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Exhibit 12 (b)
TALEN ENERGY SUPPLY, LLC AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions of Dollars)

 
Three Months
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ended
March 31, 2016
 
Years Ended December 31,
 
 
2015
 
2014
 
2013
 
2012
 
2011
Earnings, as defined:
 
 
 
 
 
 
 
 
 
 
 
    Income (Loss) from Continuing Operations
       Before Income Taxes (a)
$
257

 
$
(368
)
 
$
303

 
$
(420
)
 
$
665

 
$
1,061

    Adjustments to reflect earnings from equity
       method investments on a cash basis
—

 
—

 
—

 
—

 
—

 
1

 
257

 
(368
)
 
303

 
(420
)
 
665

 
1,062

 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges as below
68

 
236

 
161

 
226

 
238

 
259

    Less:
 
 
 
 
 
 
 
 
 
 
 
    Capitalized interest
7

 
20

 
22

 
35

 
37

 
38

    Interest expense and fixed charges related to
       discontinued operations
—

 
—

 
10

 
14

 
12

 
6

Total fixed charges included in Income (Loss) from
  Continuing Operations Before Income Taxes
61

 
216

 
129

 
177

 
189

 
215

 
 
 
 
 
 
 
 
 
 
 
 
    Total earnings
$
318

 
$
(152
)
 
$
432

 
$
(243
)
 
$
854

 
$
1,277

 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges, as defined:
 
 
 
 
 
 
 
 
 
 
 
    Interest charges
$
67

 
$
231

 
$
156

 
$
207

 
$
214

 
$
223

    Estimated interest component of operating rentals
1

 
5

 
5

 
19

 
24

 
36

 
 
 
 
 
 
 
 
 
 
 
 
          Total fixed charges (b)
$
68

 
$
236

 
$
161

 
$
226

 
$
238

 
$
259

 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges (a)
4.7

 
(0.6
)
 
2.7

 
(1.1
)
 
3.6

 
4.9

 
 
 
 
 
 
 
 
 
 
 
 

(a)
The three months ended March 31, 2016 includes $140 million of net pre-tax gains related to the sale of certain generation facilities. See Note 7 to the Financial Statements for additional information on the sales.

In 2015, $657 million non-cash, pre-tax goodwill and other long-lived asset impairment charges were recorded. See Note 16 to the Financial Statements in Talen Energy's 2015 10-K for additional information. As a result of these non-cash charges, earnings were lower in 2015, 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 $388 million.

To facilitate the sale of the hydroelectric generating facilities in 2014, in December 2013, Talen Montana terminated a lease agreement which resulted in a $697 million charge. See Note 6 to the Financial Statements in Talen Energy's 2015 10-K for additional information. As a result of these transactions, earnings were lower in 2014, 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.
    
(b)
Interest on unrecognized tax benefits is not included in fixed charges.