Commission File Number | Registrant; State of Incorporation; Address and Telephone Number | IRS Employer Identification No. |
1-37388 | Talen Energy Corporation (Exact name of Registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation) 835 Hamilton Street, Suite 150 Allentown, PA 18101-1179 (888) 211-6011 | 47-1197305 |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits | ||||
99.1 - | November 5, 2015 Press Release |
TALEN ENERGY CORPORATION | |||
By: | /s/ Jeremy R. McGuire | ||
Jeremy R. McGuire Senior Vice President, Chief Financial Officer and Chief Accounting Officer |
• | Adjusted EBITDA of $357 million for the three months ended September 30 |
• | Adjusted EBITDA of $765 million for the nine months ended September 30 |
• | Adjusted Free Cash Flow of $439 million for the nine months ended September 30 |
• | Raised and narrowed full-year 2015 guidance ranges for Adjusted EBITDA to $1,050-$1,100 million and for Adjusted Free Cash Flow to $375-$425 million1 |
• | Updated full-year 2016 midpoint projections for Adjusted EBITDA and Adjusted Free Cash Flow to $845 million and $260 million respectively, reflecting announced asset sales2 |
• | Completed acquisition of MACH Gen, LLC, adding 2,500 megawatts of efficient natural gas-fired generation in key markets |
• | Completed sale of renewable energy business |
• | Announced agreement for sale of Ironwood combined-cycle natural gas-fired plant for $654 million ($929/kilowatt) |
• | Announced agreement for sale of Holtwood and Lake Wallenpaupack hydroelectric plants for a total of $860 million ($2,945/kilowatt) |
• | Announced agreement for sale of C.P. Crane coal-fired plant in Maryland |
• | Increased expected 2015 synergies to $135 million |
(in millions) | Three Months Ended | Nine Months Ended | |||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Operating Income (Loss) | |||||||||||||||
East | $ | (230 | ) | $ | 242 | $ | 132 | $ | 307 | ||||||
West | 24 | — | 18 | — | |||||||||||
Other(2) | (40 | ) | (53 | ) | (184 | ) | (181 | ) | |||||||
Total | $ | (246 | ) | $ | 189 | $ | (34 | ) | $ | 126 | |||||
EBITDA(1) | |||||||||||||||
East | $ | (245 | ) | $ | 327 | $ | 289 | $ | 554 | ||||||
West | 34 | — | 31 | — | |||||||||||
Other(2) | (39 | ) | (54 | ) | (183 | ) | (180 | ) | |||||||
Total | $ | (250 | ) | $ | 273 | $ | 137 | $ | 374 | ||||||
Adjusted EBITDA(1) | |||||||||||||||
East | $ | 337 | $ | 290 | $ | 825 | $ | 740 | |||||||
West | 43 | — | 45 | — | |||||||||||
Other(2) | (23 | ) | (43 | ) | (105 | ) | (135 | ) | |||||||
Total | $ | 357 | $ | 247 | $ | 765 | $ | 605 |
(in millions) | Nine Months Ended | |||||||
September 30, 2015 | September 30, 2014 | |||||||
Cash from Operations | $ | 731 | $ | 465 | ||||
Adjusted Free Cash Flow(1) | $ | 439 | $ | 202 |
(in millions) | September 30, 2015 | December 31, 2014 | |||||||
Cash and cash equivalents | $ | 648 | $ | 352 | |||||
Short-term debt | — | 630 |
(in millions) | 2015 | 2014 | Change - Cash | |||||||||
Operating activities | $ | 731 | $ | 465 | $ | 266 | ||||||
Investing activities | (173 | ) | (344 | ) | 171 | |||||||
Financing activities | (262 | ) | (166 | ) | (96 | ) |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED FINANCIAL INFORMATION (a) | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(Unaudited) | |||||||
(Millions of Dollars) | |||||||
September 30, | December 31, | ||||||
2015 | 2014 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 648 | $ | 352 | |||
Restricted cash and cash equivalents | 67 | 176 | |||||
Accounts receivable (less reserve: 2015, $1; 2014, $2) | 297 | 289 | |||||
Accounts receivable from affiliates | — | 36 | |||||
Unbilled revenues | 125 | 218 | |||||
Fuel, materials and supplies | 468 | 455 | |||||
Prepayments | 52 | 70 | |||||
Deferred income taxes | 114 | 8 | |||||
Price risk management assets | 576 | 1,079 | |||||
Assets of discontinued operations | 266 | — | |||||
Other current assets | 9 | 18 | |||||
Investments | 938 | 980 | |||||
Property, Plant and Equipment | 14,139 | 12,235 | |||||
Less: accumulated depreciation | 6,479 | 6,242 | |||||
Property, plant and equipment, net | 7,660 | 5,993 | |||||
Construction work in progress | 411 | 443 | |||||
Total Property, Plant and Equipment, net | 8,071 | 6,436 | |||||
Goodwill | — | 72 | |||||
Other intangibles | 309 | 257 | |||||
Price risk management assets | 226 | 239 | |||||
Other noncurrent assets | 88 | 75 | |||||
Total Assets | $ | 12,254 | $ | 10,760 |
Liabilities and Equity | |||||||
Short-term debt | $ | — | $ | 630 | |||
Long-term debt due within one year | 654 | 535 | |||||
Accounts payable | 278 | 361 | |||||
Accounts payable to affiliates | — | 50 | |||||
Liabilities of discontinued operations | 5 | — | |||||
Other current liabilities | 911 | 1,314 | |||||
Long-term Debt | 3,376 | 1,683 | |||||
Deferred income taxes and investment tax credits | 1,585 | 1,250 | |||||
Price risk management liabilities - noncurrent | 178 | 193 | |||||
Accrued pension obligations | 253 | 299 | |||||
Asset retirement obligations | 472 | 415 | |||||
Other deferred credits and noncurrent liabilities | 140 | 123 | |||||
Predecessor Member's Equity (a) | — | 3,930 | |||||
Common Stock and additional paid-in capital | 4,719 | — | |||||
Earnings reinvested | (311 | ) | — | ||||
Accumulated other comprehensive income (loss) | (6 | ) | (23 | ) | |||
Total Liabilities and Equity | $ | 12,254 | $ | 10,760 |
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, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Operating Revenues | |||||||||||||||
Wholesale energy | $ | 986 | $ | 1,109 | $ | 2,181 | $ | 203 | |||||||
Wholesale energy to affiliate | — | 20 | 14 | 68 | |||||||||||
Retail energy | 277 | 283 | 831 | 913 | |||||||||||
Energy-related businesses | 156 | 189 | 404 | 469 | |||||||||||
Total Operating Revenues | 1,419 | 1,601 | 3,430 | 1,653 | |||||||||||
Operating Expenses | |||||||||||||||
Operation | |||||||||||||||
Fuel | 394 | 212 | 945 | 953 | |||||||||||
Energy purchases | 298 | 708 | 588 | (893 | ) | ||||||||||
Other operation and maintenance | 228 | 232 | 759 | 746 | |||||||||||
Impairments | 479 | — | 479 | — | |||||||||||
Depreciation | 95 | 74 | 259 | 225 | |||||||||||
Taxes, other than income | 19 | 14 | 49 | 45 | |||||||||||
Energy-related businesses | 152 | 172 | 385 | 451 | |||||||||||
Total Operating Expenses | 1,665 | 1,412 | 3,464 | 1,527 | |||||||||||
Operating Income (Loss) | (246 | ) | 189 | (34 | ) | 126 | |||||||||
Other Income (Expense) - net | 1 | 10 | 11 | 23 | |||||||||||
Interest Expense | 55 | 31 | 146 | 95 | |||||||||||
Income (Loss) from Continuing Operations Before Income Taxes | (300 | ) | 168 | (169 | ) | 54 | |||||||||
Income Taxes | 39 | 74 | 49 | 16 | |||||||||||
Income (Loss) from Continuing Operations After Income Taxes | (339 | ) | 94 | (218 | ) | 38 | |||||||||
Income (Loss) from Discontinued Operations (net of income taxes) | (62 | ) | 7 | (61 | ) | 10 | |||||||||
Net Income (Loss) | $ | (401 | ) | $ | 101 | $ | (279 | ) | $ | 48 | |||||
Earnings Per Share of Common Stock: | |||||||||||||||
Basic: | |||||||||||||||
Income (Loss) from continuing operations after income taxes | $ | (2.64 | ) | $ | 1.13 | $ | (2.10 | ) | $ | 0.45 | |||||
Income (Loss) from discontinued operations (net of income taxes) | (0.48 | ) | 0.08 | (0.59 | ) | 0.12 | |||||||||
Net Income (Loss) | $ | (3.12 | ) | $ | 1.21 | $ | (2.69 | ) | $ | 0.57 | |||||
Diluted: | |||||||||||||||
Income (Loss) from continuing operations | $ | (2.64 | ) | $ | 1.13 | $ | (2.10 | ) | $ | 0.45 | |||||
Income (Loss) from discontinued operations (net of income taxes) | (0.48 | ) | 0.08 | (0.59 | ) | 0.12 | |||||||||
Net Income (Loss) | $ | (3.12 | ) | $ | 1.21 | $ | (2.69 | ) | $ | 0.57 | |||||
Weighted-Average Shares of Common Stock Outstanding (in thousands) | |||||||||||||||
Basic | 128,509 | 83,524 | 103,627 | 83,524 | |||||||||||
Diluted | 128,509 | 83,524 | 103,627 | 83,524 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
Talen Energy Corporation and Subsidiaries | |||||||
(Unaudited) | |||||||
(Millions of Dollars) | |||||||
Nine Months Ended | |||||||
September 30, | |||||||
2015 | 2014 | ||||||
Cash Flows from Operating Activities | |||||||
Net income (loss) | $ | (279 | ) | $ | 48 | ||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation | 259 | 242 | |||||
Amortization | 137 | 117 | |||||
Defined benefit plans - expense | 35 | 34 | |||||
Deferred income taxes and investment tax credits | (30 | ) | (150 | ) | |||
Impairment of assets | 592 | 20 | |||||
Unrealized (gains) losses on derivatives, and other hedging activities | (80 | ) | 216 | ||||
Other | 76 | 19 | |||||
Change in current assets and current liabilities | |||||||
Accounts receivable | 64 | (1 | ) | ||||
Accounts payable | (148 | ) | (45 | ) | |||
Unbilled revenues | 93 | 41 | |||||
Fuel, materials and supplies | 58 | (67 | ) | ||||
Prepayments | 23 | 5 | |||||
Counterparty collateral | 76 | (18 | ) | ||||
Price risk management assets and liabilities | (9 | ) | (34 | ) | |||
Taxes payable | (23 | ) | 70 | ||||
Other | (32 | ) | (14 | ) | |||
Other operating activities | |||||||
Defined benefit plans - funding | (74 | ) | (32 | ) | |||
Other assets | 1 | (2 | ) | ||||
Other liabilities | (8 | ) | 16 | ||||
Net cash provided by operating activities | 731 | 465 | |||||
Cash Flows from Investing Activities | |||||||
Expenditures for property, plant and equipment | (252 | ) | (276 | ) | |||
Expenditures for intangible assets | (35 | ) | (38 | ) | |||
Purchases of nuclear plant decommissioning trust investments | (154 | ) | (124 | ) | |||
Proceeds from the sale of nuclear plant decommissioning trust investments | 143 | 112 | |||||
Proceeds from the receipt of grants | — | 164 | |||||
Net (increase) decrease in restricted cash and cash equivalents | 110 | (199 | ) | ||||
Other investing activities | 15 | 17 | |||||
Net cash provided by (used in) investing activities | (173 | ) | (344 | ) | |||
Cash Flows from Financing Activities | |||||||
Issuance of long-term debt | 600 | — | |||||
Retirement of long-term debt | (33 | ) | (308 | ) | |||
Contributions from member | 82 | 730 | |||||
Distributions to member | (214 | ) | (1,178 | ) | |||
Net increase (decrease) in short-term debt | (667 | ) | 590 | ||||
Other financing activities | (30 | ) | — | ||||
Net cash provided by (used in) financing activities | (262 | ) | (166 | ) | |||
Net Increase (Decrease) in Cash and Cash Equivalents | 296 | (45 | ) | ||||
Cash and Cash Equivalents at Beginning of Period | 352 | 239 | |||||
Cash and Cash Equivalents at End of Period | $ | 648 | $ | 194 |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | |||||||||||||||||||||||||||||||
Regulation G Reconciliations | |||||||||||||||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
(Millions of Dollars) | |||||||||||||||||||||||||||||||
Three Months | |||||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||||
East | West | Other | Total | East | West | Other | Total | ||||||||||||||||||||||||
Net income (loss) | $ | (401 | ) | $ | 101 | ||||||||||||||||||||||||||
(Income) loss from discontinued operations (net of tax) | 62 | (7 | ) | ||||||||||||||||||||||||||||
Interest expense | 55 | 31 | |||||||||||||||||||||||||||||
Income taxes | 39 | 74 | |||||||||||||||||||||||||||||
Other (income) expense - net | (1 | ) | (10 | ) | |||||||||||||||||||||||||||
Operating income (loss) | $ | (230 | ) | $ | 24 | $ | (40 | ) | $ | (246 | ) | $ | 242 | $ | — | $ | (53 | ) | $ | 189 | |||||||||||
Depreciation | 84 | 10 | 1 | 95 | 74 | — | — | 74 | |||||||||||||||||||||||
Other income (expense) - net | 1 | — | — | 1 | 11 | — | (1 | ) | 10 | ||||||||||||||||||||||
Sapphire EBITDA (a) | (100 | ) | — | — | (100 | ) | — | — | — | — | |||||||||||||||||||||
EBITDA | $ | (245 | ) | $ | 34 | $ | (39 | ) | $ | (250 | ) | $ | 327 | $ | — | $ | (54 | ) | $ | 273 | |||||||||||
Unrealized (gain) loss on derivative contracts (b) | (59 | ) | 9 | — | (50 | ) | (26 | ) | — | — | (26 | ) | |||||||||||||||||||
Stock-based compensation expense (c) | — | — | 1 | 1 | — | — | 3 | 3 | |||||||||||||||||||||||
(Gain) loss from NDT funds | (1 | ) | — | — | (1 | ) | (10 | ) | — | — | (10 | ) | |||||||||||||||||||
ARO accretion | 8 | — | — | 8 | 8 | — | — | 8 | |||||||||||||||||||||||
Coal contract adjustment (d) | 41 | — | — | 41 | — | — | — | — | |||||||||||||||||||||||
Impairments (e) | 588 | — | — | 588 | — | — | — | — | |||||||||||||||||||||||
Mechanical subsidiary revenue adjustment (f) | — | — | — | — | (14 | ) | — | — | (14 | ) | |||||||||||||||||||||
TSA costs | — | — | 14 | 14 | — | — | — | — | |||||||||||||||||||||||
Separation benefits (g) | — | — | — | — | — | — | 8 | 8 | |||||||||||||||||||||||
RJS transaction costs | — | — | 1 | 1 | — | — | — | — | |||||||||||||||||||||||
Other (l) | 5 | — | — | 5 | 5 | — | — | 5 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 337 | $ | 43 | $ | (23 | ) | $ | 357 | $ | 290 | $ | — | $ | (43 | ) | $ | 247 |
Nine Months | |||||||||||||||||||||||||||||||
2015 | 2014 | ||||||||||||||||||||||||||||||
East | West | Other | Total | East | West | Other | Total | ||||||||||||||||||||||||
Net income (loss) | $ | (279 | ) | $ | 48 | ||||||||||||||||||||||||||
(Income) loss from discontinued operations (net of tax) | 61 | (10 | ) | ||||||||||||||||||||||||||||
Interest expense | 146 | 95 | |||||||||||||||||||||||||||||
Income taxes | 49 | 16 | |||||||||||||||||||||||||||||
Other (income) expense - net | (11 | ) | (23 | ) | |||||||||||||||||||||||||||
Operating income (loss) | $ | 132 | $ | 18 | $ | (184 | ) | $ | (34 | ) | $ | 307 | $ | — | $ | (181 | ) | $ | 126 | ||||||||||||
Depreciation | 244 | 13 | 2 | 259 | 225 | — | — | 225 | |||||||||||||||||||||||
Other income (expense) - net | 12 | — | (1 | ) | 11 | 22 | — | 1 | 23 | ||||||||||||||||||||||
Sapphire EBITDA (a) | (99 | ) | — | — | (99 | ) | — | — | — | — | |||||||||||||||||||||
EBITDA | $ | 289 | $ | 31 | $ | (183 | ) | $ | 137 | $ | 554 | $ | — | $ | (180 | ) | $ | 374 | |||||||||||||
Unrealized (gain) loss on derivative contracts (b) | (117 | ) | 14 | — | (103 | ) | 192 | — | — | 192 | |||||||||||||||||||||
Stock-based compensation expense (c) | — | — | 41 | 41 | — | — | 15 | 15 | |||||||||||||||||||||||
(Gain) loss from NDT funds | (11 | ) | — | — | (11 | ) | (21 | ) | — | — | (21 | ) | |||||||||||||||||||
ARO accretion | 25 | — | — | 25 | 23 | — | — | 23 | |||||||||||||||||||||||
Coal contract adjustment (d) | 41 | — | — | 41 | — | — | — | — | |||||||||||||||||||||||
Impairments (e) | 588 | — | — | 588 | — | — | — | — | |||||||||||||||||||||||
Mechanical subsidiary revenue adjustment (f) | — | — | — | — | (17 | ) | — | — | (17 | ) | |||||||||||||||||||||
TSA costs | — | — | 19 | 19 | — | — | — | — | |||||||||||||||||||||||
Separation benefits (g) | — | — | 2 | 2 | — | — | 30 | 30 | |||||||||||||||||||||||
Corette closure costs (h) | 4 | — | — | 4 | — | — | — | — | |||||||||||||||||||||||
Terminated derivative contracts (i) | (13 | ) | — | — | (13 | ) | — | — | — | — | |||||||||||||||||||||
Revenue adjustment (j) | 7 | — | — | 7 | — | — | — | — | |||||||||||||||||||||||
RJS transaction costs | — | — | 6 | 6 | — | — | — | — | |||||||||||||||||||||||
Restructuring costs (k) | — | — | 10 | 10 | — | — | — | — | |||||||||||||||||||||||
Other (l) | 12 | — | — | 12 | 9 | — | — | 9 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 825 | $ | 45 | $ | (105 | ) | $ | 765 | $ | 740 | $ | — | $ | (135 | ) | $ | 605 |
(a) | Sapphire has been classified as discontinued operations since its June 1, 2015 acquisition. This includes an impairment recorded during the three and nine months ended September 30, 2015. |
(b) | Represents unrealized gains (losses) on derivatives. Amounts have been adjusted for option premiums of $5 million and $14 million for the three and nine months ended September 30, 2015 and $2 million and $6 million for the same periods in 2014. |
(c) | 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. |
(d) | To mitigate the risk of oversupply, Talen Energy incurred pre-tax charges of $41 million for the three and nine months ended September 30, 2015 to reduce its 2015-2018 contracted coal deliveries. |
(e) | Includes charges for goodwill and certain long lived assets. |
(f) | In 2014, Talen Energy recorded $14 million and $17 million for the three and nine month periods to "Energy-related businesses" revenues on the 2014 Statement of Income related to prior periods and the timing of revenue recognition for a mechanical contracting and engineering subsidiary. |
(g) | 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 were recorded. In addition, the three and nine month periods in 2014 include separation costs related to the spinoff transaction. |
(h) | Operations were suspended and the Corette plant was retired in March 2015. |
(i) | Represents net realized gains on certain derivative contracts that were early-terminated due to the spinoff transaction. |
(j) | 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. |
(k) | Costs related to the spinoff transaction, including FERC-required mitigation plan expenses and legal and professional fees. |
(l) | All periods include OCI amortization on non-active derivative positions and the 2015 periods include an asset write-off. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||
Regulation G Reconciliations | ||||||||
Adjusted Free Cash Flow | ||||||||
(Unaudited) | ||||||||
(Millions of Dollars) | ||||||||
Nine Months Ended September 30, | ||||||||
2015 | 2014 | |||||||
Cash from Operations | $ | 731 | $ | 465 | ||||
Capital Expenditures, excluding growth | (265 | ) | (299 | ) | ||||
Counterparty collateral paid (received) | (76 | ) | 18 | |||||
Adjusted Free Cash Flow, including other adjustments | 390 | 184 | ||||||
Cash adjustments (after tax): | ||||||||
Coal contract adjustment | 25 | — | ||||||
Transition Services Agreement costs | 11 | — | ||||||
Separation benefits | 1 | 18 | ||||||
Corette closure costs (a) | 2 | — | ||||||
RJS transaction costs | 4 | — | ||||||
Restructuring costs (b) | 6 | — | ||||||
Adjusted Free Cash Flow | $ | 439 | $ | 202 |
(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. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||||||
Regulation G Reconciliations | ||||||||||||||||
Adjusted EBITDA Projections | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Millions of Dollars) | ||||||||||||||||
Low - 2015E (a) | Midpoint - 2015E (a) | High - 2015E (a) | Midpoint 2016E - Adjusted for Anticipated Sales (b) | |||||||||||||
Net Income (Loss) | $ | (388 | ) | $ | (373 | ) | $ | (358 | ) | $ | 77 | |||||
Income Taxes | (37 | ) | (27 | ) | (17 | ) | 41 | |||||||||
Interest Expense | 363 | 363 | 363 | 225 | ||||||||||||
Depreciation and Amortization | 401 | 401 | 401 | 409 | ||||||||||||
EBITDA | 339 | 364 | 389 | 752 | ||||||||||||
Non-Cash Compensation | 45 | 45 | 45 | 21 | ||||||||||||
Asset Retirement Obligation | 34 | 34 | 34 | 37 | ||||||||||||
MTM losses (gains) | (101 | ) | (101 | ) | (101 | ) | — | |||||||||
Nuclear decommissioning trust losses (gains) | (12 | ) | (12 | ) | (12 | ) | (10 | ) | ||||||||
Impairments | 588 | 588 | 588 | |||||||||||||
Adjusted EBITDA, including other adjustments | 893 | 918 | 943 | 800 | ||||||||||||
Other Adjustments: | ||||||||||||||||
Transition Services Agreement costs and allocations (c) | 66 | 66 | 66 | 45 | ||||||||||||
Other (d) | 91 | 91 | 91 | — | ||||||||||||
Adjusted EBITDA | $ | 1,050 | $ | 1,075 | $ | 1,100 | $ | 845 |
(a) | 2015 forecasted amounts include twelve months of performance from RJS, including the five-month period prior to acquisition and an adjustment for PPL allocations not expected to continue in future periods, and have not been adjusted to reflect the acquisition of MACH Gen, LLC or the sale of Talen Renewable Energy. |
(b) | 2016 forecasted amounts have been adjusted to reflect the acquisition of MACH Gen, LLC and to remove the operations associated with the sales of Talen Renewable Energy and the Ironwood, Holtwood, Lake Wallenpaupack and C.P. Crane plants. Does not include the impact of the sales transaction gain or loss or related tax effects. |
(c) | Low, midpoint and high 2015 amounts include $33 million of allocations from PPL and $33 million of TSA costs that are not expected to continue in future periods. |
(d) | Restructuring costs that are not expected to continue in future periods. |
TALEN ENERGY CORPORATION AND SUBSIDIARIES | ||||||||||||||||
Regulation G Reconciliations | ||||||||||||||||
Adjusted Free Cash Flow Projections | ||||||||||||||||
(Unaudited) | ||||||||||||||||
(Millions of Dollars) | ||||||||||||||||
Low - 2015E (a) | Midpoint - 2015E (a) | High - 2015E (a) | Midpoint 2016E - Adjusted for Anticipated Sales (b) | |||||||||||||
Cash from Operations | $ | 870 | $ | 885 | $ | 900 | $ | 698 | ||||||||
Capital Expenditures, excluding growth | (500 | ) | (490 | ) | (480 | ) | (465 | ) | ||||||||
Counterparty collateral paid (received) | (76 | ) | (76 | ) | (76 | ) | — | |||||||||
Adjusted Free Cash Flow, including other adjustments | 294 | 319 | 344 | 233 | ||||||||||||
Cash adjustments (after tax): | ||||||||||||||||
Transition Services Agreement costs and allocations (c) | 39 | 39 | 39 | 27 | ||||||||||||
Other (d) | 42 | 42 | 42 | — | ||||||||||||
Adjusted Free Cash Flow (e) | $ | 375 | $ | 400 | $ | 425 | $ | 260 |
(a) | 2015 forecasted amounts include twelve months of performance from RJS, including the five-month period prior to acquisition and an adjustment for PPL allocations not expected to continue in future periods, and have not been adjusted to reflect the acquisition of MACH Gen, LLC or the sale of Talen Renewable Energy. |
(b) | 2016 forecasted amounts have been adjusted to reflect the acquisition of MACH Gen, LLC and to remove the operations associated with the sales of Talen Renewable Energy and the Ironwood, Holtwood, Lake Wallenpaupack and C.P. Crane plants. Does not include the impact of the sales transaction proceeds or related gain or loss and tax effects. |
(c) | Low, midpoint and high 2015 amounts include $20 million of allocations from PPL and $19 million of TSA costs that are not expected to continue in future periods. |
(d) | Restructuring and certain other costs that are not expected to continue in future periods. |
(e) | Does not include growth capital expenditures of $38 million in 2015 and $84 million in 2016. |
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