COST: 166 $MM
ALLENTOWN, Pa., Dec. 6, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN), a competitive energy and power generation company that owns or controls 16,000 megawatts of capacity in eight states, today reported the completion of its merger with an affiliate of Riverstone Holdings LLC, which was initially announced on June 3, 2016. Talen Energy Corporation common stock ceased trading on the New York Stock Exchange before the commencement of trading on December 6, 2016 and will be delisted from the NYSE.
Under the terms of the merger agreement, which was adopted by Talen Energy Corporation stockholders at a special meeting on October 6, 2016, Talen Energy Corporation stockholders will receive $14 in cash for each share of common stock they owned immediately prior to the effective time of the merger.
Ralph Alexander has been named President and Chief Executive Officer of Talen Energy, effective immediately. When asked about his appointment, Mr. Alexander said, "I look forward to leading our team of experienced professionals and continuing our legacy of efficiently generating safe, reliable energy for our customers."
Stockholders of record and stockholders who hold shares through a bank or broker generally will not need to take any action for their shares to be converted into cash because the conversion will be handled automatically by Talen Energy Corporation's transfer agent or their bank or broker, respectively. In certain limited instances, Talen Energy Corporation's transfer agent or the requisite bank or broker, as applicable, will notify stockholders if additional information is required before they may receive the merger consideration.
Financial and Legal Advisors
Citibank served as financial advisor to Talen Energy in the transaction, and Kirkland & Ellis LLP served as Talen Energy's legal advisor. Goldman, Sachs & Co. and RBC Capital Markets served as financial advisors to Riverstone. Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP served as Riverstone's legal advisors for the transaction.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in North America. The company owns or controls 16,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. For more information, visit www.talenenergy.com.
About Riverstone Holdings LLC
Riverstone Holdings is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $34 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed over $33 billion to more than 120 investments in North America, Latin America, Europe, Africa and Asia. Visit www.riverstonellc.com for more information.
Forward-Looking Information
Statements contained in this news release are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy and its subsidiaries believe that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island dual-fuel project; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, Form 10-Q for the quarters ended March 31, 2016, June 30, 2016 and September 30, 2016, and its other reports on file with the SEC.
Media contact:
Todd L. Martin
(570) 542-2881
todd.martin@talenenergy.com
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SOURCE Talen Energy Corporation
ALLENTOWN, Pa., Nov. 10, 2016 /PRNewswire/ --
2016 Financial Results
(in millions) |
Three Months Ended |
Nine Months Ended | |||||
September 30, 2016 |
September 30, 2016 | ||||||
Net Income (Loss) |
$ |
88 |
$ |
236 |
|||
Adjusted EBITDA |
247 |
614 |
|||||
Cash from Operations |
549 |
||||||
Adjusted Free Cash Flow |
523 |
2016 Guidance Ranges
Transaction Update
Talen Energy Corporation (NYSE: TLN) today reported Net Income of $88 million for the three months ended September 30, 2016, compared with a Net Loss of $401 million for the three months ended September 30, 2015, and Adjusted EBITDA of $247 million, compared with $357 million for the three months ended September 30, 2015.
For the nine months ended September 30, 2016, Talen Energy reported Net Income of $236 million, compared with a Net Loss of $279 million for the nine months ended September 30, 2015, and Adjusted EBITDA of $614 million, compared with Adjusted EBITDA of $765 million for the nine months ended September 30, 2015.
The 2015 Net Losses reflected non-cash goodwill and other asset impairment charges detailed at that time.
Based on results through the end of the third quarter, Talen Energy narrowed 2016 guidance for Adjusted EBITDA to $705-$805 million, and increased and narrowed 2016 guidance for Adjusted Free Cash Flow to $500-$600 million.
On June 3, 2016, Talen Energy announced a merger agreement with affiliates of Riverstone Holdings LLC, a private investment firm. Talen Energy stockholders overwhelmingly approved the merger on Oct. 6, 2016. The merger has been approved by the Federal Energy Regulatory Commission and the New York Public Service Commission. The parties also have been granted early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is expected to close by the end of 2016, subject to approval by the Nuclear Regulatory Commission and satisfaction of other customary closing conditions.
A Talen Energy subsidiary, Talen Energy Supply LLC, has successfully priced a $600 million term loan B facility, the net proceeds of which are expected to be used to fund the payment of fees and expenses in connection with the term loan B issuance and the merger, for working capital needs and for other general corporate purposes of Talen Energy, including repayment of debt under Talen Energy Supply's revolving credit facility. Closing of the term loan B is subject to customary closing conditions and completion of the merger.
Looking at operating highlights, natural gas co-firing capability at the coal-fired Brunner Island plant in York County, Pa. is in commercial operation for Unit 3 and expected to be in commercial operation for Unit 2 by the end of 2016. The company decided to defer completion and commercial operation of co-firing capability for Unit 1 until the spring of 2017, to avoid taking the unit out of service during the winter demand season. Talen Energy also has decided to evaluate further plans it announced in June 2016 to add natural gas co-firing capability at the coal-fired Montour plant in Montour County, Pa., to consider operating experience and results from the Brunner Island Unit 3 project. There is no current timetable for completing the Montour project, and the company has excluded the estimated $70 million capital cost from its forecasted capital expenditures.
Review of Segment Results
Financial information presented in this news release for the nine months ended September 30, 2015 represents nine months of legacy Talen Energy Supply results, consolidated with four months of RJS Power results. Financial information for three and nine months ended September 30, 2015 excludes results from the Athens, Millennium and Harquahala plants because they were acquired in November 2015.
(in millions) |
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Operating Income (Loss) |
|||||||||||||||
East |
$ |
221 |
$ |
(345) |
$ |
765 |
$ |
33 |
|||||||
West |
16 |
39 |
(64) |
18 |
|||||||||||
Other (b) |
(44) |
(40) |
(149) |
(184) |
|||||||||||
Total |
$ |
193 |
$ |
(346) |
$ |
552 |
$ |
(133) |
|||||||
EBITDA (a) |
|||||||||||||||
East |
$ |
327 |
$ |
(260) |
$ |
1,072 |
$ |
288 |
|||||||
West |
28 |
49 |
(28) |
32 |
|||||||||||
Other (b) |
(41) |
(39) |
(141) |
(183) |
|||||||||||
Total |
$ |
314 |
$ |
(250) |
$ |
903 |
$ |
137 |
|||||||
Adjusted EBITDA (a) |
|||||||||||||||
East |
$ |
250 |
$ |
331 |
$ |
691 |
$ |
817 |
|||||||
West |
21 |
49 |
(9) |
53 |
|||||||||||
Other (b) |
(24) |
(23) |
(68) |
(105) |
|||||||||||
Total |
$ |
247 |
$ |
357 |
$ |
614 |
$ |
765 |
(a) |
EBITDA and Adjusted EBITDA are non-U.S. GAAP financial measures used by management, in addition to Operating Income, to evaluate Talen Energy's business on an ongoing basis. For the definitions of EBITDA and Adjusted EBITDA, a detailed itemization of adjustments, and a reconciliation of EBITDA and Adjusted EBITDA to Operating Income (Loss), see the tables at the end of this news release. Management does not allocate interest expense and income taxes on a segment level and therefore uses Operating Income (Loss) as the most directly comparable U.S. GAAP measure. |
(b) |
General and administrative expenses are not allocated to each segment and are included in the "Other" category. |
East Segment
The East segment includes operations in PJM, New York ISO and ISO New England.
In the third quarter of 2016, Operating Income increased by $566 million compared with the third quarter of 2015 primarily due to the impact of non-recurring, non-cash goodwill and asset impairment charges in 2015, a coal contract modification charge in 2015, and unrealized gains from hedging activities, partially offset by factors that affected Adjusted EBITDA, which are described in the next paragraph.
In the third quarter of 2016, Adjusted EBITDA decreased by $81 million compared with the third quarter of 2015 primarily due to lower margins, partially offset by lower operation and maintenance costs. The decrease in margins was primarily due to lost energy and capacity revenues from assets sold in 2016, and lower capacity prices, realized energy prices and spark spreads, partially offset by the addition of margins from the Athens and Millennium plants acquired in 2015 and other portfolio margins. The decrease in operation and maintenance costs was primarily due to reduced non-outage costs at the Susquehanna nuclear plant and lower costs associated with assets sold in 2016, partially offset by additional costs associated with assets acquired in 2015.
For the first nine months of 2016, Operating Income increased by $732 million compared with the first nine months of 2015, primarily due to gains on assets sold in 2016, the impact of non-recurring, non-cash goodwill and asset impairment charges in the third quarter of 2015, and a coal contract modification charge in the third quarter of 2015, partially offset by an impairment charge related to the Bell Bend nuclear project in the second quarter of 2016, unrealized losses from hedging activities, higher depreciation driven by assets acquired in 2015, and factors that affected Adjusted EBITDA, which are described in the next paragraph.
For the first nine months of 2016, Adjusted EBITDA decreased by $126 million compared with the first nine months of 2015 primarily due to lower margins and higher operation and maintenance costs. The decrease in margins was primarily due to lost energy and capacity revenues from assets sold in 2016, and lower realized energy prices, nuclear plant availability, spark spreads and capacity prices, partially offset by the addition of margins from assets acquired in 2015 and other portfolio margins. Operation and maintenance costs increased primarily due to additional costs associated with assets acquired in 2015.
West Segment
The West segment includes operations in the ERCOT and WECC markets in Texas, Montana and Arizona.
In the third quarter of 2016, Operating Income decreased by $23 million compared with the third quarter of 2015, primarily due to factors that affected Adjusted EBITDA, which are described in the next paragraph.
In the third quarter of 2016, Adjusted EBITDA decreased by $28 million compared with the third quarter of 2015, primarily due to lower margins and higher operation and maintenance costs. Margins decreased primarily due to lower realized energy prices in Texas and Montana, partially offset by the addition of margins from the Harquahala plant acquired in 2015. Operation and maintenance costs increased primarily due to additional costs associated with assets acquired in 2015.
For the first nine months of 2016, Operating Income decreased by $82 million compared with the first nine months of 2015, primarily due to factors that affected Adjusted EBITDA, which are described in the next paragraph, and higher depreciation driven by assets acquired in 2015, partially offset by a decrease in unrealized losses from hedging activities.
For the first nine months of 2016, Adjusted EBITDA decreased by $62 million compared with the first nine months of 2015, primarily due to lower margins and higher operation and maintenance costs. Margins decreased primarily due to lower realized energy prices in Texas and Montana, and lower availability of the Colstrip plant, partially offset by the addition of margins from the Harquahala plant acquired in 2015. Operation and maintenance costs increased primarily due to additional costs associated with assets acquired in 2015.
Other
The "Other" category includes general and administrative expenses not allocated to a segment.
For the third quarter of 2016, Operating Loss and Adjusted EBITDA were relatively flat compared with the third quarter of 2015.
For the first nine months of 2016, Operating Loss decreased by $35 million and Adjusted EBITDA improved by $37 million compared with the first nine months of 2015, primarily due to lower corporate expenses.
Adjusted Free Cash Flow
(in millions) |
Nine Months Ended | |||||||
September 30, 2016 |
September 30, 2015 | |||||||
Cash from Operations |
$ |
549 |
$ |
731 |
||||
Adjusted Free Cash Flow (a) |
523 |
421 |
(a) |
Adjusted Free Cash Flow is a non-U.S. GAAP financial measure used by management in addition to Cash from Operations. For the definition of Adjusted Free Cash Flow, a detailed itemization of adjustments and a reconciliation of Adjusted Free Cash Flow to Cash from Operations, see the tables at the end of this news release. |
Liquidity and Capital Resources
(in millions) |
September 30, 2016 |
December 31, 2015 | |||||||
Cash and cash equivalents |
$ |
1,358 |
$ |
141 |
|||||
Short-term debt (a) |
350 |
608 |
(a) |
December 31, 2015 figure includes $108 million, which at September 30, 2016 is classified as "Long-term debt" on the Balance Sheet at September 30, 2016 based on Talen Energy's intent to refinance on a long-term basis. |
The decrease in short-term debt was primarily due to the use of proceeds from assets sold in 2016 to repay $600 million of outstanding borrowings under revolving credit facilities, partially offset by a drawdown on revolving credit facilities to repay $350 million in debt that matured in May 2016.
Net cash provided by (used in) operating, investing and financing activities for the nine months ended September 30, and the changes between periods were as follows.
(in millions) |
2016 |
2015 |
Change - Cash | |||||||||
Operating activities |
$ |
549 |
$ |
731 |
$ |
(182) |
||||||
Investing activities |
1,219 |
(173) |
1,392 |
|||||||||
Financing activities |
(551) |
(262) |
(289) |
2016 Financial Outlook
Talen Energy narrowed 2016 guidance for Adjusted EBITDA to $705-$805 million from the previously announced $655-$855 million. The company increased and narrowed guidance for Adjusted Free Cash Flow to $500-$600 million from the previously announced $260-$460 million. The primary drivers of the increase in Adjusted Free Cash Flow guidance include lower expected tax payments, updated working capital assumptions and lower capital expenditures.
For a detailed itemization of adjustments and reconciliations of Adjusted EBITDA to Operating Income (Loss) and Adjusted Free Cash Flow to Cash from Operations, see the tables at the end of the news release.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
The Investors & Media section of the website contains a significant amount of information about Talen Energy, including financial and other information for investors. Talen Energy encourages investors to visit its website periodically to view new and updated information. Slides describing third quarter financial performance have been posted on the Events & Presentations page in the Investors & Media section of the website.
Forward-Looking Information
Statements contained in this news release, including statements with respect to future earnings, EBITDA, Adjusted EBITDA or Adjusted Free Cash Flow results, cash flows, tax attributes, financing, regulation and closing of the Merger, are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: failure to complete the Merger as a result of the failure to obtain necessary regulatory approvals or otherwise; the payment by Talen Energy of a termination fee if the Merger Agreement is terminated in certain circumstances; the loss of key customers and suppliers resulting from any uncertainties associated with the Merger; the negative impact on Talen Energy's business and the market price for Talen Energy's common stock should the Merger not be consummated; adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island dual-fuel project; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, and other reports on file with the SEC.
Definition of Non-U.S. GAAP Financial Measures
In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying earnings release contains non-U.S. GAAP financial measures EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow, which we use as measures of our performance.
EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted for certain non-cash and other items that management believes are not indicative of ongoing operations, including, but not limited to, unrealized gains and losses on derivative contracts, stock-based compensation expense, asset retirement obligation accretion (net of gains or losses on retirements), gains and losses on securities in the nuclear decommissioning trust fund, impairments, gains or losses on sales, dispositions or retirements of assets, debt extinguishments, and transition, transaction and restructuring costs.
EBITDA and Adjusted EBITDA are not intended to represent cash flows from operations or net income (loss) as defined by U.S. GAAP as indicators of operating performance and are not necessarily comparable to similarly-titled measures reported by other companies. We believe EBITDA and Adjusted EBITDA are useful to investors and other users of our financial statements in evaluating our operating performance because they provide additional tools to compare business performance across companies and across periods. We believe that EBITDA is widely used by investors to measure a company's operating performance without regard to such items as interest expense, income taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Additionally, we believe that investors commonly adjust EBITDA information to eliminate the effect of restructuring and other expenses, which vary widely from company to company and impair comparability. We adjust for these and other items, as our management believes that these items would distort their ability to efficiently view and assess our core operating trends. In summary, our management uses EBITDA and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as measures for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, stockholders, creditors, analysts and investors concerning our financial performance.
Adjusted Free Cash Flow represents Cash from Operations less capital expenditures, excluding growth-related capital expenditures, adjusted for changes in counterparty collateral and further adjusted for after-tax transaction and restructuring costs, and certain other after-tax cash items that management believes are not indicative of ongoing operations. Adjusted Free Cash Flow should not be considered an alternative to Cash from Operations, which is determined in accordance with U.S. GAAP. We believe that Adjusted Free Cash Flow, although a non-U.S. GAAP measure, is an important measure to both management and investors as an indicator of the company's ability to sustain operations without additional outside financing beyond the requirement to fund maturing debt obligations. These measures are not necessarily comparable to similarly-titled measures reported by other companies as they may be calculated differently.
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (a) | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(Unaudited) | |||||||
(Millions of Dollars) |
|||||||
September 30, |
December 31, | ||||||
2016 |
2015 | ||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
1,358 |
$ |
141 |
|||
Restricted cash and cash equivalents |
46 |
106 |
|||||
Accounts receivable (less reserve: 2016, $1; 2015, $1) |
238 |
267 |
|||||
Unbilled revenues |
125 |
160 |
|||||
Fuel, materials and supplies |
407 |
508 |
|||||
Prepayments |
45 |
52 |
|||||
Price risk management assets |
350 |
562 |
|||||
Assets held for sale |
— |
954 |
|||||
Other current assets |
10 |
12 |
|||||
Investments |
1,028 |
976 |
|||||
Property, Plant and Equipment |
14,741 |
14,462 |
|||||
Less: accumulated depreciation |
6,658 |
6,411 |
|||||
Property, plant and equipment, net |
8,083 |
8,051 |
|||||
Construction work in progress |
398 |
536 |
|||||
Total Property, Plant and Equipment, net |
8,481 |
8,587 |
|||||
Other intangibles |
103 |
310 |
|||||
Price risk management assets |
194 |
131 |
|||||
Other noncurrent assets |
44 |
43 |
|||||
Total Assets |
$ |
12,429 |
$ |
12,809 |
|||
Liabilities and Equity |
|||||||
Short-term debt |
$ |
350 |
$ |
608 |
|||
Long-term debt due within one year |
5 |
399 |
|||||
Accounts payable |
260 |
291 |
|||||
Liabilities held for sale |
— |
33 |
|||||
Other current liabilities |
661 |
757 |
|||||
Long-term Debt |
3,894 |
3,787 |
|||||
Deferred income taxes and investment tax credits |
1,617 |
1,602 |
|||||
Price risk management liabilities - noncurrent |
126 |
108 |
|||||
Accrued pension obligations |
318 |
340 |
|||||
Asset retirement obligations |
506 |
490 |
|||||
Other deferred credits and noncurrent liabilities |
125 |
91 |
|||||
Common Stock and additional paid-in capital |
4,710 |
4,702 |
|||||
Accumulated deficit |
(137) |
(373) |
|||||
Accumulated other comprehensive income (loss) |
(6) |
(26) |
|||||
Total Liabilities and Equity |
$ |
12,429 |
$ |
12,809 |
(a) |
The Financial Statements in this news release have been condensed and summarized for the purposes of presentation. Please refer to Talen Energy Corporation's periodic filings with the Securities and Exchange Commission for full Financial Statements, including note disclosures and certain defined terms used herein. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||
(Unaudited) |
|||||||||||||||
(Millions of Dollars, Except Share Data) |
|||||||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||||||
September 30, |
September 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Operating Revenues |
|||||||||||||||
Wholesale energy |
$ |
893 |
$ |
887 |
$ |
2,082 |
$ |
2,124 |
|||||||
Retail energy |
202 |
277 |
650 |
831 |
|||||||||||
Energy-related businesses |
143 |
156 |
376 |
404 |
|||||||||||
Total Operating Revenues |
1,238 |
1,320 |
3,108 |
3,359 |
|||||||||||
Operating Expenses |
|||||||||||||||
Operation |
|||||||||||||||
Fuel and energy purchases |
564 |
589 |
1,402 |
1,486 |
|||||||||||
Operation and maintenance |
221 |
235 |
780 |
760 |
|||||||||||
(Gain) loss on sale |
— |
— |
(563) |
— |
|||||||||||
Impairments |
1 |
588 |
214 |
591 |
|||||||||||
Depreciation |
112 |
95 |
330 |
259 |
|||||||||||
Taxes, other than income |
12 |
9 |
34 |
17 |
|||||||||||
Energy-related businesses |
135 |
150 |
359 |
379 |
|||||||||||
Total Operating Expenses |
1,045 |
1,666 |
2,556 |
3,492 |
|||||||||||
Operating Income (Loss) |
193 |
(346) |
552 |
(133) |
|||||||||||
Other Income (Expense) - net |
9 |
1 |
21 |
11 |
|||||||||||
Interest Expense |
60 |
55 |
180 |
146 |
|||||||||||
Income (Loss) Before Income Taxes |
142 |
(400) |
393 |
(268) |
|||||||||||
Income Taxes |
54 |
1 |
157 |
11 |
|||||||||||
Net Income (Loss) |
$ |
88 |
$ |
(401) |
$ |
236 |
$ |
(279) |
|||||||
Earnings Per Share of Common Stock: |
|||||||||||||||
Basic |
$ |
0.69 |
$ |
(3.12) |
$ |
1.84 |
$ |
(2.69) |
|||||||
Diluted |
$ |
0.68 |
$ |
(3.12) |
$ |
1.82 |
$ |
(2.69) |
|||||||
Weighted-Average Shares of Common Stock Outstanding (in thousands) |
|||||||||||||||
Basic |
128,527 |
128,509 |
128,527 |
103,627 |
|||||||||||
Diluted |
130,143 |
128,509 |
129,702 |
103,627 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
Talen Energy Corporation and Subsidiaries | |||||||
(Unaudited) |
|||||||
(Millions of Dollars) |
|||||||
Nine Months Ended | |||||||
September 30, | |||||||
2016 |
2015 | ||||||
Cash Flows from Operating Activities |
|||||||
Net income (loss) |
$ |
236 |
$ |
(279) |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities |
|||||||
Pre-tax gain from the sale of certain generation facilities |
(595) |
— |
|||||
Depreciation |
330 |
259 |
|||||
Amortization |
162 |
159 |
|||||
Defined benefit plans - expense |
33 |
35 |
|||||
Deferred income taxes and investment tax credits |
(8) |
(30) |
|||||
Impairment of assets |
216 |
595 |
|||||
Unrealized (gains) losses on derivatives, and other hedging activities |
(3) |
(80) |
|||||
Other |
29 |
51 |
|||||
Change in current assets and current liabilities |
|||||||
Accounts receivable |
17 |
64 |
|||||
Accounts payable |
(30) |
(148) |
|||||
Unbilled revenues |
35 |
93 |
|||||
Fuel, materials and supplies |
94 |
58 |
|||||
Counterparty collateral |
(27) |
76 |
|||||
Taxes payable |
88 |
(23) |
|||||
Other |
6 |
(18) |
|||||
Other operating activities |
|||||||
Defined benefit plans - funding |
(40) |
(74) |
|||||
Other assets and liabilities |
6 |
(7) |
|||||
Net cash provided by operating activities |
549 |
731 |
|||||
Cash Flows from Investing Activities |
|||||||
Expenditures for property, plant and equipment |
(336) |
(252) |
|||||
Proceeds from the sale of certain generation facilities |
1,525 |
— |
|||||
Expenditures for intangible assets |
(44) |
(35) |
|||||
Purchases of nuclear plant decommissioning trust investments |
(134) |
(154) |
|||||
Proceeds from the sale of nuclear plant decommissioning trust investments |
121 |
143 |
|||||
Net (increase) decrease in restricted cash and cash equivalents |
60 |
110 |
|||||
Other investing activities |
27 |
15 |
|||||
Net cash provided by (used in) investing activities |
1,219 |
(173) |
|||||
Cash Flows from Financing Activities |
|||||||
Issuance of long-term debt |
— |
600 |
|||||
Retirement of long-term debt |
(395) |
(33) |
|||||
Contributions from member |
— |
82 |
|||||
Distributions to predecessor member |
— |
(214) |
|||||
Net increase (decrease) in short-term debt |
(150) |
(667) |
|||||
Borrowings on long-term revolving credit facility |
33 |
— |
|||||
Repayments on long-term revolving credit facility |
(36) |
— |
|||||
Other financing activities |
(3) |
(30) |
|||||
Net cash provided by (used in) financing activities |
(551) |
(262) |
|||||
Net Increase (Decrease) in Cash and Cash Equivalents |
1,217 |
296 |
|||||
Cash and Cash Equivalents at Beginning of Period |
141 |
352 |
|||||
Cash and Cash Equivalents at End of Period |
$ |
1,358 |
$ |
648 |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
Regulation G Reconciliations | |||||||||||||||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||||||
(Millions of Dollars) |
|||||||||||||||||||||||||||||||
Three Months Ended September 30, | |||||||||||||||||||||||||||||||
2016 |
2015 | ||||||||||||||||||||||||||||||
East |
West |
Other |
Total |
East |
West |
Other |
Total | ||||||||||||||||||||||||
Net income (loss) |
$ |
88 |
$ |
(401) |
|||||||||||||||||||||||||||
Interest expense |
60 |
55 |
|||||||||||||||||||||||||||||
Income taxes |
54 |
1 |
|||||||||||||||||||||||||||||
Other (income) expense - net |
(9) |
(1) |
|||||||||||||||||||||||||||||
Operating income (loss) |
$ |
221 |
$ |
16 |
$ |
(44) |
$ |
193 |
$ |
(345) |
$ |
39 |
$ |
(40) |
$ |
(346) |
|||||||||||||||
Depreciation |
97 |
12 |
3 |
112 |
84 |
10 |
1 |
95 |
|||||||||||||||||||||||
Other income (expense) - net |
9 |
— |
— |
9 |
1 |
— |
— |
1 |
|||||||||||||||||||||||
EBITDA |
$ |
327 |
$ |
28 |
$ |
(41) |
$ |
314 |
$ |
(260) |
$ |
49 |
$ |
(39) |
$ |
(250) |
|||||||||||||||
Margins: |
|||||||||||||||||||||||||||||||
Unrealized (gain) loss on derivative contracts (a) |
(85) |
(9) |
— |
(94) |
(50) |
— |
— |
(50) |
|||||||||||||||||||||||
Coal contract adjustment (d) |
— |
— |
— |
— |
41 |
— |
— |
41 |
|||||||||||||||||||||||
Other (e) |
5 |
— |
— |
5 |
5 |
— |
— |
5 |
|||||||||||||||||||||||
Operation and maintenance: |
|||||||||||||||||||||||||||||||
Stock-based compensation expense (f) |
— |
— |
2 |
2 |
— |
— |
1 |
1 |
|||||||||||||||||||||||
ARO accretion, net |
10 |
1 |
— |
11 |
8 |
— |
— |
8 |
|||||||||||||||||||||||
Impairments (g) |
— |
1 |
— |
1 |
588 |
— |
— |
588 |
|||||||||||||||||||||||
TSA costs |
— |
— |
8 |
8 |
— |
— |
14 |
14 |
|||||||||||||||||||||||
Separation benefits |
— |
— |
3 |
3 |
— |
— |
— |
— |
|||||||||||||||||||||||
Transaction and restructuring costs (i) |
— |
— |
4 |
4 |
— |
— |
1 |
1 |
|||||||||||||||||||||||
Other income (expense): |
|||||||||||||||||||||||||||||||
(Gain) loss from NDT funds |
(7) |
— |
— |
(7) |
(1) |
— |
— |
(1) |
|||||||||||||||||||||||
Adjusted EBITDA |
$ |
250 |
$ |
21 |
$ |
(24) |
$ |
247 |
$ |
331 |
$ |
49 |
$ |
(23) |
$ |
357 |
|||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2016 |
2015 | ||||||||||||||||||||||||||||||
East |
West |
Other |
Total |
East |
West |
Other |
Total | ||||||||||||||||||||||||
Net income (loss) |
$ |
236 |
$ |
(279) |
|||||||||||||||||||||||||||
Interest expense |
180 |
146 |
|||||||||||||||||||||||||||||
Income taxes |
157 |
11 |
|||||||||||||||||||||||||||||
Other (income) expense - net |
(21) |
(11) |
|||||||||||||||||||||||||||||
Operating income (loss) |
$ |
765 |
$ |
(64) |
$ |
(149) |
$ |
552 |
$ |
33 |
$ |
18 |
$ |
(184) |
$ |
(133) |
|||||||||||||||
Depreciation |
289 |
36 |
5 |
330 |
243 |
14 |
2 |
259 |
|||||||||||||||||||||||
Other income (expense) - net |
18 |
— |
3 |
21 |
12 |
— |
(1) |
11 |
|||||||||||||||||||||||
EBITDA |
$ |
1,072 |
$ |
(28) |
$ |
(141) |
$ |
903 |
$ |
288 |
$ |
32 |
$ |
(183) |
$ |
137 |
|||||||||||||||
Margins: |
— |
||||||||||||||||||||||||||||||
Unrealized (gain) loss on derivative contracts (a) |
(29) |
3 |
— |
(26) |
(120) |
17 |
— |
(103) |
|||||||||||||||||||||||
Terminated derivative contracts (b) |
— |
— |
— |
— |
(13) |
— |
— |
(13) |
|||||||||||||||||||||||
Revenue adjustment (c) |
— |
— |
— |
— |
7 |
— |
— |
7 |
|||||||||||||||||||||||
Coal contract adjustment (d) |
— |
— |
— |
— |
41 |
— |
— |
41 |
|||||||||||||||||||||||
Other (e) |
10 |
— |
— |
10 |
9 |
— |
— |
9 |
|||||||||||||||||||||||
Operation and maintenance: |
|||||||||||||||||||||||||||||||
Stock-based compensation expense (f) |
— |
— |
10 |
10 |
— |
— |
41 |
41 |
|||||||||||||||||||||||
ARO accretion, net |
25 |
2 |
— |
27 |
25 |
— |
— |
25 |
|||||||||||||||||||||||
Impairments (g) |
204 |
10 |
— |
214 |
591 |
— |
— |
591 |
|||||||||||||||||||||||
(Gain) loss on dispositions (j) |
(563) |
— |
— |
(563) |
— |
— |
— |
— |
|||||||||||||||||||||||
TSA costs |
— |
— |
32 |
32 |
— |
— |
19 |
19 |
|||||||||||||||||||||||
Separation benefits |
— |
— |
12 |
12 |
— |
— |
2 |
2 |
|||||||||||||||||||||||
Corette closure costs (h) |
— |
— |
— |
— |
— |
4 |
— |
4 |
|||||||||||||||||||||||
Transaction and restructuring costs (i) |
— |
— |
19 |
19 |
— |
— |
16 |
16 |
|||||||||||||||||||||||
Legal contingency (k) |
— |
4 |
— |
4 |
— |
— |
— |
— |
|||||||||||||||||||||||
Other |
(8) |
— |
— |
(8) |
— |
— |
— |
— |
|||||||||||||||||||||||
Other income (expense): |
|||||||||||||||||||||||||||||||
(Gain) loss from NDT funds |
(20) |
— |
— |
(20) |
(11) |
— |
— |
(11) |
|||||||||||||||||||||||
Adjusted EBITDA |
$ |
691 |
$ |
(9) |
$ |
(68) |
$ |
614 |
$ |
817 |
$ |
53 |
$ |
(105) |
$ |
765 |
(a) |
Represents unrealized gains (losses) on derivatives. Amounts have been adjusted for option premiums of $3 million and $5 million for the three months ended September 30, 2016 and 2015, and $8 million and $14 million for the nine months ended September 30, 2016 and 2015. |
(b) |
Represents net realized gains on certain derivative contracts that were terminated due to the spinoff transaction. |
(c) |
Related to a prior period revenue adjustment for the receipt of revenue under a transmission operating agreement with Talen Energy Supply's former affiliate, PPL Electric Utilities Corporation. |
(d) |
To mitigate the risk of oversupply, Talen Energy incurred pre-tax charges for the three and nine months ended September 30, 2015 to reduce its contracted coal deliveries. |
(e) |
Includes OCI amortization on non-active derivative positions. |
(f) |
For the periods prior to June 2015, represents the portion of PPL's stock-based compensation cost allocable to Talen Energy. |
(g) |
2016 includes charges for the Bell Bend Combined Operating License Application and Harquahala plant impairments. 2015 includes charges for goodwill and certain long lived assets. |
(h) |
Operations were suspended and the Corette plant was retired in March 2015. |
(i) |
Costs related to the spinoff transaction, including expenses associated with FERC-required mitigation and legal and professional fees. Also includes transaction costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
(j) |
Relates to Ironwood, Holtwood, Lake Wallenpaupack and C.P. Crane sales. |
(k) |
Contingency relates to the termination of a gas supply contract. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||
Regulation G Reconciliations | ||||||||
Adjusted Free Cash Flow | ||||||||
(Unaudited) |
||||||||
(Millions of Dollars) |
||||||||
Nine Months Ended September 30, | ||||||||
2016 |
2015 | |||||||
Cash from Operations |
$ |
549 |
$ |
731 |
||||
Capital Expenditures, excluding growth (a) |
(303) |
(282) |
||||||
Counterparty collateral paid (received) |
27 |
(76) |
||||||
Adjusted Free Cash Flow, including other adjustments |
273 |
373 |
||||||
Cash adjustments: |
||||||||
Transition Services Agreement costs |
32 |
19 |
||||||
Coal contract adjustment (b) |
— |
41 |
||||||
Legal settlement (c) |
3 |
— |
||||||
Separation benefits |
12 |
2 |
||||||
Corette closure costs (d) |
— |
4 |
||||||
Transaction and restructuring costs (e) |
32 |
15 |
||||||
Taxes on above adjustments (f) |
(32) |
(33) |
||||||
Taxes on mitigated asset sales (g) |
203 |
— |
||||||
Adjusted Free Cash Flow |
$ |
523 |
$ |
421 |
(a) |
Includes expenditures related to intangible assets. |
(b) |
To mitigate the risk of oversupply, Talen Energy incurred pre-tax charges for the nine months ended September 30, 2015 to reduce its contracted coal deliveries. |
(c) |
Contingency relates to the termination of a gas supply contract. |
(d) |
Operations were suspended and the Corette plant was retired in March 2015. |
(e) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. Also includes transaction costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
(f) |
Assumed a marginal tax rate of 40%. |
(g) |
Federal taxes paid on gains associated with mitigated asset sales. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted EBITDA Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - 2016E |
High - 2016E | ||||||||||
Net Income (Loss) |
$ |
179 |
$ |
209 |
$ |
239 |
||||||
Income Taxes |
117 |
137 |
157 |
|||||||||
Interest Expense |
240 |
240 |
240 |
|||||||||
Depreciation and Amortization |
442 |
442 |
442 |
|||||||||
EBITDA |
978 |
1,028 |
1,078 |
|||||||||
Stock-based compensation |
12 |
12 |
12 |
|||||||||
Asset retirement obligation, net |
37 |
37 |
37 |
|||||||||
Unrealized (gains) losses on derivative contracts (a) |
(26) |
(26) |
(26) |
|||||||||
Nuclear decommissioning trust losses (gains) |
(23) |
(23) |
(23) |
|||||||||
(Gain) loss on dispositions (b) |
(563) |
(563) |
(563) |
|||||||||
Impairments (c) |
214 |
214 |
214 |
|||||||||
Transition Services Agreement costs and other adjustments (d) |
76 |
76 |
76 |
|||||||||
Adjusted EBITDA |
$ |
705 |
$ |
755 |
$ |
805 |
(a) |
Represents unrealized (gains) losses on derivatives. Amounts have been adjusted for option premiums. |
(b) |
Relates to Ironwood, Holtwood, Lake Wallenpaupack and C.P. Crane sales. |
(c) |
Relates to Bell Bend Combined Operating License Application costs and Harquahala plant impairments. |
(d) |
Other includes: (i) costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees; (ii) separation benefits related to workforce reductions; and (iii) costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted Free Cash Flow Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - 2016E |
High - 2016E | ||||||||||
Cash from Operations (a) |
$ |
582 |
$ |
622 |
$ |
662 |
||||||
Capital Expenditures, excluding growth (b) |
(437) |
(427) |
(417) |
|||||||||
Counterparty collateral paid (received) |
27 |
27 |
27 |
|||||||||
Transition Services Agreement costs |
40 |
40 |
40 |
|||||||||
Legal contingency (c) |
3 |
3 |
3 |
|||||||||
Separation benefits |
12 |
12 |
12 |
|||||||||
Transaction and restructuring costs (d) |
42 |
42 |
42 |
|||||||||
Taxes on above adjustments (e) |
(39) |
(39) |
(39) |
|||||||||
Taxes on mitigated asset sales (f) |
270 |
270 |
270 |
|||||||||
Adjusted Free Cash Flow |
$ |
500 |
$ |
550 |
$ |
600 |
(a) |
Includes taxes paid on gains generated from the mitigated asset sales. |
(b) |
Includes expenditures related to intangible assets. |
(c) |
Contingency relates to the termination of a gas supply contract. |
(d) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. Also includes costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
(e) |
Assumed a marginal tax rate of 40%. |
(f) |
Estimated federal taxes associated with mitigated asset sales included in Cash from Operations. |
Contacts:
Media Relations - George Lewis, 610-774-4687
Investor Relations - Andy Ludwig, 610-774-3389
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy
ALLENTOWN, Pa., Oct. 31, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) plans to release its third quarter 2016 financial results before the stock market opens on Thursday, Nov. 10.
Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contacts:
Media Relations – George C. Lewis, 610-774-4687
Investor Relations – Andy Ludwig, 610-774-3389
SOURCE Talen Energy Corporation
ALLENTOWN, Pa., Oct. 19, 2016 /PRNewswire/ -- Talen Energy Supply, LLC (the "Company"), an indirect wholly owned subsidiary of Talen Energy Corporation (NYSE: TLN), has successfully priced a $600 million term loan B facility. The net proceeds of the facility are expected to be used in connection with the consummation of the previously announced merger of Talen Energy Corporation with an affiliate of Riverstone Holdings LLC (the "Merger") and for the working capital needs and other general corporate purposes of the Company and its subsidiaries and affiliates, including the repayment of indebtedness under the Company's revolving credit facility.
The term loan B facility will be issued at a price equal to 98.5% of its face value, will bear interest at a rate of LIBOR plus 5.00%, with a 1.0% LIBOR floor, and will have a seven year maturity. The term loan B facility will be secured by the same collateral securing, and will be guaranteed by the same direct and indirect wholly owned subsidiaries of the Company that are guarantors of, the Company's revolving credit facility.
The closing of the term loan B facility is subject to customary closing conditions and the closing of the Merger, which is expected to occur by the end of 2016.
Goldman Sachs Bank USA, RBC Capital Markets, Barclays Bank PLC, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley Senior Funding, Inc. and MUFG will act as joint lead arrangers and joint bookrunners for the term loan B facility.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in North America. The company owns or controls 16,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. For more information, visit www.talenenergy.com.
About Riverstone
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $34 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed approximately $30 billion to more than 120 investments in North America, Latin America, Europe, Africa and Asia. Visit www.riverstonellc.com for more information.
Forward-Looking Information
Statements contained in this news release are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy and its subsidiaries believe that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: failure to complete the Merger as a result of the failure to obtain necessary regulatory approvals or otherwise; the payment by Talen Energy of a termination fee if the merger agreement is terminated in certain circumstances; the loss of key customers and suppliers resulting from any uncertainties associated with the Merger; the negative impact on the Talen Energy's business and the market price for Talen Energy's common stock should the Merger not be consummated; adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island dual-fuel project; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, and its other reports on file with the SEC.
Contacts: |
Media Relations – George C. Lewis, 610-774-4687 |
Investor Relations – Andy Ludwig, 610-774-3389 |
SOURCE Talen Energy Corporation
ALLENTOWN, Pa., Oct. 19, 2016 /PRNewswire/ -- The Federal Energy Regulatory Commission (FERC) issued an order today approving the proposed merger of Talen Energy Corporation (NYSE: TLN) with an affiliate of Riverstone Holdings LLC, a private investment firm.
FERC concluded that the merger would not have a detrimental effect on competitive wholesale power markets. The order approving the transaction contains no substantive conditions that the two parties must meet.
The merger agreement was announced on June 3, 2016. Talen Energy stockholders approved the proposed merger at a special meeting of stockholders on Oct. 6, 2016.
An application to approve the transaction is pending before the Nuclear Regulatory Commission. The transaction remains on schedule to close by the end of 2016, subject to receipt of NRC approval and satisfaction of other customary closing conditions.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in North America. The company owns or controls 16,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. For more information, visit www.talenenergy.com.
About Riverstone
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $34 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed approximately $30 billion to more than 120 investments in North America, Latin America, Europe, Africa and Asia. Visit www.riverstonellc.com for more information.
Forward-Looking Information
Statements contained in this news release are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy and its subsidiaries believe that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: failure to complete the Merger as a result of the failure to obtain necessary regulatory approvals or otherwise; the payment by Talen Energy of a termination fee if the merger agreement is terminated in certain circumstances; the loss of key customers and suppliers resulting from any uncertainties associated with the Merger; the negative impact on the Talen Energy's business and the market price for Talen Energy's common stock should the Merger not be consummated; adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island dual-fuel project; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, and its other reports on file with the SEC.
Contacts: |
Media Relations – George C. Lewis, 610-774-4687 |
Investor Relations – Andy Ludwig, 610-774-3389 |
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Corporation
BERWICK, Pa., Oct. 8, 2016 /PRNewswire/ -- Operators reconnected Unit 2 at the Susquehanna nuclear power plant in Luzerne County to the regional power grid on Saturday, Oct. 8. During the seven day outage, Susquehanna successfully replaced two blades on the unit's low pressure turbine and completed planned maintenance on other systems that are only accessible when the plant is in a safe, shut down mode.
As previously announced, the plant is continuing a multi-year, systematic turbine blade modification and replacement project. Susquehanna has determined the root cause of the issue and is expected to complete the final, permanent modifications on the Unit 2 turbine during the 2017 refueling outage and on the Unit 1 turbine during the 2018 refueling outage.
"During this outage, our team worked safely and efficiently to replace the blades and return the unit to service," said Tim Rausch, Senior Vice President and Chief Nuclear Officer. "Combined with other maintenance completed by our nuclear professionals, we expect the unit to deliver clean, reliable energy until its next biennial refueling outage."
Unit 1 at the plant continues to operate safely at full power.
The Susquehanna plant, located about seven miles north of Berwick, is jointly owned by Susquehanna Nuclear, LLC, and Allegheny Electric Cooperative Inc., and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy's generating affiliates. Talen Energy (NYSE: TLN) is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Forward-Looking Information
Statements contained in this news release are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy and its subsidiaries believe that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: failure to complete the contemplated merger of Talen Energy Corporation with an affiliate of Riverstone Holdings LLC (the "Merger") as a result of the failure to obtain necessary regulatory approvals or otherwise; the payment by Talen Energy Corporation of a termination fee if the merger agreement is terminated in certain circumstances; the loss of key customers and suppliers resulting from any uncertainties associated with the Merger; the negative impact on the Talen Energy's business and the market price for Talen Energy Corporation's common stock should the Merger not be consummated; ability to secure final approval of the Colstrip settlement agreement from the federal court; adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including any dual-fuel projects; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, and its other reports on file with the SEC.
Media contact: |
Todd L. Martin |
(570) 542-2881 | |
SOURCE Talen Energy Susquehanna Nuclear LLC
ALLENTOWN, Pa., Oct. 6, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) ("Talen Energy" or "the Company") announced today the results of a special meeting of stockholders held to, among other things, approve a proposed merger of the Company with and into an affiliate of Riverstone Holdings LLC ("Riverstone"), a private investment firm, for cash consideration of $14.00 per share of Talen Energy common stock.
Stockholders approved all proposals put forward at the meeting. The required vote of a majority of Talen Energy stockholders not affiliated with Riverstone was obtained, satisfying a condition under the merger agreement.
Results of stockholder voting will be filed with the Securities and Exchange Commission by Oct. 13, 2016.
The signing of the merger agreement was announced on June 3, 2016. The parties have been granted early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and received an order from the New York Public Service Commission on Sept. 19, 2016 approving the transaction as it applies to Talen Energy's ownership and operation of the Athens power plant.
Applications to approve the transaction remain pending before the Federal Energy Regulatory Commission and the Nuclear Regulatory Commission.
The transaction remains on schedule to close by the end of 2016, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in North America. The company owns or controls 16,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. For more information, visit www.talenenergy.com.
About Riverstone
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $34 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed approximately $30 billion to more than 120 investments in North America, Latin America, Europe, Africa and Asia. Visit www.riverstonellc.com for more information.
Forward-Looking Information
Statements contained in this news release are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy and its subsidiaries believe that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: failure to complete the Merger as a result of the failure to obtain necessary regulatory approvals or otherwise; the payment by Talen Energy of a termination fee if the Merger Agreement is terminated in certain circumstances; the loss of key customers and suppliers resulting from any uncertainties associated with the Merger; the negative impact on the Talen Energy's business and the market price for Talen Energy's common stock should the Merger not be consummated; ability to secure final approval of the Colstrip settlement agreement from the federal court; adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island and Montour dual-fuel projects; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, Form 10-Q for the quarters ended March 31, 2016 and June 30, 2016, and its other reports on file with the SEC.
Contacts:
Media Relations, George Lewis, 610-774-4687
Investor Relations, Andy Ludwig, 610-774-3389
SOURCE Talen Energy
BERWICK, Pa., Oct. 1, 2016 /PRNewswire/ -- Operators began the process to safely shut down the Unit 2 reactor at Talen Energy's Susquehanna nuclear plant in Luzerne County, Pa. late Friday (9/30) and disconnected from the regional transmission grid early Saturday (10/1). As previously announced, the outage plan was developed to address indications of small cracks developing on a metal blade on the unit's low pressure turbine.
The plant is continuing a multi-year, systematic turbine blade modification and replacement project. Susquehanna has determined root cause of the issue and is expected to complete the final, permanent modifications on the Unit 2 turbine during the 2017 refueling outage and on the Unit 1 turbine during the 2018 refueling outage.
"Since we are addressing a single blade, we expect this to be a brief outage and the plant will inform its neighbors when we return to service," said Tim Rausch, Senior Vice President and Chief Nuclear Officer. "As is always the case, Susquehanna's primary focus is safety, which then enables us to deliver reliable, zero-carbon energy to our customers," said Rausch.
Susquehanna Unit 1 continues to operate safely at full rated power and there are no indications of issues with Unit 1 turbine blades that have yet to be modified.
The Susquehanna plant, located about seven miles north of Berwick, is jointly owned by Susquehanna Nuclear, LLC, and Allegheny Electric Cooperative Inc., and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy's generating affiliates. Talen Energy (NYSE: TLN) is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Forward-Looking Information
Statements contained herein are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone Holdings LLC to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015 and its other reports on file with the SEC.
Media Contact: Todd Martin 570-542-2881
SOURCE Susquehanna Nuclear, LLC
BERWICK, Pa., Sept. 26, 2016 /PRNewswire/ -- Talen Energy is planning to take a brief maintenance outage on Unit 2 at the Susquehanna nuclear power plant in Luzerne County, Pa., within the next few weeks.
As the company has discussed publicly for several years, Susquehanna has been working with the manufacturer of the main steam turbines for both units at the plant to understand and address issues associated with the formation of very small cracks in the metal blades.
Susquehanna generates electricity by boiling water to make steam that passes through the turbines, which have many rows of fanlike metal blades. The spinning blades turn a generator that produces electricity.
Recently, plant engineers identified an indication of crack development on one blade of the Unit 2 turbine where modifications have not yet been completed. "The plan we are developing will meet our primary objectives of safe and reliable long-term operation," said Timothy S. Rausch, Talen Energy senior vice president and Chief Nuclear Officer. "This outage will enable us to replace the blade safely and efficiently so we remain prepared to meet the regional demand for electricity, especially during the peak winter season."
The plant is continuing a multi-year, systematic turbine blade modification and replacement project. Susquehanna has determined root cause of the issue and is expected to complete the final, permanent modifications on the Unit 2 turbine during the 2017 refueling outage and on the Unit 1 turbine during the 2018 refueling outage.
There are no current indications of issues with Unit 1 turbine blades that have yet to be modified. The other turbines on Unit 1 and Unit 2 have previously completed the permanent modifications to address the cracking issue.
Talen Energy will inform the public when Unit 2 is shut down to begin the planned outage, as well as when it returns to service.
The Susquehanna plant, located about seven miles north of Berwick, is owned jointly by Susquehanna Nuclear, LLC and Allegheny Electric Cooperative Inc. and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear, LLC is one of Talen Energy Corporation's generating affiliates. Talen Energy (NYSE: TLN), is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Forward-Looking Information
Statements contained herein are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone Holdings LLC to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015 and its other reports on file with the SEC.
Contact: Todd Martin, 570-542-2881
SOURCE Talen Energy
ALLENTOWN, Pa., Aug. 4, 2016 /PRNewswire/ --
2016 Financial Results |
|||||||
(in millions) |
Three Months Ended |
Six Months Ended | |||||
June 30, 2016 |
June 30, 2016 | ||||||
Net Income (Loss) |
$ |
(3) |
$ |
148 |
|||
Adjusted EBITDA |
132 |
367 |
|||||
Cash from Operations |
207 |
||||||
Adjusted Free Cash Flow |
67 |
2016 Guidance Ranges
Operating and Commercial Highlights
Talen Energy Corporation (NYSE: TLN) reported this morning a Net Loss of $3 million for the three months ended June 30, 2016, compared with Net Income of $26 million for the three months ended June 30, 2015, and Adjusted EBITDA of $132 million, compared with $171 million for the three months ended June 30, 2015.
The Net Loss in the second quarter includes an after-tax, non-cash asset impairment charge of $122 million related to the proposed Bell Bend nuclear power plant project. Although the project's Combined Operating License Application remains on file, licensing and permitting activities are suspended, and Talen Energy has no plans to resume them.
For the six months ended June 30, 2016, Talen Energy reported Net Income of $148 million, compared with $122 million for the six months ended June 30, 2015, and Adjusted EBITDA of $367 million, compared with $408 million for the six months ended June 30, 2015.
"Our second quarter financial results reflect the unrelenting focus of Talen Energy employees on executing major projects designed to improve our resilience to low commodity prices, enhance the safe and reliable operation of our plants, and reduce corporate support costs even further," said Paul Farr, Talen Energy President and Chief Executive Officer.
The company is adding natural gas co-firing capability to about 3,000 megawatts of coal-fired generation in Pennsylvania that will enhance its operating flexibility by enabling those plants to use low-cost gas from nearby Marcellus shale. Co-firing at the Brunner Island plant is on schedule to be completed and in commercial operation by the end of 2016. In June, Talen Energy announced that it will proceed with natural gas co-firing capability at the Montour plant. Assuming timely receipt of necessary permits and regulatory approvals, completion is expected in the second quarter of 2018.
Affiliate Talen Montana is party to a settlement agreement in a lawsuit involving the Colstrip plant. The agreement, which was filed in July and is pending approval by a federal court, includes a commitment to retire Colstrip Units 1 and 2 no later than July 2022. Talen Montana owns 50 percent (307 megawatts) of those units.
Based on second quarter results, Talen Energy has affirmed 2016 guidance ranges for Adjusted EBITDA of $655-$855 million and for Adjusted Free Cash Flow of $260-$460 million.
On June 3, 2016, Talen Energy announced entry into a definitive merger agreement, executed on June 2, 2016, with affiliates of Riverstone Holdings LLC, a private investment firm. Filings have been made with the Nuclear Regulatory Commission, Federal Energy Regulatory Commission and other regulatory agencies. The parties have been granted early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is expected to close by the end of 2016, subject to receipt of stockholder and regulatory approvals and satisfaction of other customary closing conditions.
Review of Segment Results
Financial information presented in this news release for three and six months ended June 30, 2015 represents three and six months of legacy Talen Energy Supply results, consolidated with one month of RJS Power results, and does not include MACH Gen results because that acquisition occurred later in 2015.
(in millions) |
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Operating Income (Loss) |
|||||||||||||||
East |
$ |
152 |
$ |
147 |
$ |
544 |
$ |
378 |
|||||||
West |
(52) |
(20) |
(80) |
(21) |
|||||||||||
Other (b) |
(52) |
(92) |
(105) |
(144) |
|||||||||||
Total |
$ |
48 |
$ |
35 |
$ |
359 |
$ |
213 |
|||||||
EBITDA (a) |
|||||||||||||||
East |
$ |
253 |
$ |
233 |
$ |
745 |
$ |
548 |
|||||||
West |
(42) |
(16) |
(56) |
(17) |
|||||||||||
Other (b) |
(48) |
(92) |
(100) |
(144) |
|||||||||||
Total |
$ |
163 |
$ |
125 |
$ |
589 |
$ |
387 |
|||||||
Adjusted EBITDA (a) |
|||||||||||||||
East |
$ |
165 |
$ |
214 |
$ |
441 |
$ |
486 |
|||||||
West |
(20) |
(1) |
(30) |
4 |
|||||||||||
Other (b) |
(13) |
(42) |
(44) |
(82) |
|||||||||||
Total |
$ |
132 |
$ |
171 |
$ |
367 |
$ |
408 |
(a) |
EBITDA and Adjusted EBITDA are non-U.S. GAAP financial measures used by management, in addition to Operating Income, to evaluate Talen Energy's business on an ongoing basis. For the definitions of EBITDA and Adjusted EBITDA, a detailed itemization of adjustments, and a reconciliation of EBITDA and Adjusted EBITDA to Operating Income (Loss), see the tables at the end of this news release. Management does not allocate interest expense and income taxes on a segment level and therefore uses Operating Income (Loss) as the most directly comparable U.S. GAAP measure. |
(b) |
General and administrative expenses are not allocated to each segment and are included in the "Other" category. |
East Segment
The East segment includes operations in PJM, New York ISO and ISO New England.
In the second quarter of 2016, Operating Income increased by $5 million compared with the second quarter of 2015 primarily due to the gain on the sale of the Holtwood and Lake Wallenpaupack hydroelectric plants, partially offset by the impairment charge related to the Bell Bend project, unrealized losses from economic hedging activities and factors that affected Adjusted EBITDA, which are described in the next paragraph.
In the second quarter of 2016, Adjusted EBITDA decreased by $49 million compared with the second quarter of 2015 primarily due to lower margins and higher operation and maintenance costs. The decrease in margins was primarily due to lost energy and capacity revenues from assets sold in 2016 and lower nuclear availability, spark spreads and other portfolio margins, partially offset by higher margins from assets acquired during 2015. The increase in operation and maintenance costs was primarily due to additional costs associated with assets acquired during 2015.
For the first six months of 2016, Operating Income increased by $166 million compared with the first six months of 2015, primarily due to the gain on assets sold during 2016, partially offset by the impairment charge related to the Bell Bend project, unrealized losses from economic hedging activities and factors that affected Adjusted EBITDA, which are described in the next paragraph.
For the first six months of 2016, Adjusted EBITDA decreased by $45 million compared with the first six months of 2015 primarily due to higher operation and maintenance costs, partially offset by higher margins. Operation and maintenance costs increased primarily due to additional costs associated with assets acquired during 2015. Margins increased primarily due to additional margins from assets acquired during 2015, and higher capacity prices and other portfolio margins, partially offset by lost energy and capacity revenues from assets sold during 2016, and lower realized energy prices, nuclear availability and spark spreads.
West Segment
The West segment includes operations in the ERCOT and WECC markets in Texas, Montana and Arizona.
In the second quarter of 2016, Operating Income decreased by $32 million and Adjusted EBITDA decreased by $19 million compared with the second quarter of 2015, primarily due to additional operation and maintenance costs associated with assets acquired during 2015 and lower margins. Margins decreased primarily due to lower realized energy prices and generation in Montana, partially offset by higher margins from assets acquired during 2015.
For the first six months of 2016, Operating Income decreased by $59 million and Adjusted EBITDA decreased by $34 million compared with the first six months of 2015, primarily due to additional operation and maintenance costs associated with assets acquired during 2015 and lower margins. Margins decreased primarily due to lower realized energy prices and generation in Montana, partially offset by higher margins from assets acquired during 2015.
Other
The "Other" category includes general and administrative expenses not allocated to a segment.
For the second quarter of 2016, the $40 million improvement in Operating Income and the $29 million improvement in Adjusted EBITDA compared with the second quarter of 2015 are primarily due to lower corporate expenses following the spinoff from PPL Corporation.
For the first six months of 2016, the $39 million improvement in Operating Income and the $38 million improvement in Adjusted EBITDA compared with the first six months of 2015 are primarily due to lower corporate expenses following the spinoff from PPL Corporation.
Adjusted Free Cash Flow |
||||||||
(in millions) |
Six Months Ended | |||||||
June 30, 2016 |
June 30, 2015 | |||||||
Cash from Operations |
$ |
207 |
$ |
355 |
||||
Adjusted Free Cash Flow (a) |
67 |
137 |
(a) |
Adjusted Free Cash Flow is a non-U.S. GAAP financial measure used by management in addition to Cash from Operations. For the definition of Adjusted Free Cash Flow, a detailed itemization of adjustments and a reconciliation of Adjusted Free Cash Flow to Cash from Operations, see the tables at the end of this news release. |
Liquidity and Capital Resources |
|||||||||
(in millions) |
June 30, 2016 |
December 31, 2015 | |||||||
Cash and cash equivalents |
$ |
1,091 |
$ |
141 |
|||||
Short-term debt (a) |
350 |
608 |
(a) |
December 31, 2015 includes $108 million, which at June 30, 2015 is classified as "Long-term debt" on the Balance Sheet based on Talen Energy's intent to refinance on a long-term basis. |
The decrease in short-term debt was primarily due to the use of proceeds from assets sold in 2016 to repay $600 million of outstanding borrowings under Talen Energy's revolving credit facilities, partially offset by a drawdown on the revolving credit facility to repay $350 million in debt that matured in May 2016.
Net cash provided by (used in) operating, investing and financing activities for the six months ended June 30, and the changes between periods were as follows.
(in millions) |
2016 |
2015 |
Change - Cash | |||||||||
Operating activities |
$ |
207 |
$ |
355 |
$ |
(148) |
||||||
Investing activities |
1,290 |
(127) |
1,417 |
|||||||||
Financing activities |
(547) |
(228) |
(319) |
2016 Financial Outlook
Talen Energy affirmed 2016 guidance ranges for Adjusted EBITDA and Adjusted Free Cash Flow. The forecast for Adjusted EBITDA is $655-$855 million. The forecast for Adjusted Free Cash Flow is $260-$460 million.
For a detailed itemization of adjustments and reconciliations of Adjusted EBITDA to Operating Income (Loss) and Adjusted Free Cash Flow to Cash from Operations, see the tables at the end of the news release.
Conference Call and Webcast
Talen Energy management will discuss these results during a conference call and webcast on August 4, 2016, beginning at 8 a.m. Eastern time. The phone number to join the conference call is 1-888-317-6003. Participants from outside of the United States should call 1-412-317-6061. The entry number to join the call is 4143588.
The webcast, in audio format with slides of the presentation, will be accessible on the Investors & Media section of the company's website. A replay will be available on the website for those who are unable to listen live.
The Investors & Media section of the company's website contains a significant amount of information about Talen Energy, including financial and other information for investors. Talen Energy encourages investors to visit its website periodically to view new and updated information.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Important Information for Investors and Stockholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The proposed acquisition of Talen Energy (the "Merger") by affiliates of Riverstone Holdings LLC ("Riverstone") will be submitted to the stockholders of Talen Energy for their consideration. On July 1, 2016, Talen Energy filed with the Securities and Exchange Commission ("SEC") a preliminary proxy statement in connection with the Merger. When completed, a definitive proxy statement and a form of proxy will be filed with the SEC and mailed to Talen Energy stockholders. Talen Energy also plans to file other documents with the SEC regarding the Merger. Investors and security holders of Talen Energy are urged to read the proxy statement and other relevant documents that will be filed with the SEC carefully and in their entirety when they become available because they will contain important information about the Merger. Investors and stockholders will be able to obtain free copies of the proxy statement and other documents containing important information about Talen Energy and Riverstone, once such documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by Talen Energy will be available free of charge on Talen Energy's website at www.talenenergy.com under the Investors & Media section or by contacting Talen Energy's Investor Relations Department at (610) 774-3389. Talen Energy and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Talen Energy in connection with the Merger. Information about the directors and executive officers of Talen Energy is set forth in its proxy statement for its 2016 annual meeting of stockholders, which was filed with the SEC on April 12, 2016. This document may be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.
Forward-Looking Information
Statements contained in this presentation, including statements with respect to future earnings, EBITDA, Adjusted EBITDA or Adjusted Free Cash Flow results, cash flows, tax attributes, financing, regulation, closing of the Merger, completion of co-firing projects and litigation settlements are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: failure to complete the Merger as a result of the failure to obtain necessary stockholder or regulatory approvals or otherwise; the payment by Talen Energy of a termination fee if the Merger Agreement is terminated in certain circumstances; the loss of key customers and suppliers resulting from any uncertainties associated with the Merger; the negative impact on Talen Energy's business and the market price for Talen Energy's common stock should the Merger not be consummated; ability to secure final approval of the Colstrip settlement agreement from the federal court; adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island and Montour dual-fuel projects; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, and its other reports on file with the SEC.
Definition of Non-U.S. GAAP Financial Measures
In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying earnings release contains non-U.S. GAAP financial measures EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow, which we use as measures of our performance.
EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted for certain non-cash and other items that management believes are not indicative of ongoing operations, including, but not limited to, unrealized gains and losses on derivative contracts, stock-based compensation expense, asset retirement obligation accretion (net of gains or losses on retirements), gains and losses on securities in the nuclear decommissioning trust fund, impairments, gains or losses on sales, dispositions or retirements of assets, debt extinguishments, and transition, transaction and restructuring costs.
EBITDA and Adjusted EBITDA are not intended to represent cash flows from operations or net income (loss) as defined by U.S. GAAP as indicators of operating performance and are not necessarily comparable to similarly-titled measures reported by other companies. We believe EBITDA and Adjusted EBITDA are useful to investors and other users of our financial statements in evaluating our operating performance because they provide additional tools to compare business performance across companies and across periods. We believe that EBITDA is widely used by investors to measure a company's operating performance without regard to such items as interest expense, income taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Additionally, we believe that investors commonly adjust EBITDA information to eliminate the effect of restructuring and other expenses, which vary widely from company to company and impair comparability. We adjust for these and other items, as our management believes that these items would distort their ability to efficiently view and assess our core operating trends. In summary, our management uses EBITDA and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as measures for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, stockholders, creditors, analysts and investors concerning our financial performance.
Adjusted Free Cash Flow represents Cash from Operations less capital expenditures, excluding growth-related capital expenditures, adjusted for changes in counterparty collateral and further adjusted for after-tax transaction and restructuring costs, and certain other after-tax cash items that management believes are not indicative of ongoing operations. Adjusted Free Cash Flow should not be considered an alternative to Cash from Operations, which is determined in accordance with U.S. GAAP. We believe that Adjusted Free Cash Flow, although a non-U.S. GAAP measure, is an important measure to both management and investors as an indicator of the company's ability to sustain operations without additional outside financing beyond the requirement to fund maturing debt obligations. These measures are not necessarily comparable to similarly-titled measures reported by other companies as they may be calculated differently.
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (a) | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(Unaudited) | |||||||
(Millions of Dollars) |
|||||||
June 30, |
December 31, | ||||||
2016 |
2015 | ||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
1,091 |
$ |
141 |
|||
Restricted cash and cash equivalents |
53 |
106 |
|||||
Accounts receivable (less reserve: 2016, $1; 2015, $1) |
273 |
267 |
|||||
Unbilled revenues |
136 |
160 |
|||||
Fuel, materials and supplies |
482 |
508 |
|||||
Prepayments |
57 |
52 |
|||||
Price risk management assets |
429 |
562 |
|||||
Assets held for sale |
— |
954 |
|||||
Other current assets |
14 |
12 |
|||||
Investments |
1,002 |
976 |
|||||
Property, Plant and Equipment |
14,605 |
14,462 |
|||||
Less: accumulated depreciation |
6,533 |
6,411 |
|||||
Property, plant and equipment, net |
8,072 |
8,051 |
|||||
Construction work in progress |
492 |
536 |
|||||
Total Property, Plant and Equipment, net |
8,564 |
8,587 |
|||||
Other intangibles |
105 |
310 |
|||||
Price risk management assets |
153 |
131 |
|||||
Other noncurrent assets |
44 |
43 |
|||||
Total Assets |
$ |
12,403 |
$ |
12,809 |
|||
Liabilities and Equity |
|||||||
Short-term debt |
$ |
350 |
$ |
608 |
|||
Long-term debt due within one year |
5 |
399 |
|||||
Accounts payable |
262 |
291 |
|||||
Liabilities held for sale |
— |
33 |
|||||
Other current liabilities |
865 |
757 |
|||||
Long-term Debt |
3,896 |
3,787 |
|||||
Deferred income taxes and investment tax credits |
1,470 |
1,602 |
|||||
Price risk management liabilities - noncurrent |
127 |
108 |
|||||
Accrued pension obligations |
352 |
340 |
|||||
Asset retirement obligations |
501 |
490 |
|||||
Other deferred credits and noncurrent liabilities |
110 |
91 |
|||||
Common Stock and additional paid-in capital |
4,707 |
4,702 |
|||||
Accumulated deficit |
(225) |
(373) |
|||||
Accumulated other comprehensive income (loss) |
(17) |
(26) |
|||||
Total Liabilities and Equity |
$ |
12,403 |
$ |
12,809 |
(a) The Financial Statements in this news release have been condensed and summarized for the purposes of presentation. Please refer to Talen Energy Corporation's periodic filings with the Securities and Exchange Commission for full Financial Statements, including note disclosures and certain defined terms used herein.
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||
Condensed Consolidated Statements of Income | |||||||||||||||
(Unaudited) |
|||||||||||||||
(Millions of Dollars, Except Share Data) |
|||||||||||||||
Three Months Ended |
Six Months Ended | ||||||||||||||
June 30, |
June 30, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Operating Revenues |
|||||||||||||||
Wholesale energy |
$ |
389 |
$ |
561 |
$ |
1,189 |
$ |
1,237 |
|||||||
Retail energy |
189 |
243 |
448 |
554 |
|||||||||||
Energy-related businesses |
119 |
144 |
233 |
248 |
|||||||||||
Total Operating Revenues |
697 |
948 |
1,870 |
2,039 |
|||||||||||
Operating Expenses |
|||||||||||||||
Operation |
|||||||||||||||
Fuel and energy purchases |
347 |
382 |
838 |
897 |
|||||||||||
Operation and maintenance |
277 |
306 |
559 |
528 |
|||||||||||
(Gain) loss on sale |
(423) |
— |
(563) |
— |
|||||||||||
Impairments |
213 |
— |
213 |
— |
|||||||||||
Depreciation |
109 |
87 |
218 |
164 |
|||||||||||
Taxes, other than income |
11 |
5 |
22 |
8 |
|||||||||||
Energy-related businesses |
115 |
133 |
224 |
229 |
|||||||||||
Total Operating Expenses |
649 |
913 |
1,511 |
1,826 |
|||||||||||
Operating Income (Loss) |
48 |
35 |
359 |
213 |
|||||||||||
Other Income (Expense) - net |
6 |
3 |
12 |
10 |
|||||||||||
Interest Expense |
60 |
55 |
120 |
91 |
|||||||||||
Income (Loss) Before Income Taxes |
(6) |
(17) |
251 |
132 |
|||||||||||
Income Taxes |
(3) |
(43) |
103 |
10 |
|||||||||||
Income (Loss) After Income Taxes |
(3) |
26 |
148 |
122 |
|||||||||||
Net Income (Loss) |
$ |
(3) |
$ |
26 |
$ |
148 |
$ |
122 |
|||||||
Earnings Per Share of Common Stock: |
|||||||||||||||
Basic |
$ |
(0.02) |
$ |
0.26 |
$ |
1.15 |
$ |
1.34 |
|||||||
Diluted |
$ |
(0.02) |
$ |
0.26 |
$ |
1.14 |
$ |
1.34 |
|||||||
Weighted-Average Shares of Common Stock Outstanding (in thousands) |
|||||||||||||||
Basic |
128,527 |
98,354 |
128,526 |
90,980 |
|||||||||||
Diluted |
128,527 |
98,376 |
129,475 |
91,002 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
Talen Energy Corporation and Subsidiaries | |||||||
(Unaudited) |
|||||||
(Millions of Dollars) |
|||||||
Six Months Ended | |||||||
June 30, | |||||||
2016 |
2015 | ||||||
Cash Flows from Operating Activities |
|||||||
Net income (loss) |
$ |
148 |
$ |
122 |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities |
|||||||
Pre-tax gain from the sale of certain generation facilities |
(595) |
— |
|||||
Depreciation |
218 |
164 |
|||||
Amortization |
93 |
93 |
|||||
Defined benefit plans - expense |
23 |
23 |
|||||
Deferred income taxes and investment tax credits |
(142) |
(46) |
|||||
Impairment of assets |
214 |
6 |
|||||
Unrealized (gains) losses on derivatives, and other hedging activities |
83 |
(40) |
|||||
Other |
17 |
38 |
|||||
Change in current assets and current liabilities |
|||||||
Accounts receivable |
(18) |
50 |
|||||
Accounts payable |
(28) |
(135) |
|||||
Unbilled revenues |
24 |
80 |
|||||
Fuel, materials and supplies |
23 |
33 |
|||||
Prepayments |
(5) |
37 |
|||||
Counterparty collateral |
(57) |
36 |
|||||
Taxes payable |
212 |
(2) |
|||||
Other |
(10) |
(33) |
|||||
Other operating activities |
|||||||
Defined benefit plans - funding |
— |
(74) |
|||||
Other assets |
3 |
2 |
|||||
Other liabilities |
4 |
1 |
|||||
Net cash provided by operating activities |
207 |
355 |
|||||
Cash Flows from Investing Activities |
|||||||
Expenditures for property, plant and equipment |
(268) |
(179) |
|||||
Proceeds from the sale of certain generation facilities |
1,525 |
— |
|||||
Expenditures for intangible assets |
(29) |
(19) |
|||||
Purchases of nuclear plant decommissioning trust investments |
(101) |
(108) |
|||||
Proceeds from the sale of nuclear plant decommissioning trust investments |
92 |
100 |
|||||
Net (increase) decrease in restricted cash and cash equivalents |
53 |
67 |
|||||
Other investing activities |
18 |
12 |
|||||
Net cash provided by (used in) investing activities |
1,290 |
(127) |
|||||
Cash Flows from Financing Activities |
|||||||
Issuance of long-term debt |
— |
600 |
|||||
Retirement of long-term debt |
(394) |
(2) |
|||||
Contributions from member |
— |
82 |
|||||
Distributions to predecessor member |
— |
(214) |
|||||
Net increase (decrease) in short-term debt |
(150) |
(668) |
|||||
Borrowing on long-term revolving credit facility |
— |
— |
|||||
Other financing activities |
(3) |
(26) |
|||||
Net cash provided by (used in) financing activities |
(547) |
(228) |
|||||
Net Increase (Decrease) in Cash and Cash Equivalents |
950 |
— |
|||||
Cash and Cash Equivalents at Beginning of Period |
141 |
352 |
|||||
Cash and Cash Equivalents at End of Period |
$ |
1,091 |
$ |
352 |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
Regulation G Reconciliations | |||||||||||||||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||||||
(Millions of Dollars) |
|||||||||||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||||||||||
2016 |
2015 | ||||||||||||||||||||||||||||||
East |
West |
Other |
Total |
East |
West |
Other |
Total | ||||||||||||||||||||||||
Net income (loss) |
$ |
(3) |
$ |
26 |
|||||||||||||||||||||||||||
Interest expense |
60 |
55 |
|||||||||||||||||||||||||||||
Income taxes |
(3) |
(43) |
|||||||||||||||||||||||||||||
Other (income) expense - net |
(6) |
(3) |
|||||||||||||||||||||||||||||
Operating income (loss) |
$ |
152 |
$ |
(52) |
$ |
(52) |
$ |
48 |
$ |
147 |
$ |
(20) |
$ |
(92) |
$ |
35 |
|||||||||||||||
Depreciation |
97 |
11 |
1 |
109 |
82 |
4 |
1 |
87 |
|||||||||||||||||||||||
Other income (expense) - net |
4 |
(1) |
3 |
6 |
4 |
— |
(1) |
3 |
|||||||||||||||||||||||
EBITDA |
$ |
253 |
$ |
(42) |
$ |
(48) |
$ |
163 |
$ |
233 |
$ |
(16) |
$ |
(92) |
$ |
125 |
|||||||||||||||
Margins: |
— |
||||||||||||||||||||||||||||||
Unrealized (gain) loss on derivative contracts (a) |
137 |
13 |
— |
150 |
(22) |
15 |
— |
(7) |
|||||||||||||||||||||||
Terminated derivative contracts (b) |
— |
— |
— |
— |
(13) |
— |
— |
(13) |
|||||||||||||||||||||||
Revenue adjustment (c) |
— |
— |
— |
— |
7 |
— |
— |
7 |
|||||||||||||||||||||||
Other (d) |
2 |
— |
— |
2 |
1 |
— |
— |
1 |
|||||||||||||||||||||||
Operation and maintenance: |
|||||||||||||||||||||||||||||||
Stock-based compensation expense (e) |
— |
— |
3 |
3 |
— |
— |
31 |
31 |
|||||||||||||||||||||||
ARO accretion, net |
6 |
— |
— |
6 |
9 |
— |
— |
9 |
|||||||||||||||||||||||
Impairments (f) |
204 |
9 |
— |
213 |
— |
— |
— |
— |
|||||||||||||||||||||||
(Gain) loss on dispositions (g) |
(423) |
— |
— |
(423) |
— |
— |
— |
— |
|||||||||||||||||||||||
TSA costs |
— |
— |
11 |
11 |
— |
— |
5 |
5 |
|||||||||||||||||||||||
Separation benefits |
— |
— |
9 |
9 |
— |
— |
2 |
2 |
|||||||||||||||||||||||
Transaction and restructuring costs (i) |
— |
— |
12 |
12 |
— |
— |
12 |
12 |
|||||||||||||||||||||||
Other |
(5) |
— |
— |
(5) |
3 |
— |
— |
3 |
|||||||||||||||||||||||
Other income (expense): |
|||||||||||||||||||||||||||||||
(Gain) loss from NDT funds |
(9) |
— |
— |
(9) |
(4) |
— |
— |
(4) |
|||||||||||||||||||||||
Adjusted EBITDA |
$ |
165 |
$ |
(20) |
$ |
(13) |
$ |
132 |
$ |
214 |
$ |
(1) |
$ |
(42) |
$ |
171 |
Six Months Ended June 30, | |||||||||||||||||||||||||||||||
2016 |
2015 | ||||||||||||||||||||||||||||||
East |
West |
Other |
Total |
East |
West |
Other |
Total | ||||||||||||||||||||||||
Net income (loss) |
$ |
148 |
$ |
122 |
|||||||||||||||||||||||||||
Interest expense |
120 |
91 |
|||||||||||||||||||||||||||||
Income taxes |
103 |
10 |
|||||||||||||||||||||||||||||
Other (income) expense - net |
(12) |
(10) |
|||||||||||||||||||||||||||||
Operating income (loss) |
$ |
544 |
$ |
(80) |
$ |
(105) |
$ |
359 |
$ |
378 |
$ |
(21) |
$ |
(144) |
$ |
213 |
|||||||||||||||
Depreciation |
192 |
24 |
2 |
218 |
159 |
4 |
1 |
164 |
|||||||||||||||||||||||
Other income (expense) - net |
9 |
— |
3 |
12 |
11 |
— |
(1) |
10 |
|||||||||||||||||||||||
EBITDA |
$ |
745 |
$ |
(56) |
$ |
(100) |
$ |
589 |
$ |
548 |
$ |
(17) |
$ |
(144) |
$ |
387 |
|||||||||||||||
Margins: |
— |
||||||||||||||||||||||||||||||
Unrealized (gain) loss on derivative contracts (a) |
56 |
12 |
— |
68 |
(70) |
17 |
— |
(53) |
|||||||||||||||||||||||
Terminated derivative contracts (b) |
— |
— |
— |
— |
(13) |
— |
— |
(13) |
|||||||||||||||||||||||
Revenue adjustment (c) |
— |
— |
— |
— |
7 |
— |
— |
7 |
|||||||||||||||||||||||
Other (d) |
5 |
— |
— |
5 |
4 |
— |
— |
4 |
|||||||||||||||||||||||
Operation and maintenance: |
|||||||||||||||||||||||||||||||
Stock-based compensation expense (e) |
— |
— |
8 |
8 |
— |
— |
40 |
40 |
|||||||||||||||||||||||
ARO accretion, net |
15 |
1 |
— |
16 |
17 |
— |
— |
17 |
|||||||||||||||||||||||
Impairments (f) |
204 |
9 |
— |
213 |
— |
— |
— |
— |
|||||||||||||||||||||||
(Gain) loss on dispositions (g) |
(563) |
— |
— |
(563) |
— |
— |
— |
— |
|||||||||||||||||||||||
TSA costs |
— |
— |
24 |
24 |
— |
— |
5 |
5 |
|||||||||||||||||||||||
Separation benefits |
— |
— |
9 |
9 |
— |
— |
2 |
2 |
|||||||||||||||||||||||
Corette closure costs (h) |
— |
— |
— |
— |
— |
4 |
— |
4 |
|||||||||||||||||||||||
Transaction and restructuring costs (i) |
— |
— |
15 |
15 |
— |
— |
15 |
15 |
|||||||||||||||||||||||
Legal contingency (j) |
— |
4 |
— |
4 |
— |
— |
— |
— |
|||||||||||||||||||||||
Other |
(8) |
— |
— |
(8) |
3 |
— |
— |
3 |
|||||||||||||||||||||||
Other income (expense): |
|||||||||||||||||||||||||||||||
(Gain) loss from NDT funds |
(13) |
— |
— |
(13) |
(10) |
— |
— |
(10) |
|||||||||||||||||||||||
Adjusted EBITDA |
$ |
441 |
$ |
(30) |
$ |
(44) |
$ |
367 |
$ |
486 |
$ |
4 |
$ |
(82) |
$ |
408 |
(a) |
Represents unrealized (gains) losses on derivatives. Amounts have been adjusted for insignificant option premiums for the three months ended June 30, 2016 and 2015, and $6 million and $9 million for the six months ended June 30, 2016 and 2015. |
(b) |
Represents net realized gains on certain derivative contracts that were terminated due to the spinoff transaction. |
(c) |
Related to a prior period revenue adjustment for the receipt of revenue under a transmission operating agreement with Talen Energy Supply's former affiliate, PPL Electric Utilities Corporation. |
(d) |
Includes OCI amortization on non-active derivative positions. |
(e) |
For the periods prior to June 2015, represents the portion of PPL's stock-based compensation cost allocable to Talen Energy. |
(f) |
Relates to Bell Bend Combined Operating License Application costs and Harquahala plant impairments. |
(g) |
Relates to Ironwood, Holtwood, Lake Wallenpaupack and C.P. Crane sales. |
(h) |
Operations were suspended and the Corette plant was retired in March 2015. |
(i) |
Costs related to the spinoff transaction, including expenses associated with FERC-required mitigation and legal and professional fees. Also includes transaction costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
(j) |
Contingency relates to the termination of a gas supply contract. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||
Regulation G Reconciliations | ||||||||
Adjusted Free Cash Flow | ||||||||
(Unaudited) |
||||||||
(Millions of Dollars) |
||||||||
Six Months Ended June 30, | ||||||||
2016 |
2015 | |||||||
Cash from Operations |
$ |
207 |
$ |
355 |
||||
Capital Expenditures, excluding growth (a) |
(235) |
(197) |
||||||
Counterparty collateral paid (received) |
57 |
(36) |
||||||
Adjusted Free Cash Flow, including other adjustments |
29 |
122 |
||||||
Cash adjustments: |
||||||||
Transition Services Agreement costs |
23 |
5 |
||||||
Legal settlement (b) |
3 |
— |
||||||
Separation benefits |
3 |
2 |
||||||
Corette closure costs (c) |
— |
4 |
||||||
Transaction and restructuring costs (d) |
35 |
15 |
||||||
Taxes on above adjustments (e) |
(26) |
(11) |
||||||
Adjusted Free Cash Flow |
$ |
67 |
$ |
137 |
(a) |
Includes expenditures related to intangible assets. |
(b) |
Contingency relates to the termination of a gas supply contract. |
(c) |
Operations were suspended and the Corette plant was retired in March 2015. |
(d) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. Also includes transaction costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
(e) |
Assumed a marginal tax rate of 40%. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted EBITDA Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - 2016E |
High - 2016E | ||||||||||
Net Income (Loss) |
$ |
107 |
$ |
167 |
$ |
227 |
||||||
Income Taxes |
72 |
112 |
152 |
|||||||||
Interest Expense |
240 |
240 |
240 |
|||||||||
Depreciation and Amortization |
424 |
424 |
424 |
|||||||||
EBITDA |
843 |
943 |
1,043 |
|||||||||
Stock-based compensation |
12 |
12 |
12 |
|||||||||
Asset retirement obligation, net |
35 |
35 |
35 |
|||||||||
Unrealized (gains) losses on derivative contracts (a) |
68 |
68 |
68 |
|||||||||
Nuclear decommissioning trust losses (gains) |
(18) |
(18) |
(18) |
|||||||||
(Gain) loss on sale (b) |
(563) |
(563) |
(563) |
|||||||||
Asset impairments (c) |
213 |
213 |
213 |
|||||||||
Transition Services Agreement costs and other adjustments (d) |
65 |
65 |
65 |
|||||||||
Adjusted EBITDA |
$ |
655 |
$ |
755 |
$ |
855 |
(a) |
Represents unrealized (gains) losses on derivatives. Amounts have been adjusted for insignificant option premiums. |
(b) |
Relates to Ironwood, Holtwood, Lake Wallenpaupack and C.P. Crane sales. |
(c) |
Relates to Bell Bend Combined Operating License Application costs and Harquahala plant impairments. |
(d) |
Other includes: (i) costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees; (ii) separation benefits related to workforce reductions; and (iii) costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted Free Cash Flow Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - 2016E |
High - 2016E | ||||||||||
Cash from Operations (a) |
$ |
321 |
$ |
401 |
$ |
481 |
||||||
Capital Expenditures, excluding growth (b) |
(467) |
(447) |
(427) |
|||||||||
Counterparty collateral paid (received) |
57 |
57 |
57 |
|||||||||
Transition Services Agreement costs |
41 |
41 |
41 |
|||||||||
Legal settlement (c) |
3 |
3 |
3 |
|||||||||
Separation benefits |
3 |
3 |
3 |
|||||||||
Transaction and restructuring costs (d) |
35 |
35 |
35 |
|||||||||
Taxes on above adjustments (e) |
(33) |
(33) |
(33) |
|||||||||
Taxes on mitigated asset sales (f) |
300 |
300 |
300 |
|||||||||
Adjusted Free Cash Flow |
$ |
260 |
$ |
360 |
$ |
460 |
(a) |
Excludes taxes paid on gains generated from the mitigated asset sales. |
(b) |
Includes expenditures related to intangible assets. |
(c) |
Contingency relates to the termination of a gas supply contract. |
(d) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. Also includes costs related to the proposed merger with Riverstone affiliates that was announced in June 2016. |
(e) |
Assumed a marginal tax rate of 40%. |
(f) |
Estimated taxes associated with asset sales included in Cash from Operations. |
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
Contacts:
Media Relations - George Lewis, 610-774-4687
Investor Relations - Andy Ludwig, 610-774-3389
SOURCE Talen Energy Corporation
BILLINGS, Mont., July 12, 2016 /PRNewswire/ -- Talen Montana, LLC and the five other owners of the Colstrip Steam Electric Station (Puget Sound Energy, Avista Corporation, Portland General Electric Company, NorthWestern Corporation and PacifiCorp) have reached a proposed settlement in a lawsuit filed in 2013 by Sierra Club and the Montana Environmental Information Center under the Clean Air Act.
"The proposed consent decree, if approved by the United States District Court for the District of Montana, would resolve the litigation against all four Colstrip units and provide liability releases to the owners of all four units," said Charles Baker, general manager, Talen Montana.
The core elements of the proposed settlement include a commitment to cease operations of Units 1 and 2 on or before July 1, 2022, and liability releases for the owners of all four units, without requiring monetary payments to the plaintiffs. Apart from outright dismissal of all claims against Units 3 and 4, those units are not affected by the proposed settlement.
Aside from the July 1, 2022 deadline in the proposed settlement, there is no formal plan or timeline currently in place for retiring Units 1 and 2.
Talen Montana is an affiliate of Talen Energy (NYSE: TLN). Talen Montana is one of six owners of the 2,094-megawatt Colstrip plant, and operates the plant on behalf of the owners' group. Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Colstrip Steam Electric Station:
Media contact: |
Todd L. Martin |
(570) 542-2881 | |
SOURCE Talen Montana, LLC
ALLENTOWN, Pa., July 11, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) plans to announce second quarter 2016 financial results before the stock market opens on Thursday, Aug. 4.
A conference call and webcast with President and Chief Executive Officer Paul Farr and other members of the executive team is scheduled to begin at 8 a.m. Eastern time. The phone number to join the conference call is 1-888-317-6003. Participants from outside of the United States should call 1-412-317-6061. The entry number to join the conference call is 4143588.
The webcast, in audio format with slides of the presentation, will be accessible on the Events & Presentations page of the company's "Investors & Media" website. A replay will be available on the website for those who are unable to listen live.
Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contacts:
Media Relations – George C. Lewis, 610-774-4687
Investor Relations – Andy Ludwig, 610-774-3389
SOURCE Talen Energy Corporation
BERWICK, Pa., June 27, 2016 /PRNewswire/ -- Operators reconnected Unit 1 at the Susquehanna nuclear power plant to the regional power grid on Monday, June 27. The Unit 1 reactor was manually shut down on Monday, June 6 to address a water leak inside the unit's containment structure. During a thorough inspection of the area, Susquehanna staff identified and subsequently reported a second minor leak from a pipe beneath the reactor vessel to the Nuclear Regulatory Commission on June 8, 2016.
"Throughout the maintenance outage, our nuclear professionals maintained their primary focus on keeping each other and the surrounding community safe," said Jon Franke, site vice president. "We have worked effectively with our equipment vendors and other industry experts to develop and implement the plan to complete repairs to return the unit to reliable service."
Unit 2 at the plant remained fully operational and safely generating electricity at full power.
The Susquehanna plant, located about seven miles north of Berwick, is jointly owned by Susquehanna Nuclear, LLC, and Allegheny Electric Cooperative Inc., and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy's generating affiliates. Talen Energy (NYSE: TLN) is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Media contact:
Todd L. Martin
(570) 542-2881
todd.martin@talenenergy.com
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Susquehanna Nuclear LLC
BERWICK, Pennsylvania, June 8, 2016 /PRNewswire/ -- The Susquehanna nuclear power plant in Luzerne County, Pennsylvania made a non-emergency notification to the Nuclear Regulatory Commission (NRC) on Wednesday, June 8, 2016. As was previously reported, Susquehanna Unit 1 was safely shut down on June 6 for planned maintenance to identify and repair a small leak inside the containment structure that completely surrounds the reactor. During the investigation, Susquehanna staff identified and reported additional leakage from an instrumentation connection to the reactor vessel. The leak rate is currently measured at two drops per minute.
Unit 1 remains shut down and the condition is not a safety risk for plant workers or the public. "We have established a dedicated team of nuclear professionals to further evaluate the situation and develop a plan to safely complete repairs, said Robert Franssen, plant general manager. "We will continue to work with the NRC, industry experts and our equipment vendors to understand the issue, evaluate our repair options, complete the necessary work and safely return the unit to service."
Susquehanna Unit 2 continues to operate safely at full rated power.
The Susquehanna plant, located about seven miles north of Berwick, is jointly owned by Susquehanna Nuclear, LLC, and Allegheny Electric Cooperative Inc., and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy's generating affiliates. Talen Energy (NYSE: TLN) is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contacts: |
Media Relations – Todd L. Martin, 570-542-2881 |
Investor Relations – Andy Ludwig, 610-774-3389 |
SOURCE Susquehanna Nuclear LLC
ALLENTOWN, Pa., June 7, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) has completed a feasibility assessment related to bringing natural gas to the Montour plant and installing boiler modifications to enable a dual-fuel, also known as co-firing, capability. The company's Board of Directors approved the project, which will enable the Montour plant to operate on coal, natural gas or in combination. Engineering and design work is already in progress and, based on obtaining all necessary permitting and regulatory approval, the anticipated completion date is the second quarter of 2018.
Based on the results of a competitive RFP process, the company is currently in the process of selecting a qualified third party to construct, own and operate a 15 mile lateral pipeline to bring natural gas to the 1,500 megawatt Montour plant. The estimated capital expenditure for plant modifications is approximately $70 million with additional pipeline expenses and payments to be made to the third party constructing the pipeline and regulating and metering station.
"Montour is a significant asset in the Talen Energy fleet and we are making the necessary investments to improve its competitive position in the market," said Paul Farr, Talen Energy President and Chief Executive Officer. "The Montour plant is located in close proximity to one of the largest natural gas formations in the world, the Marcellus Shale. Co-firing the plant to burn natural gas, produced in Pennsylvania, enables Talen Energy to leverage the strategic location of the plant."
The pipeline company selected by Talen Energy will be responsible for obtaining all necessary environmental and construction permitting from the appropriate federal, state and local agencies. Talen Energy expects to announce additional details related to the pipeline, contractor and next steps as part of its typical quarterly reporting as those details become available.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in North America. The company owns or controls 16,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. For more information, visit www.talenenergy.com.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" that are not limited to historical facts, but reflect Talen Energy's current beliefs, expectations or intentions regarding future events. Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursue," "target," "continue," and similar expressions are intended to identify such forward-looking statements. Although Talen Energy believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island dual-fuel project; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone Holdings, LLC, to exercise influence over matters requiring Board of Directors and/or stockholder approval; and the announced merger transaction involving Talen Energy and affiliates of Riverstone. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015, its Form 10-Q for the quarter ended March 31, 2016 and its other reports on file with the Securities and Exchange Commission.
Contacts:
Media Relations – Todd L. Martin, 570-542-2881
Investor Relations – Andy Ludwig, 610-774-3389
SOURCE Talen Energy Corporation
BERWICK, Pa., June 6, 2016 /PRNewswire/ -- Operators began the process to safely down-power the Unit 1 reactor at Talen Energy's Susquehanna nuclear plant in Luzerne County, Pa. late Sunday (6/5) and disconnected from the regional transmission grid early Monday (6/6). The plan to shut down the unit was developed to address a small water leak inside the Unit 1 containment structure that is designed to maintain safety for this kind of issue.
"Our nuclear professionals have spent the past week developing various contingencies to ensure the safest and most efficient approach to repairing the leak," said Jon Franke, site vice president. "Although this is not causing a challenge at this time, it is our priority to find and fix this prior to full summer operations."
Since the unit disconnected from the grid in the past few hours, it is premature to provide a specific timeline for returning Unit 1 to service. "As has always been the case, Team Susquehanna's primary focus is safety, so that we can then deliver reliable, zero-carbon energy to our customers," said Franke.
Susquehanna Unit 2 continues to operate safely at full rated power.
The Susquehanna plant, located about seven miles north of Berwick, is jointly owned by Susquehanna Nuclear, LLC, and Allegheny Electric Cooperative Inc., and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy's generating affiliates. Talen Energy (NYSE: TLN) is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Media Contact: Todd Martin 570-542-2881
SOURCE Susquehanna Nuclear LLC
NEW ORLEANS, June 3, 2016 /PRNewswire/ -- Former Attorney General of Louisiana Charles C. Foti, Jr., Esq. and the law firm of Kahn Swick & Foti, LLC ("KSF") are investigating the proposed sale of Talen Energy Corporation ("Talen" or the "Company") (NYSE: TLN) to affiliates of Riverstone Holdings LLC. Under the terms of the proposed transaction, shareholders of Talen will receive only $14.00 in cash for each share of Talen that they own. KSF is seeking to determine whether this consideration and the process that led to it are adequate, or whether the consideration undervalues the Company.
If you believe that this transaction undervalues the Company and/or if you would like to discuss your legal rights regarding the proposed sale, you may, without obligation or cost to you, e-mail or call KSF Managing Partner Lewis S. Kahn (lewis.kahn@ksfcounsel.com) toll free at any time at 855-768-1857.
To learn more about KSF, whose partners include the Former Louisiana Attorney General, visit www.ksfcounsel.com.
Kahn Swick & Foti, LLC
206 Covington St.
Madisonville, LA 70447
SOURCE Kahn Swick & Foti, LLC
ALLENTOWN, Pa., June 3, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN), a competitive energy and power generation company that owns or controls 16,000 megawatts of capacity in eight states, announced today that it has entered into a definitive merger agreement with affiliates of Riverstone Holdings LLC ("Riverstone"), a private investment firm.
Under terms of the merger agreement, all outstanding shares of Talen Energy common stock not currently owned by Riverstone affiliated entities will be acquired for $14.00 per share in cash. Affiliates of Riverstone currently own approximately 35 percent of the outstanding shares of Talen Energy common stock, which were issued in the June 2015 transaction that established Talen Energy by combining competitive generation assets that had been owned by affiliates of PPL Corporation and affiliates of Riverstone.
The purchase price represents a 56 percent premium to the closing price of $9.00 per share on March 31, 2016, the last trading day before public reports of a potential sale of Talen Energy, and a 101 percent premium to the 60-day volume-weighted average price of $6.95 per share through March 31.
The transaction has a total enterprise value of approximately $5.2 billion.
"We believe the transaction offers compelling value to our stockholders, while eliminating execution risk, and will provide additional momentum to the outstanding work our employees have done to drive improvements in the safety, reliability and efficiency of our plants in the time since we became an independent company," said Paul Farr, Talen Energy President and Chief Executive Officer.
"The disinterested directors of the Board, not including the two Riverstone directors, with the assistance of our financial and legal advisors, carefully analyzed Riverstone's offer, and after extensive negotiation and thorough consideration, concluded that the agreement we are announcing today is in the best interests of our stockholders," said Stuart E. Graham, Chairman of Talen Energy's Board of Directors.
David M. Leuschen and Pierre F. Lapeyre, Jr., co-founders of Riverstone, added, "As an experienced owner of power generation assets, Riverstone is excited to acquire Talen Energy and its world class generating fleet, which is located in some of the United States' most attractive power markets."
'Go Shop'
The agreement provides for a "go-shop" period, during which Talen Energy – with the assistance of its legal and financial advisors – may actively solicit, receive, evaluate and potentially enter into negotiations with parties that offer alternative proposals. The go-shop period is 40 days. Talen Energy will be permitted to continue discussions with certain parties that make a qualifying offer during the go-shop period for an additional 20 days and, subject to customary requirements included in the agreement, enter into or recommend a transaction with a person or group that makes a superior proposal. The agreement provides for the payment of a termination fee by Talen Energy to Riverstone in the event that the agreement is terminated for a superior proposal, which termination fee will be $50 million, but which will be reduced to $25 million if Talen Energy accepts a superior proposal made during the go-shop period.
There can be no assurance that this process will result in a superior proposal. Talen Energy does not intend to disclose developments during this process unless and until the Board makes a decision with respect to any superior proposal it may receive.
Stockholder and Regulatory Approval
In addition to approval by stockholders representing a majority of outstanding shares of common stock, the transaction is subject to approval by a majority of non- Riverstone affiliated stockholders voting at a special stockholder meeting to be scheduled. Riverstone and its affiliates have agreed to vote their 35 percent stake in favor of the proposed transaction.
The transaction is subject to expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, approval of the Nuclear Regulatory Commission and the Federal Energy Regulatory Commission, as well as certain other customary regulatory approvals and other customary closing conditions. Riverstone's obligation to consummate the transaction is also subject to Talen Energy having a minimum amount of cash and revolving credit facility capacity available at closing.
The parties currently expect the transaction to be completed by the end of 2016.
Transaction Financing
The consideration for the common stock in the transaction, of approximately $1.8 billion, is expected to be funded by a conversion of Riverstone's existing ownership of 35 percent of the common stock of Talen into shares of the surviving corporation, Talen Energy's cash on hand, and proceeds of a $250 million new secured term loan. The new secured term loan is fully committed by Goldman Sachs Bank USA, Royal Bank of Canada, Barclays Bank plc, Credit Suisse AG and Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and Deutsche Bank AG New York Branch, Morgan Stanley Senior Funding Inc., and the Bank of Tokyo-Mitsubishi UFJ Ltd., and will rank pari-passu with the existing first lien revolving credit facility of Talen Energy Supply LLC (a wholly owned subsidiary of Talen Energy) ("Energy Supply"), which will be reduced from $1.85 billion to $1.4 billion upon closing of the transaction. Concurrently with the signing of the merger agreement, all of Energy Supply's subsidiaries that currently guarantee its revolving credit facility have executed guarantees (effective as of the closing of the transaction) of Talen Energy's outstanding unsecured notes due 2025 ("2025 Notes") and its Pennsylvania Economic Development Financing Authority revenue bonds ("Municipal Bonds"), which together comprise approximately $831 million of Energy Supply's approximately $3.3 billion total unsecured debt that will remain outstanding. As a result of this new credit support for the 2025 Notes and the Municipal Bonds, it is expected that these notes and bonds will be structurally senior to the non-guaranteed unsecured debt of Energy Supply, and we believe that the issue ratings on the 2025 Notes and the Municipal Bonds will be maintained or improved.
Financial and Legal Advisors
Citi is serving as financial advisor to Talen Energy. Kirkland & Ellis LLP is serving as Talen Energy's legal advisor. Goldman, Sachs & Co. and RBC Capital Markets are serving as financial advisors to Riverstone. Wachtell, Lipton, Rosen & Katz and Vinson & Elkins LLP are serving as Riverstone's legal advisors for the transaction.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in North America. The company owns or controls 16,000 megawatts of generating capacity in well-developed, structured wholesale power markets, principally in the Northeast, Mid-Atlantic and Southwest regions of the United States. For more information, visit www.talenenergy.com.
Talen Energy Generating Assets
Plant |
Fuel Type |
Ownership in MW (summer rating) |
State |
Region |
Martins Creek |
Natural gas/oil |
1,708 |
PA |
PJM |
Lower Mt. Bethel |
Natural gas |
555 |
PA |
PJM |
Bayonne |
Natural gas/oil |
165 |
NJ |
PJM |
Camden |
Natural gas/oil |
145 |
NJ |
PJM |
Dartmouth |
Natural gas/oil |
82 |
MA |
ISO-NE |
Elmwood Park |
Natural gas/oil |
70 |
NJ |
PJM |
Newark Bay |
Natural gas/oil |
122 |
NJ |
PJM |
Pedricktown |
Natural gas/oil |
117 |
NJ |
PJM |
York |
Natural gas |
46 |
PA |
PJM |
Athens |
Natural gas |
969 |
NY |
NYISO |
Millennium |
Natural gas |
335 |
MA |
ISO-NE |
Laredo |
Natural gas |
181 |
TX |
ERCOT |
Nueces Bay |
Natural gas |
648 |
TX |
ERCOT |
Barney Davis |
Natural gas |
964 |
TX |
ERCOT |
Harquahala |
Natural gas |
1,040 |
AZ |
WECC |
Combustion turbines |
Natural gas/oil |
370 |
PA |
PJM |
Montour |
Coal |
1,528 |
PA |
PJM |
Brunner Island (a) |
Coal |
1,428 |
PA |
PJM |
Brandon Shores |
Coal |
1,274 |
MD |
PJM |
H.A. Wagner |
Coal/natural gas/oil |
966 |
MD |
PJM |
Keystone (b) |
Coal |
212 |
PA |
PJM |
Conemaugh (b) |
Coal |
285 |
PA |
PJM |
Colstrip (b) |
Coal |
529 |
MT |
WECC |
Susquehanna (b) |
Nuclear |
2,262 |
PA |
PJM |
(a) Project to co-fire with natural gas expected to be completed by the end of 2016. | ||||
(b) Jointly owned facility. |
About Riverstone Holdings
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $34 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed approximately $30 billion to more than 120 investments in North America, Latin America, Europe, Africa and Asia. Visit www.riverstonellc.com for more information.
Important Information For Investors And Stockholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. The proposed acquisition of Talen Energy by Riverstone affiliated entities will be submitted to the stockholders of Talen Energy for their consideration. Talen Energy will file with the Securities and Exchange Commission ("SEC") a proxy statement of Talen Energy. Talen Energy also plans to file other documents with the SEC regarding the proposed transaction. INVESTORS AND SECURITY HOLDERS OF TALEN ENERGY ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and stockholders will be able to obtain free copies of the proxy statement and other documents containing important information about Talen Energy and Riverstone, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Talen Energy will be available free of charge on Talen Energy's website at www.talenenergy.com under the tab "Investors & Media" or by contacting Talen Energy's Investor Relations Department at (610) 774-3389. Talen Energy and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of Talen Energy in connection with the proposed transaction. Information about the directors and executive officers of Talen Energy is set forth in its proxy statement for its 2016 annual meeting of stockholders, which was filed with the SEC on April 12, 2016. This document can be obtained free of charge from the sources indicated above. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when they become available.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains "forward-looking statements" that are not limited to historical facts, but reflect Talen Energy's current beliefs, expectations or intentions regarding future events. Words such as "may," "will," "could," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursue," "target," "continue," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Talen Energy's expectations with respect to the costs and other anticipated financial impacts of the proposed transaction; future financial and operating results of the company; the company's plans, objectives, expectations and intentions with respect to future operations and services; approval of the proposed transaction by stockholders; the satisfaction of the closing conditions to the proposed transaction; and the timing of the completion of the proposed transaction.
All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, many of which are generally outside the control of Talen Energy and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to, (i) the possibility that the proposed transaction is delayed or does not close, including due to the failure to receive required stockholder or regulatory approvals, the taking of governmental action to block the transaction, the inability to obtain required financing, or the failure of other closing conditions, and (ii) the possibility that expected financial results will not be realized, or will not be realized within the expected time period, because of, among other things, changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; and risks associated with federal and state tax laws and regulations.
Talen Energy cautions that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in Talen Energy's most recently filed Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings. All subsequent written and oral forward-looking statements concerning Talen Energy the proposed transaction or other matters and attributable to Talen Energy or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Talen Energy does not undertake any obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
Contacts: Media Relations – George C. Lewis, 610-774-4687
Investor Relations – Andy Ludwig, 610-774-3389
SOURCE Talen Energy Corporation
BERWICK, Pa., May 17, 2016 /PRNewswire/ -- Operators reconnected Unit 2 at the Susquehanna nuclear power plant to the regional power grid on Tuesday, May 17. The Unit 2 reactor was manually shut down on Friday, May 13 due to a fault in one of the unit's 480-volt electrical distribution centers. The plant's design provides redundancy to account for the potential of these types of electrical faults. The operational crew responded in accordance with their training to place the unit in the condition to allow investigation and repair.
A thorough investigation by the plant's nuclear professionals determined the reason for the shutdown was a short in a breaker that supplies power to a ventilation fan. "Our electrical engineers and craftsmen completed a comprehensive assessment and identified an isolated electrical short, said Jon Franke, site vice president. "We have replaced the breaker and verified the functionality of the system."
Unit 1 at the plant continues to operate safely at full power.
The Susquehanna plant, located about seven miles north of Berwick, is jointly owned by Susquehanna Nuclear, LLC, and Allegheny Electric Cooperative Inc., and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy's generating affiliates. Talen Energy (NYSE: TLN) is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Media contact: |
Todd L. Martin |
(570) 542-2881 | |
SOURCE Talen Energy Susquehanna Nuclear LLC
BERWICK, Pa., May 13, 2016 /PRNewswire/ -- Operators safely shut down the Unit 2 reactor at Talen Energy's Susquehanna nuclear plant in Luzerne County, Pa. early Friday (5/13) following an electrical fault in one of the unit's 480-volt electrical distribution centers.
"The fault interrupted power supply to some of the systems we use to operate the unit," said Jon Franke, site vice president. "Our operators determined the need to bring the unit off-line, and completed the shutdown safely, as designed, using established plant procedures and reflecting the conditions they experienced due to the electrical fault."
He said plant workers are investigating the cause of the electrical issue and will determine the necessary repairs. When repairs are completed, operators will begin the process of returning the unit to service.
Unit 2 had been in continuous operation for 355 days since returning to service from its last scheduled refueling and maintenance outage in May 2015. Susquehanna Unit 1 continues to operate safely at full rated power.
The Susquehanna plant, located about seven miles north of Berwick, is jointly owned by Susquehanna Nuclear, LLC, and Allegheny Electric Cooperative Inc., and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy's generating affiliates. Talen Energy (NYSE: TLN) is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contact: George Lewis 610-774-4687
SOURCE Talen Energy Susquehanna Nuclear LLC
ALLENTOWN, Pa., May 10, 2016 /PRNewswire/ --
2016 Financial Results
(in millions) |
Three Months Ended | ||
March 31, 2016 | |||
Adjusted EBITDA |
$ |
235 |
|
Adjusted Free Cash Flow |
100 |
||
Net Income (Loss) |
151 |
||
Cash from Operations |
196 |
2016 Financial Outlook
Operating and Commercial Highlights
Talen Energy Corporation (NYSE: TLN) reported this morning first quarter 2016 Adjusted EBITDA of $235 million, compared with $237 million in the first quarter of 2015, and Net Income of $151 million, compared with $96 million for the first quarter of 2015.
"Our solid first quarter results reflect the commitment of Talen Energy employees to execute our business strategy and deliver value despite the effects of a mild winter and low wholesale power prices," said Paul Farr, Talen Energy President and Chief Executive Officer. "We continue to position the company to be more resilient to periods of extended low commodity prices by cutting costs, making effective use of capital, and operating our plants safely and reliably."
Talen Energy completed the sale of the Holtwood and Lake Wallenpaupack hydroelectric facilities in April and completed the sale of the Ironwood and C.P. Crane plants in February to satisfy the requirements of a December 2014 Federal Energy Regulatory Commission (FERC) order approving the transactions that formed Talen Energy.
The company updated 2016 guidance ranges for Adjusted EBITDA and Adjusted Free Cash Flow to include actual results of the FERC mitigation assets that have been sold in 2016. The updated ranges are $655-$855 million for Adjusted EBITDA and $260-$460 million for Adjusted Free Cash Flow.
A key strategic objective that continues on schedule is the natural gas co-firing project at the 1,500-megawatt Brunner Island coal-fired plant in Pennsylvania. The company expects gas co-firing capability for the 750-megawatt Unit 3 to be completed in the third quarter of 2016. Co-firing of Units 1 and 2, which have a combined generating capacity of 750 megawatts, is on schedule for completion by the end of 2016.
Portfolio additions, cost optimization, and safe, reliable fleet performance helped the company maintain quarter-over-quarter Adjusted EBITDA even with the mild winter. The biennial scheduled refueling outage for Susquehanna Unit 1, which began in March, has been completed safely. The equivalent forced outage factor for the fleet was about 3 percent for the first quarter.
Review of Segment Results
Financial information for the first three months of 2015 represents only legacy Talen Energy Supply results and does not include results of the RJS Power acquisition or the MACH Gen acquisition, both of which occurred later in 2015.
(in millions) |
Three Months Ended March 31, | ||||||
2016 |
2015 | ||||||
Operating Income (Loss) |
|||||||
East |
$ |
392 |
$ |
231 |
|||
West |
(28) |
(1) |
|||||
Other (b) |
(53) |
(52) |
|||||
Total |
$ |
311 |
$ |
178 |
|||
EBITDA (a) |
|||||||
East |
$ |
492 |
$ |
315 |
|||
West |
(14) |
(1) |
|||||
Other (b) |
(52) |
(52) |
|||||
Total |
$ |
426 |
$ |
262 |
|||
Adjusted EBITDA (a) |
|||||||
East |
$ |
276 |
$ |
272 |
|||
West |
(10) |
5 |
|||||
Other (b) |
(31) |
(40) |
|||||
Total |
$ |
235 |
$ |
237 |
(a) |
EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management, in addition to Operating Income, to evaluate Talen Energy's business on an ongoing basis. For the definitions of EBITDA and Adjusted EBITDA, a detailed itemization of adjustments, and a reconciliation of EBITDA and Adjusted EBITDA to Operating Income (Loss), see the tables at the end of this news release. Management does not allocate interest expense and income taxes on a segment level and therefore uses Operating Income (Loss) as the most directly comparable GAAP measure. |
(b) |
General and administrative expenses are not allocated to each segment and are included in the "Other" category. |
East Segment
The East segment includes operations in PJM, New York ISO and ISO New England.
Operating Income increased by $161 million compared with the first quarter of 2015 primarily due to the gain on the sale of the Ironwood plant, and the factors that affected Adjusted EBITDA as described in the next paragraph.
Adjusted EBITDA increased $4 million compared with the first quarter of 2015. Higher margins from assets acquired during 2015, higher capacity prices, higher margins on full-requirements sales contracts, and higher retail electricity sales were offset by the addition of operation and maintenance costs associated with the assets acquired during 2015, lower realized energy prices, the timing of the nuclear refueling outage, and lost energy and capacity revenue from the sale of the Ironwood plant.
West Segment
The West segment includes operations in the ERCOT and WECC markets in Texas, Montana and Arizona.
Operating Income decreased by $27 million and Adjusted EBITDA decreased by $15 million compared with the first quarter of 2015, primarily due to the addition of operation and maintenance costs associated with the assets acquired during 2015, and lower realized energy prices in Montana, partially offset by higher margins from assets acquired during 2015.
Other
The "Other" category includes general and administrative expenses not allocated to a segment.
The $9 million improvement in Adjusted EBITDA compared with the first quarter of 2015 is primarily due to lower corporate expenses following the spinoff from PPL Corporation.
Adjusted Free Cash Flow
(in millions) |
Three Months Ended | |||||||
March 31, 2016 |
March 31, 2015 | |||||||
Cash from Operations |
$ |
196 |
$ |
221 |
||||
Adjusted Free Cash Flow (a) |
$ |
100 |
$ |
107 |
(a) |
Adjusted Free Cash Flow is a non-GAAP financial measure used by management in addition to Cash from Operations. For the definition of Adjusted Free Cash Flow, a detailed itemization of adjustments and a reconciliation of Adjusted Free Cash Flow to Cash from Operations, see the tables at the end of this news release. |
The $7 million decrease in Adjusted Free Cash Flow compared with the first quarter of 2015 is primarily due to the change in counterparty collateral received, partially offset by reduced capital expenditures.
Liquidity and Capital Resources
(in millions) |
March 31, 2016 |
December 31, 2015 | |||||||
Cash and cash equivalents |
$ |
393 |
$ |
141 |
|||||
Short-term debt (a) |
— |
608 |
(a) |
December 31, 2015 includes $108 million that was reclassified to "Long-term debt" on the Balance Sheet at March 31, 2016 based on Talen Energy's intent and ability to refinance on a long-term basis. |
The decrease in short-term debt was primarily due to the use of proceeds from the sales of the Ironwood and C.P. Crane plants to repay $600 million of outstanding borrowings under Talen Energy's revolving credit facilities.
Net cash provided by (used in) operating, investing and financing activities for the three months ended March 31, and the changes between periods were as follows.
(in millions) |
2016 |
2015 |
Change - Cash | |||||||||
Operating activities |
$ |
196 |
$ |
221 |
$ |
(25) |
||||||
Investing activities |
583 |
(130) |
713 |
|||||||||
Financing activities |
(527) |
(222) |
(305) |
2016 Financial Outlook
Talen Energy updated its 2016 guidance ranges for Adjusted EBITDA and Adjusted Free Cash Flow to include the results of mitigation asset sales it has completed. The forecast for Adjusted EBITDA is $655-$855 million. The forecast for Adjusted Free Cash Flow is $260-$460 million.
For a detailed itemization of adjustments and reconciliations of Adjusted EBITDA to Operating Income (Loss) and Adjusted Free Cash Flow to Cash from Operations, see the tables at the end of the news release.
Conference Call and Webcast
Talen Energy management will discuss these results during a conference call and webcast on May 10, 2016, beginning at 8 a.m. Eastern time. The phone number to join the conference call is 1-888-317-6003. Participants from outside of the United States should call 1-412-317-6061. The entry number to join the call is 5083196.
The webcast, in audio format with slides of the presentation, will be accessible on the Investors & Media section of the company's website. A replay will be available on the website for those who are unable to listen live.
The Investors & Media section of the company's website contains a significant amount of information about Talen Energy, including financial and other information for investors. Talen Energy encourages investors to visit its website periodically to view new and updated information.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Forward-Looking Information
Statements contained in this presentation, including statements with respect to future earnings, EBITDA, Adjusted EBITDA or Adjusted Free Cash Flow results, cash flows, tax attributes, financing, regulation and corporate strategy are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island dual-fuel project; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone Holdings, LLC, to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's Form 10-K for the year ended December 31, 2015 and its other reports on file with the Securities and Exchange Commission.
Definition of Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying earnings release contains non-GAAP financial measures EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow, which we use as measures of our performance.
EBITDA represents net income (loss) before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA further adjusted for certain non-cash and other items that management believes are not indicative of ongoing operations, including, but not limited to, unrealized gains and losses on derivative contracts, stock-based compensation expense, asset retirement obligation accretion, gains and losses on securities in the nuclear decommissioning trust fund, impairments, gains or losses on sales, dispositions or retirements of assets, debt extinguishments, and transition, transaction and restructuring costs.
EBITDA and Adjusted EBITDA are not intended to represent cash flows from operations or net income (loss) as defined by U.S. GAAP as indicators of operating performance and are not necessarily comparable to similarly-titled measures reported by other companies. We believe EBITDA and Adjusted EBITDA are useful to investors and other users of our financial statements in evaluating our operating performance because they provide additional tools to compare business performance across companies and across periods. We believe that EBITDA is widely used by investors to measure a company's operating performance without regard to such items as interest expense, income taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Additionally, we believe that investors commonly adjust EBITDA information to eliminate the effect of restructuring and other expenses, which vary widely from company to company and impair comparability. We adjust for these and other items, as our management believes that these items would distort their ability to efficiently view and assess our core operating trends. In summary, our management uses EBITDA and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as measures for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, stockholders, creditors, analysts and investors concerning our financial performance.
Adjusted Free Cash Flow represents Cash from Operations less capital expenditures, excluding growth-related capital expenditures, adjusted for changes in counterparty collateral and further adjusted for after-tax transaction and restructuring costs, and certain other after-tax cash items that management believes are not indicative of ongoing operations. Adjusted Free Cash Flow should not be considered an alternative to Cash from Operations, which is determined in accordance with GAAP. We believe that Adjusted Free Cash Flow, although a non-GAAP measure, is an important measure to both management and investors as an indicator of the company's ability to sustain operations without additional outside financing beyond the requirement to fund maturing debt obligations. These measures are not necessarily comparable to similarly-titled measures reported by other companies as they may be calculated differently.
1 Previously announced 2016 guidance ranges for Adjusted EBITDA of $635-$835 million and for Adjusted Free Cash Flow of $250-$450 million assumed no contributions from assets that have been sold to satisfy the FERC mitigation requirement.
Contacts: Media Relations - George Lewis, 610-774-4687
Investor Relations - Andy Ludwig, 610-774-3389
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (a) | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(Unaudited) | |||||||
(Millions of Dollars) |
|||||||
March 31, |
December 31, | ||||||
2016 |
2015 | ||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
393 |
$ |
141 |
|||
Restricted cash and cash equivalents |
72 |
106 |
|||||
Accounts receivable (less reserve: 2016, $1; 2015, $1) |
249 |
267 |
|||||
Unbilled revenues |
141 |
160 |
|||||
Fuel, materials and supplies |
484 |
508 |
|||||
Prepayments |
65 |
52 |
|||||
Price risk management assets |
680 |
562 |
|||||
Assets held for sale |
429 |
954 |
|||||
Other current assets |
15 |
12 |
|||||
Investments |
988 |
976 |
|||||
Property, Plant and Equipment |
14,653 |
14,462 |
|||||
Less: accumulated depreciation |
6,551 |
6,411 |
|||||
Property, plant and equipment, net |
8,102 |
8,051 |
|||||
Construction work in progress |
459 |
536 |
|||||
Total Property, Plant and Equipment, net |
8,561 |
8,587 |
|||||
Other intangibles |
312 |
310 |
|||||
Price risk management assets |
160 |
131 |
|||||
Other noncurrent assets |
46 |
43 |
|||||
Total Assets |
$ |
12,595 |
$ |
12,809 |
|||
Liabilities and Equity |
|||||||
Short-term debt |
$ |
— |
$ |
608 |
|||
Long-term debt due within one year |
354 |
399 |
|||||
Accounts payable |
277 |
291 |
|||||
Liabilities held for sale |
— |
33 |
|||||
Other current liabilities |
909 |
757 |
|||||
Long-term Debt |
3,914 |
3,787 |
|||||
Deferred income taxes and investment tax credits |
1,610 |
1,602 |
|||||
Price risk management liabilities - noncurrent |
127 |
108 |
|||||
Accrued pension obligations |
346 |
340 |
|||||
Asset retirement obligations |
499 |
490 |
|||||
Other deferred credits and noncurrent liabilities |
96 |
91 |
|||||
Common Stock and additional paid-in capital |
4,707 |
4,702 |
|||||
Accumulated deficit |
(222) |
(373) |
|||||
Accumulated other comprehensive income (loss) |
(22) |
(26) |
|||||
Total Liabilities and Equity |
$ |
12,595 |
$ |
12,809 |
(a) |
The Financial Statements in this news release have been condensed and summarized for the purposes of presentation. Please refer to Talen Energy Corporation's periodic filings with the Securities and Exchange Commission for full Financial Statements, including note disclosures and certain defined terms used herein. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||
Condensed Consolidated Statements of Income | |||||||
(Unaudited) |
|||||||
(Millions of Dollars, Except Share Data) |
|||||||
Three Months Ended | |||||||
March 31, | |||||||
2016 |
2015 | ||||||
Operating Revenues |
|||||||
Wholesale energy |
$ |
800 |
$ |
676 |
|||
Retail energy |
259 |
311 |
|||||
Energy-related businesses |
114 |
104 |
|||||
Total Operating Revenues |
1,173 |
1,091 |
|||||
Operating Expenses |
|||||||
Operation |
|||||||
Fuel and energy purchases |
491 |
515 |
|||||
Operation and maintenance |
282 |
222 |
|||||
(Gain) loss on sale |
(140) |
— |
|||||
Depreciation |
109 |
77 |
|||||
Taxes, other than income |
11 |
3 |
|||||
Energy-related businesses |
109 |
96 |
|||||
Total Operating Expenses |
862 |
913 |
|||||
Operating Income (Loss) |
311 |
178 |
|||||
Other Income (Expense) - net |
6 |
7 |
|||||
Interest Expense |
60 |
36 |
|||||
Income (Loss) Before Income Taxes |
257 |
149 |
|||||
Income Taxes |
106 |
53 |
|||||
Income (Loss) After Income Taxes |
151 |
96 |
|||||
Net Income (Loss) |
$ |
151 |
$ |
96 |
|||
Earnings Per Share of Common Stock: |
|||||||
Basic |
$ |
1.18 |
$ |
1.15 |
|||
Diluted |
$ |
1.17 |
$ |
1.15 |
|||
Weighted-Average Shares of Common Stock Outstanding (in thousands) |
|||||||
Basic |
128,526 |
83,524 |
|||||
Diluted |
129,018 |
83,524 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
Talen Energy Corporation and Subsidiaries | |||||||
(Unaudited) |
|||||||
(Millions of Dollars) |
|||||||
Three Months Ended | |||||||
March 31, | |||||||
2016 |
2015 | ||||||
Cash Flows from Operating Activities |
|||||||
Net income (loss) |
$ |
151 |
$ |
96 |
|||
Adjustments to reconcile net income to net cash provided by operating activities |
|||||||
Pre-tax gain from the sale of certain generation facilities |
(164) |
— |
|||||
Depreciation |
109 |
77 |
|||||
Amortization |
51 |
46 |
|||||
Defined benefit plans - expense |
11 |
12 |
|||||
Deferred income taxes and investment tax credits |
2 |
13 |
|||||
Unrealized (gains) losses on derivatives, and other hedging activities |
(73) |
(38) |
|||||
Other |
19 |
7 |
|||||
Change in current assets and current liabilities |
|||||||
Accounts receivable |
7 |
(16) |
|||||
Accounts payable |
(37) |
(94) |
|||||
Unbilled revenues |
19 |
77 |
|||||
Fuel, materials and supplies |
21 |
73 |
|||||
Prepayments |
(13) |
34 |
|||||
Counterparty collateral |
22 |
— |
|||||
Taxes payable |
69 |
30 |
|||||
Other |
(6) |
(25) |
|||||
Other operating activities |
|||||||
Defined benefit plans - funding |
— |
(74) |
|||||
Other assets |
3 |
5 |
|||||
Other liabilities |
5 |
(2) |
|||||
Net cash provided by operating activities |
196 |
221 |
|||||
Cash Flows from Investing Activities |
|||||||
Expenditures for property, plant and equipment |
(99) |
(109) |
|||||
Proceeds from the sale of certain generation facilities |
670 |
— |
|||||
Purchases of nuclear plant decommissioning trust investments |
(60) |
(43) |
|||||
Proceeds from the sale of nuclear plant decommissioning trust investments |
54 |
38 |
|||||
Net (increase) decrease in restricted cash and cash equivalents |
34 |
(7) |
|||||
Other investing activities |
(16) |
(9) |
|||||
Net cash provided by (used in) investing activities |
583 |
(130) |
|||||
Cash Flows from Financing Activities |
|||||||
Retirement of long-term debt |
(43) |
(1) |
|||||
Distributions to predecessor member |
— |
(191) |
|||||
Net increase (decrease) in short-term debt |
(500) |
(30) |
|||||
Borrowing on long-term revolving credit facility |
19 |
— |
|||||
Other financing activities |
(3) |
— |
|||||
Net cash provided by (used in) financing activities |
(527) |
(222) |
|||||
Net Increase (Decrease) in Cash and Cash Equivalents |
252 |
(131) |
|||||
Cash and Cash Equivalents at Beginning of Period |
141 |
352 |
|||||
Cash and Cash Equivalents at End of Period |
$ |
393 |
$ |
221 |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
Regulation G Reconciliations | |||||||||||||||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
(Millions of Dollars) | |||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||||||||
2016 |
2015 | ||||||||||||||||||||||||||||||
East |
West |
Other |
Total |
East |
West |
Other |
Total | ||||||||||||||||||||||||
Net income (loss) |
$ |
151 |
$ |
96 |
|||||||||||||||||||||||||||
Interest expense |
60 |
36 |
|||||||||||||||||||||||||||||
Income taxes |
106 |
53 |
|||||||||||||||||||||||||||||
Other (income) expense - net |
(6) |
(7) |
|||||||||||||||||||||||||||||
Operating income (loss) |
$ |
392 |
$ |
(28) |
$ |
(53) |
$ |
311 |
$ |
231 |
$ |
(1) |
$ |
(52) |
$ |
178 |
|||||||||||||||
Depreciation |
95 |
13 |
1 |
109 |
77 |
— |
— |
77 |
|||||||||||||||||||||||
Other income (expense) - net |
5 |
1 |
— |
6 |
7 |
— |
— |
7 |
|||||||||||||||||||||||
EBITDA |
$ |
492 |
$ |
(14) |
$ |
(52) |
$ |
426 |
$ |
315 |
$ |
(1) |
$ |
(52) |
$ |
262 |
|||||||||||||||
Margins: |
|||||||||||||||||||||||||||||||
Unrealized (gain) loss on derivative contracts (a) |
(81) |
(1) |
— |
(82) |
(48) |
2 |
— |
(46) |
|||||||||||||||||||||||
Other (b) |
3 |
— |
— |
3 |
3 |
— |
— |
3 |
|||||||||||||||||||||||
Operation and maintenance: |
|||||||||||||||||||||||||||||||
Stock-based compensation expense (c) |
— |
— |
5 |
5 |
— |
— |
9 |
9 |
|||||||||||||||||||||||
ARO accretion |
9 |
1 |
— |
10 |
8 |
— |
— |
8 |
|||||||||||||||||||||||
(Gain) loss on sale (d) |
(140) |
— |
— |
(140) |
— |
— |
— |
— |
|||||||||||||||||||||||
TSA costs |
— |
— |
13 |
13 |
— |
— |
— |
— |
|||||||||||||||||||||||
Corette closure costs (e) |
— |
— |
— |
— |
— |
4 |
— |
4 |
|||||||||||||||||||||||
Transaction and restructuring costs (f) |
— |
— |
3 |
3 |
— |
— |
3 |
3 |
|||||||||||||||||||||||
Legal contingency |
— |
4 |
— |
4 |
— |
— |
— |
— |
|||||||||||||||||||||||
Other |
(3) |
— |
— |
(3) |
— |
— |
— |
— |
|||||||||||||||||||||||
Other income (expense): |
|||||||||||||||||||||||||||||||
(Gain) loss from NDT funds |
(4) |
— |
— |
(4) |
(6) |
— |
— |
(6) |
|||||||||||||||||||||||
Adjusted EBITDA |
$ |
276 |
$ |
(10) |
$ |
(31) |
$ |
235 |
$ |
272 |
$ |
5 |
$ |
(40) |
$ |
237 |
(a) |
Represents unrealized gains (losses) on derivatives. Amounts have been adjusted for insignificant option premiums for the three months ended March 31, 2016 and 2015. |
(b) |
All periods include OCI amortization on non-active derivative positions. |
(c) |
For periods prior to June 2015, represents the portion of PPL's stock-based compensation cost allocable to Talen Energy. |
(d) |
Relates to Ironwood and C.P. Crane sales. |
(e) |
Operations were suspended and the Corette plant was retired in March 2015. |
(f) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||
Regulation G Reconciliations | ||||||||
Adjusted Free Cash Flow | ||||||||
(Unaudited) |
||||||||
(Millions of Dollars) |
||||||||
Three Months Ended March 31, | ||||||||
2016 |
2015 | |||||||
Cash from Operations |
$ |
196 |
$ |
221 |
||||
Capital Expenditures, excluding growth (a) |
(99) |
(118) |
||||||
Counterparty collateral paid (received) |
(22) |
— |
||||||
Adjusted Free Cash Flow, including other adjustments |
75 |
103 |
||||||
Cash adjustments (after tax): |
||||||||
Transition Services Agreement costs |
8 |
— |
||||||
Legal settlement |
2 |
— |
||||||
Corette closure costs (b) |
— |
2 |
||||||
Transaction and restructuring costs (c) |
15 |
2 |
||||||
Adjusted Free Cash Flow |
$ |
100 |
$ |
107 |
(a) |
Includes expenditures related to intangible assets. |
(b) |
Operations were suspended and the Corette plant was retired in March 2015. |
(c) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted EBITDA Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - |
High - 2016E | ||||||||||
Net Income (Loss) |
$ |
93 |
$ |
153 |
$ |
213 |
||||||
Income Taxes |
62 |
102 |
142 |
|||||||||
Interest Expense |
220 |
220 |
220 |
|||||||||
Depreciation and Amortization |
417 |
417 |
417 |
|||||||||
EBITDA |
792 |
892 |
992 |
|||||||||
Stock-based compensation |
11 |
11 |
11 |
|||||||||
Asset retirement obligation |
40 |
40 |
40 |
|||||||||
Unrealized (gains) losses on derivative contracts (a) |
(82) |
(82) |
(82) |
|||||||||
Nuclear decommissioning trust losses (gains) |
(12) |
(12) |
(12) |
|||||||||
(Gain) loss on sale (b) |
(140) |
(140) |
(140) |
|||||||||
Transition Services Agreement costs and other adjustments (c) |
46 |
46 |
46 |
|||||||||
Adjusted EBITDA |
$ |
655 |
$ |
755 |
$ |
855 |
(a) |
Represents unrealized gains (losses) on derivatives. Amounts have been adjusted for insignificant option premiums. |
(b) |
Relates to Ironwood and C.P. Crane sales. |
(c) |
Includes costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted Free Cash Flow Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - 2016E |
High - 2016E | ||||||||||
Cash from Operations |
$ |
710 |
$ |
790 |
$ |
870 |
||||||
Capital Expenditures, excluding growth (a) |
(470) |
(450) |
(430) |
|||||||||
Counterparty collateral paid (received) |
(22) |
(22) |
(22) |
|||||||||
Transition Services Agreement costs |
25 |
25 |
25 |
|||||||||
Transaction and restructuring costs (b) |
15 |
15 |
15 |
|||||||||
Legal settlement |
2 |
2 |
2 |
|||||||||
Adjusted Free Cash Flow |
$ |
260 |
$ |
360 |
$ |
460 |
(a) |
Includes expenditures related to intangible assets. |
(b) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. |
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Corporation
BERWICK, Pa., May 3, 2016 /PRNewswire/ -- Unit 1 at Talen Energy's Susquehanna nuclear plant in Luzerne County, Pa., resumed generating safe, reliable electricity for the power grid May 3 after completing its scheduled refueling and maintenance outage.
"As an independent power producer operating in highly competitive markets, the company's investments in equipment and maintenance are designed to ensure safe, sustainable operations and deliver maximum value for our customers and investors in Talen Energy," said Jon Franke, site vice president.
Susquehanna's nuclear professionals replaced more than one third of the unit's uranium fuel, and performed maintenance and ongoing upgrades. The Susquehanna plant's two generating units have planned refueling and maintenance outages every 24 months. Unit 2 has been in continuous operation for 345 days since it returned to service following a similar refueling outage last spring.
"Our investments in the plant's infrastructure enable Susquehanna to continue to deliver reliable, zero-carbon energy to our customers," said Franke. "We replaced essential equipment and performed necessary maintenance, while maintaining our primary focus on keeping each other and our community safe. With more than 1,500 supplemental contractors on-site, Susquehanna achieved its pre-outage goal of zero recordable injuries," said Franke.
The Susquehanna plant, located about seven miles north of Berwick, is owned jointly by Susquehanna Nuclear LLC and Allegheny Electric Cooperative Inc. and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy Corporation's generating affiliates. Talen Energy (NYSE: TLN), is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Media contact: |
Todd L. Martin |
(570) 542-2881 | |
SOURCE Talen Energy Susquehanna Nuclear LLC
AUSTIN, Texas, April 19, 2016 /PRNewswire/ -- Extol Energy LLC ("Extol") and private investment firm Riverstone Holdings LLC ("Riverstone") announced today an agreement to jointly pursue investment, operation, and commercialization opportunities in the conventional power generation sector.
Extol is led by the former management team of Topaz Power Management, LP ("TPM"), which managed over 5,325 MWs of conventionally-fueled power facilities representing more than $1 billion of equity capital invested by Riverstone.
Most recently, the team facilitated the merger of Riverstone's competitive power generation businesses with those of PPL Corporation. The resulting Talen Energy Corporation (NYSE: TLN) debuted as one of the largest independent power producers in the United States.
Charles Cook, Extol's President and Chief Executive Officer, says, "We believe that Extol's prospects are compelling, and our team looks forward to putting our collective commercial, analytical and change-driven management philosophy to work."
Riverstone founders David M. Leuschen and Pierre F. Lapeyre, Jr. added, "Partnering with proven management teams to build energy businesses around the world has been Riverstone's model for over 15 years. We are confident that the Extol leadership team's track record, industry expertise and management agility make them the right group to partner with and to best capitalize on the excellent opportunities we are seeing in this transforming power market."
About Extol Energy LLC
Extol is an independent energy company pursuing ownership of conventional power generation assets with identifiable catalysts for value enhancement. Based in Austin, Texas and funded by Riverstone Holdings LLC, Extol's team of multi-disciplinary energy professionals specializes in change management, driving operational efficiencies, and optimizing commercial strategy to reduce risk and maximize return on strategic power investments. Visit www.extolenergy.com for more information.
About Riverstone Holdings LLC
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $34 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London, Houston and Mexico City, the firm has committed approximately $30 billion to more than 120 investments in North America, Latin America, Europe, Africa and Asia. Visit www.riverstonellc.com for more information.
Media Contacts:
Jeffrey Taufield
Jeffrey.taufield@kekst.com
212-521-4815
or
Daniel Yunger
daniel.yunger@kekst.com
212-521-4879
SOURCE Riverstone Holdings LLC; Extol Energy LLC
ALLENTOWN, Pa., April 13, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) plans to announce first quarter 2016 financial results before the stock market opens on Tuesday, May 10.
A conference call and webcast with President and Chief Executive Officer Paul Farr and other members of the executive team is scheduled to begin at 8 a.m. Eastern time. The phone number to join the conference call is 1-888-317-6003. Participants from outside of the United States should call 1-412-317-6061. The entry number to join the conference call is 5083196.
The webcast, in audio format with slides of the presentation, will be accessible on the Events & Presentations page of the company's "Investors & Media" website. A replay will be available on the website for those who are unable to listen live.
Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contacts: |
Media Relations – George C. Lewis, 610-774-4687 |
Investor Relations – Andy Ludwig, 610-774-3389 |
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Corporation
ALLENTOWN, Pa., April 1, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) completed the sale of the Holtwood and Lake Wallenpaupack hydroelectric plants on Friday (4/1) to a subsidiary of Brookfield Renewable Energy Partners L.P. The total purchase price was $860 million, subject to customary post-closing adjustments.
Closing of the sale completes asset divestitures within the PJM Interconnection energy market required by a December 2014 Federal Energy Regulatory Commission order approving the transactions that formed Talen Energy.
The two Pennsylvania hydroelectric plants – Holtwood in Lancaster County and Lake Wallenpaupack in the Pocono Mountain region – have a combined generating capacity of 292 megawatts.
RBC Capital Markets served as financial advisor to Talen Energy. Simpson, Thacher & Bartlett LLP was transaction counsel.
Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contacts: |
Media Relations – George C. Lewis, 610-774-4687 |
Investor Relations – Andy Ludwig, 610-774-3389 |
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Corporation
BERWICK, Pa., March 12, 2016 /PRNewswire/ -- Operators at Talen Energy's Susquehanna nuclear power plant disconnected the Unit 1 reactor from the electrical grid late Friday, March 11 into early Saturday, March 12 to begin a scheduled refueling and maintenance outage.
While the reactor is shut down, Susquehanna's nuclear professionals will maintain their primary focus on safety, while replacing more than a third of the unit's fuel. "Our continued investment in Susquehanna ensures plant safety, reliability and value to our customers and investors in Talen Energy," said Jon Franke, site vice president. "We have developed the right plan to upgrade essential equipment, inspect our main generator and perform thousands of necessary maintenance activities to build on our track record of operational excellence that enabled Susquehanna to generate more than 20 million megawatt-hours, a single-year plant record, in 2015."
In order to complete the work in Susquehanna's outage plan, the company has made a significant investment in our local economy by procuring goods and services from area suppliers. Additionally, Susquehanna hired more than 1,500 supplemental employees who will be making significant expenditures on lodging, food and entertainment in the region.
Talen Energy's Susquehanna nuclear schedules refueling and maintenance outages at this time of year, when seasonal temperatures typically drive lower regional power demand and lower electricity prices. Each of the two units at the Susquehanna plant is taken out of service for refueling and maintenance every 24 months.
Unit 2 continues to operate at full power.
The Susquehanna plant, located about seven miles north of Berwick, is owned jointly by Susquehanna Nuclear LLC and Allegheny Electric Cooperative Inc. and is operated by Susquehanna Nuclear. For information, visit www.susquehannanuclear.com.
Susquehanna Nuclear LLC is one of Talen Energy Corporation's generating affiliates. Talen Energy (NYSE: TLN), is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Media contact: Todd L. Martin
(570) 542-2881
todd.martin@talenenergy.com
Photo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Susquehanna Nuclear LLC
ALLENTOWN, Pa., Feb. 25, 2016 /PRNewswire/ --
2015 Financial Results
(in millions) |
Year Ended | ||
December 31, 2015 | |||
Adjusted EBITDA (Reported Results) (1) |
$ |
1,002 |
|
Adjusted EBITDA (Guidance Basis) (2) |
1,082 |
||
Adjusted Free Cash Flow (Reported Results) (1) |
314 |
||
Adjusted Free Cash Flow (Guidance Basis) (2) |
403 |
||
Net Income (Loss) |
(341) |
||
Cash from Operations |
768 |
Financial Outlook
Operating and Commercial Highlights
Talen Energy Corporation (NYSE: TLN) reported Thursday (2/25) Adjusted EBITDA of $1,002 million for 2015, compared with $759 million in 2014, and a Net Loss of $341 million for 2015, compared with Net Income of $410 million in 2014. The company also reported Adjusted Free Cash Flow of $314 million for 2015, compared with $229 million in 2014.
On a guidance basis, 2015 Adjusted EBITDA was $1,082 million and 2015 Adjusted Free Cash Flow was $403 million. Both figures were just above the midpoints of previously announced 2015 guidance ranges of $1,050-$1,100 million for Adjusted EBITDA and $375-$425 million for Adjusted Free Cash Flow.
Reported 2015 Adjusted EBITDA and Adjusted Free Cash Flow include 12 months of legacy Talen Energy Supply results, consolidated with seven months of RJS results and two months of MACH Gen results. Guidance ranges and guidance basis results for 2015 included 12 months of legacy Talen Energy Supply results and 12 months of RJS results, but excluded PPL Corporation allocated costs incurred before spinoff that are not expected to continue in future periods, and MACH Gen results. For more information about how 2015 reported figures compare with 2015 guidance, see the tables at the end of this news release.
The 2015 Net Loss includes non-cash goodwill and other asset impairment charges of $557 million after tax and a one-time charge of $80 million after tax for the retirement of certain debt securities in October.(5)
For the fourth quarter of 2015, Talen Energy reported Adjusted EBITDA of $237 million, compared with $154 million in the fourth quarter of 2014, and a Net Loss of $62 million, compared with Net Income of $362 million for the fourth quarter of 2014.
The fourth-quarter 2015 Net Loss includes a non-cash asset impairment charge of $40 million after tax and the one-time charge for the debt securities repurchase mentioned above.
"Our 2015 performance reflects strong execution of our business strategy and improved operations despite the challenges of launching a new, stand-alone competitive power generation company in this period of declining energy prices," said President and Chief Executive Officer Paul Farr.
"In just seven months, we integrated 8,000 megawatts of acquired generating capacity that established our presence in the Texas, New York and New England markets. We also executed on required asset sales that will provide an expected $1.5 billion in pre-tax cash proceeds," he said. Sales of the Ironwood and C.P. Crane plants were completed in February 2016. Talen Energy expects to complete the sale of the Holtwood and Lake Wallenpaupack hydroelectric facilities in March 2016.
"I'm proud of how we drove financial results ahead of the increased guidance midpoints we gave after the third quarter. We achieved cost reductions faster and at greater levels than our original guidance, and the entire Talen Energy team remains focused on this imperative in the current business environment. We are positioning Talen Energy to be more resilient to market volatility, and focusing on strategic priorities that are designed to increase value for our stockholders. The priorities include a project that will enhance our generating flexibility by enabling the coal-fired Brunner Island plant to run on natural gas as well. We expect to complete that project by the end of 2016," he said.
From an operational perspective, Talen Energy realized more than $135 million in synergies on an annualized basis in 2015, and remains on track to achieve synergies of $165-$175 million by 2017. The Susquehanna nuclear power plant generated 20.6 million megawatt-hours in 2015, a plant record, while achieving an annualized capacity factor of 94 percent.
Talen Energy provided full-year guidance for 2016 Adjusted EBITDA of $635-$835 million and 2016 Adjusted Free Cash Flow of $250-$450 million(6). The 2016 guidance excludes contributions to Adjusted EBITDA and Adjusted Free Cash Flow from the Ironwood, C.P. Crane, Holtwood and Lake Wallenpaupack facilities that Talen Energy has sold or announced it will sell to satisfy mitigation requirements associated with the RJS Power acquisition.
Review of Segment Results
Three Months Ended December 31, |
Year Ended December 31, | ||||||||||||||
(in millions) |
2015 |
2014 |
2015 |
2014 | |||||||||||
Operating Income (Loss) |
|||||||||||||||
East (b) |
$ |
165 |
$ |
283 |
$ |
198 |
$ |
558 |
|||||||
West (b) |
(16) |
39 |
2 |
71 |
|||||||||||
Other (c) |
(55) |
(51) |
(239) |
(232) |
|||||||||||
Total |
$ |
94 |
$ |
271 |
$ |
(39) |
$ |
397 |
|||||||
EBITDA (a) |
|||||||||||||||
East (b) |
$ |
255 |
$ |
361 |
$ |
544 |
$ |
883 |
|||||||
West (b) |
(5) |
40 |
26 |
72 |
|||||||||||
Other (c) |
(188) |
(51) |
(371) |
(231) |
|||||||||||
Total |
$ |
62 |
$ |
350 |
$ |
199 |
$ |
724 |
|||||||
Adjusted EBITDA (a) |
|||||||||||||||
East (b) |
$ |
262 |
$ |
180 |
$ |
1,080 |
$ |
898 |
|||||||
West (b) |
4 |
18 |
56 |
40 |
|||||||||||
Other (c) |
(29) |
(44) |
(134) |
(179) |
|||||||||||
Total |
$ |
237 |
$ |
154 |
$ |
1,002 |
$ |
759 |
(a) |
EBITDA and Adjusted EBITDA are non-GAAP financial measures used by management, in addition to Operating Income, to evaluate Talen Energy's business on an ongoing basis. For the definitions of EBITDA and Adjusted EBITDA, a detailed itemization of adjustments, and a reconciliation of EBITDA and Adjusted EBITDA to Operating Income (Loss), see the tables at the end of this news release. Management does not allocate interest expense and income taxes on a segment level and therefore uses Operating Income (Loss) as the most directly comparable GAAP measure. |
(b) |
Results from Talen Energy Supply operations in Montana, which were reported in the East Segment in prior periods, have been reclassified to the West Segment for the three months and year ended Dec. 31, 2015. All figures shown in the table have been reclassified to reflect that change. |
(c) |
General and administrative expenses are not allocated to each segment and are included in the "Other" category. |
East Segment
The East segment includes operations in PJM, New York ISO and ISO New England.
Operating Income for 2015 was $198 million, a decrease of $360 million from 2014 affected by, among other items, non-cash goodwill and other asset impairment charges of $657 million.
Adjusted EBITDA for 2015 increased by $182 million compared with 2014, primarily due to higher margins driven by newly acquired facilities, higher realized energy prices, improved spark spreads, higher nuclear availability, and lower average fuel prices, partially offset by lower capacity prices, gains that were realized in 2014 on certain commodity positions, the net effect of unusual market and weather volatility in the first quarter of 2014, lower volumes on full-requirements sales contracts, and retail electric sales activity. The net margin improvements were partially offset by higher operation and maintenance expenses due to newly acquired facilities, which were partially offset by lower planned outage costs for coal-fired units and other cost reductions attributable to the spinoff from PPL.
Operating Income for the fourth quarter of 2015 was $165 million, a decrease of $109 million from the fourth quarter of 2014, affected by, among other items, a non-cash asset impairment charge of $66 million.
Adjusted EBITDA for the fourth quarter of 2015 increased by $91 million compared with the fourth quarter of 2014, primarily due to higher margins driven by newly acquired facilities, higher capacity prices, lower average fuel prices, and improved spark spreads. The net margin improvements were partially offset by higher operation and maintenance expenses due to newly acquired facilities.
West Segment
The West segment includes operations in the ERCOT and WECC markets in Texas, Montana and Arizona.
Operating Income for 2015 was $2 million, a decrease of $69 million from 2014.
Adjusted EBITDA for 2015 increased by $16 million compared with 2014, primarily due to newly acquired facilities, partially offset by higher coal-fired plant outage costs.
The segment reported an Operating Loss for the fourth quarter of 2015 of $16 million, a decrease of $64 million compared with the fourth quarter of 2014.
Adjusted EBITDA for the fourth quarter of 2015 decreased by $23 million compared with the fourth quarter of 2014, primarily due to lower generation volumes as a result of the Corette plant retirement, partially offset by newly acquired facilities.
Other
The "Other" category includes general and administrative expenses not allocated to a segment.
The 2015 improvement of $45 million in Adjusted EBITDA and the quarter-over-quarter improvement of $15 million in Adjusted EBITDA were due to lower corporate expenses, which were primarily a result of cost reductions attributable to the spinoff from PPL.
Adjusted Free Cash Flow
(in millions) |
Year Ended December 31, | |||||||
2015 |
2014 | |||||||
Cash from Operations |
$ |
768 |
$ |
462 |
||||
Adjusted Free Cash Flow (a) |
314 |
229 |
(a) |
Adjusted Free Cash Flow is a non-GAAP financial measure used by management in addition to Cash from Operations. For the definition of Adjusted Free Cash Flow, a detailed itemization of adjustments and a reconciliation of Adjusted Free Cash Flow to Cash from Operations, see the tables at the end of this news release. |
Liquidity and Capital Resources
(in millions) |
December 31, 2015 |
December 31, 2014 | |||||||
Cash and cash equivalents |
$ |
141 |
$ |
352 |
|||||
Short-term debt |
608 |
630 |
Net cash provided by (used in) operating, investing and financing activities for the year ended December 31 and the changes between periods were as follows.
(in millions) |
2015 |
2014 |
Change - Cash | |||||||||
Operating activities |
$ |
768 |
$ |
462 |
$ |
306 |
||||||
Investing activities |
(915) |
497 |
(1,412) |
|||||||||
Financing activities |
(64) |
(846) |
782 |
2016 Financial Outlook
Talen Energy's guidance for 2016 Adjusted EBITDA is a range of $635-$835 million, and 2016 Adjusted Free Cash Flow is a range of $250-$450 million(7).
The company expects lower Adjusted EBITDA and Adjusted Free Cash Flow in 2016 compared with 2015 primarily due to lower energy margins. This guidance excludes contributions to Adjusted EBITDA and Adjusted Free Cash Flow from assets Talen Energy has sold or has announced it will sell in 2016. The guidance assumes that asset sale proceeds will be used to retire pre-payable, short-term and maturing debt, and for other general corporate purposes. Beginning in 2016, all interest incurred during construction associated with growth-related capital expenditures will reduce Talen Energy's Adjusted Free Cash Flow.
For a detailed itemization of adjustments and reconciliations of Adjusted EBITDA to Operating Income (Loss) and Adjusted Free Cash Flow to Cash Flow from Operations, see the tables at the end of the news release.
Conference Call and Webcast
Talen Energy management will discuss these results during a conference call and webcast on Thursday, Feb. 25, beginning at 8 a.m. Eastern time. The phone number to join the conference call is 1-888-317-6003. Participants from outside of the United States should call 1-412-317-6061. The entry number to join the call is 0763819.
The webcast, in audio format with slides of the presentation, will be accessible on the Events & Presentations page of the Investors & Media section of the company's website. A replay will be available on the website for those who are unable to listen live.
The Investors & Media section of the company's website contains a significant amount of information about Talen Energy, including financial and other information for investors. Talen Energy encourages investors to visit its website periodically to view new and updated information.
About Talen Energy
Talen Energy is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Forward-Looking Information
Statements contained in this presentation, including statements with respect to future earnings, EBITDA, Adjusted EBITDA or Adjusted Free Cash Flow results, cash flows, tax attributes, financing, regulation and corporate strategy are "forward-looking statements" within the meaning of the federal securities laws. These statements often include such words as "believe," "expect," "anticipate," "intend," "plan," "estimate," "target," "project," "forecast," "seek," "will," "may," "should," "could," "would" or similar expressions. Although Talen Energy Corporation believes that the expectations and assumptions reflected in these forward-looking statements are reasonable, these statements are subject to a number of risks and uncertainties, and actual results may differ materially from the results discussed in the statements. Among the important factors that could cause actual results to differ materially from the forward-looking statements are: adverse economic conditions; changes in commodity prices and related costs; the effectiveness of Talen Energy's risk management techniques, including hedging; accounting interpretations and requirements that may impact reported results; operational, price and credit risks in the wholesale and retail electricity markets; Talen Energy's ability to forecast the actual load needed to perform full-requirements sales contracts; weather conditions affecting generation, customer energy use and operating costs and revenues; disruptions in fuel supply; unforeseen circumstances that may impact the levels of coal inventory that are held; the performance of transmission facilities and any changes in the structure and operation of, or the pricing limitations imposed by, the RTOs and ISOs that operate those facilities; blackouts due to disruptions in neighboring interconnected systems; competition; federal and state legislation and regulation; costs of complying with environmental and related worker health and safety laws and regulations; the impacts of climate change; the availability and cost of emission allowances; changes in legislative and regulatory policy; security and safety risks associated with nuclear generation; Talen Energy's level of indebtedness; the terms and conditions of debt instruments that may restrict Talen Energy's ability to operate its business; the performance of Talen Energy's subsidiaries and affiliates, on which its cash flow and ability to meet its debt obligations largely depend; the risks inherent with variable rate indebtedness; disruption in financial markets; Talen Energy's ability to access capital markets; acquisition or divestiture activities, including the pending sale of the Holtwood and Lake Wallenpaupack plants, and Talen Energy's ability to realize expected synergies and other benefits from such business transactions, including in connection with the completed MACH Gen acquisition; changes in technology; any failure of Talen Energy's facilities to operate as planned, including in connection with scheduled and unscheduled outages; Talen Energy's ability to optimize its competitive power generation operations and the costs associated with any capital expenditures, including the Brunner Island dual-fuel project; significant increases in operation and maintenance expenses; the loss of key personnel, the ability to hire and retain qualified employees and the impact of collective labor bargaining negotiations; war, armed conflicts or terrorist attacks, including cyber-based attacks; risks associated with federal and state tax laws and regulations; any determination that the transaction that formed Talen Energy does not qualify as a tax-free distribution under the Internal Revenue Code; Talen Energy's ability to successfully integrate the RJS Power businesses and to achieve anticipated synergies and cost savings as a result of the spinoff transaction and combination with RJS Power; costs of complying with reporting requirements as a newly public company and any related risks of deficiencies in disclosure controls and internal control over financial reporting as a standalone entity; and the ability of affiliates of Riverstone Holdings, LLC, to exercise influence over matters requiring Board of Directors and/or stockholder approval. Any such forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy Corporation's prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b)(3) on Nov. 3, 2015, as supplemented, Form 10-Q for the quarter ended September 30, 2015 and its other reports on file with the Securities and Exchange Commission.
Definition of Non-GAAP Financial Measures
In addition to disclosing financial results in accordance with U.S. GAAP, the accompanying earnings release contains non-GAAP financial measures EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow, which we use as measures of our performance.
EBITDA represents net income (loss) before interest expense, income taxes, depreciation and certain amortization. Adjusted EBITDA represents EBITDA further adjusted for certain non-cash and other items that management believes are not indicative of ongoing operations, including, but not limited to, unrealized gains and losses on derivative contracts, stock-based compensation expense, asset retirement obligation accretion, gains and losses on securities in the nuclear decommissioning trust fund, impairments, gains or losses on sales, dispositions or retirements of assets, debt extinguishments, and transition, transaction and restructuring costs.
EBITDA and Adjusted EBITDA are not intended to represent cash flows from operations or net income (loss) as defined by U.S. GAAP as indicators of operating performance and are not necessarily comparable to similarly-titled measures reported by other companies. We believe EBITDA and Adjusted EBITDA are useful to investors and other users of our financial statements in evaluating our operating performance because they provide additional tools to compare business performance across companies and across periods. We believe that EBITDA is widely used by investors to measure a company's operating performance without regard to such items as interest expense, income taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. Additionally, we believe that investors commonly adjust EBITDA information to eliminate the effect of restructuring and other expenses, which vary widely from company to company and impair comparability. We adjust for these and other items, as our management believes that these items would distort their ability to efficiently view and assess our core operating trends. In summary, our management uses EBITDA and Adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis and to readily view operating trends, as measures for planning and forecasting overall expectations and for evaluating actual results against such expectations, and in communications with our Board of Directors, stockholders, creditors, analysts and investors concerning our financial performance.
Adjusted Free Cash Flow represents Cash from Operations less capital expenditures, excluding growth-related capital expenditures, adjusted for changes in counterparty collateral and further adjusted for after-tax transaction and restructuring costs, and certain other after-tax cash items that management believes are not indicative of ongoing operations. Adjusted Free Cash Flow should not be considered an alternative to Cash from Operations, which is determined in accordance with GAAP. We believe that Adjusted Free Cash Flow, although a non-GAAP measure, is an important measure to both management and investors as an indicator of the company's ability to sustain operations without additional outside financing beyond the requirement to fund maturing debt obligations. These measures are not necessarily comparable to similarly-titled measures reported by other companies as they may be calculated differently.
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||
CONSOLIDATED FINANCIAL INFORMATION (a) | |||||||
Consolidated Balance Sheets | |||||||
(Millions of Dollars) |
|||||||
2015 |
2014 | ||||||
Assets |
|||||||
Cash and cash equivalents |
$ |
141 |
$ |
352 |
|||
Restricted cash and cash equivalents |
106 |
176 |
|||||
Accounts receivable (less reserve: 2015, $1; 2014, $2) |
267 |
289 |
|||||
Accounts receivable from affiliates |
— |
36 |
|||||
Unbilled revenues |
160 |
218 |
|||||
Fuel, materials and supplies |
508 |
455 |
|||||
Prepayments |
52 |
70 |
|||||
Price risk management assets |
562 |
1,079 |
|||||
Assets held for sale |
954 |
— |
|||||
Other current assets |
12 |
26 |
|||||
Investments |
976 |
980 |
|||||
Property, Plant and Equipment |
14,462 |
12,235 |
|||||
Less: accumulated depreciation |
6,411 |
6,242 |
|||||
Property, plant and equipment, net |
8,051 |
5,993 |
|||||
Construction work in progress |
536 |
443 |
|||||
Total Property, Plant and Equipment, net |
8,587 |
6,436 |
|||||
Goodwill |
— |
72 |
|||||
Other intangibles |
310 |
257 |
|||||
Price risk management assets |
131 |
239 |
|||||
Other noncurrent assets |
60 |
75 |
|||||
Total Assets |
$ |
12,826 |
$ |
10,760 |
|||
Liabilities and Equity |
|||||||
Short-term debt |
608 |
630 |
|||||
Long-term debt due within one year |
399 |
535 |
|||||
Accounts payable |
291 |
361 |
|||||
Accounts payable to affiliates |
— |
50 |
|||||
Liabilities held for sale |
33 |
— |
|||||
Other current liabilities |
757 |
1,314 |
|||||
Long-term Debt |
3,804 |
1,683 |
|||||
Deferred income taxes and investment tax credits |
1,602 |
1,250 |
|||||
Price risk management liabilities - noncurrent |
108 |
193 |
|||||
Accrued pension obligations |
340 |
299 |
|||||
Asset retirement obligations |
490 |
415 |
|||||
Other deferred credits and noncurrent liabilities |
91 |
123 |
|||||
Predecessor Member's Equity (a) |
— |
3,930 |
|||||
Common Stock and additional paid-in capital |
4,702 |
— |
|||||
Accumulated deficit |
(373) |
— |
|||||
Accumulated other comprehensive income (loss) |
(26) |
(23) |
|||||
Total Liabilities and Equity |
$ |
12,826 |
$ |
10,760 |
|||
(a) |
The Financial Statements in this news release have been condensed and summarized for the purposes of presentation. Please refer to Talen Energy Corporation's periodic filings with the Securities and Exchange Commission for full Financial Statements, including note disclosures and certain defined terms used herein. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
(Millions of Dollars, Except Share Data) |
|||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
Operating Revenues |
|||||||||||||||
Wholesale energy |
$ |
718 |
$ |
875 |
$ |
2,828 |
$ |
2,653 |
|||||||
Wholesale energy to affiliate |
— |
16 |
14 |
84 |
|||||||||||
Retail energy |
264 |
330 |
1,095 |
1,243 |
|||||||||||
Energy-related businesses |
140 |
132 |
544 |
601 |
|||||||||||
Total Operating Revenues |
1,122 |
1,353 |
4,481 |
4,581 |
|||||||||||
Operating Expenses |
|||||||||||||||
Operation |
|||||||||||||||
Fuel |
229 |
243 |
1,194 |
1,196 |
|||||||||||
Energy purchases |
203 |
372 |
676 |
1,054 |
|||||||||||
Other operation and maintenance |
283 |
261 |
1,052 |
1,007 |
|||||||||||
Impairments |
66 |
— |
657 |
— |
|||||||||||
Depreciation |
97 |
72 |
356 |
297 |
|||||||||||
Taxes, other than income |
15 |
12 |
65 |
57 |
|||||||||||
Energy-related businesses |
135 |
122 |
520 |
573 |
|||||||||||
Total Operating Expenses |
1,028 |
1,082 |
4,520 |
4,184 |
|||||||||||
Operating Income (Loss) |
94 |
271 |
(39) |
397 |
|||||||||||
Other Income (Expense) - net |
(129) |
7 |
(118) |
30 |
|||||||||||
Interest Expense |
65 |
29 |
211 |
124 |
|||||||||||
Income (Loss) from Continuing Operations Before Income Taxes |
(100) |
249 |
(368) |
303 |
|||||||||||
Income Taxes |
(38) |
100 |
(27) |
116 |
|||||||||||
Income (Loss) from Continuing Operations After Income Taxes |
(62) |
149 |
(341) |
187 |
|||||||||||
Income (Loss) from Discontinued Operations (net of income taxes) |
— |
213 |
— |
223 |
|||||||||||
Net Income (Loss) |
$ |
(62) |
$ |
362 |
$ |
(341) |
$ |
410 |
|||||||
Earnings Per Share of Common Stock Attributable to Talen |
|||||||||||||||
Basic: |
|||||||||||||||
Income (Loss) from continuing operations after income taxes |
$ |
(0.48) |
$ |
1.78 |
$ |
(3.10) |
$ |
2.24 |
|||||||
Income (Loss) from discontinued operations (net of income taxes) |
— |
2.55 |
— |
2.67 |
|||||||||||
Net Income (Loss) |
$ |
(0.48) |
$ |
4.33 |
$ |
(3.10) |
$ |
4.91 |
|||||||
Diluted: |
|||||||||||||||
Income (Loss) from continuing operations |
$ |
(0.48) |
$ |
1.78 |
$ |
(3.10) |
$ |
2.24 |
|||||||
Income (Loss) from discontinued operations (net of income taxes) |
— |
2.55 |
— |
2.67 |
|||||||||||
Net Income (Loss) |
$ |
(0.48) |
$ |
4.33 |
$ |
(3.10) |
$ |
4.91 |
|||||||
Weighted-Average Shares of Common Stock Outstanding (in thousands) |
|||||||||||||||
Basic |
128,509 |
83,524 |
109,898 |
83,524 |
|||||||||||
Diluted |
128,509 |
83,524 |
109,898 |
83,524 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
Talen Energy Corporation and Subsidiaries | |||||||||||
(Millions of Dollars) |
|||||||||||
2015 |
2014 |
2013 | |||||||||
Cash Flows from Operating Activities |
|||||||||||
Net income (loss) |
$ |
(341) |
$ |
410 |
$ |
(229) |
|||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities |
|||||||||||
Pre-tax gain from the sale of Montana hydroelectric generation business (Note 6) |
— |
(315) |
— |
||||||||
Depreciation |
356 |
313 |
318 |
||||||||
Amortization |
222 |
163 |
156 |
||||||||
Defined benefit plans - expense |
50 |
42 |
51 |
||||||||
Deferred income taxes and investment tax credits |
(61) |
(26) |
(296) |
||||||||
Impairment of assets |
662 |
20 |
65 |
||||||||
Unrealized (gains) losses on derivatives, and other hedging activities |
(119) |
4 |
171 |
||||||||
Loss on lease termination (Note 6) |
— |
— |
426 |
||||||||
Other |
46 |
36 |
2 |
||||||||
Change in current assets and current liabilities |
|||||||||||
Accounts receivable |
115 |
17 |
23 |
||||||||
Accounts payable |
(147) |
2 |
(56) |
||||||||
Unbilled revenues |
58 |
68 |
83 |
||||||||
Fuel, materials and supplies |
12 |
(97) |
(31) |
||||||||
Prepayments |
31 |
(53) |
(5) |
||||||||
Counterparty collateral |
63 |
(17) |
(81) |
||||||||
Price risk management assets and liabilities |
(14) |
(30) |
7 |
||||||||
Taxes payable |
(23) |
(3) |
(31) |
||||||||
Other |
(49) |
(40) |
(16) |
||||||||
Other operating activities |
|||||||||||
Defined benefit plans - funding |
(74) |
(35) |
(113) |
||||||||
Other assets |
4 |
3 |
(4) |
||||||||
Other liabilities |
(23) |
— |
(30) |
||||||||
Net cash provided by operating activities |
768 |
462 |
410 |
||||||||
Cash Flows from Investing Activities |
|||||||||||
Expenditures for property, plant and equipment |
(451) |
(416) |
(583) |
||||||||
Proceeds from the sale of Montana hydroelectric generation business (Note 6) |
— |
900 |
— |
||||||||
Expenditures for intangible assets |
(70) |
(46) |
(42) |
||||||||
Acquisition of MACH Gen |
(603) |
— |
— |
||||||||
Purchases of nuclear plant decommissioning trust investments |
(196) |
(170) |
(159) |
||||||||
Proceeds from the sale of nuclear plant decommissioning trust investments |
180 |
154 |
144 |
||||||||
Proceeds from the receipt of grants |
— |
164 |
3 |
||||||||
Proceeds from the sale of the Renewable business |
116 |
— |
— |
||||||||
Net (increase) decrease in restricted cash and cash equivalents |
87 |
(108) |
(22) |
||||||||
Other investing activities |
22 |
19 |
28 |
||||||||
Net cash provided by (used in) investing activities |
(915) |
497 |
(631) |
||||||||
Cash Flows from Financing Activities |
|||||||||||
Issuance of long-term debt |
600 |
— |
— |
||||||||
Retirement of long-term debt |
(335) |
(309) |
(747) |
||||||||
Contributions from predecessor member |
82 |
739 |
1,577 |
||||||||
Distributions to predecessor member |
(217) |
(1,906) |
(408) |
||||||||
Net increase (decrease) in short-term debt |
(162) |
630 |
(356) |
||||||||
Other financing activities |
(32) |
— |
(19) |
||||||||
Net cash provided by (used in) financing activities |
(64) |
(846) |
47 |
||||||||
Net Increase (Decrease) in Cash and Cash Equivalents |
(211) |
113 |
(174) |
||||||||
Cash and Cash Equivalents at Beginning of Period |
352 |
239 |
413 |
||||||||
Cash and Cash Equivalents at End of Period |
$ |
141 |
$ |
352 |
$ |
239 |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
Regulation G Reconciliations | |||||||||||||||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||||||
(Millions of Dollars) |
|||||||||||||||||||||||||||||||
Three Months Ended December 31, | |||||||||||||||||||||||||||||||
2015 |
2014 | ||||||||||||||||||||||||||||||
East |
West |
Other |
Total |
East |
West |
Other |
Total | ||||||||||||||||||||||||
Net income (loss) |
$ |
(62) |
$ |
362 |
|||||||||||||||||||||||||||
(Income) loss from discontinued operations (net of tax) |
— |
(213) |
|||||||||||||||||||||||||||||
Interest expense |
65 |
29 |
|||||||||||||||||||||||||||||
Income taxes |
(38) |
100 |
|||||||||||||||||||||||||||||
Other (income) expense - net |
129 |
(7) |
|||||||||||||||||||||||||||||
Operating income (loss) |
$ |
165 |
$ |
(16) |
$ |
(55) |
$ |
94 |
$ |
283 |
$ |
39 |
$ |
(51) |
$ |
271 |
|||||||||||||||
Depreciation |
83 |
13 |
1 |
97 |
71 |
1 |
— |
72 |
|||||||||||||||||||||||
Other income (expense) - net |
7 |
(2) |
(134) |
(129) |
7 |
— |
— |
7 |
|||||||||||||||||||||||
EBITDA |
$ |
255 |
$ |
(5) |
$ |
(188) |
$ |
62 |
$ |
361 |
$ |
40 |
$ |
(51) |
$ |
350 |
|||||||||||||||
Unrealized (gain) loss on derivative contracts (a) |
(55) |
8 |
— |
(47) |
(187) |
(22) |
— |
(209) |
|||||||||||||||||||||||
Stock-based compensation expense (b) |
— |
— |
(1) |
(1) |
— |
— |
3 |
3 |
|||||||||||||||||||||||
(Gain) loss from NDT funds |
(4) |
— |
— |
(4) |
(5) |
— |
— |
(5) |
|||||||||||||||||||||||
ARO accretion |
8 |
1 |
— |
9 |
9 |
— |
— |
9 |
|||||||||||||||||||||||
Impairments (d) |
66 |
— |
— |
66 |
— |
— |
— |
— |
|||||||||||||||||||||||
REPS Remarketing |
— |
— |
134 |
134 |
— |
— |
— |
— |
|||||||||||||||||||||||
Transition services agreement costs |
— |
— |
10 |
10 |
— |
— |
— |
— |
|||||||||||||||||||||||
Separation benefits (f) |
— |
— |
— |
— |
— |
— |
3 |
3 |
|||||||||||||||||||||||
RJS transaction costs |
— |
— |
14 |
14 |
— |
— |
— |
— |
|||||||||||||||||||||||
Restructuring costs (j) |
— |
— |
2 |
2 |
— |
— |
1 |
1 |
|||||||||||||||||||||||
Other (k) |
(8) |
— |
— |
(8) |
2 |
— |
— |
2 |
|||||||||||||||||||||||
Adjusted EBITDA |
$ |
262 |
$ |
4 |
$ |
(29) |
$ |
237 |
$ |
180 |
$ |
18 |
$ |
(44) |
$ |
154 |
Year Ended December 31, | |||||||||||||||||||||||||||||||
2015 |
2014 | ||||||||||||||||||||||||||||||
East |
West |
Other |
Total |
East |
West |
Other |
Total | ||||||||||||||||||||||||
Net income (loss) |
$ |
(341) |
$ |
410 |
|||||||||||||||||||||||||||
(Income) loss from discontinued operations (net of tax) |
— |
(223) |
|||||||||||||||||||||||||||||
Interest expense |
211 |
124 |
|||||||||||||||||||||||||||||
Income taxes |
(27) |
116 |
|||||||||||||||||||||||||||||
Other (income) expense - net |
118 |
(30) |
|||||||||||||||||||||||||||||
Operating income (loss) |
$ |
198 |
$ |
2 |
$ |
(239) |
$ |
(39) |
$ |
558 |
$ |
71 |
$ |
(232) |
$ |
397 |
|||||||||||||||
Depreciation |
327 |
26 |
3 |
356 |
296 |
1 |
— |
297 |
|||||||||||||||||||||||
Other income (expense) - net |
19 |
(2) |
(135) |
(118) |
29 |
— |
1 |
30 |
|||||||||||||||||||||||
EBITDA |
$ |
544 |
$ |
26 |
$ |
(371) |
$ |
199 |
$ |
883 |
$ |
72 |
$ |
(231) |
$ |
724 |
|||||||||||||||
Unrealized (gain) loss on derivative contracts (a) |
(175) |
25 |
— |
(150) |
15 |
(32) |
— |
(17) |
|||||||||||||||||||||||
Stock-based compensation expense (b) |
— |
— |
40 |
40 |
— |
— |
18 |
18 |
|||||||||||||||||||||||
(Gain) loss from NDT funds |
(15) |
— |
— |
(15) |
(26) |
— |
— |
(26) |
|||||||||||||||||||||||
ARO accretion |
33 |
1 |
— |
34 |
32 |
— |
— |
32 |
|||||||||||||||||||||||
Coal contract adjustment (c) |
41 |
— |
— |
41 |
— |
— |
— |
— |
|||||||||||||||||||||||
Impairments (d) |
657 |
— |
— |
657 |
— |
— |
— |
— |
|||||||||||||||||||||||
REPS Remarketing |
— |
— |
134 |
134 |
— |
— |
— |
— |
|||||||||||||||||||||||
Mechanical subsidiary revenue adjustment (e) |
— |
— |
— |
— |
(17) |
— |
— |
(17) |
|||||||||||||||||||||||
Transition service agreement costs |
— |
— |
29 |
29 |
— |
— |
— |
— |
|||||||||||||||||||||||
Separation benefits (f) |
— |
— |
2 |
2 |
— |
— |
33 |
33 |
|||||||||||||||||||||||
Corette closure costs (g) |
— |
4 |
— |
4 |
— |
— |
— |
— |
|||||||||||||||||||||||
Terminated derivative contracts (h) |
(13) |
— |
— |
(13) |
— |
— |
— |
— |
|||||||||||||||||||||||
Revenue adjustment (i) |
7 |
— |
— |
7 |
— |
— |
— |
— |
|||||||||||||||||||||||
Transaction costs |
— |
— |
20 |
20 |
— |
— |
— |
— |
|||||||||||||||||||||||
Restructuring costs (j) |
— |
— |
12 |
12 |
— |
— |
1 |
1 |
|||||||||||||||||||||||
Other (k) |
1 |
— |
— |
1 |
11 |
— |
— |
11 |
|||||||||||||||||||||||
Adjusted EBITDA |
$ |
1,080 |
$ |
56 |
$ |
(134) |
$ |
1,002 |
$ |
898 |
$ |
40 |
$ |
(179) |
$ |
759 |
|||||||||||||||
MACH Gen, RJS and PPL Allocations (l) |
80 |
||||||||||||||||||||||||||||||
Adjusted EBITDA (Guidance) |
$ |
1,082 |
|||||||||||||||||||||||||||||
(a) |
Represents unrealized gains (losses) on derivatives. Amounts have been adjusted for option premiums of $8 million and $(10) million for 2015 and 2014. |
(b) |
2015 includes a charge for the acceleration of expense as a result of the spinoff. For periods prior to June 2015, represents the portion of PPL's stock-based compensation cost allocable to Talen Energy. Amounts for the 2014 periods were cash settled with a former affiliate. |
(c) |
To mitigate the risk of oversupply, Talen Energy incurred pre-tax charges of $41 million in 2015 in connection with an agreement to reduce its contracted coal deliveries. |
(d) |
2015 includes charges for goodwill and certain long-lived assets. 2013 includes a charge for the Corette plant and related emission allowances. |
(e) |
In 2014, Talen Energy recorded $17 million to "Energy-related businesses" revenues related to prior periods and the timing of revenue recognition for a mechanical contracting and engineering subsidiary. |
(f) |
In June 2014, Talen Energy Supply's largest IBEW local ratified a new three-year labor agreement. In connection with the new agreement, estimated bargaining unit one-time voluntary retirement benefits of $17 million were recorded. In addition, 2014 includes separation costs of $16 million related to the spinoff transaction. |
(g) |
Operations were suspended and the Corette plant was retired in March 2015. |
(h) |
Represents net realized gains on certain derivative contracts that were early-terminated due to the spinoff transaction. |
(i) |
Relates to a prior period revenue adjustment for the receipt of revenue under a transmission operating agreement with Talen Energy Supply's former affiliate, PPL Electric. |
(j) |
Costs related to the spinoff transaction, including expenses associated with the FERC-required mitigation and legal and professional fees. |
(k) |
All periods include OCI amortization on non-active derivative positions and 2015 includes a gain on the sale of the renewable energy business. |
(l) |
Includes performance from RJS and removes PPL allocations for the five month period prior to spinoff and removes two months of performance from MACH Gen. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||
Regulation G Reconciliations | ||||||||
Adjusted Free Cash Flow | ||||||||
(Unaudited) |
||||||||
(Millions of Dollars) |
||||||||
Year Ended December 31, | ||||||||
2015 |
2014 | |||||||
Cash from Operations |
$ |
768 |
$ |
462 |
||||
Capital Expenditures, excluding growth |
(491) |
(447) |
||||||
Counterparty collateral paid (received) |
(63) |
17 |
||||||
Adjusted Free Cash Flow, including other adjustments |
214 |
32 |
||||||
Cash adjustments (after tax): |
||||||||
Coal contract adjustment |
25 |
— |
||||||
MACH Gen Bridge Financing |
4 |
— |
||||||
Tax related to gain on sale of Renewables |
28 |
— |
||||||
Tax related to gain on sale of Montana hydro business |
— |
176 |
||||||
Transition Services Agreement costs |
17 |
— |
||||||
Insurance proceeds |
4 |
— |
||||||
Separation benefits |
1 |
20 |
||||||
Corette closure costs (a) |
2 |
— |
||||||
RJS transaction costs |
12 |
— |
||||||
Restructuring costs (b) |
7 |
1 |
||||||
Adjusted Free Cash Flow |
$ |
314 |
$ |
229 |
||||
MACH Gen, RJS and PPL allocations (c) |
89 |
|||||||
Adjusted Free Cash Flow (Guidance) |
$ |
403 |
||||||
(a) |
Operations were suspended and the Corette plant was retired in March 2015. |
(b) |
Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. |
(c) |
Includes performance from RJS and removes PPL allocations for the five month period prior to spinoff and removes two months of performance from MACH Gen. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted EBITDA Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - |
High - 2016E | ||||||||||
Net Income (Loss) |
$ |
(44) |
$ |
16 |
$ |
76 |
||||||
Income Taxes |
(36) |
4 |
44 |
|||||||||
Interest Expense |
223 |
223 |
223 |
|||||||||
Depreciation and Amortization |
409 |
409 |
409 |
|||||||||
EBITDA |
552 |
652 |
752 |
|||||||||
Non-Cash Compensation |
12 |
12 |
12 |
|||||||||
Asset Retirement Obligation |
40 |
40 |
40 |
|||||||||
MTM losses (gains) |
— |
— |
— |
|||||||||
Nuclear decommissioning trust losses (gains) |
(10) |
(10) |
(10) |
|||||||||
Adjusted EBITDA, including other adjustments |
594 |
694 |
794 |
|||||||||
Other Adjustments: |
||||||||||||
Transition Services Agreement costs and allocations |
41 |
41 |
41 |
|||||||||
Other |
— |
— |
— |
|||||||||
Adjusted EBITDA |
$ |
635 |
$ |
735 |
$ |
835 |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||
Regulation G Reconciliations | ||||||||||||
Adjusted Free Cash Flow Projections | ||||||||||||
(Unaudited) |
||||||||||||
(Millions of Dollars) |
||||||||||||
Low - 2016E |
Midpoint - 2016E |
High - 2016E | ||||||||||
Cash from Operations |
$ |
678 |
$ |
758 |
$ |
838 |
||||||
Capital Expenditures, excluding growth (a) |
(453) |
(433) |
(413) |
|||||||||
Adjusted Free Cash Flow, including other adjustments |
225 |
325 |
425 |
|||||||||
Cash adjustments (after tax): |
||||||||||||
Transition Services Agreement costs and allocations |
25 |
25 |
25 |
|||||||||
Other |
— |
— |
— |
|||||||||
Adjusted Free Cash Flow |
$ |
250 |
$ |
350 |
$ |
450 |
(a) |
Includes allocated capitalized interest associated with growth capital expenditures of $15 million. This capitalized interest was previously excluded from the calculation of Adjusted Free Cash Flow. |
(1) |
For 2015, includes 12 months of legacy Talen Energy Supply results, seven months of RJS results and two months of MACH Gen results. |
(2) |
For 2015, includes 12 months of legacy Talen Energy Supply results and 12 months of RJS results; excludes PPL Corporation allocations and MACH Gen results. |
(3) |
Excludes contributions to Adjusted EBITDA and Adjusted Free Cash Flow from assets Talen Energy has sold or has announced it will sell in 2016. |
(4) |
Includes $15 million of capitalized interest related to capital expenditures classified as growth projects, which was previously excluded from the calculation of Adjusted Free Cash Flow. |
(5) |
In October 2015, Talen Energy Supply's $300 million of 5.70% REset Put Securities (REPS) due 2035 were subject to mandatory tender to the remarketing dealer. Talen Energy Supply and the dealer agreed to terminate the dealer's right to remarket the REPS and Talen Energy Supply repurchased the REPS at par. |
(6) |
Includes $15 million of capitalized interest related to capital expenditures classified as growth projects, which was previously excluded from the calculation of Adjusted Free Cash Flow. |
(7) |
Includes $15 million of capitalized interest related to capital expenditures classified as growth projects, which was previously excluded from the calculation of Adjusted Free Cash Flow. |
Contacts:
Media Relations - George Lewis, 610-774-4687
Investor Relations - Andy Ludwig, 610-774-3389
SOURCE Talen Energy Corporation
ALLENTOWN, Pa., Feb. 16, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) announced that one of its subsidiaries has completed the sale of C.P. Crane LLC, which owns and operates the 399-megawatt C.P. Crane coal-fired power plant near Baltimore, Md., to an affiliate of Avenue Capital Group.
The sale supports mitigation measures required by a December 2014 Federal Energy Regulatory Commission order approving the transactions that formed Talen Energy. The company expects to complete the remaining asset sales to satisfy the FERC order by the end of the first quarter of 2016.
Proceeds of the sale were not material. Effects of the sale on 2016 Net Income, Adjusted EBITDA and Adjusted Free Cash Flow are not expected to be material.
Goldman Sachs served as financial advisor to Talen Energy. Kirkland & Ellis was Talen Energy's transaction counsel.
Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Forward-Looking Statements
All statements contained herein other than statements of historical fact are "forward-looking" statements for purposes of the U.S. federal and state securities laws. Although Talen Energy believes that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct. Forward-looking statements are subject to many risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: adverse economic conditions; changes in commodity prices and related costs; operational, price and credit risks in the wholesale and retail electricity markets; operating performance and the length of scheduled and unscheduled outages at our generating plants; volatility in the availability and/or price of electric transmission and/or fuel transmission and delivery services; competition in the power generation market; federal and state legislation and regulation, including laws and regulations concerning the environment; the impact of climate change; and weather conditions affecting customer energy usage and/or the availability of fuel for our generating plants. Any forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's filings with the Securities and Exchange Commission that are available at www.sec.gov.
Contacts: |
Media Relations – George C. Lewis, 610-774-4687 |
Investor Relations – Andy Ludwig, 610-774-3389 |
SOURCE Talen Energy Corporation
ALLENTOWN, Pa., Feb. 1, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) completed on Monday (2/1) the sale of Talen Ironwood Holdings, LLC, which through its subsidiaries owns and operates the Ironwood combined-cycle, natural gas-fired power plant in Lebanon County, Pa., to a subsidiary of TransCanada Corporation (TSX, NYSE: TRP).
The total purchase price, after estimated adjustments for net working capital, was $657 million. In connection with the transaction, Talen Energy repaid approximately $41 million in debt, plus a customary pre-payment premium, associated with the plant. Talen Energy expects to use transaction proceeds to retire pre-payable and maturing debt, and for other general corporate purposes.
Sale of the 704-megawatt plant supports mitigation measures required by a December 2014 Federal Energy Regulatory Commission order that approved the transactions that formed Talen Energy. Other previously announced mitigation sales in specified regions of the PJM Interconnection are expected to close in the first quarter of 2016, subject to the satisfaction of customary closing conditions.
Credit Suisse served as financial advisor to Talen Energy for the Ironwood transaction. Kirkland & Ellis LLP served as transaction counsel.
Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Forward-Looking Statements
All statements contained herein other than statements of historical fact are "forward-looking" statements for purposes of the U.S. federal and state securities laws. Although Talen Energy believes that the expectations and assumptions reflected in these statements are reasonable, there can be no assurance that these expectations will prove to be correct. Forward-looking statements are subject to many risks and uncertainties, and actual results may differ materially from the results discussed in the statements. The following are among the important factors that could cause actual results to differ materially from the forward-looking statements: adverse economic conditions; changes in commodity prices and related costs; operational, price and credit risks in the wholesale and retail electricity markets; operating performance and the length of scheduled and unscheduled outages at our generating plants; volatility in the availability and/or price of electric transmission and/or fuel transmission and delivery services; competition in the power generation market; federal and state legislation and regulation, including laws and regulations concerning the environment; the impact of climate change; and weather conditions affecting customer energy usage and/or the availability of fuel for our generating plants. Any forward-looking statements should be considered in light of such important factors and in conjunction with Talen Energy's filings with the Securities and Exchange Commission that are available at www.sec.gov.
Contacts:
Media Relations – George C. Lewis, 610-774-4687
Investor Relations – Andy Ludwig, 610-774-3389
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Corporation
ALLENTOWN, Pa., Jan. 28, 2016 /PRNewswire/ -- Talen Energy Corporation (NYSE: TLN) plans to announce year-end and fourth-quarter 2015 financial results before the stock market opens on Thursday, Feb. 25. The company also intends at that time to provide guidance for 2016 Adjusted EBITDA and Adjusted Free Cash Flow.
A conference call and webcast with President and Chief Executive Officer Paul Farr and other members of the executive team is scheduled to begin Feb. 25 at 8 a.m. Eastern time. The phone number to join the conference call is 1-888-317-6003. Participants from outside of the United States should call 1-412-317-6061. The entry number to join the conference call is 0763819.
The webcast, in audio format with slides of the presentation, will be accessible on the Events & Presentations page of the company's "Investors & Media" website. A replay will be available on the website for those who are unable to listen live.
Talen Energy is one of the largest competitive energy and power generation companies in North America. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contacts: |
Media Relations – George C. Lewis, 610-774-4687 |
Investor Relations – Andy Ludwig, 610-774-3389 |
SOURCE Talen Energy Corporation
ALLENTOWN, Pa., Dec. 22, 2015 /PRNewswire/ -- Talen Energy Supply, LLC (the "Issuer"), a wholly owned subsidiary of Talen Energy Corporation (NYSE: TLN), announced today that it is commencing an exchange offer for its outstanding $600,000,000 aggregate principal amount of 6.500% Senior Notes due 2025 that were issued on May 19, 2015 (the "Outstanding Notes"), upon the terms and conditions set forth in a prospectus, dated Dec. 22, 2015, and in the accompanying letter of transmittal relating to the exchange offer.
Pursuant to the exchange offer, the Issuer is offering to exchange all of the Outstanding Notes for a like principal amount of its 6.500% Senior Notes due 2025, which have been registered under the Securities Act of 1933, as amended (the "Exchange Notes").
The exchange offer will expire at 5 p.m., New York City time, on Jan. 22, 2016, unless extended.
This press release is not an offer to exchange any of the Outstanding Notes for the Exchange Notes or the solicitation of an offer to exchange, which the Issuer is making only through the prospectus. Copies of the prospectus, the letter of transmittal and other related documents may be obtained from The Bank of New York Mellon, as exchange agent for the exchange offers, at the following address:
The Bank of New York Mellon, as Exchange Agent
c/o The Bank of New York Mellon Corporation
Corporate Trust Operations-Reorganization Unit
111 Sanders Creek Parkway
East Syracuse, NY 13057
Attn: Pamela Adamo
(315) 414-3317
Talen Energy Corporation is one of the largest competitive energy and power generation companies in the United States. Our diverse generating fleet operates in well-developed, structured wholesale power markets. To learn more about us, visit www.talenenergy.com.
Contacts: |
Media Relations – George C. Lewis, 610-774-4687 |
Investor Relations – Andy Ludwig, 610-774-3389 |
Logo - http://photos.prnewswire.com/prnh/20150601/219745LOGO
SOURCE Talen Energy Corporation
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