CONSTELLATION ENERGY GENERATION LLC

2. Mergers, Acquisitions, and Dispositions

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. 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.

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

In November 2023, we completed the acquisition of NRG South Texas LP (renamed and converted as Constellation South Texas, LLC), which owns a 44% undivided ownership interest in the jointly-owned STP, a 2,645 MW, dual-unit nuclear plant located in Bay City, Texas. The consideration transferred was $1.66 billion. Other owners include City Public Service Board of San Antonio (CPS,40%) and the City of Austin, Texas (Austin,16%). This acquisition is complementary to and aligned strategically with our existing clean energy business operations.

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 were not significant to our reported results for the period of acquisition. Accordingly, no pro forma financial information has been presented herein.

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.