Talen Energy Corp
For the period ended Mar 31, 2025. Filed May 8, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 8, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
12. Fair Value
- Fair Value
Recurring Fair Value Measurements
Financial assets and liabilities reported at fair value on a recurring basis primarily include energy commodity derivatives, interest rate derivatives, and investments held within the NDT.
Level 1 derivative assets and liabilities primarily represent exchange-traded futures and options that are valued using unadjusted prices available from the underlying exchange. Level 1 financial assets also include investments in equity securities and available-for-sale U.S. government debt securities, which are valued using exchange prices.
Level 2 derivative assets and liabilities primarily represent over-the-counter swaps, options, and forward purchase and sale contracts that are valued using adjusted exchange prices, prices provided by brokers, or pricing service companies that are all corroborated by market data. Level 2 financial assets also include investments in available-for-sale debt securities, including investments in corporate and municipal bonds, that are valued using pricing provided by brokers or pricing service companies and corroborated with market data.
The classifications of recurring fair value measurements within the fair value hierarchy were:
| March 31, 2025 | December 31, 2024 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Level 1 | Level 2 | NAV | Netting (a) | Total | Level 1 | Level 2 | NAV | Netting (a) | Total | |
| Assets | ||||||||||
| Cash equivalents | $— | $— | $12 | $— | $12 | $— | $— | $3 | $— | $3 |
| Equity securities (b) | 728 | — | 354 | — | 1,082 | 758 | — | 347 | — | 1,105 |
| U.S. government debt securities | 339 | — | — | — | 339 | 353 | — | — | — | 353 |
| Municipal debt securities | — | 96 | — | — | 96 | — | 85 | — | — | 85 |
| Corporate debt securities | — | 187 | — | — | 187 | — | 173 | — | — | 173 |
| Receivables (payables), net (c) | — | — | — | — | 1 | — | — | — | — | 5 |
| NDT funds | 1,067 | 283 | 366 | — | 1,717 | 1111 | 258 | 350 | — | 1,724 |
| Commodity derivatives | 267 | 85 | — | (314) | 38 | 134 | 91 | — | (156) | 69 |
| Interest rate derivatives | — | — | — | — | — | — | 2 | — | — | 2 |
| Total assets | $1,334 | $368 | $366 | $(314) | $1,755 | $1,245 | $351 | $350 | $(156) | $1,795 |
| Liabilities | ||||||||||
| Commodity derivatives | $345 | $169 | $— | $(391) | $123 | $145 | $29 | $— | $(167) | $7 |
| Interest rate derivatives | — | 11 | — | — | 11 | — | — | — | — | — |
| Total liabilities | $345 | $180 | $— | $(391) | $134 | $145 | $29 | $— | $(167) | $7 |
(a)Amounts represent netting pursuant to master netting arrangements and cash collateral held or placed with the same counterparty.
(b)Includes fixed income funds and real estate investment trusts.
(c)Represents: (i) interest and dividends earned but not received; and (ii) net sold or purchased investments, but not settled.
There were no recurring fair value measurements classified as Level 3 as of March 31, 2025 and December 31, 2024.
Nonrecurring Fair Value Measurements
There were no nonrecurring fair value measurements related to impairments of long-lived assets during the three months ended March 31, 2025 and 2024.
Reported Fair Value
The carrying value of certain financial assets and liabilities on the Consolidated Balance Sheets, including “Cash and cash equivalents,” “Restricted cash and cash equivalents,” “Accounts receivable,” and “Accounts payable and other accrued liabilities” approximate fair value.
The fair value measurements of indebtedness are classified as Level 2 within the fair value hierarchy. The fair value of fixed rate debt was estimated primarily by utilizing an income approach whereby the future cash flows of the obligations are discounted at the estimated current cost of funding rates, which incorporates the credit risk associated with the obligations. The carrying value of variable rate indebtedness approximates fair value.
The carrying value and fair value of indebtedness presented on the Consolidated Balance Sheets were:
| March 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Carrying Value | Fair Value | Carrying Value | Fair Value | |
| Long-term debt (a) | $2,992 | $3,109 | $3,004 | $3,120 |
(a)Aggregate value of “Long-term debt” and “Long-term debt, due within one year” presented on the Consolidated Balance Sheets.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.