Constellation Energy Corporation · NASDAQ:CEG

Constellation Energy — Merger or Acquisition (January 2025)

42 slides from Constellation Energy's merger presentation, Jan 10, 2025

  1. Slide 1: Constellation Acquisition of Calpine: Creating the Right Company at the Right Time

    Constellation Acquisition of Calpine: Creating the Right Company at the Right Time January 10, 2025

  2. Slide 2: Cautionary Statements Regarding Forward-Looking Information

    Cautionary Statements Regarding Forward-Looking Information This presentation 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,” “w

  3. Slide 3: Non-GAAP Financial Measures

    Non-GAAP Financial Measures The Registrants report their financial results in accordance with accounting principles generally accepted in the United States (GAAP). We supplement the reporting of financial information determined in accordance with GAAP with certain non-GAAP financial measures, includ

  4. Slide 4: Non-GAAP Financial Measures Continued

    Non-GAAP Financial Measures Continued This information is intended to enhance an investor’s overall understanding of period over period financial results and provide an indication of Constellation’s operating performance by excluding items that are considered by management to be not directly related

  5. Slide 5: Constellation to Acquire Calpine

    Constellation to Acquire Calpine Calpine Overview (1) Geographical Overview Calpine has 27.7 GW of operating capacity across 79 plants, and a strong retail platform with ~59 TWh annual load Conventional Gas Assets • 61 operating assets, primarily consisting of CCGTs, with a combined operating capaci

  6. Slide 6: The Acquisition of Calpine Better Positions Constellation for the Future

    The Acquisition of Calpine Better Positions Constellation for the Future Creates leading coast-to-coast generation fleet that is irreplaceable, dispatchable, reliable, and the cleanest in America Reliable, clean and sustainable MWs are a premium product EPS* (1) accretive by more than 20% in 2026 an

  7. Slide 7: Key Transaction Terms

    Key Transaction Terms • Enterprise value of $29.1B including $12.7B of net debt; after adjusting for forecasted 2025 free cash flow and NPV of tax attributes, effective enterprise value of $26.6B Consideration • Equity purchase price of $16.4B made up of $11.9B of Constellation shares (1) (50 millio

  8. Slide 8: Unprecedented Demand Growth Projected for the U.S.

    Unprecedented Demand Growth Projected for the U.S. ERCOT Peak Load Growth Projection (MW) (1) PJM Peak Demand Forecasts Keeps Growing (MW) (2) +81% 60% 120% 230,000 150,000 History History 2020 220,000 2020 50% 140,000 2021 100% 2021 210,000 2022 2022 ERCOT Peak Load (MW) 130,000 +31% PJM Peak Load

  9. Slide 9: New Supply is Primarily Intermittent Renewables, Increasing the Value of Reliable and Clean Generation

    New Supply is Primarily Intermittent Renewables, Increasing the Value of Reliable and Clean Generation U.S. 2025 Planned Capacity Additions (1) PJM Generation Interconnection Queue (2) Wind Wind 33.4 GW Natural Gas 9.1 GW 7.5 GW Battery 16.2 GW Natural Gas Hybrid (3) 4.7 GW Battery 29.9 GW Other 44.

  10. Slide 10: Natural Gas Capacity Will Support the Electric System for Decades

    Natural Gas Capacity Will Support the Electric System for Decades (1) 175% % of Current Natural Gas Installed Capacity 150% 125% 100% 75% 50% 25% 0% California (2024) Texas (2023) New England (2020) PJM (2024) US (2021) Numerous studies have reinforced the long-term need for the natural gas generati

  11. Slide 11: Creates Leading Clean U.S. Energy Producer with Coast-to-Coast Presence

    Creates Leading Clean U.S. Energy Producer with Coast-to-Coast Presence Generation Output (million MWhs) 308 228 216 206 183 130 115 113 79 76 Constellation NextEra Energy Duke Vistra Southern Berkshire Entergy Dominion AEP Xcel + Calpine Hathaway Energy Leading Carbon-Free Generators (million MWhs)

  12. Slide 12: Creates Leading Clean U.S. Energy Producer with Coast-to-Coast Presence

    Creates Leading Clean U.S. Energy Producer with Coast-to-Coast Presence America’s Leading Power Generation Company • Largest operator of carbon-free, long-lived, 24/7 nuclear plants • Leading natural gas fired generator and leader in natural gas-fired CCS • Leading cogeneration operator • Largest ge

  13. Slide 13: Coast-to-Coast Footprint Creates Substantial Market Diversification

    Coast-to-Coast Footprint Creates Substantial Market Diversification (1) Constellation Standalone Calpine Standalone Combined Business Other (2) Other (2) 10% 7% Other (2) NYISO 8% PJM NYISO ISO-NE 14% 13% 8% 7% CAISO PJM ERCOT 11% CAISO = 10% 49% PJM 69% 28% ERCOT 43% ERCOT 23% Combination creates a

  14. Slide 14: Proven Teams with Shared Values

    Proven Teams with Shared Values • Experienced, best-in-class teams with strong cultures of safety, operating excellence and commitment to serving customers, communities and the country Constellation - Constellation’s and Calpine’s people share a passion for ~14,000 Employees powering America’s famil

  15. Slide 15: Our Assets are Needed to Support Reliability

    Our Assets are Needed to Support Reliability Constellation – Nuclear Generation Calpine – Gas Generation Average Nuclear Refueling Nuclear Capacity Factor (%) (1) Fleet Availability Capacity Factor Outage Days (2) Industry Average Industry Average 95.4% 94.5% 94.8% 94.4% 94.6% 40 88% 38 84% 86% 90.8

  16. Slide 16: Opportunity to Provide Energy and Sustainability Solutions to More Customers

    Opportunity to Provide Energy and Sustainability Solutions to More Customers Retail Electric Load Served (million MWhs) (1) 200 Constellation C&I Constellation Residential C&I Calpine C&I Calpine Residential Residential 151 120 76 52 36 32 24 17 14 Constellation NRG Energy Vistra Energy (2) bp ENGIE

  17. Slide 17: Calpine Complements Existing Portfolio in Uniquely Beneficial Ways

    Calpine Complements Existing Portfolio in Uniquely Beneficial Ways Complementary Generation and Customer Businesses Allows for Expansion • Calpine offers high quality dispatchable assets in Texas, California and New England – all markets where Constellation sees opportunities to expand Dispatchable

  18. Slide 18: Complementary Capabilities Will Create Value for Combined Company

    Complementary Capabilities Will Create Value for Combined Company Combined Combined Largest Nuclear Fleet Strong Management Team Leading Natural Gas Fleet Best Operator of Nuclear Plants Assets Largest Geothermal Fleet People Leading Operator of Natural Gas Battery Storage Best Customer Platform Ren

  19. Slide 19: 2024 Adjusted Operating Earnings Expected to Exceed Top End of Guidance Range

    2024 Adjusted Operating Earnings* Expected to Exceed Top End of Guidance Range $/share $8.40 $8.40 $8.40+ $8.03 $8.20 $8.20 $8.00 $8.00 $7.63 $7.63 $7.60 $7.60 $7.23 $7.23 Original Guidance Previously Revised Guidance Current Guidance (1) 2024 Expectation Feb 2024 Q2 Earnings Call Q3 Earnings Call B

  20. Slide 20: Initiating Constellation Standalone 2025 Adjusted Operating Earnings Guidance of $8.90 - $9.60 Per Share

    Initiating Constellation Standalone 2025 Adjusted Operating Earnings* Guidance of $8.90 - $9.60 Per Share (1) Guidance Range $8.90 - $9.60 Enhanced Base Earnings Changes from February 2024 Business and Earnings Outlook  Increase in commercial margins (updated to 10-year average (2))  Portfolio opt

  21. Slide 21: Calpine Acquisition is Immediately EPS and Free Cash Flow Before Growth Accretive

    Calpine Acquisition is Immediately EPS* and Free Cash Flow Before Growth* Accretive Key Financial Details Transaction Financing ($M) CEG Equity (3) $11.9B At least $2.00 At least $2.0B Cash Payment $4.5B EPS* accretion annually (1) of additional FCFbG* annually Net Debt Assumed at Close $12.7B Enter

  22. Slide 22: Immediately Highly Accretive to Adjusted Operating Earnings per Share by 20% in 2026

    Immediately Highly Accretive to Adjusted Operating Earnings* per Share by 20% in 2026 $/share At least $2.00 $8.70 - $9.70 Enhanced Base $5.95 - $6.05 2026 Standalone Guidance (1) 2026 Accretion from Transaction When looking beyond 2026, we expect to: • Maintain base EPS* growth target of at least 1

  23. Slide 23: Numerous Opportunities for Additional Value Creation Beyond Current Projections

    Numerous Opportunities for Additional Value Creation Beyond Current Projections Timeline of MWhs Available for Attribute Payments Higher Inflation Results in Higher from Nuclear and Geothermal (1) Nuclear PTC Floor Price Program NJ ZEC IL CMC and IL ZEC NY ZEC roll-off $60 Expected Generation 186 19

  24. Slide 24: Constellation is Uniquely Positioned to Acquire Calpine while Maintaining Strong Investment Grade Balance Sheet

    Constellation is Uniquely Positioned to Acquire Calpine while Maintaining Strong Investment Grade Balance Sheet Constellation’s Balance Sheet Strength and Expect Rating Agencies to Affirm Financing Structure Enables Highly Accretive Constellation Credit Ratings Acquisition Moody’s Baa1; stable outlo

  25. Slide 25: Continued Disciplined Capital Allocation

    Continued Disciplined Capital Allocation Capital Allocation Priorities Debt reduction to maintain credit ratings Dividend growth Pursue growth that meets double-digit unlevered return threshold Return capital to shareholders 25

  26. Slide 26: Continuing to Add Generation to Meet Rising Power Demand

    Continuing to Add Generation to Meet Rising Power Demand Investing for the Future, Today • 835 MW Crane Clean Energy Center • ~160 MW of uprates from Byron and Braidwood • More than 4,250 MW of nuclear license renewals (1) • ~165 MW of Battery Energy Storage Systems (BESS) and solar • 760 MW current

  27. Slide 27: Constellation – Our Assets Are Unmatched

    Constellation – Our Assets Are Unmatched Visible, Double-Digit Long-Term Base EPS Growth Backed by Nuclear PTC, Contracts and Customer Margins Best and Leading Operator of Clean, Emissions-free and Low-emissions, Reliable Generation, with Coast-to-Coast Presence Growing Product Opportunities Through

  28. Slide 28: Appendix

    28 Appendix =a <= Constellation.

  29. Slide 29: Required Regulatory Approvals and Timing

    Required Regulatory Approvals and Timing Regulatory Filings Will Be Made Expeditiously Federal Energy Regulatory U.S. Department of Justice: Other Filings: Commission (FERC): • Hart-Scott-Rodino review • Other FERC filings to address • FERC filing will include mitigation discrete regulatory and • In

  30. Slide 30: Combined Company Characteristics Compared to Leading Companies in Different Sectors

    Combined Company Characteristics Compared to Leading Companies in Different Sectors Constellation Combined Specialty Waste Rail Towers IPPs Standalone Company Chemicals Double-digit Double-digit Strong Growth Rates through the decade (1) through the decade (1)    ~ ~ Consistent Earnings (meet or

  31. Slide 31: 2025 and 2026 Standalone Constellation Year-Over-Year Adjusted Operating Earnings Drivers

    2025 and 2026 Standalone Constellation Year-Over-Year Adjusted Operating Earnings* Drivers 2025 $/share Guidance Range Guidance Range Adjusted Operating Earnings* guidance initiated $8.90 - $9.60 $8.70 - $9.70 at $8.90-9.60 per share (1) • Higher generation output with fewer planned nuclear outages

  32. Slide 32: Standalone Constellation Base Earnings Modeling Tools

    Standalone Constellation Base Earnings Modeling Tools $/share Base Gross Modeling Tools Additional Detail Margin Generation Can be broken down by CMC units, NY Expected generation x price (Nuclear) units, Crane and remaining fleet (PTC) Cleared capacity volumes x Capacity volumes and prices provided

  33. Slide 33: Standalone Constellation Visible 13%+ Adjusted Operating Earnings Growth on Base Earnings Through 2030

    Standalone Constellation Visible 13%+ Adjusted Operating Earnings* Growth on Base Earnings Through 2030 Long-term Growth Rate of at Least 13% from 2024-2030 but Will Vary from Year to Year Factors 2025 2026 2027 2028 2029 PTC Step-Up (2% Inflation) $44.75 $44.75 $45.75 $45.75 $49.88 $34.50 CMC Progr

  34. Slide 34: Standalone Constellation Modeling Tools for Base Earnings

    Standalone Constellation Modeling Tools for Base Earnings 2025 2026 Quantity Prices Quantity Prices Gross Margin* (Base Only) (1) (million MWhs) ($/MWh) (million MWhs) ($/MWh) Nuclear (2) Illinois CMC Units (3) 55 $33.47 53 $34.09 NY Units (4) 26 $61 - $62 25 $61 - $63 Remaining Units (PTC) 101 $44.

  35. Slide 35: Standalone Constellation Detailed Modeling Inputs for Base Earnings

    Standalone Constellation Detailed Modeling Inputs for Base Earnings Expected Generation (million MWhs) (1) Nuclear 2025 2026 2027 2028 2029 IL CMC Units 55 53 23 - - NY Units 26 25 26 25 26 Remaining Units 101 102 132 158 157 Crane - - - 3 6 Total Nuclear 182 180 180 187 188 Number of Planned Refuel

  36. Slide 36: Standalone Constellation Detailed Modeling Inputs for Base Earnings (continued)

    Standalone Constellation Detailed Modeling Inputs for Base Earnings (continued) Expected Generation (million MWhs) Modeling Prices Non-Nuclear (Energy) 2025 2026 ($/MWh) (1) Wind/Solar 5 5 Historical renewable contracts $60 - $70 Hydro 2 2 Hydro revenue price ($/MWh) $45 Natural Gas, Oil, Other 20 1

  37. Slide 37: Standalone Constellation Additional Modeling Inputs and Information

    Standalone Constellation Additional Modeling Inputs and Information Other Modeling Inputs ($M) 2025 2026 Additional Information 2025 2026 Adjusted Gross Margin* (Enhanced Only) $1,050 - $1,300 $1,175 - $1,550 Power Margins Above 10-year Average $0.35 - Performance Incentive Adjustment Percentage of

  38. Slide 38: Standalone Constellation Only Adjusted O&M and Capital Expenditures

    Standalone Constellation Only Adjusted O&M* and Capital Expenditures Adjusted O&M* 2024-2026 (1) Investing for Long-Term Value Through CapEx (3) ($M) ($M) $3,400 $5,725 $150 $5,375 $5,450 $3,000 $150 $50 $950 $2,650 $750 $425 $1,250 $1,100 $5,575 $5,400 $1,350 $5,225 $1,150 $1,200 $875 2024E 2025E 2

  39. Slide 39: Appendix Reconciliation of Non-GAAP Measures

    Appendix Reconciliation of Non-GAAP Measures 39

  40. Slide 40: GAAP to Non-GAAP Reconciliations for Credit Metrics

    GAAP to Non-GAAP Reconciliations for Credit Metrics (1) FFO (a) CFO (Pre-WC) (c) S&P FFO/Debt (2) = Moody’s CFO Pre-WC/Debt (3) = Adjusted Debt (b) Adjusted Debt (d) S&P FFO Calculation (2) Moody’s CFO Pre-WC Calculation (3) GAAP Operating Income Cash Flow From Operations + Depreciation & Amortizati

  41. Slide 41: GAAP to Non-GAAP Reconciliation

    GAAP to Non-GAAP Reconciliation Adjusted O&M* Reconciliation ($M) 2024 2025 2026 GAAP O&M $6,200 $5,700 $5,800 Decommissioning-Related Activities (1) ($100) ($200) ($225) Direct cost of sales incurred to generate revenues ($200) ($125) ($125) for certain Commercial and Power businesses (2) Change in

  42. Slide 42: Contact Information

    Contact Information InvestorRelations@constellation.com Links Events and Presentations ESG Resources Reports & SEC Filings Constellation Sustainability Report ESG Investor Presentation Nuclear 101 42

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