Calpine Reports Fourth Quarter And Full Year 2011 Results, Tightens 2012 Guidance

Calpine Corporation (NYSE:CPN):

Summary of 2011 Financial Results (in millions):

		Three Months Ended December 31,															Year Ended December 31,
		2011					2010					% Change					2011						2010						% Change
Operating Revenues		$	1,459				$	1,471				(0.8	)	%			$		6,800				$		6,545				3.9		%
Commodity Margin		$	553				$	576				(4.0	)	%			$		2,474				$		2,391				3.5		%
Adjusted EBITDA		$	379				$	386				(1.8	)	%			$		1,726				$		1,712				0.8		%
Adjusted Recurring Free Cash Flow		$	108				$	59				83.1		%			$		489				$		558				(12.4	)	%
Net Income (Loss) 1		$	(13	)			$	(24	)								$		(190	)			$		31
Net Income (Loss), As Adjusted 2		$	(43	)			$	62									$		(13	)			$		87

Tightening 2012 Full Year Guidance:

	Prior Guidance (as of October 2011)			Current Guidance
	(in millions)
Adjusted EBITDA	$1,550 - 1,750			$1,600 - 1,725
Adjusted Recurring Free Cash Flow	$375 - 575			$ 425 - 550

Recent Achievements:

• Operations:— Produced 94 million MWh ³ of electricity in 2011— Delivered excellent 2011 fleetwide forced outage factor of 2.5%— Achieved 98% fleetwide starting reliability in 2011

• Commercial:— Signed five-year contract for the full output of our Auburndale Peaking Energy Center

• Capital Structure:— Continued execution of share repurchase program: $124 million (more than 40%) complete— Increased CDHI letter of credit facility by $100 million and extended its maturity to 2016— Resolved and formally closed bankruptcy case

Calpine Corporation (NYSE:CPN) today reported fourth quarter 2011 Adjusted EBITDA of $379 million, compared to $386 million in the prior year period, and Adjusted Recurring Free Cash Flow of $108 million, compared to $59 million in the prior year period. Net Loss ¹ for the fourth quarter narrowed to $13 million, or $0.03 per diluted share, compared to $24 million, or $0.05 per diluted share, in the prior year period. Net Loss, As Adjusted ², for the fourth quarter of 2011 was $43 million compared to Net Income, As Adjusted ², of $62 million in the prior year period, a decline primarily related to a reduction in income tax benefit associated with non-cash intraperiod tax allocations and an increase in various state and foreign jurisdiction income taxes.

Full year 2011 Adjusted EBITDA was $1,726 million, compared to $1,712 million in the prior year. Full year 2011 Adjusted Recurring Free Cash Flow was $489 million, compared to $558 million in the prior year, a decrease mainly due to higher scheduled major maintenance expense and capital expenditures in 2011 compared to 2010. Net Loss ¹ for the year was $190 million, or $0.39 per diluted share, compared to Net Income ¹ of $31 million, or $0.06 per diluted share, in the prior year. Net Loss, As Adjusted ², for 2011 was $13 million compared to Net Income, As Adjusted ², of $87 million in the prior year, a decline primarily due to a reduction in income tax benefit, as previously discussed.

“We successfully delivered on our 2011 financial and operational commitments to our shareholders and have effectively positioned the company for continued growth in long term shareholder value,” said Jack Fusco, Calpine's President and Chief Executive Officer. “Our focus on operational excellence, commercial optimization of our fleet of power plants and efficient capital allocation has enabled us to continue to deliver results during a period of volatility in the power and commodity markets and lethargic economic recovery.