Summary: Calpine Corp.

U.S. independent power producer, Calpine Corp's generation remains subject to energy margin variability, driven by low natural gas prices, demand growth, renewable proliferation, and weather patterns. California markets are increasingly downward biased by renewables, although there has been some rebound in certain other capacity and energy markets, notably in Texas (ERCOT) About half of expected commodity margin is hedged through 2022 from capacity revenues, bilateral contracts, financial hedges, and retail power margins. Calpine continues to be free operating cash flow (cash from operations less capital spending) positive. The company's cash flow conversion (free cash flow/EBITDA) has increased to 45% in 2017 from 33% in 2016. Despite a highly leveraged financial risk profile and low gas prices over the forecast period,

...Business Risk : Fair Financial Risk: Highly leveraged + U.S. independent power producer, Calpine Corp's generation remains subject to energy margin variability, driven by low natural gas prices, demand growth, renewable proliferation, and weather patterns. + California markets are increasingly downward biased by renewables, although there has been some rebound in certain other capacity and energy markets, notably in Texas (ERCOT) + About half of expected commodity margin is hedged through 2022 from capacity revenues, bilateral contracts, financial hedges, and retail power margins. + Calpine continues to be free operating cash flow (cash from operations less capital spending) positive. The company's cash flow conversion (free cash flow/EBITDA) has increased to 45% in 2017 from 33% in 2016. + Despite a highly leveraged financial risk profile and low gas prices over the forecast period, we expect adjusted free operating cash flow (FOCF) to debt to remain positive. + We expect Calpine to be...

Summary