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America’s Premier Power Generation Company
... Creating Power for a Sustainable Future

Calpine Reports 2007 Full-Year Results

02/29/2008

Significantly Improved Financial Performance

HOUSTON & SAN JOSE, Calif., Feb 29, 2008 (BUSINESS WIRE) -- Calpine Corporation (NYSE:CPN) today reported full-year financial and operating results for the year ended Dec. 31, 2007. Calpine's Annual Report on Form 10-K, including its audited financial statements, for the year ended Dec. 31, 2007, was filed with an effective date of today with the Securities and Exchange Commission (SEC) and can be found on the SEC's website at http://www.sec.gov.

Full-year highlights include:

                                                Year Ended Dec. 31
                                             -------------------------

                                               2007      2006    % Chg
                                             --------  --------  -----
Operating Revenues (millions) (a)            $ 7,970   $ 6,937    15%
GAAP Net Income/(loss) (millions) (a)        $ 2,693   $(1,765)   NA
Commodity Margin (millions) (b,c)            $ 2,225   $ 2,021    10%
Adjusted EBITDA (millions) (c,d)             $ 1,412   $ 1,029    37%
Megawatt-Hours Generated (thousands)          90,811    83,146     9%
Average Total Megawatts in Operation
 (thousands)                                  24,755    26,785    (8)%
Average Capacity Factor (excluding peakers)     46.6%     39.2%   19%

(a) See the accompanying Consolidated Statements of Operations for the
 periods ending on December 31 for 2005, 2006 and 2007

(b) Commodity margin includes Calpine's electricity and steam
 revenues, hedging and optimization activities, renewable energy
 credit revenue, transmission revenue and expenses, and fuel and
 purchased energy expenses, but excludes mark-to-market activity and
 other service revenues.

(c) Commodity Margin and Adjusted EBITDA are non-GAAP measures
 important to management's assessment of the Company's performance.
 Commodity margin and Adjusted EBITDA do not purport to represent net
 income (loss), the most comparable GAAP measure, as an indicator of
 operating performance and are not necessarily comparable to
 similarly-titled measures reported by other companies. See the
 accompanying tables for a reconciliation of commodity margin and
 Adjusted EBITDA to net income (loss) from operations.

(d) Earnings Before Interest, Tax, Depreciation and Amortization, as
 adjusted.

Robert P. May, Calpine's Chief Executive Officer, stated, "We entered 2008 as the new Calpine with a renewed commitment to: generating and selling clean, reliable and cost-effective electricity. We continue to deliver on this commitment every day, which is why Calpine is one of the industry's largest North American natural gas-fired power providers and is the nation's largest renewable geothermal energy producer, well-positioned to lead a new era of clean power generation."

Outlook

Going forward, Calpine expects to maintain its strong liquidity position and maximize the performance of core strategic assets in the markets in which Calpine operates. The Company has taken steps to stabilize, improve and strengthen its power generation business and financial health by reducing activities and curtailing expenditures in certain non-core areas.

Analyst Meeting and Webcast

As previously announced, Calpine will host an analyst meeting today. A live Internet Webcast of the meeting, including management's presentation will be active at approximately 12:45 p.m. EST and can be found at http://www.calpine.com by clicking on an available audio link. The Webcast will be available for replay purposes on the Company's website approximately two hours after the event and then for 45 days following the live broadcast.

About Calpine

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, currently capable of delivering approximately 24,000 megawatts of clean, cost-effective, reliable, and fuel-efficient electricity to customers and communities in 18 states in the United States. Calpine 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 http://www.calpine.com for more information.

Forward Looking Statement

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. Words such as "believe," "intend," "expect," "anticipate," "plan," "may," "will" and similar expressions identify forward-looking statements. Such statements include, among others, those concerning 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) Calpine's ability to implement its business plan; (ii) financial results that may be volatile and may not reflect historical trends; (iii) seasonal fluctuations of results and exposure to variations in weather patterns; (iv) potential volatility in earnings associated with fluctuations in prices for commodities such as natural gas and power; (v) ability to manage liquidity needs and comply with covenants related to the Exit Credit and Bridge Facilities and other existing financing obligations; (vi) Calpine's ability to complete the implementation of its Plan of Reorganization and the discharge of its chapter 11 cases including successfully resolving any remaining claims; (vii) disruptions in or limitations on the transportation of natural gas and transmission of electricity; (viii) the expiration or termination of power purchase agreements and the related results on revenues; (ix) risks associated with the operation of power plants including unscheduled outages; (x) factors that impact the output of Calpine's 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; (xi) risks associated with power project development and construction activities; (xii) ability to attract, retain and motivate key employees including filling certain significant positions within Calpine's management team; (xiii) ability to attract and retain customers and counterparties; (xiv) competition; (xv) risks associated with marketing and selling power from plants in the evolving energy markets; (xvi) present and possible future claims, litigation and enforcement actions; (xvii) effects of the application of laws or regulations, including changes in laws or regulations or the interpretation thereof; and (xviii) 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, 2007. 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. 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, 2007, 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 http://www.sec.gov or Calpine's website at http://www.calpine.com.

                CALPINE CORPORATION AND SUBSIDIARIES
                       (DEBTOR-IN-POSSESSION)

                CONSOLIDATED STATEMENTS OF OPERATIONS

                                        Years Ended December 31,
                                    ---------------------------------
                                      2007        2006        2005
                                    ---------  ----------  ----------
                                     (in millions, except per share
                                                 amounts)
Operating revenues                  $   7,970  $    6,937  $   10,302

Cost of revenue:
Fuel and purchased energy expenses      5,683       4,752       8,318
Plant operating expense                   749         750         717
Depreciation and amortization             463         470         506
Operating plant impairments                44          53       2,413
Other cost of revenue                     136         172         293
                                    ---------  ----------  ----------
  Gross profit (loss)                     895         740      (1,945)
Equipment, development project and
 other impairments                          2          65       2,117
Sales, general and other
 administrative expense                   146         175         240
Other operating expenses                   42          36          69
                                    ---------  ----------  ----------
  Income (loss) from operations           705         464      (4,371)
Interest expense                        2,019       1,254       1,397
Interest (income)                         (64)        (79)        (84)
Loss (income) from various
 repurchases of debt                       --          18        (203)
Minority interest expense                  --           5          43
Other (income) expense, net              (139)         (5)         72
                                    ---------  ----------  ----------
  Loss before reorganization items,
   income taxes and discontinued
   operations                          (1,111)       (729)     (5,596)
Reorganization items                   (3,258)        972       5,026
                                    ---------  ----------  ----------
  Income (loss) before income taxes
   and discontinued operations          2,147      (1,701)    (10,622)
Provision (benefit) for income
 taxes                                   (546)         64        (741)
                                    ---------  ----------  ----------
  Income (loss) before discontinued
   operations                           2,693      (1,765)     (9,881)
Discontinued operations, net of tax
 provision of $132 in 2005                 --          --         (58)
                                    ---------  ----------  ----------
   Net income (loss)                $   2,693  $   (1,765) $   (9,939)
                                    =========  ==========  ==========


Basic earnings (loss) per common
 share:
  Weighted average shares of common
   stock outstanding (in thousands)   479,235     479,136     463,567
  Income (loss) before discontinued
   operations                      $     5.62 $     (3.68) $   (21.32)
  Discontinued operations, net of
   tax                                     --          --       (0.12)
                                   ----------------------  ----------
    Net income (loss)              $     5.62 $     (3.68) $   (21.44)
                                   ======================  ==========


Diluted earnings (loss) per common
 share:
  Weighted average shares of common
   stock outstanding (in thousands)   479,478     479,136     463,567
  Income (loss) before discontinued
   operations                      $     5.62 $     (3.68) $   (21.32)
  Discontinued operations, net of
   tax                                     --          --       (0.12)
                                   ----------------------  ----------
    Net income (loss)              $     5.62 $     (3.68) $   (21.44)
                                   ======================  ==========

Consolidated Commodity Margin

The following table reconciles our commodity margin to our GAAP results for the years ended December 31, 2007 and 2006 (in millions).

                                                       2007    2006
                                                      ------- -------
Operating revenues                                    $ 7,970 $ 6,937
(Less): Other service revenues                            (57)    (73)
(Less): Fuel and purchased energy expenses             (5,683) (4,752)
Adjustment to remove: Mark-to-market activity, net(1)      (5)    (91)
                                                      ------- -------
 Consolidated commodity margin                        $ 2,225 $ 2,021
                                                      ======= =======

(1) Included in operating revenues and fuel and purchased energy
 expenses.

Adjusted EBITDA

The below table provides a reconciliation of Adjusted EBITDA to our cash flow from operations and GAAP net income (loss):

                                            Years Ended December 31,
                                            -------------------------
                                             2007     2006     2005
                                            -------  -------  -------
                                                  (in millions)
Cash provided by (used in) operating
 activities                                 $   182  $   156  $  (708)
Less:
  Changes in operating assets and
   liabilities, excluding the effects of
   acquisition                                  686      259     (332)
  Additional adjustments to reconcile GAAP
   net loss to net cash provided by (used
   in) operating activities from both
   continuing and discontinued operations:
   Depreciation and amortization expense
    (1)                                         554      585      760
   Deferred income taxes                       (517)      22     (610)
   Mark-to-market activity, net                  13      (99)     (11)
   Non-cash reorganization items             (3,342)     807    5,013
   Impairment charges and other                  95      347    4,411
                                            -------  -------  -------
GAAP net income (loss)                        2,693   (1,765)  (9,939)
Less: Loss from discontinued operations          --       --      (58)
                                            -------  -------  -------
Net income (loss) from continuing
 operations                                   2,693   (1,765)  (9,881)
Add:
  Adjustments to reconcile Adjusted EBITDA
   to net income (loss) from continuing
   operations:
  Interest expense, net of interest income    1,955    1,175    1,313
  Depreciation and amortization expense,
   excluding deferred financing costs(1)        507      522      558
  Income tax provision (benefit)               (546)      64     (741)
  Impairment charges                             46      118    4,530
  Reorganization items                       (3,258)     972    5,026
  Major maintenance expense                      98       77       70
  Operating lease expense                        54       66      105
  Loss (income) on various repurchases of
   debt                                          --       18     (203)
  (Gains) losses on derivatives                   2     (213)      52
  (Gains) losses on sales of assets and
   contract restructuring, excluding
   reorganization items                          (7)      (6)      18
  Claim settlement income                      (135)      --       --
  Other                                           3        1       80
                                            -------  -------  -------
     Adjusted EBITDA                        $ 1,412  $ 1,029  $   927
                                            =======  =======  =======


(1) Depreciation and amortization in the GAAP net income (loss)
 calculation on our Consolidated Statements of Operations excludes
 amortization of other assets and amounts classified as SG&A.

SOURCE: Calpine Corporation

Calpine Corporation
Media Relations:
Mel Scott, 713-570-4553
scottm@calpine.com
or
Investor Relations:
Norma Dunn, 713-830-8883
norma.dunn@calpine.com