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United States securities and exchange commission logo
May 31, 2024
Mark McFarland
Chief Executive Officer
Talen Energy Corporation
2929 Allen Pkwy, Suite 2200
Houston, TX 77019
Re: Talen Energy
Corporation
Amendment No. 5 to
Draft Registration Statement on Form S-1
Submitted May 17,
2024
CIK No. 0001622536
Dear Mark McFarland:
We have reviewed your amended draft registration statement and have
the following
comments.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe a comment applies to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to this
letter and your amended
draft registration statement or filed registration statement, we may
have additional
comments. Unless we note otherwise, any references to prior comments are
to comments in our
April 18, 2024 letter.
Amendment No. 5 to Draft Registration Statement on Form S-1
Prospectus Summary
Recent Developments
Cumulus Data Campus Sale, page 9
1. We note your disclosure
responding to prior comment 1. With regard to the table on page
9, which you disclosed
as showing the EBITDA values based on the described PTC
reference prices and
your minimum commitments with AWS, please expand your
disclosure to clarify
the reasons for the wide range of EBITDA each year, instead of one
estimated EBITDA amount
based on your reference price and minimum commitment with
AWS that year.
Mark McFarland
Talen Energy Corporation
May 31, 2024
Page 2
In this regard, please clarify why footnote (2) refers to Susquehanna
revenues without
AWS agreements, and why footnote (3) refers to financial outcomes
based on offtake
outcomes dependent on the buyer, instead of just AWS as the buyer.
If you have a reasonable basis supporting the EBITDA ranges, please
add clarifying
supporting details. Otherwise please revise the EBITDA amounts, and
footnotes as
necessary, to correspond with the minimum commitments with AWS only.
Financial Statements
Note 17 - Acquisitions and Divestitures
Completed Divestitures
ERCOT Asset Sale, page F-31
2. We note disclosure of your ERCOT asset sale for $785 million that
closed on May 1,
2024. Beside customary net working capital adjustments, please expand
your disclosure to
clarify the extent of any contingency, recourse or continuing
involvement associated with
the sale that would impact your gain on sale recognition in the second
quarter ending June
30, 2024.
Cumulus Data Campus Sale, page F-32
3. We note you disclosed on page F-32 that for the quarter ended March
31, 2024, you
recognized a $324 million net gain on the sale of the Cumulus data
campus assets.
Per ASC 450, a contingent gain should not be recognized prior to the
gain being realized
or realizable, with claim to cash reasonably assured without
expectation of repayment.
Please explain how you have considered ASC 450-30-25-1 in concluding
that gain
recognition was appropriate, given your disclosures on pages 9 and 52
that the $300
million held in escrow will not be released until zoning approvals and
ordinances allowing
construction and operation of the data center facilities are received,
and if not received,
AWS may revert the escrowed funds and you may repurchase the property.
FirstName LastNameMark McFarland
Unless you are able to show how you have control over receiving the
zoning and
Comapany NameTalen
ordinance Energy
approvals (i.e.Corporation
contingency), it appears that you will need
to postpone your gain
May 31,on2024
sale Page
recognition
2 until the contingency is resolved and the gain is
realizable.
FirstName LastName
Mark McFarland
FirstName LastNameMark
Talen Energy Corporation McFarland
Comapany
May NameTalen Energy Corporation
31, 2024
May 31,
Page 3 2024 Page 3
FirstName LastName
Please contact Yolanda Guobadia at 202-551-3562 or Lily Dang at
202-551-3867 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Michael Purcell at 202-551-5351 or Karina Dorin at 202-551-3763 with
any other
questions.
Sincerely,
Division of Corporation
Finance
Office of Energy &
Transportation
cc: Anthony Sanderson