Talen Energy Corporation

Good day and thank you for standing by. Welcome to the Talent Energy Corporation third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Bill Appicelli. Please go ahead.

Thank you, Lisa. Welcome to Talent Energy's third quarter 2026 conference call. Speaking today are Chief Executive Officer Mack McFarland, President Terry Nutt, and Chief Financial Officer Cole Muller. They are joined by other talent senior executives to address questions during the second part of today's call as necessary. We issued our earnings release this morning along with the presentation, all of which can be found on the investor relations section of TALEN's website, talenenergy.com. Today, we are making some forward-looking statements based on current expectations and assumptions. Actual results could differ due to risk factors and other considerations described in our financial disclosures and other SEC filings. Today's discussion also includes references to certain non-GAAP financial measures, We have provided information reconciling our non-GAAP measures to the most directly comparable GAAP measures in our earnings release in the appendix of our presentation. With that, I will turn the call over to Mac.

Thanks, Bill. Good morning, everyone, and thank you for joining us. Before we get into the quarterly results, I want to spend a few minutes on what we're seeing in the market, how we're thinking about the business, and a few topics on investors' minds. Talent is in a fundamentally stronger position today than at any point since we began rebuilding this company. Our financial outlook continues to improve, our cash flows are becoming more durable, and we have more ways to create value than ever before. We own advantaged assets in advantaged locations. In markets where demand is growing, supply remains constrained, and the value of our reliable generation continues to increase. These assets would be extraordinarily difficult, expensive, and time consuming to replicate today. Across PJM, we've seen a significant move in forward power prices and spark spreads this year. I know there's a debate about whether those levels are sustainable. Our view is straightforward. We don't expect markets to move in a straight line. There will be volatility, but we don't believe this is simply another commodity cycle. The underlying fundamentals have changed. Demand is growing, new supply is difficult and expensive to build, and the timeline for bringing new generation online continues to stretch. The demand is here, the supply isn't, and we already own the assets the market needs. Now basis matters, congestion matters, and how we hedge and manage our portfolio matters. Our commercial team remains focused on managing those exposures and converting stronger market conditions into realized financial performance. We're seeing that translate directly into our financial outlook. Today, we're providing 2027 guidance, updating our 28 outlook, and initiating our 2029 outlook. Focusing on the 29 outlook, our adjusted free cash flow is in the range of $56 to $60 per share. That outlook assumes no additional large load transactions. That's the cash generating power of the business we've built, supported by our capital allocation strategy. Additional large load contracting and powered land monetization represent upside. While the magnitude of the cash flow is important, so is its quality. Our objective is to generate more durable cash flow and grow that cash flow on a per share basis. That's what the talent flywheel is all about. Strong assets and attractive markets generate significant cash flow. That gives us the flexibility to make high return investments, pursue attractive long-term contracts, optimize our portfolio, and return capital to shareholders, all while maintaining our balance sheet discipline. Contracting can lock in attractive economics and reduce risk. Strategic investments can expand our earning space. And disciplined share repurchases can drive further growth and free cash flow per share. We're not dependent on any single lever to create value. We have several and they reinforce one another. That's the power of the flywheel and it's working. which brings me to large load contracting and powered land monetization. I know there's a lot of interest in when we're going to announce our next data center transaction, so let me address that directly. We're actively engaged with customers across our footprint, evaluating a variety of commercial structures and working to bring additional transactions to fruition. We have existing generation infrastructure, interconnections, and strategically located land. Those are all real advantages for customers trying to solve increasingly difficult power challenges. Some need speed to power. Some need reliability. Some need long-term price certainty. Increasingly, they need all three. We can provide solutions ranging from long-term power contracts to powered land development and monetization. We don't have to build a position in these markets. We already have one. And we're going to be disciplined about how we monetize it. We are focused on creating value, not headlines. The objective is to lock in attractive economics, increase the durability of our cash flows, and create lasting value for our shareholders. We know what we own, we know what it's worth, and we're not going to compromise that value to meet someone else's timeline. That's not a lack of urgency, that's just discipline. Every attractive transaction we execute creates an opportunity to build on an already compelling financial outlook. We're negotiating from a position of strength, not necessity, and that matters. That same conviction is reflected in our capital allocation decisions. The $1.5 billion ASR is a tangible example. We believe in the value of the business, and the ASR puts capital behind that conviction. Our cash generation gives us the flexibility to invest in the business and return capital to shareholders. We can advance large load contracting, monetize powered land, optimize our portfolio, and repurchase shares. These opportunities aren't mutually exclusive. We're focused on maximizing value per share, period. All of this is happening against the backdrop of a continued regulatory and market design reform in PJM. There's considerable discussion around large load interconnections, reliability requirements, capacity market design, price caps, and how the cost of serving new demand should be allocated. We support reforms that facilitate load growth, maintain reliability, protect existing customers from inappropriate cost shifts, and provide the economic incentives necessary to retain and build new generation. But I'd make two points. First, the changing market rules doesn't change the underlying physics of the system. PJM needs more reliable generation to meet growing demand. That generation takes time and capital to develop, and the existing fleet needs to be maintained economically viable. Whatever market structure ultimately emerges has to recognize those realities. You can't regulate your way out of a physical supply shortage. You can change how the market compensates generation. You can't change the fact that the system needs it. We're not waiting for every regulatory issue to be resolved before moving our business forward. We're continuing to engage with customers, advance development opportunities, and evaluate commercial structures in parallel with the regulatory process. Because we have multiple ways to serve large load customers, we believe we're well positioned to adapt as those rules evolve. Regulatory uncertainty may change the path. It doesn't change the fundamental need for power or the value of the assets we own. Capacity market design matters and auction outcomes matter, and we'll continue to engage constructively in that process. So let me close with this. We have attractive market fundamentals, an advantage portfolio, and a strategy focused on generating increasingly durable cash flows and growing adjusted free cash flow per share. And we're not done. We're working to capture additional value through large load contracting, optimizing our portfolio, and returning capital to shareholders. We've built a company with multiple paths to create value and the financial strength to pursue them. The strategy is working, the flywheel is working, and the opportunity in front of Talon is substantial. As I look ahead to the leadership transition, I have tremendous confidence in Talon's future. Terry and the entire management team know these assets, understand these markets, and have the experience and discipline to take this business forward. One of the things that I'm most proud of is that we built a company whose success isn't dependent on any one individual. We have the strategy, the culture, and the leadership team to keep moving forward and creating value. I believe the best days for talent are still ahead of us. And with that, I'll turn the call over to Terry.