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Hier eine Mitschrfit der CC (kopiert aus dem Fool-Board) Calpine 2Q 2002 Peter Cartwright: Focus on liquidity, reduction in Cap Ex, putting on hold development projects, sale of non strategic assets. Very low spark spreads, but still profitable, with positive cash flow from operations 5300 new Calpine Megawatts strengthened cash position Bob Kelly: Net income 73M or 19c EBIT adj 314M 3.3x interest coverage 16,000 MW in ops. 2nd quarter 15.7M MW of production, 100% more than last year. 95% capability factor is incredible. System heat rate 7,455 BTU/KWh. And continues to decline with most efficient plants. Unit cost decline to $7.5/MWH Completing cost, improving efficiency and gaining additional experience. Gas Production increase equal 25% of fuel for fleet. Market spread $8 on peak, Calpine ~$28 Last year market was $25 or a 68% decrease. Last year Calpine enjoyed $32 spread or a 14% decrease 125 long term contracts, with 9% discount has $2B in spark spread is very predictable cash flow. We want a 2:1 interest coverage, but are doing better than that and are highly leveraged for any increase. Lowering guidance to 80c this year. EBITA 1.4 to 1.6B range. SEC order on finance certification: expect to file before Aug 14 deadline Cash&Credit: 529M, and 200M credit available = 729M available in line with expectations. Cap Ex: originally 2.5B but only 1.6B so far to date, expect 2.6B 800M cash flow expected, so we will sell assets. Prepared to move forward with sales. Canadian Power Incme fund, road show next week, expect to finish by end of Aug. Blue Spruce, 300MW peaking in Colorado should close next week 120M transaction. Rocky Mt and Riverside Sale lease back of Zion for 150M, but Witco wants another 150MW so it will be a 225M sale leaseback. Expect to finish 11 project in Calif, sale leaseback expected. 175M of Gilmore expected to be earned by end of this quarter. Liquidity is going slower than what they want, the market is tougher, but still confident. Want to have Capex prefunded for 2003, its about 3B Corporate facility Revolver is rated at investment grade Construction program is coming down rapidly 1B maturing in October, a closed end fund for 9 new plants 2.9B total invested … 34% debt and most modern fleet out there Asset sales upto 650M Peter Cartwright: Calpine is changing from development to operations and marketing. Still have lots of construction. Will have 95 Plants, ?28,000MW will be 4th or 5th largest generator with the most modern fleet in the world. Looking for economy of scale to allow Calpine to be lowest cost producer. CES seeks to get gas at best price. Continue to execute with load serving entities. Have found creative ways to maintain liquidity and continue to sign long term contracts. Lots of equipment on order, will change to match new program. Have cancelled 35 turbine and will cancel upto another 85 units by 4th quarter. Working with GE and Siemens. Corporate integrity: Calpine is highly ethical, it is a top priority. Calpine is becoming the premier power generator in the country. Q&A Session: Caren Miller of USB Warberg: Value of hedges. In past explained that they`d be higher? We`ve been consistent that the spark spread of contractual 1.9B is gross profit only, but need to factor expenses. Less other EBITDA, MW bringing in less from merchant. Less money than original expected. Contract has not changed. Neil Spine: CSSB: Turbine Cost for the next year? 300M range. Assuming 89 cancels. MWH sale projection up 40 to 50M; page 12 of release? Est. Gen. use 95% factor for contractual purposes only. Expect actual generation to be 75%. Will reduce Est. Gen. only. Contractual does not change. Timeline to get royalty trust and Gilroy receivable monetization? Not a 1 by 1. Going to Canada. Sept 30, we`ve had offers but no incentive to sell until then since the price may change. Calif.: Can only do sale leaseback when everything is completed and we have construction using in the interim. Can`t get going until everything is done. Zion: Working to get done maybe the end of this quarter, but could go to next quarter. Collateral requirement for Hedging? It is peaking out right now, it has stabilized running 700-750M with letter credit of support. Hasn`t changed. Raymond Niles SSB: What is watt/hedge spark spread value on portfolio basis? 5years of est generation and contractual in press release. 2314 time contracts yields upto several billion spark spread. More info will be in website, but we are trying to keep competition in the dark. Capacity utilization; was mid 60 in prior years, why expect it to increase in depressed environment? Last year during 01 2Q, we had 65% in Calif with a great market. In cracking market, this year we had 66%, so capacity is not changing its just that we are not getting the same amount of money for the MW, so still expect to be in 75% range since our heat rates are in the 7000 range. Being lowest cost producer has its advantage. George Gasoy of Robert W Beard: How much gas consumption in terms of MCF? 112 BCF this year in Q2, 53 this quarter last year. A double year to year. ID total Gen. capacity what is level of peak vs. base? Website has project portfolio list there and breaks thing down. We expect 23,600 base load out of 28,500 total. The rest is peaking. Peak shaving being installed in Calif., what is investment debt on average? $800 per KW for 500MW under DWR contract so everything is contracted. Andy Levy of Bear Wagnor: 6.1B of value in long term contract. Though about monetize any? Every banker in the world would do that since there would be so many fees. We are in the business of producing power. If we monetize the contract, we are cashing out the day and giving up the future. In a bare liquidity crisis we have that option, but would limit the future so severely that we don`t want to do that. We have 25M MWH unhedged, so every $1 is 4c a share. If you take the 5$ market and increase it to $6. But it does not work visa versa since it`s not clear you could ever get to zero. Not to beat a dead horse, but It`d seem to be a benefit to monetize some? We continue to look at it and evaluate it, but if we monetize at 8% and debt is trading at 16% that a pretty good arbitrage. Crag Benson of Legg Mason: Previously indicated 900M op cash flow vs 800 now? Things have gotten worse than earlier worse case scenario. $2.4 weighted average around the clock spark spread are not prices ever expected. ….? Hesitant until 2003. Working towards giving more information. Can see production. Use own forward price curve. 2002 output, prior given 100M MW, now showing 75M MW? When we gave 100M MWH, we actually do not run since we buy back from the market. Some of the 70M we do not run. 79M represent balance of year generation. Contractual generation, how much is fixed vs index contract? See chart on website, 32% is fixed, 67% are heat rate, rounding 1%. Jay Dobson Deutsche Banc: 80 to 100c impueding current $5 spark spread? Maybe a bit lower, but one needs to be careful about round the clock vs peak. Essentially we brought low side down to actual curves. So previous $8 spark spread, and $1.3 and use 4c per dollar? $7.69 op cost; is most variable or fixed. If we have under $5 spark spread? Most is fixed, can`t send a operating home. I thought that can`t be right for brand new plant. We have geothermal that may be biasing the number. We`ll being dong a better job on getting it broken out better. Most of O&M is pretty much fixed. Capital interest in quarter? 171M. Tax rate dropped 600 bits, why? Benefit of write offs, so forward year tax rate expect 23 to 24% range. Cap Ex up 140M to 2.6B? As we refine 03, it will be closer to 1B to complete and it will be up 200M. Mike Wang KKM: Additional Asset sales include gas assets? No, as we work thru we will start with some oil properties in Canadian that are non strategic. Worth between 400-500M Canadian. Gas is easily monetizeable and replaceable. But for the most part we don`t want to sell stuff that is hedging fixed price contracts. In June, worse case scenario was $1.25, what`s changed? State of market, trading market has changed. Post Enron we didn`t expect a meltdown, not as optimist 6 weeks ago. We don`t expect to see price movement until June. We`re going along okay in May, but then things fell apart when we expected to see price increases. They didn`t come back and haven`t recovered. David Silverstein of Merrill Lynch: Earlier you indicated Avg $5 spread, but then you indicated that you expected $2.4 round the clock. The EBITDA is that much lower is because the merchant portfolio is a drain and really contributing to fixed cost? That is correct. Quarter to date, on Eastern Seaboard where you do have some capacity, there has been a tremendous difference, but not in Texas yet and Calif. is most under contract. Quarter to date, any change? We have seen some volatility, but no sustainable increase in spark spread. Price caps in west when we saw some movement. In Northeast, we had a few days that had increases, but nothing sustained. In the Northeast we had a few days in the $75 to $100 MWH with heat, but nothing sustainable. Short term volatility, but nothing sustained. Moving forward, looking at Cap Ex, you indicated construction budget excluding turbine including was 1B? Correct. Does that include maintenance? No, 300-400M for plants and EP? Correct, including EP. Any reason to believe it could change? No, when we put the 2.5B together in January and working since then we still feel comfortable. Dispersion over the year, lumped any? Over first 3, by then should get good handle of when construction will be over. Losane of Weylocks: Gas purchases & sales negative spread? Need to look at purchase and sales expenses. We are netting the two since we are managing the spark spread. Should be positive 150M. Industrial demand is not coming back. Can you give us some color? We haven`t seen on industrial. But with the weakening dollar we should be manufacturing picking up, but not over the remainder of this year. Yesterday FERC announced a market design. Can you comment on provisions to take away capacity markets? They are laying out a clear road map and structure for new market and how it will work with locational marginal pricing, so value of having strategically located assets will be rewarded. We are encouraged. Have you talked with any major regulators in Calif. or NY? We do, but they can speak for themselves. Congestion revenue; might that be traded actively? They are providing clarity, and we would expect to be participation due to the strategic location of most of our plants. John Riley of Goldman Sachs: Reduced number 135 M Mark to market and optimization. Obviously have a cost structure to optimize. Can you give us a idea of why you don`t eliminate and what the cost is? We have 250 people. 200 plus are scheduling and moving power and gas around, but that is not a cost structure that can be eliminated and will only get lower as we add more megawatts. Cost 50 to 60M to run annually. Only 15-20 traders do optimizing. See no reason to eliminate. They are optimizing on the short term. It`s only beyond 6 months where we see no market. We have not been able to do any long term optimizing. In the short term we are doing well at maintaining liquidity. We have one of the largest portfolio in the US and we are creating value. You`ve assumed $5/MWH spark spread for unhedged position for rest of 02. There will be addition of 16,000 to 28,000 at end of buildout. Everyone knows 50,000 to 75,000 added to market over next year. Why not try as hard as hell to push that out as long as possible in terms of remaining buildup? In the midst of all this turmoil, we`ve entered into long term contracts. So, we will try to meet that, but we will slow down where we see as possible. 2004? In 2004 we have 2.5B coming due. That is a portfolio, 13 projects total market value of 4.7b invested, all completed by end of 03, 8700 MW with debt: equity just over 50%. Investment grade could be refinanced when needed. 1B term load fee that matures, but we should have enough free cash flow to pay down. But it is investment grade and w could roll over if needed. Source of concern about Pete selling stock. What is reason for stock sales? Stock options were granted in 1992 with a 10 year life and have to be exercerzied by end of this year. Started a 10D15 program at end of last year, but Now in hand of my Broker to sell over the rest of this year. Can not start/stop 10B15 program. Been out of my hands since February and over half of sales is used to cover taxes. Ali Aga of Bank of America Securities: How much contracted capacity to power marketers? Most to load serving entities. No triggers. 85% is investment grade. PGE is in portfolio. We watch daily any, Dynegy, Reliant, Mirant etc. Our exposure to all of those is we own them money. Less than 5% goes to marketers and traders. What is cash flow implication of trading and marketing apart from mark to market elimination for P&L? Thought to add 10% of optimization to business. So, if we were turning out 2B EBITDA on a regular basis, it should be 200M. Some of our competition though they could do better, but we have since reduced that to zero for our current guidance. From cash perspective, have 750M of LC`s tied up. Where is that now. We have always been around 700 to 750 LC`s. Given new program, by year end? Yes, it doesn`t contribute that much. Existing LC support gas hedges to support longer term contracts. Looking at pricing in forward markets, how much flexibility in current budget for Construction Cap Ex? Looking at it all the time, we could do some but not a great deal. Tom Boyd of Bear Sterns: Mitchel Segal of CSSB: 2003 cash outflows; is 400M Maint Cap ex, 1B cap ex and in turbines? In 04, assuming all 89 cancelled? We would have 0 cap ex and 350M maintenance cap ex and no turbine payments. David Relm of Morgan Stanley: How many assets not securing the current bank facilities? Don`t have exact number. All the oil and gas secures bank facilities. On peak 7-8$, implies at night and off peak it is very hard to make cash coverage? We contract enough off peak capacity so we have enough capacity. If spread isn`t there we back off. We do it day by day and hour by hour. Some units cycling more than intended? Some we ramp multiple plant down partially. Use less fuel. We factors in lots of information before deciding to shut down. Looking at some dispatch decisions, affect availability as well as cost. Gordon Howle of Credit DNA: Potential takeover? We do have a poison pill program in place. Have not been approached about any takeover or had any discussions. If someone were, we`d take a hard look at it. Any potential impairments with regards to turbine cancellations? We have the 89 on the turbines that we talked about. Expensing what is feasible in a very methodical basis. But reviewing all of our development projects. Alina Tarbone of Deutsche Asset Management: Not willing to give any details about 2003. Are you close to break even? Take 2003 unhedged MW and forward price curve. We will generate 2.5B at a $5 spark spread, so the operating business is very cash flow positive. So, one question is what to do with all the cash late next year. If bonds are trading at 50c to the dollar, then we will be buying back debt toward the end of next year Looking for trading partner business? Since last year the whole trading industry is in turmoil. However, we don`t need to do anything and nor do we need to until the trading environment is clear. We are in a steady state, but we will continue to look at opportunities, but won`t unless they are in Calpines best interest. Yes, but that would have freed up some cash. So, that is why you need a partner there? Yes, but once you free up cash you are giving away something. Once we allow somebody to optimize the megawatts you are giving up half and you want to get half back. Total LC`s haven`t changed all that much. It has to be economic going forward. You are suggesting that 2003 should be close to break even on cash flow but 2004 is really positive cash flows? We have tremendous operating leverage. $100K of EBITDA per mw in equilibrium state and 30K per MW of net income. However, despite depressed market, our trading EBITDA is still 198K and net income is 37K per MW. The business model is working very well. We went long contracts at the right time when EBITDA was $150K and we We are doing very well hedging the portfolio. You can take 150K and 50K and divide by 2 and still meet the business plan even in a depressed market. So, we are doing very good hedging the portfolio. This will allow us to ride through 02 and 03 and when we arrive in 04, we`ll be tremendously positive and will just have to figure out what to do with the cash. Mike Sunershine of CSSB: Differences in mark to market in electric vs gas contracts. One to income vs the other to balance sheet. Are there better metrics? No, both Power and Gas go to P&L. One is revenue the other to fuel expenses. EBITDA is best measure. Mark to market is not a great number. Alina Raja of Octagon Investors: 457M of future turbines that you`re restructuring. Should you restructure? The 457 are payment we will make, the 89 are if we cancel, otherwise they`d be like 600M. So, we will have to pay the 457. Cal Gorski of KBC investors: The 2003 cap ex of 1B. What was reason for increase? For the most part it is a small number on 27 plants it is just a refinement of the number. But we still expect the $1B. Liquidity. 730 or 750M with initiative to raise cash by end of year. How tight could things get if projects move out? Comfortable with press release and there is other stuff we are working on that`s not on the tables. 2B of cushion is the goal. Assets sales are always questionable since the other party is not in our control. We`ve been working on the 400M and confident it will happen by end of the year. Kathy Shield of KBC financial products: Payments for future turbines is final and can`t be pulled back? Yes. On the 89, it would just make sense to pull those. Why not cancel? We are very comfortable with our debt and our coverage ratios with our contractual cash flows. But, if you have a $5 spark spread market, and you have $4 operating costs, thats a $1 contribution, so then you don`t invest in turbines unless you have a perception that the market is in a $15 18 range. We do need to make a final decision in October. Plans for convertible in December 04? Focusing on May 03, Oct 03. But have not focused on 04. I`m optimistic that stock price will return to just reasonable levels of valuation and there won`t be any reason to refinance that put. |
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| aus der Diskussion: | Calpine |
| Autor (Datum des Eintrages): | Ant@res (06.08.02 14:12:59) |
| Beitrag: | 134 von 251 (ID:7054743) |
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