CONSTELLATION ENERGY GENERATION LLC

For discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, refer to the Liquidity and Capital Resources section of MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the 2024 Form 10-K which was filed with the SEC on February 18, 2025.

All results included throughout the liquidity and capital resources section are presented on a GAAP basis.

Our operating and capital expenditure requirements are provided by internally generated cash flows from operations, as well as funds from bank borrowings and other capital market sources. Our business is capital intensive and requires considerable capital resources. We regularly evaluate our financing plan and credit line sizing, focusing on maintaining our investment grade credit ratings while meeting our cash needs to fund capital requirements, including funding construction expenditures, retiring debt, paying dividends, funding pension and OPEB obligations, and investing in new and existing ventures, such as our acquisition of Calpine and planned restart of Crane. A broad spectrum of financing alternatives beyond the core financing options can be used to meet our needs and fund growth, including monetizing assets in the portfolio via project financing, asset sales, and the use of other financing structures (e.g., issuing equity, joint ventures, minority partners, etc.). Our access to external financing on reasonable terms depends on our credit ratings and current overall capital market business conditions. If these conditions deteriorate to the extent that we no longer have access to the capital markets at reasonable terms, we have access to credit facilities with aggregate bank commitments of $9.5 billion. We utilize our credit facilities to support our commercial paper programs, provide for other short-term borrowings and to issue letters of credit. See the “Credit Matters and Cash Requirements” section below for additional information. We expect cash flows to be sufficient to meet operating expenses, financing costs, and capital expenditure requirements. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.

Cash Flow Activities

The following table summarizes our cash flow activities for the years ended December 31, 2025 and 2024, respectively:

Net Cash Provided By (Used In) Operating Activities

Cash provided by operating activities was $4,237 million for the year ended December 31, 2025, compared to cash used in operating activities of ($2,464) million for the year ended December 31, 2024. Changes in our cash flows from operations were generally consistent with changes in results of operations, as adjusted for changes in working capital in the normal course of business. In December 2024, we amended our Accounts Receivable Facility whereby we now retain the rights to our receivables and any changes in our receivable balance flow through operating activities. This increase in cash flows from operating activities was partially offset by cash outflows associated with an increase in collateral postings. See Note 7 — Accounts Receivable and Note 15 — Derivative Financial Instruments of the Combined Notes to Consolidated Financial Statements for additional information.

Net Cash Provided By (Used In) Investing Activities

Cash used in investing activities was ($3,198) million for the year ended December 31, 2025, compared to cash provided by investing activities of $7,428 million for the year ended December 31, 2024. The change was primarily due to an amendment of our Accounts Receivable Facility. Prior to the amendment, the collection and reinvestment of proceeds associated with the sale of receivables were treated as cash flows from investing activities in the Consolidated Statements of Cash Flows. As a result of the amendment, cash collections of accounts receivable are now treated as Cash flows from operating activities in the Consolidated Statements of Cash Flows. See Note 7 — Accounts Receivable of the Combined Notes to Consolidated Financial Statements for additional information.

Net Cash Provided By (Used In) Financing Activities

Cash used in financing activities was ($420) million for the year ended December 31, 2025, compared to cash used in financing activities of ($2,289) million for the year ended December 31, 2024. The change primarily relates to long-term debt and changes in short-term borrowings. Debt issuances and redemptions or repayments vary each year. The remaining change primarily relates to repurchases of common stock during each period. See Note 16 — Debt and Credit Agreements and Note 19 — Shareholders' Equity of the Combined Notes to Consolidated Financial Statements for additional information.

Debt Issuances and Redemptions

See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on our long-term debt. Debt activity for 2025 and 2024 was as follows:

During 2025, the following long-term debt was issued (redeemed):

(a)The interest rate for long-term debt redemptions prior to October 2025 were based on SOFR + 2.25%. Beginning in October 2025, these redemptions are based on SOFR + 2.00%.

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

During 2024, the following long-term debt was issued (redeemed):

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

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

(c)The interest rate for long-term debt redemptions prior to July 2024 were based on SOFR + 2.76%. Beginning in July 2024 these redemptions are based on SOFR + 2.25%.

Calpine Acquisition

In January 2026, upon completion of the acquisition of Calpine, we assumed all of Calpine's outstanding obligations including approximately $12.6 billion of debt composed of approximately $7.6 billion of long-term debt and approximately $5 billion of various project financing arrangements. The acquisition of Calpine had the following impacts on our liquidity position:

•The purchase price included cash consideration of approximately $4.5 billion which was funded through cash on hand from normal operating activities at the time of acquisition.

•We assumed approximately $7.6 billion of long-term debt including senior unsecured and secured notes, and corporate term loans. In December 2025, we commenced private exchange offers and related consent solicitations (“Exchange Offers”) with respect to certain outstanding debt of Calpine. Pursuant to the Exchange Offers, we issued new notes in January 2026 effectively replacing $2.3 billion of Calpine's senior unsecured and secured notes. Using the proceeds from our January 2026 bond issuance, as described more fully below, along with cash on hand and short-term debt, we repaid Calpine corporate term loans totaling $2.5 billion immediately after the acquisition closing and repaid additional Calpine senior secured first lien notes totaling $1.25 billion in February 2026. Following the debt exchange and redemptions discussed, approximately $1.5 billion of long-term Calpine corporate debt remains outstanding, which matures primarily in March 2028. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.

•We assumed approximately $5 billion of various project financing arrangements including:

◦Calpine Construction Finance Company, L.P. (CCFC) term loan, a first lien senior secured facility with $2.1 billion outstanding at acquisition. The CCFC term loan matures July 2030 and is secured by certain real and personal property of CCFC, primarily seven natural gas-fired power plants.

◦Geysers Power Company, LLC (GPC) term loan and credit facility, a first lien senior secured term loan facility, with approximately $1.35 billion and $45 million of borrowings outstanding under the term loan and credit facility, respectively, at acquisition. The GPC term loan and credit facility mature May 2029. The GPC term loan and credit facility is secured by certain real and personal property of GPC and subsidiaries primarily consisting of the Geysers Assets.

◦Nova Power, LLC (Nova Power) credit agreement, comprising credit facilities intended to finance a portion of the cost of the development, construction and operation of the Nova Power battery storage project. These facilities include a first lien term loan with $591 million outstanding at acquisition and letter of credit facilities. The Nova Power credit agreement matures September 2031 and is secured by Nova Power's real and personal property.

◦Greenfield LP (Greenfield) loan facility which includes a term loan with $342 million outstanding at acquisition and several letters of credit facilities. The Greenfield loan facility matures November 2030 and is secured by certain real and personal property, primarily the Greenfield Energy Center in Ontario, Canada.

◦Pin Oak Creek Energy Center loan pursuant to the TEF with lender, PUCT, with an outstanding amount of $230 million at acquisition. The proceeds were used to finance anticipated eligible costs for the development, construction, and installation of Pin Oak Creek Energy Center in Texas. The loan will mature in October 2045.

◦Calpine Development Holdings, LLC Revolver (CDHI Revolver) with total capacity of approximately $1.2 billion and borrowings totaling $319 million outstanding at acquisition. The CDHI Revolver matures March 2028.

•During 2025, we amended our RCF to increase the capacity from $4.5 billion to $7.0 billion, of which the incremental $2.5 billion became available upon closing of the Calpine acquisition. As a result, Calpine's revolving credit facility and commodity linked revolver were both paid off and terminated at the time of acquisition. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.

•We issued senior unsecured notes in January 2026 totaling $2.75 billion, the proceeds from which were used to retire certain outstanding indebtedness of Calpine following completion of the Calpine acquisition. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.

•In addition to the Calpine revolving credit facility and commodity linked revolver referenced above, we assumed credit facilities totaling approximately $2.3 billion of capacity, which is reduced by outstanding borrowings under the GPC term loan facility and CDHI Revolver totaling $364 million. At the time of the acquisition, there were outstanding letters of credit on the assumed facilities of approximately $1.7 billion. These facilities consist of secured and unsecured Calpine facilities and project facilities including the CDHI Revolver.

•We assumed Calpine's accounts receivable sales program with a financial institution which allows for the sale of, at a discount, up to $500 million of certain Calpine receivables. The program is set to mature November 2026. At the time of acquisition, there was $399 million of accounts receivable sold into the program outstanding.

Dividends

Quarterly dividends declared by our Board of Directors during 2025 and for the first quarter of 2026 were as follows:

Credit Matters and Cash Requirements

We fund liquidity needs for capital expenditures, working capital, energy hedging and other financial commitments through cash flows from operations, public debt offerings, commercial paper markets and large, diversified credit facilities. As of December 31, 2025, we have access to facilities with aggregate bank commitments of $9.5 billion. We had access to the commercial paper markets and had availability under our revolving credit facilities during 2025 to fund our short-term liquidity needs, when necessary. We routinely review the sufficiency of our liquidity position, including appropriate sizing of credit facility commitments, by performing various stress test scenarios, such as commodity price movements, increases in margin-related transactions, changes in hedging levels, and the impacts of hypothetical credit downgrades. We closely monitor events in the financial markets and the financial institutions associated with the credit facilities, including monitoring credit ratings and outlooks, credit default swap levels, capital raising, and merger activity. See PART I, ITEM 1A. RISK FACTORS for additional information regarding the effects of uncertainty in the capital and credit markets.

We believe our cash flow from operating activities, access to credit markets and our credit facilities provide sufficient liquidity to support the estimated future cash requirements discussed below, including the cash consideration used to close on our acquisition of Calpine. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information.

Security Ratings

Our access to the capital markets, including the commercial paper market, and our financing costs in those markets, may depend on our security ratings. A loss of investment grade credit rating would have required a three-notch downgrade by S&P or Moody's from their current levels as of December 31, 2025 of BBB+ and Baa1, to BB+ and Ba1 or below, respectively. As of December 31, 2025, we had $7.4 billion of available capacity under our credit facilities and $3.6 billion of cash on hand. In the event of a credit downgrade below investment grade and a resulting requirement to provide incremental collateral exceeding available capacity under our credit facilities and cash on hand, we would be required to access additional liquidity through the capital markets. Our borrowings are not subject to default or prepayment as a result of a downgrade of our securities, although such a downgrade could increase fees and interest charges under our credit agreements. Our credit ratings were affirmed by Moody’s and S&P in January 2026 following the completion of the acquisition of Calpine.

If we had lost our investment grade credit ratings as of December 31, 2025, we would have been required to provide incremental collateral estimated to be approximately $2.7 billion to meet collateral obligations for derivatives, non-derivatives, NPNS, and applicable payables and receivables, net of the contractual right of offset under master netting agreements.

See Note 15 — Derivative Financial Instruments and Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.

Capital Expenditures

Our most recent estimate of capital expenditures, inclusive of Calpine, is approximately $5.7 billion and $4.7 billion for 2026 and 2027, respectively. Approximately 29% of projected capital expenditures is for the acquisition of nuclear fuel, which includes additional nuclear fuel to increase inventory levels in response to the potential for the continuing Russia and Ukraine conflict to impact our long-term nuclear fuel supply. Additionally, the above estimates of capital expenditures include $3.9 billion of growth capital expenditures, including our planned restart of Crane, nuclear uprates, co-location infrastructure, and license renewals. The remaining amounts primarily reflect additions and upgrades to existing generation facilities (including material condition improvements during nuclear refueling outages). See ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, Other Key Business Drivers for more information on the Russia and Ukraine conflict.

Planned additions, upgrades and other investments are subject to periodic review and revision to reflect changes in economic conditions impacting our generating assets and other factors, including, but not limited to, market power prices, results of capacity auctions, potential legislative and regulatory actions, impacts of inflation, changes in the cost of materials and labor, and financing costs.

We anticipate funding these capital expenditures with a combination of internally generated funds and borrowings.

Pension and Other Postretirement Benefits

We consider various factors when making qualified pension funding decisions, including actuarially determined minimum contribution requirements under ERISA, contributions required to avoid benefit restrictions and at-risk status as defined by the Pension Protection Act, and management of the pension obligation. 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 contributions in the table below reflect a funding strategy to make annual contributions to offset the growth of the liability. Unlike the qualified pension plans, our non-qualified pension plans are not subject to statutory minimum contribution requirements.

OPEB plans are also not subject to statutory minimum contribution requirements, though we have funded a portion of our plans. Annually, we evaluate whether additional funding for those plans is needed. 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.

Expected contributions in 2026 or future years could be affected by adjustments in our pension and OPEB funding strategy, market conditions, or pension regulation changes. See Note 14 — Retirement Benefits of the Combined Notes to Consolidated Financial Statements for additional information on pension and OPEB contributions.

Cash Requirements for Other Financial Commitments

The following table summarizes our projected cash payments as of December 31, 2025 under existing financial commitments with fixed or minimum payments required:

(a)Interest payments are estimated based on final maturity dates of debt securities outstanding at December 31, 2025 and do not reflect anticipated future refinancing, early redemptions, or debt issuances. Variable rate interest obligations are estimated based on rates as of December 31, 2025.

(b)Capacity payments associated with contracted generation lease agreements are net of sublease and capacity offsets of $48 million and $181 million for 2026 and beyond 2026, respectively and $229 million in total.

(c)Purchase power obligations primarily include REC purchases and capacity payments that are not unit contingent.

(d)Represents commitments to purchase nuclear fuel and related services and natural gas-related transportation and capacity.

(e)Represents the future estimated value at December 31, 2025 of the cash flows associated with all contracts, both cancellable and non-cancellable, entered into with third parties for the provision of services and materials, entered into in the normal course of business not specifically reflected elsewhere in this table. These estimates are subject to significant variability from period to period.

(f)These amounts represent our expected contributions to our qualified pension plans.

(g)In January 2026, we acquired all of the outstanding equity interest of Calpine in a cash and stock transaction. The aggregate purchase price included approximately $4.5 billion in cash. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to the Combined Consolidated for additional information.

See Note 18 — Commitments and Contingencies of the Combined Notes to Consolidated Financial Statements for additional information on our other commitments potentially triggered by future events. Additionally, see below for where to find additional information regarding the financial commitments in the table above in the Combined Notes to Consolidated Financial Statements.

Accounts Receivable Facility

We have an accounts receivable financing facility that provides us access to revolving loans from a number of financial institutions secured by certain customer accounts receivables. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information.

Project Financing

Project financing is based upon a nonrecourse financial structure, in which project debt is paid back from the cash generated by a specific asset or portfolio of assets. Borrowings under these agreements are secured by the assets and equity of each respective project. Lenders do not have recourse against us in the event of a default. If a project financing entity does not maintain compliance with its specific debt covenants, there could be a requirement to accelerate repayment of the associated debt or other project-related borrowings earlier than the stated maturity dates. In these instances, if such repayment were not satisfied, or restructured, the lenders or security holders would generally have rights to foreclose against the project-specific assets and related collateral. The potential requirement to repay the debt or other borrowings earlier than otherwise anticipated could lead to impairments due to a higher likelihood of disposing of the respective project-specific assets significantly before the end of their useful lives. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on project finance credit facilities and nonrecourse debt.

Credit Facilities

We meet our short-term liquidity requirements primarily through the issuance of commercial paper. We may use our credit facilities for general corporate purposes, including meeting short-term funding requirements and the issuance of letters of credit. During 2025, we increased the capacity of our RCF from $4.5 billion to $7.0 billion, of which the incremental $2.5 billion became available upon closing of the Calpine acquisition in January 2026. See Note 16 — Debt and Credit Agreements of the Combined Notes to Consolidated Financial Statements for additional information on our credit facilities.

Capital Structure

At December 31, 2025, our capital structure consisted of the following:

NRC Minimum Funding Requirements

NRC regulations require that licensees of nuclear generating facilities demonstrate reasonable assurance that sufficient funds will be available in certain minimum amounts for radiological decommissioning of the facility. These NRC minimum funding levels are typically based upon the assumption that decommissioning activities will commence after the end of the current licensed life of each unit. If a unit fails the NRC minimum funding test, then the plant’s owners or parent companies would be required to take steps, such as providing financial guarantees through surety bonds, letters of credit, or parent company guarantees or making additional cash contributions to the NDT fund to ensure sufficient funds are available. See Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information.

If a nuclear plant were to retire before the end of its licensed life, there is a risk that it will no longer meet the NRC minimum funding requirements due to the earlier commencement of decommissioning activities and a shorter time period over which the NDT funds could appreciate in value. A shortfall could require that we address the shortfall by providing additional financial assurances, such as surety bonds, letters of credit, or parent company guarantees for our share of the funding assurance. However, the amount of any assurance will ultimately depend on the decommissioning approach, the associated level of costs, and the NDT fund investment performance going forward. No later than two years after shutting down a plant, we must submit a Post-shutdown Decommissioning Activities Report (PSDAR) to the NRC that includes the planned option for decommissioning the site.

Upon issuance of any additional financial assurance mechanisms to address a decommissioning funding shortfall, subject to satisfying various regulatory preconditions, each site would be able to utilize the respective NDT funds for radiological decommissioning costs, which represent the majority of the total expected decommissioning costs. However, under the regulations, the NRC must approve an exemption in order for us to utilize the NDT funds to pay for non-radiological decommissioning costs (i.e., spent fuel management and site restoration costs, if applicable). Any amounts not covered by an exemption would be borne by us without reimbursement.

As of December 31, 2025, the Crane NDT is fully funded under the SAFSTOR scenario that was the planned decommissioning option, as described in the Crane PSDAR filed with the NRC in April 2019. We will continue to file Crane's decommissioning funding status with the NRC annually until restart, at which point we will file decommissioning funding status reports in accordance with applicable NRC requirements. Additionally, as of December 31, 2025, we have adequate NDT funds for the remaining radiological decommissioning cost at Zion Station related to the Independent Spent Fuel Storage Installation. Decommissioning costs other than radiological may require funding from us. See Note 10 — Asset Retirement Obligations of the Combined Notes to Consolidated Financial Statements for additional information.