrative expense | 36 | 47 | 28 | 29 | — | 140 | |||||||||||||||||
Other operating expenses | 42 | 5 | 29 | 5 | (3 | ) | 78 | ||||||||||||||||
(Gain) on sale of assets, net | — | — | (7 | ) | (215 | ) | — | (222 | ) | ||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (28 | ) | — | — | (28 | ) | |||||||||||||||
Income from operations | 252 | 216 | 353 | 177 | 4 | 1,002 | |||||||||||||||||
Interest expense, net of interest income | 725 | ||||||||||||||||||||||
Loss on interest rate derivatives | 14 | ||||||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 45 | ||||||||||||||||||||||
Income before income taxes and discontinued operations | $ | 218 |
Year Ended December 31, 2011 | |||||||||||||||||||||||
West | Texas | North | Southeast | Consolidation and Elimination | Total | ||||||||||||||||||
Revenues from external customers | $ | 2,372 | $ | 2,306 | $ | 1,336 | $ | 786 | $ | — | $ | 6,800 | |||||||||||
Intersegment revenues | 12 | 23 | 7 | 135 | (177 | ) | — | ||||||||||||||||
Total operating revenues | $ | 2,384 | $ | 2,329 | $ | 1,343 | $ | 921 | $ | (177 | ) | $ | 6,800 | ||||||||||
Commodity Margin(1)(2) | $ | 1,061 | $ | 469 | $ | 704 | $ | 240 | $ | — | $ | 2,474 | |||||||||||
Add: Unrealized mark-to-market commodity activity, net and other(3) | 113 | (102 | ) | (13 | ) | 1 | (32 | ) | (33 | ) | |||||||||||||
Less: | |||||||||||||||||||||||
Plant operating expense | 380 | 235 | 177 | 141 | (29 | ) | 904 | ||||||||||||||||
Depreciation and amortization expense | 192 | 135 | 138 | 90 | (5 | ) | 550 | ||||||||||||||||
Sales, general and other administrative expense | 43 | 43 | 24 | 22 | (1 | ) | 131 | ||||||||||||||||
Other operating expenses | 41 | 3 | 30 | 5 | (2 | ) | 77 | ||||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (21 | ) | — | — | (21 | ) | |||||||||||||||
Income (loss) from operations | 518 | (49 | ) | 343 | (17 | ) | 5 | 800 | |||||||||||||||
Interest expense, net of interest income | 751 | ||||||||||||||||||||||
Loss on interest rate derivatives | 145 | ||||||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 115 | ||||||||||||||||||||||
Loss before income taxes and discontinued operations | $ | (211 | ) |
Year Ended December 31, 2010 | |||||||||||||||||||||||
West | Texas | North | Southeast | Consolidation and Elimination | Total | ||||||||||||||||||
Revenues from external customers | $ | 2,525 | $ | 2,162 | $ | 978 | $ | 880 | $ | — | $ | 6,545 | |||||||||||
Intersegment revenues | 12 | 22 | 6 | 138 | (178 | ) | — | ||||||||||||||||
Total operating revenues | $ | 2,537 | $ | 2,184 | $ | 984 | $ | 1,018 | $ | (178 | ) | $ | 6,545 | ||||||||||
Commodity Margin(1)(2) | $ | 1,080 | $ | 504 | $ | 535 | $ | 272 | $ | — | $ | 2,391 | |||||||||||
Add: Unrealized mark-to-market commodity activity, net and other | 69 | 89 | 21 | 22 | (30 | ) | 171 | ||||||||||||||||
Less: | |||||||||||||||||||||||
Plant operating expense | 351 | 285 | 138 | 123 | (29 | ) | 868 | ||||||||||||||||
Depreciation and amortization expense | 207 | 150 | 111 | 109 | (7 | ) | 570 | ||||||||||||||||
Sales, general and other administrative expense | 55 | 38 | 45 | 12 | 1 | 151 | |||||||||||||||||
Other operating expenses | 59 | 2 | 28 | 4 | (2 | ) | 91 | ||||||||||||||||
Impairment losses | 97 | — | — | 19 | — | 116 | |||||||||||||||||
(Gain) on sale of assets, net | — | (119 | ) | — | — | — | (119 | ) | |||||||||||||||
(Income) from unconsolidated investments in power plants | — | — | (16 | ) | — | — | (16 | ) | |||||||||||||||
Income from operations | 380 | 237 | 250 | 27 | 7 | 901 | |||||||||||||||||
Interest expense, net of interest income | 802 | ||||||||||||||||||||||
Loss on interest rate derivatives | 223 | ||||||||||||||||||||||
Debt extinguishment costs and other (income) expense, net | 106 | ||||||||||||||||||||||
Loss before income taxes and discontinued operations | $ | (230 | ) |
(1) | Our North segment includes Commodity Margin related to Riverside Energy Center, LLC of $73 million , $70 million and $73 million for the years ended December 31, 2012, 2011 and 2010, respectively. |
(2) | Our Southeast segment includes Commodity Margin related to Broad River of $52 million, $51 million and $55 million for the years ended December 31, 2012, 2011 and 2010, respectively. |
(3) | Includes $1 million and $12 million of lease levelization and $14 million and $8 million of amortization expense for the years ended December 31, 2012 and 2011, respectively, related to contracts that became effective in 2011. |
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Quarter Ended | |||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||
(in millions, except per share amounts) | |||||||||||||||
2012 | |||||||||||||||
Operating revenues | $ | 1,367 | $ | 1,996 | $ | 879 | $ | 1,236 | |||||||
Income (loss) from operations | $ | 295 | $ | 705 | $ | (193 | ) | $ | 195 | ||||||
Net income (loss) attributable to Calpine | $ | 100 | $ | 437 | $ | (329 | ) | $ | (9 | ) | |||||
Net income (loss) per common share attributable to Calpine — Basic | $ | 0.22 | $ | 0.95 | $ | (0.69 | ) | $ | (0.02 | ) | |||||
Net income (loss) per common share attributable to Calpine — Diluted | $ | 0.22 | $ | 0.94 | $ | (0.69 | ) | $ | (0.02 | ) | |||||
2011 | |||||||||||||||
Operating revenues | $ | 1,459 | $ | 2,209 | $ | 1,633 | $ | 1,499 | |||||||
Income from operations | $ | 196 | $ | 403 | $ | 183 | $ | 18 | |||||||
Net income (loss) attributable to Calpine | $ | (13 | ) | $ | 190 | $ | (70 | ) | $ | (297 | ) | ||||
Net income (loss) per common share attributable to Calpine — Basic | $ | (0.03 | ) | $ | 0.39 | $ | (0.14 | ) | $ | (0.61 | ) | ||||
Net income (loss) per common share attributable to Calpine — Diluted | $ | (0.03 | ) | $ | 0.39 | $ | (0.14 | ) | $ | (0.61 | ) |
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Guarantee Commitments | 2013 | 2014 | 2015 | 2016 | 2017 | Thereafter | Total | |||||||||||||||||||||
Guarantee of subsidiary debt(1) | $ | 47 | $ | 36 | $ | 37 | $ | 36 | $ | 26 | $ | 209 | $ | 391 | ||||||||||||||
Standby letters of credit(2)(4) | 536 | 41 | — | — | 19 | 30 | 626 | |||||||||||||||||||||
Surety bonds(3)(4)(5) | — | — | — | — | — | 4 | 4 | |||||||||||||||||||||
Guarantee of subsidiary operating lease payments(4) | 7 | 3 | — | — | — | — | 10 | |||||||||||||||||||||
Total | $ | 590 | $ | 80 | $ | 37 | $ | 36 | $ | 45 | $ | 243 | $ | 1,031 |
(1) | Represents Calpine Corporation guarantees of certain power plant capital leases and related interest. All guaranteed capital leases are recorded on our Consolidated Balance Sheets. |
(2) | The standby letters of credit disclosed above represent those disclosed in Note 6. |
(3) | The majority of surety bonds do not have expiration or cancellation dates. |
(4) | These are contingent off balance sheet obligations. |
(5) | As of December 31, 2012, $3 million of cash collateral is outstanding related to these bonds. |
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