Talen Energy Corporation · NASDAQ:TLN
Talen Energy — Q3 2024 Earnings Presentation
20 slides from Talen Energy's earnings presentation, Nov 14, 2024
Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation Talen Energy Corporation | November 14, 2024
Slide 2: Disclaimers
Disclaimers The information contained herein, as well as any information that has been supplied orally in connection herewith, speaks only as of the date of this presentation. Talen Energy Corporation (“Talen,” “TEC,” the “Company,” “we,” “our,” or “us”) and our affiliates and representatives expres
Slide 3: Agenda
Agenda 1 Business Review 2 Financial Review 3 Q&A 2
Slide 4: Key Highlights
Key Highlights Solid Q3 performance, with $230mm Adjusted EBITDA and $97mm Adjusted Free Cash Flow Raising and narrowing 2024 guidance; reaffirming 2025 guidance Strategic acquisition increasing Nautilus ownership to 100% creates optionality for the data center campus Added to five equity indices, w
Slide 5: Key Regulatory Updates
Key Regulatory Updates Moving Forward from the FERC ISA Decision PJM Capacity Auction ▪ On November 1, FERC rejected the Susquehanna ▪ PJM has received a 6-month delay of its upcoming Base ISA amendment to 480 MW Residual Auction (“BRA”) that has also pushed subsequent auctions through 2028/2029 by
Slide 6: Resource Adequacy in PJM
Resource Adequacy in PJM Generation Retirements vs. Additions in PJM PJM Large Load Adjustment Requests since Jan 2020 (GW) (Summer Peak GW) Fossil Renewables & Battery Included in the 2024 Forecast Requested for the 2025 Forecast 0.2 80 12.7 70 60 18.8 50 40 9.8 30 20 Retirements New Generation Add
Slide 7: Solid Year-to-Date Financial and Operational Performance
Solid Year-to-Date Financial and Operational Performance Key Financial Metrics1 Key Operational Metrics1 $606mm $262mm 0.3 2.4% Adjusted EBITDA Adjusted Free Cash Flow OSHA TRIR4 Fleet EFOF5 ~$1.3bn ~2.1x 27 TWh 49% Liquidity2 Net Debt / Total Generation6 Carbon-Free Generation7 2024E Adjusted EBITD
Slide 8: Q3 2024 and YTD 2024 Financial Results
Q3 2024 and YTD 2024 Financial Results $mm $606 Adjusted EBITDA Adjusted Free Cash Flow ▪ Solid Adjusted EBITDA and Adjusted Free Cash Flow performance ▪ Expanded spark spreads and higher power demand drove $262 increased generation margin1 for $230 $224 PJM gas fleet vs. Q3 2023 $146 ▪ Higher pensi
Slide 9: 2024 and 2025 Guidance
2024 and 2025 Guidance 2024E 2025E Adjusted EBITDA $750 – $780 million $925 – $1,175 million Adjusted Free Cash Flow $265 – $285 million $395 – $595 million Raising and narrowing 2024; reaffirming 2025 Note: Please refer to Reconciliation of Non-GAAP Financial Measures section of the Appendix for mo
Slide 10: Modest Leverage and Ample Liquidity
Modest Leverage and Ample Liquidity Capitalization Summary ($mm unless otherwise noted) November 8, 2024 Corporate Credit Ratings Upgrades Unrestricted Cash $557 ▪ September: S&P upgraded to BB- Secured Debt $2,059 ▪ October: Moody’s upgraded to Ba3 Total Debt $2,190 Shareholder Update 1 Net Debt $1
Slide 11: Talen is Now Included in Multiple Indices
Talen is Now Included in Multiple Indices ✓ Talen has been added to 5 stock indices and is eligible for several more, which could drive substantial institutional / passive fund demand: Inclusion Date ✓ September 2024 ✓ September 2024 ✓ November 2024 June 2025 September 2025 or later ▪ S&P TMI ▪ CRSP
Slide 12: Talen is Powering the Future
Talen is Powering the Future Susquehanna Powering Data Nuclear Facility Centers Premium PJM Dynamic Commercial Gas Assets Hedging Strategy Disciplined Cost and Reliability Assets Capital Management 11
Slide 13: Appendix
Appendix TALENY ENERGY
Slide 14: Generation Portfolio Summary as of September 30, 2024
Generation Portfolio Summary as of September 30, 2024 Plant Owned Commercial Asset Location Fuel Type Plant Type Ownership Region Configuration Capacity (MW)1 Operations Date Susquehanna Nuclear Facility Susquehanna2 PA Nuclear Baseload Dual-Unit 90% 2,228 1983 – 1985 PJM-PPL/MAAC Premium PJM Gas As
Slide 15: Hedging Program Supports Cash Flow Stability and Maintains Upside Optionality
Hedging Program Supports Cash Flow Stability and Maintains Upside Optionality Pricing Summary Balance of 20241 2025 2026 PJM West Hub ATC as of 6/28/2024 ($/MWh) $43.64 $46.75 $49.85 PJM West Hub ATC as of 9/30/2024 ($/MWh) $42.67 $46.59 $49.01 TETCO M3 as of 6/28/2024 ($/MMBtu) $2.14 $3.16 $3.50 TE
Slide 16: Long-Dated Debt Maturities and Solid Credit Ratings
Long-Dated Debt Maturities and Solid Credit Ratings Debt Overview Debt Maturity Summary ($mm) Revolving Credit Facility (Undrawn) Principal Interest Rate1 Tranche Maturity Term Loan B2 / Secured Notes ($mm) as of 9/30 PEDFA Bonds3 Revolving Credit Facility May 2028 $- 8.10% Secured Notes June 2030 1
Slide 17: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures
Slide 18: Definitions of Non-GAAP Financial Measures
Definitions of Non-GAAP Financial Measures Non-GAAP Financial Measures The following non-GAAP financial measures of Adjusted EBITDA and Adjusted Free Cash Flow discussed below, which we use as measures of our performance and liquidity, are not financial measures prepared under GAAP. Non-GAAP financi
Slide 19: Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: Q3 (Unaudited)
Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: Q3 (Unaudited) The reconciliation from “Net Income (Loss)” presented on the Condensed Consolidated Statements of Operations to Adjusted EBITDA and Adjusted Free Cash Flow for: Three Months Ended Three Months Ended Nine Months Ended Notes ($mm
Slide 20: Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: 2024E & 2025E Guidance
Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: 2024E & 2025E Guidance The reconciliation from forecasted “Net Income (Loss)” to Adjusted EBITDA and Adjusted Free Cash Flow for the year ended December 31: ($mm) 2024E 2025E Notes Low High Low High a. Excludes income taxes paid from the NDT.