Talen Energy Corp Q4 FY2024 earnings call

• Talen has benefited from strong tailwinds since signing the AWS contract in March 2024 and listing on NASDAQ in July 2024. • Has over $1 billion in dry powder for share repurchase and has balance sheet flexibility. • In 2024, achieved record reliability and safety, with the fleet generating over 36 terawatt hours of power. • Worked with AWS on site development for the data center, with visibility to 300 megawatts under the existing PPA. • Agreed to an RMR arrangement with PJM, FERC staff, Maryland PSC, and local utilities, extending the life of certain plants and receiving annual payments. • Focused on unlocking value from existing assets and returning value to shareholders in 2024 and aiming to continue this in 2025 while seeking growth opportunities.

Talen generated $770 million of adjusted EBITDA and $283 million of adjusted free cash flow for the year. The fleet produced over 36 terawatt hours of power with an equivalent forced outage factor of 2.2%, down from 5.5% the previous year. Half of the generation came from the carbon - free Susquehanna nuclear facility. The gas - fired fleet saw increased dispatch opportunities, driving higher volumes and energy margin.

• Reaffirmed 2025 adjusted EBITDA range of $0.925 billion to $1.175 billion and adjusted free cash flow range of $395 million to $595 million. • 2026 outlook remains unchanged from the September Investor Day. • In 2024, repurchased approximately 13 million shares (22% of outstanding shares), returning nearly $2 billion of capital to shareholders. • Has significant buyback capacity through year - end 2026 supported by cash on hand and adjusted free cash flow generation.

• Market volatility has caused some to question IPP investments related to data center demand growth. • Uncertainty in the regulatory process, such as with respect to colocation and capacity market rules, which could impact long - term investments and grid reliability.

Q: Michael Sullivan asked about how quickly the FERC order on colocation could be turned around and interim actions.

A: Mac McFarland said they were encouraged by FERC's push to PJM and the time frame outlined, with a simple solution possible if parties agree. Talen has an existing AWS contract being executed.

Q: Shar Pourreza inquired about the backdrop for resource adequacy legislation in Pennsylvania and development program.

A: Mac McFarland talked about the governor's focus on resource adequacy, near - term cap on capacity auctions, and development focus on existing fleet upgrades and longer - term contracts.

Q: Jeremy Tonet asked about the visibility of forward EBITDA and hyperscaler spend impact.

A: Terry Nutt said a significant portion of 2025 EBITDA is bracketed, and Mac McFarland stated no signs of hyperscaler spend slowing.

Q: Angie Storozynski questioned about waiting on deals and gas plants.

A: Mac McFarland and Cole Muller said Talen is executing under existing contracts, working on various opportunities across the fleet, and there is interest in gas - fired deals but it takes time.

Q: Brinny Singh asked about RMR situation at FERC.

A: Mac McFarland said they reached a settlement with stakeholders and John Wander mentioned FERC approval timeline and ability to run plants in the meantime.

Q: Craig Shere asked about gas - fired investment and guidance update.

A: Mac McFarland and Terry Nutt said gas - fired investments need long - term contracts with adequate returns, and guidance will be updated later in the year as the year progresses