Talen Energy Corp

Results of Operations

The results of operations presented below for the three months ended March 31, 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 March 31, 2025 and 2024

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

Three Months Ended March 31, 2025 compared to March 31, 2024

Net Income (Loss) Attributable to Stockholders decreased by $(429) million, primarily driven by the factors discussed below.

•Operating Revenues, net of Energy Expenses. $(142) million unfavorable decrease, primarily due to the following:

Energy and Other Revenues, net of Fuel and Energy Purchases.$(108) million unfavorable decrease. This is primarily related to the combined effect of: (i) $(170) million decrease in realized hedges; and (ii) $(77) million decrease in digital revenue and Nuclear PTC revenue. Such amounts are partially offset by $137 million favorable increase in margin associated with electric generation and ancillary revenue resulting from higher realized prices at Susquehanna and higher generation volumes and realized prices associated with our PJM fossil fleet.

Unrealized Gain (Loss) on Derivative Instruments, net.$(47) million unfavorable decrease. This is primarily related to the combined effect of: (i) $(95) million from higher forward power prices relative to the Company’s hedge positions during the first quarter 2025 as compared to the first quarter 2024; and (ii) $(41) million associated with lower volume of hedge positions executed in the first quarter 2025 as compared to hedge positions executed in the first quarter 2024. Such amounts are partially offset by $89 million unrealized gains from the reversal of positions previously recognized as mark-to-market liabilities which settled during the period.

•Nuclear Decommissioning Trust Funds Gain (Loss), net. $(87) million unfavorable decrease. This is primarily due to the combined effect of: (i) $(24) million decrease in the unrealized value of equity securities in the first quarter 2025 compared with a $41 million increase in the first quarter 2024; and (ii) $(23) million decrease in realized activity due to asset portfolio rebalancing activities that occurred in the first quarter 2024. See Notes 7 and 12 to the Interim Financial Statements for additional information.

•Gain (Loss) on Sale of Assets, net. $(322) million unfavorable decrease. This is primarily related to the gain from the AWS Data Campus Sale in March 2024. See Note 18 to the Interim Financial Statements for additional information.

•Income Tax Benefit (Expense). $121 million favorable increase. This is due to the change of the estimated income tax effect resulting from income before taxes in the first quarter 2024 and a loss before taxes in the first quarter 2025.

•Net Income (Loss) Attributable to Noncontrolling Interest.$(25) million favorable decrease. This is due to the acquisition of the remaining noncontrolling interest in Cumulus Digital in March 2024 and the subsequent acquisition of the remaining noncontrolling interest in Nautilus in October 2024.