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Wolfe Research
Energy & Power
Deep Dive Conference
Thad Hill
President and CEO, Calpine Corp.
March 31, 2015
Safe Harbor Statement
Forward-Looking Statements
The information contained in this presentation includes certain estimates, projections and other forward-looking
information that reflect Calpine’s current views with respect to future events and financial performance. These
estimates, projections and other forward-looking information are based on assumptions that Calpine believes, as of
the date hereof, are reasonable. Inevitably, there will be differences between such estimates and actual results, and
those differences may be material.
There can be no assurance that any estimates, projections or forward-looking information will be realized.
All such estimates, projections and forward-looking information speak only as of the date hereof. Calpine undertakes
no duty to update or revise the information contained herein other than as required by law.
You are cautioned not to place undue reliance on the estimates, projections and other forward-looking information in
this presentation as they are based on current expectations and general assumptions and are subject to various risks,
uncertainties and other factors, including those set forth in Calpine’s Annual Report on Form 10-K for the year ended
December 31, 2014 and in other documents that Calpine files with the SEC. Many of these risks, uncertainties and
other factors are beyond Calpine’s control and may cause actual results to differ materially from the views, beliefs
and estimates expressed herein. Calpine’s reports and other information filed with the SEC, including the risk factors
identified in its Annual Report on Form 10-K for the year ended December 31, 2014, can be found on the SEC’s website
at www.sec.gov and on Calpine’s website at www.calpine.com.
Reconciliation to U.S. GAAP Financial Information
The following presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the
Securities Exchange Act of 1934, as amended. Schedules are included herein that reconcile the non-GAAP financial
measures included in the following presentation to the most directly comparable financial measures calculated and
presented in accordance with U.S. GAAP.
2
Calpine: National Portfolio of Nearly 27,000 MW
Geographic
Diversity
Dispatch
Flexibility
As of 2/13/2015
•
•
•
•
Geographically diversified portfolio: Scale in three most competitive power markets in America
Largest operator of combined heat and power (cogeneration) technology in America
Largest geothermal power producer in America
Featuring one of smallest environmental footprints in America’s power generation sector
3
Nation’s Largest Baseload Renewable,
Natural Gas and Cogeneration Power Provider
50
5
SO2 lbs/MWh (Fossil Fleet)
Capacity Wtd Avg Age (Years)
Clean
Modern
40
30
20
10
0
CPN
DYN
CO2 lbs/MWh (Fossil Fleet)
Heat Rate (btu/kwh)
2
1
CPN
DYN
NRG
CPN
DYN
NRG
2,500
12,000
Our 2013 steam-adjusted
heat rate was 7,384
10,000
8,000
6,000
DYN
3
0
NRG
Efficient
CPN
4
NRG
2,000
1,500
1,000
500
0
Source: Calpine, Energy Velocity (2014). Pro forma adjustments include: CPN – Southeast asset divestiture; DYN – Announced DUK-OH and ECP asset acquisitions; NRG – EME acquisition. Heat rates
not adjusted for steam, and excluding non-fossil fuel generation; CPN steam-adjusted heat rate does not include peakers.
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Calpine Value Drivers
Environmental Trends
Effective
CSAPR
2012
2015
MATS
2012
2015
Regional Haze (TX)
20151
2018 - 2020
Ozone NAAQS
2015
2019+
Clean Power Plan
2015
2020
2
External
Factors
Reliability Initiatives
• Stable financial performance
despite gas price volatility
Final Rule
Adjusted EBITDA ($MM)
EPA Rule
Shale Gas Economics
$2,300
$4.50
$2,000
$4.00
$1,700
$3.50
$1,400
$3.00
$1,100
$2.50
• More renewables = Higher value
for flexibility, lower for baseload
Market
Henry Hub Gas Price ($/mmbtu)
($ millions)
Product
Eff. Date
PJM
Capacity
Performance
May 2016 
May 2018
ISO-NE
Performance
Incentives
May 2018
ERCOT
$9,000/MWh
SWOC
Jun 2015
All
Price Formation
Ongoing
$2.00
$800
2009
2010
2011
Adj. EBITDA
2012
2
2013
2014
2015E
HH Gas Price
CPN Shareholder Value
Active Portfolio Management
Returning Capital to Shareholders
Tilting Mix to Attractive Markets
Repurchase total: $2.4B3
(~25% of outstanding shares4)
$3.5B
$3.2B
Annual Repurchases
$22.14
Internal
Efforts
Multiple2
$1,100
$623
$20.07
$463
$17.52
Bought
(2010 - Current)
Sold
(2010 - Current)
$14.60
~6x
~14x
2011
$119
$125
$21.68
2012
2013
2014
2015 YTD 3
1 Anticipated approval for TX FIP. 2 MW-weighted Adj. EBITDA multiple. Includes sale of Osprey (as illustrated by the hashed portion of the bar in the chart above), pending regulatory approvals. 3 As of
2/12/15. 4 Based upon 490.6M shares outstanding as of 6/30/11, immediately prior to announcement of repurchase program.
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Capital Allocation and Portfolio Management
($ millions, unless otherwise indicated)
2014: Aggressively Deploying Capital
Portfolio Transformation
2Q08:
~$3.3B
Cash
$470
Financings2
$450
~$3.3B
$1,100
Adj. Free
Cash Flow1
$1,530
$830
Sources
• Amortization
• Unsecureds
• 4Q Call
$290
Growth4
Uses
• TX Expansions
• Garrison
• York 2
Acquisitions4
• Guadalupe
• Fore River
77 plants
23.8 GW
West
7,246 MW
30%
Texas
7,487 MW
32%
Sheet3
$690
$1,200
Southeast
6,254 MW
26%
Share
Repurchase
Bal.
Asset Sale
Proceeds,
Net
North
2,822 MW
12%
Today:
East
Region
North
7,859 MW
30%
87 plants
26.5 GW
West
7,524 MW
28%
Southeast
1,738 MW
7%
Texas
9,427 MW
35%
1
2
3
4
A non-GAAP financial measure. Reconciliations of Adj. FCF to Net Income (Loss), the most comparable U.S. GAAP measure, are available on our website at www.calpine.com.
Does not include financing completed in February 2015.
Includes fees, premiums and other financing costs associated with debt refinancings.
Shown gross of debt financing.
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Continuing to Reposition the Portfolio
Monetizing Non-Core Assets
Investing at Attractive Returns
Osprey Energy Center
Mankato Power Plant
Auburndale, FL (FRCC)
599 MW CCGT
Mankato, MN (MISO)
375 MW CCGT
345 MW Proposed Expansion
• Key terms of agreements
— New PPA through Dec 2016
— Plant to be sold Jan 2017
— State / Federal regulatory approvals required
• Secured ~$225 million of value from
underperforming asset through monetization
— $166 million sale proceeds
— Balance attributable to net contract value
• MPUC Order issued to enter into 20-year PPA;
Contract execution forthcoming
• Investing at ~$600/kW
• COD expected as early as June 2018
Ongoing Growth Projects:
Project
Region
Capacity
Status
Garrison
PJM
309 MW
COD projected 2Q15
York 2
PJM
760 MW
EPC contract issued;
Construction to begin
Spring 2015
Strategically managing our footprint,
consistent with our focus on competitive wholesale power markets
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Evolving Markets Continue to Favor
Flexible, Reliable Generation like Calpine’s
ERCOT Weather-Normalized Economic Reserve Margin1
Three Quick Facts About Our Regions:
16%
12%
• Market fundamentals growing tighter…
Texas
• …Yet, no scarcity in forward curves
8%
• Stricter environmental regulations +
Low natural gas prices =
TX resource mix transformation looks more like PJM
4%
0%
2011
Non-Economic
Resources
1,612 MW
Removed:
2014
2,644 MW
2015
2,401 MW
2016
2,645 MW
• Marcellus-advantaged natural gas prices benefit CCGTs
• Potential energy market benefits from 11,000+ MW of
announced retirements this year and next
$50
$3.50
$40
$3.00
$30
$2.50
$20
$2.00
Natural Gas Price ($/mmbtu)
PJM &
New
England
• Capacity market emphasis on reliability = Positive for
auction pricing
Summer 2015 Spark Spread ($/MWh)
Spark Spreads Maintaining Strength2
$1.50
$10
Oct-14
Nov-14
Dec-14
PJM-W On-Peak Spark Spread
Jan-15
Tetco M3 Gas Price
• Exposure to on-peak solar largely mitigated by
contracts, Geysers and NoCal-concentrated fleet
California
• Incremental solar offers no capacity value
• Steep net load requirements from afternoon peak
result in CPN capturing higher evening prices
?
Day Ahead Heat Rate (mmbtu/kWh, NP-15)
Increasing Intraday Volatility3
13
Steepening
afternoon ramp
12
11
10
9
8
4Q13
4Q14
7
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23
Hour
Source: Calpine, ERCOT. Calculation based upon available resources as per May 2011, Dec 2013 and Dec 2014 CDR, adjusted to (i) remove non-economic resources dispatched at scarcity pricing (Reserves, ERS, DR), (ii) consistently apply
2011 ELCC for wind of 8.7% across all periods, and (iii) exclude non-seasonally mothballed units. 2 Source: Calpine, Broker data.) 3 Source: CAISO, ICE.
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