CALPINE CORP - FORM 8-K - EX-99.1 - UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - July 7, 2014

Attached files

file filename
EX-10.3 - LS POWER EQUITY PARTNERS GUARANTEE, DATED APRIL 17, 2014 - CALPINE CORPexhibit103-lspowerequitypa.htm
EX-10.1 - PURCHASE AND SALE AGREEMENT, DATED APRIL 17, 2014 - CALPINE CORPexhibit101-purchaseandsale.htm
EX-10.5 - AMENDMENT TO CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT, DATED APRIL 17, 2014 - CALPINE CORPexhibit105-amendmenttoconf.htm
EX-10.2 - CALPINE GUARANTEE, DATED APRIL 17, 2014 - CALPINE CORPexhibit102-calpineguarantee.htm
EX-10.4 - CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT, DATED FEBRUARY 19, 2014 - CALPINE CORPexhibit104-confidentiality.htm
8-K - CALPINE 8-K FOR COMPLETION OF SALE OF THE SIX SOUTHEAST POWER PLANTS - CALPINE CORPcpn_8kxjulyx7x2014xclosing.htm

 
EXHIBIT 99.1
    
Unaudited Pro Forma Consolidated Condensed Financial Information of Calpine Corporation for the three months ended March 31, 2014 and for the year ended December 31, 2013 and as of March 31, 2014

As previously announced, on April 17, 2014, Calpine Corporation (“Calpine” or the “Company”) entered into a purchase and sale agreement, through its indirect wholly-owned subsidiaries, Calpine Project Holdings, Inc. and Calgen Expansion Company, LLC, to sell six of its power plants in the Southeast segment. The purchase and sale agreement dated April 17, 2014 (the “Agreement”) allows for the sale of 100% of the limited liability company interests in (i) Mobile Energy LLC, (ii) Santa Rosa Energy Center, LLC, (iii) Carville Energy, LLC, (iv) Decatur Energy Center, LLC, (v) Columbia Energy LLC and (vi) Calpine Oneta Power, LLC and thereby sell assets comprising 3,498 MW of combined-cycle generation capacity in Oklahoma, Louisiana, Alabama, Florida and South Carolina.

On July 3, 2014, the Company completed the sale of six of its power plants in the Southeast segment for a purchase price of approximately $1.57 billion, plus an additional approximately $4 million for working capital. In accordance with the Agreement, Calpine may also be required to make up to $16 million in future cash payments for certain planned maintenance events. The following unaudited pro forma consolidated condensed statements of operations of the Company for the three months ended March 31, 2014 and for the year ended December 31, 2013 and unaudited pro forma consolidated condensed balance sheet as of March 31, 2014, illustrate the financial impact of the transaction.

The unaudited pro forma consolidated condensed statements of operations illustrate the impact of the transaction as if it had occurred on January 1, 2013. The unaudited pro forma consolidated condensed balance sheet illustrate the impact of the transaction as if it had occurred on March 31, 2014.

The assumptions and estimates used in the preparation of the unaudited pro forma consolidated condensed financial statements are reasonable under the circumstances and intended for informational purposes only. They are not necessarily indicative of the financial results that would have occurred if the sale had taken place on the dates indicated. The pro forma consolidated condensed financial statements should be read in conjunction with the historical financial statements and related notes of Calpine Corporation filed with the Securities and Exchange Commission on Form 10-Q on May 1, 2014 and on Form 10-K on February 13, 2014.


1



CALPINE CORPORATION AND SUBSIDIARIES

PROFORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2014
(Unaudited)
 
Calpine Historical
As Reported
 
Pro Forma Adjustments
 
Pro Forma, as Adjusted
 
(in millions, except share and per share amounts)
Operating revenues:
 
 
 
 
 
Commodity revenue
$
2,048

 
$
(127
)
(a)
$
1,921

Unrealized mark-to-market (loss)
(86
)
 
—

 
(86
)
Other revenue
3

 
—

 
3

Operating revenues
1,965

 
(127
)
 
1,838

Operating expenses:
 
 
 
 
 
Fuel and purchased energy expense:
 
 
 
 
 
Commodity expense
1,370

 
(86
)
(a)
1,284

Unrealized mark-to-market (gain)
(13
)
 
—

 
(13
)
Fuel and purchased energy expense
1,357

 
(86
)
 
1,271

Plant operating expense
265

 
(13
)
(a)
252

Depreciation and amortization expense
153

 
(10
)
(a)
143

Sales, general and other administrative expense
33

 
—

 
33

Other operating expenses
22

 
—

 
22

Total operating expenses
1,830

 
(109
)
 
1,721

(Income) from unconsolidated investments in power plants
(9
)
 
—

 
(9
)
Income from operations
144

 
(18
)
 
126

Interest expense
166

 
—

 
166

Interest (income)
(1
)
 
—

 
(1
)
Other (income) expense, net
11

 
—

 
11

Loss before income taxes
(32
)
 
(18
)
 
(50
)
Income tax benefit
(19
)
 
—

(b)
(19
)
Net loss
(13
)
 
(18
)
 
(31
)
Net income attributable to the noncontrolling interest
(4
)
 
—

 
(4
)
Net loss attributable to Calpine
$
(17
)
 
$
(18
)
 
$
(35
)
 
 
 
 
 
 
Basic and diluted loss per common share attributable to Calpine:
 
 
 
 
 
Weighted average shares of common stock outstanding (in thousands)
420,105

 
—

 
420,105

Net loss per common share attributable to Calpine — basic and diluted
$
(0.04
)
 
—

 
$
(0.08
)

See Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements




2



CALPINE CORPORATION AND SUBSIDIARIES

PROFORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2013
(Unaudited)
 
Calpine Historical
As Reported
 
Pro Forma Adjustments
 
Pro Forma, as Adjusted
 
 
(in millions, except share and per share amounts)
 
Operating revenues:
 
 
 
 
 
 
Commodity revenue
$
6,374

 
$
(397
)
(a)
$
5,977

 
Unrealized mark-to-market (loss)
(86
)
 
—

 
(86
)
 
Other revenue
13

 
—

 
13

 
Operating revenues
6,301

 
(397
)
 
5,904

 
Operating expenses:
 
 
 
 
 
 
Fuel and purchased energy expense:
 
 
 
 
 
 
Commodity expense
3,808

 
(240
)
(a)
3,568

 
Unrealized mark-to-market (gain)
(72
)
 
—

 
(72
)
 
Fuel and purchased energy expense
3,736

 
(240
)
 
3,496

 
Plant operating expense
895

 
(57
)
(a)
838

 
Depreciation and amortization expense
609

 
(39
)
(a)
570

 
Sales, general and other administrative expense
136

 
—

 
136

 
Other operating expenses
81

 
—

 
81

 
Total operating expenses
5,457

 
(336
)
 
5,121

 
(Income) from unconsolidated investments in power plants
(30
)
 
—

 
(30
)
 
Income from operations
874

 
(61
)
 
813

 
Interest expense
696

 
—

 
696

 
Interest (income)
(6
)
 
—

 
(6
)
 
Debt extinguishment costs
144

 
—

 
144

 
Other (income) expense, net
20

 
(1
)
(a)
19

 
Income (loss) before income taxes
20

 
(60
)
 
(40
)
 
Income tax expense
2

 
1

(b)
3

 
Net income (loss)
18

 
(61
)
 
(43
)
 
Net income attributable to the noncontrolling interest
(4
)
 
—

 
(4
)
 
Net income (loss) attributable to Calpine
$
14

 
$
(61
)
 
$
(47
)
 
 
 
 
 
 
 
 
Basic earnings (loss) per common share attributable to Calpine:
 
 
 
 
 
 
Weighted average shares of common stock outstanding (in thousands)
440,666

 
—

 
440,666

 
Net income (loss) per common share attributable to Calpine — basic
$
0.03

 
—

 
$
(0.11
)
 
 
 
 
 
 
 
 
Diluted earnings (loss) per common share attributable to Calpine:
 
 
 
 
 
 
Weighted average shares of common stock outstanding (in thousands)
444,773

 
—

 
440,666

(c)
Net income (loss) per common share attributable to Calpine — diluted
$
0.03

 
—

 
$
(0.11
)
 

See Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements



3



CALPINE CORPORATION AND SUBSIDIARIES

PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 2014
(Unaudited)
 
Calpine Historical
As Reported
 
Pro Forma Adjustments
 
Pro Forma, as Adjusted
 
(in millions)
ASSETS
 
 
 
 
 
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
515

 
$
1,570

(d)
$
2,085

Accounts receivable, net of allowance of $5
627

 
17

(e)
644

Margin deposits and other prepaid expense
293

 
(5
)
 
288

Restricted cash, current
195

 
—

 
195

Derivative assets, current
655

 
—

 
655

Inventory and other current assets
417

 
(12
)
(e)
405

Total current assets
2,702

 
1,570

 
4,272

Property, plant and equipment, net
13,598

 
(752
)
(e)
12,846

Restricted cash, net of current portion
71

 
—

 
71

Investments in power plants
85

 
—

 
85

Long-term derivative assets
174

 
—

 
174

Other assets
437

 
1

(e)
438

Total assets
$
17,067

 
$
819

 
$
17,886

LIABILITIES AND STOCKHOLDER'S EQUITY
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
$
607

 
$
—

 
$
607

Accrued interest payable
93

 
—

 
93

Debt, current portion
189

 
—

 
189

Derivative liabilities, current
728

 
—

 
728

Income taxes payable
—

 
4

(e)
4

Other current liabilities
256

 
58

(e)
314

Total current liabilities
1,873

 
62

 
1,935

Debt, net of current portion
11,286

 
—

 
11,286

Long-term derivative liabilities
230

 
—

 
230

Other long-term liabilities
266

 
(2
)
(e)
264

Total liabilities
13,655

 
60

 
13,715

 
 
 
 
 
 
Commitments and contingencies
 
 
 
 
 
Stockholders' equity
3,412

 
759

(e)
4,171

Total liabilities and stockholders’ equity
$
17,067

 
$
819

 
$
17,886


See Notes to the Unaudited Pro Forma Consolidated Condensed Financial Statements



4



Notes to the Unaudited Pro Forma Consolidated Condensed Statements of Operations and Balance Sheet

(a)
Adjustments to eliminate the historical results of operations associated with the sale of six power plants as if the transaction had occurred on January 1, 2013.
(b)
Related tax impact of pro forma adjustments using a modified effective tax rate which reflects the tax characteristics of the entities sold.
(c)
Diluted loss per share for the pro forma results is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive.
(d)
Adjustments to record the cash proceeds received upon closing of the sale of six power plants as if the transaction had occurred on March 31, 2014.
(e)
Adjustments to eliminate the assets and liabilities that were transferred in the sale and record other transaction adjustments and the gain on sale of assets as if the transaction had occurred on March 31, 2014. The calculation of the gain on sale of assets is set forth below:
Purchase price
$
1,570

Working capital adjustments
17

Purchase price including working capital adjustments
1,587

Less: Estimated net book value of assets sold
(752
)
         Transaction expenses
(4
)
         Parts purchased subsequent to closing
(22
)
         Other adjustments
(46
)
         Income tax expense
(4
)
Estimated gain on sale, net of tax
759


 

5

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