CONSTELLATION ENERGY GENERATION LLC

Strategy

We believe shareholder value is built on a foundation of operational excellence and the pairing of our reliable energy fleet with our customer-facing platform. We are committed to maintaining investment grade credit ratings. We focus on optimizing cash returns through a disciplined approach to safe and efficient operations and cost management, underpinned by stable and durable margins from our customer-facing business and coupled with distinct payments to our generation plants for the clean, reliable, and available energy they provide to customers. We may pursue future growth opportunities that provide additional value building on our core businesses, or expanding our competitive advantages. We are committed to maintaining a strong balance sheet, providing our customers with cost-effective and sustainable solutions to meet their energy needs, and returning value to our shareholders.

The demand for reliable, emissions-free energy and sustainability solutions continues to grow across the country. We aim to meet the growing energy needs of all our customers. We continue to serve as a partner to businesses and public entities to help meet their energy and sustainability needs.

We are committed to maintaining sufficient financial liquidity and an appropriate capital structure to support safe, secure and reliable operations, even in volatile market conditions. We believe our investment grade credit rating is a competitive advantage and we intend to maintain our credit position and best-in-class balance sheet. In line with that commitment, available cash flow will first be used to meet investment grade credit targets, with incremental capital allocated towards disciplined growth and shareholder return. We will build upon a strong compliance and risk management foundation and recognize the critical role this serves in maximizing operational results. We will continue to manage cash flow volatility through prudent risk management strategies across our business.

Growth Opportunities. We continually evaluate growth opportunities aligned with our businesses, assets, and markets leveraging our expertise in those areas and offering durable returns. We may pursue growth opportunities that optimize our core business or expand upon our strengths, including, but not limited to the following:

•Opportunistic energy acquisitions and generation development opportunities with a focus on reliability,

•Create new value from the existing fleet through nuclear uprates and license extensions, repowering of renewables, serving data economy customers, long-term power purchase agreements, and other opportunities,

•Grow solutions for our customers focused on clean energy, efficiency, storage and electrification; help our C&I customers develop and meet sustainability targets, and

•Continue to monitor opportunities to participate in advanced nuclear and CCUS as well as investments in battery storage and solar to maintain our leadership position as stewards of an emissions-free energy future.

We will employ a disciplined approach to acquisitions that grow future cash flow and support strategic initiatives. This strategy was realized, in part, with the acquisition of Calpine, a combination that brings together premier nuclear, natural gas, and geothermal fleets with a leading commercial platform to deliver innovative customer solutions and strengthen U.S. energy leadership, national security, and economic prosperity. See Note 2 — Mergers, Acquisitions, and Dispositions of the Combined Notes to Consolidated Financial Statements for additional information on our acquisition of Calpine.

Various market, financial, regulatory, legislative and operational factors could affect our success in pursuing these strategies. We continue to assess infrastructure, operational, policy, and legal solutions to these issues. See ITEM 1A. RISK FACTORS for additional information.

Outlook

The U.S. energy sector is undergoing unprecedented transformation, which we believe will drive significant growth in demand for reliable, clean power generation and benefit our business. Our diversified generation fleet, including our industry-leading nuclear assets, is well-positioned to meet this rising demand for dependable emissions-free electricity. Key drivers of increased demand include:

•Expanded policy support for nuclear energy that enhances energy security, reliability and system diversity,

•Federal and state incentives for new and resilient generation to support grid stability,

•Rapid data center growth, increasing large-scale, around-the-clock load requirements,

•Electrification across the economy, including transportation, buildings, and industrial processes,

•Onshoring and expansion of domestic manufacturing to strengthen U.S. supply chains, and

•Evolving customer preferences that favor clean energy, greater choice, transparency, and digitization.

Policy Support for Nuclear Energy. We expect our nuclear generation fleet to continue playing a vital role in meeting the nation's baseload power needs. Nuclear energy remains the largest source of zero-emissions electricity in the U.S., providing more than half of all emissions-free power. Our nuclear plants are significant contributors to the clean energy mix in the states in which they operate. Federal policymakers from both parties have underscored the importance of preserving existing nuclear assets through the nuclear PTC enacted in the IRA and maintained under the OBBBA. The action by New York to extend the NY ZEC program in January 2026 reaffirms that states recognize that existing nuclear generation facilities are essential to meeting their policy objectives to reduce GHG emissions. In addition, a number of states including Delaware, New Jersey, Illinois, Maryland, New York, and Texas, are currently drafting bills to add nuclear energy to clean energy targets by repealing bans, studying methods to accelerate their development, or in some cases, providing financial incentives to drive their construction. Beyond emissions reductions, nuclear energy supports high-quality jobs, strengthens regional economies, and enhances the reliability and security of the electrical grid. In alignment with this supportive policy landscape, we intend to file applications to extend the licenses of our nuclear units to 80 years where long-term policy support continues to be available.

Policy Support for New, Reliable Generation. With our significantly increased presence in Texas following the Calpine acquisition, our fleet is positioned to play a critical role in ensuring reliability within ERCOT. In November 2023, Texas voters approved a state constitutional amendment to create the TEF, which provides up to $7.2 billion in low-interest loans and completion bonuses to support as much as 10 GW of new dispatchable generation statewide. Project selections announced in Fall 2025 included a $278 million loan for Calpine's 460 MW Pin Oak Creek peaking facility. Policy mechanisms like the TEF are essential to maintaining the reliability of the Texas energy market by enhancing the economic viability of new dispatchable generation.

In Maryland, the Next Generation Energy Act of 2025 directed the Maryland Public Service Commission (MPSC) to solicit and approve applications for dispatchable and large-capacity resources through an expedited Certification of Public Convenience and Necessity process. We submitted multiple proposals, and the MPSC approved our application to advance more than 700 MW of natural gas generation under the streamlined pathway. We are also continuing to evaluate additional resource options for Maryland, including battery storage projects, under a separate solicitation established by the Next Generation Energy Act.

Data Center Growth. The rapid expansion of data centers continues to accelerate, driven by widespread adoption of AI technologies and large-scale infrastructure investments by major hyperscalers such as Microsoft, Google, Meta, and Amazon. This growth is creating unprecedented demand for reliable, around-the-clock electricity in the U.S. and globally. According to the DOE, data centers are amongst the most energy-intensive building types, consuming 10 to 50 times more energy per square foot than a typical commercial office building. As AI workloads scale and computing needs increase, the energy requirements of data centers are expected to grow substantially, further reinforcing the need for dependable, 24/7 power supply.

Electrification. Efforts to optimize our energy infrastructure and reduce GHG emissions are expected to drive continued electrification of the U.S. economy, including transportation, industrial processes, heating and cooling, and household appliances. This transition has the potential to materially increase overall electricity demand. For companies like ours, whose core strength lies in safely generating and delivering electricity and related energy solutions, this growing demand represents a natural and meaningful opportunity for long-term growth.

Onshoring of Manufacturing. Recent federal industrial policy, most notably the CHIPS and Science Act and the IRA, explicitly incentivize the return of manufacturing and supply‑chain capacity back to the United States. This resurgence in domestic industrial activity is driving a meaningful increase in electricity demand, as new facilities are both expanding and becoming more energy intensive. These trends are further amplified by broader shifts such as electrification and rapid data center growth. The resulting load growth presents a strategic opportunity for our business as our expanded generation fleet is well positioned to enable this national policy objective.

Evolving Customer Preferences. Consumers are increasingly purpose-driven and knowledgeable about solutions that reduce emissions. As a result, they place greater value on being able to trace the sources of their clean energy. Rising awareness of climate change and clean energy options is fueling demand for value-added products and services, such as solar, behind-the-meter storage, EV charging, and the ability to choose 100% clean power 24/7 in competitive retail energy markets. Customers are also showing heightened interest in long-term energy agreements that provide price stability and reliability. At the same time, continued innovation and digitization across the economy are empowering customers with more visibility and control over their energy usage. This increased engagement enables both residential and business customers to make more informed choices about their energy supply and the products and solutions we provide.