Separation (Exelon)

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

Separation

Separation (Exelon)

On February 21, 2021, Exelon’s Board of Directors approved a plan to separate the Utility Registrants and Generation, creating two publicly traded companies ("the separation").

On February 25, 2021, Exelon filed applications with FERC, NYPSC, and NRC seeking approvals for the separation of Generation. On March 25, 2021, Exelon filed a request for a private letter ruling with the IRS to confirm the tax-free treatment of the separation, which was received on September 23, 2021. Exelon received approval from FERC on August 24, 2021, NRC on November 16, 2021, and NYPSC on December 16, 2021 for the separation.

The Form 10 registration statement was declared effective by the SEC on December 29, 2021.

Exelon completed the separation on February 1, 2022, through the distribution of 326,663,937 common stock shares of Constellation Energy Corporation, the new publicly traded company, to Exelon shareholders. Under the separation plan, Exelon shareholders retained their current shares of Exelon stock and received one share of Constellation Energy Corporation common stock for every three shares of Exelon common stock held on January 20, 2022, the record date for the distribution, in a transaction that is tax-free to Exelon and its shareholders for U.S. federal income tax purposes.

In order to govern the ongoing relationships between Exelon and Constellation Energy Corporation after the separation, and to facilitate an orderly transition, Exelon and Constellation Energy Corporation have entered into several agreements, including a Separation Agreement, Tax Matters Agreement, a Transition Services Agreement, and an Employee Matters Agreement, and other ancillary agreements.

Pursuant to the Separation Agreement, Exelon made a cash payment of $1.75 billion to Generation on January 31, 2022. Exelon issued term loans of $2.0 billion on January 21, 2022 and January 24, 2022 primarily to fund the cash payment to Constellation Energy Corporation and for general corporate purposes. See Note 17 — Debt and Credit Agreements for additional information.