UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2022

 or

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number	Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number	IRS Employer Identification Number
001-41137	CONSTELLATION ENERGY CORPORATION	87-1210716
	(a Pennsylvania corporation) 1310 Point Street Baltimore, Maryland 21231-3380 (610) 765-5959
333-85496	CONSTELLATION ENERGY GENERATION, LLC	23-3064219
	(a Pennsylvania limited liability company) 200 Exelon Way Kennett Square, Pennsylvania 19348-2473 (610) 765-5959

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
CONSTELLATION ENERGY CORPORATION:
Common Stock, without par value	CEG	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   

Constellation Energy Corporation	Yes	x	No	☐
Constellation Energy Generation, LLC	Yes	x	No	☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Constellation Energy Corporation	Large Accelerated Filer	☐	Accelerated Filer	☐	Non-accelerated Filer	x	Smaller Reporting Company	☐	Emerging Growth Company	☐
Constellation Energy Generation, LLC	Large Accelerated Filer	☐	Accelerated Filer	☐	Non-accelerated Filer	x	Smaller Reporting Company	☐	Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes  ☐  No  x

The number of shares outstanding of each registrant’s common stock as of March 31, 2022 was as follows:

Constellation Energy Corporation Common Stock, without par value	326,698,937
Constellation Energy Generation, LLC	Not applicable

TABLE OF CONTENTS

		Page No.
GLOSSARY OF TERMS AND ABBREVIATIONS		1
FILING FORMAT		4
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION		4
WHERE TO FIND MORE INFORMATION		4
PART I	FINANCIAL INFORMATION	4
ITEM 1.	FINANCIAL STATEMENTS	4
	Constellation Energy Corporation
	Consolidated Statements of Operations and Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Balance Sheets	7
	Consolidated Statements of Changes in Equity	9
	Constellation Energy Generation, LLC
	Consolidated Statements of Operations and Comprehensive Income	10
	Consolidated Statements of Cash Flows	11
	Consolidated Balance Sheets	12
	Consolidated Statements of Changes in Equity	14
	Combined Notes to Consolidated Financial Statements
	1. Basis of Presentation	15
	2. Mergers, Acquisitions, and Dispositions	16
	3. Regulatory Matters	17
	4. Revenue from Contracts with Customers	18
	5. Segment Information	20
	6. Accounts Receivable	23
	7. Early Plant Retirements	24
	8. Nuclear Decommissioning	26
	9. Income Taxes	28
	10. Retirement Benefits	29
	11. Derivative Financial Instruments	33
	12. Debt and Credit Agreements	37
	13. Fair Value of Financial Assets and Liabilities	39
	14. Commitments and Contingencies	45
	15. Stock-Based Compensation Plans	48
	16. Changes in Accumulated Other Comprehensive Loss	49
	17. Variable Interest Entities	50
	18. Supplemental Financial Information	53
	19. Related Party Transactions	56
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	58
	Executive Overview	58
	Financial Results of Operations	58
	Significant 2022 Transactions and Developments	68
	Other Key Business Drivers and Management Strategies	68
	Critical Accounting Policies and Estimates	69

	Liquidity and Capital Resources	71
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	76
ITEM 4.	CONTROLS AND PROCEDURES	81
PART II	OTHER INFORMATION	81
ITEM 1.	LEGAL PROCEEDINGS	81
ITEM 1A.	RISK FACTORS	81
ITEM 4.	MINE SAFETY DISCLOSURES	81
ITEM 5.	OTHER INFORMATION	81
ITEM 6.	EXHIBITS	82
SIGNATURES		85
	Constellation Energy Corporation	85
	Constellation Energy Generation, LLC	86

GLOSSARY OF TERMS AND ABBREVIATIONS
Constellation Energy Corporation and Related Entities
CEG Parent	Constellation Energy Corporation
Constellation	Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC)
Registrants	CEG Parent and Constellation, collectively
Antelope Valley	Antelope Valley Solar Ranch One
CENG	Constellation Energy Nuclear Group, LLC
CR	Constellation Renewables, LLC (formerly ExGen Renewables IV, LLC)
CRP	Constellation Renewables Partners, LLC (formerly ExGen Renewables Partners, LLC)
FitzPatrick	James A. FitzPatrick nuclear generating station
Ginna	R. E. Ginna nuclear generating station
NER	NewEnergy Receivables LLC
NMP	Nine Mile Point nuclear generating station
RPG	Renewable Power Generation, LLC
SolGen	SolGen, LLC
TMI	Three Mile Island nuclear facility

Former Related Entities
Exelon	Exelon Corporation
ComEd	Commonwealth Edison Company
PECO	PECO Energy Company
BGE	Baltimore Gas and Electric Company
Pepco Holdings or PHI	Pepco Holdings LLC (formerly Pepco Holdings, Inc.)
Pepco	Potomac Electric Power Company
DPL	Delmarva Power & Light Company
ACE	Atlantic City Electric Company
BSC	Exelon Business Services Company, LLC

1

GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
Note - of the 2021 Form 10-K	Reference to specific Note to Consolidated Financial Statements within our 2021 Annual Report on Form 10-K
AEC	Alternative Energy Credit that is issued for each megawatt hour of generation from a qualified alternative energy source
AESO	Alberta Electric Systems Operator
AOCI	Accumulated Other Comprehensive Income (Loss)
APBO	Accumulated Postretirement Benefit Obligation
ARC	Asset Retirement Cost
ARO	Asset Retirement Obligation
Brookfield Renewable	Brookfield Renewable Partners, L.P.
CES	Clean Energy Standard
Clean Energy Law	Illinois Public Act 102-0062 signed into law on September 15, 2021
Clean Water Act	Federal Water Pollution Control Amendments of 1972, as amended
CMC	Carbon Mitigation Credit
CODM	Chief Operating Decision Maker
DCPSC	District of Columbia Public Service Commission
DEPSC	Delaware Public Service Commission
DOE	United States Department of Energy
DOJ	United States Department of Justice
DPP	Deferred Purchase Price
EBITDA	Earnings Before Interest, Tax, Depreciation and Amortization
EDF	Electricite de France SA and its subsidiaries
EPA	United States Environmental Protection Agency
ERCOT	Electric Reliability Council of Texas
ERISA	Employee Retirement Income Security Act of 1974, as amended
EROA	Expected Rate of Return on Assets
FERC	Federal Energy Regulatory Commission
FRCC	Florida Reliability Coordinating Council
GAAP	Generally Accepted Accounting Principles in the United States
GWh	Gigawatt hour
ICC	Illinois Commerce Commission
ICE	Intercontinental Exchange
IRS	Internal Revenue Service
ISO	Independent System Operator
ISO-NE	ISO New England Inc.
LIBOR	London Interbank Offered Rate
LTIP	Long-Term Incentive Plan
MATS	U.S. EPA Mercury and Air Toxics Standards
MDPSC	Maryland Public Service Commission
MISO	Midcontinent Independent System Operator, Inc.
MPSC	Missouri Public Service Commission
MRV	Market Related Value
MW	Megawatt
MWh	Megawatt hour
NAV	Net Asset Value
NDT	Nuclear Decommissioning Trust
NERC	North American Electric Reliability Corporation

2

NGX	Natural Gas Exchange, Inc.
Non-Regulatory Agreement Units	Nuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting
NPNS	Normal Purchase Normal Sale scope exception
NRC	Nuclear Regulatory Commission
NYISO	New York ISO
NYMEX	New York Mercantile Exchange
NYPSC	New York Public Service Commission
OCI	Other Comprehensive Income
OPEB	Other Postretirement Employee Benefits
PA DEP	Pennsylvania Department of Environmental Protection
PAPUC	Pennsylvania Public Utility Commission
PBO	Projected Benefit Obligation
PG&E	Pacific Gas and Electric Company
PJM	PJM Interconnection, LLC
PPA	Power Purchase Agreement
PP&E	Property, Plant, and Equipment
PRP	Potentially Responsible Parties
PSDAR	Post-shutdown Decommissioning Activities Report
PSEG	Public Service Enterprise Group Incorporated
PUCT	Public Utility Commission of Texas
REC	Renewable Energy Credit which is issued for each megawatt hour of generation from a qualified renewable energy source
Regulatory Agreement Units	Nuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting
RFP	Request for Proposal
RGGI	Regional Greenhouse Gas Initiative
RMC	Risk Management Committee
RNF	Revenue Net of Purchased Power and Fuel Expense
ROU	Right-of-use
RTO	Regional Transmission Organization
S&P	Standard & Poor’s Ratings Services
SEC	United States Securities and Exchange Commission
SERC	SERC Reliability Corporation (formerly Southeast Electric Reliability Council)
SNF	Spent Nuclear Fuel
SOA	Society of Actuaries
SOFR	Secured Overnight Financing Rate
SOS	Standard Offer Service
TWh	Terawatt-hour
U.S. Court of Appeals for the D.C. Circuit	United States Court of Appeals for the District of Columbia Circuit
VEBA	Voluntary Employees' Beneficiary Associations
VIE	Variable Interest Entity
WECC	Western Electric Coordinating Council
ZEC	Zero Emission Credit
ZES	Zero Emission Standard

3

FILING FORMAT

This combined Form 10-Q is being filed separately by Constellation Energy Corporation and Constellation Energy Generation, LLC, (Registrants). Information contained herein relating to any individual Registrant is filed by the Registrant on its own behalf. Neither Registrant makes any representation as to information relating to the other Registrant.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

This Report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Words such as “could,” “may,” “expects,” “anticipates,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic, and financial performance, are intended to identify such forward-looking statements.

The factors that could cause actual results to differ materially from the forward-looking statements made by us include those factors discussed herein, as well as the items discussed in (1) the Registrants' combined 2021 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 19, Commitments and Contingencies; (2) this Quarterly Report on Form 10-Q in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 14, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC.

Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this Report. Neither of the Registrants undertakes any obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.

WHERE TO FIND MORE INFORMATION

The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information that we file electronically with the SEC. These documents are also available to the public from commercial document retrieval services and our website at www.ConstellationEnergy.com. Information contained on our website shall not be deemed incorporated into, or to be a part of, this Report.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

4

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

	Three Months Ended March 31,
(In millions, except per share data)	2022		2021
Operating revenues
Operating revenues	$	5,431	$	5,264
Operating revenues from affiliates	160		295
Total operating revenues	5,591		5,559
Operating expenses
Purchased power and fuel	3,545		4,610
Purchased power and fuel from affiliates	5		—
Operating and maintenance	1,161		856
Operating and maintenance from affiliates	44		145
Depreciation and amortization	280		940
Taxes other than income taxes	137		121
Total operating expenses	5,172		6,672
Gain on sales of assets and businesses	16		71
Operating income (loss)	435		(1,042)
Other income and (deductions)
Interest expense, net	(55)		(68)
Interest expense to affiliates	(1)		(4)
Other, net	(318)		167
Total other income and (deductions)	(374)		95
Income (loss) before income taxes	61		(947)
Income taxes	(53)		(179)
Equity in losses of unconsolidated affiliates	(3)		(1)
Net income (loss)	111		(769)
Net income attributable to noncontrolling interests	5		24
Net income (loss) attributable to common shareholders	$	106	$	(793)
Comprehensive income (loss), net of income taxes
Net income (loss)	$	111	$	(769)
Other comprehensive income, net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost	(1)		—
Actuarial loss reclassified to periodic cost	18		—
Unrealized gain on foreign currency translation	4		1
Other comprehensive income, net of income taxes	21		1
Comprehensive income (loss)	132		(768)
Comprehensive income attributable to noncontrolling interests	5		24
Comprehensive income (loss) attributable to common shareholders	$	127	$	(792)
Average shares of common stock outstanding:
Basic	327		—
Assumed exercise and/or distributions of stock-based awards	1		—
Diluted	328		—
Earnings per average common share
Basic	$	0.32	$	—
Diluted	$	0.32	$	—

See the Combined Notes to Consolidated Financial Statements

5

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Cash Flows

(Unaudited)

	Three Months Ended March 31,
(In millions)	2022		2021
Cash flows from operating activities
Net income (loss)	$	111	$	(769)
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization	602		1,346
Asset impairments	—		1
Gain on sales of assets and businesses	(16)		(71)
Deferred income taxes and amortization of investment tax credits	(307)		(123)
Net fair value changes related to derivatives	75		(178)
Net realized and unrealized losses (gains) on NDT funds	271		(118)
Net unrealized losses on equity investments	20		23
Other non-cash operating activities	256		(202)
Changes in assets and liabilities:
Accounts receivable	(78)		(453)
Receivables from and payables to affiliates, net	20		59
Inventories	82		50
Accounts payable and accrued expenses	36		208
Option premiums (paid) received, net	(31)		16
Collateral received, net	1,169		270
Income taxes	254		(55)
Pension and non-pension postretirement benefit contributions	(204)		(205)
Other assets and liabilities	(909)		(1,411)
Net cash flows provided by (used in) operating activities	1,351		(1,612)
Cash flows from investing activities
Capital expenditures	(410)		(382)
Proceeds from NDT fund sales	1,130		2,908
Investment in NDT funds	(1,193)		(2,939)
Collection of DPP	853		1,574
Proceeds from sales of assets and businesses	28		680
Other investing activities	(4)		(2)
Net cash flows provided by investing activities	404		1,839
Cash flows from financing activities
Change in short-term borrowings	(702)		997
Repayments of short-term borrowings with maturities greater than 90 days	(300)		—
Issuance of long-term debt	2		1
Retirement of long-term debt	(1,058)		(35)
Retirement of long-term debt to affiliate	(258)		—
Changes in money pool with Exelon	—		(285)
Distributions to Exelon	—		(458)
Contribution from Exelon	1,750		—
Dividends paid on common stock	(46)		—
Other financing activities	(23)		(12)
Net cash flows (used in) provided by financing activities	(635)		208
Increase in cash, restricted cash, and cash equivalents	1,120		435
Cash, restricted cash, and cash equivalents at beginning of period	576		327
Cash, restricted cash, and cash equivalents at end of period	$	1,696	$	762
Supplemental cash flow information
Decrease in capital expenditures not paid	$	(119)	$	(37)
Increase in DPP	918		1,339
Increase in PP&E related to ARO update	335		—

See the Combined Notes to Consolidated Financial Statements

6

Constellation Energy Corporation and Subsidiary Companies

Consolidated Balance Sheets

(Unaudited)

(In millions)	March 31, 2022		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	1,605	$	504
Restricted cash and cash equivalents	91		72
Accounts receivable
Customer accounts receivable (net of allowance for credit losses of $50 and $55 as of March 31, 2022 and December 31, 2021, respectively)	1,936		1,669
Other accounts receivable (net of allowance for credit losses of $5 as of March 31, 2022 and December 31, 2021)	334		592
Mark-to-market derivative assets	1,775		2,169
Receivables from affiliates	—		160
Inventories, net
Natural gas, oil and emission allowances	212		284
Materials and supplies	999		1,004
Renewable energy credits	577		520
Other	1,238		1,007
Total current assets	8,767		7,981
Property, plant, and equipment (net of accumulated depreciation and amortization of $16,007 and $15,873 as of March 31, 2022 and December 31, 2021, respectively)	19,837		19,612
Deferred debits and other assets
Nuclear decommissioning trust funds	15,272		15,938
Investments	217		174
Mark-to-market derivative assets	565		949
Prepaid pension asset	—		1,683
Deferred income taxes	36		32
Other	2,152		1,717
Total deferred debits and other assets	18,242		20,493
Total assets(a)	$	46,846	$	48,086

See the Combined Notes to Consolidated Financial Statements

7

Constellation Energy Corporation and Subsidiary Companies

Consolidated Balance Sheets

(Unaudited)

(In millions)	March 31, 2022		December 31, 2021
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings	$	1,080	$	2,082
Long-term debt due within one year	191		1,220
Accounts payable	1,847		1,757
Accrued expenses	803		737
Payables to affiliates	—		131
Mark-to-market derivative liabilities	1,469		981
Renewable energy credit obligation	727		777
Other	317		311
Total current liabilities	6,434		7,996
Long-term debt	4,548		4,575
Long-term debt to affiliates	—		319
Deferred credits and other liabilities
Deferred income taxes and unamortized investment tax credits	3,247		3,703
Asset retirement obligations	13,276		12,819
Pension obligations	722		—
Non-pension postretirement benefit obligations	862		847
Spent nuclear fuel obligation	1,210		1,210
Payables to affiliates	—		3,357
Payable related to Regulatory Agreement Units	2,969		—
Mark-to-market derivative liabilities	773		513
Other	1,300		1,133
Total deferred credits and other liabilities	24,359		23,582
Total liabilities(a)	35,341		36,472
Commitments and contingencies
Shareholders' equity
Predecessor Member's Equity(b)	—		11,250
Common stock (No par value, 1,000 shares authorized, 327 shares outstanding as of March 31, 2022)	13,212		—
Retained deficit	(91)		—
Accumulated other comprehensive loss, net	(2,016)		(31)
Total shareholders' equity	11,105		11,219
Noncontrolling interests	400		395
Total equity	11,505		11,614
Total liabilities and shareholders' equity	$	46,846	$	48,086

__________

(a)Our consolidated assets include $2,588 million and $2,549 million at March 31, 2022 and December 31, 2021, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Our consolidated liabilities include $1,045 million and $1,077 million at March 31, 2022 and December 31, 2021, respectively, of certain VIEs for which the VIE creditors do not have recourse to us. See Note 17 — Variable Interest Entities for additional information.

(b)Represents Constellation’s predecessor member's equity prior to the separation transaction. Upon completion of the separation, the predecessor member's equity was transferred to CEG Parent’s Common stock. See Note 1 — Basis of Presentation for additional information on the separation.

See the Combined Notes to Consolidated Financial Statements

8

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Changes in Equity

(Unaudited)

	Three Months Ended March 31, 2022
	Shareholders' Equity
(In millions, shares in thousands)	Issued Shares	Common Stock		Retained Deficit		Accumulated Other Comprehensive Loss, net		Noncontrolling Interests		Predecessor Member's Equity(a)		Total Equity
Balance, December 31, 2021	—	$	—	$	—	$	(31)	$	395	$	11,250	$	11,614
Net income from January 1, 2022 to January 31, 2022	—	—		—		—		—		151		151
Separation related adjustments	—	—		—		(2,006)		7		1,802		(197)
Changes in equity of noncontrolling interests from January 1, 2022 to January 31, 2022	—	—		—		—		(7)		—		(7)
Consummation of separation	326,664	13,203		—		—		—		(13,203)		—
Net (loss) income from February 1, 2022 to March 31, 2022	—	—		(45)		—		5		—		(40)
Long-term incentive plan activity from February 1, 2022 to March 31, 2022	35	9		—		—		—		—		9
Common stock dividends ($0.14/common share) from February 1, 2022 to March 31, 2022	—	—		(46)		—		—		—		(46)
Other comprehensive income, net of income taxes from February 1, 2022 to March 31, 2022	—	—		—		21		—		—		21
Balance, March 31, 2022	326,699	$	13,212	$	(91)	$	(2,016)	$	400	$	—	$	11,505

__________

(a)Represents Constellation’s predecessor member's equity prior to the separation transaction. Upon completion of the separation, the predecessor member's equity was transferred to CEG Parent’s Common stock. See Note 1 — Basis of Presentation for additional information on the separation.

	Three Months Ended March 31, 2021
	Member's Equity
(In millions)	Membership Interest	Undistributed Earnings	Accumulated Other Comprehensive Loss, net	Noncontrolling Interests	Total Equity
Balance, December 31, 2020	$