Talen Energy Corp

Results of Operations

The results of operations presented below for the three and nine months ended September 30, 2025 and 2024, should be reviewed in conjunction with the Interim Financial Statements and Notes thereto. Our results of operations as reported in the Interim Financial Statements are prepared in accordance with GAAP.

In the explanations below, “Energy and other revenues” and “Fuel and energy purchases” are evaluated collectively because the price for power is generally determined by the variable operating cost of the next marginal generator dispatched to meet demand. “Energy and other revenues” relate to sales to an RTO or ISO, sales under wholesale bilateral contracts, realized hedges, Bitcoin revenue, and Nuclear PTC revenue. “Fuel and energy purchases” includes costs for fuel to generate electricity and settlements of financial and physical transactions related to fuel and energy purchases.

Unrealized gains (losses) on derivative instruments resulting from changes in fair value during the periods are presented separately as revenues within “Operating Revenues” and expenses within “Energy Expenses.” We evaluate them collectively because they represent the changes in fair value of our economic hedging activities.

Results for the Three Months Ended September 30, 2025 and 2024

The following table and subsequent section display the results of operations:

Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024

Net Income (Loss) Attributable to Stockholders increased by $39 million, primarily driven by the factors discussed below.

•Operating Revenues, net of Energy Expenses. $115 million favorable increase, primarily due to the following:

◦Capacity Revenues.$116 million favorable increase. This is primarily related to a $172 million increase due to higher cleared capacity prices though the PJM BRA for the 2025/2026 PJM Capacity Year compared to the 2024/2025 PJM Capacity Year, partially offset by a $(56) million decrease due to lower volumes cleared though the PJM BRA for the 2025/2026 PJM Capacity Year compared to the 2024/2025 PJM Capacity Year.

◦Energy and Other Revenues, net of Fuel and Energy Purchases.$62 million favorable increase. This is primarily related to the combined effects of: (i) $118 million increase in margin associated with electric generation and ancillary revenue, primarily due to higher realized prices received at Susquehanna and our PJM fossil fleet, and higher generation volumes at our PJM fossil fleet, coupled with (ii) $36 million increase in realized hedge results. Such amounts are partially offset by a $(92) million decrease in digital revenue and Nuclear PTC revenue.

◦Unrealized Gain (Loss) on Derivative Instruments, net.$(66) million unfavorable decrease. This is primarily related to unrealized losses from the reversal of positions previously recognized as mark-to-market assets which settled during the period.

•Gain (Loss) on Sale of Assets, net.$25 million favorable increase. This is primarily related to a $22 million gain on sale of the Camden and Dartmouth facilities in September 2025.

•Income Tax Benefit (Expense). $(86) million unfavorable increase. This is primarily related to an increase in pre-tax income for the three months ended September 30, 2025, and the absence of a change in the Company’s valuation allowance that occurred in 2024.

Results for the Nine Months Ended September 30, 2025 and 2024

The following table and subsequent sections display the results of operations:

Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024

Net Income (Loss) Attributable to Stockholders decreased by $(772) million, primarily driven by the factors discussed below.

•Operating Revenues, net of Energy Expenses. $38 million favorable increase, primarily due to the following:

◦Capacity Revenues.$162 million favorable increase. This is primarily related to a $246 million increase due to higher cleared capacity prices through the PJM BRA for the 2025/2026 PJM Capacity Year compared to the 2024/2025 PJM Capacity Year, partially offset by $(84) million decrease due to lower volumes cleared through the PJM BRA for the 2025/2026 PJM Capacity Year compared to the 2024/2025 PJM Capacity Year.

◦Energy and Other Revenues, net of Fuel and Energy Purchases.$(34) million unfavorable decrease. This is primarily related to the combined effects of: (i) $(235) million decrease in digital revenue and Nuclear PTC revenue, coupled with (ii) $(112) million decrease in realized hedge results. Such amounts are partially offset by $313 million increase in margin associated with electric generation and ancillary revenue, primarily due to higher realized prices received at Susquehanna and our PJM fossil fleet.

◦Unrealized Gain (Loss) on Derivative Instruments, net.$(112) million unfavorable decrease. This is primarily driven by $(84) million lower volume of hedge positions executed in the current period and $(27) million unrealized losses from the settlement of previously recognized mark-to-market liabilities.

•Nuclear Fuel Amortization. $22 million favorable decrease. This is primarily related to a $16 million decrease in the amortization of intangible assets related to certain nuclear fuel supply contracts which have expired.

•Operation, Maintenance and Development. $(24) million unfavorable increase. This is primarily due to incremental maintenance at Susquehanna performed during its planned refueling outage on Unit 2 in Spring 2025.

•Other Operating Income (Expense), net. $(29) million unfavorable decrease. This is primarily related to the loss resulting from the sale of Nuclear PTCs and noncash charges associated with miscellaneous assets.

•Gain (Loss) on Sale of Assets, net. $(849) million unfavorable decrease. This primarily consisted of a: (i) $564 million gain from the ERCOT Sale that closed in the second quarter 2024; (ii) $324 million gain from the AWS Data Campus Sale in the first quarter 2024; and (iii) a $22 million gain from the sale of the Camden and Dartmouth in September 2025. See Note 17 to the Interim Financial Statements for additional information.

•Other Non-Operating Income (Expense), net.$(51) million unfavorable decrease. This primarily consisted of interest income on cash deposits earned in 2024.

•Income Tax Benefit (Expense). $122 million favorable decrease. This is primarily due to a decrease in pre-tax income for the nine months ended September 30, 2025, and the absence of a change in the Company’s valuation allowance that occurred in 2024.

•Net Income Attributable to Noncontrolling Interest. $29 million favorable decrease. This is related to the purchase of the remaining noncontrolling interests in Cumulus Digital in the fourth quarter 2024.