Talen Energy Reports Third Quarter 2024 Results, Raises and Narrows 2024 Guidance and Reaffirms 2025 Guidance
Talen Energy reported strong Q3 2024 results with GAAP Net Income of $168 million and year-to-date earnings of $916 million. The company achieved Adjusted EBITDA of $230 million and Adjusted Free Cash Flow of $97 million for Q3. Based on performance, Talen raised and narrowed its 2024 guidance, projecting Adjusted EBITDA of $750-780 million and Adjusted Free Cash Flow of $265-285 million. The company reaffirmed its 2025 guidance ranges. Notable developments include becoming 100% owner of Nautilus JV, repurchasing 2.6 million shares at $117.64 per share, and addition to five equity indices. The company maintains strong liquidity of $1.3 billion and a net leverage ratio of 2.1x.
Talen Energy ha riportato risultati solidi per il terzo trimestre del 2024 con un reddito netto GAAP di 168 milioni di dollari e guadagni da inizio anno di 916 milioni di dollari. L'azienda ha ottenuto un EBITDA rettificato di 230 milioni di dollari e un flusso di cassa libero rettificato di 97 milioni di dollari per il terzo trimestre. In base alle performance, Talen ha aumentato e affinato le proprie previsioni per il 2024, progettando un EBITDA rettificato compreso tra 750 e 780 milioni di dollari e un flusso di cassa libero rettificato tra 265 e 285 milioni di dollari. L'azienda ha confermato i propri obiettivi per il 2025. Sviluppi significativi includono il diventare proprietari al 100% della Nautilus JV, il riacquisto di 2,6 milioni di azioni a 117,64 dollari per azione e l'aggiunta a cinque indici azionari. L'azienda mantiene una solida liquidità di 1,3 miliardi di dollari e un rapporto di leva finanziaria netto di 2,1x.
Talen Energy reportó resultados sólidos en el tercer trimestre de 2024 con una ingresos netos GAAP de 168 millones de dólares y ganancias en lo que va del año de 916 millones de dólares. La compañía logró un EBITDA ajustado de 230 millones de dólares y un flujo de caja libre ajustado de 97 millones de dólares para el tercer trimestre. Basándose en el rendimiento, Talen elevó y ajustó su previsión para 2024, proyectando un EBITDA ajustado de entre 750 y 780 millones de dólares y un flujo de caja libre ajustado de entre 265 y 285 millones de dólares. La compañía reafirmó sus expectativas para 2025. Desarrollos notables incluyen convertirse en propietario al 100% de Nautilus JV, recomprar 2,6 millones de acciones a 117,64 dólares por acción, y añadirse a cinco índices de acciones. La empresa mantiene una sólida liquidez de 1,3 mil millones de dólares y una relación de apalancamiento neto de 2,1x.
탈렌 에너지는 2024년 3분기 강력한 실적을 발표했으며, GAAP 순이익은 1억 6,800만 달러, 올해 누적 수익은 9억 1,600만 달러에 달합니다. 이 회사는 3분기 조정된 EBITDA로 2억 3천만 달러와 조정된 자유 현금 흐름 9천7백만 달러를 달성했습니다. 실적에 따라 탈렌은 2024년 전망을 상향 조정하고 좁혀서 조정된 EBITDA를 7억 5천만에서 7억 8천만 달러, 조정된 자유 현금 흐름을 2억 6천5백만에서 2억 8천5백만 달러로 예상하고 있습니다. 회사는 2025년 가이던스 범위도 재확인했습니다. 주요 개발 사항에는 Nautilus JV의 100% 소유권 확보, 주당 117.64달러에 260만 주 재매입, 및 5개의 주식 지수 추가가 포함됩니다. 이 회사는 13억 달러의 강력한 유동성과 2.1배의 순차입금 비율을 유지하고 있습니다.
Talen Energy a annoncé de solides résultats pour le troisième trimestre 2024 avec un revenu net GAAP de 168 millions de dollars et des bénéfices depuis le début de l'année de 916 millions de dollars. L'entreprise a réalisé un EBITDA ajusté de 230 millions de dollars et un flux de trésorerie libre ajusté de 97 millions de dollars pour le troisième trimestre. Sur la base des performances, Talen a relevé et affiné ses prévisions pour 2024, projetant un EBITDA ajusté de 750 à 780 millions de dollars et un flux de trésorerie libre ajusté de 265 à 285 millions de dollars. L'entreprise a réaffirmé ses prévisions pour 2025. Les développements notables comprennent le fait de devenir propriétaire à 100 % de Nautilus JV, le rachat de 2,6 millions d'actions à 117,64 dollars par action, et l'ajout à cinq indices boursiers. L'entreprise maintient une solide liquidité de 1,3 milliard de dollars et un ratio d'endettement net de 2,1x.
Talen Energy berichtete über starke Ergebnisse im dritten Quartal 2024 mit einem GAAP Nettogewinn von 168 Millionen Dollar und einem bisherigen Jahresgewinn von 916 Millionen Dollar. Das Unternehmen erzielte ein bereinigtes EBITDA von 230 Millionen Dollar und einen bereinigten freien Cashflow von 97 Millionen Dollar für das dritte Quartal. Basierend auf der Leistung hat Talen seine Prognose für 2024 angehoben und eingeengt und rechnet mit einem bereinigten EBITDA von 750 bis 780 Millionen Dollar sowie einem bereinigten freien Cashflow von 265 bis 285 Millionen Dollar. Das Unternehmen bekräftigte seine Prognose für 2025. Zu den bemerkenswerten Entwicklungen gehören der vollständige Erwerb der Nautilus JV, der Rückkauf von 2,6 Millionen Aktien zu einem Preis von 117,64 Dollar pro Aktie und der Eintritt in fünf Aktienindizes. Das Unternehmen weist eine starke Liquidität von 1,3 Milliarden Dollar und ein Nettoschuldenverhältnis von 2,1x auf.
- Q3 2024 GAAP Net Income of $168 million, up from -$77 million in Q3 2023
- Year-to-date Net Income of $916 million
- Raised 2024 guidance for Adjusted EBITDA to $750-780 million
- Strong liquidity position of $1.3 billion
- 14% of outstanding shares repurchased year-to-date
- Low net leverage ratio of 2.1x
- 100% hedged generation volumes for remainder of 2024
- Adjusted Free Cash Flow decreased by $49 million compared to Q3 2023
- Disappointing FERC decision on Susquehanna ISA
- Slight decrease in total generation to 10.8 TWh from 10.9 TWh YoY
Insights
Strong financial performance with
Notable is the aggressive share repurchase program, having bought back
The company's strategic positioning in the power generation sector is strengthening, with
Strong operational metrics and hedging positions (
Earnings Release Highlights
- GAAP Net Income (Loss) Attributable to Stockholders of
$168 million for the third quarter 2024 and$916 million year-to-date. - Adjusted EBITDA of
$230 million and Adjusted Free Cash Flow of$97 million for the third quarter 2024; year-to-date Adjusted EBITDA of$606 million and Adjusted Free Cash Flow of$262 million . - Raising and narrowing 2024 guidance ranges: Adjusted EBITDA of
$750 t o$780 million and Adjusted Free Cash Flow of$265 t o$285 million . Reaffirming 2025 guidance ranges: Adjusted EBITDA of$925 t o$1,175 million and Adjusted Free Cash Flow of$395 t o$595 million . - Became the
100% owner of the Nautilus JV by completing the strategic purchase of TeraWulf’s remaining equity interest in Nautilus. - Repurchased approximately 2.6 million shares of stock at an average price of
$117.64 per share during the third quarter 2024. - Added to five equity indices, driving substantial passive stock demand.
HOUSTON, Nov. 14, 2024 (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 third quarter 2024 financial and operating results.
“Market and regulatory events over the last few months have further underscored how critical existing generation is to serving demand growth, largely driven by electrification and data centers, and to supporting grid reliability. Our fleet continued to run well this quarter, which is reflected in our year-to-date results. We are raising and narrowing our 2024 guidance ranges and reaffirming guidance for 2025,” said Talen President and Chief Executive Officer Mac McFarland.
“Progress at the AWS data center campus is accelerating with our acquisition of TeraWulf’s minority share of the Nautilus JV, enabling the campus to access power more quickly and easily. We are obviously disappointed with the FERC’s recent decision on the Susquehanna ISA. That said, we are moving forward with AWS on commercial solutions,” McFarland continued. “We continue to execute on our share repurchase program, which has a remaining capacity of
Summary of Financial and Operating Results (Unaudited)
| (Millions of Dollars Unless Otherwise Stated) | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | |||||||||
| GAAP Net Income (Loss) Attributable to Stockholders | $ | 168 | $ | (77 | ) | $ | 916 | |||||
| Adjusted EBITDA | 230 | 224 | 606 | |||||||||
| Adjusted Free Cash Flow | 97 | 146 | 262 | |||||||||
| Total Generation (TWh) (a) | 10.8 | 10.9 | 27.1 | |||||||||
| Carbon-Free Generation | 43 | % | 44 | % | 49 | % | ||||||
| OSHA TRIR (b) | 0.4 | 1.1 | 0.3 | |||||||||
| Fleet EFOF (c) | 3.1 | % | 5.0 | % | 2.4 | % | ||||||
| __________________ | |
| (a) | Aggregate generation is net of station use consumption, where applicable, and includes volumes produced by Susquehanna in support of Nautilus operations. |
| (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 third quarter 2024, Talen reported GAAP Net Income (Loss) Attributable to Stockholders of
Compared to the same quarter last year, GAAP Net Income (Loss) Attributable to Stockholders was
Compared to the same quarter last year, Adjusted EBITDA was
Adjusted Free Cash Flow, which was
Additionally, for the third quarter 2024, Talen’s fleet continued to run reliably and safely, with a Fleet EFOF of
Given the impacts of fresh start accounting and the implementation of the plan of reorganization in the second quarter 2023, our financial position and results of operations for year-to-date 2024 are not comparable to our financial position or results of operations for year-to-date 2023.
Raising and Narrowing 2024 Guidance; Reaffirming 2025 Guidance
| (Millions of Dollars) | Range |
| 2024E Adjusted EBITDA | |
| 2024E Adjusted Free Cash Flow |
| (Millions of Dollars) | Range |
| 2025E Adjusted EBITDA | |
| 2025E Adjusted Free Cash Flow | |
Talen is raising and narrowing the 2024 guidance ranges and reaffirming the 2025 guidance ranges.
Update on Share Repurchase Program
Since the start of 2024, Talen has repurchased approximately
During the third quarter 2024, we repurchased approximately 2.6 million shares of stock at an average price of
Index Inclusion
After uplisting to the NASDAQ Global Select Market and based on their respective methodologies, Talen became eligible to join several equity indices, which could drive substantial institutional and passive stock demand. During the third quarter 2024, Talen was added to the S&P Total Market Index, S&P Completion Index, CRSP Total Market Index, and CRSP Small Cap Index. These additions led to passive index funds acquiring more than six million shares of Talen common stock.
On November 6, 2024, MSCI announced Talen will be added to the MSCI USA Small Cap Index, effective after market close on November 25, 2024. Talen may qualify for additional value, growth, and / or sector-related indices, leading to further demand for our shares.
Balance Sheet and Liquidity
Talen is focused on maintaining net leverage below our target of 3.5x net debt-to-Adjusted EBITDA, along with ample liquidity. As of November 8, 2024, Talen had total available liquidity of approximately
Update on Hedging Activities
As of September 30, 2024, including the impact of the Nuclear PTC, Talen had hedged approximately
Earnings Call
The Company will hold an earnings call on Thursday, November 14, 2024, at 10:00 a.m. EST (9:00 a.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, delivering the most value per megawatt produced and driving the energy transition. 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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||||||||
| Successor | Predecessor | ||||||||||||||||||||
| (Millions of Dollars, except share data) | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | May 18 through September 30, 2023 | January 1 through May 17, 2023 | ||||||||||||||||
| Capacity revenues | $ | 50 | $ | 44 | $ | 141 | $ | 70 | $ | 108 | |||||||||||
| Energy and other revenues | 505 | 600 | 1,444 | 788 | 1,042 | ||||||||||||||||
| Unrealized gain (loss) on derivative instruments | 95 | (128 | ) | 63 | (41 | ) | 60 | ||||||||||||||
| Operating Revenues | 650 | 516 | 1,648 | 817 | 1,210 | ||||||||||||||||
| Fuel and energy purchases | (222 | ) | (253 | ) | (535 | ) | (310 | ) | (176 | ) | |||||||||||
| Nuclear fuel amortization | (30 | ) | (47 | ) | (93 | ) | (72 | ) | (33 | ) | |||||||||||
| Unrealized gain (loss) on derivative instruments | 7 | 44 | (5 | ) | (2 | ) | (123 | ) | |||||||||||||
| Energy Expenses | (245 | ) | (256 | ) | (633 | ) | (384 | ) | (332 | ) | |||||||||||
| Operating Expenses | |||||||||||||||||||||
| Operation, maintenance and development | (127 | ) | (140 | ) | (445 | ) | (209 | ) | (285 | ) | |||||||||||
| General and administrative | (38 | ) | (37 | ) | (121 | ) | (55 | ) | (51 | ) | |||||||||||
| Depreciation, amortization and accretion | (75 | ) | (66 | ) | (225 | ) | (94 | ) | (200 | ) | |||||||||||
| Impairments | — | (2 | ) | — | (2 | ) | (381 | ) | |||||||||||||
| Other operating income (expense), net | (7 | ) | (8 | ) | (14 | ) | (11 | ) | (37 | ) | |||||||||||
| Operating Income (Loss) | 158 | 7 | 210 | 62 | (76 | ) | |||||||||||||||
| Nuclear decommissioning trust funds gain (loss), net | 67 | (24 | ) | 169 | 15 | 57 | |||||||||||||||
| Interest expense and other finance charges | (66 | ) | (68 | ) | (187 | ) | (101 | ) | (163 | ) | |||||||||||
| Reorganization income (expense), net | — | — | — | — | 799 | ||||||||||||||||
| Gain (loss) on sale of assets, net | — | — | 885 | — | 50 | ||||||||||||||||
| Other non-operating income (expense), net | 20 | (7 | ) | 60 | (18 | ) | 10 | ||||||||||||||
| Income (Loss) Before Income Taxes | 179 | (92 | ) | 1,137 | (42 | ) | 677 | ||||||||||||||
| Income tax benefit (expense) | (11 | ) | 16 | (192 | ) | (3 | ) | (212 | ) | ||||||||||||
| Net Income (Loss) | 168 | (76 | ) | 945 | (45 | ) | 465 | ||||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | — | 1 | 29 | 3 | (14 | ) | |||||||||||||||
| Net Income (Loss) Attributable to Stockholders (Successor) / Member (Predecessor) | $ | 168 | $ | (77 | ) | $ | 916 | $ | (48 | ) | $ | 479 | |||||||||
| Per Common Share (Successor) | |||||||||||||||||||||
| Net Income (Loss) Attributable to Stockholders - Basic | $ | 3.30 | $ | (1.30 | ) | $ | 16.44 | $ | (0.81 | ) | N/A | ||||||||||
| Net Income (Loss) Attributable to Stockholders - Diluted | 3.16 | (1.30 | ) | 15.86 | (0.81 | ) | N/A | ||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Basic (in thousands) | 50,924 | 59,029 | 55,703 | 59,029 | N/A | ||||||||||||||||
| Weighted-Average Number of Common Shares Outstanding - Diluted (in thousands) | 53,169 | 59,029 | 57,756 | 59,029 | N/A | ||||||||||||||||
| TALEN ENERGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
| Successor | ||||||||
| (Millions of Dollars, except share data) | September 30, 2024 | December 31, 2023 | ||||||
| Assets | ||||||||
| Cash and cash equivalents | $ | 648 | $ | 400 | ||||
| Restricted cash and cash equivalents | 484 | 501 | ||||||
| Accounts receivable | 97 | 137 | ||||||
| Inventory, net | 297 | 375 | ||||||
| Derivative instruments | 50 | 89 | ||||||
| Other current assets | 97 | 52 | ||||||
| Total current assets | 1,673 | 1,554 | ||||||
| Property, plant and equipment, net | 3,228 | 3,839 | ||||||
| Nuclear decommissioning trust funds | 1,737 | 1,575 | ||||||
| Derivative instruments | 22 | 6 | ||||||
| Other noncurrent assets | 188 | 147 | ||||||
| Total Assets | $ | 6,848 | $ | 7,121 | ||||
| Liabilities and Equity | ||||||||
| Long-term debt, due within one year | $ | 9 | $ | 9 | ||||
| Accrued interest | 54 | 32 | ||||||
| Accounts payable and other accrued liabilities | 210 | 344 | ||||||
| Derivative instruments | 6 | 32 | ||||||
| Other current liabilities | 129 | 69 | ||||||
| Total current liabilities | 408 | 486 | ||||||
| Long-term debt | 2,616 | 2,811 | ||||||
| Derivative instruments | 4 | 11 | ||||||
| Postretirement benefit obligations | 318 | 368 | ||||||
| Asset retirement obligations and accrued environmental costs | 475 | 469 | ||||||
| Deferred income taxes | 452 | 407 | ||||||
| Other noncurrent liabilities | 130 | 35 | ||||||
| Total Liabilities | $ | 4,403 | $ | 4,587 | ||||
| Commitments and Contingencies | ||||||||
| Stockholders' Equity | ||||||||
| Common stock ( | $ | — | $ | — | ||||
| Additional paid-in capital | 1,980 | 2,346 | ||||||
| Accumulated retained earnings (deficit) | 412 | 134 | ||||||
| Accumulated other comprehensive income (loss) | (5 | ) | (23 | ) | ||||
| Total Stockholders' Equity | 2,387 | 2,457 | ||||||
| Noncontrolling interests | 58 | 77 | ||||||
| Total Equity | 2,445 | 2,534 | ||||||
| Total Liabilities and Equity | $ | 6,848 | $ | 7,121 | ||||
| __________________ | |
| (a) | As of September 30, 2024 (Successor): 50,855,417 shares issued and outstanding. |
| (b) | As of December 31, 2023 (Successor): 59,028,843 shares issued and outstanding. |
| TALEN ENERGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||||
| Successor | Predecessor | ||||||||||||
| (Millions of Dollars) | Nine Months Ended September 30, 2024 | May 18 through September 30, 2023 | January 1 through May 17, 2023 | ||||||||||
| Operating Activities | |||||||||||||
| Net income (loss) | $ | 945 | $ | (45 | ) | $ | 465 | ||||||
| Non-cash reconciliation adjustments: | |||||||||||||
| Unrealized (gains) losses on derivative instruments | (59 | ) | 49 | 65 | |||||||||
| (Gain) loss on Cumulus Data Campus Sale and ERCOT Sale | (886 | ) | — | — | |||||||||
| (Gain) loss on sales of assets, net | — | — | (50 | ) | |||||||||
| Nuclear fuel amortization | 93 | 71 | 33 | ||||||||||
| Depreciation, amortization and accretion | 216 | 89 | 208 | ||||||||||
| Impairments | — | 2 | 381 | ||||||||||
| NDT funds (gain) loss, net (excluding interest and fees) | (135 | ) | 1 | (43 | ) | ||||||||
| Deferred income taxes | 39 | (4 | ) | 195 | |||||||||
| Reorganization (income) expense, net | — | — | (933 | ) | |||||||||
| Other | (58 | ) | 23 | 7 | |||||||||
| Changes in assets and liabilities: | |||||||||||||
| Accounts receivable, net | 41 | (23 | ) | 261 | |||||||||
| Inventory, net | 73 | 9 | 10 | ||||||||||
| Other assets | 28 | 45 | 98 | ||||||||||
| Accounts payable and accrued liabilities | (115 | ) | (89 | ) | (69 | ) | |||||||
| Accrued interest | 22 | 65 | (124 | ) | |||||||||
| Other liabilities | 42 | (13 | ) | (42 | ) | ||||||||
| Net cash provided by (used in) operating activities | 246 | 180 | 462 | ||||||||||
| Investing Activities | |||||||||||||
| Property, plant and equipment expenditures | (58 | ) | (60 | ) | (138 | ) | |||||||
| Nuclear fuel expenditures | (89 | ) | (43 | ) | (49 | ) | |||||||
| NDT funds investment sale proceeds | 1,646 | 768 | 949 | ||||||||||
| NDT funds investment purchases | (1,670 | ) | (780 | ) | (959 | ) | |||||||
| Equity investments in affiliates | (6 | ) | (3 | ) | (8 | ) | |||||||
| Proceeds from Cumulus Data Campus Sale and ERCOT Sale | 1,398 | — | — | ||||||||||
| Proceeds from the sale of assets | 1 | — | 46 | ||||||||||
| Other investing activities | 3 | 10 | 2 | ||||||||||
| Net cash provided by (used in) investing activities | 1,225 | (108 | ) | (157 | ) | ||||||||
| TALEN ENERGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||||
| Successor | Predecessor | ||||||||||||
| (Millions of Dollars) | Nine Months Ended September 30, 2024 | May 18 through September 30, 2023 | January 1 through May 17, 2023 | ||||||||||
| Financing Activities | |||||||||||||
| Contributions from member | — | — | 1,393 | ||||||||||
| Financing proceeds at Emergence, net of discount | — | — | 2,219 | ||||||||||
| Repayment of Prepetition Secured Indebtedness | — | — | (3,898 | ) | |||||||||
| Payment of make-whole premiums on Prepetition Secured Indebtedness | — | — | (152 | ) | |||||||||
| TLB proceeds, net | — | 289 | — | ||||||||||
| LMBE-MC TLB payments | — | (294 | ) | (7 | ) | ||||||||
| Cumulus Digital TLF repayment | (182 | ) | — | — | |||||||||
| Share repurchases | (956 | ) | — | — | |||||||||
| Repurchase of noncontrolling interest | (39 | ) | (19 | ) | — | ||||||||
| Cash settlement of restricted stock units | (31 | ) | — | — | |||||||||
| Deferred finance costs | — | (4 | ) | (74 | ) | ||||||||
| Repurchase of warrants | — | (40 | ) | — | |||||||||
| Derivatives with financing elements | — | — | (20 | ) | |||||||||
| Other | (32 | ) | 6 | — | |||||||||
| Net cash provided by (used in) financing activities | (1,240 | ) | (62 | ) | (539 | ) | |||||||
| Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash and Cash Equivalents | 231 | 10 | (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 | $ | 1,132 | $ | 764 | $ | 754 | |||||||
Non-GAAP Financial Measures
We include Adjusted EBITDA and Adjusted Free Cash flow, which the Company uses as measures of its performance and are not financial measures prepared under GAAP, in these materials. 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, non-GAAP financial measures are numerical measures of financial performance, financial position, or cash flows that exclude (or include) amounts that are included in (or excluded from) the most directly comparable measures calculated and presented in accordance with GAAP. Management cautions readers of these materials not to place undue reliance on these non-GAAP financial measures, but to also consider them along with their most directly comparable GAAP financial measures. Non-GAAP measures have limitations as an analytical tool 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 the Company’s 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; 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 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 the 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, a key non-GAAP financial measure, is a useful metric 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), 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.
Please see below for reconciliations of Adjusted EBITDA and Adjusted Free Cash Flow to “Net Income (Loss),” the most comparable GAAP financial measure. Adjusted EBITDA and Adjusted Free Cash Flow are not intended to replace “Net Income (Loss),” a measure calculated and presented in accordance with GAAP.
Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation
The reconciliations from “Net Income (Loss)” presented on the Consolidated Statements of Operations to Adjusted EBITDA and Adjusted Free Cash Flow for the periods were:
| Successor | Predecessor | ||||||||||||||||||||
| (Millions of Dollars) | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | May 18 through September 30, 2023 | January 1 through May 17, 2023 | ||||||||||||||||
| Net Income (Loss) | $ | 168 | $ | (76 | ) | $ | 945 | $ | (45 | ) | $ | 465 | |||||||||
| Adjustments | |||||||||||||||||||||
| Interest expense and other finance charges | 66 | 68 | 187 | 101 | 163 | ||||||||||||||||
| Income tax (benefit) expense | 11 | (16 | ) | 192 | 3 | 212 | |||||||||||||||
| Depreciation, amortization and accretion | 75 | 66 | 225 | 94 | 200 | ||||||||||||||||
| Nuclear fuel amortization | 30 | 47 | 93 | 72 | 33 | ||||||||||||||||
| Reorganization (gain) loss, net (a) | — | — | — | — | (799 | ) | |||||||||||||||
| Unrealized (gain) loss on commodity derivative contracts | (102 | ) | 84 | (58 | ) | 43 | 63 | ||||||||||||||
| Nuclear decommissioning trust funds (gain) loss, net | (67 | ) | 24 | (169 | ) | (15 | ) | (57 | ) | ||||||||||||
| Stock-based compensation expense | 8 | 9 | 24 | 11 | — | ||||||||||||||||
| Long-term incentive compensation expense | 3 | — | 19 | — | — | ||||||||||||||||
| (Gain) loss on asset sales, net (b) | — | — | (885 | ) | — | (50 | ) | ||||||||||||||
| Non-cash impairments (c) | — | 2 | — | 2 | 381 | ||||||||||||||||
| Operational and other restructuring activities | 40 | 4 | 61 | 30 | 17 | ||||||||||||||||
| Development expenses | 1 | 5 | 1 | 7 | 10 | ||||||||||||||||
| Non-cash inventory net realizable value, obsolescence, and other charges (d) | 2 | (2 | ) | 5 | 1 | 56 | |||||||||||||||
| Noncontrolling interest | (3 | ) | (14 | ) | (21 | ) | (22 | ) | (14 | ) | |||||||||||
| Other | (2 | ) | 23 | (13 | ) | 21 | 15 | ||||||||||||||
| Total Adjusted EBITDA | $ | 230 | $ | 224 | $ | 606 | $ | 303 | $ | 695 | |||||||||||
| Capital expenditures, net | (55 | ) | (48 | ) | (135 | ) | (71 | ) | (96 | ) | |||||||||||
| Interest and finance charge payments | (36 | ) | (27 | ) | (161 | ) | (36 | ) | (173 | ) | |||||||||||
| Tax payments | (1 | ) | (2 | ) | (3 | ) | (3 | ) | (5 | ) | |||||||||||
| Pension contributions | (41 | ) | (1 | ) | (45 | ) | (2 | ) | (3 | ) | |||||||||||
| Total Adjusted Free Cash Flow | $ | 97 | $ | 146 | $ | 262 | $ | 191 | $ | 418 | |||||||||||
| _______________ | |
| (a) | See Note 2 in Notes to the Q3 2024 Financial Statements for additional information. |
| (b) | See Note 17 in Notes to the Q3 2024 Financial Statements for additional information. |
| (c) | See Note 8 in Notes to the Q3 2024 Financial Statements for additional information. |
| (d) | See Note 6 in Notes to the Q3 2024 Financial Statements for additional information. |
Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: 2024 Guidance
| 2024E | ||||||||
| (Millions of dollars) | Low | High | ||||||
| Net Income (Loss) | $ | 735 | $ | 765 | ||||
| Adjustments | ||||||||
| Interest expense and other finance charges | 240 | 240 | ||||||
| Income tax (benefit) expense | 190 | 190 | ||||||
| Depreciation, amortization and accretion | 300 | 300 | ||||||
| Nuclear fuel amortization | 120 | 120 | ||||||
| Unrealized (gain) loss on commodity derivative contracts | 60 | 60 | ||||||
| (Gain) loss on sale of assets | (885 | ) | (885 | ) | ||||
| Other | (10 | ) | (10 | ) | ||||
| Adjusted EBITDA | $ | 750 | $ | 780 | ||||
| Capital expenditures, net | $ | (185 | ) | $ | (190 | ) | ||
| Interest and finance charge payments | (240 | ) | (240 | ) | ||||
| Tax payments (a) | (5 | ) | (5 | ) | ||||
| Pension contributions | (55 | ) | (60 | ) | ||||
| Adjusted Free Cash Flow | $ | 265 | $ | 285 | ||||
_______________
Note: Figures include January - April contribution from the ERCOT generation fleet and are rounded to the nearest
(a) Excludes income taxes paid from the NDT.
Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: 2025 Guidance
| 2025E | ||||||||
| (Millions of dollars) | Low | High | ||||||
| Net Income (Loss) | $ | 190 | $ | 410 | ||||
| Adjustments | ||||||||
| Interest expense and other finance charges | 215 | 225 | ||||||
| Income tax (benefit) expense | 90 | 110 | ||||||
| Depreciation, amortization and accretion | 295 | 295 | ||||||
| Nuclear fuel amortization | 105 | 105 | ||||||
| Unrealized (gain) loss on commodity derivative contracts | 30 | 30 | ||||||
| Adjusted EBITDA | $ | 925 | $ | 1,175 | ||||
| Capital expenditures, net | $ | (195 | ) | $ | (205 | ) | ||
| Interest and finance charge payments | (215 | ) | (225 | ) | ||||
| Tax payments (a) | (65 | ) | (85 | ) | ||||
| Pension contributions | (55 | ) | (65 | ) | ||||
| Adjusted Free Cash Flow | $ | 395 | $ | 595 | ||||
_______________
Note: Figures are rounded to the nearest
(a) Excludes income taxes paid from the NDT.
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