In Q4 2023, operating cash flow dropped sharply because of **significantly higher cash outflows**. This was mainly due to **changes in working capital**—notably a decrease in accounts payable and accrued expenses driven by lower gas prices and reduced CMC program activity—combined with a **substantial increase in collateral posted** (with an outflow of **$(1,491) million**). These negative effects were only partially offset by improvements in net income, better option premium activity, and reduced pension contributions, resulting in overall much higher operating cash outflows.  **[0001868275-24-000014_ceg-20231231.htm:97]** **[0001868275-24-000010_ceg-20240227991.htm:9]** **[0001868275-24-000014_ceg-20231231.htm:118]** **[0001868275-24-000014_ceg-20231231.htm:122]** **[0001868275-23-000080_ceg-20230930.htm:73]** 

Why did operating cash flow drop so sharply in Q4 2023?

The significantly lower operating cash flow in **FY 2023** was primarily driven by changes in working capital and a major increase in cash outflows related to **collateral received (posted), net**. Although net income improved and there were positive effects from option premiums and lower pension contributions, the negative impact of a **decrease in accounts payable and accrued expenses** (primarily due to lower gas prices and reduced CMC program activity) along with the jump in collateral outflows (from **$(351) million** in FY 2022 to **$(1,491) million** in FY 2023) outweighed these benefits, leading to a much larger cash outflow in operating activities.  **[0001868275-24-000014_ceg-20231231.htm:97]** **[0001868275-24-000014_ceg-20231231.htm:118]** 

What drove the much lower operating cash flow in FY 2023?

The **substantial operating cash flow improvement** in Q3 2024 was driven primarily by several key factors. First, there was a **significant increase in net income**, which contributed an additional **$1,272 million** to operating cash flows.  **[0001868275-24-000069_ceg-20240930.htm:63]** **[0001868275-24-000066_ceg-20241104991.htm:7]**  Second, there was a major positive change in **collateral received (net)**, which improved by **$1,717 million** compared to the previous period.  **[0001868275-24-000069_ceg-20240930.htm:63]** **[0001868275-24-000066_ceg-20241104991.htm:7]**  Additionally, the shift in **option premiums received (net)** added **$195 million** to cash flows.  **[0001868275-24-000069_ceg-20240930.htm:63]** **[0001868275-24-000066_ceg-20241104991.htm:7]**  Finally, **$670 million** in cash was received from the sale of nuclear production tax credits, further bolstering operating cash flows.  **[0001868275-24-000069_ceg-20240930.htm:63]**  These improvements, despite some offsets from increased pension contributions and adverse changes in working capital and other noncurrent assets and liabilities, collectively drove the notable improvement in Q3 2024.

What factors contributed to the substantial operating cash flow improvement in Q3 2024?

c61bd297fb7bf49f332ec527a1d389f6efe6cb7602f732581a627b65d1ebcb93

The surge in **Cash and Cash Equivalents** in Q3 2024—from **$368 million** at December 31, 2023 to **$1,793 million** at September 30, 2024—is not explained by a single factor. The documents suggest that the significant increase may be attributed to several potential factors, including **improved operational performance**, a **favorable market and portfolio optimization** (which includes strong nuclear PTC portfolio results), actions related to **financing activities** (notably the repayment of short-term borrowings that were at **$1,644 million** at the end of 2023), and adjustments in **working capital** such as a notable decline in customer accounts receivable. However, the documents do not provide a detailed breakdown of these drivers.  **[0001868275-24-000066_ceg-20241104991.htm:6]** **[0001868275-24-000069_ceg-20240930.htm:6]** **[0001868275-24-000066_ceg-20241104991.htm:0]** 

Why did Cash and Cash Equivalents surge in Q3 2024?

The increase in **long-term debt** in Q1 2024 was driven primarily by the issuance of new debt and the redemption of existing debt. Specifically, CEG issued **$900 million** in Green Senior Notes (5.75%, maturing in March 2054) and recorded a **net long-term debt issuance of $868 million**, alongside redeeming several nonrecourse debts (including **$15 million**, **$8 million**, **$6 million**, and **$3 million** issues). These combined activities elevated the debt level from **$7,496 million** at the end of Q4 2023 to **$8,352 million** in Q1 2024.  **[0001868275-24-000026_ceg-20240331.htm:30]** **[CEG_3387862_6]** **[0001868275-24-000026_ceg-20240331.htm:30]** **[0001868275-24-000026_ceg-20240331.htm:57]** 

What drove the increase in Long-Term Debt in Q1 2024?

The jump in short-term borrowings in Q4 2023 was primarily driven by **repayments on and issuances of notes due in less than 365 days**, resulting in a net change of **$485 million** in 2023 compared to **$(923) million** in 2022—a difference of **$1,408 million**.  **[0001868275-24-000014_ceg-20231231.htm:99]** 

Why did Short-Term Borrowings jump in Q4 2023?

655dbb26859924c44d66f489dd06212d288e5b0f690ffd7f2412b6cd00f1b9f8

The low Operating Income in Q4 2023 was driven by a combination of factors. Despite some favorable market conditions and lower purchased power and fuel costs, **increased operating and maintenance expenses**, along with the **negative impacts from nuclear outages**, significantly offset these benefits. This mix of factors led to the reported **($67 million)** operating loss in the quarter.  **[0001868275-24-000010_ceg-20240227991.htm:2]** **[0001868275-24-000014_ceg-20231231.htm:88]** **[0001868275-24-000010_ceg-20240227991.htm:7]** **[0001868275-24-000010_ceg-20240227991.htm:12]** 

Why was Operating Income so low in Q4 2023?

The net income turned negative in Q4 2023 because several unfavorable factors outweighed the positive market and portfolio conditions. **Increased costs related to labor, contracting, and materials**, along with **decreased Zero Emission Credit (ZEC) and capacity revenues**, and the **adverse impacts of nuclear outages** led to the shift from a net income in the previous year to a net loss in Q4 2023.  **[0001868275-24-000010_ceg-20240227991.htm:2]** **[0001868275-24-000010_ceg-20240227991.htm:10]** 

Why did Net Income turn negative in Q4 2023?

The surge in **Operating Income** in **FY 2023** was primarily driven by **favorable market and portfolio conditions**—including higher realized margins on load contracts and generation-to-load optimization—as well as **favorable net realized and unrealized NDT activity** and **unrealized gains from investments**. These factors significantly outweighed the negative impacts from higher labor, contracting, and materials costs, lower capacity revenues, nuclear outages, and increased interest expenses.  **[0001868275-24-000014_ceg-20231231.htm:88]** 

What drove the surge in Operating Income in FY 2023?

The **Interest Expense, Net** increased in Q4 2023 primarily due to the **issuance of Senior Notes and Tax-Exempt Bonds**, **increased fees and interest on short-term borrowings**, and **changes in the 13-Week Treasury Rate** that impacted the company’s spent nuclear fuel obligation. These factors together drove the significant increase in interest expense in that period.  **[0001868275-24-000010_ceg-20240227991.htm:7]** **[0001868275-24-000010_ceg-20240227991.htm:10]** 

Why did Interest Expense increase in Q4 2023?

9e44e074985323a6945e435a23384a5468a41417d9a72f028bd65b52788eb8a0

Operating Revenues (USD, millions)

Purchased Power and Fuel (USD, millions)

Operating and Maintenance (USD, millions)

Depreciation and Amortization (USD, millions)

Taxes Other Than Income Taxes (USD, millions)

Total Operating Expenses (USD, millions)

Operating Income (Loss) (USD, millions)

Interest Expense, Net (USD, millions)

Other Income (Expense), Net (USD, millions)

Total Other Income (Deductions) (USD, millions)

Income (Loss) Before Income Taxes (USD, millions)

Income Tax (Benefit) Expense (USD, millions)

Net Income (Loss) (USD, millions)

Net Income (Loss) Attributable to Noncontrolling Interests (USD, millions)

Net Income (Loss) Attributable to Common Shareholders (USD, millions)

0d07ad39b46de41512cab0e0ab4ee3f21c0663c504a0d03b1f58a30de80ab1c8

848fd35b59dc811dc0f3844a735a6b421932f8ca15abb2239a0b08976e4407ac

1fa71529ef13f8736db704ba162800da70f7b614aa77fbef6c1b9e890dee0c8f

Current Assets [USD, Millions]

Cash and Cash Equivalents [USD, Millions]

Accounts Receivable [USD, Millions]

Inventory [USD, Millions]

Non-Current Assets [USD, Millions]

Property, Plant, and Equipment (PP&E) [USD, Millions]

Goodwill [USD, Millions]

Intangible Assets [USD, Millions]

Current Liabilities [USD, Millions]

Accounts Payable [USD, Millions]

Short-term Debt [USD, Millions]

Accrued Expenses [USD, Millions]

Non-Current Liabilities [USD, Millions]

Long-term Debt [USD, Millions]

Lease Liabilities [USD, Millions]

Deferred Tax Liabilities [USD, Millions]

Shareholders' Equity [USD, Millions]

Retained Earnings [USD, Millions]

Common Stock [USD, Millions]

Additional Paid-in Capital [USD, Millions]

8a234cb67b725253d2b69d610d40a21ef7ff76f9fa9cc394fc5b3086f6290b24

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD, Units]

Earnings Per Share (EPS) - Diluted [USD, Units]

e41893c5599bfa65806ba2d0aa82562dd20766f4a630f762481d56296f10c708

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [Shares, Thousands]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

ff76c604d71281faa7e1fd15aaa4f4afc2e0d6cdb728d21e0b45813fa6c7df25

Nuclear PTC (maximum credit) ($/MWh)

ZEC reference price for New Jersey (Mid-Atlantic) ($/MWh)

ZEC reference price for Illinois (Midwest) ($/MWh)

ZEC reference price for New York ($/MWh)

Illinois CMC Price ($/MWh)

Average day-ahead around-the-clock reference price in PJM West (Mid-Atlantic) ($/MWh)

Average day-ahead around-the-clock reference price in ComEd (Midwest) ($/MWh)

Average day-ahead around-the-clock reference price in Central (New York) ($/MWh)

Average day-ahead around-the-clock reference price in North (ERCOT) ($/MWh)

Average day-ahead around-the-clock reference price in Southeast Massachusetts (Other) ($/MWh)

Capacity price in Eastern Mid-Atlantic Area Council (Mid-Atlantic) ($/MW Day)

Capacity price in ComEd (Midwest) ($/MW Day)

Capacity price in Rest of State (New York) ($/MW Day)

Capacity price in Southeast Massachusetts (Other) ($/MW Day)

Nuclear Generation in Mid-Atlantic (GWh)

Nuclear Generation in Midwest (GWh)

Nuclear Generation in New York (GWh)

Nuclear Generation in ERCOT (GWh)

Total Nuclear Generation (GWh)

Natural Gas, Oil, and Renewables in Mid-Atlantic (GWh)

Natural Gas, Oil, and Renewables in Midwest (GWh)

Natural Gas, Oil, and Renewables in ERCOT (GWh)

Natural Gas, Oil, and Renewables in Other Power Regions (GWh)

Total Natural Gas, Oil, and Renewables (GWh)

Purchased Power in Mid-Atlantic (GWh)

Purchased Power in Midwest (GWh)

Purchased Power in ERCOT (GWh)

Purchased Power in Other Power Regions (GWh)

Total Purchased Power (GWh)

Total Supply/Sales in Mid-Atlantic (GWh)

Total Supply/Sales in Midwest (GWh)

Total Supply/Sales in New York (GWh)

Total Supply/Sales in ERCOT (GWh)

Total Supply/Sales in Other Power Regions (GWh)

Total Supply/Sales (All Regions) (GWh)

Nuclear fleet capacity factor (percent)

Refueling outage days (days)

Non-refueling outage days (days)

82563739b925c3a3e40ecf6a04e4e0003237f8d4119b990f3b52883b008555f1

Power Revenues

Natural Gas Revenues

Other Revenues

Total Revenue

95b8833b3178bfb6dc26402f5a1abe2b21deab152b8281e0f37b881b410c9704

Mid-Atlantic

- Intersegment

Midwest

New York

ERCOT

Other Power Regions

Total Power Revenues

e9842bc5c8b67a9d2839b976f41cdcbad55f1b911305ccf88d86b99cb78f555e

Constellation Energy (CEG)

Financials