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 September 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 (833) 883-0162
333-85496	CONSTELLATION ENERGY GENERATION, LLC	23-3064219
	(a Pennsylvania limited liability company) 200 Exelon Way Kennett Square, Pennsylvania 19348-2473 (833) 883-0162

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 September 30, 2022 was as follows:

Constellation Energy Corporation Common Stock, without par value	327,017,895
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	5
ITEM 1.	FINANCIAL STATEMENTS	5
	Constellation Energy Corporation
	Consolidated Statements of Operations and Comprehensive Income	6
	Consolidated Statements of Cash Flows	7
	Consolidated Balance Sheets	8
	Consolidated Statements of Changes in Equity	10
	Constellation Energy Generation, LLC
	Consolidated Statements of Operations and Comprehensive Income	12
	Consolidated Statements of Cash Flows	13
	Consolidated Balance Sheets	14
	Consolidated Statements of Changes in Equity	16
	Combined Notes to Consolidated Financial Statements
	1. Basis of Presentation	18
	2. Mergers, Acquisitions, and Dispositions	19
	3. Regulatory Matters	21
	4. Revenue from Contracts with Customers	23
	5. Segment Information	26
	6. Accounts Receivable	30
	7. Early Plant Retirements	32
	8. Nuclear Decommissioning	34
	9. Asset Impairments	36
	10. Income Taxes	37
	11. Retirement Benefits	39
	12. Derivative Financial Instruments	43
	13. Debt and Credit Agreements	48
	14. Fair Value of Financial Assets and Liabilities	50
	15. Commitments and Contingencies	57
	16. Stock-Based Compensation Plans	60
	17. Changes in Accumulated Other Comprehensive Loss	62
	18. Variable Interest Entities	63
	19. Supplemental Financial Information	65
	20. Related Party Transactions	68
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	71
	Executive Overview	71
	Financial Results of Operations	71
	Significant 2022 Transactions and Developments	83
	Other Key Business Drivers and Management Strategies	84

	Critical Accounting Policies and Estimates	86
	Liquidity and Capital Resources	87
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	93
ITEM 4.	CONTROLS AND PROCEDURES	98
PART II	OTHER INFORMATION	98
ITEM 1.	LEGAL PROCEEDINGS	98
ITEM 1A.	RISK FACTORS	98
ITEM 4.	MINE SAFETY DISCLOSURES	98
ITEM 5.	OTHER INFORMATION	98
ITEM 6.	EXHIBITS	99
SIGNATURES		100
	Constellation Energy Corporation	100
	Constellation Energy Generation, LLC	101

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
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
CTV	Constellation Technology Ventures
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
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
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
PTC	Production Tax Credit
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
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
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 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.

4

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

5

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions, except per share data)	2022		2021		2022		2021
Operating revenues
Operating revenues	$	6,051	$	4,082	$	16,947	$	13,245
Operating revenues from affiliates	—		324		160		872
Total operating revenues	6,051		4,406		17,107		14,117
Operating expenses
Purchased power and fuel	4,695		1,542		11,749		8,103
Purchased power and fuel from affiliates	—		4		5		—
Operating and maintenance	989		761		3,422		2,955
Operating and maintenance from affiliates	—		177		44		458
Depreciation and amortization	262		866		818		2,735
Taxes other than income taxes	145		115		415		354
Total operating expenses	6,091		3,465		16,453		14,605
(Loss) gain on sales of assets and businesses	(1)		65		13		144
Operating (loss) income	(41)		1,006		667		(344)
Other income and (deductions)
Interest expense, net	(75)		(73)		(186)		(214)
Interest expense to affiliates	—		(4)		(1)		(11)
Other, net	(196)		(115)		(1,169)		561
Total other income and (deductions)	(271)		(192)		(1,356)		336
(Loss) income before income taxes	(312)		814		(689)		(8)
Income taxes	(123)		177		(504)		108
Equity in losses of unconsolidated affiliates	(4)		(4)		(10)		(6)
Net (loss) income	(193)		633		(195)		(122)
Net (loss) income attributable to noncontrolling interests	(5)		26		(1)		125
Net (loss) income attributable to common shareholders	$	(188)	$	607	$	(194)	$	(247)
Comprehensive (loss) income, net of income taxes
Net (loss) income	$	(193)	$	633	$	(195)	$	(122)
Other comprehensive income (loss), net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost	(2)		—		(4)		—
Actuarial loss reclassified to periodic cost	28		—		73		—
Pension and non-pension postretirement benefit plan valuation adjustment	4		—		4		—
Unrealized loss on cash flow hedges	(1)		—		(1)		(1)
Unrealized loss on foreign currency translation	(6)		(4)		(4)		—
Other comprehensive income (loss), net of income taxes	23		(4)		68		(1)
Comprehensive (loss) income	(170)		629		(127)		(123)
Comprehensive (loss) income attributable to noncontrolling interests	(5)		26		(1)		125
Comprehensive (loss) income attributable to common shareholders	$	(165)	$	603	$	(126)	$	(248)
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	$	(0.57)	$	—	$	(0.59)	$	—
Diluted	$	(0.57)	$	—	$	(0.59)	$	—

See the Combined Notes to Consolidated Financial Statements

6

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
(In millions)	2022		2021
Cash flows from operating activities
Net loss	$	(195)	$	(122)
Adjustments to reconcile net loss to net cash flows provided by operating activities:
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization	1,810		3,951
Asset impairments	—		537
Gain on sales of assets and businesses	(13)		(144)
Deferred income taxes and amortization of investment tax credits	(915)		(204)
Net fair value changes related to derivatives	544		(1,244)
Net realized and unrealized losses (gains) on NDT funds	1,032		(383)
Net unrealized loss on CTV investments	27		83
Other non-cash operating activities	304		(582)
Changes in assets and liabilities:
Accounts receivable	(150)		(207)
Receivables from and payables to affiliates, net	20		82
Inventories	(166)		(29)
Accounts payable and accrued expenses	789		357
Option premiums paid, net	(163)		(186)
Collateral received, net	766		1,974
Income taxes	364		177
Pension and non-pension postretirement benefit contributions	(229)		(237)
Other assets and liabilities	(3,756)		(2,849)
Net cash flows provided by operating activities	69		974
Cash flows from investing activities
Capital expenditures	(1,090)		(1,086)
Proceeds from NDT fund sales	3,034		5,766
Investment in NDT funds	(3,212)		(5,900)
Collection of DPP, net	3,095		3,052
Proceeds from sales of assets and businesses	41		802
Other investing activities	3		5
Net cash flows provided by investing activities	1,871		2,639
Cash flows from financing activities
Change in short-term borrowings	(209)		(340)
Proceeds from short-term borrowings with maturities greater than 90 days	—		880
Repayments of short-term borrowings with maturities greater than 90 days	(1,180)		—
Issuance of long-term debt	9		152
Retirement of long-term debt	(1,143)		(89)
Retirement of long-term debt to affiliate	(258)		—
Changes in money pool with Exelon	—		(285)
Acquisiti