Talen Energy Reports Full Year 2024 Results, Exceeds 2024 Guidance and Reaffirms 2025 Guidance
Talen Energy (NASDAQ: TLN) reported strong financial results for full year 2024, with GAAP Net Income of $998 million, Adjusted EBITDA of $770 million, and Adjusted Free Cash Flow of $283 million, exceeding 2024 guidance midpoints.
The company demonstrated robust operational performance with a Fleet EFOF of 2.2% and total generation of 36.3 TWh, with 50% from carbon-free nuclear generation. Key developments include: reaching an RMR settlement agreement for Brandon Shores and H.A. Wagner facilities through May 2029, with expected annual revenues of $145 million and $35 million respectively starting June 2025; selling ERCOT assets; and completing significant share repurchases totaling 13 million shares (22% of outstanding shares).
As of February 21, 2025, Talen maintained strong liquidity of $1.2 billion and a net leverage ratio of 3.3x. The company has hedged 89% of expected generation volumes for 2025 and 33% for 2026.
Talen Energy (NASDAQ: TLN) ha riportato risultati finanziari solidi per l'intero anno 2024, con un utile netto GAAP di 998 milioni di dollari, un EBITDA rettificato di 770 milioni di dollari e un flusso di cassa libero rettificato di 283 milioni di dollari, superando i punti medi delle previsioni per il 2024.
L'azienda ha dimostrato una robusta performance operativa con un Fleet EFOF del 2,2% e una generazione totale di 36,3 TWh, con il 50% proveniente da generazione nucleare priva di carbonio. Tra i principali sviluppi ci sono: il raggiungimento di un accordo di risoluzione RMR per gli impianti di Brandon Shores e H.A. Wagner fino a maggio 2029, con ricavi annuali attesi di 145 milioni di dollari e 35 milioni di dollari rispettivamente a partire da giugno 2025; la vendita di asset ERCOT; e il completamento di significativi riacquisti di azioni per un totale di 13 milioni di azioni (22% delle azioni in circolazione).
Al 21 febbraio 2025, Talen ha mantenuto una solida liquidità di 1,2 miliardi di dollari e un rapporto di leva finanziaria netto di 3,3x. L'azienda ha coperto l'89% dei volumi di generazione attesi per il 2025 e il 33% per il 2026.
Talen Energy (NASDAQ: TLN) reportó resultados financieros sólidos para el año completo 2024, con un ingreso neto GAAP de 998 millones de dólares, un EBITDA ajustado de 770 millones de dólares y un flujo de caja libre ajustado de 283 millones de dólares, superando los puntos medios de las guías para 2024.
La compañía demostró un rendimiento operativo robusto con un Fleet EFOF del 2.2% y una generación total de 36.3 TWh, con el 50% proveniente de generación nuclear libre de carbono. Los desarrollos clave incluyen: alcanzar un acuerdo de liquidación RMR para las instalaciones de Brandon Shores y H.A. Wagner hasta mayo de 2029, con ingresos anuales esperados de 145 millones de dólares y 35 millones de dólares respectivamente a partir de junio de 2025; la venta de activos de ERCOT; y completar importantes recompras de acciones que totalizan 13 millones de acciones (22% de las acciones en circulación).
Al 21 de febrero de 2025, Talen mantuvo una sólida liquidez de 1.2 mil millones de dólares y una relación de apalancamiento neto de 3.3x. La compañía ha cubierto el 89% de los volúmenes de generación esperados para 2025 y el 33% para 2026.
탈렌 에너지 (NASDAQ: TLN)는 2024년 전체 회계연도에 대해 9억 9800만 달러의 GAAP 순이익, 7억 7000만 달러의 조정 EBITDA, 2억 8300만 달러의 조정 자유 현금 흐름을 보고하며 2024년 가이던스 중간값을 초과하는 강력한 재무 성과를 발표했습니다.
회사는 2.2%의 Fleet EFOF와 36.3 TWh의 총 발전량을 기록하며 탄소 없는 원자력 발전에서 50%를 차지하는 견고한 운영 성과를 보여주었습니다. 주요 개발 사항으로는: 2029년 5월까지 Brandon Shores 및 H.A. Wagner 시설에 대한 RMR 합의 도달, 2025년 6월부터 각각 1억 4500만 달러와 3500만 달러의 연간 수익 예상; ERCOT 자산 판매; 그리고 1300만 주(발행 주식의 22%)에 달하는 상당한 자사주 매입 완료가 있습니다.
2025년 2월 21일 기준으로 탈렌은 12억 달러의 강력한 유동성을 유지하고 있으며, 순 레버리지 비율은 3.3배입니다. 회사는 2025년 예상 발전량의 89%와 2026년의 33%를 헤지했습니다.
Talen Energy (NASDAQ: TLN) a annoncé de solides résultats financiers pour l'année complète 2024, avec un revenu net GAAP de 998 millions de dollars, un EBITDA ajusté de 770 millions de dollars et un flux de trésorerie libre ajusté de 283 millions de dollars, dépassant les points moyens des prévisions pour 2024.
L'entreprise a démontré une performance opérationnelle robuste avec un Fleet EFOF de 2,2 % et une production totale de 36,3 TWh, dont 50 % proviennent de la production nucléaire sans carbone. Parmi les développements clés figurent : la conclusion d'un accord de règlement RMR pour les installations de Brandon Shores et H.A. Wagner jusqu'en mai 2029, avec des revenus annuels prévus de 145 millions de dollars et 35 millions de dollars respectivement à partir de juin 2025 ; la vente d'actifs ERCOT ; et l'achèvement de rachats d'actions significatifs totalisant 13 millions d'actions (22 % des actions en circulation).
Au 21 février 2025, Talen maintenait une solide liquidité de 1,2 milliard de dollars et un ratio d'endettement net de 3,3x. L'entreprise a couvert 89 % des volumes de production attendus pour 2025 et 33 % pour 2026.
Talen Energy (NASDAQ: TLN) hat für das gesamte Jahr 2024 starke finanzielle Ergebnisse berichtet, mit einem GAAP-Nettoeinkommen von 998 Millionen US-Dollar, einem bereinigten EBITDA von 770 Millionen US-Dollar und einem bereinigten freien Cashflow von 283 Millionen US-Dollar, die die Mittelwerte der Prognosen für 2024 übertreffen.
Das Unternehmen zeigte eine robuste operative Leistung mit einem Fleet EFOF von 2,2% und einer Gesamtproduktion von 36,3 TWh, wobei 50% aus kohlenstofffreier Kernenergie stammten. Zu den wichtigsten Entwicklungen gehören: der Abschluss einer RMR-Vereinbarung für die Anlagen Brandon Shores und H.A. Wagner bis Mai 2029, mit erwarteten jährlichen Einnahmen von 145 Millionen US-Dollar bzw. 35 Millionen US-Dollar ab Juni 2025; der Verkauf von ERCOT-Assets; und der Abschluss signifikanter Aktienrückkäufe in Höhe von insgesamt 13 Millionen Aktien (22% der ausstehenden Aktien).
Am 21. Februar 2025 hatte Talen eine starke Liquidität von 1,2 Milliarden US-Dollar und ein Netto-Leverage-Verhältnis von 3,3x. Das Unternehmen hat 89% der erwarteten Produktionsvolumina für 2025 und 33% für 2026 abgesichert.
- Exceeded 2024 guidance with $770M Adjusted EBITDA and $283M Free Cash Flow
- Secured RMR agreement worth $180M annually through 2029
- Strong share repurchase program: 22% of shares bought back
- Robust hedging position: 89% of 2025 generation volumes hedged
- Healthy liquidity of $1.2B and leverage ratio below 3.5x target
- 50% of generation from carbon-free nuclear sources
- Loss of ERCOT assets earnings following sale
- High dependency on regulatory approvals for RMR arrangements
- Significant cash outflow for share repurchases ($1.95B)
Insights
Talen Energy delivered exceptional financial results in 2024, with Adjusted EBITDA of $770 million and Adjusted Free Cash Flow of $283 million, both exceeding guidance midpoints. The $998 million in GAAP Net Income represents substantial profitability that positions the company strongly heading into 2025.
The landmark agreement with AWS marks Talen as the first power company to provide electricity directly to a major tech company, creating a new revenue model that bypasses traditional utility structures. This pioneering arrangement could become a template for future power producer-tech partnerships, potentially opening additional high-margin commercial opportunities.
The strategic divestiture of ERCOT assets earlier in 2024 has streamlined Talen's portfolio while generating significant capital for shareholder returns. While this reduces geographic diversification, it allows management to concentrate resources on their higher-performing PJM and nuclear assets.
The recently negotiated RMR agreement for Brandon Shores and H.A. Wagner facilities represents a important win, securing $180 million in annual revenue through May 2029. This agreement provides exceptional visibility into future cash flows while supporting grid reliability in Maryland during the broader energy transition. Such agreements are becoming increasingly valuable as conventional generation retires faster than replacement capacity can be built.
Talen's aggressive capital return strategy has resulted in repurchasing 22% of outstanding shares in just one year, demonstrating management's confidence and commitment to per-share value creation. With $1.1 billion remaining in the repurchase authorization through 2026, this trend is likely to continue.
The company's hedging strategy (89% hedged for 2025) combined with the benefits of the Nuclear Production Tax Credit provides significant downside protection while maintaining a healthy balance sheet with 3.3x net leverage and $1.2 billion in liquidity. The fully contracted nuclear fuel cycle through 2027 further stabilizes operations and costs.
Management's reaffirmation of 2025 guidance signals confidence in continued strong performance despite market volatility, suggesting the operational improvements and strategic positioning implemented in 2024 have created sustainable advantages.
Talen Energy's 2024 performance demonstrates a sophisticated navigation of the energy transition, balancing reliable generation with strategic positioning for an evolving grid. The RMR agreement for Brandon Shores and H.A. Wagner through 2029 represents more than just $180 million in annual revenue - it signals a critical policy shift as regulators increasingly intervene to ensure grid reliability amid accelerating thermal plant retirements.
This agreement effectively creates a capacity payment mechanism outside traditional market structures, reflecting growing recognition that conventional market designs may be insufficient to maintain resource adequacy during the transition. As similar arrangements proliferate across PJM and other markets, they're reshaping the regulatory landscape for legacy generation assets.
The groundbreaking direct power arrangement with AWS represents a potential paradigm shift in corporate energy procurement. Moving beyond traditional PPAs and virtual agreements, this integrated partnership model could become increasingly attractive to energy-intensive industries seeking both reliability and sustainability. For Talen, this creates a differentiated commercial pathway that leverages existing generation while serving emerging corporate demand.
Talen's balanced generation portfolio, with 50% carbon-free nuclear, positions them advantageously under evolving federal policy. The Nuclear Production Tax Credit provides significant value enhancement for the Susquehanna facility, effectively subsidizing reliable baseload generation while supporting decarbonization goals - a rare policy win-win in today's polarized energy landscape.
The company's strategic focus on shareholder returns through aggressive share repurchases (22% of outstanding shares in one year) contrasts with peers who are heavily investing in renewables and grid modernization. This reflects a pragmatic recognition that in certain markets, maximizing value from existing assets may deliver superior returns compared to capital-intensive green transitions.
Their proactive approach to nuclear fuel security through 2029 demonstrates sophisticated supply chain risk management in an increasingly volatile global uranium market. As nuclear gains policy support globally, securing fuel supply has become a strategic imperative that Talen has effectively addressed.
While FERC approval for the RMR agreements remains pending, the joint settlement with key stakeholders suggests a high probability of successful implementation, providing a bridge to transmission solutions while maintaining essential generation capacity during a period of accelerating energy transition challenges.
Earnings Release Highlights
- Full year GAAP Net Income (Loss) Attributable to Stockholders of
$998 million . - Full year Adjusted EBITDA of
$770 million and Adjusted Free Cash Flow of$283 million , exceeding the 2024 guidance midpoints. - Reaffirming 2025 guidance; 2026 outlook unchanged.
- Reached reliability-must-run (“RMR”) settlement agreement with PJM and key stakeholders to run Brandon Shores and H.A. Wagner generation facilities through May 31, 2029.
- Repurchased approximately 13 million shares in 2024 (
22% of total outstanding shares).
HOUSTON, Feb. 27, 2025 (GLOBE NEWSWIRE) -- Talen Energy Corporation (“Talen,” the “Company,” “we,” or “our”) (NASDAQ: TLN), an independent power producer dedicated to powering the future, today reported its full year 2024 financial and operating results.
“Talen had an exciting year focused on unlocking value from existing assets. Our fleet ran well this year, earning
“We sold our ERCOT assets earlier in the year, realizing significant value that was largely returned to our shareholders, and in Q4, we reached a settlement with PJM and other stakeholders to continue running our Brandon Shores and H.A. Wagner generation facilities through May 2029, supporting grid reliability in Maryland.” McFarland continued. “We have simplified our capital structure and prioritized shareholder returns, repurchasing
Summary of Financial and Operating Results (Unaudited)
| (Millions of Dollars) | Year Ended December 31, 2024 | ||
| GAAP Net Income (Loss) Attributable to Stockholders | |||
| Adjusted EBITDA | 770 | ||
| Adjusted Free Cash Flow | 283 | ||
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||
| Total Generation (TWh) (a) | 36.3 | 32.5 | ||||
| Carbon-Free Generation | 50 | % | 55 | % | ||
| OSHA TRIR (b) | 0.34 | 0.58 | ||||
| Fleet EFOF (c) | 2.2 | % | 5.5 | % | ||
__________________
(a) Total generation is net of station use consumption, where applicable, includes volumes produced by Susquehanna in support of Nautilus operations and includes generation from ERCOT assets through April 2024.
(b) OSHA Total Recordable Incident Rate (“OSHA TRIR”) is the number of recordable incidents x 200,000 / total number of manhours worked. Only includes Talen-operated generation facilities (i.e., excludes Conemaugh and Keystone).
(c) Fleet Equivalent Forced Outage Factor (“Fleet EFOF”) is the percentage of a given period in which a generating unit is not available due to forced outages and forced de-rates. Represents all generation facilities, including our portion of partially-owned facilities.
For the year ended December 31, 2024, we reported GAAP Net Income (Loss) Attributable to Stockholders of
Given the impacts of fresh start accounting and the implementation of the plan of reorganization in the second quarter 2023, our full year 2024 results are not comparable to 2023.
Full year 2024 results were supported by strong operational performance across the generation fleet, the benefits from hedging activities, the impact of the Nuclear PTC, and disciplined cost management, despite the absence of earnings from the ERCOT generation portfolio that was sold in May 2024.
Our generation fleet continued to run reliably and safely, with a Fleet EFOF of
Reaffirming 2025 Guidance; 2026 Outlook Unchanged
| (Millions of Dollars) | Range |
| 2025E Adjusted EBITDA | |
| 2025E Adjusted Free Cash Flow | |
| (Millions of Dollars) | Range |
| 2026E Adjusted EBITDA | |
| 2026E Adjusted Free Cash Flow | |
RMR Arrangements
In December 2024, we reached an agreement with PJM, FERC staff, Maryland PSC and public utilities on the terms of RMR arrangements for our Brandon Shores and H.A. Wagner generation facilities. On January 27, 2025, we filed with FERC the resulting Joint Offers of Settlement regarding both facilities’ RMR Continuing Operations Rates Schedules, and they remain subject to FERC approval. If approved, the proposed RMR arrangements will extend the operating life of these facilities through May 31, 2029, or until such time as the necessary transmission upgrades are placed into service. Beginning June 1, 2025, we expect to receive
Update on Share Repurchase Program
Since the start of 2024, we have repurchased approximately
Balance Sheet and Liquidity
We are focused on maintaining net leverage below our target of 3.5x net debt-to-Adjusted EBITDA, along with ample liquidity. As of February 21, 2025, we had total available liquidity of approximately
Update on Hedging Activities
As of December 31, 2024, including the impact of the Nuclear PTC, we had hedged approximately
As an update on nuclear fuel supply activities, the nuclear fuel cycle is fully contracted through the 2027 fuel load, almost entirely contracted through 2028, and over
Earnings Call
The Company will hold an earnings call on Thursday, February 27, 2025, at 4:30 p.m. EST (3:30 p.m. CST). To listen to the earnings call, please register in advance for the webcast here. For participants joining the call via phone, please register here prior to the start time to receive dial-in information. For those unable to participate in the live event, a digital replay of the earnings call will be archived for approximately one year and available on Talen's Investor Relations website at https://ir.talenenergy.com/news-events/events.
About Talen
Talen Energy (NASDAQ: TLN) is a leading independent power producer and energy infrastructure company dedicated to powering the future. We own and operate approximately 10.7 gigawatts of power infrastructure in the United States, including 2.2 gigawatts of nuclear power and a significant dispatchable fossil fleet. We produce and sell electricity, capacity, and ancillary services into wholesale U.S. power markets, with our generation fleet principally located in the Mid-Atlantic and Montana. Our team is committed to generating power safely and reliably and delivering the most value per megawatt produced. Talen is also powering the digital infrastructure revolution. We are well-positioned to capture this significant growth opportunity, as data centers serving artificial intelligence increasingly demand more reliable, clean power. Talen is headquartered in Houston, Texas. For more information, visit https://www.talenenergy.com/.
Investor Relations:
Ellen Liu
Senior Director, Investor Relations
InvestorRelations@talenenergy.com
Media:
Taryne Williams
Director, Corporate Communications
Taryne.Williams@talenenergy.com
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this communication, or incorporated by reference into this communication, are forward-looking statements. Throughout this communication, we have attempted to identify forward-looking statements by using words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecasts,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or other forms of these words or similar words or expressions or the negative thereof, although not all forward-looking statements contain these terms. Forward-looking statements address future events and conditions concerning, among other things, capital expenditures, earnings, litigation, regulatory matters, hedging, liquidity and capital resources and accounting matters. Forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, results of operations or performance to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this communication. All of our forward-looking statements include assumptions underlying or relating to such statements that may cause actual results to differ materially from expectations, and are subject to numerous factors that present considerable risks and uncertainties.
| TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
| Successor | Predecessor | ||||||||||||
| (Millions of Dollars, except share data) | Year Ended December 31, 2024 | May 18 through December 31, 2023 | January 1 through May 17, 2023 | ||||||||||
| Capacity revenues | $ | 192 | $ | 133 | $ | 108 | |||||||
| Energy and other revenues | 1,881 | 1,156 | 1,042 | ||||||||||
| Unrealized gain (loss) on derivative instruments | 42 | 55 | 60 | ||||||||||
| Operating Revenues | 2,115 | 1,344 | 1,210 | ||||||||||
| Fuel and energy purchases | (694 | ) | (424 | ) | (176 | ) | |||||||
| Nuclear fuel amortization | (123 | ) | (108 | ) | (33 | ) | |||||||
| Unrealized gain (loss) on derivative instruments | 20 | (3 | ) | (123 | ) | ||||||||
| Energy Expenses | (797 | ) | (535 | ) | (332 | ) | |||||||
| Operating Expenses | |||||||||||||
| Operation, maintenance and development | (592 | ) | (358 | ) | (285 | ) | |||||||
| General and administrative | (163 | ) | (93 | ) | (51 | ) | |||||||
| Depreciation, amortization and accretion | (298 | ) | (165 | ) | (200 | ) | |||||||
| Impairments | (1 | ) | (3 | ) | (381 | ) | |||||||
| Other operating income (expense), net | (38 | ) | (30 | ) | (37 | ) | |||||||
| Operating Income (Loss) | 226 | 160 | (76 | ) | |||||||||
| Nuclear decommissioning trust funds gain (loss), net | 178 | 108 | 57 | ||||||||||
| Interest expense and other finance charges | (238 | ) | (176 | ) | (163 | ) | |||||||
| Reorganization income (expense), net | — | — | 799 | ||||||||||
| Gain (loss) on sale of assets, net | 884 | 7 | 50 | ||||||||||
| Other non-operating income (expense), net | 61 | 95 | 10 | ||||||||||
| Income (Loss) Before Income Taxes | 1,111 | 194 | 677 | ||||||||||
| Income tax benefit (expense) | (98 | ) | (51 | ) | (212 | ) | |||||||
| Net Income (Loss) | 1,013 | 143 | 465 | ||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | 15 | 9 | (14 | ) | |||||||||
| Net Income (Loss) Attributable to Stockholders (Successor) / Member (Predecessor) | $ | 998 | $ | 134 | $ | 479 | |||||||
| Per Common Share (Successor) | |||||||||||||
| Net Income (Loss) Attributable to Stockholders - Basic | $ | 18.40 | $ | 2.27 | N/A | ||||||||
| Net Income (Loss) Attributable to Stockholders - Diluted | $ | 17.67 | $ | 2.26 | N/A | ||||||||
| Weighted-Average Number of Common Shares Outstanding - Basic (in thousands) | 54,254 | 59,029 | N/A | ||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted (in thousands) | 56,486 | 59,399 | N/A | ||||||||||
| TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS | ||||||||
| Successor | ||||||||
| (Millions of Dollars, except share data) | December 31, 2024 | December 31, 2023 | ||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 328 | $ | 400 | ||||
| Restricted cash and cash equivalents | 37 | 501 | ||||||
| Accounts receivable | 123 | 137 | ||||||
| Inventory, net | 302 | 375 | ||||||
| Derivative instruments | 66 | 89 | ||||||
| Other current assets | 184 | 52 | ||||||
| Total current assets | 1,040 | 1,554 | ||||||
| Property, plant and equipment, net | 3,154 | 3,839 | ||||||
| Nuclear decommissioning trust funds | 1,724 | 1,575 | ||||||
| Derivative instruments | 5 | 6 | ||||||
| Other noncurrent assets | 183 | 147 | ||||||
| Total Assets | $ | 6,106 | $ | 7,121 | ||||
| Liabilities and Equity | ||||||||
| Long-term debt, due within one year | $ | 17 | $ | 9 | ||||
| Accrued interest | 18 | 32 | ||||||
| Accounts payable and other accrued liabilities | 266 | 344 | ||||||
| Derivative instruments | — | 32 | ||||||
| Other current liabilities | 154 | 69 | ||||||
| Total current liabilities | 455 | 486 | ||||||
| Long-term debt | 2,987 | 2,811 | ||||||
| Derivative instruments | 7 | 11 | ||||||
| Postretirement benefit obligations | 305 | 368 | ||||||
| Asset retirement obligations and accrued environmental costs | 468 | 469 | ||||||
| Deferred income taxes | 362 | 407 | ||||||
| Other noncurrent liabilities | 135 | 35 | ||||||
| Total Liabilities | $ | 4,719 | $ | 4,587 | ||||
| Commitments and Contingencies | ||||||||
| Stockholders' Equity | ||||||||
| Common stock ( | $ | — | $ | — | ||||
| Additional paid-in capital | 1,725 | 2,346 | ||||||
| Accumulated retained earnings (deficit) | (326 | ) | 134 | |||||
| Accumulated other comprehensive income (loss) | (12 | ) | (23 | ) | ||||
| Total Stockholders' Equity | 1,387 | 2,457 | ||||||
| Noncontrolling interests | — | 77 | ||||||
| Total Equity | 1,387 | 2,534 | ||||||
| Total Liabilities and Equity | $ | 6,106 | $ | 7,121 | ||||
__________________
(a) 45,961,910 and 59,028,843 shares issued and outstanding as of December 31, 2024 (Successor) and December 31, 2023 (Successor), respectively.
| TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| Successor | Predecessor | ||||||||||||
| (Millions of Dollars) | Year Ended December 31, 2024 | May 18 through December 31, 2023 | January 1 through May 17, 2023 | ||||||||||
| Operating Activities | |||||||||||||
| Net income (loss) | $ | 1,013 | $ | 143 | $ | 465 | |||||||
| Non-cash reconciliation adjustments: | |||||||||||||
| (Gain) loss on AWS Data Campus Sale and ERCOT Sale | (886 | ) | — | — | |||||||||
| Depreciation, amortization and accretion | 285 | 157 | 208 | ||||||||||
| NDT funds (gain) loss, net (excluding interest and fees) | (130 | ) | (78 | ) | (43 | ) | |||||||
| Nuclear fuel amortization | 123 | 108 | 33 | ||||||||||
| Unrealized (gains) losses on derivative instruments | (69 | ) | (40 | ) | 65 | ||||||||
| Deferred income taxes | (46 | ) | 55 | 195 | |||||||||
| Impairments | 1 | 3 | 381 | ||||||||||
| (Gain) loss on sales of assets, net | — | (7 | ) | (50 | ) | ||||||||
| Reorganization (income) expense, net | — | — | (933 | ) | |||||||||
| Other | (26 | ) | 7 | 7 | |||||||||
| Changes in assets and liabilities: | |||||||||||||
| Inventory, net | 67 | (68 | ) | 10 | |||||||||
| Accounts receivable | 14 | 8 | 261 | ||||||||||
| Other assets | (61 | ) | 147 | 98 | |||||||||
| Accounts payable and accrued liabilities | (69 | ) | (49 | ) | (69 | ) | |||||||
| Accrued interest | (15 | ) | 28 | (124 | ) | ||||||||
| Other liabilities | 55 | (12 | ) | (42 | ) | ||||||||
| Net cash provided by (used in) operating activities | 256 | 402 | 462 | ||||||||||
| Investing Activities | |||||||||||||
| NDT funds investment purchases | (2,295 | ) | (1,290 | ) | (959 | ) | |||||||
| NDT funds investment sale proceeds | 2,263 | 1,265 | 949 | ||||||||||
| Proceeds from AWS Data Campus Sale and ERCOT Sale | 1,398 | — | — | ||||||||||
| Nuclear fuel expenditures | (104 | ) | (45 | ) | (49 | ) | |||||||
| Property, plant and equipment expenditures | (85 | ) | (116 | ) | (138 | ) | |||||||
| Equity investments in affiliates | (10 | ) | (5 | ) | (8 | ) | |||||||
| Proceeds from the sale of assets | 2 | 8 | 46 | ||||||||||
| Other investing activities | 2 | 12 | 2 | ||||||||||
| Net cash provided by (used in) investing activities | 1,171 | (171 | ) | (157 | ) | ||||||||
| TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| Successor | Predecessor | ||||||||||||
| (Millions of Dollars) | Year Ended December 31, 2024 | May 18 through December 31, 2023 | January 1 through May 17, 2023 | ||||||||||
| Financing Activities | |||||||||||||
| Share repurchases | (1,958 | ) | — | — | |||||||||
| TES debt issuance | 849 | — | — | ||||||||||
| TES debt repayments | (479 | ) | — | — | |||||||||
| Cumulus Digital TLF repayment | (182 | ) | (15 | ) | — | ||||||||
| Repurchase of noncontrolling interest | (125 | ) | (19 | ) | — | ||||||||
| Cash settlement of restricted stock units | (32 | ) | — | — | |||||||||
| Exercise or repurchase of warrants | (16 | ) | (40 | ) | — | ||||||||
| Deferred financing costs | (13 | ) | (7 | ) | (74 | ) | |||||||
| LMBE-MC TLB payments | — | (294 | ) | (7 | ) | ||||||||
| TLB-1 proceeds, net | — | 288 | — | ||||||||||
| Repayment of prepetition secured indebtedness | — | — | (3,898 | ) | |||||||||
| Financing proceeds at Emergence, net of discount | — | — | 2,219 | ||||||||||
| Contributions from member | — | — | 1,393 | ||||||||||
| Payment of make-whole premiums on prepetition secured indebtedness | — | — | (152 | ) | |||||||||
| Derivatives with financing elements | — | — | (20 | ) | |||||||||
| Other | (7 | ) | 3 | — | |||||||||
| Net cash provided by (used in) financing activities | (1,963 | ) | (84 | ) | (539 | ) | |||||||
| Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | (536 | ) | 147 | (234 | ) | ||||||||
| Beginning of period cash and cash equivalents and restricted cash and cash equivalents | 901 | 754 | 988 | ||||||||||
| End of period cash and cash equivalents and restricted cash and cash equivalents | $ | 365 | $ | 901 | $ | 754 | |||||||
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted Free Cash flow, which we use as measures of our performance and liquidity, are not financial measures prepared under GAAP. Non-GAAP financial measures do not have definitions under GAAP and may be defined and calculated differently by, and not be comparable to, similarly titled measures used by other companies. Non-GAAP measures are not intended to replace the most comparable GAAP measures as indicators of performance. Generally, a non-GAAP financial measures is a numerical measure of financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Management cautions readers not to place undue reliance on the following non-GAAP financial measures, but to also consider them along with their most directly comparable GAAP financial measures. Non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analyzing our results as reported under GAAP.
Adjusted EBITDA
We use Adjusted EBITDA to: (i) assist in comparing operating performance and readily view operating trends on a consistent basis from period to period without certain items that may distort financial results; (ii) plan and forecast overall expectations and evaluate actual results against such expectations; (iii) communicate with our Board of Directors, shareholders, creditors, analysts, and the broader financial community concerning our financial performance; (iv) set performance metrics for our annual short-term incentive compensation; and (v) assess compliance with our indebtedness.
Adjusted EBITDA is computed as net income (loss) adjusted, among other things, for certain: (i) nonrecurring charges; (ii) non-recurring gains; (iii) non-cash and other items; (iv) unusual market events; (v) any depreciation, amortization, or accretion; (vi) mark-to-market gains or losses; (vii) gains and losses on the nuclear facility decommissioning trust (“NDT”); (viii) gains and losses on asset sales, dispositions, and asset retirement; (ix) impairments, obsolescence, and net realizable value charges; (x) interest expense; (xi) income taxes; (xii) legal settlements, liquidated damages, and contractual terminations; (xiii) development expenses; (xiv) noncontrolling interests, except where otherwise noted; and (xv) other adjustments. Such adjustments are computed consistently with the provisions of our indebtedness to the extent that they can be derived from the financial records of the business. Pursuant to TES’s debt agreements, Cumulus Digital contributes to Adjusted EBITDA beginning in the first quarter 2024, following termination of the Cumulus Digital credit facility and associated cash flow sweep.
Additionally, we believe investors commonly adjust net income (loss) information to eliminate the effect of nonrecurring restructuring expenses and other non-cash charges, which can vary widely from company to company and from period to period and impair comparability. We believe Adjusted EBITDA is useful to investors and other users of our financial statements to evaluate our operating performance because it provides an additional tool to compare business performance across companies and between periods. Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to such items described above. These adjustments can vary substantially from company to company and period to period depending upon accounting policies, book value of assets, capital structure, and the method by which assets were acquired.
Adjusted Free Cash Flow
Adjusted Free Cash Flow is utilized by our chief operating decision makers to evaluate cash flow activities. Adjusted Free Cash Flow is computed as Adjusted EBITDA reduced by capital expenditures (including nuclear fuel but excluding development, growth, and (or) conversion capital expenditures), cash payments for interest and finance charges, cash payments for taxes (excluding income taxes paid from the NDT, taxes paid or deductions taken as a result of strategic asset sales, and benefits of the Nuclear PTC utilized to reduce taxes paid), and pension contributions.
We believe Adjusted Free Cash Flow is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to determine a company’s ability to meet future obligations and to compare business performance across companies and across periods. Adjusted Free Cash Flow is widely used by investors to measure a company’s levered cash flow without regard to items such as ARO settlements; nonrecurring development, growth and conversion expenditures; and cash proceeds or payments for the sale or purchase of assets, which can vary substantially from company to company and from period to period depending upon accounting methods, book value of assets, capital structure, and the method by which assets were acquired.
Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation
The following table presents a reconciliation of the GAAP financial measures of “Net Income (Loss)” presented on the Consolidated Statements of Operations to the non-GAAP financial measures of Adjusted EBITDA and Adjusted Free Cash Flow:
| Successor | Predecessor | ||||||||||||
| (Millions of Dollars) | Year Ended December 31, 2024 | May 18 through December 31, 2023 | January 1 through May 17, 2023 | ||||||||||
| Net Income (Loss) | $ | 1,013 | $ | 143 | $ | 465 | |||||||
| Adjustments | |||||||||||||
| Interest expense and other finance charges | 238 | 176 | 163 | ||||||||||
| Income tax (benefit) expense | 98 | 51 | 212 | ||||||||||
| Depreciation, amortization and accretion | 298 | 165 | 200 | ||||||||||
| Nuclear fuel amortization | 123 | 108 | 33 | ||||||||||
| Reorganization (gain) loss, net (a) | — | — | (799 | ) | |||||||||
| Unrealized (gain) loss on commodity derivative contracts | (62 | ) | (52 | ) | 63 | ||||||||
| Nuclear decommissioning trust funds (gain) loss, net | (178 | ) | (108 | ) | (57 | ) | |||||||
| Stock-based compensation expense | 33 | 19 | — | ||||||||||
| Long-term incentive compensation expense | 21 | 2 | — | ||||||||||
| (Gain) loss on asset sales, net (b) | (884 | ) | (7 | ) | (50 | ) | |||||||
| Non-cash impairments (c) | 1 | 3 | 381 | ||||||||||
| Legal settlements and litigation costs (d) | (10 | ) | (84 | ) | 1 | ||||||||
| Unusual market events (d) | (1 | ) | (19 | ) | 14 | ||||||||
| Net periodic defined benefit cost | 14 | 2 | (3 | ) | |||||||||
| Operational and other restructuring activities (e) (f) | 76 | 48 | 17 | ||||||||||
| Development expenses | 1 | 7 | 10 | ||||||||||
| Non-cash inventory net realizable value, obsolescence, and other charges (g) | 20 | 4 | 56 | ||||||||||
| Noncontrolling interest | (21 | ) | (42 | ) | (14 | ) | |||||||
| Other | (10 | ) | 10 | 3 | |||||||||
| Total Adjusted EBITDA | $ | 770 | $ | 426 | $ | 695 | |||||||
| Capital expenditures, net | (177 | ) | (112 | ) | (96 | ) | |||||||
| Interest and finance charge payments | (252 | ) | (132 | ) | (173 | ) | |||||||
| Tax payments | (4 | ) | (5 | ) | (5 | ) | |||||||
| Pension contributions | (54 | ) | (8 | ) | (3 | ) | |||||||
| Total Adjusted Free Cash Flow | $ | 283 | $ | 169 | $ | 418 | |||||||
_______________
(a) See Note 4 to the FY 2024 Financial Statements for additional information.
(b) See Note 20 to the FY 2024 Financial Statements for additional information.
(c) See Note 10 to the FY 2024 Financial Statements for additional information.
(d) See Note 12 to the FY 2024 Financial Statements for additional information.
(e) The year ended December 31, 2024 (Successor) primarily includes the effects of nonrecurring ERCOT hedge settlements that occurred after the ERCOT Sale and severance payments associated with cost reduction initiatives.
(f) The periods from May 18 through December 31, 2023 (Successor) and from January 1 through May 17, 2023 (Predecessor) include the effects of nonrecurring costs associated with exit from the Restructuring, severance costs associated with cost reduction initiatives, and nonrecurring post-Restructuring strategic initiative costs.
(g) See Note 8 to the FY 2024 Financial Statements for additional information.
Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: 2025 Guidance
| 2025E | ||||||||
| (Millions of dollars) | Low | High | ||||||
| Net Income (Loss) | $ | 155 | $ | 375 | ||||
| Adjustments | ||||||||
| Interest expense and other finance charges | 235 | 245 | ||||||
| Income tax (benefit) expense | 60 | 80 | ||||||
| Depreciation, amortization and accretion | 295 | 295 | ||||||
| Nuclear fuel amortization | 105 | 105 | ||||||
| Unrealized (gain) loss on commodity derivative contracts | 75 | 75 | ||||||
| Adjusted EBITDA | $ | 925 | $ | 1,175 | ||||
| Capital expenditures, net | $ | (195 | ) | $ | (205 | ) | ||
| Interest and finance charge payments | (215 | ) | (225 | ) | ||||
| Tax payments | (50 | ) | (70 | ) | ||||
| Pension contributions | (70 | ) | (80 | ) | ||||
| Adjusted Free Cash Flow | $ | 395 | $ | 595 | ||||
_______________
Note: Figures are rounded to the nearest
FAQ
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