TALEN ENERGY SUPPLY, LLC - FORM 8-K - EX-12 - EXHIBIT 12 - December 22, 2014

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8-K - FORM 8-K - TALEN ENERGY SUPPLY, LLCform8k.htm
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EX-23 - EXHIBIT 23 - TALEN ENERGY SUPPLY, LLCexhibit23.htm
Exhibit 12
PPL ENERGY SUPPLY, LLC AND SUBSIDIARIES
 
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions of Dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2013 (a) 
 
2012 (a) 
 
2011 (a) 
 
2010 (a) 
 
2009 (a) 
Earnings, as defined:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (Loss) from Continuing Operations Before
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income Taxes (b)
 
$
 (420)
 
$
 665 
 
$
 1,061 
 
$
 860 
 
$
 (77)
 
 
Adjustments to reflect earnings from equity method
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
investments on a cash basis
 
 
   
 
 
   
 
 
 1 
 
 
 7 
 
 
 1 
 
 
 
 
 
 
 (420)
 
 
 665 
 
 
 1,062 
 
 
 867 
 
 
 (76)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges as below
 
 
 226 
 
 
 238 
 
 
 259 
 
 
 426 
 
 
 364 
 
 
 
 
Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalized interest
 
 
 35 
 
 
 37 
 
 
 38 
 
 
 27 
 
 
 42 
 
 
 
 
Interest expense and fixed charges related to
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
discontinued operations
 
 
  14 
 
 
  12 
 
 
 6 
 
 
 169 
 
 
 115 
 
 
Total fixed charges included in Income (Loss) from
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Continuing Operations Before Income Taxes
 
 
 177 
 
 
 189 
 
 
 215 
 
 
 230 
 
 
 207 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total earnings
 
$
 (243)
 
$
 854 
 
$
 1,277 
 
$
 1,097 
 
$
 131 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed charges, as defined:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest charges (c)
 
$
 207 
 
$
 214 
 
$
 223 
 
$
 387 
 
$
 321 
 
 
Estimated interest component of operating rentals
 
 
 19 
 
 
 24 
 
 
 36 
 
 
 38 
 
 
 42 
 
 
Fixed charges of majority-owned share of 50% or
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
less-owned persons
 
 
   
 
 
   
 
 
   
 
 
 1 
 
 
 1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total fixed charges (d)
 
$
 226 
 
$
 238 
 
$
 259 
 
$
 426 
 
$
 364 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges (b)
 
 
(1.1)
 
 
3.6 
 
 
4.9 
 
 
2.6 
 
 
0.4 

(a)
  
Certain line items for the years 2009 through 2013 have been adjusted to reflect the reclassification of the operating results of the Montana hydroelectric generating facilities as Discontinued Operations as a result of the sale of these facilities in November 2014.  See Note 5 to the Financial Statements for additional information.
(b)
  
To facilitate the sale of the hydroelectric generating facilities referred to in (a) above, PPL Montana terminated a lease agreement in December 2013 that resulted in a $697 million charge.  See Note 4 to the Financial Statements for additional information on the lease termination.  As a result of the lease termination and the reclassification of operating results as Discontinued Operations (referred to in (a) above), earnings for 2013 were lower, which resulted in less than one-to-one coverage.  The amount of the deficiency, or the amount of fixed charges in excess of earnings, was $469 million.
 
As a result of PPL Energy Supply's 2011 distribution of its interest in PPL Global to PPL Energy Funding and related reclassification of PPL Global's operating results as Discontinued Operations and the reclassification referred to in (a) above, earnings for 2009 were lower, which resulted in less than one-to-one coverage.  The amount of the deficiency, or the amount of fixed charges in excess of earnings, was $233 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.