Calpine Announces Updated Valuation Analysis

    SAN JOSE, Calif. and HOUSTON, Nov. 20 /CNW/ -- Calpine Corporation (Pink
Sheets: CPNLQ) and its affiliated debtors and debtors in possession
(collectively, "Calpine") announced today the release of an updated valuation
analysis (the "Updated Valuation Analysis") of the total enterprise value of
reorganized Calpine and its subsidiaries upon their emergence from Chapter 11
("Reorganized Calpine"), in connection with the Bankruptcy Court's hearing to
confirm Calpine's Chapter 11 plan of reorganization, which is scheduled to
begin on Dec. 17, 2007.  The Updated Valuation Analysis was prepared by Miller
Buckfire & Co., LLC ("Miller Buckfire"), Calpine's financial advisor, and
supersedes the June 20, 2007, valuation analysis set forth in Calpine's
disclosure statement, which was approved by the Bankruptcy Court on Sept. 26,
    In preparing its Updated Valuation Analysis, Miller Buckfire reviewed,
among other things, certain operating and financial forecasts prepared by
Calpine's management, including an updated projection of cash earnings before
interest, taxes, depreciation, amortization, operating rent, and restructuring
charges ("Cash EBITDAR") as of Nov. 1, 2007, for the period Jan. 1, 2008
through Dec. 31, 2013, which is attached as Exhibit 1.  The Cash EBITDAR
projections, which were developed as part of Calpine's ongoing efforts to
update and refine its comprehensive business plan, show increases in Calpine's
projected Cash EBITDAR as compared to Calpine's previous Cash EBITDAR
projections included in Exhibit 12 in the June 20 supplement to Calpine's plan
of reorganization.  The Cash EBITDAR projections are based on the forecasted
consolidated financial results of Calpine (or Reorganized Calpine, as
applicable) and its non-debtor affiliates, and take into account, among other
things: forward curves for power and gas as of June 29, 2007; updated plant
operating characteristics; contracts entered into at certain of Calpine's
facilities since Calpine's April 2007 business plan; long-term gas price
projections; market data, including regional supply and demand and the
construction costs of power facilities in the markets in which Calpine
operates; certain developments with carbon regulations that are projected to
impact Calpine's operations; and decreased corporate overhead and selling,
general, and administrative expense estimates.
    As discussed in its Updated Valuation Analysis and based upon an assumed
emergence from Chapter 11 on Dec. 31, 2007, Miller Buckfire estimates that the
total enterprise value of Reorganized Calpine will range from $18.3 billion to
$20.4 billion, with a midpoint of $19.35 billion.  Although Calpine's Cash
EBITDAR projections have increased, the Updated Valuation Analysis shows a
decrease of approximately $900 million in Reorganized Calpine's estimated
midpoint total enterprise value compared to Miller Buckfire's June 20
estimated midpoint total enterprise value.  This decrease is a result of,
among other things, a general decrease in the market enterprise value of the
Selected Companies (as defined in the Updated Valuation Analysis) and a
general increase in market volatility, both partially offset by the increases
in Calpine's updated Cash EBITDAR projections.
    At the confirmation hearing, Calpine will take the position that
Reorganized Calpine's total enterprise value upon its emergence from Chapter
11 is $19.35 billion, based on the midpoint total enterprise value set forth
in the Updated Valuation Analysis.  However, as described in Calpine's
disclosure statement, the Bankruptcy Court will determine the total enterprise
value of Reorganized Calpine following the confirmation hearing, and, as a
result, it is possible that the Bankruptcy Court will find that Reorganized
Calpine's total enterprise value will be materially higher or lower than
$19.35 billion.
    Using the midpoint total enterprise value in Miller Buckfire's Updated
Valuation Analysis and Calpine's litigation-risk assessment of allowed claims,
Calpine estimates that (1) general unsecured creditors will recover 96.7% of
their allowed principal plus pre- and post-petition interest claims, and (2)
shareholders will receive no recovery on account of their common stock.  Using
the same midpoint total enterprise value and Calpine's "low-claims" estimate,
Calpine estimates that (1) unsecured creditors will be paid their allowed
principal plus pre- and post-petition interest claims in full, and (2)
shareholders will receive $0.41 on account of each share of common stock.
Using the same midpoint total enterprise value and Calpine's "high-claims"
estimate, Calpine estimates that post-petition interest claims will not be
paid, and therefore (1) general unsecured creditors will recover 88.0% of
their allowed principal plus pre- and post-petition interest claims (which
recovery is equivalent to 99.7% of allowed principal plus pre-petition
interest claims), and (2) shareholders will receive no recovery on account of
their common stock. Despite these estimates, no assurances can be made
regarding the actual recoveries to creditors and shareholders because, among
other things, the Bankruptcy Court has not finally adjudicated all of the
claims asserted against Calpine and has yet to determine Reorganized Calpine's
total enterprise value.
    The summary of the Updated Valuation Analysis set forth herein does not
purport to be a complete description of the Updated Valuation Analysis
prepared by Miller Buckfire and remains subject to the reservations,
assumptions, and disclosures set forth in the Updated Valuation Analysis.
    The Updated Valuation Analysis, Calpine's plan of reorganization and
disclosure statement, and Calpine's plan supplement are available for viewing
at and at
    The conclusions in the Updated Valuation Analysis should not be ascribed
to the Official Committee of Unsecured Creditors or the Official Committee of
Equity Security Holders appointed in Calpine's Chapter 11 cases (each, a
"Committee").  Each Committee has developed its own separate analysis and
determinations regarding the valuation of Reorganized Calpine, which will be
available for viewing at, and will present its
position to the Bankruptcy Court at the confirmation hearing.
    The projections discussed herein have been prepared by Calpine's
management with the assistance of their advisors.  The projections were not
prepared to comply with the guidelines for prospective financial statements
published by the American Institute of Certified Public Accountants and the
rules and regulations of the United States Securities and Exchange Commission.
Calpine's independent accountants have neither examined nor compiled the
accompanying projections and accordingly, do not express an opinion or any
other form of assurance with respect to the projections, assume no
responsibility for the projections, and disclaim any association with the
    Calpine Corporation is helping meet the needs of an economy that demands
more and cleaner sources of electricity. Founded in 1984, Calpine is a major
U.S. power company, capable of delivering nearly 24,000 megawatts of clean,
cost-effective and reliable electricity to customers and communities in 18
states in the U.S. The company owns, leases and operates low-carbon, natural
gas-fired and renewable geothermal power plants.  Using advanced technologies,
Calpine generates electricity in a reliable and environmentally responsible
manner for the customers and communities it serves.  Please visit for more information.
    In addition to historical information, this release contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act.  We use words such as "believe,"
"intend," "expect," "anticipate," "plan," "may," "will" and similar
expressions to identify forward-looking statements. Such statements include,
among others, those concerning our expected financial performance and
strategic and operational plans, as well as all assumptions, expectations,
predictions, intentions or beliefs about future events. You are cautioned that
any such forward-looking statements are not guarantees of future performance
and that a number of risks and uncertainties could cause actual results to
differ materially from those anticipated in the forward-looking statements.
    Such risks and uncertainties include, but are not limited to: (i) the
risks and uncertainties associated with our chapter 11 cases and Companies'
Creditors Arrangement Act (CCAA) proceedings of certain of Calpine's Canadian
affiliates, including our ability to successfully reorganize and emerge from
chapter 11; (ii) our ability to implement our business plan; (iii) financial
results that may be volatile and may not reflect historical trends; (iv)
seasonal fluctuations of our results; (v) potential volatility in earnings
associated with fluctuations in prices for commodities such as natural gas and
power; (vi) our ability to manage liquidity needs and comply with covenants
related to our existing financing obligations and anticipated exit financing;
(vii) the direct or indirect effects on our business of our impaired credit
including increased cash collateral requirements in connection with the use of
commodity contracts; (viii) transportation of natural gas and transmission of
electricity; (ix) the expiration or termination of our power purchase
agreements and the related results on revenues; (*) risks associated with the
operation of power plants including unscheduled outages; (xi) factors that
impact the output of our geothermal resources and generation facilities,
including unusual or unexpected steam field well and pipeline maintenance and
variables associated with the waste water injection projects that supply added
water to the steam reservoir; (xii) risks associated with power project
development and construction activities; (xiii) our ability to attract, retain
and motivate key employees; (xiv) our ability to attract and retain customers
and contract counterparties; (xv) competition; (xvi) risks associated with
marketing and selling power from plants in the evolving energy markets; (xvii)
present and possible future claims, litigation and enforcement actions;
(xviii) effects of the application of laws or regulations, including changes
in laws or regulations or the interpretation thereof; and (xix) other risks
identified from time-to-time in Calpine's reports and registration statements
filed with the SEC, including, without limitation, the risk factors identified
in its Annual Report on Form 10-K for the year ended December 31, 2006 and
Quarterly Reports on Form 10-Q.  Actual results or developments may differ
materially from the expectations expressed or implied in the forward-looking
statements and Calpine undertakes no obligation to update any such statements.
Any financial projections, while presented with numerical specificity, are
necessarily based on a variety of estimates and assumptions which, though
considered reasonable by Calpine, may not be realized and are inherently
subject to significant business, economic, competitive, industry, regulatory,
market, and financial uncertainties and contingencies, many of which are
beyond Calpine's control.  Calpine cautions that no representations can be
made or are made as to whether the actual results will be within the range set
forth in the projections, to the accuracy of these projections or to Calpine's
ability to achieve the projected results.  Some assumptions inevitably will
not materialize.  Further, events and circumstances occurring subsequent to
the date on which these projections were prepared may be different from those
assumed, or alternatively, may have been unanticipated and thus the occurrence
of these events may affect financial results in a materially adverse or
materially beneficial manner.  Calpine does not intend to update or otherwise
revise these projections to reflect events or circumstances existing or
arising after the date hereof or to reflect the occurrence of unanticipated
events.  The projections therefore, may not be relied upon as a guaranty or
other assurance of the actual results that may occur.  Unless specified
otherwise, all information set forth in this release is as of today's date and
Calpine undertakes no duty to update this information. For additional
information about Calpine's chapter 11 reorganization or general business
operations, please refer to Calpine's Annual Report on Form 10-K for the
fiscal year ended December 31, 2006, Calpine's Quarterly Reports on Form 10-Q,
and any other recent Calpine report to the Securities and Exchange Commission.
These filings are available by visiting the Securities and Exchange
Commission's website at or Calpine's website at

                                  EXHIBIT 1
               Cash EBITDAR Projections as of November 1, 2007

    $ millions                   2008    2009    2010    2011    2012    2013
    Total Revenue Receipts     $7,201  $7,577  $7,813  $8,413  $9,177  $9,758
    Fuel Costs Disbursements   (4,623) (4,836) (4,969) (5,151) (5,138) (5,483)
    Gross Margin               $2,578  $2,741  $2,844  $3,261  $4,039  $4,275

    O&M and SG&A                ($299)  ($301)  ($313)  ($326)  ($816)  ($935)
    Overhead and other
     miscellaneous               (259)   (265)   (271)   (277)   (284)   (290)
    Labor                        (162)   (164)   (166)   (170)   (174)   (178)
    Insurance                     (71)    (87)    (90)    (93)    (95)    (97)
    Property Tax                 (104)   (131)   (227)   (230)   (234)   (242)
    Consolidated EBITDAR       $1,682  $1,794  $1,777  $2,164  $2,437  $2,533
    Minority Interest/Equity
     Investment EBITDAR
     Adjustment                    19      98      75      67      73      72
    Cash EBITDAR               $1,702  $1,892  $1,852  $2,231  $2,510  $2,605

For further information:

For further information: Media, Mel Scott, +1-713-570-4553,, or investors, Norma Dunn, +1-713-830-8883,, both of Calpine Corporation Web Site:

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