What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-24 compared with 2025-02-18 · 749 added, 882 removed, 2122 unchanged (43% of the section changed)

41 unchanged sentences

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

A company’s internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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

54 unchanged sentences

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

These procedures also included, among others;

(i) testing management’s process for estimating the decommissioning obligations by evaluating the appropriateness of the discounted cash flow model;

These procedures also included, among others (i) testing management’s process for estimating the decommissioning obligations by evaluating the appropriateness of the discounted cash flow model;

(ii) testing the completeness and accuracy of data used by management;

10 unchanged sentences

Operating revenues $ 25,533 $ 23,568 $ 24,918

Operating revenues $ 23,568 $ 24,918 $ 24,280

Operating revenues from affiliates — — 160

Total operating revenues 23,568 24,918 24,440

Operating expenses

Purchased power and fuel 14,681 11,419 16,001

Purchased power and fuel from affiliates — — 5

Operating and maintenance 6,159 6,159 5,685

Operating and maintenance from affiliates — — 44

Depreciation and amortization 985 1,123 1,096

5 unchanged sentences

Interest expense, net ( 511 ) ( 506 ) ( 431 )

Interest expense to affiliates — — ( 1 )

Other, net 936 670 1,268

2 unchanged sentences

Income tax (benefit) expense 1,187 774 859

774 859 ( 388 )

Equity in income (losses) of unconsolidated affiliates ( 1 ) ( 4 ) ( 11 )

10 unchanged sentences

Unrealized gain (loss) on cash flow hedges 7 4 ( 1 )

4 ( 1 ) ( 1 )

Unrealized gain (loss) on foreign currency translation 21 ( 10 ) 2

( 10 ) 2 ( 3 )

Other comprehensive income (loss), net of income taxes ( 123 ) ( 111 ) ( 431 )

18 unchanged sentences

Depreciation, amortization, and accretion, including nuclear fuel and energy contract amortization 2,601 2,700 2,514

Deferred income taxes and amortization of ITC 222 251 ( 643 )

Deferred income taxes and amortization of ITCs

Net fair value changes related to derivatives 645 ( 1,297 ) 996

6 unchanged sentences

Accounts receivable ( 363 ) 688 396

Receivables from and payables to affiliates, net — — 20

Inventories ( 134 ) ( 99 ) 60

21 unchanged sentences

Retirement of long-term debt ( 1,076 ) ( 121 ) ( 168 )

Retirement of long-term debt to affiliate — — ( 258 )

Contributions from Exelon — — 1,750

Dividends paid on common stock ( 486 ) ( 444 ) ( 366 )

5 unchanged sentences

Cash, restricted cash, and cash equivalents at end of period $ 3,748 $ 3,129 $ 454

Supplemental cash flow information

Increase (decrease) in capital expenditures not paid $ 129 $ 16 $ ( 23 )

Supplemental disclosure of non-cash investing and financing activities

Increase (decrease) in DPP

9 unchanged sentences

Restricted cash and cash equivalents 107 107

Accounts receivable

Customer accounts receivable (net of allowance for credit losses of $ 190 and $ 56 as of December 31, 2024 and 2023, respectively)

Other accounts receivable (net of allowance for credit losses of $ 6 and $ 5 as of December 31, 2024 and 2023, respectively)

Mark-to-market derivative assets 843 1,179

Accounts receivable, net

Derivative assets

Inventories, net 1,736 1,600

Natural gas, oil, and emission allowances 243 284

Materials and supplies 1,357 1,216

Renewable energy credits 789 797

1 unchanged sentence

Total current assets 12,119 10,776

Property, plant, and equipment (net of accumulated depreciation and amortization of $ 18,088 and $ 17,423 as of December 31, 2024 and 2023, respectively)

Property, plant, and equipment (net of accumulated depreciation and amortization of $ 19,072 and $ 18,088 , respectively)

22,474 21,235

1 unchanged sentence

Nuclear decommissioning trust funds 19,336 17,305

Investments 640 563

Goodwill 420 420

Mark-to-market derivative assets 372 995

Deferred income taxes — 52

Derivative assets

Other 2,450 2,818

2 unchanged sentences

$ 57,249 $ 52,926

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Corporation and Subsidiary Companies

Consolidated Balance Sheets

(In millions) 2024 2023

LIABILITIES AND EQUITY

3 unchanged sentences

Accounts payable and accrued expenses 4,294 3,943

Mark-to-market derivative liabilities 467 632

Derivative liabilities

Renewable energy credit obligation 1,075 1,076

6 unchanged sentences

Pension and non-pension postretirement benefit obligations 1,977 1,875

Spent nuclear fuel obligation 1,366 1,296

Payables related to Regulatory Agreement Units 5,334 4,518

Mark-to-market derivative liabilities 399 419

Derivative liabilities

Other 2,740 2,585

4 unchanged sentences

Shareholders' equity

Common stock ( No par value, 1,000 shares authorized, 313 shares and 317 shares outstanding as of December 31, 2024 and 2023, respectively)

Common stock ( No par value, 1,000 shares authorized, 312 shares and 313 shares outstanding, respectively)

11,043 11,402

1 unchanged sentence

Accumulated other comprehensive income (loss), net ( 2,425 ) ( 2,302 )

( 2,302 ) ( 2,191 )

Total shareholders' equity 14,517 13,166

8 unchanged sentences

Consolidated Statements of Changes in Equity

Shareholder's Equity Noncontrolling

Interests Predecessor Member's Equity (a)

(In millions, shares in thousands) Issued

Shares Common Stock Retained Earnings (Deficit)

Shareholders' Equity

Noncontrolling Interests

(In millions, shares in thousands) Issued Shares

Retained Earnings (Deficit)

Accumulated Other Comprehensive Income (Loss), net

Balance, December 31, 2022 327,130 $ 13,274 $ ( 496 ) $ ( 1,760 ) $ 354 $ 11,372

Net Income (loss) from January 1, 2022 to January 31, 2022 — — — — — 151 151

Separation related adjustments — — — ( 2,006 ) 7 1,802 ( 197 )

Changes in equity of noncontrolling interest from January 1, 2022 to January 31, 2022 — — — — ( 7 ) — ( 7 )

Consummation of separation 326,664 13,203 — — — ( 13,203 ) —

Net Income (loss) from February 1, 2022 to December 31, 2022 — — ( 311 ) — ( 7 ) — ( 318 )

Net Income (loss) — — 1,623 — ( 46 ) 1,577

Employee incentive plans 902 81 — — — 81

3 unchanged sentences

— — ( 366 ) — — ( 366 )

Common stock repurchased ( 10,560 ) ( 1,000 ) — — — ( 1,000 )

Other comprehensive income (loss), net of income taxes — — — ( 431 ) — ( 431 )

16 unchanged sentences

Common stock repurchased ( 1,282 ) ( 404 ) — — — ( 404 )

Capped call option contracts — 6 — — — 6

Other comprehensive income (loss), net of income taxes — — — ( 123 ) — ( 123 )

— — — ( 111 ) — — ( 111 )

Balance, December 31, 2025 312,355 $ 11,043 $ 5,899 $ ( 2,425 ) $ 336 $ 14,853

(a) Represents Constellation’s predecessor member's equity prior to the separation transaction.

Upon completion of the separation, the predecessor member's equity was transferred to CEG Parent’s Common stock.

See Note 1 — Basis of Presentation for additional information on the separation.

See the Combined Notes to Consolidated Financial Statements

4 unchanged sentences

Operating revenues $ 25,533 $ 23,568 $ 24,918

Operating revenues $ 23,568 $ 24,918 $ 24,280

Operating revenues from affiliates — — 160

Total operating revenues 23,568 24,918 24,440

Operating expenses

Purchased power and fuel 14,681 11,419 16,001

Purchased power and fuel from affiliates — — 5

Operating and maintenance 6,159 6,159 5,685

Operating and maintenance from affiliates — — 44

Depreciation and amortization 985 1,123 1,096

5 unchanged sentences

Interest expense, net ( 511 ) ( 506 ) ( 431 )

Interest expense to affiliates — — ( 1 )

Other, net 936 670 1,268

2 unchanged sentences

Income tax (benefit) expense 1,187 774 859

774 859 ( 388 )

Equity in income (losses) of unconsolidated affiliates ( 1 ) ( 4 ) ( 11 )

10 unchanged sentences

Unrealized gain (loss) on cash flow hedges 7 4 ( 1 )

4 ( 1 ) ( 1 )

Unrealized gain (loss) on foreign currency translation 21 ( 10 ) 2

( 10 ) 2 ( 3 )

Other comprehensive income (loss), net of income taxes ( 123 ) ( 111 ) ( 431 )

44 unchanged sentences

Retirement of long-term debt ( 1,076 ) ( 121 ) ( 168 )

Retirement of long-term debt to affiliate — — ( 258 )

Distributions to member ( 1,035 ) ( 1,441 ) ( 1,239 )

Contributions from Exelon — — 1,750

Contributions from member 156 — —

4 unchanged sentences

Cash, restricted cash, and cash equivalents at end of period $ 3,720 $ 3,115 $ 440

Supplemental cash flow information

Increase (decrease) in capital expenditures not paid $ 129 $ 16 $ ( 23 )

Supplemental disclosure of non-cash investing and financing activities

Increase (decrease) in DPP

9 unchanged sentences

Restricted cash and cash equivalents 79 97

Accounts receivable

Customer accounts receivable (net of allowance for credit losses of $ 190 and $ 56 as of December 31, 2024 and 2023, respectively)

Other accounts receivable (net of allowance for credit losses of $ 6 and $ 5 as of December 31, 2024 and 2023, respectively)

Mark-to-market derivative assets 843 1,179

Accounts receivable, net

Derivative assets

Inventories, net 1,736 1,600

Natural gas, oil, and emission allowance 243 284

Materials and supplies 1,357 1,216

Renewable energy credits 789 797

1 unchanged sentence

Total current assets 12,075 10,747

Property, plant, and equipment (net of accumulated depreciation and amortization of $ 18,088 and $ 17,423 as of December 31, 2024 and 2023, respectively)

Property, plant, and equipment (net of accumulated depreciation and amortization of $ 19,072 and $ 18,088 , respectively)

22,474 21,235

1 unchanged sentence

Nuclear decommissioning trust funds 19,336 17,305

Investments 640 563

Goodwill 420 420

Mark-to-market derivative assets 372 995

Deferred income taxes — 52

Derivative assets

Other 2,443 2,814

2 unchanged sentences

$ 57,198 $ 52,893

See the Combined Notes to Consolidated Financial Statements

Constellation Energy Generation, LLC and Subsidiary Companies

Consolidated Balance Sheets

(In millions) 2024 2023

LIABILITIES AND EQUITY

4 unchanged sentences

Payables to affiliates 365 349

Mark-to-market derivative liabilities 467 632

Derivative liabilities

Renewable energy credit obligation 1,075 1,076

6 unchanged sentences

Pension and non-pension postretirement benefit obligations 1,977 1,875

Spent nuclear fuel obligation 1,366 1,296

Payables related to Regulatory Agreement Units 5,334 4,518

Mark-to-market derivative liabilities 399 419

Derivative liabilities

Other 2,583 2,410

7 unchanged sentences

Accumulated other comprehensive income (loss), net ( 2,425 ) ( 2,302 )

( 2,302 ) ( 2,191 )

Total member’s equity 14,527 13,210

8 unchanged sentences

Consolidated Statements of Changes in Equity

Member’s Equity Noncontrolling

Interests Total

(In millions) Membership

Interest Undistributed Earnings (Deficit) Accumulated Other Comprehensive Income (Loss), net

Member’s Equity Noncontrolling Interests

(In millions) Membership Interest

Undistributed Earnings (Deficit)

Accumulated Other Comprehensive Income (Loss), net

Balance, December 31, 2022 $ 12,408 $ 412 $ ( 1,760 ) $ 354 $ 11,414

Net Income (loss) — 1,623 — ( 46 ) 1,577

Separation-related adjustments 1,844 ( 11 ) ( 2,006 ) 7 ( 166 )

Changes in equity of noncontrolling interests — — — 53 53

Distribution to member ( 871 ) ( 368 ) — — ( 1,239 )

Contribution from member 82 — — — 82

Other comprehensive income (loss), net of income taxes — — ( 431 ) — ( 431 )

7 unchanged sentences

Changes in equity of noncontrolling interest — — — ( 41 ) ( 41 )

Contribution from member 156 — — — 156

Distribution to member ( 550 ) ( 485 ) — — ( 1,035 )

6 unchanged sentences

Description of Business

We are the nation's largest 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.

We are the nation's largest producer of clean energy and a leading supplier of energy products and services.

Our generating capacity includes primarily nuclear, wind, solar, 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, public sector, and residential customers in markets across multiple geographic regions.

8 unchanged sentences

The Consolidated Financial Statements include the accounts of our subsidiaries and all intercompany transactions have been eliminat ed.

CEG Parent's prior period financial statements have been adjusted to reflect the balances of Constellation in accordance with applicable guidance.

Certain prior period amounts have been reclassified to conform to the presentation in the current period.

Amounts disclosed relate to CEG Parent and Constellation unless specifically noted as relating to CEG Parent only.

1 unchanged sentence

We own 100% of our significant consolidated subsidiaries, either directly or indirectly, except for certain consolidated VIEs.

The remaining interests in the consolidated VIEs are included in noncontrolling interests on the Consolidated Balance Sheets.

The remaining interests in the consolidated VIEs are included in noncontrolling interests in the Consolidated Balance Sheets.

See Note 21 — Variable Interest Entities for additional information on consolidated VIEs.

3 unchanged sentences

Under proportionate consolidation, we separately record our proportionate share of the assets, liabilities, revenues and expenses related to the undivided interest in the asset.

See Note 9 — Jointly-Owned Electric Plants for additional information on application of proportionate consolidation.

See Note 9 — Jointly-Owned Electric Plants for additional information on the application of proportionate consolidation.

We apply equity method accounting when we have a significant influence over an investee through an ownership in equity, which generally approximates to a 20% to 50% voting interest.

1 unchanged sentence

Under equity method accounting, we report our interest in the entity as an investment and our percentage share of the earnings from the entity as single line items in our consolidated financial statements.

We use accounting for investments in equity securities with or without readily determinable fair values if we lack a significant influence, which generally results when we hold less than 20% of the common stock of an entity.

We use accounting for investments in equity securities with or without readily determinable fair values if we lack significant influence, which generally results when we hold less than 20% of the common stock of an entity.

Under accounting for investments in equity securities with readily determinable fair values, the investments are reported based on quoted prices in active markets and realized and unrealized gains and losses are included in earnings.

3 unchanged sentences

Note 1 — Basis of Presentation

Separation from Exelon

Prior to completion of the separation, our financial statements include certain transactions with affiliates of Exelon, which are disclosed as related party transactions.

After February 1, 2022, all transactions with Exelon or its affiliates are no longer related party transactions.

In order to govern the ongoing relationships with Exelon after the separation, and to facilitate an orderly transition, we entered into several agreements with Exelon, including the following:

• Separation Agreement – sets forth the principal actions to be taken in connection with the separation, including the transfer of assets and assumption of liabilities and establishes certain rights and obligations between us following the distribution

• TSA – governs all matters relating to the provision of services between us and Exelon on a transitional basis, in addition to providing us with certain services.

The services include support for information technology, accounting, finance, human resources, security, and various other administrative and operational services (the TSA ended in June 2024)

• Employee Matters Agreement (EMA) – addresses certain employment, compensation and benefits matters, including the allocation of employees between us and Exelon and the allocation and treatment of certain assets and liabilities relating to our employees and former employees

• TMA – governs the respective rights, responsibilities, and obligations between us and Exelon with respect to all tax matters (excluding employee-related taxes covered under the EMA)

Pursuant to the Separation Agreement, we received a cash contribution of $ 1.75 billion from Exelon on January 31, 2022, the proceeds of which were used to settle $ 258 million of an intercompany loan from Exelon and $ 200 million of short-term debt outstanding prior to separation, in addition to a $ 192 million contribution to our pension plans.

The amounts Exelon billed us for services pursuant to the TSA were not material in 2024 and $ 151 million and $ 266 million for the years ended December 31, 2023, and 2022, respectively.

The amounts we billed Exelon for services pursuant to the TSA were not material to the periods presented.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Areas in which significant estimates have been made include, but are not limited to, the accounting for nuclear decommissioning costs and other AROs, pension and OPEB plans, inventory reserves, allowance for credit losses, long-lived asset valuations and impairment assessments, derivative instruments, goodwill, unamortized energy contracts, fixed asset depreciation, environmental costs and other loss contingencies, taxes and unbilled energy revenues.

Actual results could differ from those estimates.

Areas in which significant estimates have been made include, but are not limited to, the accounting for nuclear decommissioning costs and other AROs, pension and OPEB plans, inventory reserves, allowance for credit losses, long-lived asset valuations and impairment assessments, derivative instruments, goodwill, UECs, fixed asset depreciation, environmental costs and other loss contingencies, taxes and unbilled energy revenues.

Actual results could differ materially from those estimates.

Operating Revenues.

7 unchanged sentences

Taxes Directly Imposed on Revenue-Producing Transactions.

We collect certain taxes from customers such as sales and gross receipts taxes, along with other taxes, surcharges and fees, that are levied by state or local

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

governments on the sale or distribution of electricity and natural gas and any taxable energy-related products and services.

We collect certain taxes from customers such as sales and gross receipts taxes, along with other taxes, surcharges and fees, that are levied by state or local governments on the sale or distribution of electricity and natural gas and any taxable energy-related products and sustainable solutions.

Some of these taxes are imposed on the customer, but paid by us, while others are imposed on us.

10 unchanged sentences

We recognize a ROU asset and lease liability for operating leases with a term of greater than one year.

Operating lease ROU assets are included in Other deferred debits and other assets and operating lease liabilities are included in Other current liabilities and Other deferred credits and other liabilities on the Consolidated Balance Sheets.

The ROU asset is measured as the sum of (1) the present value of all remaining fixed and in-substance fixed payments using the rate implicit in the lease whenever that is readily determinable or our incremental borrowing rate, (2) any lease payments made at or before the commencement date (less any lease incentives received) and (3) any initial direct costs incurred.

3 unchanged sentences

Expense for operating leases and leases with a term of one year or less is recognized on a straight-line basis over the term of the lease, unless another systematic and rational basis is more representative of the derivation of benefit from use of the leased property.

Variable lease payments are recognized in the period in which the related obligation is incurred and consist primarily of payments for purchases of electricity under contracted generation that are based on the electricity produced by those generating assets.

Variable lease payments are recognized in the period in which the related obligation is incurred and consist primarily of payments for purchases of electricity under contracted

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

generation that are based on the electricity produced by those generating assets.

Operating lease expense and variable lease payments are recorded to Purchased power and fuel expense for contracted generation or Operating and maintenance expense for all other lease agreements in the Consolidated Statements of Operations and Comprehensive Income.

9 unchanged sentences

ITCs have been deferred in the Consolidated Balance Sheets and are recognized in book income over the life of the related property.

We account for uncertain

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

income tax positions using a benefit recognition model with a two-step approach;

We account for uncertain income tax positions using a benefit recognition model with a two-step approach;

a more-likely-than-not recognition criterion and a measurement approach that measures the position as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement.

9 unchanged sentences

Allowance for Credit Losses on Accounts Receivables

The allowance for credit losses reflects our best estimate of losses on the customers' accounts receivable balances based on historical experience, current information, and reasonable and supportable forecasts.

The allowance for credit losses for our retail and wholesale customers is based on accounts receivable aging historical experience coupled with specific identification through a credit monitoring process, which considers current conditions and forward-looking information such as industry trends, macroeconomic factors, changes in the regulatory environment, external credit ratings, publicly available news, payment status, payment history, and the exercise of collateral calls.

The allowance for credit losses reflects our best estimate of losses on the customers' accounts receivable balances based on historical experience and current information.

The allowance for credit losses for our retail and wholesale customers is based on accounts receivable aging historical experience coupled with specific identification through a credit monitoring process, which considers current conditions such as industry trends, macroeconomic factors, changes in the regulatory environment, external credit ratings, publicly available news, payment status, payment history, and the exercise of collateral calls.

When a wholesale customer’s risk characteristics are no longer aligned with the pooled population, we use specific identification to develop an allowance for credit losses.

Adjustments to the allowance for credit losses are recorded in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.

Adjustments to the allowance for credit losses are

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

recorded in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.

We have certain non-customer receivables in Current Assets and Other deferred debits and other assets which primarily are with governmental agencies.

8 unchanged sentences

Inventory is recorded at the lower of weighted average cost or net realizable value.

Provisions are recorded for excess and obsolete inventory.

Natural gas, oil, and emission allowances are generally included in Inventory when purchased and are expensed to Purchased power and fuel expense when consumed.

Materials and supplies are generally included in Inventory when purchased and are expensed to Operating and maintenance, or capitalized to Property, plant and equipment, as appropriate, when installed or used.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

Reserves are recorded for excess and obsolete inventory.

Natural gas, oil, and emission allowances are generally included in Inventory when delivered and are expensed to Purchased power and fuel expense when consumed.

Materials and supplies are generally included in Inventory when delivered and are expensed to Operating and maintenance, or capitalized to Property, plant and equipment, as appropriate, when installed or used.

Debt and Equity Security Investments

6 unchanged sentences

See Note 10 — Asset Retirement Obligations and Note 17 — Fair Value of Financial Assets and Liabilities for additional information.

Equity Security Investments with Readily Determinable Fair Values.

We have certain equity securities with readily determinable fair values.

Realized and unrealized gains and losses are included in Other, net in the Consolidated Statements of Operations and Comprehensive Income.

See Note 17 — Fair Value of Financial Assets and Liabilities for additional information.

Equity Security Investments without Readily Determinable Fair Values.

We have certain equity securities without readily determinable fair values.

We have elected to use the measurement alternative to measure these investments, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment.

Changes in measurement, are reported in Other, net in the Consolidated Statements of Operations and Comprehensive Income.

Equity Security Investments.

We hold equity securities both with and without readily determinable fair values.

For those with readily determinable fair values, realized and unrealized gains and losses are recognized in Other, net within the Consolidated Statements of Operations and Comprehensive Income.

For those without readily determinable fair values, we have elected the measurement alternative, which records investments at cost adjusted for observable transactions involving identical or similar investments of the same issuer, less impairment.

Changes in measurement under this alternative are also reported in Other, net within the Consolidated Statements of Operations and Comprehensive Income.

Investments in equity securities without readily determinable fair values are qualitatively assessed for impairment each reporting period.

If it is determined that the equity security is impaired, an impairment loss will be recognized in Other, net in the Consolidated Statements of Operations and Comprehensive Income in the amount by which the security’s carrying amount exceeds its fair value.

See Note 17 — Fair Value of Financial Assets and Liabilities for additional information.

3 unchanged sentences

When appropriate, acquired cost also includes capitalized interest.

Costs associated with nuclear outages and planned major maintenance activities, are expensed to Operating and maintenance expense or capitalized to Property, plant, and equipment based on the nature of the activities in the period incurred.

The cost of repairs and maintenance and minor replacements of property is charged to Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income as incurred.

Costs associated

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

with outages and planned major maintenance activities are expensed to Operating and maintenance expense or capitalized to Property, plant, and equipment based on the nature of the activities in the period incurred.

The cost of repairs and maintenance and minor replacements of property are charged to Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income as incurred.

Upon retirement, the cost of property is generally charged to accumulated depreciation in accordance with the composite and group methods of depreciation.

13 unchanged sentences

See Note 8 — Property, Plant, and Equipment, Note 9 — Jointly-Owned Electric Plants and Note 22 — Supplemental Financial Information for additional information.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

The cost of nuclear fuel is capitalized in Property, plant and equipment and charged to Purchased power and fuel using the unit-of-production method.

13 unchanged sentences

We estimate and recognize a liability for our legal obligation to perform asset retirement activities even though the timing and/or methods of settlement may be conditional on future events.

We generally update our nuclear decommissioning ARO annually, unless circumstances warrant more frequent updates, based on our annual evaluation of cost escalation factors and probabilities assigned to the multiple outcome scenarios within our probability-weighted discounted cash flow models.

We generally update our nuclear decommissioning AROs annually, unless circumstances warrant more frequent updates, based on our annual evaluation of cost escalation factors and probabilities assigned to the multiple outcome scenarios within our probability-weighted discounted cash flow models.

Our multiple outcome scenarios are generally based on decommissioning cost studies which are updated, on a rotational basis, for each of our nuclear units at least every five years, unless circumstances warrant more frequent updates.

AROs are accreted throughout each year to reflect the time value of money for these present value obligations through a charge to Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income for Non-Regulatory Agreement Units and through an offsetting decrease in noncurrent payables related to Regulatory Agreement Units.

AROs are accreted throughout each year to reflect the time value of money for these present value obligations through a charge to Operating and

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

maintenance expense in the Consolidated Statements of Operations and Comprehensive Income for Non-Regulatory Agreement Units and through an offsetting decrease in noncurrent payables related to Regulatory Agreement Units.

See Note 10 — Asset Retirement Obligations for additional information.

Accounting Implications of the Regulatory Agreement Units

Based on the requirements of the ICC, PAPUC, and PUCT that dictate our obligations related to the shortfall or excess of NDT funds necessary for decommissioning the former ComEd, former PECO, and STP units, decommissioning-related activities net of applicable taxes, including realized and unrealized gains and losses on the NDT funds, depreciation of the ARC, and accretion of the decommissioning obligation are generally offset in the Consolidated Statements of Operations and Comprehensive Income and are recorded as noncurrent payables in the Consolidated Balance Sheets (within Payables related to Regulatory Agreement Units).

Based on the requirements of the ICC, PAPUC, and PUCT that dictate our obligations related to the shortfall or excess of NDT funds necessary for decommissioning the former ComEd, former PECO, and STP units, decommissioning-related activities net of applicable taxes, including realized and unrealized gains and losses on the NDT funds, depreciation of the ARC, and accretion of the decommissioning obligation are generally offset in the Consolidated Statements of Operations and Comprehensive Income and are recorded as noncurrent payables within Payables related to Regulatory Agreement Units in the Consolidated Balance Sheets.

See Note 10 — Asset Retirement Obligations for additional information.

6 unchanged sentences

Impairment losses are recorded in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 1 — Basis of Presentation

Goodwill represents the excess of the purchase price paid over the estimated fair value of the net assets acquired and liabilities assumed in the acquisition of a business.

6 unchanged sentences

These impairment losses are recorded in Equity in income (losses) of unconsolidated affiliates in the Consolidated Statements of Operations and Comprehensive Income.

Equity Security Investments.

Equity investments with readily determinable fair values are measured and recorded at fair value with any changes in fair value recorded in Other, net in the Consolidated Statements of Operations and Comprehensive Income.

For equity securities without readily determinable fair values, we have elected to use the measurement alternative to measure these investments, defined as cost adjusted for changes from observable transactions for identical or similar investments of the same issuer, less impairment.

Investments in equity securities without readily determinable fair values are qualitatively assessed for impairment each reporting period.

Derivative Financial Instruments

2 unchanged sentences

Amounts classified in earnings are included in Operating revenues, Purchased power and fuel, or Interest expense in the Consolidated Statements of Operations and Comprehensive Income based on the activity the transaction is economically hedging.

While most of the derivatives serve as economic hedges, there are also derivatives entered into for proprietary trading purposes, subject to our RMP, and changes in the fair value of those derivatives are recorded in Operating revenues in the Consolidated Statements of Operations and Comprehensive Income.

Cash inflows and outflows related to derivative instruments are included as a component of operating, investing, or financing cash flows in the Consolidated Statements of Cash Flows, depending on the nature of each transaction.

As part of the energy marketing business, we enter contracts to buy and sell energy to meet the requirements of our customers.

As part of our customer-facing business, we enter into contracts to buy and sell energy to meet the requirements of our customers.

These contracts include short-term and long-term commitments to purchase and sell energy and energy-related products in the energy markets with the intent and ability to deliver or take delivery of the underlying physical commodity.

3 unchanged sentences

See Note 15 — Derivative Financial Instruments for additional information.

Retirement Benefits

Effective upon separation, we sponsor defined benefit pension and OPEB plans as described in Note 14 — Retirement Benefits.

The plan obligations and costs of providing benefits under these plans were measured upon separation as of February 1, 2022 and are remeasured annually as of year-end.

The measurements involved various factors, assumptions, and accounting elections.

The impact of assumption changes or experiences different from that assumed on pension and OPEB obligations is recognized over time, not immediately in the Consolidated Statements of Operations and Comprehensive Income.

For defined benefit pension plans, gains or losses exceeding the greater of ten percent of the PBO or the MRV of plan assets are amortized over the expected average remaining service period of plan participants.

For OPEB plans, gains or losses exceeding the greater of ten percent of the APBO or the MRV of plan assets are amortized over the average future remaining lifetime of the current inactive population.

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 1 — Basis of Presentation

Retirement Benefits

We sponsor defined benefit pension and OPEB plans as described in Note 14 — Retirement Benefits.

The plan obligations and costs of providing benefits under these plans are remeasured annually as of year end.

The measurements involve various factors, assumptions, and accounting policy elections.

The impact of assumption changes or experiences different from that assumed on pension and OPEB obligations are recognized over time, not immediately in the Consolidated Statements of Operations and Comprehensive Income.

For defined benefit pension plans, gains or losses exceeding the greater of 10% of the PBO or the MRV of plan assets are amortized over the expected average remaining service period of plan participants.

For OPEB plans, gains or losses exceeding the greater of 10% of the APBO or the MRV of plan assets are amortized over the average future remaining lifetime of the current inactive population.

We separately report the pension and OPEB service cost and non-service cost (credit) components of net periodic benefit costs (credits) for all plans in our Consolidated Statements of Operations and Comprehensive Income.

Effective February 1, 2022 , the service cost component remains in Operating and maintenance expense and Property, plant, and equipment, net (where criteria for capitalization of direct labor has been met) while the non-service cost (credit) components are included in Other, net, in accordance with single employer plan accounting.

Renewable Energy Credits

The service cost component remains in Operating and maintenance expense and Property, plant, and equipment, net (where criteria for capitalization of direct labor has been met) while the non-service cost (credit) components are included in Other, net, in accordance with single-employer plan accounting.

Renewable Energy Certificates/Credits

RECs are included in Renewable energy credits in the Consolidated Balance Sheets.

Purchased RECs are recorded at cost on the date they are purchased and internally generated RECs are recognized at a zero-cost basis when generated.

Purchased RECs are recorded at cost when delivered and internally generated RECs are recognized at a zero-cost basis when generated.

The cost of RECs purchased on a stand-alone basis is based on the transaction price, while the cost of RECs acquired through PPAs represents the relative fair value at contract inception.

Generally, revenue for RECs that are sold to a counterparty under a contract that specifically identifies a power plant are recognized at a point in time when the power is produced.

Generally, revenue for RECs that are sold to a counterparty under a contract that specifically identifies a power plant is recognized at a point in time when the power is produced.

This includes both bundled and unbundled REC sales.

1 unchanged sentence

Mergers, Acquisitions, and Dispositions

Proposed Acquisition of Calpine Corporation

On January 10, 2025, we entered an agreement and plan of merger (Merger Agreement) with Calpine Corporation (Calpine) under which we will acquire all the outstanding equity interests of Calpine in a cash and stock transaction.

Calpine owns and operates a generation fleet of natural gas, geothermal, battery storage, and solar assets with over 27 GWs of generation capacity, in addition to a competitive retail electric supplier platform serving approximately 60 TWhs of load annually.

This acquisition is complementary to and aligns strategically with our existing business operations and provides both increased scale and meaningful market diversification.

The merger consideration at closing will consist of an aggregate of 50 million newly issued shares of our common stock, no par value, and $ 4.5 billion in cash.

We will also assume approximately $ 12.7 billion of Calpine’s outstanding debt.

We expect to fund the cash portion of the transaction through a combination of cash on hand and cash flow generated by Calpine in the period between signing and closing of the transaction (that will be assumed at closing).

Per the terms of the Merger Agreement, consummation of the transaction is to occur by December 31, 2025 (which date may be automatically extended to June 1, 2026, as further provided in the Merger Agreement).

The Merger Agreement also provides for certain termination rights, and under certain specified circumstances, we may be required to pay Calpine a termination fee of $ 500 million.

Completion of the transaction is conditioned upon review of the transaction by the DOJ, the expiration or termination of the applicable waiting period under the HSR Act, and approval by the FERC, NYPSC, and PUCT, in addition to other regulatory bodies, and is subject to other customary closing conditions.

In connection with certain of the regulatory approvals required for the transaction, the companies will propose to divest certain generating assets located in PJM, the only market where there is a material overlap of generation owned by both companies.

Acquisition of Calpine Corporation

On January 7, 2026, we acquired all the outstanding equity interest of Calpine in a cash and stock transaction for a purchase price of approximately $ 22 billion.

The merger consideration consisted of an aggregate of 50 million newly issued shares of our common stock, no par value, and approximately $ 4.5 billion in cash.

In connection with the merger, the newly issued shares will be subject to a lock-up period which expires on June 30, 2026 for 50 % of the shares and on June 30, 2027 for the remaining 50 %.

For information on the debt assumed as part of the transaction, see Note 16 — Debt and Credit Agreements.

Calpine owns and operates a generation fleet of natural gas, geothermal, battery storage, and solar assets with approximately 23 GWs of generation capacity, after considering divestitures required by certain regulatory approvals for the transaction, including the DOJ resolution.

This resolution was the final regulatory clearance to complete the merger of Calpine and Constellation.

The DOJ resolution requires that we divest five generating assets located in PJM, one in ERCOT, and Calpine's minority interest in the Gregory Power Plant, also in ERCOT.

Four of these assets were already subject to FERC divestiture requirements.

The DOJ resolution requires us to enter into definitive agreement(s) to divest these assets within 240 days of closing the Calpine acquisition, i.e., by September 4, 2026.

In January 2026, Calpine completed the divestiture of its minority ownership interest in the Gregory Power Plant as required under the terms of the DOJ resolution.

We are taking steps to divest the remaining six power plants.

In addition to operating a large generation fleet, Calpine also operates a competitive retail electric supplier platform serving approximately 62 TWhs of load annually.

The transaction will be accounted for as a business combination using the acquisition method of accounting and we will record the fair value of the assets acquired and liabilities assumed as of the acquisition date.

To the extent that the consideration transferred is greater than the fair value of the net assets acquired, goodwill will be recorded.

To the extent the fair value of the net assets acquired is greater than the consideration transferred, a bargain purchase gain will be recorded.

Through December 31, 2024, fees incurred as part of the acquisition were not material to the Consolidated Statements of Operations and Comprehensive Income.

We expect that the consideration transferred is greater than the fair value of the net assets acquired, and therefore we anticipate recording goodwill on the opening balance sheet.

Due to the recency of the acquisition date, the preliminary acquisition valuation for the business combination is incomplete at this time.

Disclosures related to the acquisition date fair value of the assets acquired and liabilities assumed, among other acquisition-related disclosures, will be included in our March 31, 2026 Form 10-Q.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 2 — Mergers, Acquisitions, and Dispositions

Fees incurred as part of the acquisition were not material to the Consolidated Statements of Operations and Comprehensive Income for the twelve months ended December 31, 2025.

Acquisition of Joint Ownership in South Texas Project

2 unchanged sentences

Other owners include City Public Service Board of San Antonio (CPS, 40 %) and the City of Austin, Texas (Austin, 16 %).

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 2 — Mergers, Acquisitions, and Dispositions

Energy, 16 %).

This acquisition is complementary to and aligned strategically with our existing clean energy business operations.

The acquisition was accounted for using the acquisition method of accounting in accordance with authoritative guidance, which requires, among other things, the assets acquired and liabilities assumed to be recognized at their respective fair value as of the acquisition date.

The excess of the purchase price over fair value of our proportionate share of the assets acquired and liabilities assumed was recorded to goodwill.

The goodwill recognized is primarily driven by the opportunity for continued operations through 80 years and the value of STP’s carbon-free energy that is not fully reflected by the markets.

The goodwill amount has been assigned entirely to the ERCOT operating segment.

See Note 12 — Intangible Assets for additional information.

The total amount of goodwill is expected to be deductible for tax purposes over the tax amortization period.

The fair values of STP’s assets and liabilities were determined based on significant estimates and assumptions that are judgmental in nature, including projected future cash flows (including timing), discount rates reflecting risk inherent in the future cash flows and future power and fuel market prices.

The following table summarizes the final acquisition-date fair value of the consideration transferred and the assets and liabilities assumed for the STP acquisition:

Cash paid for purchase price $ 1,657

Identifiable assets acquired and liabilities assumed

Property, plant, and equipment 1,254

Nuclear decommissioning trust funds 869

Inventories, net 47

Other long-term assets 40

Other current assets 11

Total assets 2,221

Asset retirement obligations 429

Payables related to Regulatory Agreement Units 376

Deferred income taxes and unamortized investment tax credits 65

Accounts payable and accrued expenses 42

Pension and OPEB obligations 25

Other long-term liabilities 5

Total liabilities 942

Total net identifiable assets, at fair value 1,279

Goodwill $ 378

The operating revenues and results of operations for STP have been included in the Consolidated Statements of Operations and Comprehensive Income from the date of acquisition and were not material for the year ended December 31, 2023.

The pro forma effects of this acquisition are not significant to our reported results for any periods presented.

The pro forma effects of this acquisition were not significant to our reported results for the period of acquisition.

Accordingly, no pro forma financial information has been presented herein.

In July 2023, NRG Energy, Inc.

(NRG) accepted service of a lawsuit filed by the City of San Antonio, Texas, acting by and through CPS, in the 130th District Court of Matagorda County, Texas against NRG and certain of its subsidiaries, claiming the existence of a right of first refusal that applies to the transaction contemplated between us and NRG.

In July 2023, we intervened in the lawsuit and Austin Energy also intervened in the lawsuit claiming a similar right of first refusal.

Per the terms of the Equity Purchase Agreement, NRG made representations that no right of first refusal applied to the transaction contemplated between us.

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.

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 %

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 2 — Mergers, Acquisitions, and Dispositions

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 in the Consolidated Balance Sheets as of December 31, 2024.

Closing is expected to occur within the first half of 2025.

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.

In May 2024, we executed a settlement agreement with all parties (CPS/City of San Antonio, Austin, and NRG Energy, Inc.), resolving all litigation involving our purchase of the ownership interest in STP.

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 Energy Inc.

for our 44 % interest.

We are working towards closing the transaction which has already received regulatory approvals (including the NRC and PUCT).

The terms of settlement are not expected to have a material impact on our results of operations and financial condition.

Regulatory Matters

3 unchanged sentences

In December 2018, FERC issued an order accepting a cost of service agreement for Mystic Units 8 and 9 for the period between June 1, 2022 to May 31, 2024.

The agreement was intended to preserve the two gas-fired electric generating units for the two-year period while allowing the Mystic units to recover their costs of operating, including a substantial portion of the costs associated with the adjacent EMT.

The agreement preserved the two gas-fired electric generating units for the period while allowing the Mystic units to recover their costs of operating, including a substantial portion of the costs associated with the adjacent EMT.

Upon the expiration of the agreement on May 31, 2024, the two generating units retired.

The Mystic COS requires an annual process whereby we identify and support our projected costs under the agreement and/or true-up previous projections to the actual costs incurred.

Interested parties then have the opportunity to challenge our filings.

In September 2022, we made our second of the five annual filings at FERC.

In December 2023, FERC issued an order setting for settlement/hearing certain components of the second annual filing, including the issue of Mystic’s recovery of historical rate base costs.

In July 2024, the active parties to the proceeding reached a settlement in principle to resolve the second annual filing.

The same parties then proceeded to reach a global settlement that would resolve all outstanding matters related to the Mystic COS, including the fourth and fifth annual filing proceedings.

A global settlement was filed with FERC in November 2024, and FERC approved the settlement in January 2025.

The global settlement does not have a material financial impact on our consolidated financial statements.

The Mystic COS required an annual process whereby we identified and supported our projected costs under the agreement and/or true-up previous projections to the actual costs incurred.

Interested parties then had the opportunity to challenge our filings.

All proceedings related to the annual files or outstanding matters related to the Mystic COS have been settled and approved by FERC.

The settlements did not have a material financial impact on our consolidated financial statements.

Federal Regulatory Matters

Inflation Reduction Act of 2022.

In August 2022, President Biden signed into law the IRA, which, among other things, includes federal tax credits, certain of which are transferable or fully refundable, for a number of clean energy technologies including existing nuclear plants (45U).

In addition, the IRA provides for a federal tax credit for technology-neutral clean energy production (45Y PTC or 48E ITC).

We believe the planned restart of Crane and our planned nuclear uprates will be eligible for these credits.

The nuclear PTC recognizes the contributions of carbon-free nuclear power by providing a federal tax credit of up to $15/MWh, subject to phase-out, beginning in 2024 and continuing through 2032.

The nuclear PTC includes adjustments for inflation.

The PTC benefiting existing nuclear plants included in the IRA continues to be the subject of additional guidance issued from the U.S.

Treasury and IRS.

One Big Beautiful Bill Act of 2025.

In July 2025, the OBBBA was signed into law, which, among other things, permanently extends key provisions of the 2017 Tax Cuts and Jobs Act, including full bonus depreciation and immediate deduction of research and development expenses.

In addition, the OBBBA preserves transferability and certain federal tax credits from the IRA, specifically, 45U for existing nuclear plants through 2032 and 45Y for new nuclear projects, including uprates, restarts, and new reactors, through 2035, while enhancing the credit to allow advanced nuclear facilities to qualify for the energy communities bonus adder, subject to eligibility requirements.

As it relates to both 45U and 45Y, certain foreign entity of concern rules must be met to qualify for the respective credits.

Overall, the OBBBA reinforces the long-term economic viability of our nuclear generation assets.

While the provisions of the OBBBA resulted in acceleration of cash benefits of approximately $ 200 million, the impact of these provisions recognized in the year ended December 31, 2025 was not material to our results of operations.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 3 — Regulatory Matters

Operating License Renewals

8 unchanged sentences

The court of appeals issued a decision vacating FERC’s decision to grant Conowingo its license renewal and sending the matter back to FERC for further proceedings.

Upon issuance of

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 3 — Regulatory Matters

the mandate from the U.S.

Upon issuance of the mandate from the U.S.

Court of Appeals for the D.C.

1 unchanged sentence

MDE informed us that as a result of the U.S.

Court of Appeals decision, they would be resuming their administrative reconsideration of the 401 Certification.

In response to the procedure outlined by the MDE, supplemental briefs on the 401 Certification were filed by the Lower Susquehanna Riverkeeper Association and Waterkeepers Chesapeake (jointly) and us.

In addition, we filed a supplemental reply brief.

We are currently participating in mediation with MDE and the parties that sought reconsideration of the 401 Certification.

We are unable to further predict the outcome of this proceeding at this time.

Court of Appeals decision, MDE would be resuming its administrative reconsideration of the 401 Certification.

In September 2025, we reached a settlement agreement with MDE and the other parties to the MDE reconsideration proceeding, Lower Susquehanna Riverkeeper Association, and Waterkeepers Chesapeake, which resolves all outstanding issues relating to the 401 Certification.

As a result, MDE issued a Revised Water Quality Certification, which is needed for FERC to move forward with the issuance of a new 50-year license.

The Revised Water Quality Certification and accompanying settlement agreement provide for a modified operational flow regime, funding for water quality and resiliency projects, commitments for trash and debris removal, fish and eel passage improvements, funding for freshwater mussel restoration and control of invasive species like snakeheads and blue catfish, and funds to support additional studies on dredging and related activities.

Our commitments under the various provisions of this settlement are not effective unless and until FERC approves and issues the new license.

The terms of this settlement have no impact on the prior settlement agreement with the DOI.

The financial impact of this settlement and other commitments related to this renewal are estimated to be $ 15 million to $ 20 million per year, on average, recognized over the term of the 50-year renewal, inclusive of capital and operating costs.

The actual timing and amount of the majority of these costs are not currently fixed and will vary from year to year throughout the life of the new license.

We cannot currently predict when FERC will issue the new license.

Depreciation provisions continue to assume operation through 2071 given our expectation that a 50-year license will be issued.

6 unchanged sentences

In addition, the NRC modified the expiration dates for the Peach Bottom licenses from 2053 and 2054 to 2033 and 2034, respectively, pending the completion of the updated NEPA analysis.

The NRC approved final revisions to the rule in May 2024, and we have begun working with the NRC to close out the remaining environmental issues and restore the Peach Bottom expiration dates to 2053 and 2054.

Depreciation provisions and ARO assumed retirement dates continue to assume Peach Bottom Units 2 and 3 will operate through 2053 and 2054, respectively, given our expectation that the previously approved expiration dates will be restored.

In September 2025, the NRC completed its environmental impact review of Peach Bottom Units 2 and 3, restoring the expiration dates of the respective operating licenses to 2053 and 2054, consistent with current accounting estimates utilized for both depreciation and ARO assumed retirement dates.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 4 — Revenue from Contracts with Customers

Revenue from Contracts with Customers

6 unchanged sentences

As a result, there are generally no significant judgments used in determining or allocating the transaction price.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 4 — Revenue from Contracts with Customers

Revenue Source Description Performance Obligation Timing of Revenue Recognition Payment Terms

16 unchanged sentences

The average contract term for these projects is approximately 18 months.

We incur incremental costs in order to execute certain retail power and gas sales contracts.

These costs, which primarily relate to retail broker fees and sales commissions, are capitalized when incurred as contract acquisition costs and generally amortized over the corresponding term of the contract.

These capitalized costs and related amortization were not material as of and for the years ended December 31, 2024 and 2023.

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.

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 4 — Revenue from Contracts with Customers

The following table provides a rollforward of the contract assets reflected in the Consolidated Balance Sheets:

Beginning balance as of January 1

Amounts reclassified to receivables ( 95 ) ( 127 )

Revenues recognized 103 79

Ending balance as of December 31

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 (June through May), 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 contract liability balance as of December 31, 2024 primarily related to equipment service plans.

The balance as of December 31, 2023 primarily related to equipment services plans and the Mystic COS.

The following table provides a rollforward of the contract liabilities reflected in the Consolidated Balance Sheets:

2024 2023 2022

Beginning balance as of January 1

$ 40 $ 47 $ 75

Consideration received

Revenues recognized ( 127 ) ( 338 ) ( 367 )

Ending balance as of December 31

$ 33 $ 40 $ 47

We incur incremental costs in order to execute certain retail power and gas sales contracts.

These capitalized costs and related amortization were not material as of and for the years ended December 31, 2025 and 2024.

Transaction Price Allocated to Remaining Performance Obligations

6 unchanged sentences

Transaction Price Allocated to Previously Satisfied Performance Obligations

Our Clinton and Quad Cities units contract with certain utilities in Illinois that require 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.

Our Clinton and Quad Cities units contract with certain utilities in Illinois which require 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 in June 2017, we delivered ZECs to the utilities in excess of the annual compensation cap.

The program commenced June 2017 and continues through May 2027.

In various planning years since the program began, 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 was established at $0.30 per ZEC, subject to an annual cap of $224 million.

ZECs generated and delivered during the planning year did not exceed

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 4 — Revenue from Contracts with Customers

the annual cap, providing capacity to compensate for ZECs delivered in prior planning years in excess of the compensation cap.

In 2023, we recognized $ 218 million of revenue as a receivable for ZECs delivered in prior planning years, with payment received in the third quarter of 2024.

For the June 2025 through May 2026 planning year, the ZEC price has been established at $1.17 per ZEC, subject to an annual cap of $224 million.

Revenue recognized in 2024 for ZECs delivered in prior planning years was not material.

ZECs generated and delivered during this planning year will not exceed the annual cap and, as a result, we recognized $ 201 million of revenue during the second quarter of 2025 as a receivable for ZECs delivered in prior planning years, with payment expected in the third quarter of 2026.

As of December 31, 2025, this receivable is included within Accounts receivable, net in the Consolidated Balance Sheets.

For the June 2024 through May 2025 planning year, the ZEC price was established at $9.38 per ZEC, subject to an annual cap of $222 million.

ZECs generated and delivered during this planning year did not exceed the annual cap, however the revenue recognized during the second quarter of 2024 for ZECs delivered in prior planning years was not material.

For the June 2023 through May 2024 planning year, the ZEC price was established at $0.30 per ZEC, subject to an annual cap of $224 million.

ZECs generated and delivered during the planning year did not exceed the annual cap, and as a result we recognized $ 218 million of revenue during the second quarter of 2023, with payment received in the third quarter of 2024.

Revenue Disaggregation

1 unchanged sentence

See Note 5 — Segment Information for the presentation of revenue disaggregation.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 5 — Segment Information

Segment Information

22 unchanged sentences

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

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 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.

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 5 — Segment Information

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 power sales by geographic region.

The following tables, which relate directly to our Consolidated Statements of Operations and Comprehensive Income, provide the reconciliation of operating revenues, purchased power and fuel expenses, and RNF for reportable segments for the years ended December 31, 2024, 2023, and 2022.

The following tables, which relate directly to our Consolidated Statements of Operations and Comprehensive Income, provide the reconciliation of operating revenues, purchased power and fuel expenses, and RNF for our reportable segments for the years ended December 31, 2025, 2024, and 2023.

2025 Revenues from contracts with customers

Other revenues (a)

Total Operating revenues

10 unchanged sentences

$ 22,663 $ 2,870 $ 25,533 $ ( 14,681 ) $ 10,852

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 5 — Segment Information

Revenues from contracts with customers

Total Operating revenues

Total Purchased power and fuel expenses

Mid-Atlantic $ 5,429 $ 93 $ 5,522 $ ( 2,442 ) $ 3,080

8 unchanged sentences

$ 18,964 $ 4,604 $ 23,568 $ ( 11,419 ) $ 12,149

Revenues from contracts with customers

Total Operating revenues

Total Purchased power and fuel expenses

Mid-Atlantic $ 5,453 $ ( 315 ) $ 5,138 $ ( 2,214 ) $ 2,924

6 unchanged sentences

2,444 3,460 5,904 ( 6,239 ) ( 335 )

Total Consolidated Results (c)

Total Consolidated Results

$ 20,841 $ 4,077 $ 24,918 $ ( 16,001 ) $ 8,917

2 unchanged sentences

(b) Represents revenue activities not allocated to a region.

See text above for a description of included activities, includes unrealized mark-to-market gains of $ 316 million and $ 1,399 million and losses of $ 1,188 million, and natural gas revenues from contracts with customers of $ 1,429 million, $ 1,859 million, and $ 2,559 million, for the years ended December 31, 2024, 2023, and 2022, respectively.

(c) Includes all wholesale and retail electric sales to third parties and affiliated sales to Exelon's utility subsidiaries prior to the separation on February 1, 2022.

See Note 24 — Related Party Transactions for additional information.

See text above for a description of included activities.

Other includes unrealized losses of ($ 805 ) million, and unrealized gains of $ 316 million and $ 1,399 million, and natural gas revenues from contracts with customers of $ 1,758 million, $ 1,429 million, and $ 1,859 million, for the years ended December 31, 2025, 2024, and 2023, respectively.

Combined Notes to Consolidated Financial Statements

2 unchanged sentences

Government Assistance

Beginning in 2024, our existing 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 evaluated and expect to 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.

Beginning in 2024, our nuclear units are eligible for a PTC extending through 2032.

We evaluated and expect to meet the annual prevailing wage requirements at all of 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 annually 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 year ended December 31, 2024, our Consolidated Statements of Operations and Comprehensive Income include a nuclear PTC benefit of approximately $ 2,080 million in Operating revenues.

Our estimate required the exercise of judgment in determining the amount of nuclear PTC expected for each of our nuclear units.

The nuclear PTC continues to be the subject of additional guidance, which may be issued from the U.S.

Treasury and IRS sometime in 2025, and may materially impact the total amount of the benefits we receive.

In July 2025, Congress passed the OBBBA which affirmed the provisions of the nuclear PTC with no material changes.

For the years ended December 31, 2025 and 2024, our Consolidated Statements of Operations and Comprehensive Income included an estimated nuclear PTC benefit in Operating revenues of approximately $ 320 million and $ 2,080 million, respectively.

Our estimates require the exercise of judgment in determining the amount of nuclear PTC expected for each of our nuclear units.

The nuclear PTC continues to be the subject of additional guidance, from the U.S.

Treasury and IRS, and may materially impact the total amount of the benefits we receive.

Nuclear PTCs are initially 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, or an increase in Cash and cash equivalents or Other current assets when sold, depending on the specific payment terms of each contract.

In 2024, we executed agreements for the sale of $ 1,750 million of nuclear PTCs to unaffiliated third parties at a nominal discount, with approximately $ 1,570 million of cash proceeds received upon sale (included within Cash flows from operating activities in our Consolidated Statements of Cash Flows) and approximately $ 95 million to be received in the first quarter of 2025.

As of December 31, 2024, our Consolidated Balance Sheets reflect approximately $ 185 million of estimated nuclear PTCs within Other deferred debits and other assets , $ 95 million within Other current assets , and a reduction to Accounts payable and accrued expenses of $ 150 million for estimated nuclear PTCs that we have utilized as a credit against our current federal income taxes payable.

There were no sales agreements for nuclear PTCs in 2025.

In 2024, we executed agreements for the sale of $ 1,750 million of nuclear PTCs to unaffiliated third parties at a nominal discount, with approximately $ 1,570 million of cash proceeds received upon sale that were included within Cash flows from operating activities in our Consolidated Statements of Cash Flows.

Cash received in 2025 on sale agreements executed in 2024 was approximately $ 95 million.

Our Consolidated Balance Sheets reflected estimated nuclear PTCs of approximately $ 120 million within Other deferred debits and other assets as of December 31, 2025, and $ 185 million and $ 95 million within Other deferred debits and other assets, and within Other current assets , respectively, as of December 31, 2024.

Additionally, during the years ended December 31, 2025 and 2024, we recognized a reduction to Accounts payable and accrued expenses of $ 375 million and $ 150 million, respectively, for estimated nuclear PTCs that we have utilized as a credit against our current federal income taxes payable.

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 December 31, 2024, we have recognized approximately $ 1,030 million of estimated payables within Accounts payable and accrued expenses or as offsets to Customer accounts receivable in our Consolidated Balance Sheets associated with programs requiring refunds or pass through of the nuclear PTC.

We recognized a reduction to net operating revenue of approximately $ 50 million (pre-tax) for the year ended December 31, 2024 associated with these programs in our Consolidated Statements of Operations and Comprehensive Income.

As with the actual amount of the PTC earned, any change resulting from additional guidance received may materially impact amounts due under state-sponsored programs.

As of December 31, 2025 and 2024, we have recognized approximately $ 1,190 million and $ 1,030 million, respectively, of estimated payables within Other deferred credits and other liabilities , Accounts payable and accrued expenses or as offsets to Accounts receivable, net in our Consolidated Balance Sheets associated with programs requiring refunds or pass through of the nuclear PTC.

In general, we expect to remit refunds or pass-throughs of state-sponsored program compensation related to nuclear PTCs in the year following the filing of the related tax return.

We recognized a reduction to net operating revenue of approximately $ 125 million and $ 50 million, respectively, associated with these programs in our Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2025 and 2024.

As with the actual amount of the nuclear PTC earned, any change resulting from additional guidance received may materially impact amounts due under state-sponsored programs.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 7 — Accounts Receivable

Accounts Receivable

The following table provides additional information on the disaggregation of customer and other accounts receivable:

Accounts receivable, net

December 31, 2025 CEG Parent Constellation

Customer accounts receivable (net of allowance for credit losses of $ 158 for CEG Parent and Constellation)

$ 3,577 $ 3,577

Other accounts receivable (net of allowance for credit losses of $ 9 for CEG Parent and Constellation)

Total $ 4,266 $ 4,251

December 31, 2024

Customer accounts receivable (net of allowance for credit losses of $ 190 for CEG Parent and Constellation)

$ 3,116 $ 3,116

Other accounts receivable (net of allowance for credit losses of $ 6 for CEG Parent and Constellation)

Total $ 3,718 $ 3,703

Allowance for Credit Losses on Accounts Receivable

The following table presents the rollforward of allowance for credit losses on Customer accounts receivable, which does not include any allowance related to the sales of customer accounts receivable disclosed below.

Allowance for credit losses on Other accounts receivable was not material as of the balance sheet dates.

Balance as of December 31, 2023 (a)

The following table presents the rollforward of allowance for credit losses on customer accounts receivable from January 1, 2024 to December 31, 2025:

Balance as of January 1 $ 190 $ 56

Current period provision for expected credit losses 47 17

Write-offs, net of recoveries (b)

Facility amendment impact (c)

Write-offs, net of recoveries (a)

( 79 ) ( 21 )

Facility amendment impact (b)

Balance as of December 31 $ 158 $ 190

(a) 2023 beginning balance and activity were not material.

(b) Recoveries were not material.

(a) Recoveries were not material.

(b) Impact as a result of the December 2024 amendment of our revolving accounts receivable financing arrangement.

See below for details.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 7 — Accounts Receivable

The allowance for credit losses on other accounts receivable was not material as of the balance sheet dates, therefore, a rollforward is not presented.

Unbilled Customer Revenue

We recorded $ 1,109 million and $ 372 million of unbilled customer revenues in Customer accounts receivables, net in the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively.

We recorded $ 1,305 million and $ 1,109 million of unbilled customer revenues in Accounts receivable, net in the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively.

Sales of Customer Accounts Receivable

2 unchanged sentences

We will no longer sell receivables to the Purchasers and all outstanding receivables were assigned back to us.

Prior to the amendment, the maximum funding limit of the Facility was $ 1.1 billion.

Under the Facility's prior terms, NER sold eligible short-term customer accounts receivable to the Purchasers in exchange for cash and subordinated interest.

The transfers were reported as sales of receivables in the consolidated financial statements.

The subordinated interest in collections upon the receivables sold to the Purchasers was referred to as the DPP, which was reflected in Other current assets in the Consolidated Balance Sheets prior to the amendment.

The subordinated interest in collections upon the receivables sold to the Purchasers is referred to as the DPP.

As a result of the receivables being assigned back to NER under the amended Facility, NER forgave any and all remaining DPP owed by the Purchasers.

The reassignment of receivables resulted in the recognition of $ 1,529 million of Accounts receivable, net as of December 31, 2024.

See Note 16 — Debt and Credit Agreements for terms of the amended Facility.

The following table summarizes the impact of the sale of certain receivables:

As of December 31,

Derecognized receivables transferred at fair value $ — $ 1,516

Cash proceeds received — 300

(a) As a result of the Facility amendment, DPP of $ 1,529 million was reclassified to Customer accounts receivable as of December 31, 2024.

For the Years Ended December 31,

2024 2023 2022

Loss on sale of receivables (a)

$ 61 $ 75 $ 69

(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.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 7 — Accounts Receivable

The following table summarizes our cash proceeds associated with the Facility prior to the amendment:

For the Years Ended December 31,

2024 2023 2022

Proceeds from new transfers (a)

1 unchanged sentence

Cash collections received on DPP (b)

10,517 8,140 4,764

Cash collections reinvested in the Facility $ 12,205 $ 11,789

(a) Customer accounts receivable sold into the Facility were $ 12,262 million, $ 11,746 million, and $ 11,274 million for the years ended December 31, 2024, 2023, and 2022, respectively.

(b) Does not include the $ 300 million and $ 800 million net cash payments to the Purchasers in 2024 and 2023, respectively, or the $ 200 million net cash proceeds received from the Purchases in 2022.

We recognized 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 ($ 10,574 ) million, ($ 8,097 ) million, and ($ 5,166 ) million for the years ended December 31, 2024, 2023, and 2022, 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 $ 10,217 million, $ 7,340 million, and $ 4,964 million for the years ended December 31, 2024, 2023, and 2022, respectively.

As a result of the receivables being assigned back to NER under the amended Facility, NER forgave any and all remaining DPP owed by the Purchasers.

The reassignment of receivables and unwind of DPP will be treated as a non-cash activity and therefore have no impact in the Consolidated Statements of Cash Flows.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 7 — Accounts Receivable

See Note 17 — Fair Value of Financial Assets and Liabilities and Note 21 — Variable Interest Entities for additional information on DPP and NER, respectively.

(a) Customer accounts receivable sold into the Facility were $ 12,262 million and $ 11,746 million for the years ended December 31, 2024, and 2023, respectively.

(b) Does not include the $ 300 million and $ 800 million net cash payments to the Purchasers in 2024 and 2023, respectively, in order to reduce the outstanding borrowing amount under the Facility.

We previously recognized 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 ($ 10,574 ) million and ($ 8,097 ) million for the years ended December 31, 2024, and 2023, respectively.

The collection and reinvestment of DPP was recognized in Cash flows from investing activities in the Collection of DPP, net line in the Consolidated Statements of Cash Flows, which was $ 10,217 million, and $ 7,340 million for the years ended December 31, 2024, and 2023, respectively.

See Note 21 — Variable Interest Entities for additional information on NER.

Other Sales of Customer Accounts Receivables

We are required, under supplier tariffs, to sell customer receivables to certain utility companies.

The total receivables sold was $ 280 million, $ 356 million, and $ 423 million for the years ended December 31, 2024, 2023, and 2022, respectively.

We are required, under supplier tariffs, to sell customer receivables to certain utility companies at a nominal discount.

The total gross receivables sold were $ 4,204 million, $ 280 million, and $ 356 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Prior to the Facility amendment discussed in the preceding paragraphs, certain accounts receivable subject to these supplier tariffs were sold to the Purchasers under the Facility.

Property, Plant, and Equipment

3 unchanged sentences

Nuclear fuel (a)

Construction work in progress 1,273 1,133

Other property, plant, and equipment 15 14

Total property, plant, and equipment 41,546 39,323

4 unchanged sentences

(b) Includes accumulated amortization of nuclear fuel in the reactor core of $ 2,622 million and $ 2,447 million as of December 31, 2025 and 2024, respectively.

The estimated useful lives of our generating facilities are based on a combination of depreciation studies, historical retirements, site licenses and management estimates of operating costs and expected future energy market conditions.

The estimated useful lives of our nuclear stations generally include expectations for an additional 20-year term beyond current license expiration, except for Calvert Cliffs, FitzPatrick, Limerick, NMP Unit 2, Salem, and STP where depreciation provisions correspond with the expiration of the current NRC operating license.

Generally, our oil and gas plants have estimated useful lives of 40 - 45 year with wind and solar generating facilities having estimated useful lives of 25 and 35 years, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 8 — Property, Plant, and Equipment

The estimated useful lives of our nuclear stations generally include expectations for an additional 20-year term beyond current license expiration, except for Calvert Cliffs, FitzPatrick, Limerick, NMP Unit 2, and STP where depreciation provisions correspond with the expiration of the current NRC operating license.

The estimated useful lives of our hydroelectric facilities also generally align with their FERC operating licenses.

Conowingo depreciation provisions are based on an estimated useful life through 2071, in anticipation that a 50 -year license will be issued.

Generally, our oil and gas plants have estimated useful lives of 40 to 45 years with wind and solar generating facilities having estimated useful lives of 25 and 35 years, respectively.

See Note 3 — Regulatory Matters for additional information regarding license renewals for Peach Bottom and Conowingo.

Annual depreciation rates for electric generation were 2.91 %, 3.43 %, and 3.26 % for the years ended December 31, 2025, 2024, and 2023, respectively.

Nuclear fuel amortization is charged to fuel expense using the unit-of-production method and not included in the annual depreciation rates.

Nuclear fuel amortization is charged to fuel expense using the unit-of-production method based on the expected consumption period of the fuel, generally ranging from 1 to 8 years, and is excluded from the annual depreciation rates.

See Note 22 — Supplemental Financial Information for additional information on nuclear fuel amortization.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 9 — Jointly-Owned Electric Plant

Jointly-Owned Electric Plants

Our material undivided ownership interests in jointly-owned nuclear plants as of December 31, 2024 and 2023 were as follows:

Our material undivided ownership interests in jointly-owned plants as of December 31, 2025 and 2024 were as follows:

NMP Unit 2 Quad Cities Peach Bottom

4 unchanged sentences

Accumulated depreciation 363 852 752 98 402

Construction work in progress 27 13 15 25 68

53 29 25 23 101

Our share as of December 31, 2024

1 unchanged sentence

Accumulated depreciation 327 840 721 52 387

Construction work in progress 35 8 14 13 49

(a) Within the 44 % undivided ownership interest in STP, 2 % interest was recorded as held for sale as of December 31, 2024.

27 13 15 25 68

(a) Within the 44 % undivided ownership interest in STP, 2 % interest was recorded as held for sale as of December 31, 2025 and 2024.

See Note 2 — Mergers, Acquisitions, and Dispositions for additional information.

5 unchanged sentences

We update our AROs annually, unless circumstances warrant more frequent updates, based on our review of updated cost studies and our annual evaluation of cost escalation factors and probabilities assigned to various scenarios.

The financial statement impact for changes in the ARO, on an individual unit basis, due to the changes in and timing of estimated cash flows generally result in a corresponding change in the unit’s ARC in Property, plant, and equipment in the Consolidated Balance Sheets.

If the ARO decreases for a Non-Regulatory Agreement Unit without any remaining ARC, the corresponding change is recorded as a decrease in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income, whereas the corresponding decrease for Regulatory Agreement Units without any remaining ARC results in an increase to the Payables related to Regulatory Agreement Units in the Consolidated Balance Sheets.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Asset Retirement Obligations

The financial statement impact for changes in an ARO, on an individual unit basis, due to the changes in and timing of estimated cash flows generally result in a corresponding change in the unit’s ARC in Property, plant, and equipment in the Consolidated Balance Sheets.

If an ARO decreases for a Non-Regulatory Agreement Unit without any remaining ARC, the corresponding change is recorded as a decrease in Operating and maintenance expense in the Consolidated Statements of Operations and Comprehensive Income, whereas the corresponding decrease for Regulatory Agreement Units without any remaining ARC results in an increase to the Payables related to Regulatory Agreement Units in the Consolidated Balance Sheets.

The following table provides a rollforward of the nuclear decommissioning AROs reflected in the Consolidated Balance Sheets from January 1, 2024 to December 31, 2025:

1 unchanged sentence

$ 12,186 $ 13,891

Net (decrease) increase due to changes in, and timing of, estimated future cash flows

Net increase (decrease) due to changes in, and timing of, estimated future cash flows

108 ( 2,299 )

Accretion expense 630 640

Costs incurred related to decommissioning plants (a)

Costs incurred related to decommissioning plants

( 16 ) ( 24 )

Acquisition of joint ownership in STP (b)

Ending balance as of December 31 (c)

Reclassification to liabilities held for sale (a)

Ending balance as of December 31

$ 12,908 $ 12,186

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Asset Retirement Obligations

(a) We began decommissioning Crane upon permanently ceasing operations in 2019 and in 2024 commenced efforts to restart.

See below for further discussion of the decommissioning of Zion Station.

(b) Reflects our estimated share of the STP decommissioning obligation acquired in 2023 and the portion subsequently transferred to Liabilities held for sale in 2024.

(a) Reflects amounts transferred to Liabilities held for sale for the sale of 2 % interest to CPS in connection with the 2023 acquisition of interest in STP.

See Note 2 — Mergers, Acquisitions, and Dispositions for additional information.

(c) Includes $ 18 million and $ 30 million as the current portion of the ARO as of December 31, 2024 and 2023, respectively, which is included in Other current liabilities in the Consolidated Balance Sheets.

The net $ 2,299 million decrease in the ARO during 2024 for changes in the amounts and timing of estimated decommissioning cash flows was driven by multiple adjustments, including the following:

The net $ 108 million increase in the AROs during 2025 for the changes in, and timing of, estimated future cash flows was driven primarily by higher escalation rates partially offset by higher discount rates and revised cost studies for our Braidwood, Byron, Clinton, and LaSalle nuclear plants .

The net $ 2,299 million decrease in the AROs during 2024 for changes in the amounts and timing of estimated decommissioning cash flows was driven by multiple adjustments, including the following:

• Net decrease of $ 3,036 million due to changes in assumed retirement dates for various plants, including Braidwood, Byron, Calvert Cliffs, FitzPatrick, LaSalle, Limerick, NMP Unit 2, Quad Cities, Salem and Crane

1 unchanged sentence

• An increase of $ 891 million due to an increase in cost escalation rates and lower discount rates

The 2024 ARO updates resulted in a decrease of $ 78 million in Operati ng and maintenance expense for the year ended December 31, 2024 in the Consolidated Statements of Operations and Comprehensive Income.

The net $ 411 million increase in the ARO during 2023 for changes in the amounts and timing of estimated decommissioning cash flows was driven by multiple adjustments, including the following:

• Net increase of approximately $ 610 million due to an increase in cost escalation rates partly offset by an increase in discount rates .

• Net increase of approximately $ 470 million due to updated cost assumptions for dry cask storage across the fleet and revised cost studies for Dresden, Limerick and Peach Bottom .

• Net decrease of approximately $ 675 million due to changes in assumed retirement dates for Ginna, NMP Unit 1 and Salem .

The 2023 ARO updates resulted i n a decrease of $ 68 million in Operating and maintenance expense for the year ended December 31, 2023 in the Consolidated Statements of Operations and Comprehensive Income.

NDT funds have been established for each of our nuclear units to satisfy our nuclear decommissioning obligations, as required by the NRC, and withdrawals from these funds for reasons other than to pay for decommissioning are restricted pursuant to NRC requirements until all decommissioning activities have been completed.

7 unchanged sentences

In August 2022, the PAPUC approved the filing, and the new rates became effective January 1, 2023.

Additionally, for the STP units, we maintain decommissioning trust funds for those units proportionate to our ownership.

We also retain the authority through the PUCT to obtain additional decommissioning funding through AEP Texas and CenterPoint.

Every five years, owners of each Texas jurisdictional nuclear generation unit are

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 10 — Asset Retirement Obligations

required to file an update of decommissioning costs with the PUCT in support of appropriate utility rates for decommissioning trust funding.

Additionally, for the STP units, we maintain decommissioning trust funds for those units proportionate to our ownership.

We also retain the authority through the PUCT to obtain additional decommissioning funding through AEP Texas and CenterPoint.

Every five years, owners of each Texas jurisdictional nuclear generation unit are required to file an update of decommissioning costs with the PUCT in support of appropriate utility rates for decommissioning trust funding.

In July 2023, the decommissioning cost update for our share of the STP decommissioning obligation was filed, proposing annual funding amounts from AEP Texas and CenterPoint totaling approximately $ 1 million.

4 unchanged sentences

The initial $ 50 million and up to 5 % of any additional shortfalls would be borne by us.

No such limitations exist for the STP units, however PUCT regulations require that any funds remaining in the trust after completion of decommissioning to be refunded to utility customers in a manner determined by the commission.

No such limitations exist for the STP units, however PUCT regulatio ns require that any funds remaining in the trust after completion of decommissioning to be refunded to utility customers in a manner determined by the commission.

Aside from the former PECO units and STP, no recourse exists to collect additional amounts from utility customers for any of our other nuclear units.

7 unchanged sentences

We had NDT funds totali ng $ 19,396 million and $ 17,321 million as of December 31, 2025 and 2024, respectively.

As of December 31, 2024, $ 16 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.

The current portions of the NDT funds, which are included in Other current assets in our Consolidated Balance Sheets, were not material as of December 31, 2025 and 2024.

See Note 22 — Supplemental Financial Information for additional information on activities of the NDT funds.

19 unchanged sentences

We will store the SNF at Zion Station until it is transferred to the DOE for ultimate disposal and complete all remaining decommissioning activities associated with the SNF dry storage facility.

Any shortage of funds necessary to maintain the SNF and decommission the SNF storage facility is ultimately required to be funded by us.

As of December 31, 2024 and 2023, the ARO associated with Zion's SNF storage facility is $ 163 million and $ 139 million, respectively, and the NDT funds available to fund this obligation ar e $ 63 million and $ 62 million, respectively.

Any shortage of f unds necessary to maintain the SNF and decommission the SNF storage facility is ultimately required to be funded by us.

As of December 31, 2025 and 2024, the ARO associated with Zion's SNF storage facility is $ 170 million and $ 163 million, respectively, and the NDT funds available to fund this obligation are $ 67 million and $ 63 million, respectively.

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.

The estimated decommissioning obligations are calculated using an NRC methodology that is different from the ARO recorded in the Consolidated Balance Sheets primarily due to differences in the type of costs included in the estimates, the basis for estimating such costs, and assumptions regarding the decommissioning alternatives to be used, potential license renewals, decommissioning cost escalation, and the growth rate in the NDT funds.

The estimated decommissioning obligations are calculated using an NRC methodology that is different from the AROs recorded in the Consolidated Balance Sheets primarily due to differences in the type of costs included in the estimates, the basis for estimating such costs, and assumptions regarding the decommissioning alternatives to be used, potential license renewals, decommissioning cost escalation, and the growth rate in the NDT funds.

Under NRC regulations, if the minimum funding requirements for radiological decommissioning calculated under the NRC methodology are greater than the future value of the NDT funds, also calculated under the NRC methodology, then the NRC requires resolution of the shortfalls which could include further funding or other financial guarantees.

8 unchanged sentences

(5) the assumption of current nominal dollar cost estimates that are neither escalated through the anticipated period of decommissioning, nor discounted using the CARFR;

and (6) assumed annual after-tax returns on the NDT funds of 2 % ( 3 % for the former PECO units, as specified by the PAPUC).

In contrast, the key criteria and assumptions used by us to determine the ARO and to forecast the target growth in the NDT funds as of December 31, 2024 include:

and (6) assumed annual after-tax returns on the NDT funds o f 2 % ( 3 % f or the former PECO units, as specified by the PAPUC).

In contrast, the key criteria and assumptions used by us to determine the AROs and to forecast the target growth in the NDT funds as of December 31, 2025 include:

(1) the use of site specific cost estimates that are updated at least once every five years;

3 unchanged sentences

(5) the measurement of the obligation at the present value of the future estimated costs and an annual accretion of the ARO;

and (6) an estimated targeted annual pre-tax return on the NDT funds of 6.3 % to 7.1 % (as compared to a historical 5-year annual average pre-tax return of approximately 6.5 % ).

and (6) an estimated targeted annual pre-tax return on the N DT fun ds of 6.2 % to 7.1 % (as compared to a historical 5-year annual average pre-tax return of approximatel y 6.8 %).

We are required to provide to the NRC a biennial report by unit (annually for units that have been retired or are within five years of license expiration), based on values as of December 31, addressing our ability to meet the NRC minimum funding levels.

1 unchanged sentence

As a result, our cash flows and financial position may be significantly adversely affected.

We filed our biennial decommissioning funding status report with the NRC in March 2023 for all units, including our shutdown units, except for Zion Station which was included in a separate report to the NRC submitted by ZionSolutions, LLC.

The status report demonstrated adequate decommissioning funding assurance based on trust fund values as of December 31, 2022 for all units except for Peach Bottom Unit 1.

As a former PECO plant, financial assurance for decommissioning Peach Bottom Unit 1 is provided by the NDT fund, collections from PECO customers, and the ability to adjust those collections in accordance with the approved PAPUC tariff.

See NDT Funds section above for additional information.

Additionally, the STP units demonstrated adequate decommissioning funding assurance as of December 31, 2022 in the decommissioning funding status report filed with the NRC by STPNOC in March 2023.

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 based on trust fund values as of December 31, 2023 for all shutdown units except for Peach Bottom Unit 1.

We filed our biennial decommissioning funding status report with the NRC in March 2025 for all units, including our shutdown units, except for STP units which were included in a separate report submitted to the NRC submitted by STPNOC.

The status reports demonstrated adequate decommissioning funding assurance based on trust fund values as of December 31, 2024 for all 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 NDT Funds section above for additional information.

We will file the next decommissioning funding status report with the NRC in M arch 2026.

This report will reflect the status of decommissioning funding as of December 31, 2024 for all units, except for STP which will be filed separately by STPNOC.

We expect the funding status reports to demonstrate adequate funding assurance based on the value of trust funds as of December 31, 2024, for all units except for Peach Bottom Unit 1.

Financial assurance for decommissioning Peach Bottom Unit 1 is provided by the collections from PECO customers as mentioned above.

This report will reflect the status of decommissioning funding as of December 31, 2025 for shutdown units and any units within 5 years of license expiration.

We expect the funding status report to demonstrate adequate funding assurance based on the value of trust funds as of December 31, 2025 for all units.

As the future values of trust funds change due to market conditions, the NRC minimum funding status of our units will change.

In addition, if changes occur to the regulatory agreements with the PAPUC or the PUCT that currently allow amounts to be collected from utility customers for decommissioning the former PECO and STP units, the NRC minimum funding status of those plants could change at subsequent NRC filing dates.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Asset Retirement Obligations

Non-Nuclear Asset Retirement Obligations

1 unchanged sentence

See Note 1 — Basis of Presentation for additional information on the accounting policy for AROs.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 10 — Asset Retirement Obligations

The following table provides a rollforward of the non-nuclear AROs reflected in the Consolidated Balance Sheets from January 1, 2024 to December 31, 2025:

Beginning balance as of January 1

Net increase (decrease) due to changes in, and timing of, estimated future cash flows

Net increase due to changes in, and timing of, estimated future cash flows

Accretion expense 17 15

Asset divestitures — ( 9 )

Costs incurred related to decommissioning plants

1 unchanged sentence

We have operating leases for which we are the lessee.

The significant types of leases are contracted generation, real estate, and vehicles and equipment.

The significant types of operating leases are contracted generation and real estate.

The following table outlines other terms and conditions of the lease agreements as of December 31, 2025.

2 unchanged sentences

Options to extend the term 2 - 30

Options to terminate within 2

The components of operating lease costs were as follows:

5 unchanged sentences

$ 213 $ 250 $ 242

(a) Excludes $ 50 million, $ 50 million, $ 49 million of sublease income recorded for the years ended December 31, 2024, 2023, and 2022, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 11 — Leases

(a) Excludes $ 50 million of sublease income recorded for each of the years ended December 31, 2025, 2024, and 2023.

The following table provides additional information regarding the presentation of operating lease ROU assets and lease liabilities in the Consolidated Balance Sheets:

7 unchanged sentences

(a) The operating ROU assets and lease liabilities include $ 141 million and $ 241 million, respectively, related to contracted generation as of December 31, 2025, and $ 176 million and $ 289 million, respectively, as of December 31, 2024.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 11 — Leases

The weighted average remaining lease terms, in years, and the weighted average discount rates for operating leases were as follows:

13 unchanged sentences

ROU assets obtained in exchange for operating lease obligations 2 6 13

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 11 — Leases

We have operating leases for which we are the lessor.

The significant types of leases are contracted generation and real estate.

The significant types of operating leases are contracted generation and real estate.

The following table outlines other terms and conditions of the lease agreements as of December 31, 2025.

6 unchanged sentences

Variable lease income 231 244 248

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 11 — Leases

The following table presents the lease payments we expect to receive over the remaining terms as of December 31, 2025:

1 unchanged sentence

Intangible Assets

The following table presents the carrying amount of goodwill as of December 31, 2024, 2023 and 2022.

There were no impairment losses during the years ended December 31, 2024, 2023, and 2022 .

Balance at December 31, 2022 $ 47

Goodwill resulting from acquisition of STP (a)

Balance at December 31, 2023 425

Goodwill allocated to Assets held for sale (a)

Balance at December 31, 2024 $ 420

(a) Within the 44 % undivided ownership interest in STP, 2 % interest was recorded as held for sale as of December 31, 2024.

See Note 2 — Mergers, Acquisitions, and Dispositions for additional information on the STP acquisition in November 2023 and held for sale reclassification in 2024.

See Note 1 — Basis of Presentation for our policy regarding goodwill.

Our operating segments are also considered reporting units for goodwill impairment assessment purposes.

The goodwill recognized in 2023 has been assigned entirely to the ERCOT operating segment.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 12 — Intangible Assets

The following table provides a rollforward of the carrying amount of goodwill from January 1, 2024 to December 31, 2025.

There were no impairment losses for the years ended December 31, 2025, 2024, and 2023 .

Beginning balance as of January 1

Goodwill allocated to assets held for sale

Ending balance as of December 31

Other Intangible Assets and Liabilities

Our other intangible assets and liabilities included in Other current assets, Other deferred debits and other assets, Other current liabilities, and Other deferred credits and other liabilities in the Consolidated Balance Sheets, consisted of the following as of December 31, 2025 and 2024.

The customer relationships are generally amortized on a straight line basis, while the unamortized energy contracts are amortized in relation to the expected realization of the underlying cash flows:

The customer relationships are generally amortized on a straight line basis, while UECs are amortized in accordance with the expected realization of the underlying cash flows:

December 31, 2025 December 31, 2024

Gross Accumulated Amortization Net Gross Accumulated Amortization Net

Unamortized Energy Contracts $ 1,850 $ ( 1,669 ) $ 181 $ 1,892 $ ( 1,631 ) $ 261

$ 1,850 $ ( 1,686 ) $ 164 $ 1,850 $ ( 1,669 ) $ 181

Customer Relationships 174 ( 137 ) 37 244 ( 189 ) 55

1 unchanged sentence

The following table summarizes the amortization expense related to our other intangible assets and liabilities for the years ended December 31, 2025, 2024, and 2023:

For the Years Ended December 31, Amortization Expense (a)

(a) See Note 22 — Supplemental Financial Information for additional information related to the amortization of unamortized energy contracts.

For the Years Ended December 31,

2025 2024 2023

Amortization expense (a)

$ 35 $ 60 $ 58

(a) See Note 22 — Supplemental Financial Information for additional information on amortization expense.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 12 — Intangible Assets

The following table summarizes the estimated future amortization expense related to our other intangible assets and liabilities as of December 31, 2025:

1 unchanged sentence

2031 and thereafter 63

Income (Loss) Before Income Taxes

Income (loss) before income taxes is comprised of the following components:

For the Years Ended December 31,

2025 2024 2023

Domestic $ 3,458 $ 4,433 $ 2,137

Foreign 53 83 310

Total Income (loss) before income taxes $ 3,511 $ 4,516 $ 2,447

Components of Income Tax Expense or Benefit

1 unchanged sentence

For the Years Ended December 31,

2025 2024 2023

Current $ 764 $ 451 $ 392

3 unchanged sentences

Deferred 50 ( 39 ) ( 34 )

Current 14 ( 25 ) 72

Deferred — 45 —

Total Income tax (benefit) expense $ 1,187 $ 774 $ 859

$ 774 $ 859 $ ( 388 )

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 13 — Income Taxes

Income Taxes Paid

Income taxes (net of refunds) paid during the year was comprised of the following components:

For the Years Ended December 31,

2025 2024 2023

Federal $ 341 $ 242 $ 315

Illinois 16 24 19

Maryland 11 24 7

Other state 91 141 41

United Kingdom ( 20 ) — 61

Other foreign 7 5 23

Total income taxes paid (net of refunds) $ 446 $ 436 $ 466

Rate Reconciliation

2 unchanged sentences

For the Years Ended December 31,

2024 2023 2022 (a)

federal statutory rate 21.0 % 21.0 % 21.0 %

(Decrease) increase due to:

State income taxes, net of federal income tax benefit (b)

2025 2024 2023

Qualified NDT fund income and losses 4.0 10.3 46.3

Amortization of ITC, including deferred taxes on basis differences

federal statutory income tax 21.0 % $ 737 21.0 % $ 948 21.0 % $ 514

(Decrease) increase due to:

State income taxes, net of federal income tax benefit (a)(b)

4.2 147 1.5 69 3.5 86

PTCs and other credits

Foreign tax effects

0.1 2 0.1 3 0.5 12

Noncontrolling interests 0.1 0.4 ( 0.3 )

Effective income tax rate (c)

PTC ( 2.1 ) ( 74 ) ( 9.4 ) ( 425 ) — —

Amortization of ITC, including deferred taxes on basis differences ( 0.3 ) ( 12 ) ( 0.2 ) ( 11 ) ( 0.5 ) ( 12 )

Other ( 0.3 ) ( 8 ) ( 0.4 ) ( 16 ) ( 0.6 ) ( 15 )

Nontaxable or nondeductible items

Share-based payment awards ( 1.2 ) ( 44 ) ( 0.4 ) ( 17 ) ( 0.3 ) ( 7 )

Excess officers compensation 1.5 51 0.7 34 0.8 20

Other 1.0 38 0.2 10 0.4 9

Other adjustments

Qualified NDT fund income and losses 9.9 350 4.0 179 10.3 252

Effective income tax (c)(d)

33.8 % $ 1,187 17.1 % $ 774 35.1 % $ 859

(a) As there was a pre-tax loss during 2022, negative percentages represent income tax expense.

Positive percentages represent income tax benefit.

(b) Includes ($ 42 ) million, ($ 4 ) million and $ 30 million related to state rate changes and certain state tax positions in 2024, 2023, and 2022, respectively.

(c) The change in effective tax rate in 2024 is primarily due to the increase in pre-tax book income inclusive of the nuclear PTC, which is not taxable.

The change in effective tax rate in 2023 is primarily due to the impacts of higher realized NDT Income and significant pretax income in 2023 compared to pretax loss in 2022.

(a) Includes $ 21 million, ($ 42 ) million and ($ 4 ) million related to state rate changes and certain state tax positions in 2025, 2024, and 2023, respectively.

(b) In 2025, state taxes in Massachusetts, New York, Pennsylvania, and New Jersey made up the majority (greater than 50%) of the tax effect in this category.

In 2024, state taxes in Maryland, Illinois, Massachusetts, California, New Jersey, New York, Pennsylvania, and Connecticut made up the majority (greater than 50%) of the tax effect in this category.

In 2023, state taxes in Maryland, Pennsylvania, New Jersey, and California made up the majority (greater than 50%) of the tax effect in this category.

(c) The change in effective tax rate in 2025 is primarily due to the inclusion of nuclear PTCs, which are not taxable, and higher income from Qualified NDT funds.

(d) Amounts may not recalculate due to rounding.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 13 — Income Taxes

Tax Differences and Carryforwards

7 unchanged sentences

Nuclear decommissioning activities ( 187 ) ( 256 )

Tax loss carryforward, net of valuation allowances 16 47

Tax loss carryforward

Tax loss carryforward valuation allowances

Investment in partnerships ( 283 ) ( 204 )

4 unchanged sentences

unamortized ITCs $ ( 3,544 ) $ ( 3,331 )

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 13 — Income Taxes

The following table provides our carryforwards, of which the state-related items are presented on a post-apportioned basis, and any corresponding valuation allowances as of December 31, 2025:

Federal December 31, 2024

December 31, 2025

Federal general business credits carryforwards and other carryforwards $ —

State net operating losses and other carryforwards 365

State net operating losses (NOL) and other carryforwards

Deferred taxes on state tax attributes (net) 17

Valuation allowance on state tax attributes ( 3 )

Foreign net operating losses and other carryforwards 20

Foreign NOL and other carryforwards

Deferred taxes on foreign tax attributes (net) 5

As of December 31, 2025, NOL carryforwards consisted primarily of NOL in ten states, totaling $ 17 M in deferred tax assets with the majority to expire between 2030 and 2032.

A portion of state NOLs is offset with a valuation allowance to address potential limitation on NOL usage prior to expiration.

Unrecognized Tax Benefits

4 unchanged sentences

There was no material interest and penalty expense related to our tax positions for the years ended December 31 , 2025, 2024, and 2023.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 13 — Income Taxes

Description of tax years open to assessment by major jurisdiction

14 unchanged sentences

Other Tax Matters

One Big Beautiful Bill Act

In July 2025, Congress passed the OBBBA which, among other things, included certain changes in tax law.

See Note 3 — Regulatory Matters for additional information.

Tax Matters Agreement

3 unchanged sentences

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

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 13 — Income Taxes

in federal and state filings.

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.

2 unchanged sentences

As of December 31, 2025 and 2024, respectively, our Consolidated Balance Sheets reflect $ 43 million and $ 39 million in Other deferred credits and other liabilities, respectively, for tax liabilities where we maintain contractual responsibility to Exelon.

There were no payables in Accounts payable and accrued expenses for both periods.

Tax Refunds and Attributes .

4 unchanged sentences

A significant portion of such attributes were generated by our business.

As of December 31, 2024 and 2023, respectively, we had $ 138 million and $ 336 million in Other accounts receivable and $ 201 million and $ 178 million in Other deferred debits and other assets for the reclassified tax attributes expected to be utilized by Exelon after separation in accordance with the terms of the TMA.

In February 2024, we executed an amendment to the TMA that modified the timing of Exelon's payment of amounts due to us.

During 2025 and 2024, we received payments for tax attributes utilized by Exelon related to the 2024 and 2023 tax years of $ 145 million and $ 174 million, respectively.

As of December 31, 2025 and 2024, respectively, we had $ 175 million and $ 138 million in Accounts receivable, net and $ 21 million and $ 201 million in Other deferred debits and other assets for the reclassified tax attributes expected to be utilized by Exelon after separation in accordance with the terms of the TMA.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 13 — Income Taxes

IRS Notice 2026.

In February 2026, the IRS issued Notice 2026‑7 (the “Notice”), which provides guidance on the implementation of the corporate alternative minimum tax (CAMT).

The Notice permits taxpayers to deduct repair and maintenance costs under tax law principles in determining adjusted financial statement income and applies retroactively to previously filed tax returns.

As a result of this Notice, Exelon amended its 2023 and 2024 tax returns to reflect less CAMT and thus lower utilization of previously refunded tax attributes.

We received a demand letter from Exelon on February 19, 2026, and expect to remit to Exelon $ 235 million under the TMA related to prior periods.

This payment is due within 45 days of our receipt of the demand letter.

We will increase our receivable for the $ 235 million in the first quarter of 2026 as we expect Exelon to pay us as it utilizes these tax attributes in future periods.

Retirement Benefits

Defined Benefit Pension and OPEB

The majority of current employees participate in the defined benefit pension and OPEB plans that we sponsor.

Approximately half of current employees participate in the defined benefit pension and OPEB plans that we sponsor.

As the plan sponsor, our Consolidated Balance Sheets reflect underfunded pension and OPEB liabilities equal to an excess of either the PBO or APBO over the fair value of the plan assets, consistent with a single employer benefit plan.

2 unchanged sentences

Benefit Obligations, Plan Assets, and Funded Status

As of February 1, 2022, we assumed from Exelon the PBO, APBO, and plan assets for our plan participants in connection with the separation.

The defined benefit pension and OPEB plans were remeasured to determine the obligations and related plan assets to be transferred to us as of that date.

The pension assets allocated to us were based on the rules prescribed by ERISA for transfers of assets in connection with a pension plan separation.

A portion of the Exelon OPEB plan assets, which are held in VEBA trusts, were also allocated to us separately for each funding vehicle based on the ratio of the APBO assumed by us to the total APBO attributed to each funding vehicle.

As a result of the remeasurement completed at separation we recognized $ 2,006 million (after-tax) in Accumulated other comprehensive income (loss) for actuarial losses and prior service costs that had accrued over the lives of the plans prior to separation, primarily based on our proportionate share of the total projected pension and OPEB obligations at Exelon prior to separation.

We use a December 31 measurement date for our pension and OPEB obligations and the related plan assets.

1 unchanged sentence

See the table below for changes associated with the pension valuation.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Retirement Benefits

The following tables provide a rollforward of the changes in the benefit obligations and plan assets for the years ended December 31, 2025 and 2024 for all plans combined:

8 unchanged sentences

289 ( 269 ) 120 12

Acquisition-related adjustments (a)

Reclassification to liabilities held for sale

— ( 9 ) — ( 1 )

2 unchanged sentences

Benefit obligation as of the end of year $ 7,593 $ 7,397 $ 1,521 $ 1,422

(a) Pension and OPEB adjustments related to held for sale impacts of the settlement agreement entered into in 2024 and acquisition of STP in 2023, respectively.

See Note 2 — Mergers, Acquisitions, and Dispositions for additional information.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Retirement Benefits

Pension Benefits OPEB

6 unchanged sentences

Actual return (loss) on plan assets

Acquisition-related adjustment (a)

( 8 ) 170 — —

Reclassification to assets held for sale

Settlements ( 3 ) ( 13 ) — —

4 unchanged sentences

$ ( 1,094 ) $ ( 1,080 ) $ ( 957 ) $ ( 824 )

(a) Pension and OPEB adjustments related to held for sale impacts of the settlement agreement in 2024 and the acquisition of STP in 2023, respectively.

See Note 2 — Mergers, Acquisitions, and Dispositions for additional information.

We present our benefit obligations net of plan assets on our Consolidated Balance Sheets within the following line items:

We present our benefit obligations net of plan assets in our Consolidated Balance Sheets within the following line items:

Pension Benefits OPEB

12 unchanged sentences

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

The following table presents the components of our net periodic benefit (credits) costs, prior to capitalization and co-owner allocations, for the years ended December 31, 2024, 2023 and 2022:

The following table presents the components of our net periodic benefit (credit) cost for the years ended December 31, 2025, 2024, and 2023.

The amounts below are shown prior to capitalization and co-owner allocations, the effects of which were not material for any of the periods presented.

Pension Benefits OPEB Total Pension Benefits and OPEB

13 unchanged sentences

24 ( 6 ) ( 67 ) 31 15 9 55 9 ( 58 )

Net periodic benefit (credit) cost (a(b)

Net periodic benefit (credit) cost

$ 108 $ 84 $ 22 $ 49 $ 32 $ 25 $ 157 $ 116 $ 47

(a) Reflected above and in the Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2024, 2023, and 2022, are pension benefit and OPEB service costs of $ 99 million, $ 94 million, and $ 131 million, respectively, and non-service costs (credits) of $ 8 million, ($ 54 ) million, and ($ 116 ) million, respectively.

(b) Our portion of the total net periodic benefit (credits) costs allocated to us from Exelon in January 2022 prior to separation was not material and remains in total Operating and maintenance expense.

Combined Notes to Consolidated Financial Statements

23 unchanged sentences

For OPEB, we amortize the unrecognized prior service (credits) costs reflected in AOCI over participants’ average remaining service period to benefit eligibility age, and amortize certain actuarial gains and losses reflected in AOCI over participants’ average remaining service period to expected retirement.

The resulting average remaining service periods for pension and OPEB as of December 31, 2024 and 2023 were as follows:

The resulting average remaining service periods (in years) for pension and OPEB as of December 31, 2025 and 2024 were as follows:

December 31, 2025 December 31, 2024

5 unchanged sentences

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

Discount Rate.

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

The spot rates are used to discount the estimated future benefit distribution amounts under the pension and OPEB plans.

The discount rate is the single level rate that

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 14 — Retirement Benefits

produces the same result as the spot rate curve.

Discount Rate.

The discount rates are determined by developing a spot rate curve based on the yield to maturity of high-quality corporate bonds with similar maturities to the related pension and OPEB obligations.

The spot rates are used to discount the estimated future benefit distribution amounts under the pension and OPEB plans.

The discount rate is the single level rate that produces the same result as the spot rate curve.

We utilize an analytical tool developed by our actuaries to determine the discount rates.

15 unchanged sentences

Healthcare cost trend on covered charges N/A N/A 9.00 % initial, 5.00 % ultimate

Initial and ultimate rate of 5.00 %

7.00 % initial, 5.00 % ultimate

(a) The discount rates above represent the blended rates used to calculate the majority of Constellation's pension and OPEB costs.

(b) The investment crediting rate above represents a weighted average rate.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Retirement Benefits

The following assumptions were used to determine the net periodic benefit cost for the plans for the years ended December 31, 2025 and 2024.

10 unchanged sentences

Mortality table Pri-2012 table with MP-2021 improvement scale (adjusted) Pri-2012 table with MP-2021 improvement scale (adjusted) Pri-2012 table with MP-2021 improvement scale (adjusted) Pri-2012 table with MP-2021 improvement scale (adjusted)

Healthcare cost trend on covered charges N/A N/A Initial and ultimate rate of 5.00 %

Healthcare cost trend on covered charges N/A N/A 7.00 % initial, 5.00 % ultimate

Initial and ultimate rate of 5.00 %

2 unchanged sentences

(d) Includes 4.25 % average for the five-year period (2025-2028) and 3.75 % average thereafter.

(d) Includes 4.25 % average for the four-year period (2025-2028) and 3.75 % average thereafter.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Retirement Benefits

Contributions

1 unchanged sentence

The Pension Protection Act requires the attainment of certain funding levels to avoid benefit restrictions (such as an inability to pay lump sums or to accrue benefits prospectively), and at-risk status (which triggers higher minimum contribution requirements and participant notification).

The projected contributions below reflect a funding strategy to make levelized annual contributions to offset some of the growth of the liability (e.g., from service cost).

Based on this funding strategy and current market conditions, which are both subject to change, we made our annual qualified pension contribution in February 2025.

The projected contributions below reflect a funding strategy to make annual contributions to offset some of the growth of the liability (e.g., from service cost).

Qualified pension contributions made in February 2026 reflect our funding strategy and market conditions as of year-end.

Our non-qualified pension plans are not funded, given that they are not subject to statutory minimum contribution requirements.

OPEB plans are also not subject to statutory minimum contribution requirements, though we have funded some of our plans.

For our funded OPEB plans, we consider several factors in determining the level of our contributions, including liabilities management and levels of benefit claims paid.

Annually, we evaluate whether additional funding for those plans is needed, and the OPEB values below reflect both plan contributions (if applicable) and benefit payments for unfunded plans.

6 unchanged sentences

$ 211 $ 184 $ 54

(a) In 2024 and 2023, our annual qualified pension contributions were $ 161 million and $ 21 million, respectively.

(a) Our annual qualified pension contributions were $ 161 million in 2025 and 2024.

The benefit payments to the non-qualified pension plans in 2025 and 2024 were not material.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Retirement Benefits

The following table provides our planned contributions to our qualified pension plans, non-qualified pension plans, and OPEB plans in 2026 (including our benefit payments related to unfunded plans):

8 unchanged sentences

$ 5,801 $ 1,240

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Retirement Benefits

On a regular basis, we evaluate our investment strategy to ensure that plan assets will be sufficient to pay plan benefits when due.

5 unchanged sentences

The actual asset returns across our pension and OPEB plans for the year ended December 31, 2025 were 10.10 % and 10.10 %, respectively, compared to an expected long-term return assumption of 6.50 % and 6.00 %, respectively.

We used an EROA of 6.50 % and 6.00 % to estimate our 2025 pension and OPEB costs.

We used an EROA of 6.50 % and 6.00 % to estimate our 2026 pension and OPEB costs, respectively.

Our pension and OPEB plan target asset allocations as of December 31, 2025 and 2024 were as follows:

15 unchanged sentences

The following table presents pension and OPEB plan assets measured and recorded at fair value as a net component of Pension and non-pension postretirement benefit obligations in our Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of December 31, 2025 and 2024.

There were no plan assets classified as Level 3 as of December 31, 2025 and 2024.

December 31, 2025 December 31, 2024

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Level 1 Level 2 Total Level 1 Level 2 Total

Pension plan assets (a)

19 unchanged sentences

These items are required to reconcile to the fair value of net plan assets and consist primarily of receivables or payables related to pending securities sales and purchases, and interest and dividends receivable.

There were no assets or liabilities valued at level 3 for the year ended December 31, 2024.

The following table presents the reconciliation of Level 3 assets and liabilities measured at fair value for pension and OPEB plans for the year ended December 31, 2023:

Pension Assets Fixed Income Private Equity Total

Balance as of January 1, 2023

$ 8 $ 180 $ 188

Actual return on plan assets:

Relating to assets still held as of the reporting date — 12 12

Relating to assets sold during the period — ( 13 ) ( 13 )

Purchases and settlements:

Purchases — 8 8

Settlements (a)

— ( 187 ) ( 187 )

Transfers out of Level 3

( 8 ) — ( 8 )

Balance as of December 31, 2023

(a) Represents cash settlements only.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 14 — Retirement Benefits

Valuation Techniques Used to Determine Fair Value

11 unchanged sentences

The employer contributions to the savings plan were $ 126 million, $ 117 million, and $ 106 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Derivative Financial Instruments

Derivative Financial Instruments

1 unchanged sentence

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.

Other accounting treatments, including NPNS, are available through special election and designation, provided they meet specific, restrictive criteria both at the time of designation and on an ongoing basis.

All derivative instruments, excluding NPNS, 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 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.

Authoritative guidance for the offsetting of 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.

In the tables below, which present fair value balances, our commodity economic hedges 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.

2 unchanged sentences

Commodity Price Risk

We employ established policies and procedures to manage our risks associated with market fluctuations in commodity prices by entering 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 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.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Derivative Financial Instruments

To the extent the amount of energy we produce or procure differs from the amount of energy we have contracted to sell, we are exposed to market fluctuations in 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 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.

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.

2 unchanged sentences

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 existing 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 6 — Government Assistance for additional information on the nuclear PTC.

Beginning in 2024, our existing nuclear fleet is eligible for a nuclear PTC, 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 annually through the duration of the program based on the GDP price deflator for the preceding calendar year.

See Note 6 — Government Assistance for additional information.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Derivative Financial Instruments

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.

2 unchanged sentences

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 years ended December 31, 2024, 2023, and 2022, 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 15 — Derivative Financial Instruments

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

The following tables provide a summary of the commodity derivative fair value balances recorded as of December 31, 2025 and 2024:

December 31, 2025 Economic Hedges

Proprietary Trading

Collateral (a)(b)

Mark-to-market derivative assets (current)

Collateral (a)

Derivative assets (current)

$ 7,349 $ 375 $ ( 6,791 ) $ 933

Mark-to-market derivative assets (noncurrent)

Derivative assets (noncurrent)

5,030 272 ( 4,853 ) 449

Total mark-to-market derivative assets 9,190 — 272 ( 8,281 ) 1,181

Mark-to-market derivative liabilities (current)

Total derivative assets

12,379 647 ( 11,644 ) 1,382

Mark-to-market derivative liabilities (noncurrent)

Derivative liabilities (current)

( 7,642 ) 386 6,791 ( 465 )

Total mark-to-market derivative liabilities ( 9,459 ) — 314 8,281 ( 864 )

Total mark-to-market derivative net assets (liabilities)

Derivative liabilities (noncurrent)

( 5,585 ) 319 4,853 ( 413 )

Total derivative liabilities

( 13,227 ) 705 11,644 ( 878 )

Total derivative net assets (liabilities)

$ ( 848 ) $ 1,352 $ — $ 504

December 31, 2024

Mark-to-market derivative assets (current)

Derivative assets (current)

$ 5,518 $ 152 $ ( 4,860 ) $ 810

Mark-to-market derivative assets (noncurrent)

Derivative assets (noncurrent)

3,672 120 ( 3,421 ) 371

Total mark-to-market derivative assets 11,272 2 1,033 ( 10,154 ) 2,153

Mark-to-market derivative liabilities (current)

Total derivative assets

9,190 272 ( 8,281 ) 1,181

Mark-to-market derivative liabilities (noncurrent)

Derivative liabilities (current)

( 5,498 ) 173 4,860 ( 465 )

Total mark-to-market derivative liabilities ( 12,564 ) ( 2 ) 1,367 10,154 ( 1,045 )

Total mark-to-market derivative net assets (liabilities)

Derivative liabilities (noncurrent)

( 3,961 ) 141 3,421 ( 399 )

Total derivative liabilities

( 9,459 ) 314 8,281 ( 864 )

Total derivative net assets (liabilities)

$ ( 269 ) $ 586 $ — $ 317

(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 $ 351 million and $ 1,712 million of variation margin posted on the exchanges as of December 31, 2024 and 2023, respectively.

The following table summarizes the net buy/(sell) notional position of commodity derivative transactions, excluding our NPNS derivatives that are not recorded at fair value, as of December 31, 2025 and 2024:

(In millions)

As of December 31,

Commodity Type

2025 2024 Unit of Measure

( 260 ) ( 130 ) MWh

( 35 ) ( 18 ) Short Ton

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Derivative Financial Instruments

Economic Hedges (Commodity Price Risk)

For the years ended December 31, 2024, 2023, and 2022, we recognized the following net pre-tax commodity mark-to-market gains (losses), which are also included in the Net fair value changes related to derivatives line in the Consolidated Statements of Cash Flows.

For the years ended December 31, 2025, 2024, and 2023, we recognized the following net pre-tax commodity unrealized gains (losses), which are also included in the Net fair value changes related to derivatives line in the Consolidated Statements of Cash Flows.

For the Years Ended December 31,

4 unchanged sentences

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 $ 1,439 million and $ 592 million as of December 31, 2025 and 2024, respectively.

The mark-to-market derivative assets and liabilities for the years ended December 31, 2024 and 2023 and the mark-to-market gains and losses associated with management of interest rate and foreign currency risk for the years ended December 31, 2024, 2023, and 2022 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 15 — Derivative Financial Instruments

The derivative assets and liabilities for the years ended December 31, 2025 and 2024 and the unrealized gains and losses associated with management of interest rate and foreign currency risk for the years ended December 31, 2025, 2024, and 2023 were not material.

The unrealized 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.

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 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.

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 t ransactions 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.

In addition to right of offset 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.

1 unchanged sentence

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 December 31, 2024.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Derivative Financial Instruments

The following tables provide information on the credit exposure for derivative instruments, inclusive of payables and receivables, net of collateral and instruments that are subject to master netting agreements, as of December 31, 2025.

The amounts in the tables below exclude credit risk exposure from individual retail counterparties, NPNS contracts, forward values on non-derivative contracts and exposure through RTOs, ISOs, as well as commodity exchanges.

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, as well as NYMEX, ICE, NASDAQ, NGX, and Nodal commodity exchanges.

Rating as of December 31, 2025 Total Exposure Before Credit Collateral

8 unchanged sentences

Total $ 1,304 $ 40 $ 1,264 1 $ 152

(a) As of December 31, 2024, credit collateral held from counterparties where we had credit exposure included $ 3 million of cash and $ 39 million of letters of credit.

(a) As of December 31, 2025, credit collateral held from counterparties was entirely in the form of letters of credit.

Net Credit Exposure by Type of Counterparty As of December 31, 2025

4 unchanged sentences

Credit-Risk-Related Contingent Features

As part of the normal course of business, we routinely enter physically or financially settled contracts for the purchase and sale of capacity, electricity, fuels, emissions allowances, and other energy-related products.

As part of the normal course of business, we routinely enter into physically and 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 commodity transactions on exchanges where the exchanges act as the counterparty to each trade.

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

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Derivative Financial Instruments

posted in the form of cash or credit support with thresholds contingent upon our credit ratings from S&P and Moody's.

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.

2 unchanged sentences

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 a reasonable estimate for the contingent collateral obligation, which has been factored into the disclosure below.

In such cases, we believe an amount of several months of future payments (e.g., capacity payments) rather than a calculation of fair value is a reasonable estimate for the contingent collateral obligation, which has been factored into the disclosure below.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 15 — Derivative Financial Instruments

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:

7 unchanged sentences

As of December 31,

Cash collateral posted (a)

Cash collateral posted

$ 1,399 $ 635

Letters of credit posted (a)

Cash collateral held (a)

Letters of credit held (a)

Additional collateral required in the event of a credit downgrade below investment grade (at BB+/Ba1) (b)(c)(d)

(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”.

Letters of credit posted

Cash collateral held

Letters of credit held

Additional collateral required in the event of a credit downgrade below investment grade (at BB+/Ba1) (a)(b)(c)

(a) 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 supply forward contracts with certain utilities with one-sided collateral postings only from us.

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

(c) A loss of investment grade credit rating would require a three-notch downgrade from 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.

8 unchanged sentences

Credit Agreements

In February 2022, we entered into a credit agreement establishing a $ 3.5 billion five-year revolving credit facility (RCF) at a variable interest rate of SOFR plus 1.275 % and we entered into a $ 1 billion five-year liquidity facility with the primary purpose of supporting our letter of credit issuances.

In June 2024, we amended the RCF to increase the available aggregate commitment to $ 4.5 billion and extend the maturity date from January 2027 to June 2029.

In September 2025, we amended our existing RCF to increase the available aggregate commitment from $ 4.5 billion to $ 7.0 billion, which included incremental revolving credit commitments of $ 2.5 billion and extension of the maturity date to September 2030.

The incremental commitments became available upon closing of the Calpine acquisition in January 2026.

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 adders for the Daily Simple SOFR-based borrowings and Term SOFR borrowings are 0.075 % and 1.075 %, 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.

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 1.00 % and 2.00 %, respectively.

The credit agreements also require us to pay facility fees based upon the aggregate commitments.

9 unchanged sentences

There were no draws on the Facility as of December 31, 2025.

In February 2026, we drew on the Facility in the amount of $ 600 million which was still outstanding as of the date of this filing.

The amended Facility requires the balance of eligible receivables to be maintained at or above the balance of cash proceeds received from the Lenders.

6 unchanged sentences

December 31, 2025

Facility Type Aggregate Bank

Facility Draws Outstanding

Letters of Credit Outstanding

Commercial Paper (a)

Facility Type Aggregate Bank Commitment

Facility Draws Outstanding Letters of Credit (a)

Outstanding Commercial Paper (b)

Total Available Capacity

Revolving Credit Facility $ 4,500 $ — $ 40 $ — $ 4,460

Bilaterals (b)

Bilaterals (c)

2,350 — 1,276 — 1,074

Accounts Receivable Facility 1,500 — — — 1,500

1,500 — — — 1,500

Liquidity Facility 971 — 907 — 21 (c)

Liquidity Facility 971 — 647 — 312 (d)

Project Finance 137 — 122 — 15

3 unchanged sentences

1,850 — 1,095 — 755

Liquidity Facility 971 — 720 — 191 (c)

Accounts Receivable Facility

1,500 — — — 1,500

Liquidity Facility 971 — 907 — 21 (d)

Project Finance 137 — 120 — 17

Total $ 8,958 $ — $ 2,173 $ — $ 6,742

(a) Our commercial paper program is supported by the revolving credit agreement.

(a) Excludes an additional outstanding letter of credit which was not issued under these facilities of $ 15 million as of December 31, 2025 and 2024.

See Note 18 — Commitments and Contingencies for additional information.

(b) 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 December 31, 2024 and 2023, the maximum program size of our commercial paper program was $ 4.5 billion and $ 3.5 billion, respectively.

As of December 31, 2025 and 2024, the maximum program size of our commercial paper program was $ 4.5 billion.

We do not issue commercial paper in an aggregate amount exceeding the then available capacity under our credit facility.

There were no commercial paper borrowings outstanding as of December 31, 2024.

The weighted average interest rate on commercial paper borrowings was 5.66 % as of December 31, 2023.

(b) Refer to table below for additional information on our bilateral credit agreements.

There were no commercial paper borrowings outstanding as of December 31, 2025 and 2024.

(d) 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.

1 unchanged sentence

As of December 31, 2025 and 2024, without posting additional collateral, the actual availability of facility, prior to outstanding letters of credit was $ 959 million and $ 928 million, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 16 — Debt and Credit Agreements

Bilateral Credit Agreements

The following table reflects the bilateral credit agreements at December 31, 2025:

Date Initiated (b)

Latest Amendment Date Maturity Date (a)

Date Initiated (a)

Latest Amendment Date Maturity Date (b)

January 2016 April 2023 April 2026 $ 150

3 unchanged sentences

November 2019 June 2024 June 2026 100

May 2020 March 2023 N/A 300

March 2023 N/A 300

August 2022 N/A N/A 50

March 2023 N/A March 2025 100

March 2023 March 2025 March 2027 100

December 2023 N/A N/A 200

March 2024 N/A N/A 200

March 2024 (c)

May 2024 N/A N/A 150

(a) Credit facilities that do not contain a maturity date are specific to the agreements set within each contract.

January 2025 (c)

March 2025 N/A March 2026 300

(a) Bilateral credit agreements solely support the issuance of letters of credit and do not back our commercial paper program.

(b) Credit facilities that do not contain a maturity date are specific to the agreements set within each contract.

In some instances, credit facilities are automatically renewed based on the contingency standards set within the specific agreement.

(b) Bilateral credit agreements solely support the issuance of letters of credit and do not back our commercial paper program.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 16 — Debt and Credit Agreements

In January 2025, we initiated a new bilateral credit agreement for $ 200 million, with no maturity date.

(c) In February 2026, we increased the capacity to issue letters of credit by an additional $ 100 million each for three existing uncommitted bilateral facilities.

Short-Term Loan Agreements

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

We had short-term loan agreements outstanding as of December 31, 2025 as reflected in the table below.

There were no short-term loan agreements outstanding as of December 31, 2024.

Month Initiated

Interest Rate

Outstanding Amount as of December 31, 2024

Weighted Average Interest Rate

Outstanding Amount as of December 31, 2025

January 2023 1-month SOFR + 0.80 %

January 2024 $ — $ 100

February 2023 1-month SOFR + 1.05 %

February 2024 — 400

May 2025 1-month SOFR + 0.90 %

May 2026 5.09 % $ 900

September 2025 1-month SOFR + 0.90 %

September 2026 4.93 % 750

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 16 — Debt and Credit Agreements

Long-Term Debt

3 unchanged sentences

Senior unsecured notes 5.60 % - 6.50 %

2028 - 2054 $ 5,688 $ 6,588

Tax-exempt notes

4.10 % - 4.45 %

2029 - 2053 (a)

Notes payable and other 1.71 % - 6.10 %

2026 - 2035 53 51

Nonrecourse debt:

Fixed rates 2.29 % - 6.00 %

2031 - 2037 653 720

Variable rates 5.82 % - 6.76 %

4 unchanged sentences

Long-term debt $ 7,250 $ 7,384

(a) The Tax-exempt notes have a maturity date of March 2025 to April 2053, and a mandatory purchase date that ranges from March 2025 to June 2029.

(a) The Tax-exempt notes have a maturity date of June 2029 to April 2053, and a mandatory purchase date that ranges from April 2028 to June 2029.

Long-term debt maturities in the periods 2026 through 2031 and thereafter are as follows:

1 unchanged sentence

Total $ 7,403

Debt Covenants

As of December 31, 2024, we are in compliance with all debt covenants.

Nonrecourse Debt

We have also issued nonrecourse debt, for which approximately $ 2 billion of generating assets have been pledged as collateral as of both December 31, 2024 and 2023, respectively.

Borrowings under these agreements

DOE Loan Guarantee

In November 2025, the DOE Office of Energy Dominance Financing issued a guarantee for up to $ 1.0 billion for an unsecured loan from the Federal Financing Bank to support the restart of the Crane Clean Energy Center.

The loan will mature in November 2055.

Interest rates on the loan will be fixed upon each advance at a spread of 0.375 % above U.S.

Treasuries of comparable maturity.

There have been no borrowings on this loan as of the date of this filing.

Calpine Acquisition

Upon completion of the acquisition of Calpine in January 2026, we assumed approximately $ 12.6 billion of debt inclusive of approximately $ 7.6 billion of corporate long-term debt, including senior unsecured and secured notes and corporate term loans in addition to approximately $ 5 billion of various project financing arrangements.

Pursuant to the Exchange Offers discussed below, we issued new notes in January 2026 effectively replacing $ 2.3 billion of Calpine's senior unsecured and secured notes with Constellation senior unsecured notes.

Using the proceeds from our January 2026 bond issuance, as discussed below, along with cash on hand and short-term debt, we repaid $ 2.5 billion of Calpine corporate term loans immediately after the acquisition closing and repaid $ 1.25 billion of Calpine senior secured first lien notes in February 2026.

Following the debt exchange and redemptions discussed, $ 6.5 billion of Calpine debt remains outstanding.

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 16 — Debt and Credit Agreements

are secured by the assets and equity of each respective project.

Debt Exchange Offering

In December 2025, we announced that, in connection with the planned acquisition of Calpine by CEG Parent, we commenced private exchange offers and related consent solicitations with respect to certain outstanding debt of Calpine.

Under the Exchange Offers, we solicited consents to holders of certain Calpine debt to amend the notes and the related indentures under which they were issued to eliminate substantially all of the restrictive covenants, restrictive provisions and events of default, other than payment-related and bankruptcy-related events of default.

In January 2026, we completed the exchange offering, effectively replacing $ 2.3 billion of Calpine senior secured and unsecured notes with Constellation senior unsecured notes.

The terms of the debt issuance under the exchange are as follows:

Note Interest Rate Maturity Issued Amount

2029 Senior Notes 4.625 % February 2029 $ 647

2031 Senior Notes 5.000 % February 2031 848

2031 Senior Notes 3.750 % March 2031 795

Total $ 2,290

Senior Note Issuance

In January 2026, we issued senior unsecured notes totaling $ 2.75 billion, the proceeds from which were used to pay down Calpine debt assumed.

The terms of the debt issuance are as follows:

Interest Rate

Maturity Issued Amount

2028 Floating Rate Senior Notes

SOFR + 0.600 %

January 2028 $ 300

2028 Senior Notes

3.900 % January 2028 900

2031 Senior Notes

4.400 % January 2031 750

2066 Senior Notes

5.875 % January 2066 800

Debt Covenants

As of December 31, 2025, we are in compliance with all debt covenants.

Nonrecourse Debt

We have also issued nonrecourse debt, for which approximately $ 1.9 billion and $ 2 billion of generating assets have been pledged as collateral as of December 31, 2025 and 2024, respectively.

Borrowings under these agreements are secured by the assets and equity of each respective project.

The lenders do not have recourse against us in the event of a default.

12 unchanged sentences

In December 2017, our interests in Antelope Valley were contributed to and are pledged as collateral for the CR financing structures referenced below.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 16 — Debt and Credit Agreements

Continental Wind, LLC.

18 unchanged sentences

In December 2020, CR entered into a financing agreement for a $ 750 million nonrecourse senior secured term loan credit facility, scheduled to mature in December 2027.

Beginning in July 2024, the term loan bears interest at a variable rate equal to 3-month SOFR + 2.25 %, subject to a 1 % SOFR floor with interest payable quarterly.

Redemptions from June 2023 through June 2024 were based on 3-month SOFR + 2.76 %.

Redemptions prior to June 2023 were based on LIBOR + 2.50 %.

Beginning in October 2025, the term loan bears interest at a variable rate equal to 3-month SOFR plus 2.00 %, subject to a 1 % SOFR floor with interest payable quarterly.

Redemptions prior to October 2025 were based on 3-month SOFR plus 2.25 %.

Redemptions from June 2023 through June 2024 were based on 3-month SOFR plus 2.76 %, and LIBOR plus 2.50 % prior to that date.

In addition to the financing, CR entered interest rate swaps to manage a portion of the interest rate exposure in connection with the financing.

7 unchanged sentences

See Note 21 — Variable Interest Entities for additional information on CRP and Note 15 — Derivative Financial Instruments for additional information on interest rate swaps.

West Medway II, LLC.

In May 2021, West Medway II, LLC (West Medway II) entered into a $ 150 million nonrecourse senior secured term loan maturing in March 2026.

Our interests in West Medway II were pledged as collateral.

Net proceeds were used for general corporate purposes.

Beginning in May 2025, the loan bore interest at 1-month SOFR plus 3.350 %.

Redemptions from May 2023 to May 2025 were based on 1-month SOFR plus the variable interest rate of 2.975 % - 3.225 % and LIBOR plus 2.875 % prior to that date.

West Medway II also entered into interest rate swaps with a $ 113 million initial notional amount that fixed LIBOR at 0.61 % and, beginning in May 2023, fixed SOFR at 0.5365 %.

The swaps were terminated in August and October 2025.

As of December 31, 2024, approximately $ 50 million was outstanding and the term loan was fully repaid in October 2025.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 16 — Debt and Credit Agreements

West Medway II, LLC.

In May 2021, West Medway II, LLC (West Medway II), our indirect subsidiary, entered into a financing agreement for a $ 150 million nonrecourse senior secured term loan credit facility with a maturity date in March 2026.

Beginning in May 2023, the term loan bears interest at a variable rate equal to 1-month SOFR plus the variable interest rate of 2.975 % - 3.225 %, paid quarterly.

Redemptions prior to May 2023 were based on LIBOR + 2.875 %.

In addition to the financing, West Medway II entered interest rate swaps to manage a portion of the interest rate exposure in connection with the financing.

The swaps had an initial notional amount of $ 113 million and fixed the 1-month LIBOR at 0.61 %.

Beginning in May 2023, the swap fixed the 1-month SOFR at 0.5365 %.

We used the net proceeds for general corporate purposes.

Our interests in West Medway II, were pledged as collateral for this financing.

As of December 31, 2024 and 2023, approximately $ 50 million and $ 85 million was outstanding, respectively.

See Note 15 — Derivative Financial Instruments for additional information on interest rate swaps.

Note 17 — Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

5 unchanged sentences

Fair Value of Financial Liabilities Recorded at Amortized Cost

The following tables present the carrying amounts and fair values of our long-term debt and the SNF obligation as of December 31, 2024 and 2023.

The following table presents the carrying amounts and fair values of our long-term debt and the SNF obligation as of December 31, 2025 and 2024.

We have no financial liabilities classified as Level 1.

4 unchanged sentences

Long-Term Debt, including amounts due within one year $ 7,342 $ 6,995 $ 666 $ 7,661 $ 8,412 $ 7,805 $ 716 $ 8,521

SNF Obligation 1,366 1,278 — 1,278 1,296 1,222 — 1,222

SNF Obligation (a)

1,426 1,406 — 1,406 1,366 1,278 — 1,278

(a) SNF Obligation is included in Other deferred credits and other liabilities in the Consolidated Balance Sheets.

Combined Notes to Consolidated Financial Statements

21 unchanged sentences

Treasury rate.

The compounded obligation amount is discounted back to present value using our discount rate, which is calculated using the same methodology as described above for the taxable debt securities, and an estimated maturity date of 2040 and 2035 for the years ended December 31, 2024 and 2023, respectively.

Combined Notes to Consolidated Financial Statements

18 unchanged sentences

Investments in equities 87 — — 87 389 — — 389

Mark-to-market derivative assets

Derivative assets

Economic hedges 1,114 7,449 3,830 12,393 1,278 5,306 2,641 9,225

Proprietary trading — — — — — — 2 2

Effect of netting and allocation of collateral

( 889 ) ( 6,853 ) ( 3,256 ) ( 10,998 ) ( 1,097 ) ( 4,790 ) ( 2,123 ) ( 8,010 )

Mark-to-market derivative assets subtotal 181 516 518 1,215 334 626 1,214 2,174

DPP consideration — — — — — 1,216 — 1,216

Derivative assets subtotal

225 596 574 1,395 181 516 518 1,215

Total assets measured at fair value 8,938 3,798 1,102 21,032 8,254 4,079 1,021 19,145

Mark-to-market derivative liabilities

Derivative liabilities

Economic hedges ( 1,148 ) ( 8,021 ) ( 4,062 ) ( 13,231 ) ( 1,222 ) ( 5,462 ) ( 2,778 ) ( 9,462 )

Proprietary trading — — — — — — ( 2 ) ( 2 )

Effect of netting and allocation of collateral

1,065 7,657 3,628 12,350 1,180 5,157 2,259 8,596

Mark-to-market derivative liabilities subtotal ( 42 ) ( 305 ) ( 519 ) ( 866 ) ( 94 ) ( 612 ) ( 345 ) ( 1,051 )

Derivative liabilities subtotal

( 83 ) ( 364 ) ( 434 ) ( 881 ) ( 42 ) ( 305 ) ( 519 ) ( 866 )

Deferred compensation obligation — ( 124 ) — ( 124 ) — ( 93 ) — ( 93 )

3 unchanged sentences

We exclude cash of $ 3,621 million and $ 2,924 million, and restricted cash of $ 57 million and $ 71 million, as of December 31, 2025 and 2024, respectively.

CEG Parent has excluded an additional $ 4 million and $ 2 million of cash as of December 31, 2024 and 2023, respectively.

CEG Parent has no additional cash exclusions as of December 31, 2025, and an additional $ 4 million of cash excluded as of December 31, 2024.

(b) Includes net liabilities of $ 166 million and $ 148 million as of December 31, 2025 and 2024, respectively, which consist of receivables related to pending securities sales, interest and dividend receivables, repurchase agreement obligations, and payables related to pending securities purchases.

2 unchanged sentences

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.

As of December 31, 2025, our NDTs have outstanding commitments to invest in private credit, private equity, and real assets of $ 505 million, $ 487 million, and $ 576 million, respectively.

These commitments will be funded by our existing NDT funds.

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 17 — Fair Value of Financial Assets and Liabilities

As of December 31, 2024, our NDTs have outstanding commitments to invest in private credit, private equity, and real assets of $ 482 million, $ 311 million, and $ 791 million, respectively.

These commitments will be funded by our existing NDT funds.

Equity Security Investments without Readily Determinable Fair Values.

4 unchanged sentences

For the Year Ended December 31, 2025

NDT Fund Investments Mark-to-Market Derivatives

NDT Fund Investments Derivatives

Rabbi Trust Investments

4 unchanged sentences

Change in collateral — 236 — 236

Purchases, sales, issuances and settlements

Purchases — 84 — 84

5 unchanged sentences

The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of December 31, 2025

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

$ 9 $ ( 56 ) $ — $ ( 47 )

For the Year Ended December 31, 2024

NDT Fund Investments Mark-to-Market Derivatives

NDT Fund Investments Derivatives

Rabbi Trust Investments

4 unchanged sentences

Change in collateral — ( 325 ) — ( 325 )

Purchases, sales, issuances and settlements

Purchases 66 61 — 127

5 unchanged sentences

The amount of total gains (losses) included in income attributed to the change in unrealized gains (losses) related to assets and liabilities as of December 31, 2024

$ 5 $ ( 126 ) $ — $ ( 121 )

(a) Includes a reduction of ($ 219 ) million and ($ 706 ) million for realized gains due to the settlement of derivative contracts for the years ended December 31, 2025 and 2024, 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 17 — Fair Value of Financial Assets and Liabilities

The following table presents 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 years ended December 31, 2025, 2024, and 2023:

15 unchanged sentences

Investments with maturities of three months or less when purchased, including certain short-term fixed income securities are considered cash equivalents and included in the recurring fair value measurements hierarchy as Level 1 or Level 2.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

These investments consist of individually held equity securities, equity mutual funds, and equity commingled funds in domestic and foreign markets.

18 unchanged sentences

Treasury securities have been categorized as Level 1 because they trade in highly-liquid and transparent markets.

Certain private placement fixed income securities have been categorized as Level 3 because they are priced using certain significant unobservable inputs and are typically illiquid.

Certain private placement fixed income securities

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

have been categorized as Level 3 because they are priced using certain significant unobservable inputs and are typically illiquid.

The remaining fixed income securities, including certain other fixed income investments, are based on evaluated prices that reflect observable market information, such as actual trade information of similar securities, adjusted for observable differences and are categorized as Level 2.

11 unchanged sentences

Private credit investments primarily consist of investments in private debt strategies.

These investments are generally less liquid assets with an underlying term of 3 to 5 years and are intended to be held to maturity.

These investments are generally less liquid assets, typically with an underlying term of 3 to 5 years, and are usually intended to be held to maturity.

The fair value of these investments is determined by the fund manager or administrator using a combination of valuation models including cost models, market models, and income models and typically cannot be redeemed until maturity of the term loan.

Private credit investments held directly by us are categorized as Level 3 because they are based largely on inputs that are unobservable and utilize complex valuation models.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

For certain private credit funds, the fair value is determined using a combination of valuation models including cost models, market models, and income models and typically cannot be redeemed until maturity of the term loan.

14 unchanged sentences

Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country, and individual fund.

As of December 31, 2024, there were no significant concentrations (generally defined as greater than 10 percent) of risk in the NDT assets.

As of December 31, 2025, there were no significant concentrations (generally defined as greater than 10%) of risk in the NDT assets.

See Note 10 — Asset Retirement Obligations for additional information on the NDT fund investments.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

Rabbi Trust Investments.

14 unchanged sentences

These equity securities are valued based on quoted prices in active markets and are categorized as Level 1.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

Deferred Purchase Price Consideration.

We had DPP consideration for the sale of certain receivables of retail electricity.

This amount was valued based on the sales price of the receivables net of allowance for credit losses (see Note 1 — Basis of Presentation for additional details on our policy for credit losses).

Since the DPP consideration was based on the sales price of the receivables, it was categorized as Level 2 in the fair value hierarchy.

See Note 7 — Accounts Receivable for additional information on the sale of certain customer accounts receivables.

Mark-to-Market Derivatives.

Derivative contracts are traded in both exchange-based and non-exchange-based markets.

22 unchanged sentences

The Level 3 balance generally consists of forward sales and purchases of power and natural gas and certain transmission congestion contracts.

We utilize various inputs and factors including market data and assumptions that market participants would use in pricing assets or liabilities as well as assumptions about the risks inherent in the inputs to the valuation technique.

We utilize various inputs and factors including market data and assumptions that market participants would use in pricing

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

assets or liabilities as well as assumptions about the risks inherent in the inputs to the valuation technique.

The inputs and factors include forward commodity prices, commodity price volatility, contractual volumes, delivery location, interest rates, credit quality of counterparties, and credit enhancements.

11 unchanged sentences

The change in fair value associated with a change in the spread is generally immaterial.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 17 — Fair Value of Financial Assets and Liabilities

average spread calculated across all Level 3 power and gas delivery locations is approximately $ 48.71 and $ 3.68 for power and natural gas, respectively as of December 31, 2024.

An average spread calculated across all Level 3 power and gas delivery locations is approximately $ 52.17 and $ 3.52 for power and natural gas, respectively as of December 31, 2025.

Many of the commodity derivatives are short term in nature and thus a majority of the fair value may be based on observable inputs even though the contract as a whole must be classified as Level 3.

See Note 15 — Derivative Financial Instruments for additional information on mark-to-market derivatives.

See Note 15 — Derivative Financial Instruments for additional information on derivatives.

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

3 unchanged sentences

2024 Range & Arithmetic Average

Mark-to-market derivatives—Economic hedges (a)(b)

Level 3 Derivatives—Economic hedges (a)(b)

$ ( 232 ) $ ( 137 ) Discounted Cash Flow Forward power price $ 1.89 - $ 154

$ 52 $ 2.57 - $ 140

Forward gas price $( 0.46 ) - $ 15

$ 3.52 $ 2.09 - $ 15

Option Model Volatility percentage 14 % - 197 %

59 % 23 % - 141 %

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

8 unchanged sentences

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 18 — Commitments and Contingencies

Commitments and Contingencies

2 unchanged sentences

Expiration within

2030 and beyond

2026 2027 2028 2029 2030 2031 and beyond Total

Letters of credit $ 1,784 $ 190 $ 122 $ — $ 1 $ 3 $ 2,100

7 unchanged sentences

The Price-Anderson Act was enacted to ensure the availability of funds for public liability claims arising from an incident at any of the U.S.

licensed nuclear facilities and to limit the liability of nuclear reactor owners for such

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

claims from any single incident.

licensed nuclear facilities and to limit the liability of nuclear reactor owners for such claims from any single incident.

As of December 31, 2025, the current liability limit per incident is $ 16.3 billion and is subject to change to account for the effects of inflation and changes in the number of licensed reactors at least once every five years with the last adjustment effective January 1, 2024.

10 unchanged sentences

The insurance maintained for each facility is currently provided through insurance policies purchased from NEIL, an industry mutual insurance company of which we are a member.

Currently, NRC requires that we maintain a minimum coverage limit for each reactor site of $ 1.06 billion, and we currently have coverage of $ 1.5 billion for each site.

Currently, the NRC requires that we maintain a minimum coverage limit for each reactor site of $ 1.06 billion, and we currently have coverage of $ 1.5 billion for each site.

NEIL may declare distributions to its members as a result of favorable operating experience.

5 unchanged sentences

The current maximum aggregate annual retrospective premium obligation for our interests is approximately $ 297 million.

NEIL requires its members to maintain an investment grade credit rating or to ensure collectability of their annual retrospective premium obligation by providing a financial guarantee, letter of credit, deposit premium, or some other means of assurance.

NEIL requires its

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

members to maintain an investment grade credit rating or to ensure collectability of their annual retrospective premium obligation by providing a financial guarantee, letter of credit, deposit premium, or some other means of assurance.

NEIL provides “all risk” property damage, decontamination, and premature decommissioning insurance for each station for losses resulting from damage to its nuclear plants, either due to accidents or acts of terrorism.

5 unchanged sentences

Any such losses could have a material adverse effect on our consolidated financial statements.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

Spent Nuclear Fuel Obligation

11 unchanged sentences

That settlement agreement does not expire until all SNF has been collected from the sites that it covers.

Calvert Cliffs, Ginna, NMP, Fitzpatrick, and STP each have separate settlement agreements in place with the DOE which were extended during 2023 to provide for the reimbursement of SNF storage costs through December 31, 2025.

We and the DOE have the option to extend those settlements every three years upon mutual consent.

1 unchanged sentence

After considering the amounts due to co-owners of certain nuclear stations and to the current owner of Oyster Creek Nuclear Generating Station, we received net cumulative cash reimbursements of $ 1,955 million.

As of December 31, 2024 and 2023, the amount of SNF storage costs for which reimbursement has been or will be requested from the DOE under the DOE settlement agreements is as follows:

As of December 31, 2025 and 2024, the amount of SNF storage costs for

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

which reimbursement has been or will be requested from the DOE under the DOE settlement agreements is as follows:

December 31, 2025 December 31, 2024

3 unchanged sentences

( 20 ) ( 40 )

(a) Recorded in Other accounts receivable.

(a) Recorded in Accounts receivable, net.

(b) Recorded in Other deferred debits and other assets.

Represents amounts owed to the co-owners of Peach Bottom, Quad Cities, and NMP Unit 2 generating facilitie s .

The Standard Contracts with the DOE also required the payment to the DOE of a one-time fee applicable to nuclear plants that generated SNF prior to April 7, 1983.

The below table outlines the SNF liability recorded as of December 31, 2024 and 2023:

The below table outlines the SNF liability, which is recorded within Other deferred credits and other liabilities, as of December 31, 2025 and 2024:

December 31, 2025 December 31, 2024

7 unchanged sentences

(b) A prior owner of FitzPatrick elected to defer payment of the one-time fee of $ 34 million, with interest to the date of payment, for the FitzPatrick unit.

As part of the FitzPatrick acquisition on March 31, 2017, we assumed a SNF liability for

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

the DOE one-time fee obligation with interest related to FitzPatrick along with an offsetting asset, included in Other deferred debits and other assets, for the contractual right to reimbursement from NYPA, a prior owner of FitzPatrick, for amounts paid for the FitzPatrick DOE one-time fee obligation.

As part of the FitzPatrick acquisition on March 31, 2017, we assumed a SNF liability for the DOE one-time fee obligation with interest related to FitzPatrick along with an offsetting asset, included in Other deferred debits and other assets, for the contractual right to reimbursement from NYPA, a prior owner of FitzPatrick, for amounts paid for the FitzPatrick DOE one-time fee obligation.

Interest for our SNF liabilities accrues at the 13-week Treasury Rate.

The 13-week Treasury Rate in effect for calculation of the interest accrual at December 31, 2024 was 4.553 % for the deferred amount transferred from ComEd and 4.615 % for the deferred FitzPatrick amount.

The 13-week Treasury Rate in effect for calculation of the interest accrual at December 31, 2025 and 2024 was 3.906 % and 4.553 %, respectively for the deferred amount transferred from ComEd, and 3.953 % and 4.615 %, respectively, for the deferred FitzPatrick amount.

The following table summarizes sites for which we do not have an outstanding SNF Obligation:

7 unchanged sentences

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.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

environmental agencies or others.

Additional costs could have a material, unfavorable impact on our consolidated financial statements.

As of December 31, 2024 and 2023, we had accrued undiscounted amounts for environmental liabilities of $ 60 million and $ 61 million, respectively, in Accounts payable and accrued expenses and $ 169 million and $ 88 million, respectively, in Other deferred credits and other liabilities in the Consolidated Balance Sheets.

As of December 31, 2025 and 2024, we had accrued undiscounted amounts for environmental liabilities of $ 9 million and $ 60 million, respectively, in Accounts payable and accrued expenses and $ 169 million for both periods in Other deferred credits and other liabilities in the Consolidated Balance Sheets.

Cotter Corporation.

10 unchanged sentences

In September 2018, the EPA issued its Record of Decision Amendment (RODA) for the selection of a final remedy that requires partial excavation of the radiological materials and capping the landfill.

The EPA and the PRPs have entered into a Consent Agreement to perform the Remedial Design, which is expected to be completed in 2025.

The EPA and the PRPs have entered into a Consent Agreement to perform the Remedial Design, which is now expected to be completed in 2026.

In March 2019, the PRPs received Special Notice Letters from the EPA to perform the Remedial Action work.

The total estimated cost of the remedy, considering the current EPA technical requirements, is approximately $ 530 million, including cost escalation on an undiscounted basis.

The total estimated cost of the design, remedy, and operation and maintenance, considering the current EPA technical requirements, is approximately $ 560 million, including cost escalation on an undiscounted basis.

West Lake Landfill;

4 unchanged sentences

We estimate the undiscounted cost for the groundwater RI/FS to be approximately $ 60 million.

At this time we cannot predict the likelihood, or the extent to which remediation activities, if any, may be

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

required and therefore cannot estimate a reasonably possible range of loss for response costs beyond those associated with the RI/FS component.

At this time we cannot predict the likelihood, or the extent to which remediation activities, if any, may be required and therefore cannot estimate a reasonably possible range of loss for response costs beyond those associated with the RI/FS component.

We determined a loss associated with the EPA's partial excavation and landfill cover remedy and the groundwater RI/FS is probable and have recorded a liability for each, both of which are included in the total amount as discussed above, that reflects management’s best estimate of Cotter’s allocable share of the cost among the PRPs.

Given the joint and several nature of these two liabilities, the amount of our ultimate liability will depend on the actual costs incurred to implement the required remedy at OU1 and the required study at OU3, as well as on the nature and terms of any cost-sharing arrangements with the final group of PRPs.

It is reasonably possible that the ultimate cost and Cotter's associated allocable share could differ significantly once these uncertainties are resolved, which could have a material impact on our consolidated financial statements.

Latty Avenue and Vicinity Properties .

5 unchanged sentences

The consent decree settles past and future responses costs incurred by the United States Army Corp of Engineers and DOE for their response actions conducted in connection with the release or threatened release of hazardous substances, including radioactive substances at Latty Avenue and certain additional adjacent properties.

The settlement amount for this matter is included in the total amount of environmental liabilities recognized as of December 31, 2024, referenced previously.

We are involved in various other litigation matters that are being defended and handled in the ordinary course of business.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

We are involved in various 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.

13 unchanged sentences

All of these cases were combined in a Multi-District-Litigation (MDL) pending in Texas state court, which established a bellwether process to consider initial motions to dismiss by the different industry groups of defendants.

Defendants filed motions to dismiss the amended

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

complaints in five bellwether cases in July 2022.

Defendants filed motions to dismiss the amended complaints in five bellwether cases in July 2022.

In February 2023, the court granted the motions to dismiss pertaining to us in part and denied them in part, leaving the plaintiffs' negligence and nuisance claims to proceed.

2 unchanged sentences

The MDL involves over 200 cases brought by approximately 30,000 plaintiffs, including more than 1,300 insurance companies, and we are defendants in the majority of them.

We are also named in an alleged class action that seeks to assert claims on behalf of over 4.1 million Texans within ERCOT who lost power during Winter Storm Uri.

We had also been named in an alleged class action that sought to assert claims on behalf of over 4.1 million Texans within ERCOT who lost power during Winter Storm Uri.

The court subsequently denied certification of the class, and plaintiffs have not presently pursued on appeal.

In December 2023, the Court of Appeals for the First District of Texas granted the power generator defendants' Petition for a Writ of Mandamus in the five bellwether cases and ordered the MDL court to dismiss the remaining claims against the power generator defendants, including our entities.

3 unchanged sentences

In January 2025, plaintiffs petitioned the Supreme Court of Texas for mandamus review, requesting that the court reinstate the MDL court's denial of the generator defendants' motions to dismiss and thereby permit plaintiffs' claims to proceed.

In June 2025, the court requested consolidated briefing on the merits in each of the five bellwether cases.

The briefing concluded in February 2026, and the parties now await a decision from the court.

In addition to the cases pending in the MDL in Texas state court, in January 2025, the Attorney General of the State of Oklahoma filed a lawsuit in state court against us, along with 10 other defendants, alleging antitrust and consumer protection act violations as well as unjust enrichment in connection with the sale, transport and marketing of natural gas to state agencies, municipalities and the people of the state of Oklahoma during the extreme cold weather event.

The Attorney General seeks compensatory and punitive damages.

In March 2025,

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 18 — Commitments and Contingencies

defendants filed multiple motions to dismiss the lawsuit, which were denied by the court in August 2025.

The parties are now engaged in discovery with trial likely to be scheduled in 2027.

We dispute liability and deny that we are responsible for any of plaintiffs’ alleged claims and are vigorously contesting them.

5 unchanged sentences

At December 31, 2025 and 2024, we recorded estimated liabilities of approximately $ 120 million and $ 125 million, respectively, in total for asbestos-related bodily injury claims.

These amounts are primarily included in Other deferred credits and other liabilities in the Consolidated Balance Sheets.

Current amounts included in Accounts payable and accrued expenses are not material in either of the periods presented.

As of December 31, 2025, approximately $ 17 million of this amount related to 251 open claims presented to us, while the remaining $ 103 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.

5 unchanged sentences

Any repurchased shares are constructively retired and cancelled.

The program does not obligate us to acquire a minimum number of shares during any period and our repurchase of CEG's common stock may be limited, suspended, or discontinued at any time at our discretion and without prior notice.

The program does not obligate us to acquire a minimum number of shares during any period and our repurchase of the Company's common stock may be limited, suspended, or discontinued at any time at our discretion and without prior notice.

No other repurchase plans or programs have been authorized.

As of December 31, 2024, there was $ 991 million of remaining authority to repurchase shares of the Company's outstanding common stock.

During 2024 and 2023, we repurchased from the open market approximately 1.2 million and 10.6 million shares, respectively, of our common stock for a total cost, inclusive of taxes and transaction costs, of $ 150 million and $ 1 billion, respectively.

As of December 31, 2025, there was approximately $ 593 million of remaining authority to repurchase shares of the Company's outstanding common stock.

During 2025, there were no open market repurchases.

During 2024, we repurchased from the open market approximately 1.2 million shares of our common stock for a total cost, inclusive of taxes and transaction costs, of $ 150 million.

In 2024 and 2025, we entered into 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 institutions 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, we received an initial share delivery based on 80 % of each 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.

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 19 — Shareholders' Equity

In 2024, we entered into 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 year ended December 31, 2024:

The following table summarizes each ASR agreement for the years ended December 31, 2025 and December 31, 2024:

(in millions, except average price paid per share)

ASR Agreement Initiation Total Cost Initial Shares Received ASR Agreement Settlement Additional Shares Received (a)

ASR Agreement Initiation Total Cost Initial Shares Received ASR Agreement Settlement Additional Shares Received

Total Number of Shares Purchased Average Price Paid per Share

1 unchanged sentence

May 2024 $ 505 1.8 July 2024 0.6 2.4 $ 211.40

(a) The 0.6 million additional shares received and settled in July 2024 were rounded for footing.

June 2025 $ 404 1.1 August 2025 0.2 1.3 $ 311.84

Capped Call Options.

During 2025, we entered into two structured share repurchase agreements.

Under these agreements, we made up-front cash payments in exchange for the right to receive a predetermined amount of shares of our common stock or cash at expiration.

Neither option was exercised during 2025, therefore we did not receive any shares at expiration.

As a result, we received our initial up-front cash payments of $ 150 million plus a nominal cash premium.

The cash received restored the remaining authority available for repurchases.

Changes in Accumulated Other Comprehensive Income (Loss) (All Registrants)

1 unchanged sentence

Gains (losses) on Cash Flow Hedges

Pension and OPEB Plan Items (a)

Pension and OPEB Items (a)

Foreign Currency Items Total

Balance at December 31, 2022 $ ( 9 ) $ ( 1,725 ) $ ( 26 ) $ ( 1,760 )

Separation-related adjustments — ( 2,006 ) — ( 2,006 )

OCI before reclassifications ( 2 ) ( 453 ) 2 ( 453 )

18 unchanged sentences

Actuarial loss reclassified to periodic benefit cost $ ( 24 ) $ ( 24 ) $ ( 10 )

Pension and OPEB plans valuation adjustment (a)

(a) Includes $ 680 million of income tax benefit related to the separation adjustment for the year ended December 31, 2022.

Pension and OPEB plans valuation adjustment

Combined Notes to Consolidated Financial Statements

2 unchanged sentences

Stock-Based Compensation Plans

Effective February 1, 2022, we established our own LTIP and began granting cash and stock-based awards that primarily include performance share awards and restricted stock units.

Our LTIP grants cash and stock-based awards that primarily include performance share awards and restricted stock units.

Our LTIP authorized 20,000,000 shares of common stock for these awards.

The existing, unvested cash and stock-based awards issued through the Exelon LTIP were modified in connection with the separation to align with our performance metrics and maintain an equivalent value immediately before and after separation.

The impact of this modification was not material to our stock-based compensation expense for the year ended December 31, 2022.

Our employees were granted stock-based awards through the Exelon LTIP prior to separation, which primarily included performance share awards and restricted stock units.

We also granted cash awards.

The following table presents the stock-based compensation expense included in the Consolidated Statements of Operations and Comprehensive Income:

The information does not include expenses related to the cash awards as they are not considered stock-based compensation plans under the applicable authoritative guidance:

For the Years Ended December 31,

1 unchanged sentence

Total stock-based compensation expense included in Operating and maintenance expense

$ 385 $ 332 $ 178

Income tax benefit ( 99 ) ( 85 ) ( 45 )

13 unchanged sentences

We process forfeitures as they occur for employees who do not complete the requisite service period.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 20 — Stock-Based Compensation Plans

The following table summarizes our unvested performance share awards activity:

10 unchanged sentences

(a) Represents performance share awards that vested but were not distributed to retirement-eligible employees during 2025 and 2024.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 20 — Stock-Based Compensation Plans

The following table summarizes the weighted average grant date fair value and the total fair value of performance share awards vested:

3 unchanged sentences

Total fair value of performance shares vested 156 138

(a) As of December 31, 2024 and 2023 , $ 50 million and $ 39 million of total unrecognized compensation costs related to unvested performance shares are expected to be recognized over the remaining weighted average period of 1.5 years and 1.6 years, respectively.

(a) As of December 31, 2025 and 2024, total unrecognized compensation costs related to unvested performance shares of $ 41 million and $ 50 million, respectively, are expected to be recognized over the remaining weighted average period of 1.5 years.

Restricted Stock Units

18 unchanged sentences

(a) Represents restricted stock units that vested but were not distributed to retirement-eligible employees during 2025 and 2024.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 20 — Stock-Based Compensation Plans

The following table summarizes the weighted average grant date fair value and the total fair value of restricted stock units vested:

3 unchanged sentences

Total fair value of restricted stock units vested

(a) As of December 31, 2024 and 2023, $ 41 million and $ 35 million of total unrecognized compensation costs related to unvested restricted stock units are expected to be recognized over the remaining weighted average period of 1.8 years and 1.9 years, respectively.

(a) As of December 31, 2025 and 2024, total unrecognized compensation costs related to unvested restricted stock units of $ 57 million and $ 41 million, respectively, are expected to be recognized over the remaining weighted average period of 1.9 years and 1.8 years, respectively.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 21 — Variable Interest Entities

Variable Interest Entities

8 unchanged sentences

Restricted cash and cash equivalents 48 50

Accounts receivable

Customer accounts receivable, net 2,134 19

Other accounts receivable, net 12 10

Accounts receivable, net

Inventories, net 13 13

Materials and supplies 13 14

Other current assets 29 38

1 unchanged sentence

Property, plant and equipment, net 1,942 2,025

Other noncurrent assets 142 166

Total noncurrent assets 2,167 2,145

Other deferred debits and other assets

Total assets (a)

2 unchanged sentences

Accounts payable and accrued expenses

Other current liabilities 3 —

Total current liabilities 103 118

1 unchanged sentence

Asset retirement obligations 231 206

Other noncurrent liabilities 2 2

Total noncurrent liabilities 850 896

Other deferred credits and other liabilities

Total deferred credits and other liabilities

Total liabilities

(a) Our balances include unrestricted assets f or 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 $ 133 million and $ 155 million, disclosed within other noncurrent assets in the table above as of December 31, 2024 and 2023, respectively.

(a) Our balances include unrestricted assets f or current UEC assets of $ 17 million and $ 22 million, disclosed within other current assets in the table above and noncurrent UEC assets of $ 116 million and $ 133 million, disclosed within other noncurrent assets in the table above as of December 31, 2025 and 2024, respectively.

Combined Notes to Consolidated Financial Statements

30 unchanged sentences

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 December 31, 2024 and 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.

Our variable interests in unconsolidated VIEs generally include energy purchase and sale contracts.

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 December 31, 2025 and 2024, we had unconsolidated variable interests in several VIEs for which we were not the primary beneficiary.

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 21 — Variable Interest Entities

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

December 31, 2024 December 31, 2023

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

Commercial Agreement VIEs

Equity Investment VIEs

Total Commercial Agreement VIEs

Equity Investment VIEs

December 31, 2025 December 31, 2024

Total assets (a)

$ 617 $ — $ 617 $ 704 $ — $ 704

Total liabilities (a)

42 — 42 77 — 77

Other ownership interests in VIE (a)

575 — 575 627 — 627

(a) These items represent amounts on the unconsolidated VIE balance sheets, not in the Consolidated Balance Sheets.

9 unchanged sentences

Supplemental Financial Information

Supplemental Statement of Operations and Comprehensive Income Information

Supplemental Consolidated Statements of Operations and Comprehensive Income Information

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

Taxes other than income taxes

For the Years Ended December 31,

2024 2023 2022

Gross receipts (a)

$ 134 $ 139 $ 130

Taxes other than income taxes 2025 2024 2023

Property $ 289 $ 285 $ 253

Gross receipts (a)

Payroll 161 152 142

$ 622 $ 586 $ 553

(a) Represent gross receipts taxes related to our retail operations.

16 unchanged sentences

1,112 567 803

Non-service net periodic benefit credit (cost)

Net realized and unrealized gains (losses) from equity investments

Net unrealized gains (losses) from equity investments (c)

( 304 ) 11 307

2 unchanged sentences

(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.

We record the fair value of this investment in Other deferred debits and other assets in the Consolidated Balance Sheets based on quoted market price of the stock.

Supplemental Cash Flow Information

The following tables provide additional information about material items recorded in the Consolidated Statements of Cash Flows.

Depreciation, amortization and accretion

For the Years Ended December 31,

Depreciation, amortization and accretion

Income statement location

2025 2024 2023

Property, plant, and equipment (a)

Depreciation and amortization

$ 967 $ 1,101 $ 1,073

Purchased power and fuel

ARO accretion

Operating and maintenance 647 655 596

Amortization of intangible assets, net (a)

Amortization of energy contract assets and liabilities (b)

Nuclear fuel (c)

ARO accretion (d)

Depreciation and amortization 18 22 23

Amortization of UECs Operating revenues or Purchased power and fuel

Total depreciation, amortization, and accretion $ 2,601 $ 2,700 $ 2,514

(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.

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

Cash paid during the year

(a) Primarily related to the amortization of customer relationships and trade names.

Excludes UEC amortization, which is shown separately in the table.

For the Years Ended December 31,

2024 2023 2022

Cash paid during the year 2025 2024 2023

Interest (net of amount capitalized) $ 412 $ 375 $ 264

Income taxes (net of refunds) 436 466 287

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 22 — Supplemental Financial Information

Other non-cash operating activities

CEG Parent Constellation

For the Years Ended December 31, For the Years Ended December 31,

2024 2023 2022 2024 2023 2022

Pension and non-pension postretirement benefit costs $ 107 $ 47 $ 17 $ 107 $ 47 $ 17

Other non-cash operating activities 2025 2024 2023 2025 2024 2023

Other decommissioning-related activity (a)

2 unchanged sentences

( 103 ) 32 183 ( 103 ) 32 183

Pension and non-pension postretirement benefit costs 152 107 47 152 107 47

191 174 322 110 128 260

3 unchanged sentences

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

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

3 unchanged sentences

Total cash, restricted cash, and cash equivalents $ 3,748 $ 3,720

December 31, 2023 CEG Parent Constellation

December 31, 2024

Cash and cash equivalents $ 3,022 $ 3,018

1 unchanged sentence

Total cash, restricted cash, and cash equivalents $ 3,129 $ 3,115

December 31, 2022 CEG Parent Constellation

December 31, 2023

Cash and cash equivalents $ 368 $ 366

2 unchanged sentences

For additional information on restricted cash, see Note 1 — Basis of Presentation.

Supplemental Balance Sheet Information

The following tables provide additional information about material items recorded in the Consolidated Balance Sheets.

Inventories, net December 31, 2025 December 31, 2024

Materials and supplies $ 1,485 $ 1,357

Natural gas, oil, and emission allowances 251 243

Total $ 1,736 $ 1,600

Combined Notes to Consolidated Financial Statements

1 unchanged sentence

Note 22 — Supplemental Financial Information

Supplemental Balance Sheet Information

The following tables provide additional information about material items recorded in the Consolidated Balance Sheets.

December 31, 2024 December 31, 2023

Equity method investments

Other investments:

Employee benefit trusts and investments (a)

Equity investments with readily determinable fair values (b)

Equity investments without readily determinable fair values 150 103

Other available for sale debt security investments 1 2

Total investments $ 640 $ 563

(a) Debt and equity security investments are recorded at fair market value.

(b) Does not include the equity investments with readily determinable fair values that are recorded in Other current assets in the Consolidated Balance Sheets.

See Note 17 — Fair Value of Financial Assets and Liabilities for additional information on Investments in equities.

Accounts payable and accrued expenses

1 unchanged sentence

Accounts payable $ 2,813 $ 2,801

$ 2,369 $ 2,348

Compensation-related accruals (a)

Taxes accrued (b)

Accounts payable and accrued expenses

December 31, 2023 CEG Parent Constellation

Other accrued expenses

$ 4,294 $ 4,033

December 31, 2024

Accounts payable

1 unchanged sentence

Compensation-related accruals (a)

Taxes accrued 399 390

Taxes accrued (b)

Other accrued expenses

$ 3,943 $ 3,696

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

(b) Includes $ 150 million related to nuclear PTC that was used to offset the current tax liability.

(b) Net of $ 375 million and $ 150 million as of December 31, 2025 and 2024, respectively, related to nuclear PTC that was used to offset the current tax liability.

See Note 6 — Government Assistance for additional information on the nuclear PTC.

Related Party Transactions

Prior to completion of the separation on February 1, 2022, we engaged in transactions with affiliates of Exelon in the normal course of business.

These affiliate transactions are summarized in the tables below.

After February 1, 2022, all transactions with Exelon or its affiliates are no longer related party transactions.

Combined Notes to Consolidated Financial Statements

(Dollars in millions, unless otherwise noted)

Note 23 — Related Party Transactions

Operating revenues from affiliates

The following table presents our Operating revenues from affiliates:

For the Year Ended December 31, 2022 (a)

Total operating revenues from affiliates $ 160

(a) Represents only January 2022 revenues prior to separation on February 1, 2022.

(b) We have an ICC-approved RFP contract with ComEd to provide a portion of ComEd’s electricity supply requirements.

We also sell RECs and ZECs to ComEd.

In addition, we have a ten-year agreement with PECO to sell solar AECs.

(d) We provide a portion of BGE’s energy requirements under its MDPSC-approved market-based SOS and gas commodity programs.

(e) We provide electric supply to Pepco under contracts executed through Pepco's competitive procurement process approved by the MDPSC and DCPSC.

(f) We provide a portion of DPL's energy requirements under its MDPSC and DEPSC approved market-based SOS commodity programs.

(g) We provide electric supply to ACE under contracts executed through ACE's competitive procurement process.

Service Company Costs for Corporate Support

We received a variety of corporate support services from Exelon.

Through its business services subsidiary, BSC, Exelon provided support services at cost, including legal, human resources, financial, information technology, and supply management services.

The costs of BSC were directly charged or allocated to us.

Certain of these services continued after the separation and were covered by the TSA.

See Note 1 — Basis of Presentation for additional information.

The operating and maintenance service and the capitalized service company costs from affiliates allocated to us prior to separation were immaterial for the year ended December 31, 2022.

The following table provides additional information about investments included in Other deferred debits and other assets in the Consolidated Balance Sheets.

Investments December 31, 2025 December 31, 2024

Equity method investments

Other investments:

Employee benefit trusts and investments (a)

Equity investments with readily determinable fair values (b)

Equity investments without readily determinable fair values 109 150

Other available for sale debt security investments 1 1

(a) Debt and equity security investments are recorded at fair market value.

(b) Does not include the equity investments with readily determinable fair values that are recorded in Other current assets in the Consolidated Balance Sheets.

See Note 17 — Fair Value of Financial Assets and Liabilities for additional information on investments in equities.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data