Diverse and efficient fleet of gas-fired electricity generation; Well positioned in gas-dominated markets such as California, Texas, and the Northeast; High construction costs and difficulty in permitting base load assets should support heat rate recovery when the economy improves; Growth of renewables may be a positive if back-up generation is needed; Gas and geothermal fleet that positions Calpine well for potential climate change legislation; Young, standardized fleet that provides operational cost advantages; and 50% cash flow sweep that supports deleveraging. Weak merchant market conditions Substantially hedged position for 2009 and 2010 that largely eliminates covenant concerns Substantial exposure to gas prices and market heat rates in the longer term Significant leverage at about $439/kW. The ratings on electricity generator Calpine
