Talen Energy Corporation (NYSE:TLN) Q4 2015 Earnings Conference Call - Final Transcript

Feb 25, 2016 • 08:00 am ET

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Talen Energy Corporation (NYSE:TLN) Q4 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good morning and welcome to the Talen Energy Fourth Quarter and Year-End Results Conference Call. All participants will be in listen-only mode. (Operator Instructions).

After today's presentation there will be an opportunity to ask questions. (Operator Instructions).

Please note this event is being recorded. I would now like to turn the conference over to Andy Ludwig, Director of Investor Relations. Mr. Ludwig, please go ahead.

Executive
Andy Ludwig

Thanks, Keith. And good morning everyone. Thank you for joining the Talen Energy conference call to discuss fourth quarter and year-end 2015 results. Today's presentation is being webcast and we are providing slides of the presentation on our website at talenenergy.com.

(Forward-Looking Cautionary Statements)

I will now turn the call over to Paul Farr, Talen Energy President and CEO.

Executive
Paul Farr

Thanks, Andy, and good morning, everyone. Joining me on the call today with prepared remarks Jeremy McGuire, our CFO; as well as Joe Hopf, our Chief Commercial Officer. Our CNO, Tim Rausch, had some commitments up with the plant today and could not join us as we're in final preparation for the unit one re-fueling outage that starts in a couple weeks.

We'll follow our normal format on the call today as outlined on the agenda on slide three. Before I jump into the slides though, let me make a few high levels remarks on some important near-term drivers. The sector obviously continues to face challenges from low prices, low demand growth and challenges from certain market participants looking for subsidies from utility customers for their uneconomic plans.

We are actively engaged on a number of fronts with respect to both the lack of economic merits of those contracts vis-a-vis consumers as well as with FERC given the preferential nature of those contracts between affiliates.

In terms of the Company's response to low commodity prices, we continue to focus significantly on cost reduction both O&M and CapEx as well as the risk profile of our portfolio and our balance sheet. We are well underway with the Brunner Island coal fire project and are actually looking to bring Brunner Island unit three capability online for that capacity as early as this August.

As I'll get to later in my remarks we're continuing to look at the merits of comparable project in Montour. We can look at making those investments and potentially take other actions with respect to our asset mix and the balance sheet even in a capital constrained environment given the $1.2 billion dollars in after-tax sales proceeds from announced and closed asset sales, strong free cash flow and significant improvements in our effective cash tax rate looking forward a number of years. Jeremy will discuss capital allocation including the potential for liability management in his remarks.

Let's move into the slides as I'm certain in the Q&A session, we'll dialogue more on these and other topics. 2015 was an extremely busy and successful year at Talen Energy from many perspectives. We were highly successful in M&A, cost cutting, integrating new assets, implementing new systems and generally