| Six Months | |||||||||||||||||||||||
| Ended June 30, 2015 | Years Ended December 31, | ||||||||||||||||||||||
| 2014 (a) | 2013 (a) | 2012 (a) | 2011 (a) | 2010 (a) | |||||||||||||||||||
| Earnings, as defined: | |||||||||||||||||||||||
Income (Loss) from Continuing Operations Before Income Taxes (b) | $ | 131 | $ | 303 | $ | (420 | ) | $ | 665 | $ | 1,061 | $ | 860 | ||||||||||
Adjustments to reflect earnings from equity method investments on a cash basis | — | — | — | — | 1 | 7 | |||||||||||||||||
| 131 | 303 | (420 | ) | 665 | 1,062 | 867 | |||||||||||||||||
| Total fixed charges as below | 102 | 161 | 226 | 238 | 259 | 426 | |||||||||||||||||
| Less: | |||||||||||||||||||||||
| Capitalized interest | 8 | 22 | 35 | 37 | 38 | 27 | |||||||||||||||||
Interest expense and fixed charges related to discontinued operations | — | 10 | 14 | 12 | 6 | 169 | |||||||||||||||||
Total fixed charges included in Income (Loss) from Continuing Operations Before Income Taxes | 94 | 129 | 177 | 189 | 215 | 230 | |||||||||||||||||
| Total earnings | $ | 225 | $ | 432 | $ | (243 | ) | $ | 854 | $ | 1,277 | $ | 1,097 | ||||||||||
| Fixed charges, as defined: | |||||||||||||||||||||||
| Interest charges (c) | $ | 99 | $ | 156 | $ | 207 | $ | 214 | $ | 223 | $ | 387 | |||||||||||
| Estimated interest component of operating rentals | 3 | 5 | 19 | 24 | 36 | 38 | |||||||||||||||||
Fixed charges of majority-owned share of 50% or less-owned persons | — | — | — | — | — | 1 | |||||||||||||||||
| Total fixed charges (d) | $ | 102 | $ | 161 | $ | 226 | $ | 238 | $ | 259 | $ | 426 | |||||||||||
| Ratio of earnings to fixed charges (b) | 2.2 | 2.7 | (1.1 | ) | 3.6 | 4.9 | 2.6 | ||||||||||||||||
| (a) | Years 2010 through 2014 reflect the reclassification of certain Talen Montana hydroelectric generating facilities and related assets as Discontinued Operations. See Note 7 to the Financial Statements for additional information. | |
| (b) | To facilitate the sale of the hydroelectric generating facilities referred to in (a) above, in December 2013, Talen Montana terminated a lease agreement which resulted in a $697 million charge. See Talen Energy Supply's Note 4 to the Financial Statements in the 2015 Prospectus for additional information. As a result of these transactions, earnings were lower, which resulted in less than one-to-one coverage. The adjusted amount of the deficiency, or the amount of fixed charges in excess of earnings, was $469 million. | |
| (c) | Includes interest on long-term and short-term debt, as well as amortization of debt discount, expense and premium - net. | |
| (d) | Interest on unrecognized tax benefits is not included in fixed charges. | |
