Cover and table of contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended June 30, 2024

or

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

Commission File Number						Name of Registrant; State or Other Jurisdiction of Incorporation; Address of Principal Executive Offices; and Telephone Number						IRS Employer Identification Number
001-41137						CONSTELLATION ENERGY CORPORATION						87-1210716
						(a Pennsylvania corporation) 1310 Point Street Baltimore, Maryland 21231-3380 (833) 883-0162
333-85496						CONSTELLATION ENERGY GENERATION, LLC						23-3064219
						(a Pennsylvania limited liability company) 200 Energy Way Kennett Square, Pennsylvania 19348-2473 (833) 883-0162

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

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

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

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

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

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

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

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

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

The number of shares outstanding of each registrant’s common stock as of July 31, 2024 was as follows:

Constellation Energy Corporation Common Stock, without par value			312,689,080
Constellation Energy Generation, LLC			Not applicable

TABLE OF CONTENTS

						Page No.
GLOSSARY OF TERMS AND ABBREVIATIONS						1
FILING FORMAT						4
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION						4
WHERE TO FIND MORE INFORMATION						4
PART I			FINANCIAL INFORMATION			5
ITEM 1.			FINANCIAL STATEMENTS			5
			Constellation Energy Corporation
			Consolidated Statements of Operations and Comprehensive Income			6
			Consolidated Statements of Cash Flows			7
			Consolidated Balance Sheets			8
			Consolidated Statements of Changes in Equity			10
			Constellation Energy Generation, LLC
			Consolidated Statements of Operations and Comprehensive Income			11
			Consolidated Statements of Cash Flows			12
			Consolidated Balance Sheets			13
			Consolidated Statements of Changes in Equity			15
			Combined Notes to Consolidated Financial Statements
			1. Basis of Presentation			16
			2. Mergers, Acquisitions, and Dispositions			16
			3. Revenue from Contracts with Customers			17
			4. Segment Information			19
			5. Government Assistance			22
			6. Accounts Receivable			22
			7. Nuclear Decommissioning			24
			8. Income Taxes			26
			9. Retirement Benefits			27
			10. Derivative Financial Instruments			28
			11. Debt and Credit Agreements			33
			12. Fair Value of Financial Assets and Liabilities			34
			13. Commitments and Contingencies			40
			14. Shareholders' Equity			41
			15. Variable Interest Entities			43
			16. Supplemental Financial Information			46
ITEM 2.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			49
			Executive Overview			49
			Significant Transactions and Developments			49
			Other Key Business Drivers			49
			Critical Accounting Policies and Estimates			50
			Financial Results of Operations			50
			Liquidity and Capital Resources			62
ITEM 3.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			67
ITEM 4.			CONTROLS AND PROCEDURES			71
PART II			OTHER INFORMATION			71

ITEM 1.			LEGAL PROCEEDINGS			72
ITEM 1A.			RISK FACTORS			72
ITEM 2.			UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			72
ITEM 4.			MINE SAFETY DISCLOSURES			72
ITEM 5.			OTHER INFORMATION			72
ITEM 6.			EXHIBITS			73
SIGNATURES						74
			Constellation Energy Corporation			74
			Constellation Energy Generation, LLC			75

GLOSSARY OF TERMS AND ABBREVIATIONS
Constellation Energy Corporation and Related Entities
CEG Parent						Constellation Energy Corporation
Constellation						Constellation Energy Generation, LLC (formerly Exelon Generation Company, LLC)
Registrants						CEG Parent and Constellation, collectively
Antelope Valley						Antelope Valley Solar Ranch One
Continental Wind						Continental Wind LLC
CRP						Constellation Renewables Partners, LLC (formerly ExGen Renewables Partners, LLC)
NER						NewEnergy Receivables LLC
RPG						Renewable Power Generation, LLC
STP						South Texas Project nuclear generating station
TMI						Three Mile Island nuclear facility
West Medway II						West Medway Generating Station II

Former Related Entities
Exelon						Exelon Corporation
ComEd						Commonwealth Edison Company
PECO						PECO Energy Company
BGE						Baltimore Gas and Electric Company

GLOSSARY OF TERMS AND ABBREVIATIONS
Other Terms and Abbreviations
AEP Texas						American Electric Power Texas
AESO						Alberta Electric Systems Operator
AOCI						Accumulated Other Comprehensive Income (Loss)
ARC						Asset Retirement Cost
ARO						Asset Retirement Obligation
ASR						Accelerated Share Repurchase
CAISO						California ISO
CenterPoint						CenterPoint Energy Houston Electric, LLC
Clean Air Act						Clean Air Act of 1963, as amended
CMC						Carbon Mitigation Credit
CODM						Chief Operating Decision Maker
DOE						United States Department of Energy
DPP						Deferred Purchase Price
EPA						United States Environmental Protection Agency
ERCOT						Electric Reliability Council of Texas
ERISA						Employee Retirement Income Security Act of 1974, as amended
ERP						Enterprise Resource Planning
Exchange Act						Securities Exchange Act of 1934, as amended
FERC						Federal Energy Regulatory Commission
Former PECO Units						Limerick, Peach Bottom, and Salem nuclear generating units
Former ComEd Units						Braidwood, Byron, Dresden, LaSalle and Quad Cities nuclear generating units
FRCC						Florida Reliability Coordinating Council
GAAP						Generally Accepted Accounting Principles in the United States
GDP						Gross Domestic Product
GHG						Greenhouse Gas
GWh						Gigawatt hour
ICE						Intercontinental Exchange
IPA						Illinois Power Agency
IRA						Inflation Reduction Act of 2022
IRS						Internal Revenue Service
ISO						Independent System Operator
ISO-NE						ISO New England Inc.
ITC						Investment Tax Credit
MISO						Midcontinent Independent System Operator, Inc.
MW						Megawatt
MWh						Megawatt hour
Mystic COS						Mystic Cost of Service Agreement
NAV						Net Asset Value
NASDAQ						Nasdaq Stock Market, LLC
NDT						Nuclear Decommissioning Trust
NERC						North American Electric Reliability Corporation
NGX						Natural Gas Exchange, Inc.
Non-Regulatory Agreement Units						Nuclear generating units or portions thereof whose decommissioning-related activities are not subject to contractual elimination under regulatory accounting

NPNS						Normal Purchase Normal Sale scope exception
NRC						Nuclear Regulatory Commission
NYISO						New York ISO
NYMEX						New York Mercantile Exchange
OCI						Other Comprehensive Income
OIESO						Ontario Independent Electricity System Operator
OPEB						Other Postretirement Employee Benefits
Pension Protection Act (the Act)						Pension Protection Act of 2006
PG&E						Pacific Gas and Electric Company
PJM						PJM Interconnection, LLC
PPA						Power Purchase Agreement
PSDAR						Post-shutdown Decommissioning Activities Report
PSEG						Public Service Enterprise Group Incorporated
PTC						Production Tax Credit
Regulatory Agreement Units						Nuclear generating units or portions thereof whose decommissioning-related activities are subject to contractual elimination under regulatory accounting (includes the Former ComEd units, the Former PECO units and STP)
RNF						Operating Revenues Net of Purchased Power and Fuel Expense
ROU						Right-of-use
RTO						Regional Transmission Organization
S&P						Standard & Poor’s Ratings Services
SEC						United States Securities and Exchange Commission
SERC						SERC Reliability Corporation (formerly Southeast Electric Reliability Council)
SNF						Spent Nuclear Fuel
SOFR						Secured Overnight Financing Rate
SPP						Southwest Power Pool
STPNOC						STP Nuclear Operating Company
TMA						Tax Matters Agreement
TSA						Transition Services Agreement
VIE						Variable Interest Entity
WECC						Western Electric Coordinating Council
ZEC						Zero Emission Credit

FILING FORMAT

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

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

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

The factors that could cause actual results to differ materially from the forward-looking statements made by us include those factors discussed herein, as well as the items discussed in (1) the Registrants' combined 2023 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 19, Commitments and Contingencies; (2) this Quarterly Report on Form 10-Q in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 13, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.

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

WHERE TO FIND MORE INFORMATION

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

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
(In millions, except per share data)			2024						2023						2024						2023
Operating revenues			$	5,475					$	5,446					$	11,637					$	13,011
Operating expenses
Purchased power and fuel			2,292						2,887						5,709						8,616
Operating and maintenance			1,645						1,477						3,131						2,908
Depreciation and amortization			296						274						602						542
Taxes other than income taxes			142						139						282						271
Total operating expenses			4,375						4,777						9,724						12,337
Gain (loss) on sales of assets and businesses			—						—						—						26
Operating income (loss)			1,100						669						1,913						700
Other income and (deductions)
Interest expense, net			(142)						(103)						(269)						(210)
Other, net			6						605						368						919
Total other income and (deductions)			(136)						502						99						709
Income (loss) before income taxes			964						1,171						2,012						1,409
Income tax (benefit) expense			154						342						318						472
Equity in income (losses) of unconsolidated affiliates			(1)						(5)						(2)						(11)
Net income (loss)			809						824						1,692						926
Net income (loss) attributable to noncontrolling interests			(5)						(9)						(5)						(3)
Net income (loss) attributable to common shareholders			$	814					$	833					$	1,697					$	929
Comprehensive income (loss), net of income taxes
Net income (loss)			$	809					$	824					$	1,692					$	926
Other comprehensive income (loss), net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost			(1)						(3)						(2)						(3)
Actuarial loss reclassified to periodic cost			21						8						39						13
Pension and non-pension postretirement benefit plan valuation adjustment			(2)						—						(5)						(53)
Unrealized gain (loss) on cash flow hedges			2						—						2						—
Unrealized gain (loss) on foreign currency translation			(1)						3						(4)						3
Other comprehensive income (loss), net of income taxes			19						8						30						(40)
Comprehensive income (loss)			828						832						1,722						886
Comprehensive income (loss) attributable to noncontrolling interests			(5)						(9)						(5)						(3)
Comprehensive income (loss) attributable to common shareholders			$	833					$	841					$	1,727					$	889
Average shares of common stock outstanding:
Basic			315						324						316						326
Assumed exercise and/or distributions of stock-based awards			1						1						1						1
Diluted			316						325						317						327
Earnings per average common share
Basic			$	2.58					$	2.57					$	5.37					$	2.85
Diluted			$	2.58					$	2.56					$	5.35					$	2.84

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Cash Flows

(Unaudited)

			Six Months Ended June 30,
(In millions)			2024						2023
Cash flows from operating activities
Net income (loss)			$	1,692					$	926
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization			1,388						1,219
Deferred income taxes and amortization of ITCs			191						189
Net fair value changes related to derivatives			(776)						281
Net realized and unrealized (gains) losses on NDT funds			(197)						(270)
Net realized and unrealized (gains) losses on equity investments			11						(414)
Other non-cash operating activities			(65)						77
Changes in assets and liabilities:
Accounts receivable			771						1,298
Inventories			58						124
Accounts payable and accrued expenses			(207)						(1,725)
Option premiums received (paid), net			129						(48)
Collateral received (posted), net			868						(474)
Income taxes			(86)						160
Pension and non-pension postretirement benefit contributions			(188)						(18)
Other assets and liabilities			(4,925)						(2,451)
Net cash flows provided by (used in) operating activities			(1,336)						(1,126)
Cash flows from investing activities
Capital expenditures			(1,284)						(1,336)
Proceeds from NDT fund sales			2,890						3,116
Investment in NDT funds			(3,043)						(3,203)
Collection of DPP, net			4,096						1,582
Acquisitions of assets and businesses			(15)						(20)
Other investing activities			6						32
Net cash flows provided by (used in) investing activities			2,650						171
Cash flows from financing activities
Change in short-term borrowings			(625)						(524)
Proceeds from short-term borrowings with maturities greater than 90 days			200						500
Repayments of short-term borrowings with maturities greater than 90 days			(539)						(200)
Issuance of long-term debt			900						1,791
Retirement of long-term debt			(65)						(121)
Dividends paid on common stock			(222)						(185)
Repurchases of common stock			(999)						(499)
Other financing activities			(35)						(10)
Net cash flows provided by (used in) financing activities			(1,385)						752
Increase (decrease) in cash, restricted cash, and cash equivalents			(71)						(203)
Cash, restricted cash, and cash equivalents at beginning of period			454						528
Cash, restricted cash, and cash equivalents at end of period			$	383					$	325
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid			$	54					$	(44)
Increase (decrease) in DPP			4,455						2,335
Increase (decrease) in PP&E related to ARO update			(389)						—

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Corporation and Subsidiary Companies

Consolidated Balance Sheets

(Unaudited)

(In millions)			June 30, 2024						December 31, 2023
ASSETS
Current assets
Cash and cash equivalents			$	311					$	368
Restricted cash and cash equivalents			72						86
Accounts receivable
Customer accounts receivable (net of allowance for credit losses of $61 and $56 as of June 30, 2024 and December 31, 2023, respectively)			1,578						1,934
Other accounts receivable (net of allowance for credit losses of $5 as of June 30, 2024 and December 31, 2023)			633						917
Mark-to-market derivative assets			935						1,179
Inventories, net
Natural gas, oil, and emission allowances			201						284
Materials and supplies			1,241						1,216
Renewable energy credits			487						660
Other			2,394						1,655
Total current assets			7,852						8,299
Property, plant, and equipment (net of accumulated depreciation and amortization of $17,618 and $17,423 as of June 30, 2024 and December 31, 2023, respectively)			21,973						22,116
Deferred debits and other assets
Nuclear decommissioning trust funds			16,883						16,398
Investments			584						563
Goodwill			420						425
Mark-to-market derivative assets			993						995
Deferred income taxes			25						52
Other			2,610						1,910
Total deferred debits and other assets			21,515						20,343
Total assets**(a)**			$	51,340					$	50,758

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Corporation and Subsidiary Companies

Consolidated Balance Sheets

(Unaudited)

(In millions)			June 30, 2024						December 31, 2023
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings			$	680					$	1,644
Long-term debt due within one year			1,035						121
Accounts payable and accrued expenses			2,422						2,612
Mark-to-market derivative liabilities			563						632
Renewable energy credit obligation			730						972
Other			371						338
Total current liabilities			5,801						6,319
Long-term debt			7,409						7,496
Deferred credits and other liabilities
Deferred income taxes and unamortized ITCs			3,377						3,209
Asset retirement obligations			13,510						14,118
Pension obligations			877						1,070
Non-pension postretirement benefit obligations			749						732
Spent nuclear fuel obligation			1,331						1,296
Payables related to Regulatory Agreement Units			4,310						3,688
Mark-to-market derivative liabilities			555						419
Other			1,640						1,125
Total deferred credits and other liabilities			26,349						25,657
Total liabilities(a)			39,559						39,472
Commitments and contingencies (Note 13)
Shareholders' equity
Common stock (No par value, 1,000 shares authorized, 313 shares and 317 shares outstanding as of June 30, 2024 and December 31, 2023, respectively)			11,350						12,355
Retained earnings (deficit)			2,236						761
Accumulated other comprehensive income (loss), net			(2,161)						(2,191)
Total shareholders' equity			11,425						10,925
Noncontrolling interests			356						361
Total equity			11,781						11,286
Total liabilities and shareholders' equity			$	51,340					$	50,758

---

(a)Our consolidated assets include $3,716 million and $3,355 million at June 30, 2024 and December 31, 2023, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Our consolidated liabilities include $992 million and $990 million at June 30, 2024 and December 31, 2023, respectively, of certain VIEs for which the VIE creditors do not have recourse to us. See Note 15 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Corporation and Subsidiary Companies

Consolidated Statements of Changes in Equity

(Unaudited)

			Six Months Ended June 30, 2024
			Shareholders' Equity
(In millions, shares in thousands)			Issued Shares						Common Stock						Retained Earnings (Deficit)						Accumulated Other Comprehensive Income (Loss), net						Noncontrolling Interests												Total Equity
Balance, December 31, 2023			317,472						$	12,355					$	761					$	(2,191)					$	361											$	11,286
Net Income (loss)			—						—						883						—						—												883
Employee incentive plans			661						(4)						—						—						—												(4)
Common stock dividends ($0.3525/common share)			—						—						(112)						—						—												(112)
Common stock repurchased			(2,900)						(504)						—						—						—												(504)
Other comprehensive income (loss), net of income taxes			—						—						—						11						—												11
Balance, March 31, 2024			315,233						$	11,847					$	1,532					$	(2,180)					$	361											$	11,560
Net Income (loss)			—						—						814						—						(5)												809
Employee incentive plans			72						8						—						—						—												8
Common stock dividends ($0.3525/common share)			—						—						(110)						—						—												(110)
Common stock repurchased			(2,091)						(505)						—						—						—												(505)
Other comprehensive income (loss), net of income taxes			—						—						—						19						—												19
Balance, June 30, 2024			313,214						$	11,350					$	2,236					$	(2,161)					$	356											$	11,781

			Six Months Ended June 30, 2023
			Shareholders' Equity
(In millions, shares in thousands)			Issued Shares						Common Stock						Retained Earnings (Deficit)						Accumulated Other Comprehensive Income (Loss), net						Noncontrolling Interests						Total Equity
Balance, December 31, 2022			327,130						$	13,274					$	(496)					$	(1,760)					$	354					$	11,372
Net Income (loss)			—						—						96						—						6						102
Employee incentive plans			528						6						—						—						—						6
Changes in equity of noncontrolling interests			—						—						—						—						(2)						(2)
Common stock dividends ($0.2820/common share)			—						—						(93)						—						—						(93)
Common stock repurchased			(3,239)						(251)						—						—						—						(251)
Other comprehensive income (loss), net of income taxes			—						—						—						(48)						—						(48)
Balance, March 31, 2023			324,419						$	13,029					$	(493)					$	(1,808)					$	358					$	11,086
Net Income (loss)			—						—						833						—						(9)						824
Employee incentive plans			115						31						—						—						—						31
Changes in equity of noncontrolling interests			—						—						—						—						7						7
Common stock dividends ($0.2820/common share)			—						—						(92)						—						—						(92)
Common stock repurchased			(2,958)						(252)						—						—						—						(252)
Other comprehensive income, net of income taxes			—						—						—						8						—						8
Balance, June 30, 2023			321,576						$	12,808					$	248					$	(1,800)					$	356					$	11,612

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Generation, LLC and Subsidiary Companies

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

			Three Months Ended June 30,												Six Months Ended June 30,
(In millions)			2024						2023						2024						2023
Operating revenues			$	5,475					$	5,446					$	11,637					$	13,011
Operating expenses
Purchased power and fuel			2,292						2,887						5,709						8,616
Operating and maintenance			1,645						1,477						3,131						2,908
Depreciation and amortization			296						274						602						542
Taxes other than income taxes			142						139						282						271
Total operating expenses			4,375						4,777						9,724						12,337
Gain (loss) on sales of assets and businesses			—						—						—						26
Operating income (loss)			1,100						669						1,913						700
Other income and (deductions)
Interest expense, net			(142)						(103)						(269)						(210)
Other, net			6						605						368						919
Total other income and (deductions)			(136)						502						99						709
Income (loss) before income taxes			964						1,171						2,012						1,409
Income tax (benefit) expense			154						342						318						472
Equity in income (losses) of unconsolidated affiliates			(1)						(5)						(2)						(11)
Net income (loss)			809						824						1,692						926
Net income (loss) attributable to noncontrolling interests			(5)						(9)						(5)						(3)
Net income (loss) attributable to membership interest			$	814					$	833					$	1,697					$	929
Comprehensive income (loss), net of income taxes
Net income (loss)			$	809					$	824					$	1,692					$	926
Other comprehensive income (loss), net of income taxes
Pension and non-pension postretirement benefit plans:
Prior service benefit reclassified to periodic benefit cost			(1)						(3)						(2)						(3)
Actuarial loss reclassified to periodic cost			21						8						39						13
Pension and non-pension postretirement benefit plan valuation adjustment			(2)						—						(5)						(53)
Unrealized gain (loss) on cash flow hedges			2						—						2						—
Unrealized gain (loss) on foreign currency translation			(1)						3						(4)						3
Other comprehensive income (loss), net of income taxes			19						8						30						(40)
Comprehensive income (loss)			828						832						1,722						886
Comprehensive income (loss) attributable to noncontrolling interests			(5)						(9)						(5)						(3)
Comprehensive income (loss) attributable to membership interest			$	833					$	841					$	1,727					$	889

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Generation, LLC and Subsidiary Companies

Consolidated Statements of Cash Flows

(Unaudited)

			Six Months Ended June 30,
(In millions)			2024						2023
Cash flows from operating activities
Net income (loss)			$	1,692					$	926
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities
Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization			1,388						1,219
Deferred income taxes and amortization of ITCs			191						189
Net fair value changes related to derivatives			(776)						281
Net realized and unrealized (gains) losses on NDT funds			(197)						(270)
Net realized and unrealized (gains) losses on equity investments			11						(414)
Other non-cash operating activities			(82)						40
Changes in assets and liabilities:
Accounts receivable			773						1,303
Receivables from and payables to affiliates, net			97						(39)
Inventories			58						124
Accounts payable and accrued expenses			(203)						(1,728)
Option premiums received (paid), net			129						(48)
Collateral received (posted), net			868						(474)
Income taxes			(86)						160
Pension and non-pension postretirement benefit contributions			(188)						(18)
Other assets and liabilities			(5,025)						(2,458)
Net cash flows provided by (used in) operating activities			(1,350)						(1,207)
Cash flows from investing activities
Capital expenditures			(1,284)						(1,336)
Proceeds from NDT fund sales			2,890						3,116
Investment in NDT funds			(3,043)						(3,203)
Collection of DPP, net			4,096						1,582
Acquisitions of assets and businesses			(15)						(20)
Other investing activities			6						32
Net cash flows provided by (used in) investing activities			2,650						171
Cash flows from financing activities
Change in short-term borrowings			(625)						(524)
Proceeds from short-term borrowings with maturities greater than 90 days			200						500
Repayments of short-term borrowings with maturities greater than 90 days			(539)						(200)
Issuance of long-term debt			900						1,791
Retirement of long-term debt			(65)						(121)
Distributions to member			(1,220)						(584)
Other financing activities			(19)						(10)
Net cash flows provided by (used in) financing activities			(1,368)						852
Increase (decrease) in cash, restricted cash, and cash equivalents			(68)						(184)
Cash, restricted cash, and cash equivalents at beginning of period			440						501
Cash, restricted cash, and cash equivalents at end of period			$	372					$	317
Supplemental cash flow information
Increase (decrease) in capital expenditures not paid			$	54					$	(44)
Increase (decrease) in DPP			4,455						2,335
Increase (decrease) in PP&E related to ARO update			(389)						—

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Generation, LLC and Subsidiary Companies

Consolidated Balance Sheets

(Unaudited)

(In millions)			June 30, 2024						December 31, 2023
ASSETS
Current assets
Cash and cash equivalents			$	308					$	366
Restricted cash and cash equivalents			64						74
Accounts receivable
Customer accounts receivable (net of allowance for credit losses of $61 and $56 as of June 30, 2024 and December 31, 2023, respectively)			1,578						1,934
Other accounts receivable (net of allowance for credit losses of $5 as of June 30, 2024 and December 31, 2023)			625						911
Mark-to-market derivative assets			935						1,179
Inventories, net
Natural gas, oil, and emission allowances			201						284
Materials and supplies			1,241						1,216
Renewable energy credits			487						660
Other			2,394						1,655
Total current assets			7,833						8,279
Property, plant, and equipment (net of accumulated depreciation and amortization of $17,618 and $17,423 as of June 30, 2024 and December 31, 2023, respectively)			21,973						22,116
Deferred debits and other assets
Nuclear decommissioning trust funds			16,883						16,398
Investments			584						563
Goodwill			420						425
Mark-to-market derivative assets			993						995
Deferred income taxes			25						52
Other			2,610						1,910
Total deferred debits and other assets			21,515						20,343
Total assets**(a)**			$	51,321					$	50,738

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Generation, LLC and Subsidiary Companies

Consolidated Balance Sheets

(Unaudited)

(In millions)			June 30, 2024						December 31, 2023
LIABILITIES AND EQUITY
Current liabilities
Short-term borrowings			$	680					$	1,644
Long-term debt due within one year			1,035						121
Accounts payable and accrued expenses			2,258						2,486
Payables to affiliates			215						118
Mark-to-market derivative liabilities			563						632
Renewable energy credit obligation			730						972
Other			369						338
Total current liabilities			5,850						6,311
Long-term debt			7,409						7,496
Deferred credits and other liabilities
Deferred income taxes and unamortized ITCs			3,377						3,209
Asset retirement obligations			13,510						14,118
Pension obligations			877						1,070
Non-pension postretirement benefit obligations			749						732
Spent nuclear fuel obligation			1,331						1,296
Payables related to Regulatory Agreement Units			4,310						3,688
Mark-to-market derivative liabilities			555						419
Other			1,477						1,025
Total deferred credits and other liabilities			26,186						25,557
Total liabilities(a)			39,445						39,364
Commitments and contingencies (Note 13)
Equity
Member’s equity
Membership interest			10,538						11,537
Undistributed earnings (deficit)			3,143						1,667
Accumulated other comprehensive income (loss), net			(2,161)						(2,191)
Total member’s equity			11,520						11,013
Noncontrolling interests			356						361
Total equity			11,876						11,374
Total liabilities and equity			$	51,321					$	50,738

---

(a)Our consolidated assets include $3,716 million and $3,355 million as of June 30, 2024 and December 31, 2023, respectively, of certain VIEs that can only be used to settle the liabilities of the VIE. Our consolidated liabilities include $992 million and $990 million as of June 30, 2024 and December 31, 2023, respectively, of certain VIEs for which the VIE creditors do not have recourse to us. See Note 15 — Variable Interest Entities for additional information.

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Generation, LLC and Subsidiary Companies

Consolidated Statements of Changes in Equity (Unaudited)

			Six Months Ended June 30, 2024
			Member's Equity
(In millions)			Membership Interest						Undistributed Earnings (Deficit)						Accumulated Other Comprehensive Income (Loss), net						Noncontrolling Interests						Total Equity
Balance, December 31, 2023			$	11,537					$	1,667					$	(2,191)					$	361					$	11,374
Net Income (loss)			—						883						—						—						883
Distributions to member			(499)						(111)						—						—						(610)
Other comprehensive income (loss), net of income taxes			—						—						11						—						11
Balance, March 31, 2024			$	11,038					$	2,439					$	(2,180)					$	361					$	11,658
Net Income (loss)			—						814						—						(5)						809
Distribution to member			(500)						(110)						—						—						(610)
Other comprehensive income (loss), net of income taxes			—						—						19						—						19
Balance, June 30, 2024			$	10,538					$	3,143					$	(2,161)					$	356					$	11,876

			Six Months Ended June 30, 2023
			Member's Equity
(In millions)			Membership Interest						Undistributed Earnings (Deficit)						Accumulated Other Comprehensive Income (Loss), net						Noncontrolling Interests						Total Equity
Balance, December 31, 2022			$	12,408					$	412					$	(1,760)					$	354					$	11,414
Net Income (loss)			—						96						—						6						102
Changes in equity of noncontrolling interests			—						—						—						(2)						(2)
Distributions to member			(152)						(97)						—						—						(249)
Other comprehensive income (loss), net of income taxes			—						—						(48)						—						(48)
Balance, March 31, 2023			$	12,256					$	411					$	(1,808)					$	358					$	11,217
Net Income (loss)			—						833						—						(9)						824
Changes in equity of noncontrolling interests			—						—						—						7						7
Distribution to member			(244)						(91)						—						—						(335)
Other comprehensive income (loss), net of income taxes			—						—						8						—						8
Balance, June 30, 2023			$	12,012					$	1,153					$	(1,800)					$	356					$	11,721

See the Combined Notes to Consolidated Financial Statements

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

1. Basis of Presentation

Description of Business

We are a producer of carbon-free energy and a supplier of energy products and services. Our generating capacity includes primarily nuclear, wind, solar, natural gas and hydroelectric assets. Through our integrated business operations, we sell electricity, natural gas, and other energy-related products and sustainable solutions to various types of customers, including distribution utilities, municipalities, cooperatives, and commercial, industrial, governmental, and residential customers in markets across multiple geographic regions. We have five reportable segments: Mid-Atlantic, Midwest, New York, ERCOT and Other Power Regions.

Basis of Presentation

The accompanying Consolidated Financial Statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 are unaudited but, in our opinion include all adjustments that are considered necessary for a fair statement of the financial statements in accordance with GAAP. All adjustments are of a normal, recurring nature, unless otherwise disclosed. The Consolidated Financial Statements include the accounts of our subsidiaries and all intercompany transactions have been eliminated. Constellation's December 31, 2023 Consolidated Balance Sheet was derived from audited financial statements. The interim financial statements are to be read in conjunction with prior annual financial statements and notes. Financial results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the fiscal year ending December 31, 2024. These Combined Notes to Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Amounts disclosed relate to CEG Parent and Constellation unless specifically noted as relating to CEG Parent only. Unless otherwise indicated or the context otherwise requires, references herein to the terms “we,” “us,” and “our” refer collectively to CEG Parent and Constellation.

Summary of Significant Accounting Policies

See Note 1 — Basis of Presentation of our 2023 Form 10-K for additional information on significant accounting policies.

2. Mergers, Acquisitions, and Dispositions

Acquisition of Joint Ownership in South Texas Project

In November 2023, we completed the acquisition of NRG South Texas LP (renamed and converted as Constellation South Texas, LLC), which owns a 44% undivided ownership interest in the jointly owned STP, a 2,645 MW, dual-unit nuclear plant located in Bay City, Texas. The net cash paid was $1.65 billion, after certain purchase price adjustments. Other owners include City Public Service Board of San Antonio (CPS, 40%) and the City of Austin, Texas (Austin, 16%). See Note 2 — Mergers, Acquisitions, and Dispositions of our 2023 Form 10-K for additional information.

In May 2024, we executed a settlement agreement with all parties (CPS/City of San Antonio, Austin, and NRG), resolving all litigation involving our purchase of the ownership interest in STP, which was initiated by CPS and Austin in Texas state court and before the NRC. The terms of the settlement include us selling a 2% ownership interest in STP to CPS at the same price and terms that we paid NRG for our 44% interest, subject to regulatory approvals from the NRC and the Public Utility Commission of Texas. Pursuant to the settlement, CPS and Austin filed Notices of Dismissal with Prejudice with the Court, which ends the litigation, and likewise withdrew their pending objections to the sale with the NRC. As a result of the settlement, we have reflected assets and liabilities associated with a 2% undivided ownership interest in STP as held for sale. The held for sale amounts are included in the Other current assets and Other current liabilities balances on our Consolidated Balance Sheets as of June 30, 2024. Closing is expected to occur within the next year. Upon closing of the sale, we and CPS will each own a 42% interest in STP, and Austin’s interest will remain at 16%. The terms of settlement are not expected to have a material impact on our consolidated financial statements.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 3 — Revenue from Contracts with Customers

3. Revenue from Contracts with Customers

We recognize revenue from contracts with customers to depict the transfer of goods or services to customers at an amount that we expect to be entitled to in exchange for those goods or services. Our primary sources of revenue include competitive sales of power, natural gas, and other energy-related products and sustainable solutions.

See Note 4 — Revenue from Contracts with Customers of our 2023 Form 10-K for additional information regarding the performance obligations, revenue recognition, and payment terms associated with these sources of revenue.

Contract Balances

Contract Assets

We record contract assets for the revenue recognized on the construction and installation of energy efficiency assets and new power generating facilities before we have an unconditional right to bill for and receive the consideration from the customer. These contract assets are subsequently reclassified to receivables when the right to payment becomes unconditional. We record contract assets and contract receivables in Other current assets and Customer accounts receivable, net, respectively, in the Consolidated Balance Sheets.

The following table provides a rollforward of the contract assets reflected in the Consolidated Balance Sheets for the three and six months ended June 30, 2024 and 2023.

			2024						2023
Beginning balance as of January 1			$	82					$	130
Amounts reclassified to receivables			(15)						(11)
Revenues recognized			14						31
Ending balance as of March 31			81						150
Amounts reclassified to receivables			(4)						(76)
Revenues recognized			16						15
Ending balance as of June 30			$	93					$	89

Contract Liabilities

We record contract liabilities when consideration is received or due prior to the satisfaction of the performance obligations. We record contract liabilities in Other current liabilities and Other deferred credits and other liabilities in the Consolidated Balance Sheets. These contract liabilities primarily relate to upfront consideration received or due for equipment service plans, the Mystic COS, and the Illinois ZEC program. The Mystic COS, which ended in May 2024, included upfront consideration received that differs from the recognized earnings over the cost of the service period. The Illinois ZEC program introduces an annual cap on the total consideration to be received by us for each delivery period. The ZEC price is established on a per MWh of production basis with a maximum annual cap for total compensation to be received for each planning year, while requiring delivery of all ZECs produced by our participating facilities during each delivery period. ZECs delivered to Illinois utilities in excess of the annual cost cap may be paid in subsequent years if the payments do not exceed the prescribed annual cost cap for that year. The balance as of June 30, 2024 primarily related to equipment service plans. The balance as of December 31, 2023 primarily related to equipment services plans and the Mystic COS.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 3 — Revenue from Contracts with Customers

The following table provides a rollforward of the contract liabilities reflected in the Consolidated Balance Sheets for the three and six months ended June 30, 2024 and 2023.

			2024						2023
Beginning balance as of January 1			$	40					$	47
Consideration received or due			49						131
Revenues recognized			(55)						(115)
Ending balance as of March 31			34						63
Consideration received or due			47						81
Revenues recognized			(46)						(92)
Ending balance as of June 30			$	35					$	52

Transaction Price Allocated to Remaining Performance Obligations

The following table shows the amounts of future revenues expected to be recorded in each year for performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2024. This disclosure only includes contracts for which the total consideration is fixed and determinable at contract inception. The average contract term varies by customer type and commodity but ranges from one month to several years. This disclosure excludes mark-to-market derivatives and certain power and gas sales contracts which contain variable volumes and/or variable pricing.

						2024						2025						2026						2027						2028 and thereafter						Total
Remaining performance obligations						$	92					$	59					$	30					$	18					$	130					$	329

Transaction Price Allocated to Previously Satisfied Performance Obligations

Our Clinton and Quad Cities units contract with certain utilities in Illinois which requires delivery of all ZECs produced during each planning year (June through May), with total compensation limited by an annual cap for each planning year designed to limit the cost of ZECs to each utility's customers. ZECs delivered that, if paid, would result in the annual cap being exceeded may be paid in subsequent years at the vintage year price as long as the payments would not exceed the annual cap in the year paid. In each planning year since the program commenced June 2017, we delivered ZECs to the utilities in excess of the annual compensation cap.

The ZEC price and annual compensation cap effective for each planning year are administratively determined by the IPA. For the June 2023 through May 2024 planning year, the ZEC price has been established at $0.30 per ZEC, subject to an annual cap of $224 million. ZECs generated and delivered during this planning year will not exceed the annual cap, providing capacity to compensate for ZECs delivered in prior planning years in excess of the compensation cap. For the three and six months ended June 30, 2023, we recognized $218 million of revenue as a receivable for ZECs delivered in prior planning years, with payment expected in the third quarter of 2024. As of June 30, 2024, this receivable is included within Customer accounts receivable, net in the Consolidated Balance Sheets. For the June 2024 through May 2025 planning year, the ZEC price has been established at $9.38 per ZEC, subject to an annual cap of $222 million. Revenue recognized for ZECs delivered in prior planning years were not material for the three and six months ended June 30, 2024.

Revenue Disaggregation

We disaggregate the revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. See Note 4 — Segment Information for the presentation of revenue disaggregation.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 4 — Segment Information

4. Segment Information

Operating segments are determined based on information used by the CODM in deciding how to evaluate performance and allocate resources. We have five reportable segments consisting of the Mid-Atlantic, Midwest, New York, ERCOT, and all other power regions referred to collectively as “Other Power Regions.”

The basis for our reportable segments is the integrated management of our electricity business that is located in different geographic regions, and largely representative of the footprints of ISO/RTO and/or NERC regions, which utilize multiple supply sources to provide electricity through various distribution channels (wholesale and retail). Our hedging strategies and risk metrics are also aligned to these same geographic regions. Descriptions of each of our five reportable segments are as follows:

• Mid-Atlantic** represents operations in the 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** represents operations in the western half of PJM and the United States footprint of MISO, excluding MISO’s Southern Region.

• New York** represents operations within NYISO.

• ERCOT** represents operations within Electric Reliability Council of Texas that covers a majority of the state of Texas.

• Other Power Regions:**

• New England represents operations within ISO-NE.

• South** represents operations in FRCC, MISO’s Southern Region, and the remaining portions of SERC not included within MISO or PJM.

• West** represents operations in WECC, which includes CAISO.

• Canada** represents operations across the entire country of Canada and includes AESO, OIESO, and the Canadian portion of MISO.

The CODM evaluates the performance of our electric business activities and allocates resources based on Operating revenues net of Purchased power and fuel expense (RNF). We believe this is a useful measurement of operational performance, although it is not a presentation defined under GAAP and may not be comparable to other companies’ presentations or deemed more useful than the GAAP information provided elsewhere in this report. Our operating revenues include all sales to third parties as well as government assistance. Purchased power costs include all costs associated with the procurement and supply of electricity including capacity, energy, and ancillary services. Fuel expense includes the fuel costs for our owned generation and fuel costs associated with tolling agreements. The results of our other business activities are not regularly reviewed by the CODM and are therefore not classified as operating segments or included in the regional reportable segment amounts. These activities include wholesale and retail sales of natural gas, energy-related sales in the United Kingdom, as well as sales of other energy-related products and sustainable solutions that are not significant to our overall results of operations. Further, our unrealized mark-to-market gains and losses on economic hedging activities and our amortization of certain intangible assets and liabilities relating to commodity contracts recorded at fair value from mergers and acquisitions are also excluded from the regional reportable segment amounts. The CODM does not use a measure of total assets in making decisions regarding allocating resources to or assessing the performance of these reportable segments.

The following tables disaggregate the revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. The disaggregation of revenues reflects our two primary products of power sales and natural gas sales, with further disaggregation of power sales provided by geographic region.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 4 — Segment Information

The following tables also show the reconciliation of reportable segment revenues and RNF to our total revenues and RNF for the three and six months ended June 30, 2024 and 2023.

			Three Months Ended June 30, 2024
			Revenues from external customers
			Contracts with customers						Other**(a)**						Total						Intersegment Revenues						Total Revenues
Mid-Atlantic			$	1,297					$	4					$	1,301					$	3					$	1,304
Midwest			993						175						1,168						—						1,168
New York			463						57						520						(6)						514
ERCOT			274						81						355						2						357
Other Power Regions			1,023						160						1,183						1						1,184
Total Reportable Segment Power Revenues			4,050						477						4,527						—						4,527
Total Natural Gas Revenues			231						349						580						—						580
Total Other Revenues(b)			125						243						368						—						368
Total Consolidated Operating Revenues			$	4,406					$	1,069					$	5,475					$	—					$	5,475
			Three Months Ended June 30, 2023
			Revenues from external customers
			Contracts with customers						Other**(a)**						Total						Intersegment Revenues						Total Revenues
Mid-Atlantic			$	1,235					$	(27)					$	1,208					$	(10)					$	1,198
Midwest			1,352						(23)						1,329						1						1,330
New York			438						30						468						3						471
ERCOT			291						36						327						1						328
Other Power Regions			962						144						1,106						5						1,111
Total Reportable Segment Power Revenues			4,278						160						4,438						—						4,438
Total Natural Gas Revenues			280						376						656						—						656
Total Other Revenues(b)			143						209						352						—						352
Total Consolidated Operating Revenues			$	4,701					$	745					$	5,446					$	—					$	5,446
			Six Months Ended June 30, 2024
			Revenues from external customers
			Contracts with customers						Other**(a)**						Total						Intersegment Revenues						Total Revenues
Mid-Atlantic			$	2,652					$	(108)					$	2,544					$	2					$	2,546
Midwest			1,993						268						2,261						1						2,262
New York			955						64						1,019						8						1,027
ERCOT			511						164						675						3						678
Other Power Regions			2,458						364						2,822						(14)						2,808
Total Reportable Segment Power Revenues			8,569						752						9,321						—						9,321
Total Natural Gas Revenues			839						903						1,742						—						1,742
Total Other Revenues(b)			255						319						574						—						574
Total Consolidated Operating Revenues			$	9,663					$	1,974					$	11,637					$	—					$	11,637

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 4 — Segment Information

			Six Months Ended June 30, 2023
			Revenues from external customers
			Contracts with customers						Other**(a)**						Total						Intersegment Revenues						Total Revenues
Mid-Atlantic			$	2,648					$	(163)					$	2,485					$	(41)					$	2,444
Midwest			2,546						(188)						2,358						3						2,361
New York			901						67						968						37						1,005
ERCOT			490						5						495						2						497
Other Power Regions			2,481						423						2,904						(1)						2,903
Total Reportable Segment Power Revenues			9,066						144						9,210						—						9,210
Total Natural Gas Revenues			1,176						966						2,142						—						2,142
Total Other Revenues(b)			290						1,369						1,659						—						1,659
Total Consolidated Operating Revenues			$	10,532					$	2,479					$	13,011					$	—					$	13,011

---

(a)Includes revenues from nuclear PTCs beginning in 2024 as well as derivatives and leases in all periods presented.

(b)Represents activities not allocated to a region. See text above for a description of included activities. Includes unrealized mark-to-market gains of $192 million and $211 million for the three months ended June 30, 2024 and 2023, respectively, and unrealized mark-to-market gains of $254 million and $1,140 million for the six months ended June 30, 2024 and 2023, respectively.

			Three Months Ended June 30, 2024																		Three Months Ended June 30, 2023
			RNF from external customers						Intersegment RNF						Total RNF						RNF from external customers						Intersegment RNF						Total RNF
Mid-Atlantic			$	756					$	4					$	760					$	732					$	(9)					$	723
Midwest			763						2						765						973						2						975
New York			379						(6)						373						314						5						319
ERCOT			212						2						214						166						(2)						164
Other Power Regions			292						1						293						218						3						221
Total RNF for Reportable Segments			2,402						3						2,405						2,403						(1)						2,402
Other(a)			781						(3)						778						156						1						157
Total RNF			$	3,183					$	—					$	3,183					$	2,559					$	—					$	2,559
			Six Months Ended June 30, 2024																		Six Months Ended June 30, 2023
			RNF from external customers						Intersegment RNF						Total RNF						RNF from external customers						Intersegment RNF						Total RNF
Mid-Atlantic			$	1,431					$	4					$	1,435					$	1,455					$	(41)					$	1,414
Midwest			1,463						5						1,468						1,662						1						1,663
New York			709						8						717						538						40						578
ERCOT			433						(9)						424						220						(3)						217
Other Power Regions			683						(23)						660						474						(4)						470
Total RNF for Reportable Segments			4,719						(15)						4,704						4,349						(7)						4,342
Other(a)			1,209						15						1,224						46						7						53
Total RNF			$	5,928					$	—					$	5,928					$	4,395					$	—					$	4,395

---

(a)Other represents activities not allocated to a region. See text above for a description of included activities. See Note 10 — Derivative Financial Instruments for more information on mark-to-market derivatives.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 5 — Government Assistance

5. Government Assistance

As a result of the enactment of the IRA, we qualify for certain federal government incentives through eligible activities. These incentives include both refundable and transferable tax credits. The current GAAP framework does not address the receipt of government assistance by for-profit entities. We account for this government assistance by analogy to International Accounting Standard (IAS) 20, Accounting for Government Grants and Disclosure of Government Assistance, and recognize the benefits when there is reasonable assurance that we will comply with the required conditions and that the benefits will be received. We believe the reasonable assurance term as used in IAS 20 is analogous to the term probable as defined in Accounting Standards Codification 450-20 of GAAP.

Beginning in 2024, our nuclear units are eligible for a PTC extending through 2032. The nuclear PTC provides a transferable credit up to $15 per MWh (a base credit of $3 per MWh with a five times multiplier provided certain prevailing wage requirements are met) and is subject to phase-out when annual gross receipts are between $25.00 per MWh and $43.75 per MWh. We have determined that we will meet the annual prevailing wage requirements at all our nuclear units and are eligible for the five times multiplier. Both the amount of the PTC and the gross receipts thresholds adjust for inflation after 2024 through the duration of the program based on the GDP price deflator for the preceding calendar year. The benefits of the PTC may be realized through a credit against our federal income taxes or transferred via sale to an unrelated party. For the three and six months ended June 30, 2024, our Consolidated Statements of Operations and Comprehensive Income includes an estimate of $408 million and $712 million, respectively, in Operating revenues for nuclear PTCs earned based on qualifying production volumes during the respective periods. Nuclear PTCs are recorded within Other deferred debits and other assets within the Consolidated Balance Sheets and reclassified as a reduction to Accounts payable and accrued expenses when used to reduce our federal income tax payable. As of June 30, 2024, our Consolidated Balance Sheets reflect an estimated nuclear PTC receivable of $610 million within Other deferred debits and other assets and a reduction to Accounts payable and accrued expenses of $102 million for estimated nuclear PTCs that we have utilized as a credit against our current federal income taxes payable. There were no transfers of estimated nuclear PTCs to third parties during the three and six months ended June 30, 2024. Our estimate required the exercise of judgment in determining the amount of nuclear PTC expected for each of our nuclear units. Since the amount of nuclear PTC is a function of annual gross receipts, the actual amount of PTC earned cannot be determined until after the end of the calendar year and may be different from this initial estimate. Further, the nuclear PTC continues to be the subject of additional guidance expected to be issued from the U.S. Treasury and IRS that may materially impact the total amount of benefits we receive.

Many of the state-sponsored programs providing compensation for the emissions-free attributes of generation from certain of our nuclear units include contractual or other provisions that require us to refund that compensation up to the amount of the nuclear PTC received or pass through the entirety of the nuclear PTC received. As of June 30, 2024, we have recognized $404 million of estimated payables within Other deferred credits and other liabilities on our Consolidated Balance Sheets and recognized net operating revenue of $51 million and $120 million (pre-tax) associated with programs requiring refunds or pass through of the nuclear PTC in our Consolidated Statement of Operations and Comprehensive Income for the three and six months ended June 30, 2024, respectively. As with the actual amount of the PTC earned, which cannot be determined until after the end of the calendar year, the actual amounts due under state-sponsored programs may be different from our initial estimate.

6. Accounts Receivable

Unbilled Customer Revenue

We recorded $171 million and $372 million of unbilled customer revenues in Customer accounts receivables, net in the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 6 — Accounts Receivable

Sales of Customer Accounts Receivable

In 2020, NER, a bankruptcy remote, special purpose entity, which is wholly owned by us, entered into a revolving accounts receivable financing arrangement with a number of financial institutions and a commercial paper conduit (Purchasers) to sell certain customer accounts receivable (Facility). The maximum funding limit of the Facility is $1.1 billion through August 2025. Under the Facility, NER may sell eligible short-term customer accounts receivable to the Purchasers in exchange for cash and subordinated interest. The transfers are reported as sales of receivables in the consolidated financial statements. The subordinated interest in collections upon the receivables sold to the Purchasers is referred to as the DPP, which is reflected in Other current assets in the Consolidated Balance Sheets.

The Facility requires the balance of eligible receivables to be maintained at or above the balance of cash proceeds received from the Purchasers. To the extent the eligible receivables decrease below such balance, we are required to repay cash to the Purchasers. When eligible receivables exceed cash proceeds, we have the ability to increase the cash received up to the maximum funding limit. These cash inflows and outflows impact the DPP.

The following tables summarize the impact of the sale of certain receivables:

			As of June 30, 2024						As of December 31, 2023
Derecognized receivables transferred at fair value			$	1,703					$	1,516
Less: Cash proceeds received			150						300
DPP			$	1,553					$	1,216

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Loss on sale of receivables(a)			$	17					$	26					$	32					$	46

---

(a)Reflected in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income. This represents the amount by which the accounts receivable sold into the Facility are discounted, limited to credit losses.

			Six Months Ended June 30,
			2024						2023
Proceeds from new transfers(a)			$	1,402					$	3,181
Cash collections received on DPP(b)			4,246						2,432
Cash collections reinvested in the Facility			$	5,648					$	5,613

---

(a)Customer accounts receivable sold into the Facility were $5,856 million and $5,516 million for the six months ended June 30, 2024 and 2023, respectively.

(b)Does not include the $150 million and $850 million net cash payments to the Purchasers for the six months ended June 30, 2024 and 2023, respectively.

Our risk of loss following the transfer of accounts receivable is limited to the DPP outstanding. Payment of DPP is not subject to significant risks other than delinquencies and credit losses on accounts receivable transferred.

We recognize the cash proceeds received upon sale in Cash flows from operating activities within the Changes in Other assets and liabilities line in the Consolidated Statements of Cash Flows, which were ($4,455) million and ($2,335) million for the six months ended June 30, 2024 and 2023, respectively. The collection and reinvestment of DPP is recognized in Cash flows from investing activities in the Collection of DPP, net line in the Consolidated Statements of Cash Flows, which were $4,096 million and $1,582 million for the six months ended June 30, 2024 and 2023, respectively.

See Note 12 — Fair Value of Financial Assets and Liabilities and Note 15 — Variable Interest Entities for additional information.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 6 — Accounts Receivable

Other Sales of Customer Accounts Receivables

We are required, under supplier tariffs, to sell customer receivables to utility companies. The following table presents the total receivables sold:

			Six Months Ended June 30,
			2024						2023
Total receivables sold			$	210					$	249

7. Nuclear Decommissioning

Nuclear Decommissioning Asset Retirement Obligations

We have a legal obligation to decommission our nuclear power plants following the permanent cessation of operations. See Note 10 — Asset Retirement Obligations of our 2023 Form 10-K for additional information regarding AROs and the financial statement impact of changes in estimate.

The following table provides a rollforward of the nuclear decommissioning AROs reflected in the Consolidated Balance Sheets from December 31, 2023 to June 30, 2024:

Balance as of December 31, 2023(a)			$	13,891
Net decrease due to changes in, and timing of, estimated future cash flows			(909)
Accretion expense			329
ARO transferred to Liabilities held for sale			(20)
Costs incurred related to decommissioning plants			(16)
Balance as of June 30, 2024(a)			$	13,275

---

(a)Includes $28 million and $30 million as the current portion of the ARO as of June 30, 2024 and December 31, 2023, respectively, which is included in Other current liabilities in the Consolidated Balance Sheets.

In the second quarter of 2024, we updated our retirement timing assumptions for the Braidwood and Byron plants, commensurate with an update to the estimated useful lives utilized for depreciation purposes that now includes an assumption for a subsequent license renewal period, provided economic levels remain supportive of extended operations. The $909 million net decrease due to changes in, and timing of, estimated future cash flows was primarily driven by the change in the assumed retirement dates for these plants. The change in depreciation expense was not material during the three and six months ended June 30, 2024, nor is the estimated annual impact material to future periods.

NDT Funds

We had NDT funds totaling $17,015 million and $16,398 million as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, $132 million of the NDT funds were current and included in Other current assets in the Consolidated Balance Sheets. As of December 31, 2023, none of the NDT funds were reflected in Other current assets. See Note 16 — Supplemental Financial Information for additional information on activities of the NDT funds.

Accounting Implications of the Regulatory Agreement Units

See Note 1 — Basis of Presentation and Note 10 — Asset Retirement Obligations of our 2023 Form 10-K for additional information on the Regulatory Agreement Units.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 7 — Nuclear Decommissioning

The following table presents our noncurrent payables to ComEd, PECO, CenterPoint, and AEP Texas reflected as Payables related to Regulatory Agreement Units in the Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023:

			June 30, 2024						December 31, 2023
ComEd			$	3,566					$	2,955
PECO			274						278
CenterPoint			349						338
AEP Texas			121						117
Payables related to Regulatory Agreement Units			$	4,310					$	3,688

NRC Minimum Funding Requirements

NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that funds will be available in specified minimum amounts for radiological decommissioning of the facility at the end of its life.

In March 2024, we filed our annual decommissioning funding status report with the NRC for our shutdown units, including Zion Station which was transferred back to us in November 2023. The status report demonstrated adequate decommissioning funding assurance as of December 31, 2023 for all our shutdown units except for Peach Bottom Unit 1. Financial assurance for decommissioning Peach Bottom Unit 1 is provided by collections from PECO customers. Additionally in March 2024, STPNOC filed the decommissioning funding status report for STP. The status report demonstrated adequate funding assurance as of December 31, 2023. See Note 10 — Asset Retirement Obligations of our 2023 Form 10-K for additional information.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 8 — Income Taxes

8. Income Taxes

Rate Reconciliation

The effective income tax rate varies from the U.S. federal statutory rate principally due to the following:

			Three Months Ended June 30,
			2024						2023
U.S. federal statutory rate			21.0		%				21.0		%
(Decrease) increase due to:
State income taxes, net of federal income tax benefit			2.5						4.2
Qualified NDT fund income and losses			1.3						4.4
Amortization of investment tax credit, including deferred taxes on basis differences			(0.2)						(0.4)
PTCs and other credits			(9.6)						(0.5)
Noncontrolling interests			0.1						0.1
Other			0.9						0.4
Effective income tax rate			16.0		%				29.2		%
			Six Months Ended June 30,
			2024						2023
U.S. federal statutory rate			21.0		%				21.0		%
(Decrease) increase due to:
State income taxes, net of federal income tax benefit			(2.0)						4.0
Qualified NDT fund income and losses			5.3						9.4
Amortization of investment tax credit, including deferred taxes on basis differences			(0.2)						(0.5)
PTCs and other credits			(8.1)						(0.5)
Other			(0.2)						0.1
Effective income tax rate			15.8		%				33.5		%

Other Tax Matters

Tax Matters Agreement

In connection with the separation, we entered into a TMA with Exelon. The TMA governs the respective rights, responsibilities, and obligations between us and Exelon after the separation with respect to tax liabilities and benefits, tax attributes, tax returns, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. See Note 14 — Income Taxes of our 2023 Form 10-K for additional information on the separation.

Responsibility and Indemnification for Taxes. As a former subsidiary of Exelon, we have joint and several liability with Exelon to the IRS and certain state jurisdictions relating to the taxable periods that we were included in federal and state filings. However, the TMA specifies the portion of this tax liability for which we will bear contractual responsibility, and we and Exelon agreed to indemnify each other against any amounts for which such indemnified party is not responsible. Specifically, we will be liable for taxes due and payable in connection with tax returns that we are required to file. We will also be liable for our share of certain taxes required to be paid by Exelon with respect to taxable years or periods (or portions thereof) ending on or prior to the separation to the extent that we would have been responsible for such taxes under the Exelon tax sharing agreement then existing. As of June 30, 2024 and December 31, 2023, our Consolidated Balance Sheets reflect $38 million and $37 million in Other deferred credits and other liabilities, respectively, for tax liabilities where we maintain contractual responsibility to Exelon.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 8 — Income Taxes

Tax Refunds and Attributes. The TMA provides for the allocation of certain pre-closing tax attributes between us and Exelon. Tax attributes will be allocated in accordance with the principles set forth in the existing Exelon tax sharing agreement, unless otherwise required by law. Under the TMA, we will be entitled to refunds for taxes for which we are responsible. In addition, it is expected that Exelon will have tax attributes that may be used to offset Exelon’s future tax liabilities. A significant portion of such attributes were generated by our business. In February 2024, we executed an amendment to the TMA that modified the timing of Exelon's payment of amounts due to us. As of June 30, 2024, our Consolidated Balance Sheets reflects receivables of $137 million and $193 million in Other accounts receivable and Other deferred debits and other assets, respectively. As of December 31, 2023, our Consolidated Balance Sheets reflected receivables of $336 million and $178 million in Other accounts receivable and Other deferred debits and other assets, respectively.

9. Retirement Benefits

Components of Net Periodic Benefit (Credits) Costs

See Note 1 — Basis of Presentation of our 2023 10-K for additional information on where we report the service cost and other non-service cost (credit) components for all plans.

The following tables present the components of our net periodic benefit (credits) costs, prior to capitalization and co-owner allocations, for the three and six months ended June 30, 2024 and 2023:

			Pension Benefits												OPEB												Total Pension Benefits and OPEB
			Three Months Ended June 30,												Three Months Ended June 30,												Three Months Ended June 30,
			2024						2023						2024						2023						2024						2023
Components of net periodic benefit (credit) cost
Service cost			$	23					$	23					$	5					$	4					$	28					$	27
Non-service components of pension benefits & OPEB (credit) cost
Interest cost			96						98						18						19						114						117
Expected return on assets			(124)						(127)						(10)						(11)						(134)						(138)
Amortization of:
Prior service (credit) cost			—						—						(1)						(2)						(1)						(2)
Actuarial (gain) loss			26						11						(2)						(4)						24						7
Settlement charges			1						—						—						—						1						—
Non-service components of pension benefits & OPEB (credit) cost			(1)						(18)						5						2						4						(16)
Net periodic benefit (credit) cost**(a,b)**			$	22					$	5					$	10					$	6					$	32					$	11

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 9 — Retirement Benefits

			Pension Benefits												OPEB												Total Pension Benefits and OPEB
			Six Months Ended June 30,												Six Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023						2024						2023
Components of net periodic benefit (credit) cost:
Service cost			$	45					$	45					$	9					$	8					$	54					$	53
Non-service components of pension benefits & OPEB (credit) cost:
Interest cost			191						197						36						37						227						234
Expected return on assets			(248)						(254)						(21)						(22)						(269)						(276)
Amortization of:
Prior service (credit) cost			—						—						(3)						(4)						(3)						(4)
Actuarial (gain) loss			51						23						(4)						(7)						47						16
Settlement charges			4						—						—						—						4						—
Non-service components of pension benefits & OPEB (credit) cost			(2)						(34)						8						4						6						(30)
Net periodic benefit (credit) cost**(a,b)**			$	43					$	11					$	17					$	12					$	60					$	23

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(a)The pension benefit and OPEB service costs reflected in the Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2024 totaled $27 million and $51 million, respectively.

(b)The pension benefit and OPEB service costs reflected in the Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2023 totaled $23 million and $47 million, respectively.

10. Derivative Financial Instruments

We use derivative instruments to manage commodity price risk, interest rate risk, and foreign exchange risk related to ongoing business operations.

Authoritative guidance requires that derivative instruments be recognized as either assets or liabilities at fair value, with changes in fair value of the derivative recognized in earnings immediately. Other accounting treatments are available through special election and designation, provided they meet specific, restrictive criteria both at the time of designation and on an ongoing basis. These alternative permissible accounting treatments include NPNS, cash flow hedges, and fair value hedges. All derivative instruments, excluding NPNS and cash flow hedges, are recorded at fair value through earnings. For all NPNS derivative instruments, accounts receivable or accounts payable are recorded when derivatives settle, and revenue or expense is recognized in earnings as the underlying physical commodity is sold or delivered.

Authoritative guidance about offsetting assets and liabilities requires the fair value of derivative instruments to be shown in the Combined Notes to Consolidated Financial Statements on a gross basis, even when the derivative instruments are subject to legally enforceable master netting agreements and qualify for net presentation in the Consolidated Balance Sheets. A master netting agreement is an agreement between two counterparties that may have derivative and non-derivative contracts with each other providing for the net settlement of all referenced contracts via one payment stream, which takes place as the contracts deliver, when collateral is requested or in the event of default. In the tables below, which present fair value balances, our energy-related economic hedges and proprietary trading derivatives are shown gross. The impact of the netting of fair value balances with the same counterparty that are subject to legally enforceable master netting agreements, as well as netting of cash collateral, including margin on exchange positions, is aggregated in the collateral and netting columns.

Our use of cash collateral is generally unrestricted unless we were downgraded below investment grade. As our senior unsecured debt rating is currently rated at BBB+ and Baa1 by S&P and Moody's, respectively, it would take a three notch downgrade by S&P or Moody's for us to go below investment grade.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Derivative Financial Instruments

Commodity Price Risk

We employ established policies and procedures to manage our risks associated with market fluctuations in commodity prices by entering into physical and financial derivative contracts, including swaps, futures, forwards, options, and short-term and long-term commitments to purchase and sell energy and energy-related products. We believe these instruments, which are either determined to be non-derivative or classified as economic hedges, mitigate exposure to fluctuations in commodity prices.

To the extent the amount of energy we produce or procure differs from the amount of energy we have contracted to sell and in connection with portfolio optimization, we are exposed to market fluctuations in the prices of electricity, natural gas, and other commodities. We use a variety of derivative and non-derivative instruments to manage the commodity price risk of our electric generation facilities, including power and gas sales, fuel and power purchases, natural gas transportation and pipeline capacity agreements, and other energy-related products marketed and purchased. To manage these risks, we may enter into fixed-price derivative or non-derivative contracts to hedge the variability in future cash flows from expected sales of power and gas and purchases of power and fuel. The objectives for executing such hedges include fixing the price for a portion of anticipated future electricity sales at a level that provides an acceptable return. We are also exposed to differences between the locational settlement prices of certain economic hedges and the hedged generating units. This price difference is actively managed through other instruments which include derivative congestion products, whose changes in fair value are recognized in earnings each period, and auction revenue rights, which are accounted for on an accrual basis.

In general, increases and decreases in forward market prices have a positive and negative impact, respectively, on owned and contracted generation positions that have not been hedged. Beginning in 2024, our nuclear fleet is eligible for the nuclear PTC provided by the IRA, an important tool in managing commodity price risk for each nuclear unit not already receiving state support. The nuclear PTC provides increasing levels of support as unit revenues decline below levels established in the IRA and is further adjusted for inflation after 2024 through the duration of the program based on the GDP price deflator for the preceding calendar year. See Note 5 — Government Assistance for additional information on the nuclear PTC.

In locations and periods where our load serving activities do not naturally offset existing generation portfolio risk, remaining commodity price exposure is managed through portfolio hedging activities. Portfolio hedging activities are generally concentrated in the prompt three years, when customer demand and market liquidity enable effective price risk mitigation. During this prompt three-year period, we seek to mitigate the price risk associated with our load serving contracts, non-nuclear generation, and any residual price risk for our nuclear generation that the nuclear PTC and state programs may not fully mitigate. We also enter transactions that further optimize the economic benefits of our overall portfolio.

Additionally, we are exposed to certain market risks through our proprietary trading activities. The proprietary trading activities are a complement to our energy marketing portfolio but represent a small portion of our overall energy marketing activities and are subject to limits established by the Executive Committee. Proprietary trading includes all contracts executed with the intent of benefiting from shifts or changes in market prices as opposed to those executed with the intent of hedging or managing risk. Gains and losses associated with proprietary trading are reported as Operating revenues in the Consolidated Statements of Operations and Comprehensive Income and are included in the Net fair value changes related to derivatives line in the Consolidated Statements of Cash Flows. For the three and six months ended June 30, 2024 and 2023, net pre-tax commodity mark-to-market gains and losses associated with proprietary trading activities were not material.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Derivative Financial Instruments

The following tables provide a summary of the derivative fair value balances recorded as of June 30, 2024 and December 31, 2023:

June 30, 2024			Economic Hedges						Proprietary Trading						Collateral (a)(b)						Netting**(a)**						Total
Mark-to-market derivative assets (current)			$	6,598					$	1					$	383					$	(6,059)					$	923
Mark-to-market derivative assets (noncurrent)			4,386						—						321						(3,715)						992
Total mark-to-market derivative assets			10,984						1						704						(9,774)						1,915
Mark-to-market derivative liabilities (current)			(7,111)						(1)						490						6,059						(563)
Mark-to-market derivative liabilities (noncurrent)			(4,600)						—						330						3,715						(555)
Total mark-to-market derivative liabilities			(11,711)						(1)						820						9,774						(1,118)
Total mark-to-market derivative net assets (liabilities)			$	(727)					$	—					$	1,524					$	—					$	797
December 31, 2023
Mark-to-market derivative assets (current)			$	7,927					$	2					$	703					$	(7,472)					$	1,160
Mark-to-market derivative assets (noncurrent)			3,345						—						330						(2,682)						993
Total mark-to-market derivative assets			11,272						2						1,033						(10,154)						2,153
Mark-to-market derivative liabilities (current)			(9,019)						(2)						922						7,472						(627)
Mark-to-market derivative liabilities (noncurrent)			(3,545)						—						445						2,682						(418)
Total mark-to-market derivative liabilities			(12,564)						(2)						1,367						10,154						(1,045)
Total mark-to-market derivative net assets (liabilities)			$	(1,292)					$	—					$	2,400					$	—					$	1,108

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(a)We net all available amounts allowed in our Consolidated Balance Sheets in accordance with authoritative guidance for derivatives. These amounts include unrealized derivative transactions with the same counterparty under legally enforceable master netting agreements and cash collateral.

(b)Includes $775 million and $1,712 million of variation margin posted on the exchanges as of June 30, 2024 and December 31, 2023, respectively.

Economic Hedges (Commodity Price Risk)

For the three and six months ended June 30, 2024 and 2023, we recognized the following net pre-tax commodity mark-to-market gains (losses), which are also located in the Net fair value changes related to derivatives line in the Consolidated Statements of Cash Flows.

			Three Months Ended June 30,												Six Months Ended June 30,
Income Statement Location			2024						2023						2024						2023
Operating revenues			$	192					$	214					$	255					$	1,145
Purchased power and fuel			397						(218)						523						(1,412)
Total			$	589					$	(4)					$	778					$	(267)

Interest Rate and Foreign Exchange Risk

We utilize interest rate swaps to manage our interest rate exposure and foreign currency derivatives to manage foreign exchange rate exposure associated with international commodity purchases in currencies other than U.S. dollars, both of which are treated as economic hedges. The notional amounts were $526 million and $562 million as of June 30, 2024 and December 31, 2023, respectively.

The mark-to-market derivative assets and liabilities as of June 30, 2024 and December 31, 2023 and the mark-to-market gains and losses associated with management of interest rate and foreign currency risk for the three and six months ended June 30, 2024 and 2023 were not material. The mark-to-market gains and losses associated with management of interest rate and foreign currency exchange rate risk are also included in the Net fair value changes related to derivatives line in the Consolidated Statements of Cash Flows.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Derivative Financial Instruments

Credit Risk

We would be exposed to credit-related losses in the event of non-performance by counterparties on executed derivative instruments. The credit exposure of derivative contracts, before collateral, is represented by the fair value of contracts as of the reporting date.

For commodity derivatives, we enter into enabling agreements that allow for payment netting with our counterparties, which reduces our exposure to counterparty risk by providing for the offset of amounts payable to the counterparty against amounts receivable from the counterparty. Typically, each enabling agreement is for a specific commodity and, with respect to each individual counterparty, netting is limited to transactions involving that specific commodity product, except where master netting agreements exist with a counterparty that allows for cross product netting. In addition to payment netting language in the enabling agreement, our credit department establishes credit limits, margining thresholds and collateral requirements for each counterparty, which are defined in the derivative contracts. Counterparty credit limits are based on an internal credit review process that considers a variety of factors, including the results of a scoring model, leverage, liquidity, profitability, credit ratings by credit rating agencies, and other risk management criteria. To the extent that a counterparty’s margining thresholds are exceeded, the counterparty is required to post collateral with us, as specified in each enabling agreement. Our credit department monitors current and forward credit exposure to counterparties and their affiliates, both on an individual and an aggregate basis.

The following tables provide information on the 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 June 30, 2024. The tables further delineate that exposure by credit rating of the counterparties and provide guidance on the concentration of credit risk to individual counterparties. The amounts in the tables below exclude credit risk exposure from individual retail counterparties and exposure through RTOs, ISOs, NYMEX, ICE, NASDAQ, NGX, and Nodal commodity exchanges.

Rating as of June 30, 2024			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
Investment grade			$	988					$	50					$	938					1						$	235
Non-investment grade			38						29						9						—						—
No external ratings
Internally rated — investment grade			94						—						94						—						—
Internally rated — non-investment grade			237						59						178						—						—
Total			$	1,357					$	138					$	1,219					1						$	235

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(a)As of June 30, 2024, credit collateral held from counterparties where we had credit exposure included $46 million of cash and $92 million of letters of credit. The credit collateral does not include non-liquid collateral.

Net Credit Exposure by Type of Counterparty			As of June 30, 2024
Investor-owned utilities, marketers, power producers			$	991
Energy cooperatives and municipalities			88
Financial Institutions			60
Other			80
Total			$	1,219

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Derivative Financial Instruments

Credit-Risk-Related Contingent Features

As part of the normal course of business, we routinely enter into physically or financially settled contracts for the purchase and sale of capacity, electricity, fuels, emissions allowances, and other energy-related products. Certain of our derivative instruments contain provisions that require us to post collateral. We also enter into commodity transactions on exchanges where the exchanges act as the counterparty to each trade. Transactions on the exchanges must adhere to comprehensive collateral and margining requirements. This collateral may be posted in the form of cash or credit support with thresholds contingent upon our credit ratings from S&P and Moody's. The collateral and credit support requirements vary by contract and by counterparty. These credit-risk-related contingent features stipulate that if we were to be downgraded or lose our investment grade credit ratings (based on our senior unsecured debt rating), we would be required to provide additional collateral. This incremental collateral requirement allows for the offsetting of derivative instruments that are assets with the same counterparty, where the contractual right of offset exists under applicable master netting agreements. In the absence of expressly agreed-to provisions that specify the collateral that must be provided, collateral requested will be a function of the facts and circumstances of the situation at the time of the demand. In this case, we believe an amount of several months of future payments (e.g., capacity payments) rather than a calculation of fair value is the best estimate for the contingent collateral obligation, which has been factored into the disclosure below.

The aggregate fair value of all derivative instruments with credit-risk-related contingent features in a liability position that are not fully collateralized (excluding transactions on the exchanges that are fully collateralized) is detailed in the table below:

Credit-Risk-Related Contingent Features			June 30, 2024						December 31, 2023
Gross fair value of derivative contracts containing this feature			$	(1,829)					$	(1,894)
Offsetting fair value of in-the-money contracts under master netting arrangements			837						925
Net fair value of derivative contracts containing this feature			$	(992)					$	(969)

As of June 30, 2024 and December 31, 2023, we posted or held the following amounts of cash collateral and letters of credit on derivative contracts with external counterparties, after giving consideration to offsetting derivative and non-derivative positions under master netting agreements.

			June 30, 2024						December 31, 2023
Cash collateral posted(a)			$	1,594					$	2,449
Letters of credit posted(a)			1,168						777
Cash collateral held(a)			80						64
Letters of credit held(a)			119						61
Additional collateral required in the event of a credit downgrade below investment grade (at BB+/Ba1)(b)(c)(d)			1,950						1,914

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(a)The cash collateral and letters of credit amounts are inclusive of NPNS contracts.

(b)Certain of our contracts contain provisions that allow a counterparty to request additional collateral when there has been a subjective determination that our credit quality has deteriorated, generally termed “adequate assurance”. Due to the subjective nature of these provisions, we estimate the amount of collateral that we may ultimately be required to post in relation to the maximum exposure with the counterparty.

(c)The downgrade collateral is inclusive of all contracts in a liability position regardless of accounting treatment and excludes any contracts with individual retail counterparties.

(d)A loss of investment grade credit rating would require a three notch downgrade from their current levels of BBB+ and Baa1 at S&P and Moody's, respectively.

We routinely enter into supply forward contracts with certain utilities with one-sided collateral postings only from us. If market prices fall below the benchmark price levels in these contracts, the utilities are not required to post collateral. However, when market prices rise above the benchmark price levels, we are required to post collateral once certain unsecured credit limits are exceeded.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 11 — Debt and Credit Agreements

11. Debt and Credit Agreements

Short-Term Borrowings

We meet our short-term liquidity requirements primarily through the issuance of commercial paper. We may use our credit facility for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit.

Credit Agreements

In June 2024, we amended our existing $3.5 billion revolving credit facility (RCF), to increase the available aggregate commitment to $4.5 billion and extend the maturity date from January 2027 to June 2029. The RCF may be drawn down in the form of loans and/or to support commercial paper and letters of credit issuances.

The RCF fixed facility fee rate is 0.175% and borrowings under the RCF bear interest at a rate based upon either the Daily Simple SOFR rate or a Term SOFR rate, plus an adder based upon our credit ratings. The adders for the Daily Simple SOFR based borrowings and Term SOFR borrowings are 7.5 basis points and 107.5 basis points, respectively. The letters of credit bear interest at a rate of 1.075%.

If we were to lose our investment grade credit rating, the maximum adders for Daily Simple SOFR rate borrowings and Term SOFR rate borrowings would be 100 basis points and 200 basis points, respectively. The credit agreements also require us to pay facility fees based upon the aggregate commitments. The fees vary depending upon our credit rating.

As of June 30, 2024 and December 31, 2023, we had the following aggregate bank commitments, credit facility borrowings and available capacity under our respective credit facilities:

Facility Type						Aggregate Bank Commitment						Facility Draws						Outstanding Letters of Credit						Outstanding Commercial Paper(a)						Available Capacity as of June 30, 2024
Revolving Credit Facility						$	4,500					$	—					$	151					$	480					$	3,869
Bilaterals(b)						1,850						—						1,114						—						736
Liquidity Facility						971						—						792						—						116			(c)
Project Finance						137						—						118						—						19
Total						$	7,458					$	—					$	2,175					$	480					$	4,740

Facility Type						Aggregate Bank Commitment						Facility Draws						Outstanding Letters of Credit						Outstanding Commercial Paper(a)						Available Capacity as of December 31, 2023
Revolving Credit Facility						$	3,500					$	—					$	60					$	1,107					$	2,333
Bilaterals						1,500						—						878						—						622
Liquidity Facility						971						—						720						—						191			(c)
Project Finance						137						—						117						—						20
Total						$	6,108					$	—					$	1,775					$	1,107					$	3,166

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(a)Our commercial paper program is supported by the revolving credit agreement. In order to maintain our commercial paper program in the amounts indicated above, we must have a credit facility in place, at least equal to the amount of our commercial paper program. As of June 30, 2024 and December 31, 2023, the maximum program size of our commercial paper program was $4.5 billion and $3.5 billion, respectively. We do not issue commercial paper in an aggregate amount exceeding the then available capacity under our credit facility. The weighted average interest rate on commercial paper borrowings was 5.57% and 5.66% as of June 30, 2024 and December 31, 2023, respectively.

(b)In March 2024, we initiated a new bilateral credit agreement for $200 million, with no maturity date. In May 2024, we initiated a new bilateral credit agreement for $150 million, with no maturity date. In June 2024, a bilateral credit agreement initiated in November 2019 was extended for an additional two years to June 2026.

(c)The maximum amount of the bank commitment is not to exceed $971 million. The aggregate available capacity of the facility is subject to market fluctuations based on the value of U.S. Treasury Securities which determines the amount of collateral held in the trust. We may post additional collateral to borrow up to the maximum bank commitment. As of June 30, 2024 and December 31, 2023, without posting additional collateral, the actual availability of facility, prior to outstanding letters of credit was $908 million and $911 million, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 11 — Debt and Credit Agreements

Short-Term Loan Agreements

As of June 30, 2024 and December 31, 2023, we had the following short-term loan agreements:

Month Initiated						Interest Rate						Maturity						Outstanding Amount as of June 30, 2024						Outstanding Amount as of December 31, 2023
January 2023						1 month SOFR + 0.80%						January 2024						$	—					$	100
February 2023						1 month SOFR + 1.05%						February 2024						—						400
February 2024						1 month SOFR + 0.90%						February 2025						200						—

Long-Term Debt

Debt Issuances and Redemptions

During the six months ended June 30, 2024, the following long-term debt was issued (redeemed):

Type						Interest Rate						Maturity						Amount
Green Senior Notes(a)						5.75		%				March 2054						$	900
Energy Efficiency Project Financing(b)						2.20% - 4.96%						December 2024						1
CR Nonrecourse Debt						3-month SOFR + 2.76%						December 2027						(23)
Continental Wind Nonrecourse Debt						6.00		%				February 2033						(16)
West Medway II Nonrecourse Debt						1 month SOFR + 3.225%						March 2026						(15)
Antelope Valley DOE Nonrecourse Debt						2.29% - 3.56%						January 2037						(8)
RPG Nonrecourse Debt						4.11		%				March 2035						(3)
Total long-term debt issued (redeemed)																		$	836

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(a)The Green Senior Notes were issued to finance or refinance, in whole or in part, one or more new or existing Eligible Projects. Eligible Projects are defined as investments and expenditures made by us in the 24 months prior to or after the issuance of the notes within the following eligible green categories: clean generation fleet, clean hydrogen, energy storage, and clean commercial offerings.

(b)Energy Efficiency Project Financing represents funding to install energy conservation measures. The maturity dates represent the expected date of project completion, upon which the respective customer assumes the outstanding debt.

Debt Covenants

As of June 30, 2024, we are in compliance with all debt covenants.

12. Fair Value of Financial Assets and Liabilities

We measure and classify fair value measurements in accordance with the hierarchy as defined by GAAP. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels as follows:

• Level 1 — quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to liquidate as of the reporting date.

• Level 2 — inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

• Level 3 — unobservable inputs, such as internally developed pricing models or third-party valuations for the asset or liability due to little or no market activity for the asset or liability.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

Fair Value of Financial Liabilities Recorded at Amortized Cost

The following table presents the carrying amounts and fair values of our long-term debt and SNF obligation as of June 30, 2024 and December 31, 2023. We have no financial liabilities classified as Level 1.

The carrying amounts of the short-term liabilities as presented in the Consolidated Balance Sheets are representative of their fair value (Level 2) because of the short-term nature of these instruments.

						June 30, 2024																								December 31, 2023
						Carrying Amount						Fair Value																		Carrying Amount						Fair Value
									Level 2						Level 3						Total									Level 2						Level 3						Total
Long-Term Debt, including amounts due within one year						$	8,444					$	7,781					$	726					$	8,507					$	7,617					$	7,140					$	774					$	7,914
SNF Obligation						1,331						1,281						—						1,281						1,296						1,222						—						1,222

Valuation Techniques Used to Determine Fair Value and Net Asset Value

Our valuation techniques used to measure the fair value and net asset value of the assets and liabilities are in accordance with the policies discussed in Note 18 — Fair Value of Financial Assets and Liabilities of our 2023 Form 10-K.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

Recurring Fair Value Measurements

The following table present assets and liabilities measured and recorded at fair value in the Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of June 30, 2024 and December 31, 2023:

			As of June 30, 2024																								As of December 31, 2023
			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Assets
Cash equivalents(a)			$	34					$	—					$	—					$	34					$	42					$	—					$	—					$	42
NDT fund investments
Cash equivalents(b)			159						160						—						319						356						87						—						443
Equities			5,016						1,937						1						6,954						4,574						1,990						1						6,565
Fixed income			2,190						1,385						350						3,925						2,043						1,523						277						3,843
Private credit			—						—						141						141						—						—						151						151
Assets measured at NAV			—						—						—						5,676						—						—						—						5,396
NDT fund investments subtotal(c)			7,365						3,482						492						17,015						6,973						3,600						429						16,398
Rabbi trust investments			52						36						1						89						48						33						1						82
Investments in equities			362						—						—						362						372						—						—						372
Mark-to-market derivative assets
Economic hedges			1,456						5,865						3,677						10,998						2,330						5,821						3,143						11,294
Proprietary trading			—						—						1						1						—						—						2						2
Effect of netting and allocation of collateral(d)			(1,213)						(5,080)						(2,778)						(9,071)						(1,996)						(5,195)						(1,931)						(9,122)
Mark-to-market derivative assets subtotal			243						785						900						1,928						334						626						1,214						2,174
DPP consideration			—						1,553						—						1,553						—						1,216						—						1,216
Total assets measured at fair value			8,056						5,856						1,393						20,981						7,769						5,475						1,644						20,284
Liabilities
Mark-to-market derivative liabilities
Economic hedges			(1,547)						(6,346)						(3,819)						(11,712)						(2,681)						(7,154)						(2,736)						(12,571)
Proprietary trading			—						—						(1)						(1)						—						—						(2)						(2)
Effect of netting and allocation of collateral(d)			1,481						5,882						3,232						10,595						2,587						6,542						2,393						11,522
Mark-to-market derivative liabilities subtotal			(66)						(464)						(588)						(1,118)						(94)						(612)						(345)						(1,051)
Deferred compensation obligation			—						(84)						—						(84)						—						(69)						—						(69)
Total liabilities measured at fair value			(66)						(548)						(588)						(1,202)						(94)						(681)						(345)						(1,120)
Total net assets			$	7,990					$	5,308					$	805					$	19,779					$	7,675					$	4,794					$	1,299					$	19,164

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(a)CEG Parent has $43 million and $54 million of Level 1 cash equivalents as of June 30, 2024 and December 31, 2023, respectively. We exclude cash of $297 million and $349 million as of June 30, 2024 and December 31, 2023, respectively, and restricted cash of $41 million and $49 million as of June 30, 2024 and December 31, 2023, respectively. CEG Parent has excluded an additional $2 million of cash as of both June 30, 2024 and December 31, 2023.

(b)Includes net liabilities of $190 million and $115 million as of June 30, 2024 and December 31, 2023, respectively, which consist of receivables related to pending securities sales, interest and dividend receivables, repurchase agreement obligations, and payables related to pending securities purchases. The repurchase agreements are generally short-term in nature with durations generally of 30 days or less.

(c)Includes total NDT derivative assets and liabilities that are not material, which have notional amounts of $998 million and $948 million as of June 30, 2024 and December 31, 2023, respectively. The notional principal amounts provide one measure of the transaction volume outstanding as of the periods ended and do not represent the amount of our exposure to credit or market loss.

(d)Includes $775 million and $1,712 million of variation margin posted on the exchanges as of June 30, 2024 and December 31, 2023, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

As of June 30, 2024, our NDTs have outstanding commitments to invest in private credit, private equity, and real estate investments of $420 million, $190 million, and $395 million, respectively. These commitments will be funded by our existing NDT funds.

Equity Security Investments without Readily Determinable Fair Values. We hold investments without readily determinable fair values with carrying amounts of $128 million and $103 million as of June 30, 2024 and December 31, 2023, respectively. Changes in fair value, cumulative adjustments, and impairments were not material for the three and six months ended June 30, 2024 and the year ended December 31, 2023.

Reconciliation of Level 3 Assets and Liabilities

The following tables present the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis during the three and six months ended June 30, 2024 and 2023:

			For the Three Months Ended June 30, 2024
			NDT Fund Investments						Mark-to-Market Derivatives						Life Insurance Contracts						Total
Balance as of April 1, 2024			$	460					$	518					$	1					$	979
Total realized / unrealized gains (losses)
Included in net income (loss)			—						(185)			(a)			—						(185)
Included in Payable related to Regulatory Agreement Units			1						—						—						1
Change in collateral			—						(40)												(40)
Purchases, sales, issuances and settlements
Purchases			33						14						—						47
Sales			—						(39)						—						(39)
Settlements			(2)						—						—						(2)
Transfers into Level 3			—						30			(b)			—						30
Transfers out of Level 3			—						14			(b)			—						14
Balance as of June 30, 2024			$	492					$	312					$	1					$	805
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2024			$	—					$	(4)					$	—					$	(4)

			For the Three Months Ended June 30, 2023
			NDT Fund Investments						Mark-to-Market Derivatives						Life Insurance Contracts						Total
Balance as of April 1, 2023			$	421					$	747					$	1					$	1,169
Total realized / unrealized gains (losses)
Included in net income (loss)			1						(245)			(a)			—						(244)
Included in Payable related to Regulatory Agreement Units			4						—						—						4
Change in collateral			—						70						—						70
Purchases, sales, issuances and settlements
Purchases			—						19						—						19
Sales			—						(1)						—						(1)
Settlements			(5)						—						—						(5)
Transfers into Level 3			—						67			(b)			—						67
Transfers out of Level 3			—						(6)			(b)			—						(6)
Balance as of June 30, 2023			$	421					$	651					$	1					$	1,073
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2023			$	1					$	(6)					$	—					$	(5)

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

			For the Six Months Ended June 30, 2024
			NDT Fund Investments						Mark-to-Market Derivatives						Life Insurance Contracts						Total
Balance as of January 1, 2024			$	429					$	869					$	1					$	1,299
Total realized / unrealized gains (losses)
Included in net income (loss)			—						(491)			(a)			—						(491)
Included in Payable related to Regulatory Agreement Units			4						—						—						4
Change in collateral			—						(7)						—						(7)
Purchases, sales, issuances and settlements
Purchases			66						18						—						84
Sales			—						(83)						—						(83)
Settlements			(7)						(2)						—						(9)
Transfers into Level 3			—						39			(b)			—						39
Transfers out of Level 3			—						(31)			(b)			—						(31)
Balance as of June 30, 2024			$	492					$	312					$	1					$	805
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2024			$	—					$	25					$	—					$	25

			For the Six Months Ended June 30, 2023
			NDT Fund Investments						Mark-to-Market Derivatives						Life Insurance Contracts						Total
Balance as of January 1, 2023			$	423					$	219					$	1					$	643
Total realized / unrealized gains (losses)
Included in net income (loss)			1						260			(a)			—						261
Included in Payable related to Regulatory Agreement Units			4						—						—						4
Change in collateral			—						105						—						105
Purchases, sales, issuances and settlements
Purchases			—						85						—						85
Sales			—						(5)						—						(5)
Settlements			(7)						—						—						(7)
Transfers into Level 3			—						59			(b)			—						59
Transfers out of Level 3			—						(72)			(b)			—						(72)
Balance as of June 30, 2023			$	421					$	651					$	1					$	1,073
The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of June 30, 2023			$	1					$	705					$	—					$	706

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(a)Includes a reduction of $181 million and $518 million for realized gains due to the settlement of derivative contracts for the three and six months ended June 30, 2024, respectively. Includes a reduction of $239 million and $445 million for realized gains due to the settlement of derivative contracts for the three and six months ended June 30, 2023, respectively.

(b)Transfers into and out of Level 3 generally occur when the contract tenor becomes less and more observable, respectively, primarily due to changes in market liquidity or assumptions for certain commodity contracts.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 12 — Fair Value of Financial Assets and Liabilities

The following tables present the income statement classification of the total realized and unrealized gains (losses) included in income for Level 3 assets and liabilities measured at fair value on a recurring basis during the three and six months ended June 30, 2024 and 2023:

			For the Three Months Ended June 30,
			Operating Revenues												Purchased Power and Fuel												Other, net
			2024						2023						2024						2023						2024						2023
Total gains (losses) included in net income			$	(103)					$	(29)					$	(82)					$	(216)					$	—					$	1
Total unrealized gains (losses)			113						209						(117)						(215)						—						1

			For the Six Months Ended June 30,
			Operating Revenues												Purchased Power and Fuel												Other, net
			2024						2023						2024						2023						2024						2023
Total gains (losses) included in net income			$	(275)					$	517					$	(218)					$	(257)					$	—					$	1
Total unrealized gains (losses)			261						1,047						(236)						(342)						—						1

Mark-to-Market Derivatives

The following table presents the significant inputs to the forward curve used to value these positions:

Type of trade						Fair Value as of June 30, 2024						Fair Value as of December 31, 2023						Valuation Technique						Unobservable Input						2024 Range & Arithmetic Average									2023 Range & Arithmetic Average
Mark-to market derivatives—Economic hedges(a)(b)						$	(142)					$	407					Discounted Cash Flow						Forward power price						$3.49 - $178			$48						$9.64 - $216			$48
																								Forward gas price						$0.80 - $14			$3.38						$1.20 - $14			$3.09
																		Option Model						Volatility percentage						26% - 88%			51%						23% - 200%			87%

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(a)The valuation techniques, unobservable inputs, ranges, and arithmetic averages are the same for the asset and liability positions.

(b)The fair values do not include cash collateral posted on Level 3 positions of $454 million and $462 million as of June 30, 2024 and December 31, 2023, respectively.

The inputs listed above, which are as of the balance sheet date, would have a direct impact on the fair values of the above instruments if they were adjusted. The significant unobservable inputs used in the fair value measurement of our commodity derivatives are forward commodity prices and for options is price volatility. Increases (decreases) in the forward commodity price in isolation would result in significantly higher (lower) fair values for long positions (contracts that give us the obligation or option to purchase a commodity), with offsetting impacts to short positions (contracts that give us the obligation or right to sell a commodity). Increases (decreases) in volatility would increase (decrease) the value for the holder of the option (writer of the option). Generally, a change in the estimate of forward commodity prices is unrelated to a change in the estimate of volatility of prices. An increase to the heat rate or renewable factors would increase the fair value accordingly. Generally, interrelationships exist between market prices of natural gas and power. As such, an increase in natural gas pricing would potentially have a similar impact on forward power markets.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 13 — Commitments and Contingencies

13. Commitments and Contingencies

Commitments

Commercial Commitments. Commercial commitments as of June 30, 2024, representing commitments potentially triggered by future events, were as follows:

									Expiration within
			Total						2024						2025						2026						2027						2028						2029 and beyond
Letters of credit			$	2,175					$	1,672					$	374					$	1					$	9					$	118					$	1
Surety bonds(a)			736						521						215						—						—						—						—
Total commercial commitments			$	2,911					$	2,193					$	589					$	1					$	9					$	118					$	1

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(a)Surety bonds—Guarantees issued related to contract and commercial agreements, excluding bid bonds.

Environmental Remediation Matters

General. Our operations have in the past, and may in the future, require substantial expenditures to comply with environmental laws. Additionally, under Federal and state environmental laws, we are generally liable for the costs of remediating environmental contamination of property now or formerly owned by us and of property contaminated by hazardous substances generated by us. We own or lease several real estate parcels, including parcels on which our operations or the operations of others may have resulted in contamination by substances that are considered hazardous under environmental laws. In addition, we are currently involved in proceedings relating to sites where hazardous substances have been deposited and may be subject to additional proceedings in the future. Unless otherwise disclosed, we cannot reasonably estimate whether we will incur significant liabilities for additional investigation and remediation costs at these or additional sites identified by us, environmental agencies, or others. Additional costs could have a material, unfavorable impact on our consolidated financial statements.

As of June 30, 2024 and December 31, 2023, we had accrued undiscounted amounts for environmental liabilities of $56 million and $61 million, respectively, in Accounts payable and accrued expenses and $161 million and $88 million, respectively, in Other deferred credits and other liabilities in the Consolidated Balance Sheets. See Note 19 — Commitments and Contingencies of our 2023 Form 10-K for additional information on environmental remediation matters. As of June 30, 2024, and through the date of filing, there have been no material changes in amounts recognized for the matters discussed in our 2023 Form 10-K.

Litigation

General. We are involved in various other litigation matters that are being defended and handled in the ordinary course of business. The assessment of whether a loss is probable or reasonably possible, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. We maintain accruals for such losses that are probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of reasonably possible loss, particularly where (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

See Note 19 — Commitments and Contingencies of our 2023 Form 10-K for additional information on litigation matters. As of June 30, 2024, and through the date of filing, there have been no significant developments to the matters discussed in our 2023 Form 10-K.

Asbestos Personal Injury Claims. We maintain a reserve for claims associated with asbestos-related personal injury actions at certain facilities that are currently owned by us or were previously owned by ComEd, PECO, or BGE. The estimated liabilities are recorded on an undiscounted basis and exclude the estimated legal costs associated with handling these matters, which could be material.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 13 — Commitments and Contingencies

At June 30, 2024 and December 31, 2023, we recorded estimated liabilities of approximately $129 million and $131 million, respectively, in total for asbestos-related bodily injury claims. As of June 30, 2024, approximately $16 million of this amount related to 207 open claims presented to us, while the remaining $113 million is for estimated future asbestos-related bodily injury claims anticipated to arise through 2055, based on actuarial assumptions and analyses, which are updated on an annual basis. On a quarterly basis, we monitor actual experience against the number of forecasted claims to be received and expected claim payments and evaluate whether adjustments to the estimated liabilities are necessary.

14. Shareholders' Equity

Share Repurchase Program (CEG Parent)

During 2023, our Board of Directors authorized the repurchase of up to $2 billion of the Company's outstanding common stock. In April 2024, our Board of Directors approved a $1 billion increase to the program, authorizing up to $3 billion in total repurchases. As of the date of filing, there was approximately $991 million of remaining authority to repurchase shares of the Company's outstanding common stock. No other repurchase plans or programs have been authorized. See Note 20 — Shareholders' Equity of our 2023 Form 10-K for additional information on our share repurchase program.

During the six months ended June 30, 2024, we repurchased from the open market 1.2 million shares of our common stock for a total cost, inclusive of taxes and transaction costs, of $150 million. There were no open market repurchases for the three months ended June 30, 2024. During the three and six months ended June 30, 2023, we repurchased from the open market 3.0 million and 6.2 million shares, respectively, of our common stock for a total cost, inclusive of taxes and transaction costs, of $252 million and $503 million, respectively.

In 2024, we entered into accelerated share repurchase (ASR) agreements with financial institutions to initiate share repurchases of our common stock. Under the ASR agreements, we paid a specified amount to the financial institution and received an initial delivery of shares of common stock, which resulted in an immediate reduction in the number of our shares outstanding. Based on the terms of the ASR agreements below, we received an initial share delivery based on 80% of the ASR agreements' cost. Upon settlement of the ASR agreements, the financial institution delivers additional incremental shares. The total number of shares ultimately delivered, and therefore the average price paid per share, is determined at the end of the applicable purchase period of each ASR agreement based on the average of the daily-volume weighted average share price, less a discount.

The following table summarizes each ASR agreement for the six months ended June 30, 2024:

(in millions, except average price paid per share)
ASR Agreement Initiation						Total Cost						Initial Shares Received						ASR Agreement Settlement						Additional Shares Received						Total Number of Shares Purchased						Average Price Paid per Share
March 2024						$	354					1.7						May 2024						0.2						1.9						$	182.65
May 2024						$	505					1.8						July 2024						0.6						2.4						$	211.40

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Shareholders' Equity

Changes in Accumulated Other Comprehensive Loss (All Registrants)

The following tables present changes in AOCI, net of tax, by component:

Three Months Ended June 30, 2024			Gains (losses) on Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items**(a)**						Foreign Currency Items						Total
Beginning balance			$	(10)					$	(2,143)					$	(27)					$	(2,180)
OCI before reclassifications			—						(2)						(1)						(3)
Amounts reclassified from AOCI			2						20						—						22
Net current-period OCI			2						18						(1)						19
Ending balance			$	(8)					$	(2,125)					$	(28)					$	(2,161)
Three Months Ended June 30, 2023			Gains (losses) on Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items**(a)**						Foreign Currency Items						Total
Beginning balance			$	(9)					$	(1,773)					$	(26)					$	(1,808)
OCI before reclassifications			(1)						—						3						2
Amounts reclassified from AOCI			1						5						—						6
Net current-period OCI			—						5						3						8
Ending balance			$	(9)					$	(1,768)					$	(23)					$	(1,800)

Six Months Ended June 30, 2024			Gains (losses) on Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items**(a)**						Foreign Currency Items						Total
Beginning balance			$	(10)					$	(2,157)					$	(24)					$	(2,191)
OCI before reclassifications			—						(5)						(4)						(9)
Amounts reclassified from AOCI			2						37						—						39
Net current-period OCI			2						32						(4)						30
Ending balance			$	(8)					$	(2,125)					$	(28)					$	(2,161)

Six Months Ended June 30, 2023			Gains (losses) on Cash Flow Hedges						Pension and Non-Pension Postretirement Benefit Plan Items**(a)**						Foreign Currency Items						Total
Beginning balance			$	(9)					$	(1,725)					$	(26)					$	(1,760)
OCI before reclassifications			(1)						(53)						3						(51)
Amounts reclassified from AOCI			1						10						—						11
Net current-period OCI			—						(43)						3						(40)
Ending balance			$	(9)					$	(1,768)					$	(23)					$	(1,800)

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(a)AOCI amounts are included in the computation of net periodic pension and OPEB cost. See Note 9 — Retirement Benefits for additional information. See our Statements of Operations and Comprehensive Income for individual components of AOCI.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Shareholders' Equity

The following table presents income tax (expense) benefit allocated to each component of our other comprehensive income (loss):

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Pension and non-pension postretirement benefit plans:
Actuarial loss reclassified to periodic benefit cost			$	(6)					$	(3)					$	(12)					$	(5)
Pension and non-pension postretirement benefit plans valuation adjustment			—						—						2						18

15. Variable Interest Entities

At June 30, 2024 and December 31, 2023, we consolidated several VIEs or VIE groups for which we are the primary beneficiary (see Consolidated VIEs below) and had significant interests in several other VIEs for which we do not have the power to direct the entities’ activities and, accordingly, we were not the primary beneficiary (see Unconsolidated VIEs below). Consolidated and unconsolidated VIEs are aggregated to the extent that the entities have similar risk profiles.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Variable Interest Entities

Consolidated VIEs

The table below shows the carrying amounts and classification of the consolidated VIEs’ assets and liabilities included in the consolidated financial statements as of June 30, 2024 and December 31, 2023. The assets, except as noted in the footnotes to the table below, can only be used to settle obligations of the VIEs. The liabilities, except as noted in the footnotes to the table below, are such that creditors, or beneficiaries, do not have recourse to our general credit.

			June 30, 2024						December 31, 2023
Cash and cash equivalents			$	56					$	48
Restricted cash and cash equivalents			57						47
Accounts receivable
Customer accounts receivable, net			29						19
Other accounts receivable, net			9						10
Inventories, net
Materials and supplies			13						14
Other current assets			1,596						1,249
Total current assets			1,760						1,387
Property, plant, and equipment, net			1,968						1,979
Other noncurrent assets			154						166
Total noncurrent assets			2,122						2,145
Total assets(a)			$	3,882					$	3,532
Long-term debt due within one year			$	64					$	63
Accounts payable and accrued expenses			55						31
Other current liabilities			—						—
Total current liabilities			119						94
Long-term debt			676						704
Asset retirement obligations			195						190
Other noncurrent liabilities			2						2
Total noncurrent liabilities			873						896
Total liabilities			$	992					$	990

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(a)Our balances include unrestricted assets for current unamortized energy contract assets of $22 million and $22 million, disclosed within other current assets in the table above and noncurrent unamortized energy contract assets of $144 million and $155 million, disclosed within other noncurrent assets in the table above as of June 30, 2024 and December 31, 2023, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Variable Interest Entities

As of June 30, 2024 and December 31, 2023, our consolidated VIEs included the following:

Consolidated VIE or VIE groups:						Reason entity is a VIE:						Reason we are the primary beneficiary:
CRP - A collection of wind and solar project entities. We have a 51% equity ownership in CRP. See additional discussion below.						Similar structure to a limited partnership and the limited partners do not have kick out rights with respect to the general partner.						We conduct the operational activities.
Bluestem Wind Energy Holdings, LLC - A Tax Equity structure which is consolidated by CRP.						Similar structure to a limited partnership and the limited partners do not have kick out rights with respect to the general partner.						We conduct the operational activities.
Antelope Valley - A solar generating facility, which is 100% owned by us. Antelope Valley sells all of its output to PG&E through a PPA.						The PPA contract absorbs variability through a performance guarantee.						We conduct all activities.
NER - A bankruptcy remote, special purpose entity which is 100% owned by us, which purchases certain of our customer accounts receivable arising from the sale of retail electricity. NER’s assets will be available first and foremost to satisfy the claims of the creditors of NER. Refer to Note 6 —Accounts Receivable for additional information on the sale of receivables.						Equity capitalization is insufficient to support its operations.						We conduct all activities.

Unconsolidated VIEs

Our variable interests in unconsolidated VIEs generally include equity investments and energy purchase and sale contracts. For the equity investments, the carrying amount of the investments is reflected in the Consolidated Balance Sheets in Investments. For the energy purchase and sale contracts (commercial agreements), the carrying amount of assets and liabilities in the Consolidated Balance Sheets that relate to our involvement with the VIEs are predominantly related to working capital accounts and generally represent the amounts owed by, or owed to, us for the deliveries associated with the current billing cycles under the commercial agreements.

As of June 30, 2024 and December 31, 2023, we had significant unconsolidated variable interests in several VIEs for which we were not the primary beneficiary. These interests include certain equity method investments and certain commercial agreements.

The following table presents summary information about our significant unconsolidated VIE entities:

			June 30, 2024																		December 31, 2023
			Commercial Agreement VIEs						Equity Investment VIEs						Total						Commercial Agreement VIEs						Equity Investment VIEs						Total
Total assets(a)			$	680					$	—					$	680					$	704					$	—					$	704
Total liabilities(a)			64						—						64						77						—						77
Our ownership interest in VIE(a)			—						—						—						—						—						—
Other ownership interests in VIE(a)			616						—						616						627						—						627

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(a)These items represent amounts on the unconsolidated VIE balance sheets, not in the Consolidated Balance Sheets. These items are included to provide information regarding the relative size of the unconsolidated VIEs. We do not have any exposure to loss as we do not have a carrying amount in the equity investment VIEs as of June 30, 2024 and December 31, 2023.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Variable Interest Entities

As of June 30, 2024 and December 31, 2023 the unconsolidated VIEs consist of:

Unconsolidated VIE groups:						Reason entity is a VIE:						Reason we are not the primary beneficiary:
Energy Purchase and Sale agreements - We have several energy purchase and sale agreements with generating facilities.						PPA contracts that absorb variability through fixed pricing.						We do not conduct the operational activities.

16. Supplemental Financial Information

Supplemental Statement of Operations and Comprehensive Income Information

The following tables provide additional information about items recorded in the Consolidated Statements of Operations and Comprehensive Income.

			Operating revenues
			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Operating lease income			$	13					$	13					$	17					$	17
Variable lease income			68						66						119						124

			Taxes other than income taxes
			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Gross receipts(a)			$	32					$	35					$	65					$	68
Property			73						65						139						121
Payroll			35						36						73						70

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(a)Represent gross receipts taxes related to our retail operations. The offsetting collection of gross receipts taxes from customers is recorded in Operating revenues in the Consolidated Statements of Operations and Comprehensive Income.

			Other, net
			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Decommissioning-related activities:
Net realized income on NDT funds(a)
Regulatory Agreement Units			$	91					$	135					$	257					$	449
Non-Regulatory Agreement Units			32						91						115						285
Net unrealized gain (loss) on NDT funds
Regulatory Agreement Units			(14)						56						211						85
Non-Regulatory Agreement Units			5						27						139						45
Regulatory offset to NDT fund-related activities(b)			(63)						(154)						(375)						(429)
Total decommissioning-related activities			51						155						347						435
Non-service net periodic benefit credit(c)			(4)						14						(6)						27
Net realized and unrealized gains (losses) from equity investments			(58)						419						(11)						414
Other			17						17						38						43
Total Other, net			$	6					$	605					$	368					$	919

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 16 — Supplemental Financial Information

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(a)Realized income includes interest, dividends and realized gains and losses on sales of NDT fund investments.

(b)Includes the elimination of decommissioning-related activities and the elimination of income taxes related to all NDT fund activity for the Regulatory Agreement Units.

(c)The non-service credit (cost) components are included in Other, net, in accordance with single employer plan accounting. See Note 9 — Retirement Benefits for additional information.

Supplemental Cash Flow Information

The following tables provide additional information about items recorded within our Consolidated Statements of Cash Flows.

			Depreciation, amortization, and accretion
			Six Months Ended June 30,
			2024						2023
Property, plant, and equipment(a)			$	590					$	531
Amortization of intangible assets, net(a)			12						11
Amortization of energy contract assets and liabilities(b)			17						17
Nuclear fuel(c)			433						373
ARO accretion(d)			336						287
Total depreciation, amortization, and accretion			$	1,388					$	1,219

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(a)Included in Depreciation and amortization expense in the Consolidated Statements of Operations and Comprehensive Income.

(b)Included in Operating revenues or Purchased power and fuel expense in the Consolidated Statements of Operations and Comprehensive Income.

(c)Included in Purchased power and fuel expense in the Consolidated Statements of Operations and Comprehensive Income.

(d)Included in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.

			Other non-cash operating activities
			CEG Parent												Constellation
			Six Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Other decommissioning-related activity(a)			$	(246)					$	(217)					$	(246)					$	(217)
Energy-related options(b)			30						121						30						121
(Gain) loss on sale of receivables			32						46						32						46
Amortization of operating ROU asset			25						24						25						24
Long-term incentive plan			15						34						—						—
Pension and non-pension postretirement benefit costs			56						23						56						23

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(a)Includes the elimination of decommissioning-related activities for the Regulatory Agreement Units, including the elimination of operating revenues, ARO accretion, ARC amortization, investment income, and income taxes related to all NDT fund activity for these units.

(b)Includes option premiums reclassified to realized at the settlement of the underlying contracts and recorded to results of operations.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 16 — Supplemental Financial Information

The following table provides a reconciliation of cash, restricted cash, and cash equivalents reported within our Consolidated Balance Sheets that sum to the total of the same amounts in the Consolidated Statements of Cash Flows.

			CEG Parent						Constellation
June 30, 2024
Cash and cash equivalents			$	311					$	308
Restricted cash and cash equivalents			72						64
Total cash, restricted cash, and cash equivalents			$	383					$	372
December 31, 2023
Cash and cash equivalents			$	368					$	366
Restricted cash and cash equivalents			86						74
Total cash, restricted cash, and cash equivalents			$	454					$	440
June 30, 2023
Cash and cash equivalents			$	269					$	269
Restricted cash and cash equivalents			56						48
Total cash, restricted cash, and cash equivalents			$	325					$	317

For additional information on restricted cash, see Note 1 — Basis of Presentation of our 2023 Form 10-K.

Supplemental Balance Sheet Information

The following table provides additional information about items recorded within our Consolidated Balance Sheets.

			Accounts payable and accrued expenses
June 30, 2024			CEG Parent						Constellation
Accounts payable			$	1,360					$	1,348
Compensation-related accruals(a)			536						402
Taxes accrued(b)			201						183
December 31, 2023
Accounts payable			$	1,302					$	1,289
Compensation-related accruals(a)			680						576
Taxes accrued			399						390

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(a)Primarily includes accrued payroll, bonuses and other incentives, vacation, and benefits.

(b)Includes $102 million related to nuclear PTC that was used to offset the current tax liability. See Note 5 — Government Assistance for additional information on the nuclear PTC.