Earnings Release Highlights

GAAP Net Income of $833 million and Adjusted EBITDA (non-GAAP) of $1,031 million for the second quarter of 2023
Raising guidance range for full year 2023 Adjusted EBITDA (non-GAAP) to $3,300 million to $3,700 million
Delivering on our commitment to shareholders – announced acquisition of NRG's 44% stake in South Texas Project Electric Generating Station (STP); commenced project to repower our Criterion wind facility; and repurchased over $250 million of shares in the second quarter, now having completed half of our $1.0 billion share repurchase program
Moody's raised outlook on credit ratings from stable to positive, reflecting continued strength in the balance sheet
Reached landmark agreement with Microsoft that will allow Microsoft to track power usage using Constellation's hourly carbon-free energy (CFE) matching platform
Exhibiting role as a leader in the clean energy transition by setting an industry record for blending hydrogen with natural gas at our Hillabee Generating Station

Constellation Energy Corporation (NASDAQ:CEG) today reported its financial results for the second quarter of 2023.

"Constellation continues to deliver strong operational and financial performance across the business, while giving customers the visibility and certainty they need to manage energy costs during a time of market volatility and creating value for our shareholders," said Joe Dominguez, president and CEO, Constellation. "During a summer of record-setting heat, our nuclear fleet continues to deliver clean, reliable and affordable electricity to the communities we serve in every hour of every day of the year, making it an essential tool in meeting our customers' carbon reduction goals. In a first for our industry, we recently signed a landmark agreement with Microsoft to provide one of its data centers with environmental attributes from nuclear energy as part of a strategy to power its operations with clean energy around the clock, demonstrating the unique value of nuclear as a sustainable climate solution."

"We earned in excess of $1 billion in adjusted EBITDA in the second quarter, marking a significant increase year-over-year," said Dan Eggers, executive vice president and chief financial officer. "Our commercial team continues to capture significant value in the market through higher customer margins, successful load auction wins and by optimizing across our load-serving and generation positions. Our strong investment-grade balance sheet remains a critical competitive advantage, allowing us to create additional value where others cannot. As a result of this strong performance, we are raising our adjusted EBITDA guidance range to $3.3 billion to $3.7 billion from $2.9 billion to $3.3 billion, which raises the midpoint by $400 million."

Second Quarter 2023

Our GAAP Net Income for the second quarter of 2023 increased to $833 million from ($111) million GAAP Net Loss in the second quarter of 2022. Adjusted EBITDA (non-GAAP) for the second quarter of 2023 increased to $1,031 million from $603 million in the second quarter of 2022. For the reconciliations of GAAP Net Income (Loss) to Adjusted EBITDA (non-GAAP), refer to the tables beginning on page 3.

Adjusted EBITDA (non-GAAP) in the second quarter of 2023 primarily reflects:

Favorable market and portfolio conditions and ZEC revenue; partially offset by unfavorable labor, contracting, and materials, unfavorable nuclear outage impacts and decreased capacity revenues.

Recent Developments and Second Quarter Highlights

Delivering on Our Capital Allocation Promises: In alignment with our capital and strategic plan we have agreed to acquire NRG Energy Inc.'s 44% ownership stake in the South Texas Project Nuclear Generating Station, a 2,645-megawatt, dual-unit nuclear plant located about 90 miles southwest of Houston, for $1.75 billion. We expect to issue approximately $500 million of incremental debt to finance the transaction, with the remainder of the purchase price being funded by existing cash and previously planned debt issuances. This acquisition is complementary to and aligned strategically with our existing clean energy business operations. Absent any delays, we expect to close within 2023.

We have commenced a project to repower our Criterion wind facility in Oakland, Md. The repower will increase the efficiency and output of the facility, resulting in the delivery of more carbon-free electricity to the region for many years to come. The project is part of our previously announced $350 million effort to increase the output and lifespan of our renewable energy portfolio.

We've also continued our share repurchase program, repurchasing nearly 3 million shares for a total of $252 million in the second quarter 2023. To date, we have successfully repurchased approximately 6.2 million shares for a combined $503 million.

Moody's credit ratings raised to positive outlook: On May 10, 2023, Moody's Investor Service reaffirmed our senior unsecured issuer ratings (Baa2) and short-term rating (Prime-2) while raising the outlook from stable to positive. Moody's cites the expected improvement of our credit metrics, revenue stability provided by the nuclear production tax credit, and our commitment to managing debt levels as rationale for putting the ratings on positive outlook.
Hourly Carbon-Free Energy Matching Agreement: We've entered into an agreement with Microsoft to significantly reduce the carbon footprint of one of its data centers in Boydton, Virginia. Under the agreement, the facility will receive up to 35 percent in environmental attributes from nuclear power, complementing the company's new wind and solar purchases. This agreement puts Microsoft very close to its goal of operating the data center on 100 percent carbon-free electricity around the clock, further proof that hourly, regional matching of clean energy to demand is both practical and feasible today with suitable infrastructure and energy innovation.
Industry Record for Hydrogen Blending: We have set an industry record for blending high concentrations of hydrogen with natural gas, further proof that hydrogen can be an effective tool to lower greenhouse gas emissions. Working with Siemens Energy and the Electric Power Research Institute, the hydrogen blending test was conducted in May 2023 at our Hillabee Generating Station, a 753-megawatt combined-cycle natural gas plant in central Alabama that began operating in 2010. The test showed that with only minor modifications, an existing natural gas plant of that age can safely operate on a blend of 38.8 percent hydrogen, nearly doubling the previous blending record for similar generators. The testing results at Hillabee demonstrate that hydrogen produced with clean energy can be an effective tool to help achieve the nation's climate goals.
Nuclear Operations: Our nuclear fleet, including our owned output from the Salem Generating Station, produced 41,895 gigawatt-hours (GWhs) in the second quarter of 2023, compared with 42,522 GWhs in the second quarter of 2022. Excluding Salem, our nuclear plants at ownership achieved a 92.4% capacity factor for the second quarter of 2023, compared with 94.2% for the second quarter of 2022. There were 94 planned refueling outage days in the second quarter of 2023 and 66 in the second quarter of 2022. There were 25 non-refueling outage days in the second quarter of 2023 and 15 in the second quarter of 2022.
Natural Gas, Oil, and Renewables Operations: The dispatch match rate for our fleet was 99.1% in the second quarter of 2023, compared with 99.6% in the second quarter of 2022. Renewable energy capture for our fleet was 96.1% in the second quarter of 2023, compared with 96.3%¹ in the second quarter of 2022.

GAAP/Adjusted EBITDA (non-GAAP) Reconciliation

Adjusted EBITDA (non-GAAP) for the second quarter of 2023 and 2022, respectively, does not include the following items that were included in our reported GAAP Net Income (Loss):

(in millions)	Three Months Ended June 30, 2023			Three Months Ended June 30, 2022
GAAP Net Income (Loss) Attributable to Common Shareholders	$	833		$	(111	)
Income Taxes		342			(270	)
Depreciation and Amortization		274			277
Interest Expense, Net		103			56
Unrealized Gain on Fair Value Adjustments		(426	)		(24	)
Plant Retirements and Divestitures		—			(8	)
Decommissioning-Related Activities		(116	)		684
Pension & OPEB Non-Service Costs		(14	)		(33	)
Separation Costs		36			31
ERP System Implementation Costs		10			5
Change in Environmental Liabilities		1			8
Noncontrolling Interests		(12	)		(12	)
Adjusted EBITDA (non-GAAP)	$	1,031		$	603
________
¹Prior year energy capture was previously reported as 95.3%. The update reflects a change to include the Conowingo run-of-river hydroelectric operational performance within renewable energy capture, and remove the performance from dispatch match. This update did not result in an impact to the dispatch match

Webcast Information

We will discuss second quarter 2023 earnings in a conference call scheduled for today at 10 a.m. Eastern Time. The webcast and associated materials can be accessed at https://investors.constellationenergy.

About Constellation

A Fortune 200 company headquartered in Baltimore, Constellation Energy Corporation (NASDAQ:CEG) is the nation's largest producer of clean, carbon-free energy and a leading supplier of energy products and services to businesses, homes, community aggregations and public sector customers across the continental United States, including three fourths of Fortune 100 companies. With annual output that is nearly 90% carbon-free, our hydro, wind and solar facilities paired with the nation's largest nuclear fleet have the generating capacity to power the equivalent of 15 million homes, providing approximately 11% of the nation's clean energy. We are further accelerating the nation's transition to a carbon-free future by helping our customers reach their sustainability goals, setting our own ambitious goal of achieving 100% carbon-free generation by 2040, and by investing in promising emerging technologies to eliminate carbon emissions across all sectors of the economy. Follow Constellation on LinkedIn and Twitter.

Non-GAAP Financial Measures

In analyzing and planning for our business, we supplement our use of net income as determined under generally accepted accounting principles in the United States (GAAP), with Adjusted EBITDA (non-GAAP) as a performance measure. Adjusted EBITDA (non-GAAP) reflects an additional way of viewing our business that, when viewed with our GAAP results and the accompanying reconciliation to GAAP net income included above, may provide a more complete understanding of factors and trends affecting our business. Adjusted EBITDA (non-GAAP) should not be relied upon to the exclusion of GAAP financial measures and is, by definition, an incomplete understanding of our business, and must be considered in conjunction with GAAP measures. In addition, Adjusted EBITDA (non-GAAP) is neither a standardized financial measure, nor a presentation defined under GAAP and may not be comparable to other companies' presentations or deemed more useful than the GAAP information provided elsewhere in this press release and earnings release attachments. We have provided the non-GAAP financial measure as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. Adjusted EBITDA (non-GAAP) should not be deemed more useful than, a substitute for, or an alternative to the most comparable GAAP Net Income measure provided in this earnings release and attachments. A reconciliation of projected Adjusted EBITDA, which is a forward-looking non-GAAP financial measure, to the most directly comparable GAAP financial measure, is not provided because we are unable to provide such reconciliation without unreasonable effort. The inability to provide each reconciliation is due to the unpredictability of the amounts and timing of events affecting the items we exclude from the non-GAAP measure. This press release and earnings release attachments provide reconciliations of Adjusted EBITDA (non-GAAP) to the most directly comparable financial measures calculated and presented in accordance with GAAP, are posted on our website: www.ConstellationEnergy.com, and have been furnished to the Securities and Exchange Commission on Form 8-K on August 3, 2023.

Cautionary Statements Regarding Forward-Looking Information

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

The factors that could cause actual results to differ materially from the forward-looking statements made by Constellation Energy Corporation and Constellation Energy Generation, LLC, (Registrants) include those factors discussed herein, as well as the items discussed in (1) the Registrants' 2022 Annual Report on Form 10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part II, ITEM 8. Financial Statements and Supplementary Data: Note 19, Commitments and Contingencies; (2) the Registrants' Second Quarter 2023 Quarterly Report on Form 10-Q (to be filed on August 3, 2023) in (a) Part II, ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, and (c) Part I, ITEM 1. Financial Statements: Note 13, Commitments and Contingencies; and (3) other factors discussed in filings with the SEC by the Registrants.

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

Constellation Energy Corporation GAAP Consolidated Statements of Operations and Adjusted EBITDA (non-GAAP) Reconciling Adjustments (unaudited) (in millions, except per share data)

	Three Months Ended June 30, 2023							Three Months Ended June 30, 2022
	GAAP^(a)			Non-GAAP Adjustments				GAAP^(a)			Non-GAAP Adjustments
Operating revenues	$	5,446		$	(212	)	(b),(c)	$	5,465		$	298		(b),(c)
Operating expenses
Purchased power and fuel		2,887			(202	)	(b)		3,508			328		(b)
Operating and maintenance		1,477			(89	)	(c),(d),(f),(l)		1,273			(80	)	(c),(d),(f),(g)
Depreciation and amortization		274			(274	)	(h)		277			(277	)	(h)
Taxes other than income taxes		139			—				133			—
Total operating expenses		4,777							5,191
Loss on sales of assets and businesses		—			—				(2	)		2		(g)
Operating income		669							272
Other income and (deductions)
Interest expense, net		(103	)		103		(i)		(56	)		56		(i)
Other, net		605			(588	)	(b),(c),(e)		(654	)		669		(b),(c),(d),(e), (g),(j),(m)
Total other income and (deductions)		502							(710	)
Income (loss) before income taxes		1,171							(438	)
Income taxes		342			(342	)	(j)		(328	)		328		(j)
Equity in losses of unconsolidated affiliates		(5	)		—				(3	)		—
Net income (loss)		824							(113	)
Net loss attributable to noncontrolling interests		(9	)		12		(k)		(2	)		12		(k)
Net income (loss) attributable to common shareholders	$	833						$	(111	)
Effective tax rate		29.2	%						74.9	%
Earnings per average common share
Basic	$	2.57						$	(0.34	)
Diluted	$	2.56						$	(0.34	)
Average common shares outstanding
Basic		324							327
Diluted		325							328

__________

(a)		Results reported in accordance with GAAP.
(b)		Adjustment for mark-to-market on economic hedges and fair value adjustments related to gas imbalances and equity investments.
(c)		Adjustment for all gains and losses associated with NDTs, ARO accretion, ARO remeasurement, and any earnings neutral impacts of contractual offset for Regulatory Agreement Units.
(d)		Adjustment for certain incremental costs related to the separation (system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation), including a portion of the amounts billed to us pursuant to the TSA.
(e)		Adjustment for Pension and Other Postretirement Employee Benefits (OPEB) Non-Service costs.
(f)		Adjustment for costs related to a multi-year ERP system implementation
(g)		Adjustments related to plant retirements and divestitures.
(h)		Adjustment for depreciation and amortization expense.
(i)		Adjustment for interest expense.
(j)		Adjustment for income taxes.
(k)		Adjustment for elimination of the noncontrolling interest related to certain adjustments.
(l)		Adjustment for changes in environmental liabilities.
(m)		In 2022, includes amounts contractually owed to Exelon under the tax matters agreement.

Constellation Energy Corporation GAAP Consolidated Statements of Operations and Adjusted EBITDA (non-GAAP) Reconciling Adjustments (unaudited) (in millions, except per share data)

	Six Months Ended June 30, 2023							Six Months Ended June 30, 2022
	GAAP^(a)			Non-GAAP Adjustments				GAAP^(a)			Non-GAAP Adjustments
Operating revenues	$	13,011		$	(1,142	)	(b),(c)	$	11,056		$	1,217		(b),(c)
Operating expenses
Purchased power and fuel		8,616			(1,428	)	(b)		7,059			1,131		(b)
Operating and maintenance		2,908			(181	)	(c),(d),(f),(l)		2,477			(131	)	(c),(d),(e),(f),(g),(l)
Depreciation and amortization		542			(542	)	(h)		557			(557	)	(h)
Taxes other than income taxes		271			—				268			(2	)	(d)
Total operating expenses		12,337							10,361
Gain on sales of assets and businesses		26			(26	)	(g)		13			—
Operating income		700							708
Other income and (deductions)
Interest expense, net		(210	)		210		(i)		(112	)		112		(i)
Other, net		919			(882	)	(c),(e)		(973	)		992		(b),(c),(d), (e),(g),(j),(m)
Total other income and (deductions)		709							(1,085	)
Income (loss) before income taxes		1,409							(377	)
Income taxes		472			(472	)	(j)		(381	)		381		(j)
Equity in losses of unconsolidated affiliates		(11	)		—				(6	)		—
Net income (loss)		926							(2	)
Net (loss) income attributable to noncontrolling interests		(3	)		24		(k)		3			25		(k)
Net income (loss) attributable to common shareholders	$	929						$	(5	)
Effective tax rate		33.5	%						101.1	%
Earnings per average common share
Basic	$	2.85						$	(0.02	)
Diluted	$	2.84						$	(0.02	)
Average common shares outstanding
Basic		326							327
Diluted		327							328

__________

(a)		Results reported in accordance with GAAP.
(b)		Adjustment for mark-to-market on economic hedges and fair value adjustments related to gas imbalances and equity investments.
(c)		Adjustment for all gains and losses associated with NDTs, ARO accretion, ARO remeasurement, and any earnings neutral impacts of contractual offset for Regulatory Agreement Units.
(d)		Adjustment for certain incremental costs related to the separation (system-related costs, third-party costs paid to advisors, consultants, lawyers, and other experts assisting in the separation), including a portion of the amounts billed to us pursuant to the TSA.
(e)		Adjustment for Pension and Other Postretirement Employee Benefits (OPEB) Non-Service costs.
(f)		Adjustment for costs related to a multi-year ERP system implementation
(g)		Adjustments related to plant retirements and divestitures.
(h)		Adjustment for depreciation and amortization expense.
(i)		Adjustment for interest expense.
(j)		Adjustment for income taxes.
(k)		Adjustment for elimination of the noncontrolling interest related to certain adjustments.
(l)		Adjustment for changes in environmental liabilities.
(m)		In 2022, includes amounts contractually owed to Exelon under the tax matters agreement.

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