Segments

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segments

18. Segments

Talen’s operating segments are based on the market areas in which our generation facilities operate and reflect the manner in which our chief operating decision maker review results and allocate resources. Adjusted EBITDA is the key profit metric used to measure financial performance of each segment. Total assets or other asset metrics are not considered a key metric or reviewed by the chief operating decision makers.

“PJM” is engaged in electricity generation, marketing activities, commodity risk and fuel management within the PJM RTO or ISO markets and is comprised of Susquehanna and Talen’s natural gas and coal generation facilities.

“Other” represents a non-reportable segment that includes the operating and marketing activities of Talen Montana’s proportionate share of the Colstrip Units in the WECC market, the operating activities of Nautilus, and other non-material operating and development activities. The Other segment also included the operating activities of our Texas power generation facilities in the ERCOT market prior to their disposal in May 2024. We have determined it appropriate to aggregate results of Talen’s remaining non-reportable segments and other operating activities.

“Corporate and Eliminations” represents a non-reportable segment represents the remaining grouping that includes: (i) General and administrative expenses incurred by our corporate and commercial functions that are not allocated to our reportable segments; (ii) other non-material components that are not regularly reviewed by our chief operating decision maker; and (iii) intercompany eliminations. This grouping is presented to reconcile the reportable segments to our consolidated results.

Financial data for the segments and reconciliation to consolidated results are:

	PJM		Other		Corporate and Eliminations		Total
Three Months Ended June 30, 2024 (Successor)
Operating revenues	$	438	$	58	$	(7)	$	489
Interest expense	—		—		62		62
Capital expenditures	14		—		—		14
Adjusted EBITDA	95		5				100
May 18 through June 30, 2023 (Successor)
Operating revenues	$	355	$	(30)	$	(24)	$	301
Interest expense	—		—		33		33
Capital expenditures	23		10		1		34
Adjusted EBITDA	72		21				93
April 1 through May 17, 2023 (Predecessor)
Operating revenues	$	78	$	81	$	(22)	$	137
Interest expense	—		—		59		59
Capital expenditures	38		19		—		57
Adjusted EBITDA	44		3				47

	PJM		Other		Corporate and Eliminations		Total
Six Months Ended June 30, 2024 (Successor)
Operating revenues	$	871	$	208	$	(81)	$	998
Interest expense	—		—		121		121
Capital expenditures	66		14		—		80
Adjusted EBITDA	375		43				418
May 18 through June 30, 2023 (Successor)
Operating revenues	$	355	$	(30)	$	(24)	$	301
Interest expense	—		—		33		33
Capital expenditures	23		10		1		34
Adjusted EBITDA	72		21				93
January 1 through May 17, 2023 (Predecessor)
Operating revenues	$	1,054	$	193	$	(37)	$	1,210
Interest expense	—		—		163		163
Capital expenditures	132		53		2		187
Adjusted EBITDA	688		37				725

	Successor				Predecessor		Successor				Predecessor
	Three Months Ended June 30, 2024		May 18 through June 30, 2023		April 1 through May 17, 2023		Six Months Ended June 30, 2024		May 18 through June 30, 2023		January 1 through May 17, 2023
Adjusted EBITDA:
PJM	$	95	$	72	$	44	$	375	$	72	$	688
Other	5		21		3		43		21		37
Total Adjusted EBITDA	$	100	$	93	$	47	$	418	$	93	$	725
Reconciling Items:
Interest expense and other finance charges	(62)		(33)		(59)		(121)		(33)		(163)
Income tax benefit (expense)	(112)		(19)		(198)		(181)		(19)		(212)
Depreciation, amortization and accretion	(75)		(28)		(68)		(150)		(28)		(200)
Nuclear fuel amortization	(28)		(25)		(9)		(63)		(25)		(33)
Reorganization gain (loss), net	—		—		838		—		—		799
Unrealized (gain) loss on commodity derivative contracts	91		41		(94)		(44)		41		(63)
Nuclear decommissioning trust funds gain (loss), net	27		39		11		102		39		57
Stock-based compensation expense	(8)		(16)		—		(16)		(16)		—
Long-term incentive compensation expense	(6)		—		—		(16)		—		—
Gain (loss) on asset sales, net	561		—		15		885		—		50
Non-cash impairments	—		—		(16)		—		—		(381)
Operational and other restructuring activities	(19)		(12)		(9)		(21)		(12)		(17)
Development expenses	—		(2)		(3)		—		(2)		(10)
Non-cash inventory net realizable value, obsolescence, and other charges	(2)		(3)		(32)		(3)		(3)		(56)
Noncontrolling interest	7		8		9		18		8		14
Other items	(3)		2		(1)		11		2		(15)
Corporate and Eliminations	(13)		(14)		(12)		(42)		(14)		(30)
Net Income (Loss)	$	458	$	31	$	419	$	777	$	31	$	465