Constellation Energy (CEG) 10-K risk factor changes: FY2022 vs FY2021

- emerging technologies and business models, including those related to climate change mitigation and transition to a [removed: low carbon] [added: low-carbon] economy.

- environmental and climate policy, [removed: including ZEC] and [removed: CMC programs, and]

- challenges to achieving the benefits of separation, including [removed: limited business diversification, loss of economies of scale in sourcing goods and services, and] the need to replicate certain services provided by Exelon [removed: (such as treasury, finance, human resources, investor relations, legal,] [added: (e.g.] information [removed: technology, security, and supply),] [added: technology),] which will require additional resources and expense,

We are exposed to price volatility associated with both the wholesale and retail power markets and the procurement of [removed: nuclear] [added: nuclear, natural gas] and [removed: fossil fuels.][added: oil.]

We are exposed to commodity price risk for natural gas and the unhedged portion of our [removed: electricity] generation [removed: supply] portfolio.

Cost of Fuel. We depend on nuclear [removed: fuel] [added: fuel, natural gas] and [removed: fossil fuels] [added: oil] to operate most of our generating facilities.

The supply markets for nuclear fuel, natural gas and oil are subject to price fluctuations, availability restrictions, counterparty default, and geopolitical [removed: risk] [added: risk,] including the current Russia [added: and] Ukraine conflict and [added: the potential for additional] United States sanctions against Russia.

See Note [added: 3 — Regulatory Matters and Note] 7 — Early Plant Retirements of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

Each of these factors could affect our consolidated financial statements through, among other things, reduced operating revenues, increased operating and maintenance expenses, increased capital [removed: expenditures, and potential asset impairment charges or accelerated depreciation and decommissioning expenses over shortened remaining asset useful lives.]

Disruptions in the capital markets and their actual or perceived effects on particular businesses and the [removed: greater] [added: broader] economy could adversely affect the value of the investments held within our NDTs and employee benefit plan trusts.

See Note 10 — Asset Retirement Obligations and Note 15 — Retirement Benefits of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

The inability to access capital markets or credit facilities, and longer-term disruptions in the capital and credit markets as a result of uncertainty, changing or increased regulation, reduced alternatives or failures of significant financial institutions could result in the deferral of discretionary capital expenditures, affect our ability to [removed: hedge] effectively [added: hedge] our generation portfolio, require changes to our hedging strategy in order to reduce collateral posting requirements, or require a reduction in discretionary uses of cash.

As of December 31, [removed: 2021,] [added: 2022,] approximately [removed: 26%, 19%,] [added: 38%, 13%,] and [removed: 17%] [added: 19%] of our available credit facilities were with European, Canadian and Asian banks, respectively.

See ITEM 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Liquidity and Capital Resources – Credit Matters [removed: – Market Conditions] and [added: Cash Requirements –] Security Ratings for additional information regarding the potential impacts of credit downgrades on our cash flows.

We buy and sell energy and other products and enter financial contracts to manage risk and hedge various positions in our [removed: power generation] portfolio.

We attempt to manage this exposure through enforcement of established risk limits and risk management [added: procedures.]

Our financial results could be negatively affected if we are unable to [removed: meet] cost-effectively [added: meet] the load requirements of our customers, manage our power portfolio or effectively address the changes in the wholesale power markets.

The impacts of significant economic downturns [added: (i.e. recession)] could lead to decreased volumes delivered and increased expense for uncollectible customer balances.

COVID-19 has [added: previously] disrupted economic activity in our markets and negatively affected our results of operations.

The estimated impact of COVID-19 to our Net income was approximately $170 million for the year ended December 31, 2020 and was not material for the [removed: year] [added: years] ended December 31, [removed: 2021.][added: 2021 and 2022.]

[removed: In addition, any] [added: Any] future widespread pandemic or other local or global health issue could adversely affect customer demand and our ability to operate our generation assets.

See ITEM [removed: 7.][added: 1.]

Climate change projections suggest increases to summer temperature and humidity trends, as well as more erratic precipitation and storm patterns over the [removed: long-term] [added: long term] in the areas where we have generation assets.

See Note [removed: 3] [added: 19] — [removed: Regulatory Matters] [added: Commitments and Contingencies] of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

Long-lived assets – principally, generation assets – represent the single largest asset class on our [removed: statement of financial position.][added: Consolidated Balance Sheets.]

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Critical Accounting Policies and Estimates, Note 8 — Property, Plant, and Equipment and Note 12 — Asset Impairments of the [added: Combined] Notes to Consolidated Financial Statements for additional information on long-lived asset impairments.

We could incur substantial costs in the event of non-performance by third-parties under indemnification [removed: agreements, or when we have guaranteed their performance.][added: agreements.]

See Note 3 — Regulatory Matters of the [added: Combined] Notes to Consolidated Financial Statements for additional information on the February 2021 extreme cold weather event and Texas-based generating asset outages.

Approximately [removed: 65%] [added: 70%] of our generating resources, which include directly owned assets and capacity obtained through long-term contracts, are in the area encompassed by PJM.

[removed: Legislative] [added: Federal or state legislative] and regulatory efforts [removed: in Illinois, New York and New Jersey] to preserve the environmental attributes and reliability benefits of zero-emission nuclear-powered generating facilities [removed: through ZEC and CMC programs are or] could be subject to legal and regulatory challenges and, if overturned, could result in the early retirement of certain of our nuclear plants.

See Note [removed: 3] [added: 17] — [removed: Regulatory Matters] [added: Debt] and [removed: Note 7 — Early Plant Retirements] [added: Credit Agreements] of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

We cannot predict whether [added: in the future] a fee [added: for SNF disposal] may be [removed: established] [added: reestablished] or to what [removed: extent, in the future for SNF disposal.][added: extent.]

See Note 19 — Commitments and Contingencies of the [added: Combined] Notes to [removed: the] Consolidated Financial Statements for additional [removed: information.][added: information of nuclear insurance.]

BUSINESS – Environmental Matters and Regulation and Note 19 — Commitments and Contingencies of the [added: Combined] Notes to [removed: the] Consolidated Financial Statements for additional information.

The impact could include reduced use of some of our generating facilities with effects on our [added: operating] revenues and costs.

Federal and state legislation mandating the implementation of energy conservation programs and new energy consumption technologies could cause declines in customer energy consumption and lead to a decline in our [added: operating] revenues.

We could also lose [removed: revenue] [added: operating revenues] and incur increased [removed: fuel and] purchased power [added: and fuel] expense to meet our supply commitments.

In addition, conditions could be imposed as part of the license renewal process that could adversely affect operations, require a substantial [removed: increase in capital expenditures, result in increased operating costs or render the project uneconomic.]

See Note 1 — [removed: Significant Accounting Policies] [added: Basis of Presentation] and Note 14 — Income Taxes of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

The material ones are summarized in Note [added: 3 — Regulatory Matters and Note] 19 — Commitments and Contingencies of the [added: Combined] Notes to Consolidated Financial [added: Statements.]

- our ability to operate our generating assets,

- our ability to access capital markets,

The cycle of production and utilization of nuclear fuel is complex, and we engage a diverse set of suppliers to ensure we can secure the nuclear fuel needed to continue to operate our nuclear fleet long-term.

Non-performance by these suppliers could have a material adverse impact on our consolidated financial statements.

BUSINESS – Price and Supply Risk Management and See ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information on the nuclear fuel cycle and procurement.

We may be adversely affected by the effects of sustained inflation.

The existence of inflation in the economy has resulted in, or may result in, higher interest rates and capital costs, increased costs of labor, and other similar effects.

If inflation rates continue to rise or remain elevated for a sustained period, they could have a material adverse effect on our business, financial condition, results of operations and liquidity.

Although we may take measures to mitigate the impact of inflation, those measures may not be effective.

expenditures, and potential asset impairment charges or accelerated depreciation and decommissioning expenses over shortened remaining asset useful lives.

Our results were negatively affected by the impacts of COVID-19 in 2020 and future pandemics or other significant health issues could also adversely affect our results.

As a result of this weather event, we incurred a loss of approximately $800 million for the year ended December 31, 2021.

By comparison, the estimated impact reduced our overall Net loss by approximately $50 million for the year ended December 31, 2022, see Note 3 — Regulatory Matters and Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information.

increase in capital expenditures, result in increased operating costs or render the project uneconomic.

See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information regarding the license renewal for the Conowingo hydroelectric project.

To the extent additional GHG reduction regulation or legislation becomes

We expect these attacks and disruptions to continue to occur in the future and we are constantly managing efforts to infiltrate and compromise our physical assets and information technology systems and data.

A security breach, including physical or electronic break-ins, computer viruses, malware, attacks by hackers, ransomware attacks, phishing attacks, supply chain attacks, breaches due to employee error or misconduct and other similar breaches, of our physical assets or information systems, or those of our competitors, vendors,

Furthermore, in the future, such insurance may not be available on commercially reasonable terms, or at all.

- our ability to operate our generating assets, our ability to access capital markets, and the impacts on our results of operations due to the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19),

Risks related to our common stock primarily include:

- following the separation, a trading market for our common stock will have only been initiated recently and our stock price may fluctuate significantly and

- certain anti-takeover provisions in our charter and bylaws that could have the effect of delaying or discouraging an acquisition of our company or a change in our management.

The impact of sustained low market prices or depressed demand and over-supply could be emphasized given our concentration of base-load electric generating capacity within primarily two geographic market regions, namely the Midwest and the Mid-Atlantic.

These impacts could adversely affect our ability to reduce debt and provide attractive shareholder returns.

In addition, such conditions may no longer support the continued operation of certain generating facilities, which could adversely affect our financial statements primarily through accelerated depreciation and amortization expenses and one-time charges.

procedures.

Our results were negatively affected by the impacts of COVID-19.

We cannot predict the full extent of the impacts of COVID-19, which will depend on, among other things, the rate, and public perceptions of the effectiveness, of vaccinations and rate of resumption of business activity.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – Executive Overview for additional information.

The estimated impact to our Net income arising from these market and weather conditions for the year ended December 31, 2021 was a reduction of approximately $800 million.

We have issued guarantees for the performance of third parties, which obligate us to perform if the third parties do not perform.

In the event of non-performance by those third parties, we could incur substantial costs to fulfill their obligations under these guarantees.

Statements.

factors decrease, and we face lower margins due to higher energy replacement costs and/or lower energy sales and higher operating and maintenance costs.

We recognize as a liability the present value of the estimated future costs to decommission our nuclear facilities.

The estimated liability is based on assumptions in the approach and timing of decommissioning the nuclear facilities, estimation of decommissioning costs and Federal and state regulatory requirements.

See Note 10 — Asset Retirement Obligations of the Notes to Consolidated Financial Statements for additional information.

Following the separation, our financial profile has changed, and we are a smaller, less diversified company than Exelon prior to the separation.

The separation resulted in us being a smaller, less diversified company.

As a result, we may be more vulnerable to changing market conditions, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, the diversification of our revenues, costs, and cash flows will diminish as a standalone company, such that our results of operations, cash flows, working capital and financing requirements may be subject to increased volatility and our ability to fund capital expenditures and investments, pay dividends and service debt may be diminished.

financial results could be negatively impacted.

Risks Related to Our Common Stock

A trading market for our common stock was only recently initiated following the separation and our stock price may fluctuate significantly.

An active trading market for our common stock was only recently initiated following the separation, which may affect your ability to sell your shares and could lead to our share price being depressed or more volatile.

For many reasons, including the risks identified in this “Risk Factors” section, the market price of our common stock following the separation may be more volatile than the market price of Exelon’s common stock before the separation.

These factors may result in short-term or long-term negative pressure on the value of our common stock.

We cannot predict the prices at which our common stock may trade.

The market price of our common stock may fluctuate significantly, depending on many factors including the following:

- our announcements or our competitors’ announcements regarding new products or services, enhancements, significant contracts, acquisitions or strategic investments;

- fluctuations in our quarterly or annual financial results or the quarterly or annual financial results of companies perceived to be similar to us;

- changes in earnings estimates or recommendations by securities analysts or our ability to meet those estimates;

- the operating and stock price performance of other comparable companies;

- investors’ general perception of us and our industry;

- changes to the regulatory and legal environment under which we operate;

- changes in general economic and market conditions; and

- changes in industry conditions.

In addition, if the market for stocks in our industry, or the stock market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations.

Our generating capacity [added: primarily] consists of nuclear, wind, solar, natural gas and hydroelectric assets.

See ITEM [removed: 9A.][added: 1.]

See Note 12 — Asset Impairments of the [added: Combined] Notes to Consolidated Financial Statements for [removed: additional information related to other] [added: a discussion of asset] impairment assessments.

Significant [removed: 2021] [added: 2022] Transactions and Developments

On February 21, 2021, Exelon’s Board of Directors approved a plan to separate its competitive generation and customer-facing [added: energy] businesses into a stand-alone publicly traded company [removed: ("the separation").][added: (the "separation").]

See Note [removed: 24] [added: 1] — [removed: Separation from Exelon] [added: Basis] of [added: Presentation of] the [added: Combined] Notes to Consolidated Financial Statements for additional information.

[removed: In connection with the separation, we] [added: We] incurred [removed: transaction] [added: separation] costs of [added: $140 million and] $49 million for the [removed: year] [added: twelve months] ended December 31, [added: 2022 and] 2021, [added: respectively,] which are [added: primarily] recorded in Operating and maintenance expense.

We expect to incur incremental [removed: transaction] costs of approximately [removed: $150 million and $60] [added: $80] million in [removed: 2022 and 2023, respectively.][added: 2023.]

The [removed: transaction] [added: separation] costs are primarily comprised of system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation.

See Note 2 [removed: –] [added: —] Mergers, Acquisitions, and Dispositions [removed: and Note 17 — Debt and Credit Agreements] of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

See Note [removed: 3] [added: 13] — [removed: Regulatory Matters] [added: Intangible Assets] of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

See Note 7 [removed: -] [added: —] Early Plant Retirements of the [added: Combined] Notes to Consolidated Financial Statements for additional [removed: information and Early Retirement of Generation Facilities below.][added: information.]

See Note [removed: 7 — Early Plant Retirements, Note] 10 — Asset Retirement [removed: Obligations, and Note 12 — Asset Impairments] [added: Obligations] of the [added: Combined] Notes to Consolidated Financial [removed: Statement] [added: Statements] for additional information.

[removed: Impacts] [added: - The absence] of [added: impacts from the] February 2021 [removed: Extreme Cold Weather Event and Texas-based Generating Assets Outages][added: extreme cold weather event;]

The ultimate impact to our consolidated financial statements may be affected by [removed: a number of] [added: several] factors, including [added: final non-performance charges billed,] the impacts of [removed: customer and counterparty defaults and recoveries, any additional solutions to address the financial challenges caused by the event,] [added: generator defaults,] and related litigation and [removed: contract] disputes.

See Note [removed: 3 — Regulatory Matters and Note] 19 — Commitments and Contingencies of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

See Note 2 — Mergers, Acquisitions, and Dispositions of the [added: Combined] Notes to Consolidated Financial Statements for additional [removed: information.][added: information on our acquisition of EDF’s interest in CENG.]

For merchant revenues not already hedged via comprehensive state programs, such as the CMC in Illinois, we [added: typically] utilize a three-year ratable sales plan to align our hedging strategy with our financial objectives.

As of December 31, [removed: 2021,] [added: 2022,] the percentage of expected generation hedged for the Mid-Atlantic, Midwest, New York, and ERCOT reportable segments is [removed: 92%-95%] [added: 94%-97%] and [removed: 73%-76%] [added: 75%-78%] for [removed: 2022] [added: 2023] and [removed: 2023,][added: 2024, respectively.]

Approximately [removed: 50%] [added: 60%] of our uranium concentrate requirements from [removed: 2022] [added: 2023] through [removed: 2026] [added: 2027] are supplied by three suppliers.

Geopolitical [removed: developments] [added: developments, including the Russia and Ukraine conflict and United States sanctions against Russia,] have the potential to impact delivery from multiple suppliers in the international uranium [added: processing] industry.

See Note 16 — Derivative Financial Instruments of the [added: Combined] Notes to Consolidated Financial Statements and ITEM 7A.

The preparation of financial statements in conformity with GAAP requires that management apply accounting policies and make estimates and assumptions that affect results of operations and the amounts of assets and liabilities reported in the [added: consolidated] financial statements.

Additional information on the application of these accounting policies can be found in the [added: Combined] Notes to Consolidated Financial Statements.

The AROs associated with decommissioning our nuclear units were [removed: $12.7] [added: $12.5] billion at December 31, [removed: 2021.][added: 2022.]

The actual decommissioning approach selected [removed: once a nuclear facility is shutdown] will be determined at the time of shutdown and may be influenced by multiple factors including the funding status of the NDT funds at the time of shutdown and regulatory or other commitments.

For additional information regarding SNF, see Note 19 — Commitments and Contingencies of the [added: Combined] Notes to Consolidated Financial Statements.

If all our future nominal cash flows associated with the ARO were to be discounted at the current prevailing CARFR, the obligation would [removed: increase] [added: decrease] from approximately [removed: $12.7] [added: $12.5] billion to approximately [removed: $16.0] [added: $10.5] billion.

| Change in the CARFR applied to the annual ARO update | | | [removed: (Decrease) Increase] [added: Increase (Decrease)] to ARO as of December 31, [removed: 2021] [added: 2022] | | |

| [removed: 2020] [added: 2021] CARFR rather than the [removed: 2021] [added: 2022] CARFR | | | $ | [removed: (490)] [added: 3,470] | |

| [removed: 2021] [added: 2022] CARFR increased by 50 basis points | | | [removed: (600)] [added: (570)] | | |

| [removed: 2021] [added: 2022] CARFR decreased by 50 basis points | | | [removed: 750] [added: 710] | | |

| Change in ARO Assumption | | | Increase [added: (Decrease)] to ARO as of December 31, [removed: 2021] [added: 2022] | | |

| Uniform increase in escalation rates of 50 basis points | | | $ | [removed: 2,900] [added: 1,780] | |

| Increase the estimated costs to decommission the nuclear plants by 10 percent | | | [removed: 1,110] [added: 720] | | |

| Increase the likelihood of the DECON scenario by 10 percent and decrease the likelihood of the SAFSTOR scenario by 10 percent(a) | | | [removed: 480] [added: 140] | | |

| Shorten each unit's probability weighted operating life assumption by 10 percent(b) | | | [removed: 1,570] [added: 280] | | |

| Extend the estimated date for DOE acceptance of SNF to 2040 | | | [removed: 290] [added: (70)] | | |

See Note 1 — [removed: Significant Accounting Policies] [added: Basis of Presentation] and Note 10 — Asset Retirement Obligations of the [added: Combined] Notes to Consolidated Financial Statements for additional information regarding accounting for nuclear AROs.

See Note [removed: 13] [added: 16] — [removed: Intangible Assets] [added: Derivative Financial Instruments] of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

For discussion of the year ended December 31, 2021 compared to the year ended December 31, 2020, refer to ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the 2021 Form 10-K, which was filed with the SEC on February 25, 2022.

Capital Allocation and Growth Announcements

We are announcing our capital allocation strategy for 2023 and 2024 supporting our core principles outlined in our Strategy and Outlook discussion.

BUSINESS – Constellation's Strategy and Outlook for additional information about our strategy.

We will double the annual dividend in 2023 from $0.5640 per share to $1.1280 per share while targeting growth of 10% annually.

We are allocating capital towards our best-in-class generation fleet by committing $1.5 billion of growth capital expenditures over the next three years, including nuclear uprates, wind repowering and hydrogen.

These organic growth opportunities are projected to exceed our double-digit return threshold.

In our commitment to return value to shareholders, we have also authorized a share buyback program of $1.0 billion.

PJM Performance Bonuses

On December 23, 2022, and continuing through the morning of December 25, 2022, winter storm Elliott blanketed the entirety of PJM’s footprint with record low temperatures and extreme weather conditions.

A significant portion of PJM's fossil generation fleet failed to perform as reserves were called.

PJM’s initial estimate of non-performance charges ranges from $1 billion to $2 billion and, in accordance with its tariff, funds collected from those charges are redistributed to generating resources that performed above expectations during the event.

PJM released preliminary invoices to generators subject to non-performance charges and bonuses on February 10, 2023.

PJM indicated that these preliminary invoices are informational and subject to change for items that could have a material impact to the final amounts billed to non-performing generators, pending PJM’s

completion of their internal processes and data quality assurance reviews.

Leveraging preliminary data from PJM and applying significant judgments and assumptions, we recognized an estimated benefit of $109 million (pre-tax) for performance bonuses (net of non-performance charges), primarily driven by the overperformance of our nuclear fleet.

It is reasonably possible that the ultimate benefit could differ significantly once these uncertainties are resolved, which could have a material impact on our financial statements.

Russia and Ukraine Conflict

We are closely monitoring developments of the Russia and Ukraine conflict including United States sanctions against Russian energy exports, the potential for sanctions on Russian nuclear fuel supply, and enrichment activities, as well as yet undefined action by Russia to limit energy deliveries.

To-date, our nuclear fuel deliveries have not been affected by the Russia and Ukraine conflict.

Our nuclear fuel is obtained predominantly through long-term uranium supply and service contracts.

We work with a diverse set of domestic and international suppliers years in advance to procure our nuclear fuel and generally have enough nuclear fuel to support all our refueling needs for multiple years regardless of sanctions.

Recognizing the potential for the continuing conflict to impact our longer-term security and cost of supply, we have entered into contracts to increase the size of our nuclear fuel inventory.

We are taking this affirmative action by working with our diverse set of suppliers to ensure we can secure the nuclear fuel needed to continue to operate our nuclear fleet long-term and provide the necessary fuel to bridge potential Russian supply disruption through 2028, which is the date multiple suppliers are expected to have incremental capacity online.

We are also continuing to work with federal policymakers and other stakeholders to facilitate the expansion of the domestic nuclear fuel cycle within the United States to improve carbon-free energy security.

Defined Benefit Pension and Other Postretirement Employee Benefits

We sponsor defined benefit pension and OPEB plans for most current employees.

The measurement of the plan obligations and costs of providing benefits involves various factors, including the development of valuation assumptions and inputs and accounting policy elections.

When developing the required assumptions, we consider historical information as well as future expectations.

The measurement of projected benefit obligations and costs is affected by several assumptions including the discount rate, the long-term expected rate of return on plan assets, the anticipated rate of increase of health care costs, our contributions, the rate of compensation increases, and the long-term expected investment rate credited to employees of certain plans, among others.

The assumptions are updated annually and upon any interim remeasurement of the plan obligations.

Pension and OPEB plan assets include equity securities, including U.S. and international securities, and fixed income securities, as well as certain alternative investment classes such as real estate, private equity, private credit, and hedge funds.

Expected Rate of Return on Plan Assets. In determining the EROA, we consider expectations regarding future long-term capital market performance, weighted by our target asset class allocations.

We calculate the amount of expected return on pension and OPEB plan assets by multiplying the EROA by the MRV of plan assets at the beginning of the year, taking into consideration anticipated contributions and benefit payments to be made during the year.

In determining MRV, the authoritative guidance for pensions and postretirement benefits allows the use of either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not more than five years.

For the majority of pension plan assets, we use a calculated value that adjusts for 20% of the difference between fair value and expected MRV of plan assets.

Use of this calculated value approach enables less volatile expected asset returns to be recognized as a component of pension cost from year to year.

For OPEB plan assets and certain pension plan assets, we use fair value to calculate the MRV.

Discount Rate. The discount rates are determined by developing a spot rate curve based on the yield to maturity of a universe of high-quality non-callable (or callable with make whole provisions) bonds with similar maturities to the related pension and OPEB obligations.

COVID-19. We have taken steps to mitigate the potential risks posed by the global outbreak (pandemic) of COVID-19.

We provide a critical service to our customers which means that it is paramount that we keep our employees who operate our businesses safe and minimize unnecessary risk of exposure to the virus by taking extra precautions for employees who work in the field and in our facilities.

We have implemented work from home policies where appropriate, and imposed travel limitations on employees.

We continue to implement strong physical and cyber-security measures to ensure that our systems remain functional in order to both serve our operational needs with a remote workforce and keep them running to ensure uninterrupted service to our customers.

There were no changes in internal control over financial reporting as a result of COVID-19 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

CONTROLS AND PROCEDURES for additional information.

Unfavorable economic conditions due to COVID-19 resulted in an estimated reduction to our Net income of approximately $170 million for the year ended December 31, 2020.

The impact was not material for the year ended December 31, 2021.

We assessed long-lived assets, goodwill, and investments for recoverability and there were no material impairment charges recorded in 2020 or 2021 as a result of COVID-19.

We will continue to monitor developments affecting our workforce, customers, and suppliers and will take additional precautions that we determine to be necessary in order to mitigate the impacts.

We cannot predict the full extent of the impacts of COVID-19, which will depend on, among other things, the rate, and public perceptions of the effectiveness, of vaccinations and rate of resumption of business activity.

CENG Put Option

EDF had the option to sell its 49.99% equity interest in CENG to us exercisable beginning on January 1, 2016 and thereafter until June 30, 2022.

On November 20, 2019, we received notice of EDF’s intention to exercise the put option and sell its 49.99% equity interest in CENG to us and the put automatically exercised on January 19, 2020 at the end of the sixty-day advance notice period.

On August 6, 2021, we entered into a settlement agreement with EDF pursuant to which we, through a wholly owned subsidiary, purchased EDF’s equity interest in CENG for a net purchase price of $885 million, which includes, among other things, a credit for EDF’s share of the balance of the preferred distribution payable by CENG to us.

The difference between the net purchase price and EDF’s noncontrolling interest as of the closing date was recorded to Membership Interest in the Consolidated Balance Sheet.

In connection with the settlement agreement, on August 6, 2021, we issued approximately $880 million under a term loan credit agreement to fund the transaction, which will expire on August 5, 2022.

Clean Energy Law

On September 15, 2021, the Illinois Public Act 102-0662 was signed into law by the Governor of Illinois (“Clean Energy Law”).

The Clean Energy Law is designed to achieve 100% carbon-free power by 2045 to enable the state’s transition to a clean energy economy.

The Clean Energy Law establishes decarbonization requirements for Illinois as well as programs to support the retention and development of emissions-free sources of electricity.

Among other things, the Clean Energy Law authorized the IPA to procure up to 54.5 million CMCs from qualifying nuclear plants for a five-year period beginning on June 1, 2022 through May 31, 2027.

CMCs are credits for the carbon-free attributes of eligible nuclear power plants in PJM.

The Byron, Dresden, and Braidwood nuclear plants located in Illinois participated in the CMC procurement process and were awarded contracts that commit each plant to operate through May 31, 2027.

Pursuant to these contracts, ComEd will procure CMCs based upon the number of MWhs produced annually by each plant, subject to minimum performance requirements.

Following enactment of the Clean Energy Law, we announced on September 15, 2021 that we reversed our previous decision to retire Byron and Dresden given the opportunity for additional revenue.

In addition, we no longer consider the Braidwood or LaSalle nuclear plants to be at risk for premature retirement.

Early Retirement of Generation Facilities

In August 2020, we announced the intention to retire the Byron Generating Station in September 2021, Dresden Generating Station in November 2021, and Mystic Units 8 and 9 at the expiration of the cost of service commitment in May 2024.

As a result, we recognized a $500 million pre-tax impairment for the New England asset group along with certain one-time charges in the third and fourth quarters of 2020, in addition to ongoing annual financial impacts stemming from shortening the expected economic useful lives of these facilities primarily related to accelerated depreciation of plant assets (including any ARC) and accelerated amortization of nuclear fuel.

In the second quarter of 2021, an incremental decline in value resulted in an additional pre-tax impairment charge of $350 million for the New England asset group.

We recorded pre-tax charges of $53 million and $140 million in the second and third quarters of 2021, respectively, for decommissioning-related activities that were not offset for the Byron units due to the inability to recognize a regulatory asset at ComEd.

On September 15, 2021, we reversed our previous decision to early retire Byron and Dresden and the expected economic useful life for both facilities was updated to 2044 and 2046 for Byron Units 1 and 2, respectively, and to 2029 and 2031 for Dresden Units 2 and 3, respectively.

Depreciation was therefore adjusted beginning September 15, 2021, to reflect these extended useful life estimates.

In addition, in the third quarter of 2021, we reversed approximately $81 million of severance benefit costs and $13 million of other one-time charges initially recorded in the third and fourth quarters of 2020 associated with the early retirements.

We recognized pre-tax expenses for Byron, Dresden, and Mystic Units 8 and 9 of $1,458 million for the year ended December 31, 2021, primarily due to accelerated depreciation and amortization of plant assets, partially offset by the reversal of one-time charges for Byron and Dresden.

Beginning on February 15, 2021, our Texas-based generating assets within the ERCOT market, specifically Colorado Bend II, Wolf Hollow II, and Handley, experienced outages as a result of extreme cold weather conditions.

In addition, those weather conditions drove increased demand for service, dramatically increased wholesale power prices, and also increased gas prices in certain regions.

The estimated impact to our Net income for the year ended December 31, 2021 arising from these market and weather conditions was a reduction of approximately $800 million.

To offset a portion of the unfavorable impacts, we identified between $370 million and $450 million of enhanced revenue opportunities, deferral of selected non-essential maintenance, and primarily one-time cost savings, which was achieved in 2021.

After [removed: separation,] [added: the separation on February 1, 2022,] reporting on risk management issues [removed: will be] [added: is] to the Executive Committee, the Risk Management Committees of our generation and customer-facing businesses, and the Audit and Risk Committee of the Board of Directors.

[added: To the extent the total amount of energy we produce or procure differs from the amount of energy we] have contracted to sell, we are exposed to market fluctuations in commodity prices.

We seek to mitigate our commodity price risk through the sale and purchase of electricity, [removed: fossil fuel,] [added: natural gas] and [added: oil, and] other commodities.

We expect the settlement of the majority of our economic hedges will occur during [removed: 2022] [added: 2023] through [removed: 2024.][added: 2025.]

[removed: For merchant revenues] not already hedged via comprehensive state programs, such as the CMC in Illinois, we [added: typically] utilize a three-year ratable sales plan to align our hedging strategy with our financial objectives.

The prompt three-year merchant [removed: revenues] [added: sales] are hedged on an approximate rolling 90%/60%/30% basis.

As of December 31, [removed: 2021,] [added: 2022,] the percentage of expected generation hedged for the Mid-Atlantic, Midwest, New York, and ERCOT reportable segments is [removed: 92%-95%] [added: 94%-97%] and [removed: 73%-76%] [added: 75%-78%] for [removed: 2022] [added: 2023] and [removed: 2023,] [added: 2024,] respectively.

The forecasted market price risk exposure for our entire economic hedge portfolio associated with a $5/MWh reduction in the annual average around-the-clock energy price based on December 31, [removed: 2021] [added: 2022] market conditions and hedged position would be a decrease in pre-tax net income of approximately [removed: $20] [added: $8] million and [removed: $243] [added: $215] million for [removed: 2022] [added: 2023] and [removed: 2023,] [added: 2024,] respectively.

See Note 16 — Derivative Financial Instruments of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

Nuclear fuel assemblies are obtained predominantly through long-term uranium concentrate supply contracts, contracted conversion services, contracted enrichment services, or a combination thereof, [added: including contracts sourced from Russia,] and contracted fuel fabrication services.

Approximately [removed: 50%] [added: 60%] of our uranium concentrate requirements from [removed: 2022] [added: 2023] through [removed: 2026] [added: 2027] are supplied by three suppliers.

Geopolitical developments, including the [removed: Russian] [added: Russia and] Ukraine conflict and United States sanctions against Russia, have the potential to impact delivery from multiple suppliers in the international uranium industry.

Non-performance by these counterparties could have a material adverse impact in our [added: consolidated] financial statements.

The following table provides detail on changes in our commodity mark-to-market net asset or liability balance sheet position from December 31, [removed: 2019] [added: 2020] to December 31, [removed: 2021.][added: 2022.]

See Note 16 — Derivative Financial Instruments of the [added: Combined] Notes to Consolidated Financial Statements for additional information on the balance sheet classification of the mark-to-market energy contract net assets (liabilities) recorded as of December 31, [removed: 2021] [added: 2022] and [removed: 2020.][added: 2021.]

| | | | [removed: Mark-to-market] [added: Mark-to-Market] Energy Contract Net [removed: Assets (Liabilities)] [added: Assets] | | | | | | | | | | | | | | | | | |

| Total change in fair value during [removed: 2020] [added: 2022] of contracts recorded in result of operations | | | [removed: (203)] [added: (647)] | | | | | | | | | | | | | | | | | |

| Reclassification to realized at settlement of contracts recorded in results of operations | | | [removed: 469] [added: (380)] | | | | | | | | | | | | | | | | | |

| Changes in allocated collateral | | | [removed: (513)] [added: 386] | | | | | | | | | | | | | | | | | |

| Net option premium paid | | | [removed: 139] [added: 177] | | | | | | | | | | | | | | | | | |

| Option premium amortization | | | [removed: (104)] [added: (293)] | | | | | | | | | | | | | | | | | |

| Upfront payments and amortizations(b) | | | [removed: 73] [added: 167] | | | | | | | | | | | | | | | | | |

See Note 18 — Fair Value of Financial Assets and Liabilities of the [added: Combined] Notes to Consolidated Financial Statements for additional information regarding fair value measurements and the fair value hierarchy.

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | [removed: 2026] [added: 2027] | | | | | | [removed: 2027] [added: 2028] and Beyond | | | | | | | | |

| Actively quoted prices (Level 1) | | | $ | [removed: 711] [added: 264] | | | | | $ | [removed: 66] [added: 169] | | | | | $ | [removed: 53] [added: 128] | | | | | $ | [removed: 43] [added: 68] | | | | | $ | [removed: 24] [added: 33] | | | | | $ | — | | | | | $ | [removed: 897] [added: 662] | |

| Prices provided by external sources (Level 2) | | | [removed: 442] [added: 238] | | | | | | [removed: 436] [added: 4] | | | | | | [removed: (60)] [added: (83)] | | | | | | [removed: 1] [added: 6] | | | | | | — | | | | | | — | | | | | | [removed: 819] [added: 165] | | |

| Prices based on model or other valuation methods (Level 3) | | | [removed: 37] [added: 284] | | | | | | [removed: (74)] [added: (107)] | | | | | | [removed: 23] [added: 83] | | | | | | [removed: 5] [added: 38] | | | | | | [removed: (24)] [added: 7] | | | | | | [removed: (61)] [added: (86)] | | | | | | [removed: (94)] [added: 219] | | |

(b)Amounts are shown net of collateral paid/(received) from counterparties (and offset against mark-to-market assets and liabilities) of [removed: $512] [added: $898] million at December 31, [removed: 2021.][added: 2022.]

See Note 16 — Derivative Financial Instruments of the [added: Combined] Notes to Consolidated Financial Statements for a detailed discussion of credit risk.

The following tables provide information on our credit exposure for all derivative instruments, NPNS, and payables and receivables, net of collateral and instruments that are subject to master netting agreements, as of December 31, [removed: 2021.][added: 2022.]

| Rating as of December 31, [removed: 2021] [added: 2022] | | | Total Exposure Before Credit Collateral | | | | | | Credit Collateral(a) | | | | | | Net Exposure | | | | | | Number of Counterparties Greater than 10% of Net Exposure | | | | | | Net Exposure of Counterparties Greater than 10% of Net Exposure | | |

| Non-investment grade | | | [removed: 13] [added: 110] | | | | | | [removed: —] [added: 88] | | | | | | [removed: 13] [added: 22] | | | | | | — | | | | | | — | | |

| Internally rated—investment grade | | | [removed: 111] [added: 106] | | | | | | — | | | | | | [removed: 111] [added: 106] | | | | | | — | | | | | | — | | |

| Internally rated—non-investment grade | | | [removed: 226] [added: 374] | | | | | | [removed: 47] [added: 40] | | | | | | [removed: 179] [added: 334] | | | | | | — | | | | | | — | | |

(a)As of December 31, [removed: 2021,] [added: 2022,] credit collateral held from counterparties where we had credit exposure included [removed: $163] [added: $152] million of cash and [removed: $60] [added: $111] million of letters of credit.

| Rating as of December 31, [removed: 2021] [added: 2022] | | | Less than 2 Years | | | | | | 2-5 Years | | | | | | Exposure Greater than 5 Years | | | | | | Total Exposure Before Credit Collateral | | |

| Non-investment grade | | | [removed: 13] [added: 108] | | | | | | [removed: —] [added: 2] | | | | | | — | | | | | | [removed: 13] [added: 110] | | |

| Internally rated—investment grade | | | [removed: 111] [added: 106] | | | | | | — | | | | | | — | | | | | | [removed: 111] [added: 106] | | |

| Internally rated—non-investment grade | | | [removed: 181] [added: 227] | | | | | | [removed: 39] [added: 104] | | | | | | [removed: 6] [added: 43] | | | | | | [removed: 226] [added: 374] | | |

| Net Credit Exposure by Type of Counterparty | | | As of December 31, [removed: 2021] [added: 2022] | | |

For merchant generation sales

We engage a diverse set of suppliers to ensure we can secure the nuclear fuel needed to continue to operate our nuclear fleet long-term.

To-date, we have not experienced any counterparty credit risk associated with these suppliers stemming from the Russian and Ukraine conflict.

To-date, we have not experienced any delivery or non-performance issues from our suppliers, nor any degradation in the quality of fuel we have received, and we are closely monitoring developments from the conflict.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Other Key Business Drivers for more information on the Russia and Ukraine conflict.

| Foreign Currency Translation | | | 14 | | | | | | | | | | | | | | | | | |

| Balance as of December 31, 2022 | | | $ | 1,046 | | (a) | | | | | | | | | | | | | | |

| Total | | | $ | 786 | | | | | $ | 66 | | | | | $ | 128 | | | | | $ | 112 | | | | | $ | 40 | | | | | $ | (86) | | | | | $ | 1,046 | |

| Investment grade | | | $ | 1,304 | | | | | $ | 135 | | | | | $ | 1,169 | | | | | — | | | | | | $ | — | |

| Total | | | $ | 1,894 | | | | | $ | 263 | | | | | $ | 1,631 | | | | | — | | | | | | $ | — | |

| Investment grade | | | $ | 1,276 | | | | | $ | 7 | | | | | $ | 21 | | | | | $ | 1,304 | |

| Total | | | $ | 1,717 | | | | | $ | 113 | | | | | $ | 64 | | | | | $ | 1,894 | |

| Total | | | $ | 1,631 | |

See ITEM 7.

The credit policies of the RTOs and ISOs may, under certain circumstances,

See Note 16 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.

Historically, reporting on risk management issues has been to Exelon’s Risk Management Committee and the Risk Committee of Exelon’s Board of Directors.

To the extent the total amount of energy we generate and purchase differs from the amount of energy we

| Balance as of December 31, 2019 | | | $ | 868 | | (a) | | | | | | | | | | | | | | |

| Total | | | $ | 1,190 | | | | | $ | 428 | | | | | $ | 16 | | | | | $ | 49 | | | | | $ | — | | | | | $ | (61) | | | | | $ | 1,622 | |

| Investment grade | | | $ | 715 | | | | | $ | 176 | | | | | $ | 539 | | | | | 1 | | | | | | $ | 106 | |

| Total | | | $ | 1,065 | | | | | $ | 223 | | | | | $ | 842 | | | | | 1 | | | | | | $ | 106 | |

| Investment grade | | | $ | 605 | | | | | $ | 62 | | | | | $ | 48 | | | | | $ | 715 | |

| Total | | | $ | 910 | | | | | $ | 101 | | | | | $ | 54 | | | | | $ | 1,065 | |

| Total | | | $ | 842 | |

adverse impact on our financial statements.

On February 1, 2022, Exelon completed the separation by distributing all the outstanding shares of the Company’s common stock, on a pro rata basis to the holders of Exelon’s common stock, with the Company holding all the interests in Constellation previously held by [removed: Exelon.][added: Exelon (the "Separation").]

[removed: We produced nearly 10% of the nation's carbon-free energy (based on generation output of electricity) based on published reports on energy delivery by the U.S. Energy Information Administration, making] [added: This makes] us an important partner to businesses and state and local governments that are setting ambitious carbon-reduction goals and seeking long-term solutions to the climate crisis.

Our customer-facing business is one of the nation's largest competitive energy suppliers, offering innovative [removed: options] [added: solutions] along the sustainability continuum to meet customer clean energy and climate goals.

We operate the largest carbon-free generation fleet in the nation and are one of the largest competitive electric generation companies in the country, as measured by owned and contracted [removed: MW.][added: MWs.]

At December 31, [removed: 2021,] [added: 2022,] our generating resources consisted of the following:

| Type of Capacity | | | [removed: MW] [added: MWs] | | |

| Natural gas and oil | | | [removed: 8,819] [added: 8,807] | | |

| Owned generation assets | | | [removed: 32,400] [added: 32,355] | | |

| Contracted generation(c) | | | [removed: 4,102] [added: 3,883] | | |

| Total generating resources | | | [removed: 36,502] [added: 36,238] | | |

The following map illustrates the locations of our [added: owned] generation facilities as of December 31, [removed: 2021:][added: 2022:]

[removed: ][added: ]

[removed: ] [added: ] Nuclear [removed: ] [added: ] Wind

[removed: ] [added: ] Gas/Other [removed: ] [added: ] Solar

[removed: ] [added: ] Hydro [removed:  Other Renewables]

We have five reportable segments, as described in the table below, representing the different geographical areas in which our owned generating resources are [removed: located,] [added: located] and our customer-facing activities are conducted.

| Segment | | | | | | Net Generation Capacity [removed: (MW)(a)] [added: (MWs)(a)] | | | | | | % of Net Generation Capacity | | | | | | Geographical Area | | |

| Mid-Atlantic | | | | | | [removed: 10,508] [added: 10,495] | | | | | | 32 | | % | | | | Eastern half of PJM, which includes New Jersey, Maryland, Virginia, West Virginia, Delaware, the District of Columbia, and parts of Pennsylvania and North Carolina | | |

| Midwest | | | | | | [removed: 11,898] [added: 11,892] | | | | | | 37 | | % | | | | Western half of PJM and the United States footprint of MISO, excluding MISO’s Southern Region | | |

| Other Power Regions | | | | | | [removed: 3,291] [added: 3,265] | | | | | | 10 | | % | | | | New England, South, West, and Canada | | |

| Total | | | | | | [removed: 32,400] [added: 32,355] | | | | | | 100 | | % | | | | | | |

(a)Net generation capacity is stated at proportionate ownership share as of December 31, [removed: 2021.][added: 2022.]

The following table shows sources of electric supply in [removed: GWh] [added: GWhs] for [removed: 2021] [added: 2022] and [removed: 2020:][added: 2021:]

| Purchases — non-trading portfolio | | | [removed: 67,605] [added: 70,682] | | | | | | [removed: 79,972] [added: 67,605] | | |

| Natural gas and oil | | | [removed: 19,960] [added: 21,563] | | | | | | [removed: 19,501] [added: 19,960] | | |

| [removed: Renewable(b)] [added: Renewable(c)] | | | [removed: 6,577] [added: 6,049] | | | | | | [removed: 7,052] [added: 6,577] | | |

[removed: (b)Includes] [added: (c)Includes] wind, hydroelectric, solar, and [added: in 2021,] biomass generating assets.

Our nuclear fleet is the nation’s [removed: largest] [added: largest,] with current generating capacity of approximately 21 gigawatts; it produced [removed: 175] [added: 173] terawatt hours of zero-emissions electricity during [removed: 2021] [added: 2022] – enough to power [removed: 14.9] [added: 15.4] million homes and avoid more than [removed: 124] [added: 123] million metric tons of carbon emissions according to the [removed: US] EPA GHG Equivalencies Calculator.

As of December 31, [removed: 2021,] [added: 2022,] we wholly own all our nuclear generating stations, except for undivided ownership interests in four jointly owned nuclear stations: Quad Cities (75% ownership), Peach Bottom (50% ownership), Salem (42.59% ownership), and Nine Mile Point Unit 2 (82% ownership), which are consolidated in our [added: consolidated] financial statements relative to our proportionate ownership interest in each unit.

On August 6, 2021, Constellation and EDF entered into a settlement agreement pursuant to which we, through a wholly owned subsidiary, purchased EDF’s equity interest in CENG, a joint venture with EDF, which wholly [removed: owns] [added: owned] the Calvert Cliffs and Ginna nuclear stations and Nine Mile Point Unit 1, in addition to the 82% undivided ownership interest in Nine Mile Point Unit 2.

[removed: See Note 2 — Mergers, Acquisitions, and Dispositions and Note 21 — Variable Interest Entities of the Notes to Consolidated] Financial Statements for additional information regarding the acquisition of EDF's equity interest in CENG and the CENG consolidation.

During [added: 2022,] 2021, [removed: 2020,] and [removed: 2019,] [added: 2020,] our nuclear generating facilities achieved capacity factors(a) of [added: 94.8%,] 94.5%, [removed: 95.4%,] and [removed: 95.7%,] [added: 95.4%,] respectively, at ownership percentage.

[removed: More broadly, the] [added: The] nuclear capacity factor has been approximately four percentage points better than the industry average annually since 2013.

In [removed: 2021,] [added: 2022,] we achieved an average refueling outage duration of [removed: 22] [added: 21] days for units we operate.

[removed: During 2020, and 2019, we] [added: We] achieved an average refueling outage duration of 22 days [added: in both 2021] and [removed: 21 days] [added: 2020,] against [removed: an] industry [removed: average] [added: averages] of [removed: 34] [added: 32] and [removed: 36] [added: 34] days, respectively.

We manage our scheduled refueling outages to minimize their duration and to maintain high nuclear generating capacity factors, resulting in a stable [removed: generation base] [added: supply position] for our wholesale and retail power marketing activities.

In [added: 2022,] 2021, [removed: 2020,] and [removed: 2019] [added: 2020,] electric supply (in [removed: GWh)] [added: GWhs)] generated from our nuclear generating facilities was [added: 64%,] 65%, [removed: 62%,] and [removed: 64%,] [added: 62%,] respectively, of our total electric supply, which also includes natural gas, oil, and renewable generation and electric supply purchased for resale.

Peach Bottom has [added: previously] received a second 20-year license renewal from the NRC, for a total 80-year term, for Units 2 and 3.

| [removed: Dresden] [added: Dresden(b)] | | | 2 | | | | | | 1970 | | | | | | 2029 | | |

| Peach [removed: Bottom] [added: Bottom(c)] | | | 2 | | | | | | 1974 | | | | | | [removed: 2053] [added: 2033] | | |

Unless otherwise indicated or the context otherwise requires, references herein to the terms "we," "our," "us" and "the Company" refer collectively to CEG Parent and Constellation.

We are the nation’s largest producer of carbon-free energy and a leading supplier of energy products and services to businesses, homes, community aggregations and public sector customers across the continental United States, including three-fourths of Fortune 100 companies.

Our generation fleet of nuclear, hydro, wind, natural gas, and solar generation facilities has the generating capacity to power the equivalent of 15 million homes, producing 11 percent of the carbon-free energy in the United States.

Constellation’s fleet is helping to accelerate the nation’s transition to a carbon-free future with more than 32,355 megawatts of capacity and an annual output that is nearly 90 percent carbon-free.

We employ approximately 13,370 people, and do business in 48 states, the District of Columbia, Canada, and the United Kingdom.

Our generation fleet produces more clean, carbon-free energy than any other company in the United States.

| Nuclear | | | 20,895 | | |

| Renewable(b) | | | 2,653 | | |

| | | | 2022 | | | | | | 2021 | | |

| Nuclear(a)(b) | | | 173,350 | | | | | | 172,990 | | |

| Total Supply | | | 271,644 | | | | | | 267,132 | | |

(b)2021 values have been revised from those previously reported to correctly reflect our 82% undivided ownership interest in Nine Mile Point Unit 2.

See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information regarding the sale of our biomass facility.

See Note 2 — Mergers, Acquisitions, and Dispositions and Note 22 — Variable Interest Entities of the Combined Notes to Consolidated

See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

| | | | 3 | | | | | | 1974 | | | | | | 2034 | | |

(b)We are currently seeking license renewals for Clinton and Dresden Units 2 and 3 to extend the operating licenses by an additional 20 years.

(c)In February 2022, the NRC issued an order related to its review of our subsequent license renewal application for Peach Bottom and the NRC directed its staff to change the expiration dates for the licenses back to 2033 and 2034.

We expect that the license expiration dates will be restored to 2053 and 2054, respectively, See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

We are currently seeking license renewals for our Clinton and Dresden units.

Clinton depreciation provisions are based on an estimated useful life through 2047.

Dresden Units 2 and 3 depreciation provisions are based on an estimated useful life through 2049 and 2051, respectively, in anticipation of the license renewals.

Peach Bottom Units 2 and 3 depreciation provisions are based on an estimated useful life through 2053 and 2054 respectively, in anticipation of the license expiration dates being restored.

See Note 3 — Regulatory Matters of the Combined Notes to Consolidated Financial Statements for additional information.

the current NRC operating license for each unit consistent with the table above.

In March 2021, FERC issued a new 50-year license for Conowingo, vacated in December 2022 on remand, however depreciation provisions continue to assume an estimated useful life through 2071 in anticipation of the license expiration date being restored.

Factors having an adverse effect on Dispatch Match include forced outages, derates, and failure to operate to the desired generation signal.

| Mid-Atlantic | | | | | | 6 | | | | | | 2023 - 2035 | | | | | | 279 | | |

| ERCOT | | | | | | 6 | | | | | | 2026 - 2035 | | | | | | 841 | | |

| Other Power Regions | | | | | | 12 | | | | | | 2023 - 2037 | | | | | | 2,386 | | |

| Total | | | | | | 31 | | | | | | | | | | | | 3,883 | | |

In

In addition to sustainability products and services, data and analytics have also become increasingly important for our customers.

We manage various risks around our nuclear fuel requirements in accordance with our fuel procurement policy.

We engage a diverse set of domestic and international suppliers and limit our transactions with each supplier to mitigate concentration of risk.

Refer to ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK for additional information.

Additionally, we are subject to NERC mandatory

The principles of our sustainable business strategy demonstrate our commitment to a carbon-free future while maintaining a strong balance sheet, advancing our ESG initiatives and investing in clean energy solutions.

Power America's Clean Energy Future. We will operate and grow the nation’s largest fleet of clean, zero-emissions generation facilities, with world-class levels of safety, reliability and resiliency.

The consolidated financial information presented in this Annual Report on Form 10-K for 2021 represents twelve months of information for Constellation.

References in this report to "we," "our," "us" and "the Company" are to Constellation and/or its subsidiaries, as apparent in the context.

We are America’s leading clean energy company, based on the production of carbon-free electricity.

We are the largest supplier of clean energy and sustainable solutions to homes, businesses, governments, community aggregations and a range of wholesale customers (such as municipalities, cooperatives, and other strategics) across the continental U.S., backed by approximately 32,400 megawatts of generating capacity consisting of nuclear, wind, solar, natural gas and hydroelectric assets.

We operate in 48 states, Canada and now employ approximately 12,700 people after separation.

We are differentiated by owning the cleanest generation fleet in the country.

We are uniquely positioned through the pairing of our clean energy fleet with our customer-facing business.

| Nuclear | | | 20,899 | | |

| Renewable(b) | | | 2,682 | | |

| | | | 2021 | | | | | | 2020 | | |

| Nuclear(a) | | | 174,987 | | | | | | 175,085 | | |

| Total Supply | | | 269,129 | | | | | | 281,610 | | |

| | | | 3 | | | | | | 1974 | | | | | | 2054 | | |

(b)Although timing has been delayed, we currently plan to seek license renewal for Clinton and have received a Timely Renewal Exemption from the NRC that allows for the license renewal application to be filed in the first quarter of 2024.

The TMI nuclear station located in Middletown, Pennsylvania, permanently ceased generation operations on September 20, 2019.

The Oyster Creek nuclear station located in Forked River, New Jersey, which permanently ceased generation operations on September 17, 2018, was sold to Holtec International (Holtec) on July 1, 2019.

Muddy Run's license expires on December 1, 2055 and Conowingo's on February 28, 2071.

Note 2 — Mergers, Acquisitions, and Dispositions for additional information on these dispositions.

Desired energy is measured by revenues less purchased power and fuel costs when unit is dispatched by us or the RTO.

| Mid-Atlantic | | | | | | 7 | | | | | | 2022 - 2032 | | | | | | 176 | | |

| ERCOT | | | | | | 5 | | | | | | 2022 - 2035 | | | | | | 864 | | |

| Other Power Regions | | | | | | 12 | | | | | | 2022 - 2033 | | | | | | 2,685 | | |

| Total | | | | | | 31 | | | | | | | | | | | | 4,102 | | |

We also have a non-commodity element of our customer facing business, providing sustainability, efficiency and technology solutions to offer a comprehensive suite of energy solutions to meet customers’ growing and evolving needs.

businesses and coupled with visible payments to our generation plants for the clean energy attributes.

For two decades, our predecessor company was a strong advocate for policies that would address the climate crisis.

Our business strategy is to maximize value for all our stakeholders, coupled with ESG principles that are integrated with and core to our strategy, through a particular emphasis on:

Carbon-Free Energy Advocacy. We will continue to work with policymakers to find solutions that drive decarbonization and provide value to customers.

Carbon-Free Energy & Climate Mitigation. We will continue to prioritize safety in operating our reliable, best in class, carbon-free, generation assets and growing the supply of clean power, fuels, and energy carriers including hydrogen that will be essential to fighting the climate crisis.

We will mitigate the impacts of climate change on our business through adaptation and building resiliency in our supply chain through partnerships with our key suppliers to build a sustainable supply chain that delivers energy and quality products and services and responsibly manages waste.

We will also partner with our key energy suppliers on their GHG emissions and climate adaptation strategies.

Clean Customer Transformation. Customers, including businesses and cities, are transforming to become more sustainable from energy supply to management.

From products that supply clean power when they need it 24 hours a day to transformative solutions to integrate clean fuels, we will continue to innovate and develop new products to meet our customers’ needs.

Technology and Commercialization. We will partner with our customers, suppliers, universities, governments, national labs, and startups to support technology advancement through development, partnerships and commercialization pathways.

We commit to help enable future technologies and business models needed to drive the clean energy economy to improve the health and welfare of communities through venture investing and R&D.

We will target 25% of these investments to minority and women led businesses and will require investment recipients to disclose how they engage in equitable employment and contracting practices, using performance as a factor when considering investments.

Equity and Community Empowerment. We are committed to building a future in which all of our customers, employees, business partners, and communities benefit equitably from social, environmental and economic progress.

Diversity, Equity and Inclusion. Our commitment is an advantage in the fight against climate change, including a commitment to attract, retain, and develop a diverse, equitable workforce, promote an inclusive culture and extend diversity and inclusiveness throughout our value chain.

decarbonization as our generation fleet is essential to helping meet clean energy targets at both the state and federal levels.

Given the Biden Administration’s aggressive goals for reducing emissions within the electric power sector, policymakers have recognized the urgent need to prevent the retirement of nuclear power plants prior to the end of their licensed lives.

For information regarding material lawsuits and proceedings, see Note 3 — Regulatory Matters and Note 19 — Commitments and Contingencies of the [added: Combined] Notes to Consolidated Financial Statements.

| [removed: ☒ ANNUAL] [added: ☒ | | | ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |

For the Fiscal Year Ended December 31, [removed: 2021][added: 2022]

| [removed: ☐ TRANSITION] [added: ☐ | | | TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |

| | | | | | | (a Pennsylvania corporation) 1310 Point Street Baltimore, Maryland 21231-3380 [removed: (610) 765-5959] [added: (833) 883-0162] | | | | | | | | |

| | | | | | | (a Pennsylvania limited liability company) 200 Exelon Way Kennett Square, Pennsylvania 19348-2473 [removed: (610) 765-5959] [added: (833) 883-0162] | | | | | | | | |

| Constellation Energy Corporation | | | Yes | | | [removed: ☐] [added: x] | | | | | | No | | | [removed: x] [added: ☐] | | |

| Constellation Energy Corporation | | | Large Accelerated Filer | | | [removed: ☐] [added: x] | | | Accelerated Filer | | | ☐ | | | Non-accelerated Filer | | | [removed: x] [added: ☐] | | | Smaller Reporting Company | | | ☐ | | | Emerging Growth Company | | | ☐ | | |

The number of shares outstanding of each registrant’s common stock as of [removed: February 1, 2022] [added: January 31, 2023] was as follows:

| Constellation Energy Corporation Common Stock, without par value | | | [removed: 326,663,937] [added: 327,131,082] | | |

| [GLOSSARY OF TERMS AND [removed: ABBREVIATIONS](#i59ca7ab3cc784e42904d434b0008a7a9_13)] [added: ABBREVIATIONS](#i0f667b69a013404da82f8d403a978330_13)] | | | | | | [removed: [1](#i59ca7ab3cc784e42904d434b0008a7a9_13)] [added: [1](#i0f667b69a013404da82f8d403a978330_13)] | | |

| [FILING [removed: FORMAT](#i59ca7ab3cc784e42904d434b0008a7a9_16)] [added: FORMAT](#i0f667b69a013404da82f8d403a978330_16)] | | | | | | [removed: [5](#i59ca7ab3cc784e42904d434b0008a7a9_16)] [added: [6](#i0f667b69a013404da82f8d403a978330_16)] | | |

| [CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING [removed: INFORMATION](#i59ca7ab3cc784e42904d434b0008a7a9_19)] [added: INFORMATION](#i0f667b69a013404da82f8d403a978330_19)] | | | | | | [removed: [5](#i59ca7ab3cc784e42904d434b0008a7a9_19)] [added: [6](#i0f667b69a013404da82f8d403a978330_19)] | | |

| [WHERE TO FIND MORE [removed: INFORMATION](#i59ca7ab3cc784e42904d434b0008a7a9_22)] [added: INFORMATION](#i0f667b69a013404da82f8d403a978330_22)] | | | | | | [removed: [5](#i59ca7ab3cc784e42904d434b0008a7a9_22)] [added: [6](#i0f667b69a013404da82f8d403a978330_22)] | | |

| [ITEM [removed: 1.](#i59ca7ab3cc784e42904d434b0008a7a9_28)] [added: 1.](#i0f667b69a013404da82f8d403a978330_28)] | | | [removed: [BUSINESS](#i59ca7ab3cc784e42904d434b0008a7a9_28)] [added: [BUSINESS](#i0f667b69a013404da82f8d403a978330_28)] | | | [removed: [6](#i59ca7ab3cc784e42904d434b0008a7a9_28)] [added: [7](#i0f667b69a013404da82f8d403a978330_28)] | | |

| | | | [Constellations Strategy and [removed: Outlook](#i59ca7ab3cc784e42904d434b0008a7a9_34)] [added: Outlook](#i0f667b69a013404da82f8d403a978330_34)] | | | [removed: [17](#i59ca7ab3cc784e42904d434b0008a7a9_34)] [added: [19](#i0f667b69a013404da82f8d403a978330_34)] | | |

| | | | [Environmental Matters and [removed: Regulation](#i59ca7ab3cc784e42904d434b0008a7a9_40)] [added: Regulation](#i0f667b69a013404da82f8d403a978330_40)] | | | [removed: [22](#i59ca7ab3cc784e42904d434b0008a7a9_40)] [added: [23](#i0f667b69a013404da82f8d403a978330_40)] | | |

| [ITEM [removed: 1A.](#i59ca7ab3cc784e42904d434b0008a7a9_43)] [added: 1A.](#i0f667b69a013404da82f8d403a978330_43)] | | | [RISK [removed: FACTORS](#i59ca7ab3cc784e42904d434b0008a7a9_43)] [added: FACTORS](#i0f667b69a013404da82f8d403a978330_43)] | | | [removed: [28](#i59ca7ab3cc784e42904d434b0008a7a9_43)] [added: [29](#i0f667b69a013404da82f8d403a978330_43)] | | |

| [ITEM [removed: 1B.](#i59ca7ab3cc784e42904d434b0008a7a9_46)] [added: 1B.](#i0f667b69a013404da82f8d403a978330_46)] | | | [UNRESOLVED STAFF [removed: COMMENTS](#i59ca7ab3cc784e42904d434b0008a7a9_46)] [added: COMMENTS](#i0f667b69a013404da82f8d403a978330_46)] | | | [removed: [43](#i59ca7ab3cc784e42904d434b0008a7a9_46)] [added: [43](#i0f667b69a013404da82f8d403a978330_46)] | | |

| [ITEM [removed: 2.](#i59ca7ab3cc784e42904d434b0008a7a9_49)] [added: 2.](#i0f667b69a013404da82f8d403a978330_49)] | | | [removed: [PROPERTIES](#i59ca7ab3cc784e42904d434b0008a7a9_49)] [added: [PROPERTIES](#i0f667b69a013404da82f8d403a978330_49)] | | | [removed: [43](#i59ca7ab3cc784e42904d434b0008a7a9_49)] [added: [43](#i0f667b69a013404da82f8d403a978330_49)] | | |

| [ITEM [removed: 3.](#i59ca7ab3cc784e42904d434b0008a7a9_52)] [added: 3.](#i0f667b69a013404da82f8d403a978330_52)] | | | [LEGAL [removed: PROCEEDINGS](#i59ca7ab3cc784e42904d434b0008a7a9_52)] [added: PROCEEDINGS](#i0f667b69a013404da82f8d403a978330_52)] | | | [removed: [46](#i59ca7ab3cc784e42904d434b0008a7a9_52)] [added: [46](#i0f667b69a013404da82f8d403a978330_52)] | | |

| [ITEM [removed: 4.](#i59ca7ab3cc784e42904d434b0008a7a9_55)] [added: 4.](#i0f667b69a013404da82f8d403a978330_55)] | | | [MINE SAFETY [removed: DISCLOSURES](#i59ca7ab3cc784e42904d434b0008a7a9_55)] [added: DISCLOSURES](#i0f667b69a013404da82f8d403a978330_55)] | | | [removed: [46](#i59ca7ab3cc784e42904d434b0008a7a9_55)] [added: [46](#i0f667b69a013404da82f8d403a978330_55)] | | |

| [ITEM [removed: 5.](#i59ca7ab3cc784e42904d434b0008a7a9_61)] [added: 5.](#i0f667b69a013404da82f8d403a978330_61)] | | | [MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#i59ca7ab3cc784e42904d434b0008a7a9_61)] [added: SECURITIES](#i0f667b69a013404da82f8d403a978330_61)] | | | [removed: [47](#i59ca7ab3cc784e42904d434b0008a7a9_61)] [added: [46](#i0f667b69a013404da82f8d403a978330_61)] | | |

| [ITEM [removed: 7.](#i59ca7ab3cc784e42904d434b0008a7a9_67)] [added: 7.](#i0f667b69a013404da82f8d403a978330_67)] | | | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#i59ca7ab3cc784e42904d434b0008a7a9_67)] [added: OPERATIONS](#i0f667b69a013404da82f8d403a978330_67)] | | | [removed: [48](#i59ca7ab3cc784e42904d434b0008a7a9_67)] [added: [49](#i0f667b69a013404da82f8d403a978330_67)] | | |

| | | | [Executive [removed: Overview](#i59ca7ab3cc784e42904d434b0008a7a9_70)] [added: Overview](#i0f667b69a013404da82f8d403a978330_70)] | | | [removed: [48](#i59ca7ab3cc784e42904d434b0008a7a9_70)] [added: [49](#i0f667b69a013404da82f8d403a978330_70)] | | |

| | | | [Significant [removed: 2021 Transactions] [added: 202](#i0f667b69a013404da82f8d403a978330_73)[2](#i0f667b69a013404da82f8d403a978330_73) [Transactions] and [removed: Developments](#i59ca7ab3cc784e42904d434b0008a7a9_73)] [added: Developments](#i0f667b69a013404da82f8d403a978330_73)] | | | [removed: [48](#i59ca7ab3cc784e42904d434b0008a7a9_73)] [added: [49](#i0f667b69a013404da82f8d403a978330_73)] | | |

| | | | [Other Key Business [removed: Drivers and Management Strategies](#i59ca7ab3cc784e42904d434b0008a7a9_76)] [added: Drivers](#i0f667b69a013404da82f8d403a978330_76)] | | | [removed: [51](#i59ca7ab3cc784e42904d434b0008a7a9_76)] [added: [50](#i0f667b69a013404da82f8d403a978330_76)] | | |

| | | | [Critical Accounting Policies and [removed: Estimates](#i59ca7ab3cc784e42904d434b0008a7a9_79)] [added: Estimates](#i0f667b69a013404da82f8d403a978330_79)] | | | [removed: [52](#i59ca7ab3cc784e42904d434b0008a7a9_79)] [added: [51](#i0f667b69a013404da82f8d403a978330_79)] | | |

| | | | [removed: [Results] [added: [Financial Results] of [removed: Operations](#i59ca7ab3cc784e42904d434b0008a7a9_82)] [added: Operations](#i0f667b69a013404da82f8d403a978330_82)] | | | [removed: [58](#i59ca7ab3cc784e42904d434b0008a7a9_82)] [added: [58](#i0f667b69a013404da82f8d403a978330_82)] | | |

| | | | [Liquidity and Capital [removed: Resources](#i59ca7ab3cc784e42904d434b0008a7a9_85)] [added: Resources](#i0f667b69a013404da82f8d403a978330_85)] | | | [removed: [66](#i59ca7ab3cc784e42904d434b0008a7a9_85)] [added: [68](#i0f667b69a013404da82f8d403a978330_85)] | | |

| [ITEM [removed: 7A.](#i59ca7ab3cc784e42904d434b0008a7a9_91)] [added: 7A.](#i0f667b69a013404da82f8d403a978330_91)] | | | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#i59ca7ab3cc784e42904d434b0008a7a9_91)] [added: RISK](#i0f667b69a013404da82f8d403a978330_91)] | | | [removed: [73](#i59ca7ab3cc784e42904d434b0008a7a9_91)] [added: [77](#i0f667b69a013404da82f8d403a978330_91)] | | |

| [ITEM [removed: 8.](#i59ca7ab3cc784e42904d434b0008a7a9_94)] [added: 8.](#i0f667b69a013404da82f8d403a978330_94)] | | | [FINANCIAL STATEMENTS AND SUPPLEMENTARY [removed: DATA](#i59ca7ab3cc784e42904d434b0008a7a9_94)] [added: DATA](#i0f667b69a013404da82f8d403a978330_94)] | | | [removed: [79](#i59ca7ab3cc784e42904d434b0008a7a9_94)] [added: [83](#i0f667b69a013404da82f8d403a978330_94)] | | |

| | | | [Constellation Energy Generation, [removed: LLC](#i59ca7ab3cc784e42904d434b0008a7a9_130)] [added: LLC](#i0f667b69a013404da82f8d403a978330_130)] | | | [removed: [82](#i59ca7ab3cc784e42904d434b0008a7a9_130)] [added: [93](#i0f667b69a013404da82f8d403a978330_130)] | | |

| | | | [removed: [Notes] [added: [Combined Notes] to Consolidated Financial [removed: Statements](#i59ca7ab3cc784e42904d434b0008a7a9_145)] [added: Statements](#i0f667b69a013404da82f8d403a978330_145)] | | | [removed: [87](#i59ca7ab3cc784e42904d434b0008a7a9_145)] [added: [98](#i0f667b69a013404da82f8d403a978330_145)] | | |

| | | | [2. Mergers, Acquisitions, and [removed: Dispositions](#i59ca7ab3cc784e42904d434b0008a7a9_154)] [added: Dispositions](#i0f667b69a013404da82f8d403a978330_154)] | | | [removed: [93](#i59ca7ab3cc784e42904d434b0008a7a9_154)] [added: [105](#i0f667b69a013404da82f8d403a978330_154)] | | |

| | | | [3. Regulatory [removed: Matters](#i59ca7ab3cc784e42904d434b0008a7a9_160)] [added: Matters](#i0f667b69a013404da82f8d403a978330_160)] | | | [removed: [95](#i59ca7ab3cc784e42904d434b0008a7a9_160)] [added: [106](#i0f667b69a013404da82f8d403a978330_160)] | | |

| | | | [4. Revenue from Contracts with [removed: Customers](#i59ca7ab3cc784e42904d434b0008a7a9_166)] [added: Customers](#i0f667b69a013404da82f8d403a978330_166)] | | | [removed: [100](#i59ca7ab3cc784e42904d434b0008a7a9_166)] [added: [112](#i0f667b69a013404da82f8d403a978330_166)] | | |

| | | | [8. Property, Plant, and [removed: Equipment](#i59ca7ab3cc784e42904d434b0008a7a9_190)] [added: Equipment](#i0f667b69a013404da82f8d403a978330_193)] | | | [removed: [110](#i59ca7ab3cc784e42904d434b0008a7a9_190)] [added: [121](#i0f667b69a013404da82f8d403a978330_193)] | | |

| | | | [9. Jointly Owned Electric Utility [removed: Plant](#i59ca7ab3cc784e42904d434b0008a7a9_196)] [added: Plant](#i0f667b69a013404da82f8d403a978330_202)] | | | [removed: [111](#i59ca7ab3cc784e42904d434b0008a7a9_196)] [added: [122](#i0f667b69a013404da82f8d403a978330_202)] | | |

| | | | [10. Asset Retirement [removed: Obligations](#i59ca7ab3cc784e42904d434b0008a7a9_202)] [added: Obligations](#i0f667b69a013404da82f8d403a978330_208)] | | | [removed: [111](#i59ca7ab3cc784e42904d434b0008a7a9_202)] [added: [122](#i0f667b69a013404da82f8d403a978330_208)] | | |

| | | | [16. Derivative Financial [removed: Instruments](#i59ca7ab3cc784e42904d434b0008a7a9_238)] [added: Instruments](#i0f667b69a013404da82f8d403a978330_250)] | | | [removed: [127](#i59ca7ab3cc784e42904d434b0008a7a9_238)] [added: [143](#i0f667b69a013404da82f8d403a978330_250)] | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

The estimated aggregate market value of the voting and non-voting common equity held by nonaffiliates of each registrant as of June 30, 2022 was as follows:

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Constellation Energy Corporation | | | $18,711,601,222 | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

Documents Incorporated by Reference

Portions of the Registrants’ Definitive Proxy Statement relating to the 2023 Annual Meeting of Shareholders are incorporated by reference into Part III of this report.

The Registrants expect to file the Definitive Proxy Statement with the Securities and Exchange Commission within 120 days after December 31, 2022.

| [PART I](#i0f667b69a013404da82f8d403a978330_25) | | | | | | | | |

| | | | [General](#i0f667b69a013404da82f8d403a978330_31) | | | [7](#i0f667b69a013404da82f8d403a978330_31) | | |

| | | | [Employees](#i0f667b69a013404da82f8d403a978330_37) | | | [21](#i0f667b69a013404da82f8d403a978330_37) | | |

| [PART II](#i0f667b69a013404da82f8d403a978330_58) | | | | | | | | |

| [ITEM 6.](#i0f667b69a013404da82f8d403a978330_64) | | | [RESERVED](#i0f667b69a013404da82f8d403a978330_64) | | | [48](#i0f667b69a013404da82f8d403a978330_64) | | |

| | | | [Constellation Energy Corporation](#i0f667b69a013404da82f8d403a978330_115) | | | [87](#i0f667b69a013404da82f8d403a978330_115) | | |

| | | | [1. Basis of Presentation](#i0f667b69a013404da82f8d403a978330_148) | | | [98](#i0f667b69a013404da82f8d403a978330_148) | | |

| | | | [5. Segment Information](#i0f667b69a013404da82f8d403a978330_175) | | | [114](#i0f667b69a013404da82f8d403a978330_175) | | |

| | | | [6. Accounts Receivable](#i0f667b69a013404da82f8d403a978330_181) | | | [117](#i0f667b69a013404da82f8d403a978330_181) | | |

| | | | [7. Early Plant Retirements](#i0f667b69a013404da82f8d403a978330_187) | | | [119](#i0f667b69a013404da82f8d403a978330_187) | | |

| | | | [11. Leases](#i0f667b69a013404da82f8d403a978330_214) | | | [127](#i0f667b69a013404da82f8d403a978330_214) | | |

| | | | [12. Asset Impairments](#i0f667b69a013404da82f8d403a978330_223) | | | [129](#i0f667b69a013404da82f8d403a978330_223) | | |

| | | | [13. Intangible Assets](#i0f667b69a013404da82f8d403a978330_229) | | | [130](#i0f667b69a013404da82f8d403a978330_229) | | |

| | | | [14. Income Taxes](#i0f667b69a013404da82f8d403a978330_235) | | | [131](#i0f667b69a013404da82f8d403a978330_235) | | |

| | | | [15. Retirement Benefits](#i0f667b69a013404da82f8d403a978330_244) | | | [135](#i0f667b69a013404da82f8d403a978330_244) | | |

| | | | [21. Changes in Accumulated Other Comprehensive Income](#i0f667b69a013404da82f8d403a978330_289) | | | [170](#i0f667b69a013404da82f8d403a978330_289) | | |

| | | | [22. Variable Interest Entities](#i0f667b69a013404da82f8d403a978330_295) | | | [171](#i0f667b69a013404da82f8d403a978330_295) | | |

| | | | [23. Supplemental Financial Information](#i0f667b69a013404da82f8d403a978330_301) | | | [174](#i0f667b69a013404da82f8d403a978330_301) | | |

| | | | [24. Related Party Transactions](#i0f667b69a013404da82f8d403a978330_307) | | | [178](#i0f667b69a013404da82f8d403a978330_307) | | |

| [PART III](#i0f667b69a013404da82f8d403a978330_331) | | | | | | | | |

| [ITEM 11.](#i0f667b69a013404da82f8d403a978330_337) | | | [EXECUTIVE COMPENSATION](#i0f667b69a013404da82f8d403a978330_337) | | | [181](#i0f667b69a013404da82f8d403a978330_337) | | |

| [PART IV](#i0f667b69a013404da82f8d403a978330_349) | | | | | | | | |

| [SIGNATURES](#i0f667b69a013404da82f8d403a978330_370) | | | | | | [190](#i0f667b69a013404da82f8d403a978330_370) | | |

| | | | [Constellation Energy Corporation](#i0f667b69a013404da82f8d403a978330_370) | | | [190](#i0f667b69a013404da82f8d403a978330_370) | | |

| | | | [Constellation Energy Generation, LLC](#i0f667b69a013404da82f8d403a978330_373) | | | [191](#i0f667b69a013404da82f8d403a978330_373) | | |

| Former Related Entities | | | | | | | | |

| *ABO* | | | | | | Accumulated Benefit Obligation | | |

| *AOCI* | | | | | | Accumulated Other Comprehensive Income (Loss) | | |

| *APBO* | | | | | | Accumulated Post-Retirement Benefit Obligation | | |

| | | |

| --- | --- | --- |

Prior to the separation of registrants from Exelon Corporation on February 1, 2022, the registrants were wholly owned subsidiaries of Exelon Corporation.

Consequently, there was no aggregate market value of common stock held by non-affiliates of the registrants as of June 30, 2021, the last business day of the registrants’ most recently completed second fiscal quarter.

| | | | | | | | | |

| [PART I](#i59ca7ab3cc784e42904d434b0008a7a9_25) | | | | | | | | |

| | | | [General](#i59ca7ab3cc784e42904d434b0008a7a9_31) | | | [6](#i59ca7ab3cc784e42904d434b0008a7a9_31) | | |

| | | | [Employees](#i59ca7ab3cc784e42904d434b0008a7a9_37) | | | [20](#i59ca7ab3cc784e42904d434b0008a7a9_37) | | |

| [PART II](#i59ca7ab3cc784e42904d434b0008a7a9_58) | | | | | | | | |

| [ITEM 6.](#i59ca7ab3cc784e42904d434b0008a7a9_64) | | | [SELECTED FINANCIAL DATA](#i59ca7ab3cc784e42904d434b0008a7a9_64) | | | [47](#i59ca7ab3cc784e42904d434b0008a7a9_64) | | |

| | | | [1. Significant Accounting Policies](#i59ca7ab3cc784e42904d434b0008a7a9_148) | | | [87](#i59ca7ab3cc784e42904d434b0008a7a9_148) | | |

| | | | [5. Segment Information](#i59ca7ab3cc784e42904d434b0008a7a9_172) | | | [103](#i59ca7ab3cc784e42904d434b0008a7a9_172) | | |

| | | | [6. Accounts Receivable](#i59ca7ab3cc784e42904d434b0008a7a9_178) | | | [106](#i59ca7ab3cc784e42904d434b0008a7a9_178) | | |

| | | | [7. Early Plant Retirements](#i59ca7ab3cc784e42904d434b0008a7a9_184) | | | [108](#i59ca7ab3cc784e42904d434b0008a7a9_184) | | |

| | | | [11. Leases](#i59ca7ab3cc784e42904d434b0008a7a9_208) | | | [116](#i59ca7ab3cc784e42904d434b0008a7a9_208) | | |

| | | | [12. Asset Impairments](#i59ca7ab3cc784e42904d434b0008a7a9_214) | | | [118](#i59ca7ab3cc784e42904d434b0008a7a9_214) | | |

| | | | [13. Intangible Assets](#i59ca7ab3cc784e42904d434b0008a7a9_220) | | | [119](#i59ca7ab3cc784e42904d434b0008a7a9_220) | | |

| | | | [14. Income Taxes](#i59ca7ab3cc784e42904d434b0008a7a9_226) | | | [120](#i59ca7ab3cc784e42904d434b0008a7a9_226) | | |

| | | | [15. Retirement Benefits](#i59ca7ab3cc784e42904d434b0008a7a9_232) | | | [124](#i59ca7ab3cc784e42904d434b0008a7a9_232) | | |

| | | | [21. Variable Interest Entities](#i59ca7ab3cc784e42904d434b0008a7a9_280) | | | [151](#i59ca7ab3cc784e42904d434b0008a7a9_280) | | |

| | | | [22. Supplemental Financial Information](#i59ca7ab3cc784e42904d434b0008a7a9_286) | | | [155](#i59ca7ab3cc784e42904d434b0008a7a9_286) | | |

| | | | [23. Related Party Transactions](#i59ca7ab3cc784e42904d434b0008a7a9_292) | | | [158](#i59ca7ab3cc784e42904d434b0008a7a9_292) | | |

| | | | [24. Separation from Exelon](#i59ca7ab3cc784e42904d434b0008a7a9_298) | | | [160](#i59ca7ab3cc784e42904d434b0008a7a9_298) | | |

| [PART III](#i59ca7ab3cc784e42904d434b0008a7a9_316) | | | | | | | | |

| [ITEM 11.](#i59ca7ab3cc784e42904d434b0008a7a9_322) | | | [EXECUTIVE AND DIRECTOR COMPENSATION](#i59ca7ab3cc784e42904d434b0008a7a9_322) | | | [167](#i59ca7ab3cc784e42904d434b0008a7a9_322) | | |

| [PART IV](#i59ca7ab3cc784e42904d434b0008a7a9_334) | | | | | | | | |

| [SIGNATURES](#i59ca7ab3cc784e42904d434b0008a7a9_352) | | | | | | [202](#i59ca7ab3cc784e42904d434b0008a7a9_352) | | |

| *Pepco Energy Services or PES* | | | | | | Pepco Energy Services, Inc. and its subsidiaries | | |

| *CAIDI* | | | | | | Customer Average Interruption Duration Index | | |

| *DOEE* | | | | | | Department of Energy & Environment | | |

| *EIMA* | | | | | | Energy Infrastructure Modernization Act (Illinois Senate Bill 1652 and Illinois House Bill 3036) | | |

| *Form 10* | | | | | | Amendment Number 2 to our General Form for Registration of Securities on Form 10, filed with the SEC on December 20, 2021 and declared effective by the SEC on December 29, 2021, as supplemented by Exhibit 99.1 to our Current Report on Form 8-K, filed with the SEC on January 28, 2022. | | |

| *LIPA* | | | | | | Long Island Power Authority | | |

| *SAIFI* | | | | | | System Average Interruption Frequency Index | | |

The following table presents our interests in net electric generating capacity by station at December 31, [removed: 2021:][added: 2022:]

| Station(a) | | | | | | Location | | | | | | No. of Units | | | | | | Percent Owned(b) | | | | | | Primary Fuel Type | | | | | | Primary Dispatch Type(c) | | | | | | Net Generation Capacity [removed: (MW)(d)] [added: (MWs)(d)] | | | | | |

| Harvest | | | | | | Huron Co., MI | | | | | | [removed: 32] [added: 31] | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | [removed: 27] [added: 26] | | | (f) | | |

| Clinton Battery Storage | | | | | | Blanchester, OH | | | | | | 1 | | | | | | | | | | | | Energy Storage | | | | | | Peaking | | | | | | [removed: 10] [added: 5] | | | | | |

| Total Midwest | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 11,898] [added: 11,892] | | | | | |

| Limerick | | | | | | Sanatoga, PA | | | | | | 2 | | | | | | | | | | | | Uranium | | | | | | Base-load | | | | | | [removed: 2,317] [added: 2,315] | | | | | |

| Salem | | | | | | Lower Alloways Creek Township, NJ | | | | | | 2 | | | | | | 42.59 | | | | | | Uranium | | | | | | Base-load | | | | | | [removed: 995] [added: 993] | | | (f) | | |

| Solar Horizons | | | | | | Emmitsburg, MD | | | | | | 1 | | | | | | 51 | | | (g) | | | Solar | | | | | | Intermittent | | | | | | [removed: 16] [added: 8] | | | (f) | | |

| Solar New Jersey 3 | | | | | | Middle Township, NJ | | | | | | [removed: 4] [added: 5] | | | | | | 51 | | | (g) | | | Solar | | | | | | Intermittent | | | | | | [removed: 2] [added: 1] | | | (f) | | |

| Total Mid-Atlantic | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 10,508] [added: 10,495] | | | | | |

| Sacramento PV Energy | | | | | | Sacramento, CA | | | | | | 4 | | | | | | 51 | | | (g) | | | Solar | | | | | | Intermittent | | | | | | [removed: 30] [added: 15] | | | (f) | | |

| Cassia | | | | | | Buhl, ID | | | | | | [removed: 14] [added: 13] | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | [removed: 15] [added: 14] | | | (f) | | |

| Echo 2 | | | | | | Echo, OR | | | | | | [removed: 10] [added: 9] | | | | | | 51 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | [removed: 10] [added: 9] | | | (f) | | |

| Denver Airport Solar | | | | | | Denver, CO | | | | | | 1 | | | | | | 51 | | | (g) | | | Solar | | | | | | Intermittent | | | | | | [removed: 4] [added: 2] | | | (f) | | |

| Mystic 8, 9 | | | | | | Charlestown, MA | | | | | | 6 | | | | | | | | | | | | Gas | | | | | | Intermediate | | | | | | [removed: 1,417] [added: 1,413] | | | (e) | | |

| West Medway II | | | | | | West Medway, MA | | | | | | 2 | | | | | | | | | | | | Oil/Gas | | | | | | Peaking | | | | | | [removed: 189] [added: 191] | | | | | |

| Total Other | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: 3,291] [added: 3,265] | | | | | |

[removed: Fossil] [added: Natural gas and oil] stations and wind and solar facilities reflect a summer rating.

(e)On August 9, 2020, we announced we would permanently cease generation operations at Byron and Dresden nuclear facilities in 2021 and Mystic [removed: Unit] [added: Units] 8 and 9 in 2024.

See Note 7 — Early Plant Retirements of the [added: Combined] Notes to [removed: the] Consolidated Financial Statements for additional information.

(g)Reflects the prior sale of 49% of CRP to a [removed: third-party.][added: third party.]

See Note [removed: 21] [added: 22] — Variable Interest Entities of the [added: Combined] Notes to Consolidated Financial Statements for additional information.

| Station(a) | | | | | | Location | | | | | | No. of Units | | | | | | Percent Owned(b) | | | | | | Primary Fuel Type | | | | | | Primary Dispatch Type(c) | | | | | | Net Generation Capacity (MWs)(d) | | | | | |

| Station(a) | | | | | | Location | | | | | | No. of Units | | | | | | Percent Owned(b) | | | | | | Primary Fuel Type | | | | | | Primary Dispatch Type(c) | | | | | | Net Generation Capacity (MWs)(d) | | | | | |

| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 32,355 | | | | | |

We also own EMT, which is a liquefied natural gas (LNG) import facility located on the Mystic River in Everett, MA.

EMT connects to two interstate pipeline systems as well as a local gas utility's distribution system and the Mystic Generating Station.

For additional information on insurance specific to our nuclear facilities, see Note 19 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Echo 3 | | | | | | Echo, OR | | | | | | 6 | | | | | | 50.49 | | | (g) | | | Wind | | | | | | Intermittent | | | | | | 5 | | | (f) | | |

| Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 32,400 | | | | | |

For additional information regarding nuclear insurance of generating facilities, see ITEM 1.

— BUSINESS — General.

(Dollars in millions except per share data, unless otherwise noted)

[removed: It was listed on February 2, 2022 and as] [added: As] of [removed: that date] [added: January 31, 2023] there were [removed: 326,663,937] [added: 327,131,082] shares of common stock outstanding and approximately [removed: 82,688] [added: 75,145] record holders of common stock.

[removed: Effective] [added: As of] January 31, [removed: 2022, in connection with the separation,] [added: 2023,] CEG Parent directly [removed: holds] [added: held] the entire membership interest in Constellation.

First Quarter [removed: 2022] [added: 2023] Dividend

On February [removed: 8, 2022,] [added: 15, 2023,] our Board of Directors declared a regular quarterly dividend of [removed: $0.1410] [added: $0.2820] per share on our common stock for the first quarter of [removed: 2022.][added: 2023.]

The dividend is payable on [removed: Thursday,] [added: Friday,] March 10, [removed: 2022,] [added: 2023,] to shareholders of record as of 5 p.m.

Eastern time on [removed: Friday,] [added: Monday,] February [removed: 25, 2022.][added: 27, 2023.]

Stock Performance Graph

The performance graph below illustrates a one-year comparison of cumulative total returns based on an initial investment of $100 in CEG Parent common stock, as compared with the S&P 500 Stock Index and the Philadelphia Utility Sector Index, or UTY, for the year 2022.

This performance chart assumes:

- $100 invested on February 1, 2022, in CEG Parent common stock, the S&P 500 Stock Index, and the UTY, and

- All dividends are reinvested.


| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Value of Investment in 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2/1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12/31 | | |

| CEG | | | $100 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $175 | | |

| S&P 500 | | | $100 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $86 | | |

| UTY | | | $100 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $107 | | |

Our Board of Directors approved an updated dividend policy for 2023.

The 2023 quarterly dividend will be $0.2820 per share.

The following table sets forth Constellation’s quarterly cash dividends per share paid during 2022.

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Fourth Quarter | | | | | | Third Quarter | | | | | | Second Quarter | | | | | | First Quarter | | |

| $ | 0.1410 | | | | | $ | 0.1410 | | | | | $ | 0.1410 | | | | | $ | 0.1410 | |

Unregistered Sales of Equity Securities

None.

Issuer Purchases of Equity Securities

None.

Under applicable federal law, Constellation can pay dividends only from retained, undistributed or current earnings.

A significant loss recorded at Constellation may limit the dividends that it can distribute to CEG Parent.

We have not paid any dividends to shareholders to date, but our Board of Directors approved a dividend of $180 million in 2022.

[removed: We are] [added: The management of Constellation Energy Generation, LLC (Constellation) is] responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

[removed: We] [added: Constellation’s management] assessed the effectiveness of [removed: our] [added: Constellation’s] internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

In making this assessment, [removed: we] [added: management] used the criteria in [removed: *Internal] [added: Internal] Control—Integrated Framework [removed: (2013)*] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this assessment, [removed: we] [added: Constellation’s management] concluded that, as of December 31, [removed: 2021, our] [added: 2022, Constellation’s] internal control over financial reporting was effective.

[removed: February 25, 2022][added: | | | | December 31, 2022 | | | | | | February 1, 2022 | | | | | | December 31, 2022 | | | | | | February 1, 2022 | | |]

We have audited the consolidated financial statements, including the related notes, as listed in the index appearing under Item [removed: 15(a)(i),] [added: 15(a)(2)(i),] and the financial statement schedule listed in the index appearing under Item [removed: 15(a)(ii),] [added: 15(a)(2)(ii),] of Constellation Energy Generation, LLC [removed: (formerly known as Exelon Generation Company, LLC)] and its subsidiaries (the “Company”) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2021] [added: 2022] in conformity with accounting principles generally accepted in the United States of America.

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (i) [removed: relate] [added: relates] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

[removed: *Annual Nuclear] [added: *Nuclear] Decommissioning Asset Retirement Obligations [removed: (AROs)] [added: (ARO)] Assessment*

As described in Notes 1 and 10 to the consolidated financial statements, the Company has a legal obligation to decommission its nuclear [removed: generation stations] [added: power plants] following [added: the] permanent cessation of operations.

To estimate its decommissioning obligations [removed: related to its nuclear generating stations for financial accounting and reporting purposes,] management uses a probability-weighted, discounted cash flow model which, on a unit-by-unit basis, considers multiple outcome scenarios that include significant estimates and assumptions, and are based on decommissioning cost studies, cost escalation rates, probabilistic cash flow models, and discount rates.

Management updates its [removed: AROs] [added: ARO] annually, unless circumstances warrant more frequent updates, based on its review of updated cost studies and its annual evaluation of cost escalation factors and probabilities assigned to various scenarios.

The principal considerations for our determination that performing procedures relating to the Company’s [removed: annual] nuclear decommissioning [removed: AROs] [added: ARO] assessment is a critical audit matter are the significant judgment by management when estimating its decommissioning obligations; this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the reasonableness of management’s discounted cash flow model and significant assumptions related to decommissioning cost studies.

These procedures included testing the effectiveness of controls relating to management’s development of the inputs, assumptions, and [added: discounted cash flow] model used in management’s [removed: AROs] [added: ARO] assessment.

These procedures included testing the effectiveness of controls relating to management’s development of the inputs, assumptions, and [added: discounted cash flow] model used [removed: to assess the recoverability and estimate the fair value of the Company’s long-lived generation assets or asset groups.][added: in management’s ARO assessment.]

These procedures also included, among others, testing management’s process for [removed: developing the expected future cash flows for] [added: estimating] the [removed: long-lived generation assets or asset groups] [added: decommissioning obligations] by evaluating the appropriateness of the [removed: future] [added: discounted] cash flow model, testing the completeness and accuracy of [removed: the] data used by management, and evaluating the reasonableness of management’s significant assumptions related to [removed: revenue and generation forecasts.][added: decommissioning cost studies.]

Professionals with specialized skill and knowledge were used to assist in evaluating the [removed: reasonableness] [added: results] of [removed: the revenue forecasts.][added: decommissioning cost studies.]

| (In millions) | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Operating revenues | | | $ | [removed: 18,461] [added: 24,280] | | | | | $ | [removed: 16,392] [added: 18,461] | | | | | $ | [removed: 17,752] [added: 16,392] | |

| Operating revenues from affiliates | | | [removed: 1,188] [added: 160] | | | | | | [removed: 1,211] [added: 1,188] | | | | | | [removed: 1,172] [added: 1,211] | | |

| Total operating revenues | | | [removed: 19,649] [added: 24,440] | | | | | | [removed: 17,603] [added: 19,649] | | | | | | [removed: 18,924] [added: 17,603] | | |

| Purchased power and fuel | | | [removed: 12,157] [added: 17,457] | | | | | | [removed: 9,592] [added: 12,157] | | | | | | [removed: 10,849] [added: 9,592] | | |

| Purchased power and fuel from affiliates | | | [removed: 6] [added: 5] | | | | | | [removed: (7)] [added: 6] | | | | | | [removed: 7] [added: (7)] | | |

| Operating and maintenance | | | [removed: 3,934] [added: 4,797] | | | | | | [removed: 4,613] [added: 3,934] | | | | | | [removed: 4,131] [added: 4,613] | | |

| Operating and maintenance from affiliates | | | [removed: 621] [added: 44] | | | | | | [removed: 555] [added: 621] | | | | | | [removed: 587] [added: 555] | | |

| Depreciation and amortization | | | [removed: 3,003] [added: 1,091] | | | | | | [removed: 2,123] [added: 3,003] | | | | | | [removed: 1,535] [added: 2,123] | | |

| Taxes other than income taxes | | | [removed: 475] [added: 552] | | | | | | [removed: 482] [added: 475] | | | | | | [removed: 519] [added: 482] | | |

| Total operating expenses | | | [removed: 20,196] [added: 23,946] | | | | | | [removed: 17,358] [added: 20,196] | | | | | | [removed: 17,628] [added: 17,358] | | |

| Gain on sales of assets and businesses | | | [removed: 201] [added: 1] | | | | | | [removed: 11] [added: 201] | | | | | | [removed: 27] [added: 11] | | |

| Operating [removed: (loss) income] [added: income (loss)] | | | [removed: (346)] [added: 495] | | | | | | [removed: 256] [added: (346)] | | | | | | [removed: 1,323] [added: 256] | | |

| Interest expense, net | | | [removed: (282)] [added: (250)] | | | | | | [removed: (328)] [added: (282)] | | | | | | [removed: (394)] [added: (328)] | | |

| Interest expense to affiliates | | | [removed: (15)] [added: (1)] | | | | | | [removed: (29)] [added: (15)] | | | | | | [removed: (35)] [added: (29)] | | |

| Other, net | | | [removed: 795] [added: (786)] | | | | | | [removed: 937] [added: 795] | | | | | | [removed: 1,023] [added: 937] | | |

| Total other income and (deductions) | | | [removed: 498] [added: (1,037)] | | | | | | [removed: 580] [added: 498] | | | | | | [removed: 594] [added: 580] | | |

| [removed: Income] [added: (Loss) income] before income taxes | | | [removed: 152] [added: (542)] | | | | | | [removed: 836] [added: 152] | | | | | | [removed: 1,917] [added: 836] | | |

| Income taxes | | | [removed: 225] [added: (388)] | | | | | | [removed: 249] [added: 225] | | | | | | [removed: 516] [added: 249] | | |

| Equity in losses of unconsolidated affiliates | | | [removed: (10)] [added: (13)] | | | | | | [removed: (8)] [added: (10)] | | | | | | [removed: (184)] [added: (8)] | | |

| Net (loss) income | | | [removed: (83)] [added: (167)] | | | | | | [removed: 579] [added: (83)] | | | | | | [removed: 1,217] [added: 579] | | |

| Net [removed: income] (loss) [added: income] attributable to noncontrolling interests | | | [removed: 122] [added: (7)] | | | | | | [removed: (10)] [added: 122] | | | | | | [removed: 92] [added: (10)] | | |

The management of Constellation Energy Corporation (CEG Parent) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

CEG Parent’s management assessed the effectiveness of CEG Parent’s internal control over financial reporting as of December 31, 2022.

Based on this assessment, CEG Parent’s management concluded that, as of December 31, 2022, CEG Parent’s internal control over financial reporting was effective.

The effectiveness of CEG Parent’s internal control over financial reporting as of December 31, 2022, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Management’s Report on Internal Control Over Financial Reporting

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In making this assessment, management used the criteria in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

To the Board of Directors and Shareholders of Constellation Energy Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the consolidated financial statements, including the related notes, as listed in the index appearing under Item 15(a)(1)(i), and the financial statement schedule listed in the index appearing under Item 15(a)(1)(ii), of Constellation Energy Corporation and its subsidiaries (the “Company”) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control Over Financial Reporting appearing under Item 8.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of December 31, 2022, the nuclear decommissioning ARO was $12.5 billion.

February 16, 2023

We have served as the Company's auditor since 2022.

Report of Independent Registered Public Accounting Firm

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

*Nuclear Decommissioning Asset Retirement Obligations (ARO) Assessment*

As of December 31, 2021, the nuclear decommissioning AROs were $12.7 billion.

*Impairment Assessment of Long-Lived Generation Assets*

As described in Notes 1, 8, and 12 to the consolidated financial statements, the Company evaluates the carrying value of long-lived assets or asset groups for recoverability whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable.

Indicators of impairment may include a deteriorating business climate, including, but not limited to, declines in energy prices, condition of the asset, or plans to dispose of a long-lived asset significantly before the end of its useful life.

Management determines if long-lived assets or asset groups are potentially impaired by comparing the undiscounted expected future cash flows to the carrying value when indicators of impairment exist.

When the undiscounted cash flow analysis indicates a long-lived asset or asset group may not be recoverable, the amount of the impairment loss is determined by measuring the excess of the carrying amount of the long-lived asset or asset group over its fair value.

The fair value analysis is primarily based on the income approach using significant unobservable inputs including revenue and generation forecasts, projected capital and maintenance expenditures, and discount rates.

As of December 31, 2021, the total carrying value of long-lived generation assets subject to this assessment was $19.6 billion.

The principal considerations for our determination that performing procedures relating to the Company’s impairment assessment of long-lived generation assets is a critical audit matter are the significant judgment by management in assessing the recoverability and estimating the fair value of these long-lived generation assets or asset groups; this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating the reasonableness of management’s significant assumptions related to revenue and generation forecasts.

Evaluating the reasonableness of the revenue and generation forecasts involved considering whether the forecasts were consistent with future commodity prices and external market data.

| Unrealized gain on investments in unconsolidated affiliates | | | — | | | | | | — | | | | | | 1 | | |

| Acquisitions of assets and businesses, net | | | — | | | | | | — | | | | | | (41) | | |

| Customer allowance for credit losses | | | (55) | | | | | | (32) | | |

| Customer accounts receivable, net | | | 1,669 | | | | | | 1,298 | | |

| Other accounts receivable | | | 597 | | | | | | 352 | | |

| Other allowance for credit losses | | | (5) | | | | | | — | | |

| Other accounts receivable, net | | | 592 | | | | | | 352 | | |

| Fossil fuel and emission allowances | | | 284 | | | | | | 233 | | |

| Assets held for sale | | | 13 | | | | | | 958 | | |

| Other | | | 994 | | | | | | 1,395 | | |

| Other | | | 308 | | | | | | 451 | | |

| Balance, December 31, 2018 | | | $ | 9,518 | | | | | $ | 3,724 | | | | | $ | (38) | | | | | $ | 2,304 | | | | | $ | 15,508 | |

| Net income | | | — | | | | | | 1,125 | | | | | | — | | | | | | 92 | | | | | | 1,217 | | |

Significant Accounting Policies

We are a supplier of clean energy.

Note 1 — Significant Accounting Policies

COVID-19We have taken steps to mitigate the potential risks posed by the global outbreak (pandemic) of the 2019 novel coronavirus (COVID-19).

We provide a critical service to our customers and have taken measures to keep employees who operate the business safe and minimize unnecessary risk of exposure to the virus, including extra precautions for employees who work in the field.

We have implemented work from home policies where appropriate and imposed travel limitations on employees.

Management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and accompanying notes, and the amounts of revenues and expenses reported during the periods covered by those financial statements and accompanying notes.

As of December 31, 2021 and 2020, and through the date of this report, management assessed certain accounting matters that require consideration of forecasted financial information, including, but not limited to the allowance for credit losses and the carrying value of other long-lived assets, in context with the information reasonably available to us and the unknown future impacts of COVID-19.

Our future assessment of the magnitude and duration of COVID-19, as well as other factors, could result in material impacts in the consolidated financial statements in future reporting periods.

Balance Sheets.

Debt Security Investments. Debt securities are reported at fair value and classified as available-for-sale securities.

Guarantees

If necessary, we recognize a liability at the time of issuance of a guarantee for the fair value of the obligations we have undertaken by issuing the guarantee.

The liability is reduced or eliminated as we are released from risk under the guarantee.

Depending on the nature of the guarantee, the release from risk may be recognized only upon the expiration or settlement of the guarantee or by a systematic and rational amortization method over the term of the guarantee.

Debt Security Investments. Declines in the fair value of debt security investments below the cost basis are reviewed to determine if such declines are other-than-temporary.

If the decline is determined to be other-than-temporary, the amount of the impairment loss is included in earnings.

[removed: All Registrants - Disclosure] [added: Disclosure] Controls and Procedures

During the fourth quarter of [removed: 2021,] [added: 2022,] our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures related to the recording, processing, summarizing, and reporting of information in periodic reports that we file [added: or submit] with the SEC.

These disclosure controls and procedures have been designed to ensure that (a) [removed: information, including] information [removed: related] [added: relating] to our consolidated subsidiaries, [removed: that] is [removed: required to be included in filings under the Securities Exchange Act of 1934, is] accumulated and made known to our management, including our principal executive officer and principal financial officer, by other employees as appropriate to allow timely decisions regarding required disclosure, and (b) this information is recorded, processed, summarized, [removed: evaluated,] and reported, as applicable, within the time periods specified in the [removed: SEC's] [added: SEC’s] rules and forms.

Accordingly, as of December 31, [removed: 2021,] [added: 2022,] our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective to accomplish their objectives.

[removed: Constellation - Changes] [added: Changes] in Internal Control Over Financial Reporting

There have been no changes in internal control over financial reporting that occurred during the fourth quarter of [removed: 2021] [added: 2022] that have materially affected, or are reasonably likely to materially affect, [added: any of] our internal [removed: controls] [added: control] over financial reporting.

[removed: CEG Parent - Internal] [added: Internal] Control Over Financial Reporting

Management is required to assess and report on the effectiveness of its internal control over financial reporting as of December 31, [removed: 2021.][added: 2022.]

As a result of that assessment, management determined that there were no material weaknesses as of December 31, [removed: 2021] [added: 2022] and, therefore, concluded that [removed: Constellation’s] [added: our] internal control over financial reporting was effective.

We continually strive to improve our disclosure controls and procedures to enhance the quality of our financial reporting and to maintain dynamic systems that change as conditions warrant.

This annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for newly public companies.

Constellation - Internal Control Over Financial Reporting

Information about our Executive Officers as of February [removed: 25, 2022][added: 16, 2023]

| Dominguez, Joseph | | | | | | [removed: 59] [added: 60] | | | | | | President and Chief Executive Officer | | | | | | 2022 - Present | | |

| Eggers, Daniel | | | | | | [removed: 46] [added: 47] | | | | | | Executive Vice President and Chief Financial Officer | | | | | | 2022 - Present | | |

| Barrόn, Kathleen | | | | | | [removed: 51] [added: 52] | | | | | | Executive Vice President and Chief Strategy Officer | | | | | | 2022 - Present | | |

| Hanson, Bryan C. | | | | | | [removed: 56] [added: 57] | | | | | | Executive Vice President and Chief Generation Officer | | | | | | 2022 - Present | | |

| Koehler, Michael R. | | | | | | [removed: 55] [added: 56] | | | | | | Executive Vice President and Chief Administration Officer | | | | | | 2022 - Present | | |

| McHugh, James | | | | | | [removed: 50] [added: 51] | | | | | | Executive Vice President and Chief Commercial Officer | | | | | | 2022 - Present | | |

| Dardis, David | | | | | | [removed: 49] [added: 50] | | | | | | Executive Vice President and General Counsel | | | | | | 2022 - Present | | |

| Bauer, Matthew | | | | | | [removed: 45] [added: 46] | | | | | | Senior Vice President and Controller | | | | | | 2022 - Present | | |

In connection with the completion of the separation from Exelon, our Board of [removed: Directors, on January 31, 2022,] [added: Directors] adopted a code of conduct and ethics (the “Code of [removed: Ethics”)] [added: Ethics”), effective February 1, 2022,] that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions.

If we amend [added: provisions of our Code of Ethics that apply to,] or grant [removed: any] [added: a] waiver from a provision of our Code of Ethics [removed: that applies to our] [added: for any] executive [removed: officers,] [added: officer,] we will publicly disclose such amendment or waiver on our website and as required by applicable [removed: law.][added: law or regulation.]

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

Directors, Director Nomination Process and Audit Committee

The information required under ITEM 10 concerning directors and nominees for election as directors at the annual meeting of shareholders (Item 401 of Regulation S-K), the director nomination process (Item 407(c)(3)), the audit committee (Item 407(d)(4) and (d)(5)), and the beneficial reporting compliance (Sec.

16(a)) is incorporated herein by reference to information to be contained in our definitive 2023 proxy statement (2023 Constellation Proxy Statement) to be filed with the SEC on or before April 30, 2023 pursuant to Regulation 14A or 14C, as applicable, under the Securities Exchange Act of 1934.

Information about our Board of Directors as of February 25, 2022

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Name | | | | | | Age | | | | | | Committee Appointment | | |

| Joseph Dominguez | | | | | | 59 | | | | | | N/A | | |

| Yves de Balmann | | | | | | 75 | | | | | | Compensation (Chair), Corporate Governance | | |

| Laurie Brlas | | | | | | 64 | | | | | | Audit and Risk (Chair) | | |

| Rhonda Ferguson | | | | | | 52 | | | | | | Audit and Risk, Nuclear Oversight | | |

| Bradley Halverson | | | | | | 61 | | | | | | Compensation, Corporate Governance | | |

| Charles Harrington | | | | | | 63 | | | | | | Corporate Governance, Nuclear Oversight | | |

| Julie Holzrichter | | | | | | 54 | | | | | | Audit and Risk, Compensation | | |

| Ashish Khandpur | | | | | | 54 | | | | | | Compensation, Corporate Governance | | |

| Robert Lawless | | | | | | 75 | | | | | | Corporate Governance (Chair) | | |

| John Richardson | | | | | | 61 | | | | | | Audit and Risk, Nuclear Oversight (Chair) | | |

*Yves de Balmann* has served on our Board since January 2022.

He has extensive experience in corporate finance, including the derivatives and capital markets as well as industry experience as a former director of Exelon from 2012 to 2022 as well as Constellation Energy Group prior to its merger with Exelon in 2012.

His deep knowledge of strategic planning, compensation, governance, and investor insights will provide significant value to the Company Board.

Mr. de Balmann currently serves as Executive Partner at Bridge Growth Partners, a private equity firm focusing on technology and financial services companies, and previously served as Co-Chairman of Bregal Investments LP, a private equity investing firm, from 2002 to 2012.

He is also currently on the Board of Directors of ESI Group, a virtual prototyping software company.

*Laurie Brlas* has served on our Board since January 2022, and previously served on the Exelon Board from 2018 to 2022.

She has proven leadership skills derived from her significant experience as an executive leader at global, capital-intensive companies, and operations and finance experience in the natural resources industry in addition to her background in financial and governance matters that will bring valuable insights to the Company Board.

Ms. Brlas served as Executive Vice President and Chief Financial Officer of Newmont Mining Corporation, a global mining company, from 2013 to 2016.

Prior to that, she served in multiple senior positions between 2006 and 2013, ultimately as Executive Vice President and President, Global Operations, with Cleveland-Cliffs, Inc., a company specializing in the mining, benefication and pelletizing of iron ore.

Ms. Brlas currently serves on the Boards of Directors of Albemarle Corporation (since 2017), Graphic Packaging Holding Company (since 2019) and Autoliv, Inc. (since 2020).

She previously served on the Boards of Directors of Calpine Corporation (2016 to 2018) and Perrigo Company plc (2003 to 2019).

*Rhonda Ferguson* has served on our board since January 2022.

She joined Allstate Corporation in 2020 and serves as its Executive Vice President, Chief Legal Officer, General Counsel and Secretary.

Prior to joining Allstate, she served as Executive Vice President, Chief Legal Officer and Secretary for Union Pacific Corporation from 2016 to 2020, and as Vice President, Secretary and Chief Ethics Officer of First Energy Corp. from 2007 to 2016.

Ms. Ferguson serves on the boards for the RAND Institute for Civil Justice and Girls Inc. of Chicago.

She has proven leadership skills derived from her significant experience as an executive leader at large, highly regulated companies, and her background in legal, regulatory, compliance and governance matters will bring valuable insights to the Board.

*Bradley Halverson* has served on our Board since January 2022.

He is the former Group President and Chief Financial Officer of Caterpillar Inc., the world’s leading manufacturer of construction and mining equipment, diesel and gas engines, turbines and locomotives.

Prior to serving as Group President and CFO from 2013 to 2018, he held a series of positions with increasing responsibility during his 30-year tenure with the Fortune 100 company, including vice president, Financial Services; corporate controller, Global Finance & Strategic Services; and corporate business development manager, Corporate Services, among others since joining the company in 1988.

Mr. Halverson currently serves on the boards of Sysco Corporation, Lear Corporation and Satellogic Inc. In addition, he serves on the board of Easter Seals Central Illinois, Inc. He previously served as a director for Custom Truck One Source from 2018-2021.

Mr. Halverson’s deep expertise in accounting, financial reporting and

corporate finance, and his leadership experience in the areas of executive leadership and management, corporate strategy development, mergers and acquisitions, risk management, information technology systems oversight and international business will provide the Board with critical perspectives on strategic, financial and other public company issues.

*Charles Harrington* has served on our Board since January 2022.

He is the chairman and former CEO of Parsons Corporation, a technology services company in the global defense, intelligence and critical infrastructure markets.

He served as Chairman and CEO of the company from 2008 to 2021, following previous roles within the company, including Executive Vice President, CFO and Treasurer; President, Commercial Technology Group; and president, Communications Technology Group, from 1999 to 2002, among others.

In addition to serving as chairman of Parsons, Mr. Harrington serves on the boards of J.G. Boswell Company and California Polytechnic State University San Luis Obispo Foundation.

The information required by this item will be set forth under "Executive Compensation Data" and "Report of the Compensation Committee" in the Constellation Proxy Statement for the 2023 Annual Meeting of Shareholders which is incorporated herein by reference.

Compensation Discussion & Analysis

As of December 31, 2021, CEG Parent and Constellation were wholly owned subsidiaries of Exelon Corporation and CEG Parent’s compensation committee had not yet been formed.

All decisions regarding 2021 compensation of Constellation's and its subsidiaries’ named executive officers were made by the Compensation and Leadership Development Committee of the Exelon Board of Directors (referred to in this section as the “Exelon Compensation Committee”) if the executive previously served as an executive officer of Exelon, or otherwise by Exelon management.

Following the distribution on February 1, 2022, the executive compensation programs, policies and practices for CEG Parent’s executive officers are subject to the review and approval of the Compensation Committee of CEG Parent’s Board of Directors (the “Company Compensation Committee”).

For purposes of this Compensation Discussion and Analysis and the following executive compensation tables, the individuals referred to as the “named executive officers” (“NEOs”) are Constellation’s principal executive officer, principal financial officer and the three most highly compensated executive officers of Constellation and its subsidiaries’ based on 2021 compensation.

The compensation discussed in this section refers to legacy Exelon compensation plans.

The individuals determined to be our NEOs based on 2021 compensation are listed below.

This information reflects positions and compensation during 2021 while we were held by Exelon and does not reflect the individuals who may be identified as NEOs by us in the future.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Christopher Crane(a) | | | President and Chief Executive Officer, Exelon | | |

| Joseph Dominguez(b) | | | President and Chief Executive Officer, Constellation | | |

| Kenneth W. Cornew(a) | | | (Former) President and Chief Executive Officer, Constellation | | |

| Daniel Eggers(c) | | | Executive Vice President and Chief Financial Officer, Constellation | | |

| Bryan Wright | | | (Former) Senior Vice President and Chief Financial Officer, Constellation | | |

| Bryan Hanson | | | Executive Vice President, Chief Generation Officer, Constellation | | |

| James Mchugh | | | Executive Vice President, Chief Commercial Officer, Constellation | | |

| David Rhoades | | | Senior Vice President, President and Chief Nuclear Officer | | |

__________

(a)Mr. Crane was named principal executive officer of Constellation effective October 21, 2020.

Mr. Cornew served as Senior Executive Vice President and Chief Commercial Officer, Exelon; President and Chief Executive Officer, Constellation through his departure on March 31, 2021.

(b)Mr. Dominguez was named as Executive Vice President and Chief Executive Officer of Constellation effective October 1, 2021.

(c)Mr. Eggers was named as Executive Vice President and Chief Financial Officer of Constellation effective October 1, 2021.

All NEOs have compensation that is structured in part like Exelon’s executive officers, based in part on overall Exelon goals as well as goals of Constellation and its subsidiaries.

The Company NEOs participated in compensation programs designed to align their interests with the Company’s customers and other stakeholders.

For both the CEO and NEOs, a significant portion of their compensation is tied to the achievement of short-term and long-term financial and operational goals and is paid in the form of Exelon equity with all components except for salary being “at-risk.”

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| CEO | | | | | | | | | All NEOs | | | | | |

| Base Salary | | | 10.5 | | % | | | | Base Salary | | | 20.3 | | % |

| Annual Incentive Plan (AIP) | | | 14.2 | | % | | | | Annual Incentive Plan (AIP) | | | 17.5 | | % |

| Long-Term Incentive Plan (LTIP) | | | 75.3 | | % | | | | Long-Term Incentive Plan (LTIP) | | | 55.0 | | % |

| Pay at Risk (AIP + LTIP) | | | 89.5 | | % | | | | Pay at Risk (AIP + LTIP) | | | 72.5 | | % |

Executive Compensation Program Philosophy and Objectives

The goal of the executive compensation program is to retain and reward leaders who create long-term value by delivering on objectives that support strategic business objectives.

Each element of total direct compensation is based on market data, the executive’s competencies and skills, scope of responsibilities, experience and performance, retention, succession planning and organizational structure of the business.

2021 Compensation Program Structure

The 2021 compensation program is summarized below.

Primary compensation elements include fixed and variable components.

| Pay Element | | | | | | Form | | | | | | Shareholder Alignment | | |