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 June 30, 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 June 30, 2022 was as follows:

Constellation Energy Corporation Common Stock, without par value	326,845,258
Constellation Energy Generation, LLC	Not applicable

TABLE OF CONTENTS

		Page No.
GLOSSARY OF TERMS AND ABBREVIATIONS		1
FILING FORMAT		5
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION		5
WHERE TO FIND MORE INFORMATION		5
PART I	FINANCIAL INFORMATION	6
ITEM 1.	FINANCIAL STATEMENTS	6
	Constellation Energy Corporation
	Consolidated Statements of Operations and Comprehensive Income	7
	Consolidated Statements of Cash Flows	8
	Consolidated Balance Sheets	9
	Consolidated Statements of Changes in Equity	11
	Constellation Energy Generation, LLC
	Consolidated Statements of Operations and Comprehensive Income	13
	Consolidated Statements of Cash Flows	14
	Consolidated Balance Sheets	15
	Consolidated Statements of Changes in Equity	17
	Combined Notes to Consolidated Financial Statements
	1. Basis of Presentation	18
	2. Mergers, Acquisitions, and Dispositions	19
	3. Regulatory Matters	20
	4. Revenue from Contracts with Customers	22
	5. Segment Information	24
	6. Accounts Receivable	28
	7. Early Plant Retirements	30
	8. Nuclear Decommissioning	31
	9. Asset Impairments	33
	10. Income Taxes	34
	11. Retirement Benefits	35
	12. Derivative Financial Instruments	40
	13. Debt and Credit Agreements	44
	14. Fair Value of Financial Assets and Liabilities	46
	15. Commitments and Contingencies	53
	16. Stock-Based Compensation Plans	56
	17. Changes in Accumulated Other Comprehensive Loss	57
	18. Variable Interest Entities	58
	19. Supplemental Financial Information	61
	20. Related Party Transactions	64
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	66
	Executive Overview	66
	Financial Results of Operations	66
	Significant 2022 Transactions and Developments	78
	Other Key Business Drivers and Management Strategies	79

	Critical Accounting Policies and Estimates	81
	Liquidity and Capital Resources	82
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	88
ITEM 4.	CONTROLS AND PROCEDURES	93
PART II	OTHER INFORMATION	93
ITEM 1.	LEGAL PROCEEDINGS	93
ITEM 1A.	RISK FACTORS	93
ITEM 4.	MINE SAFETY DISCLOSURES	93
ITEM 5.	OTHER INFORMATION	93
ITEM 6.	EXHIBITS	94
SIGNATURES		95
	Constellation Energy Corporation	95
	Constellation Energy Generation, LLC	96

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
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
ABO	Accumulated Benefit Obligation
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
CODM	Chief Operating Decision Maker
Clean Energy Law	Illinois Public Act 102-0062 signed into law on September 15, 2021
CMC	Carbon Mitigation Credit
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
GHG	Greenhouse Gas
GWh	Gigawatt hour
ICC	Illinois Commerce Commission
ICE	Intercontinental Exchange
IPA	Illinois Power Agency
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

2

NDT	Nuclear Decommissioning Trust
NERC	North American Electric Reliability Corporation
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
OIESO	Ontario Independent Electricity System Operator
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
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

3

ZES Zero Emission Standard

4

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 15, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.

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.

5

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

6

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data)	2022		2021		2022		2021
Operating revenues
Operating revenues	$	5,465	$	3,899	$	10,896	$	9,163
Operating revenues from affiliates	—		254		160		549
Total operating revenues	5,465		4,153		11,056		9,712
Operating expenses
Purchased power and fuel	3,508		1,952		7,054		6,562
Purchased power and fuel from affiliates	—		(5)		5		(5)
Operating and maintenance	1,273		1,337		2,433		2,194
Operating and maintenance from affiliates	—		137		44		282
Depreciation and amortization	277		930		557		1,869
Taxes other than income taxes	133		118		268		239
Total operating expenses	5,191		4,469		10,361		11,141
(Loss) gain on sales of assets and businesses	(2)		8		13		79
Operating income (loss)	272		(308)		708		(1,350)
Other income and (deductions)
Interest expense, net	(56)		(72)		(111)		(140)
Interest expense to affiliates	—		(4)		(1)		(8)
Other, net	(654)		508		(973)		675
Total other income and (deductions)	(710)		432		(1,085)		527
(Loss) income before income taxes	(438)		124		(377)		(823)
Income taxes	(328)		110		(381)		(70)
Equity in losses of unconsolidated affiliates	(3)		(1)		(6)		(3)
Net (loss) income	(113)		13		(2)		(756)
Net (loss) income attributable to noncontrolling interests	(2)		74		3		98
Net loss attributable to common shareholders	$	(111)	$	(61)	$	(5)	$	(854)
Comprehensive (loss) income, net of income taxes
Net (loss) income	$	(113)	$	13	$	(2)	$	(756)
Other comprehensive income, net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost	(1)		—		(3)		—
Actuarial loss reclassified to periodic cost	27		—		46		—
Unrealized gain on foreign currency translation	(2)		2		2		3
Other comprehensive income, net of income taxes	24		2		45		3
Comprehensive (loss) income	(89)		15		43		(753)
Comprehensive (loss) income attributable to noncontrolling interests	(2)		74		3		98
Comprehensive (loss) income attributable to common shareholders	$	(87)	$	(59)	$	40	$	(851)
Average shares of common stock outstanding:
Basic	327		—		327		—
Assumed exercise and/or distributions of stock-based awards	1		—		1		—
Diluted	328		—		328		—
Earnings per average common share
Basic	$	(0.34)	$	—	$	(0.02)	$	—
Diluted	$	(0.34)	$	—	$	(0.02)	$	—

See the Combined Notes to Consolidated Financial Statements

7

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
(In millions)	2022		2021
Cash flows from operating activities
Net loss	$	(2)	$	(756)
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization	1,207		2,686
Asset impairments	—		493
Gain on sales of assets and businesses	(13)		(79)
Deferred income taxes and amortization of investment tax credits	(707)		(142)
Net fair value changes related to derivatives	31		(490)
Net realized and unrealized losses (gains) on NDT funds	800		(376)
Net unrealized losses (gains) on equity investments	25		(96)
Other non-cash operating activities	459		(421)
Changes in assets and liabilities:
Accounts receivable	60		(90)
Receivables from and payables to affiliates, net	20		43
Inventories	(88)		4
Accounts payable and accrued expenses	385		154
Option premiums (paid) received, net	(167)		2
Collateral received, net	1,123		955
Income taxes	289		(1)
Pension and non-pension postretirement benefit contributions	(213)		(212)
Other assets and liabilities	(1,946)		(2,031)
Net cash flows provided by (used in) operating activities	1,263		(357)
Cash flows from investing activities
Capital expenditures	(800)		(719)
Proceeds from NDT fund sales	2,188		4,438
Investment in NDT funds	(2,323)		(4,538)
Collection of DPP	1,595		2,209
Proceeds from sales of assets and businesses	39		724
Other investing activities	2		(8)
Net cash flows provided by investing activities	701		2,106
Cash flows from financing activities
Change in short-term borrowings	(702)		(340)
Repayments of short-term borrowings with maturities greater than 90 days	(1,180)		—
Issuance of long-term debt	6		151
Retirement of long-term debt	(1,109)		(56)
Retirement of long-term debt to affiliate	(258)		—
Changes in money pool with Exelon	—		(285)
Distributions to Exelon	—		(916)
Contribution from Exelon	1,750		—
Dividends paid on common stock	(93)		—
Other financing activities	(28)		(29)
Net cash flows used in financing activities	(1,614)		(1,475)
Increase in cash, restricted cash, and cash equivalents	350		274
Cash, restricted cash, and cash equivalents at beginning of period	576		327
Cash, restricted cash, and cash equivalents at end of period	$	926	$	601
Supplemental cash flow information
Decrease in capital expenditures not paid	$	(141)	$	(66)
Increase in DPP	1,860		1,958
Increase in PP&E related to ARO update	333		—

See the Combined Notes to Consolidated Financial Statements

8

Constellation Energy Corporation and Subsidiary Companies

Consolidated Balance Sheets

(Unaudited)

(In millions)	June 30, 2022		December 31, 2021
ASSETS
Current assets
Cash and cash equivalents	$	806	$	504
Restricted cash and cash equivalents	120		72
Accounts receivable
Customer accounts receivable (net of allowance for credit losses of $49 and $55 as of June 30, 2022 and December 31, 2021, respectively)	1,734		1,669