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Calpine Reports Fourth Quarter And Full Year 2012 Results, Raises Adjusted Free Cash Flow Per Share Guidance And Increases Share Repurchase Authorization By $400 Million

Stocks in this article: CPN

Calpine Corporation (NYSE: CPN)

Summary of 2012 Financial Results (in millions, except per share amounts):

  Three Months Ended December 31,   Year Ended December 31,
2012   2011   % Change 2012   2011   % Change
Operating Revenues $ 1,367 $ 1,459 (6.3 )% $ 5,478 $ 6,800 (19.4 )%
Commodity Margin $ 515 $ 553 (6.9 )% $ 2,538 $ 2,474 2.6 %
Adjusted EBITDA $ 315 $ 379 (16.9 )% $ 1,749 $ 1,726 1.3 %
Adjusted Free Cash Flow $ 41 $ 108 (62.0 )% $ 564 $ 489 15.3 %

Per Share (diluted)

$ 0.09 $ 0.22 (59.1 )% $ 1.20 $ 1.01 18.8 %
Net Income (Loss) 1 $ 100 $ (13 ) $ 199 $ (190 )

Per Share (diluted)











Net Income (Loss), As Adjusted 2 $ (86 ) $ (43 ) $ 78 $ (13 )

2013 Full Year Guidance (in millions, except per share amounts):

Adjusted EBITDA $1,760 - 1,960
Adjusted Free Cash Flow $575 - 775
Per Share Midpoint (diluted) $1.50

Recent Achievements:

  • Operations:— Generated approximately 116 million MWh 3 of electricity in 2012, a record and 23% more than 2011— Held 2012 normal, recurring plant operating expense 4 essentially flat, despite increased generation 3, after accounting for prior period insurance reimbursements in 2011— Delivered lowest annual fleetwide forced outage factor on record: 1.6%— Achieved remarkable annual fleetwide starting reliability: 98.3%
  • Commercial:— Entered into a new 10-year PPA with Tennessee Valley Authority to provide the full output of power from our Decatur Energy Center, commencing in January 2013— Completed sales of Broad River and Riverside Energy Centers for approximately $829 million 5— Completed acquisition of Bosque Energy Center for approximately $432 million
  • Capital Allocation:— Completed previously announced share repurchase program, having repurchased approximately 35.6 million shares, or 7.25% 6, of our outstanding common stock— Announced authorization of $400 million additional share repurchases: cumulative authorized total now $1 billion— Invested in future growth with development of approximately 1,600 MW of new combined-cycle power plants

Calpine Corporation (NYSE: CPN) today reported fourth quarter 2012 Adjusted EBITDA of $315 million, compared to $379 million in the prior year period, and Adjusted Free Cash Flow of $41 million, or $0.09 per diluted share, compared to $108 million, or $0.22 per diluted share, in the prior year period. Net Income 1 for the fourth quarter was $100 million, or $0.22 per diluted share, compared to a Net Loss 1 of $13 million, or $0.03 per diluted share, in the prior year period. Net Loss, As Adjusted 2, for the fourth quarter of 2012 was $86 million compared to $43 million in the prior year period. The declines in fourth quarter Adjusted EBITDA, Adjusted Free Cash Flow and Net Loss, As Adjusted 2, in 2012 compared to 2011 were driven primarily by lower Commodity Margin, largely as a result of differences in the seasonal shaping of our hedging activity which tended to benefit the fourth quarter of 2011 more so than the comparable 2012 period.

Full year 2012 Adjusted EBITDA was $1,749 million, compared to $1,726 million in the prior year period, and Adjusted Free Cash Flow was $564 million, or $1.20 per diluted share, compared to $489 million, or $1.01 per diluted share, in the prior year period. Net Income 1 for 2012 was $199 million, or $0.42 per diluted share, compared to a Net Loss 1 of $190 million, or $0.39 per diluted share, in the prior year period. Net Income, As Adjusted 2, for 2012 was $78 million compared to a Net Loss, As Adjusted 2, of $13 million in 2011. The increases in 2012 Adjusted Free Cash Flow and Net Income, As Adjusted 2, compared to 2011 were primarily due to higher Commodity Margin and lower interest expense resulting from our refinancing efforts.

“2012 was a breakout year for Calpine, as we capitalized on the secular shift toward greater utilization of combined-cycle gas turbines in the power generation industry,” said Jack Fusco, Calpine’s Chief Executive Officer. “We achieved record operating results, generating 116 million MWh – 23% more than last year. The increased generation was primarily due to our excellent power plant operations and unprecedented coal-to-gas switching. Overall, our business continues to be resilient across a wide range of natural gas prices.

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