10-Q – 2025-08-07 – tln-20250630.htm

If completed, the Freedom and Guernsey Acquisitions may not achieve their intended results.
Although we currently anticipate that the Freedom and Guernsey Acquisitions will be accretive to our earnings and cash flow, that expectation is based on preliminary estimates that are subject to change. We may fail to realize the anticipated benefits of the acquisitions, encounter additional transaction and integration-related costs, or be affected by other factors that impact preliminary estimates, any of which could decrease or delay the expected accretion and (or) contribute to a decrease in the price of our common stock.
We entered into the Purchase Agreements with the expectation that the Freedom and Guernsey Acquisitions would result in various benefits to the Company, including enhanced generation capabilities. Achievement of the anticipated benefits is subject to a number of uncertainties, including our ability to effectively integrate the acquired assets, which may be complex, costly, and time-consuming. Additional challenges could include, among others:
• implementing our business plan for, and achieving the targeted operating or long-term strategic benefits from, the acquired assets;
• issues or costs in integrating (i) financial, information technology, communications, and other systems; (ii) relationships with industry contacts and business partners, including third-party service providers who provide key services for the acquired assets; and (iii) key hedging and other commercial activities, arrangements, and relationships;
• possible inconsistencies between our standards, controls, policies, and procedures and those of the acquired assets, as well as the resources required to implement or improve the internal controls, procedures, and policies of the acquired assets to meet public company standards;
• potential unknown liabilities and unforeseen expenses, delays, or regulatory conditions associated with the acquisitions, as well as any unexpected write offs or impairment charges resulting from the acquisitions; and
• performance of the acquired assets and the costs to operate and maintain them, relative to expectations, including any unanticipated capital expenditures or investments.
Furthermore, the Company will not control Freedom or Guernsey until completion of the proposed acquisitions, and the acquired assets or their value could be negatively impacted by conditions occurring while the acquisitions are pending. Adverse changes could result from, among other things, physical asset damage, legal or regulatory developments, deteriorating general business, market, industry, or economic conditions, and other factors both within and beyond the control of the Company and the sellers. In addition, there could be potential unknown liabilities or unforeseen expenses not discovered during due diligence and not adequately covered by representation and warranty insurance (should we choose to procure it) or otherwise adjusted for in the Purchase Agreements. Any such conditions could cause the value of the acquired assets to decline and (or) reduce the benefits of the acquisitions to the Company and its stockholders.
Any of the foregoing risks could result in failure to achieve the anticipated benefits of the acquisitions, and the expectations of our future financial condition and results of operations following the acquisitions might not be met. See also “Part I, Item 1A. Risk Factors—Commercial and Operational Risks—Acquisitions, divestitures, mergers, or other corporate transactions may expose us to additional risks” in our 2024 Annual Report.
We expect to incur a significant amount of indebtedness to finance the Freedom and Guernsey Acquisitions. However, we are obligated to complete the transactions whether or not we have obtained the necessary funding.
We intend to raise approximately $3.8 billion of additional indebtedness to fund the Freedom and Guernsey Acquisitions. The amount of our indebtedness following the acquisitions could have adverse consequences for us, including, among others:
• hindering our ability to adjust to changing market, industry, or economic conditions;
• making us more vulnerable to economic or industry downturns, including interest rate increases;
• limiting the amount of free cash flow available for future operations, acquisitions, dividends, stock repurchases, or other uses;
• reducing flexibility under the terms of our indebtedness to, among other things, make restricted payments, obtain other financing, operate our business, and (or) take advantage of mergers, acquisitions, or other corporate opportunities; and
• placing us at a competitive disadvantage compared to less leveraged competitors.
Increased indebtedness could also impact our credit ratings, borrowing costs, access to capital markets, and ability to comply with our indebtedness. See also “Part I, Item 1A. Risk Factors—Financial and Equity Risks—The amount and terms of our indebtedness could adversely affect our financial condition and impair our ability to operate our business” in our 2024 Annual Report.
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The Purchase Agreements do not contain a financing condition, and we would be required to complete the proposed acquisitions even if we do not have the required funds on hand. TEC has issued parent guaranties in favor of the sellers to guarantee performance of our obligations under the Purchase Agreements. While we have obtained 12-month commitments for 364-day bridge facilities, they are subject to a number of conditions and we cannot guarantee that we will be able to close the financings as anticipated or that the acquisitions will close prior to expiration of the bridge commitments. In addition, the tenor, economics, and other terms of the bridge facilities, provide significant incentive for us to not draw on the bridge facilities or, if drawn, to promptly refinance those facilities. Whether to initially fund the purchase price or to later refinance the bridge facilities, we will be required to raise long-term financing for the acquisitions, which could subject us to less favorable timing, costs, and market conditions than we would otherwise choose. If we cannot close on any element of our financing plan, we will need to pursue other financing options and certain existing indebtedness at Freedom and (or) Guernsey or their affiliates may remain in place, which could result in less favorable financing terms that could negatively impact our costs, credit ratings, or financing and operating flexibility, or realization of the anticipated benefits from the acquisitions. See also “Part I, Item 1A. Risk Factors—Financial and Equity Risks—We may not have sufficient access to financing for our business” in our 2024 Annual Report.
Additional Risk Factors
For additional information related to the Company’s risk factors, see “Item 1A. Risk Factors” in our 2024 Annual Report, as updated by our March 31, 2025 Quarterly Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities
In October 2023, we announced the Board of Directors approved the SRP, initially authorizing the Company to repurchase up to $300 million of TEC’s outstanding common stock. In May 2024, the Board of Directors approved an increase in the then-remaining SRP capacity to $1 billion through the end of 2025. In September 2024, the Board of Directors again approved an increase in the then-remaining SRP capacity to $1.25 billion through December 31, 2026. See “Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities” in the Company’s 2024 Annual Report for additional information related to the SRP and shares repurchased under the SRP.
There were no share repurchases during the three months ended June 30, 2025.
For a description of limitations on the payment of our dividends, see Note 2 to the Annual Financial Statements.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

ITEM 5. OTHER INFORMATION
During the three months ended June 30, 2025, none of our directors or “officers” (as such term is defined in Rule 16(a)-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading agreement” or “non-Rule 10b5-1 trading arrangement” (each as defined in Item 408 of Regulation S-K).
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ITEM 6. EXHIBITS
Incorporated by Reference

Exhibit No. Description Form File Number Date of Filing Exhibit Number

2.1* #^
Purchase and Sale Agreement, dated as of July 17, 2025, by and between Caithness Energy, L.L.C., as seller, and Talen Generation, LLC, as buyer.
— — — —
2.2* #^
Purchase and Sale Agreement, dated as of July 17, 2025, by and among Caithness Energy, L.L.C., as seller, Caithness Apex Guernsey, LLC, as subsidiary seller, and Talen Generation, LLC, as buyer.
— — — —
3.1 Third Amended and Restated Certificate of Incorporation of Talen Energy Corporatio n.
S-1 333-280341 June 20, 2024 3.1
3.2 Second Amended and Restated Bylaws of Talen Energy Corporation .
S-1 333-280341 June 20, 2024 3.2
10.1 †
Amended and Restated 2025 Employee Stock Purchase Plan.
10-Q
001-37388 May 8, 2025
10.1

31.1* Certification of Chief Executive Officer (Principal Executive Officer) p ursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
— — — —
31.2* Certification of Chief Financial Officer (Principal Financial Officer) p ursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
— — — —
32.1** Certification of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) p ursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
— — — —
101.INS* Inline XBRL Instance Document. — — — —
101.SCH* Inline XBRL Taxonomy Extension Schema Document. — — — —
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. — — — —
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. — — — —
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document. — — — —
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. — — — —
104* Cover Page Interactive Data File (embedded within the Inline XBRL document). — — — —

________________
*    Filed herewith.
**    Furnished herewith.
†      Management contract or compensatory plan or arrangement.
#     Certain of the schedules and attachments to the exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or attachment will be furnished to the SEC upon request.
^     Certain private and immaterial portions of the exhibit have been redacted pursuant to Item 601(a)(6) of Regulation S-K.
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GLOSSARY OF TERMS AND ABBREVIATIONS
Adjusted EBITDA. 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 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 TLF and associated cash flow sweep.
Annual Financial Statements. The audited consolidated balance sheets of TEC as of December 31, 2024 (Successor) and December 31, 2023 (Successor); the related audited consolidated statements of operations, statements of comprehensive income, statements of cash flows, and statements of equity for the year ended December 31, 2024 (Successor), for the period from May 18, 2023 through December 31, 2023 (Successor), and for the period from January 1, 2023 through May 17, 2023 (Predecessor) and the year ended December 31, 2022 (Predecessor); and the related notes.
AOCI. Accumulated other comprehensive income or loss, which is a component of stockholders’ equity on the Consolidated Balance Sheets.
ARO. Asset retirement obligation.
AWS. Amazon Web Services, Inc. and its affiliates.
AWS Data Campus. The data center campus initially developed by a subsidiary of Cumulus Digital adjacent to Susquehanna. See Note 17 to the Interim Financial Statements for information on the AWS Data Campus Sale.
AWS Data Campus Sale. The Company’s sale of the AWS Data Campus to AWS in March 2024 to AWS for gross proceeds of $650 million. See Note 17 to the Interim Financial Statements for additional information.
AWS PPA. The March 2024 (as revised in June 2025) power purchase agreement between the Company and AWS pursuant to which, among other things, the Company agreed to supply up to 960 MW of long-term power to the AWS Data Campus from Susquehanna. In June 2025, the Company and AWS entered into a revised AWS PPA, under which the Company is expected to provide AWS with up to 1,920 MW of power in a “front-of-the-meter” model through 2042. The transition to the revised AWS PPA is expected to occur in Spring 2026.
Bilateral LCF. The $75 million senior secured bilateral LC facility provided by Barclays Bank PLC. The Bilateral LCF was terminated in December 2024.
Board of Directors. The board of directors of Talen Energy Corporation.
Brandon Shores. A Talen-owned and operated generation facility in Curtis Bay, Maryland.
Brunner Island. A Talen-owned and operated generation facility in York Haven, Pennsylvania.
CCR. Coal Combustion Residuals, including but not limited to fly ash, bottom ash, and gypsum, that are produced from coal-fired electric generation facilities.
Colstrip. A generation facility comprised of four coal-fired generation units located in Colstrip, Montana. Talen Montana operates Colstrip, owns an undivided interest in Colstrip Unit 3, and has an economic interest in Colstrip Unit 4. Colstrip Units 1 and 2 were permanently retired in January 2020. See Note 10 to the Annual Financial Statements for additional information on jointly owned facilities and Talen Montana’s ownership interests in Colstrip.
Credit Agreement. The Credit Agreement, dated as of May 17, 2023, by and among TES, as borrower, the lending institutions from time to time parties thereto, Citibank, N.A., as administrative agent and collateral agent, and the joint lead arrangers and joint bookrunners parties thereto, which governs the RCF, TLB-1, TLB-2, and LCF, as the same may be amended, amended and restated, supplemented, or otherwise modified from time-to-time.
Cumulus Digital. Cumulus Digital Holdings LLC, a subsidiary of TES that, through its subsidiaries, (i) initially developed the AWS Data Campus; and (ii) holds the Company’s interest in Nautilus.
Cumulus Digital TLF. The term loan facility under which a subsidiary of Cumulus Digital borrowed $175 million to support the development of Nautilus and the AWS Data Campus. The Cumulus Digital TLF was repaid in full and terminated in March 2024.
DOE. U.S. Department of Energy.
EPA. U.S. Environmental Protection Agency.
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EPA CCR Rule. The national regulatory standards required by the EPA for the management of CCRs in landfills and surface impoundments.
EPA CSAPR. The Cross-State Air Pollution Rule, a federal program that aims to reduce power plant emissions that cross state lines and contribute to ground-level ozone and fine particle pollution in other states. A cap-and-trade system for both annual and ozone season periods is used to reduce the target pollutants—sulfur dioxide and nitrogen oxides. CSAPR regulations have been changed over time, and different versions of the regulations have been referred to as the “CSAPR Update,” the “Revised CSAPR Update,” and the “Good Neighbor Plan.”
EPA ELG Rule. The effluent limitation guidelines, which are national regulatory standards required by the EPA for wastewater discharged from specific industrial categories, including but not limited to coal-fired electric generation facilities, to surface waters and municipal sewage treatment plants.
EPA GHG Rule. An EPA rule that establishes carbon dioxide limits for new electric generating units and GHG guidelines for certain existing electric generating units.
EPA MATS Rule. The Mercury and Air Toxics Standards, EPA technology-based emissions standards for mercury and other hazardous air pollutants emitted by generation units with a capacity of more than 25 MWs.
EPS . Earnings per share.
ERCOT. The Electric Reliability Council of Texas, operator of the electricity transmission network and electricity energy market in most of Texas .
ERCOT Sale. The sale of our Texas fleet to CPS Energy in May 2024.
Exchange Act. The Securities Exchange Act of 1934, as amended.
FERC. U.S. Federal Energy Regulatory Commission.
Freedom and Guernsey Acquisitions. Our pending acquisitions of the Freedom Energy Center in Pennsylvania and the Guernsey Power Station in Ohio from affiliates of Caithness Energy. See Note 17 to the Interim Financial Statements for additional information.
GAAP. Generally Accepted Accounting Principles in the United States.
H.A. Wagner. A Talen-owned and operated generation facility in Curtis Bay, Maryland.
Indenture. The Indenture, dated as of May 12, 2023, as supplemented by the First Supplemental Indenture, dated as of May 17, 2023, the Second Supplemental Indenture, dated as of October 6, 2023, the Third Supplemental Indenture, dated as of June 22, 2024, and the Fourth Supplemental Indenture, dated as of January 13, 2025, each between TES, the Subsidiary Guarantors and Wilmington Savings Fund Society, FSB, as trustee, which governs the Secured Notes, as the same may be further amended, amended and restated, supplemented or otherwise modified from time-to-time.
Inflation Reduction Act. The Inflation Reduction Act of 2022, which was signed into law in August 2022. Among the Inflation Reduction Act’s provisions are: (i) amendments to the Internal Revenue Code of 1986 to create a nuclear production tax credit program; (ii) the creation, extension and modification of tax credit programs for certain clean energy projects, such as solar, wind, and battery storage; and (iii) adjustments to corporate tax rates.
Interim Financial Statements. The consolidated balance sheets of TEC as of June 30, 2025 and December 31, 2024; the related consolidated statements of operations, statements of comprehensive income, and statements of equity for the three and six months ended June 30, 2025 and 2024; the consolidated statement of cash flows for the six months ended June 30, 2025 and 2024; and the related notes.
ISA. Interconnection Service Agreement.
ISO. Independent System Operator.
LC. Letter of credit.
LCF. The $900 million stand-alone letter of credit facility established under the Credit Agreement.
Martins Creek. A Talen-owned and operated generation facility in Bangor, Pennsylvania.
MMBtu. One million British Thermal Units.
Montour. A Talen-owned and operated generation facility in Washingtonville, Pennsylvania.
MW. Megawatt.
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MWd. Megawatt-day.
MWh. Megawatt-hour.
Nautilus. Nautilus Cryptomine LLC, a cryptocurrency project that was previously a joint venture between the Company and TeraWulf. The Company purchased TeraWulf’s interest in October 2024 and now owns 100% of Nautilus.
NAV. Net asset value.
NDT. Nuclear facility decommissioning trust that is expected to fund Talen’s proportional costs associated with the future decommissioning activities of Susquehanna.
NERC. North American Electric Reliability Corporation.
NRC. U.S. Nuclear Regulatory Commission.
Nuclear PTC. The nuclear production tax credit under the Inflation Reduction Act.
PEDFA Bonds. The following series of Pennsylvania Economic Development Financing Authority (“PEDFA”) Exempt Facilities Revenue Refunding Bonds: Series 2009A, due December 2038 (“PEDFA 2009A Bonds”); Series 2009B, due December 2038 (“PEDFA 2009B Bonds”); and Series 2009C, due December 2037 (“PEDFA 2009C Bonds”). The PEDFA 2009A Bonds were extinguished at emergence from bankruptcy in 2023; the PEDFA 2009B Bonds and PEDFA 2009C Bonds remain outstanding and are guaranteed by certain of the Subsidiary Guarantors.
PJM. PJM Interconnection, L.L.C., the RTO that coordinates the movement of wholesale electricity in all or parts of Pennsylvania, New Jersey, Maryland, 10 other states, and the District of Columbia.
PJM BRA. PJM Base Residual Auction, a component of PJM’s capacity market intended to secure power supply resources from market participants in advance of the PJM Capacity Year. It is usually held during the month of May three years prior to the start of the PJM Capacity Year. Under PJM’s “pay-for-performance” model, generation resources are required to deliver on demand during system emergencies or owe a payment for non-performance.
PJM Capacity Year. PJM capacity revenues for each delivery year covering the period from June 1 to May 31.
Plan of Reorganization. The Joint Chapter 11 Plan of Reorganization of Talen Energy Supply, LLC and Its Affiliated Debtors (Docket No. 1206), as subsequently amended, supplemented, or otherwise modified, and any exhibits or schedules thereto.
PP&E. Property, plant and equipment.
RCF. The senior secured revolving credit facility that provides $700 million in aggregate revolving loan and LC commitments under the Credit Agreement.
RGGI. The Regional Greenhouse Gas Initiative, a mandatory market-based program among certain states, including Maryland, New Jersey and Massachusetts, to cap and reduce carbon dioxide emissions from the power sector. RGGI requires certain electric power generators to hold allowances equal to their carbon dioxide emissions over a three-year control period. Pennsylvania has proposed joining this program.
RMR. A generation unit that is otherwise slated to be retired but agrees with PJM to remain operational beyond its requested deactivation date as a reliability-must-run resource to mitigate reliability concerns until necessary upgrades can be established.
RTO. Regional Transmission Organization.
Secured ISDAs. Certain bilateral secured International Swaps and Derivatives Association (“ISDA”) agreements and Base Contracts for Sale and Purchase of Natural Gas as published by the North American Energy Standards Board (“NAESB”) of Talen.
Secured Notes . The 8.625% Senior Secured Notes, due 2030, issued by Talen Energy Supply.
SRP. The share repurchase program, under which the Board of Directors has authorized the Company to repurchase shares of TEC’s outstanding common stock.
Subsidiary Guarantors. The subsidiaries of TES that guarantee: (i) the obligations of TES under the Credit Facilities and the Secured Notes; and (ii) the obligations of Talen Energy Marketing under the Secured ISDAs.
Susquehanna. A nuclear-powered generation facility located near Berwick, Pennsylvania. A subsidiary of Talen Energy Supply operates and owns a 90% undivided interest in Susquehanna.
Talen (or the “Company,” “we,” “us,” or “our”). (i) for periods after May 17, 2023, Talen Energy Corporation and its consolidated subsidiaries, unless the context clearly indicates otherwise; and (ii) for periods on or before May 17, 2023, Talen Energy Supply and its consolidated subsidiaries, unless the context clearly indicates otherwise.
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Talen Energy Corporation (or “TEC”). Talen Energy Corporation, the parent company of Talen Energy Supply and its consolidated subsidiaries.
Talen Energy Marketing. Talen Energy Marketing, LLC, a direct subsidiary of Talen Energy Supply that provides energy management services to Talen-owned and operated generation facilities and engages in wholesale commodity marketing activities.
Talen Energy Supply (or “TES”). Talen Energy Supply, LLC, a direct subsidiary of Talen Energy Corporation that, thorough subsidiaries, indirectly holds all of Talen’s assets and operations.
Talen Montana. Talen Montana, LLC, a Talen subsidiary that operates Colstrip, owns an undivided interest in Colstrip Unit 3, and is party to a contractual economic sharing agreement for Colstrip Units 3 and 4.
TeraWulf. TeraWulf (Thales) LLC, a wholly owned subsidiary of TeraWulf Inc. and an unaffiliated third party.
TLB-1. The $580 million (subsequently increased to $870 million) senior secured term loan B facility, due May 2030, under the Credit Agreement.
TLB-2. The $850 million senior secured term loan B facility, due December 2031, under the Credit Agreement.
TLC LCF. The $470 million cash collateralized LC facility under the Credit Agreement. The TLC LCF was terminated in December 2024.
WECC. The Western Electricity Coordinating Council, a non-profit corporation that assures a reliable and secure bulk electric system in the Western Interconnection, covering all or parts of Montana, 13 other U.S. States, Canada, and Mexico.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:
August 7, 2025
By:
/s/ Terry L. Nutt

Name:
Terry L. Nutt

Title:
Chief Financial Officer

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