Calpine Corporation (NYSE: CPN) is a Fortune 500 power company founded in 1984 in San Jose, California.
Calpine's headquarters were permanently moved from San Jose to Houston, Texas in 2009. The company's stock was traded on the New York Stock Exchange under the symbol CPN until it was delisted on December 5, 2005 due to low share price. On 1/31/08, Calpine emerged from bankruptcy and now trades on the NYSE under the ticker symbol CPN. The company is headquartered in the Calpine Center in Downtown Houston.
Calpine Corporation (Calpine) is an independent wholesale power company in the United States. Calpine owns and operates primarily natural gas-fired and geothermal power plants in North America. It has its presence in wholesale power markets in California, Texas and the Mid-Atlantic region of the United States. Its portfolio is primarily comprised of two types of power generation technologies: natural gas-fired combustion turbines, which are primarily combined-cycle plants, and renewable geothermal conventional steam turbines. Its natural gas-fired power plants primarily utilize two types of design: 4,376 megawatts of simple-cycle combustion turbines and 22,385 megawatts of combined-cycle combustion turbines and a small portion from natural gas-fired steam turbines. Its Geysers Assets are a 725 megawatts fleet of 15 operating power plants in northern California. As of December 31, 2010, the Company operates 91 power plants, with an aggregate operating generation capacity of approximately 27,490 megawatts. On December 8, 2010, the Company, through its wholly owned, indirect subsidiary, Calpine BRSP, purchased entities from CIT Capital USA Inc. that held the leases for its Broad River and South Point power plants. On July 1, 2010, The Company acquired all of the power generation assets of Conectiv Energy from Pepco Holdings, Inc. (PHI), which include 18 operating power plants and one plant under construction, with approximately 4,490 megawatts of capacity.
The Company is a owner and operators of industrial gas turbines, as well as cogeneration power plants. Its cogeneration power plants produce steam for sale to customers for use in industrial or other heating, ventilation and air conditioning operations. The Company sells wholesale power, steam, capacity, renewable energy credits and ancillary services to its customers, including utilities, independent electric system operators, industrial and agricultural companies, retail power providers, municipalities and power marketers. The Company purchases natural gas and fuel oil as fuel for its power plants, engage in related natural gas transportation and storage transactions, and it purchases electric transmission rights to deliver power to its customers. The Company also enters into natural gas and power physical and financial contracts.
As of December 31, 2010, the Company’s generation capacity includes approximately 5,241 megawatts of baseload capacity from its Geysers Assets and cogeneration power plants, 15,838 megawatts of intermediate load capacity from its combined-cycle combustion turbines, 6,411 megawatts of capacity from its simple-cycle combustion turbines and duct-fired capability, which includes approximately four megawatts of capacity from solar, photovoltaic power generation technology located in New Jersey included in its North segment. The Company has an aggregate generation capacity of 6,886 megawatts with an additional 584 megawatts under construction in the West, 7,185 megawatts in Texas, 7,336 megawatts with an additional 565 megawatts under construction in the North and 6,083 megawatts in the Southeast.
Although Cartwright and his team completed scores of deals during the 1990s, their shrewdness reached unprecedented acuity in a purchase from Siemens Westinghouse Power Corp. In 1996, Calpine placed an order with Siemens Westinghouse for 46 gas-fired turbines. The acquisition represented a gamble considering that many of the turbines involved in the deal were purchased before the company had commitments to build new power plants, but Cartwright pressed ahead despite the risk. He had launched an ambitious plan at the beginning of 1996 to develop 6,300 megawatts of new capacity before the end of the decade, expansion that required new equipment to actualize. Although the purchase of 46 turbines shocked outside observers, the timing of the deal later justified Cartwright's gamble. The purchase was made before the tidal wave of support for deregulation reached its acme and before the majority of utilities realized more industry capacity was needed. Consequently, at the time of the Calpine-Siemen Westinghouse deal, power generation equipment was cheaper and easier to obtain than it would be once the movement toward deregulation took hold.
The combination of Calpine management's intuitive powers in foreseeing a growing demand for capacity and its willingness to gamble heavily paid handsome dividends. Commitments for new power plants arrived, thereby necessitating the acquisition of the turbines and prompting industry pundits to hail the turbine purchase as the primary cause for Calpine's glowing success at the turn of the century. Less than three years after the deal, companies were clamoring for turbines, with demand exceeding supply to the point that some companies were selling their turbine delivery slots, essentially exchanging their place in line for cash.
The decisive Siemens Westinghouse purchase coincided with another important corporate event in 1996, one that saw the Swiss cowbell at company headquarters lose its relevance. Electrowatt Ltd. informed Cartwright that it was narrowing its strategic focus on its industrial business, a decision that paved the way for Calpine's independence. In response to the news from Switzerland, Cartwright prepared Calpine for its debut as a publicly traded company, completing an initial public offering of stock in September 1996. The stock sale netted the company $82 million and gave management an 11 percent ownership stake in Calpine.
Calpine evolved from a relative unknown in the power industry to a recognizable, burgeoning national force during the mid-1990s. Between the end of 1992 and the end of 1997, the company completed transactions involving 13 gas-fired cogeneration facilities and two steam fields, more than quadrupling its total power generating capacity and substantially diversifying its fuel mix. Calpine achieved its growth by taking on the posture of an aggressive acquirer, resulting in $855 million of total indebtedness by the end of 1997. For Cartwright, the debt taken on was the price to pay for rapidly expanding in the promising business climate of the late 1990s, a sacrifice that greatly elevated his company's stature. Between 1992 and 1997, Calpine's net interest in power generation facilities increased from 297 megawatts to 1,981 megawatts, fueling a 48 percent compound annual growth rate in revenue that enabled the company to announce $276.3 million in revenue in 1997. Equally impressive, the value of Calpine's assets increased from $55 million in 1992 to $1.4 billion in 1997. The company's greatest surge in growth, however, was yet to come.
Ambitious Plans for the Future
Calpine entered the 1990s endeavoring to slip past $40 million in sales. The company ended the decade flirting with the $1-billion-in-sales mark. Much of this growth was achieved between 1997 and 1999, when the company's revenue volume swelled from $276 million to $847 million as the number of plants in which it held interests increased from 23 to 44. Deregulation was in full swing during the last years of the 1990s, prompting Cartwright to develop expansion plans that promised to exponentially increase the size of his company within the coming five years. With a flurry of acquisitions and development projects that nearly doubled the size of the company's power plant portfolio, Cartwright fleshed out Calpine's presence in California, New England, New York, and Texas. By the end of the decade, he had targeted the Southeast, Florida in particular, as the company's next major growth area for gas-fired generation.
Cartwright's short-term plans for the first years of the 21st century were of staggering proportions. Building on a total capacity of 4,273 megawatts in 1999, Cartwright hoped to increase the company's capacity to 25,000 megawatts by 2004. To help finance such expansion, the company secured a $1 billion revolving loan backed by a syndication of more than 20 banks in late 1999. The line of credit provided the means for the construction of approximately six plants, but Cartwright's plans called for far more than six additional plants. As the company entered the 21st century, ten new power plants were under construction, representing nearly 6,000 megawatts of additional capacity. In addition, the company announced plans for developing 12 more plants in the near future, which represented another 7,990 megawatts of capacity. Based on these projections, Calpine figured to be a major force in the power industry during the 21st century.
Principal Subsidiaries: Gas Energy Inc.; Calpine Natural Gas Company; Cogeneration Corporation of America (80%).
Principal Competitors: The AES Corporation; MidAmerican Energy Holdings Company; Sithe Energies Inc.
OVERALL
Beta: 0.97
Market Cap (Mil.): $7,468.18
Shares Outstanding (Mil.): 928.06
Annual Dividend: --
Yield (%): --
FINANCIALS
CPN Industry Sector
P/E (TTM): -- 22.82 22.13
EPS (TTM): -242.45 -- --
ROI: -1.10 0.95 1.23
ROE: -3.56 2.16 2.74
Statistics:
Public Company
Incorporated: 1984
Employees: 865
Sales: $847.7 million (1999)
Stock Exchanges: New York
Ticker Symbol: CPN
NAIC: 221112 Fossil Fuel Electric Power Generation (pt)
Key Dates:
1984: With the financial help of Electrowatt, Ltd., Calpine is organized.
1989: Calpine broadens its business focus to include plant operation and ownership.
1996: Calpine gains independence and completes initial public offering of stock.
1999: Company announces plan to increase capacity to 25,000 megawatts by 2004.
Name Age Since Current Position
Ryan, J. Stuart 52 2010 Independent Chairman of the Board
Fusco, Jack 48 2008 President, Chief Executive Officer, Director
Rauf, Zamir 51 2008 Chief Financial Officer, Executive Vice President
Hill, John 43 2010 Chief Operating Officer, Executive Vice President
Germeroth, Gary 52 2007 Chief Risk Officer, Executive Vice President
Miller, W. Thaddeus 60 2008 Chief Legal Officer, Executive Vice President, Secretary
Deidiker, Jim 55 2010 Chief Accounting Officer, Senior Vice President
Merritt, David 56 2006 Independent Director
Cassidy, Frank 64 2008 Independent Director
Hinckley, Robert 63 2008 Independent Director
Moreland, W. Benjamin 47 2008 Independent Director
O'Leary, Denise 53 2008 Independent Director
Mosbacher, Robert 59 2009 Independent Director
Oberndorf, William 57 2011 Independent Director
Address:
50 West San Fernando Street
San Jose, California 95113
U.S.A.
Calpine's headquarters were permanently moved from San Jose to Houston, Texas in 2009. The company's stock was traded on the New York Stock Exchange under the symbol CPN until it was delisted on December 5, 2005 due to low share price. On 1/31/08, Calpine emerged from bankruptcy and now trades on the NYSE under the ticker symbol CPN. The company is headquartered in the Calpine Center in Downtown Houston.
Calpine Corporation (Calpine) is an independent wholesale power company in the United States. Calpine owns and operates primarily natural gas-fired and geothermal power plants in North America. It has its presence in wholesale power markets in California, Texas and the Mid-Atlantic region of the United States. Its portfolio is primarily comprised of two types of power generation technologies: natural gas-fired combustion turbines, which are primarily combined-cycle plants, and renewable geothermal conventional steam turbines. Its natural gas-fired power plants primarily utilize two types of design: 4,376 megawatts of simple-cycle combustion turbines and 22,385 megawatts of combined-cycle combustion turbines and a small portion from natural gas-fired steam turbines. Its Geysers Assets are a 725 megawatts fleet of 15 operating power plants in northern California. As of December 31, 2010, the Company operates 91 power plants, with an aggregate operating generation capacity of approximately 27,490 megawatts. On December 8, 2010, the Company, through its wholly owned, indirect subsidiary, Calpine BRSP, purchased entities from CIT Capital USA Inc. that held the leases for its Broad River and South Point power plants. On July 1, 2010, The Company acquired all of the power generation assets of Conectiv Energy from Pepco Holdings, Inc. (PHI), which include 18 operating power plants and one plant under construction, with approximately 4,490 megawatts of capacity.
The Company is a owner and operators of industrial gas turbines, as well as cogeneration power plants. Its cogeneration power plants produce steam for sale to customers for use in industrial or other heating, ventilation and air conditioning operations. The Company sells wholesale power, steam, capacity, renewable energy credits and ancillary services to its customers, including utilities, independent electric system operators, industrial and agricultural companies, retail power providers, municipalities and power marketers. The Company purchases natural gas and fuel oil as fuel for its power plants, engage in related natural gas transportation and storage transactions, and it purchases electric transmission rights to deliver power to its customers. The Company also enters into natural gas and power physical and financial contracts.
As of December 31, 2010, the Company’s generation capacity includes approximately 5,241 megawatts of baseload capacity from its Geysers Assets and cogeneration power plants, 15,838 megawatts of intermediate load capacity from its combined-cycle combustion turbines, 6,411 megawatts of capacity from its simple-cycle combustion turbines and duct-fired capability, which includes approximately four megawatts of capacity from solar, photovoltaic power generation technology located in New Jersey included in its North segment. The Company has an aggregate generation capacity of 6,886 megawatts with an additional 584 megawatts under construction in the West, 7,185 megawatts in Texas, 7,336 megawatts with an additional 565 megawatts under construction in the North and 6,083 megawatts in the Southeast.
Although Cartwright and his team completed scores of deals during the 1990s, their shrewdness reached unprecedented acuity in a purchase from Siemens Westinghouse Power Corp. In 1996, Calpine placed an order with Siemens Westinghouse for 46 gas-fired turbines. The acquisition represented a gamble considering that many of the turbines involved in the deal were purchased before the company had commitments to build new power plants, but Cartwright pressed ahead despite the risk. He had launched an ambitious plan at the beginning of 1996 to develop 6,300 megawatts of new capacity before the end of the decade, expansion that required new equipment to actualize. Although the purchase of 46 turbines shocked outside observers, the timing of the deal later justified Cartwright's gamble. The purchase was made before the tidal wave of support for deregulation reached its acme and before the majority of utilities realized more industry capacity was needed. Consequently, at the time of the Calpine-Siemen Westinghouse deal, power generation equipment was cheaper and easier to obtain than it would be once the movement toward deregulation took hold.
The combination of Calpine management's intuitive powers in foreseeing a growing demand for capacity and its willingness to gamble heavily paid handsome dividends. Commitments for new power plants arrived, thereby necessitating the acquisition of the turbines and prompting industry pundits to hail the turbine purchase as the primary cause for Calpine's glowing success at the turn of the century. Less than three years after the deal, companies were clamoring for turbines, with demand exceeding supply to the point that some companies were selling their turbine delivery slots, essentially exchanging their place in line for cash.
The decisive Siemens Westinghouse purchase coincided with another important corporate event in 1996, one that saw the Swiss cowbell at company headquarters lose its relevance. Electrowatt Ltd. informed Cartwright that it was narrowing its strategic focus on its industrial business, a decision that paved the way for Calpine's independence. In response to the news from Switzerland, Cartwright prepared Calpine for its debut as a publicly traded company, completing an initial public offering of stock in September 1996. The stock sale netted the company $82 million and gave management an 11 percent ownership stake in Calpine.
Calpine evolved from a relative unknown in the power industry to a recognizable, burgeoning national force during the mid-1990s. Between the end of 1992 and the end of 1997, the company completed transactions involving 13 gas-fired cogeneration facilities and two steam fields, more than quadrupling its total power generating capacity and substantially diversifying its fuel mix. Calpine achieved its growth by taking on the posture of an aggressive acquirer, resulting in $855 million of total indebtedness by the end of 1997. For Cartwright, the debt taken on was the price to pay for rapidly expanding in the promising business climate of the late 1990s, a sacrifice that greatly elevated his company's stature. Between 1992 and 1997, Calpine's net interest in power generation facilities increased from 297 megawatts to 1,981 megawatts, fueling a 48 percent compound annual growth rate in revenue that enabled the company to announce $276.3 million in revenue in 1997. Equally impressive, the value of Calpine's assets increased from $55 million in 1992 to $1.4 billion in 1997. The company's greatest surge in growth, however, was yet to come.
Ambitious Plans for the Future
Calpine entered the 1990s endeavoring to slip past $40 million in sales. The company ended the decade flirting with the $1-billion-in-sales mark. Much of this growth was achieved between 1997 and 1999, when the company's revenue volume swelled from $276 million to $847 million as the number of plants in which it held interests increased from 23 to 44. Deregulation was in full swing during the last years of the 1990s, prompting Cartwright to develop expansion plans that promised to exponentially increase the size of his company within the coming five years. With a flurry of acquisitions and development projects that nearly doubled the size of the company's power plant portfolio, Cartwright fleshed out Calpine's presence in California, New England, New York, and Texas. By the end of the decade, he had targeted the Southeast, Florida in particular, as the company's next major growth area for gas-fired generation.
Cartwright's short-term plans for the first years of the 21st century were of staggering proportions. Building on a total capacity of 4,273 megawatts in 1999, Cartwright hoped to increase the company's capacity to 25,000 megawatts by 2004. To help finance such expansion, the company secured a $1 billion revolving loan backed by a syndication of more than 20 banks in late 1999. The line of credit provided the means for the construction of approximately six plants, but Cartwright's plans called for far more than six additional plants. As the company entered the 21st century, ten new power plants were under construction, representing nearly 6,000 megawatts of additional capacity. In addition, the company announced plans for developing 12 more plants in the near future, which represented another 7,990 megawatts of capacity. Based on these projections, Calpine figured to be a major force in the power industry during the 21st century.
Principal Subsidiaries: Gas Energy Inc.; Calpine Natural Gas Company; Cogeneration Corporation of America (80%).
Principal Competitors: The AES Corporation; MidAmerican Energy Holdings Company; Sithe Energies Inc.
OVERALL
Beta: 0.97
Market Cap (Mil.): $7,468.18
Shares Outstanding (Mil.): 928.06
Annual Dividend: --
Yield (%): --
FINANCIALS
CPN Industry Sector
P/E (TTM): -- 22.82 22.13
EPS (TTM): -242.45 -- --
ROI: -1.10 0.95 1.23
ROE: -3.56 2.16 2.74
Statistics:
Public Company
Incorporated: 1984
Employees: 865
Sales: $847.7 million (1999)
Stock Exchanges: New York
Ticker Symbol: CPN
NAIC: 221112 Fossil Fuel Electric Power Generation (pt)
Key Dates:
1984: With the financial help of Electrowatt, Ltd., Calpine is organized.
1989: Calpine broadens its business focus to include plant operation and ownership.
1996: Calpine gains independence and completes initial public offering of stock.
1999: Company announces plan to increase capacity to 25,000 megawatts by 2004.
Name Age Since Current Position
Ryan, J. Stuart 52 2010 Independent Chairman of the Board
Fusco, Jack 48 2008 President, Chief Executive Officer, Director
Rauf, Zamir 51 2008 Chief Financial Officer, Executive Vice President
Hill, John 43 2010 Chief Operating Officer, Executive Vice President
Germeroth, Gary 52 2007 Chief Risk Officer, Executive Vice President
Miller, W. Thaddeus 60 2008 Chief Legal Officer, Executive Vice President, Secretary
Deidiker, Jim 55 2010 Chief Accounting Officer, Senior Vice President
Merritt, David 56 2006 Independent Director
Cassidy, Frank 64 2008 Independent Director
Hinckley, Robert 63 2008 Independent Director
Moreland, W. Benjamin 47 2008 Independent Director
O'Leary, Denise 53 2008 Independent Director
Mosbacher, Robert 59 2009 Independent Director
Oberndorf, William 57 2011 Independent Director
Address:
50 West San Fernando Street
San Jose, California 95113
U.S.A.