Constellation Energy Corporation · NASDAQ:CEG
Constellation Energy — Investor Presentation (September 2024)
66 slides from Constellation Energy's investor presentation, September 2024
Slide 1: Investor Presentation September 2024
Investor Presentation September 2024
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
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). Constellation supplements the reporting of financial information determined in accordance with GAAP with certain non-GAAP financial meas
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
Slide 5: Constellation – Our Assets Are Unmatched
Constellation – Our Assets Are Unmatched Visible, Double-Digit Long-Term Base EPS Growth Backed by the Nuclear Production Tax Credit (PTC) Best and Largest Operator of Carbon-Free, Long-Lived, 24/7 Nuclear Plants Growing Product Opportunities Through Leading Customer Platform Uniquely Positioned to
Slide 6: We Delivered on Our Commitments Made at January 2022 Analyst Day
We Delivered on Our Commitments Made at January 2022 Analyst Day • Ranked #1 in operational metrics among Deliver on financial • Exceeded midpoint of full-year EBITDA guidance major nuclear generators in 2022 and top-end of revised guidance in 2023 Best-in-class • Strong C&I customer renewal, win-ra
Slide 7: The PTC Provides Revenue Visibility and Supports Revenue Growth
The PTC Provides Revenue Visibility and Supports Revenue Growth Illustrative Payoff Dynamics Assuming 2% Inflation (1) Higher Inflation Results in Higher Nuclear PTC Floor Price (1) $55 $60 Market Revenues + PTC ($/MWh) Market Revenues + PTC ($/MWh) ~$755M $50 $55 incremental revenue between 2% and
Slide 8: Bipartisan Support for Nuclear Energy
Bipartisan Support for Nuclear Energy State and Federal legislation has been passed Public Opinion (1) recognizing the importance of nuclear power to grid reliability and addressing the climate crisis 3x more Aug 2022 1.5x Federal Nuclear Reliability respondents want PTC more people is the public’s
Slide 9: Nuclear is an Unparalleled Source of Electricity
Nuclear is an Unparalleled Source of Electricity (1) Highest Capacity Factors (2) Existing Nuclear Will Operate Longer Than All Existing Renewables and Any Being Built Today 2020 2021 2022 100% Remaining Useful Life Useful Life if Built Today 80% Nuclear 60% Wind 40% Solar 20% 0% 0 10 20 30 40 Nucle
Slide 10: Supply is Becoming More Intermittent While Power Demand is Growing
Supply is Becoming More Intermittent While Power Demand is Growing U.S. Generation Stack (1) U.S. Demand 2010 to 2030 (1) 5,000 Today 4,100 4,500 4,000 4,000 3,500 Million MWhs Million MWhs 3,000 3,900 2,500 2,000 3,800 1,500 1,000 3,700 500 0 3,600 2010 2020 2030 2010 2015 2020 2025 2030 Wind Solar
Slide 11: AI and Data Center Growth Will Drive Power Demand
AI and Data Center Growth Will Drive Power Demand Data center electricity consumption in the U.S. is growing (TWhs) (1) In the next five years, consumers and businesses Major tech companies are will generate twice as much expected to invest $1 trillion data as all the data created in data centers ov
Slide 12: Renewable Generation is Low When Demand is High
Renewable Generation is Low When Demand is High 2023 PJM Generation and Demand 16,000 140,000 14,000 120,000 12,000 100,000 Generation (MW) Demand (MW) 10,000 80,000 8,000 60,000 6,000 40,000 4,000 20,000 2,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Demand (30-Day Rolling Avg) (1) Ren
Slide 13: Day-to-Day, Renewable Generation Can Swing Like Five Nuclear Reactors
Day-to-Day, Renewable Generation Can Swing as Much as Turning On or Off Five Nuclear Reactors in PJM 2023 PJM Renewable Generation 12,000 10,000 8,000 Generation (MWs) 6,000 4,000 2,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Renewable Gen (Daily Avg) (1) (1) Source: PJM Generation by
Slide 14: Prices Spike in ERCOT When Renewables Are Unavailable
Prices Spike in ERCOT When Renewables Are Unavailable 5,000 Avg Wind and Load Greater than 80K MW Solar Generation 4,500 as % of Total Load 4,000 3,500 ERCOT North ($/MWh) 3,000 2,500 2,000 1,500 1,000 500 0 12% 14% 16% 18% 20% 22% 24% 26% 28% 30% 32% 34% 36% 38% 40% Wind and Solar as Percentage of
Slide 15: Our Reliable, Carbon-Free Power Can Capture Additional Value
Our Reliable, Carbon-Free Power Can Capture Additional Value Timeline of MWhs Available for Attribute Payments (1) Attribute Payments Provide Substantial Upside (1,2) Revenue Uplift ($M) Program NJ ZEC IL CMC and IL ZEC NY ZEC roll-off Percentage of Volume $10 Attribute $20 Attribute Total Capacity
Slide 16: More Clean, Reliable Nuclear Capacity than All Other Competitive Generators Combined
We Have More Clean, Reliable, Nuclear Capacity than All Other Competitive Generators Combined Competitive Nuclear Generation Largest Producers of Carbon-Free Constellation is the Best Operator of Capacity (GWs) (1) Generation (1,3) Nuclear Plants in the U.S. million MWhs 22.1 2-Year Capacity Factor
Slide 17: Constellation Serves 21% of the Competitive C&I Market
Constellation Serves 21% of the Competitive C&I Market Retail Electric Load Served (million MWhs) (1) 151 146 Constellation C&I Residential 112 65 56 51 29 29 22 18 NRG Constellation Vistra Energy (2) bp ENGIE Calpine Energy Gexa Energy Shell Energy AEP Energy Just Energy Solutions North America C&I
Slide 18: Uniquely Positioned to Help C&I Customers Meet their Goals
Uniquely Positioned to Help C&I Customers Meet their Goals First, power usage was Continue to drive Power usage is matched to Traditional matched with annualized Then power usage was innovation through locational carbon-free Power and Gas National RECs, EFECs and directly tied to a specific advancin
Slide 19: Our Generation and Commercial Businesses are More Valuable Together
Our Generation and Commercial Businesses are More Valuable Together Locks-in value above the PTC “floor” Creates value from volatility through optimizing our combined generation and retail positions Minimizes need to post collateral Provides pathway to monetizing carbon-free attributes 19
Slide 20: Financial Outlook
20 Financial Outlook —— <= Constellation.
Slide 21: Raising Full-Year Adjusted Operating Earnings Guidance Range to $7.60 - $8.40
Raising Full-Year Adjusted Operating Earnings* Guidance Range to $7.60 - $8.40 Per Share (1) $/share $8.40 • Commercial business outperforming plan in a $8.03 volatile market $8.00 $7.63 – Strong wholesale and retail performance $7.60 with load auction wins and margin expansion $7.23 – Successful op
Slide 22: Base Earnings Give Visibility into Constellation's Stability and Growth
Base Earnings Give Visibility into Constellation’s Stability and Growth Adjusted Operating Earnings* Guidance Range ($7.60 - $8.40) BASE EARNINGS ENHANCED EARNINGS • Earnings that are consistent, visible, and • Earnings that reflect additional value easy to calculate that will grow over time above b
Slide 23: Visible 10%+ Adjusted Operating EPS Growth on Base Earnings
Visible 10%+ Adjusted Operating EPS* Growth on Base Earnings Long-term growth rate of at least 10% from 2024-2028 but will vary from year to year Factors 2024 2025 2026 2027 2028 PTC Step-Up $43.75 $44.75 $44.75 $45.75 $45.75 (2% Inflation) $34.50 Roll- CMC Program $33.04 $33.47 $34.09 n/a off in Ma
Slide 24: Base Earnings are Easily Calculated
Base Earnings are Easily Calculated Guidance Range Base Gross ($7.60 - $8.40) Modeling Tools Additional Detail Margin Generation Can be broken down by CMC units, NY Expected generation x price (Nuclear) units, and remaining fleet (PTC) Cleared capacity volumes x Capacity volumes and prices provided
Slide 25: We Will Capture Value Above Base Earnings
We Will Capture Value Above Base Earnings Examples of Enhanced Earnings Enhanced EPS 10-20% (1) • Margins above 13-year historical and forecast average resulting from: Retail power margins in 2024-2025 are – Volatile markets leading to risk premiums $0.50 -$1.90/MWh above 13-year average – Favorable
Slide 26: Providing Value for Shareholders Through Our Capital Allocation Plan
Providing Value for Shareholders Through Our Capital Allocation Plan Credit Ratings Growing 2024 dividend by • S&P – BBB+; stable outlook 25%, targeting 10% annual • Moody’s – Baa1; stable outlook future growth $875 million of organic growth in 2024-2025 meeting our double- Received authorization fo
Slide 27: Approximately $2.3 Billion of Capital Still to Be Allocated in 2024-2025
Approximately $2.3 Billion of Capital Still to Be Allocated in 2024-2025 ($B) $5.8 - $6.2 ($0.9) ($0.9) Deployed ~$1B through June 30, 2024 ($1.0) Remaining FCFbG* $5.7 - $6.1 authorization (3) ($1.0) ($2.0) ($2.1 - $2.5) Beginning Cash Available (1) $0.1 2024 - 2025 Identified Growth Dividend Autho
Slide 28: Constellation – Our Assets Are Unmatched
Constellation – Our Assets Are Unmatched Visible, Double-Digit Long-Term Base EPS Growth Backed by the Nuclear PTC Best and Largest Operator of Carbon-Free, Long-Lived, 24/7 Nuclear Plants Growing Product Opportunities Through Leading Customer Platform Uniquely Positioned to Support Economic Growth
Slide 29: Appendix – Table of Contents
Appendix – Table of Contents Appendix Slide Number Appendix Slide Number A. Financial Support 30 E. Fleet Overview 55 • Q1 2024 Adjusted EPS* Results • Nuclear • Modeling Tools • Renewables • 2023 – 2025 Adjusted O&M* and CapEx • Gas • Nuclear Fuel F. Reconciliation of Non-GAAP Measures 61 • Credit
Slide 30: Appendix A Financial Support
Appendix A Financial Support 30
Slide 31: Q2 2024 Results
Q2 2024 Results $/share Year-over-Year Adj. Operating Earnings* Drivers $2.56 $2.58 • Continued strong commercial performance through portfolio optimization and better than average customer margins • Nuclear PTC with sharing of benefit under certain state $1.64 $1.68 programs • Higher nuclear output
Slide 32: 2025/2026 PJM Capacity Auction
2025/2026 PJM Capacity Auction 2025/2026 Enhanced Adjusted Operating Earnings* Uplift ($/sh) Cleared Volumes Price Zone (MW) (2) ($/MW-day) Nuclear – CMC Units 6,200 N/A (3) Nuclear – Non-CMC Units 3,550 $270 2025 2026 +$0.25 EPS +$1.25 EPS (1) ComEd 9,750 Nuclear 4,225 $270 Fossil/Others 1,525 $270
Slide 33: Modeling Tools for Base Earnings
Modeling Tools for Base Earnings 2024 2025 Quantity Prices Quantity Prices Adjusted Gross Margin* (Base Only) (1) (million MWhs) ($/MWh) (million MWhs) ($/MWh) Nuclear (2) Illinois CMC Units (3) 54 $33.04 54 $33.47 NY Units (4) 25 $60 - $61 26 $60 - $63 Remaining Units (PTC) 102 $43.75 102 $44.75 Nu
Slide 34: Detailed Modeling Inputs for Base Earnings
Detailed Modeling Inputs for Base Earnings (1) Expected Generation (million MWhs) Nuclear 2024 2025 2026 2027 2028 IL CMC Units 54 54 53 23 - NY Units 25 26 25 26 25 Remaining Units 102 102 102 132 159 Total Nuclear 181 183 180 181 184 (1) Number of Planned Refueling Outages 15 12 15 15 12 Price ($/
Slide 35: Detailed Modeling Inputs for Base Earnings (continued)
Detailed Modeling Inputs for Base Earnings (continued) Expected Generation (million MWhs) Modeling Prices Non-Nuclear (Energy) 2024 2025 ($/MWh) (1) Wind/Solar 5 5 Historical renewable contracts $60 - $70 Hydro 2 2 Hydro revenue price ($/MWh) $45 Natural Gas, Oil, Other 20 18 Representative spark sp
Slide 36: Additional Modeling Inputs and Information
Additional Modeling Inputs and Information Other Modeling Inputs ($M) 2024 2025 Additional Information 2024 2025 Adjusted Gross Margin* (Enhanced Only) $1,125-$1,400 $825-$1,100 Power Margins Above 13-year Average $1.90 $0.50 Performance Incentive Adjusted O&M* Percentage of Nuclear Fleet in PTC Zon
Slide 37: Adjusted O&M and Capital Expenditures
Adjusted O&M* and Capital Expenditures Adjusted O&M* 2023-2025 (1,2) Investing for Long-Term Value Through CapEx (3) ($M) ($M) $2,750 $5,525 $2,500 $5,100 $5,125 $500 $300 $2,325 $350 $1,200 $1,300 $1,025 $1,000 $950 $925 2023A 2024E 2025E 2023A 2024E 2025E Adjusted O&M* Growth Nuclear Fuel Baseline
Slide 38: Constellation is Well-Positioned on Nuclear Fuel
Constellation is Well-Positioned on Nuclear Fuel Well-Insulated from Geopolitical Risk Uranium Purchasing • We have built a diverse and resilient portfolio that can withstand a • We transact predominantly in the term market (bi-lateral contracts) and Russian supply disruption opportunistically in th
Slide 39: Our Investment Grade Balance Sheet is a Competitive Advantage
Our Investment Grade Balance Sheet is a Competitive Advantage Current Credit Ratings Long-Term Debt Maturity Profile (3) As of 6/30/2024 Long-Term Debt Balances (4) Moody’s Baa1; stable outlook (1) ($M) Recourse $7.0B S&P BBB+; stable outlook Non-Recourse $1.4B Total Long-Term Debt $8.4B $334 $23 20
Slide 40: Appendix B: Operational Metrics
Appendix B: Operational Metrics 40
Slide 41: Strong Operations Deliver Reliable and Affordable Carbon-Free Power
Strong Operations Deliver Reliable and Affordable Carbon-Free Power Average Nuclear Refueling Outage 1-Yr Nuclear Capacity Factor (%) (1,2) Non-Nuclear Metrics (5) Days (2,4) Industry Average Industry Average Dispatch Match Renewable Energy Capture 95.7% 95.4% 94.5% 94.8% 94.4% 40 36 91.7% 34 32 90.
Slide 42: Leading Platform Enables Our Customers to Meet Their Energy and Sustainability Needs
Leading Platform Enables Our Customers to Meet Their Energy and Sustainability Needs 2023 Customer Operational Metrics (TTM) Customer Breakdown of 2023 Load Served 205 TWh 90% 75% Wholesale 30% Residential 70% C&I 30% Indexed 25% 38% C&I 90% Retail 70% Fixed 75% 15% Residential 10% Power New Gas New
Slide 43: Appendix C: State and Federal Policies
Appendix C: State and Federal Policies 43
Slide 44: PTC Provides Support for Nuclear Units When Revenues Fall Below $43.75/MWh
PTC Provides Support for Nuclear Units When Revenues Fall Below $43.75/MWh Illustrative Payoff Dynamics for Non-State-Supported Units in 2024 60 • The PTC provides support of up to $15.00/MWh for units when PTC provides revenues are between $25.00/MWh and $43.75/MWh while 55 support from preserving
Slide 45: Inflation of Nuclear Production Tax Credit (PTC)
Inflation of Nuclear Production Tax Credit (PTC) (1) PTC Overview Example Assuming 2%, 3% and 4% Inflation (2) • The PTC is in effect through 12/31/32 2% Inflation 3% Inflation 4% Inflation • In the base year 2024, Constellation qualifies for the nuclear PTC up to $15.00/MWh; the PTC amount is reduc
Slide 46: Zero-Emission Credit (ZEC) Overview and Timelines
Zero-Emission Credit (ZEC) Overview and Timelines State 2023 2024 2025 2026 2027 2028 2029 2030 New York April ’17 March ‘29 Illinois June ’17 May ‘27 New Jersey June ‘22 May ‘25 Program Elements New York ZEC Program Illinois ZEC Program New Jersey ZEC Program Under the state’s clean energy standard
Slide 47: New York ZEC Price Determination
New York ZEC Price Determination Energy and Short Ton to U.S. SCC Baseline RGGI Net CO2 Capacity MWh Adjusted SCC Reference Price Upstate ZEC Tranche Date "Central Value“ Estimate Externality Forecast (Conversion ($/MWh) ($/MWh) Price ($/MWh) ($/Short Ton) ($/Short Ton) ($/Short Ton) Adjustment Fact
Slide 48: Illinois Carbon Mitigation Credit (CMC) Overview and Timelines
Illinois Carbon Mitigation Credit (CMC) Overview and Timelines Plant State Capacity (MW) 2022 2023 2024 2025 2026 2027 Braidwood IL 2,386 June ’22 May ‘27 Byron IL 2,347 June ’22 May ‘27 Dresden IL 1,845 June ’22 May ‘27 Program Elements Illinois Carbon Mitigation Credits Program • IL CMC program is
Slide 49: Appendix D: Environmental, Social & Governance
Appendix D: Environmental, Social & Governance 49
Slide 50: Constellation's ESG Principles
Constellation’s ESG Principles Our Value Proposition and ESG Principles Constellation’s Carbon-Free Policy Advocacy Constellation is positioned to deliver long-term value for our shareholders through our enduring businesses that are ready to ESG Principles meet the climate crisis. We are leading the
Slide 51: Constellation's Climate Commitment
Constellation’s Climate Commitment 100% Of our owned generation will be 100% Reduction of our operations- 100% Of C&I customers provided with carbon-free by 2040 driven emissions by 2040 (1) specific information about how to meet GHG reduction goals Clean Energy Supply: Clean Electricity Supply:
Slide 52: Constellation is the Largest Producer of Carbon-Free Electricity in the U.S.
Constellation is the Largest Producer of Carbon-Free Electricity in the U.S. Largest Producers of Carbon-Free Lowest CO2 Emissions Among Major Lowest Carbon Intensity Among Generation (1,2) Investor-Owned Generators (2) Major Investor-Owned Generators (2) million MWhs million short tons lb/MWh Const
Slide 53: Nuclear Fuel is Extremely Energy Dense and Creates Minimal Waste
Nuclear Fuel is Extremely Energy Dense and Creates Minimal Waste Which is Safely Stored Nuclear Fuel is Dense (1) Spent Nuclear Fuel Storage and Oversight • After spent fuel is cooled in pools, it is sealed in a metal or steel cylinder, surrounded by helium gas and then encapsulated in a metal or co
Slide 54: Diversity, Equity and Inclusion (DEI)
Diversity, Equity and Inclusion (DEI) Strategic Priorities Workforce Diversity (1) White: 78.0% Strategic Talent Sourcing Black or African American: 7.0% Source talent through relationships, technology, and inclusive practices to broaden the talent pool and promote diversity Hispanic or Latino: 5.7%
Slide 55: Appendix E: Fleet Overview
Appendix E: Fleet Overview 55
Slide 56: Nuclear Fleet Overview
Nuclear Fleet Overview License 2-Year License Capacity Policy Support Spent Fuel Plant Location Type/Containment Renewal Ownership Capacity Expiration (1) (MW) (2) (Term) Storage Status Factor (3) Braidwood, IL Pressurized Water Reactor Unit 1: 2046 CMC Unit 1: 96.4% Renewed 2,386 Constellation: 100
Slide 57: Nuclear Fleet Overview (continued)
Nuclear Fleet Overview (continued) License 2-Year License Capacity Policy Support Spent Fuel Plant Location Type/Containment Renewal Ownership Capacity Expiration (1) (MW) (2) (Term) Storage Status Factor (3) Peach Bottom, PA Boiling Water Reactor Unit 2: 2033 Federal PTC Unit 2: 95.5% Renewed 1,324
Slide 58: Renewables Fleet (Wind)
Renewables Fleet (Wind) Primary Fuel Primary Dispatch Net Generation Ownership Asset Name ISO Location No. of Units Type Type Capacity (MW) (1) Interest (%) (2) Michigan Wind 2 MISO Sanilac Co., MI 50 Wind Intermittent 46 51 Beebe MISO Gratiot Co., MI 34 Wind Intermittent 42 51 Michigan Wind 1 MISO
Slide 59: Renewables Fleet (Solar/Hydro/Storage)
Renewables Fleet (Solar/Hydro/Storage) Primary Fuel Primary Dispatch Net Generation Ownership Asset Name ISO Location No. of Units Type Type Capacity (MW) (1) Interest (%) (2) Solar Horizons PJM Emmitsburg, MD 1 Solar Intermittent 8 51 Solar New Jersey 3 PJM Middle Township, NJ 5 Solar Intermittent
Slide 60: Natural Gas Fleet
Natural Gas Fleet Primary Fuel Primary Dispatch Net Generation Ownership Asset Name ISO Location No. of Units (1) Type Type Capacity (MW) Interest (%) (2) Mystic 8, 9 ISO-NE Charlestown, MA 6 Gas Intermediate 1,413 Hillabee SERC Alexander City, AL 3 Gas Intermediate 753 West Medway II ISO-NE West Me
Slide 61: Appendix F: Reconciliation of Non-GAAP Measures
Appendix F: Reconciliation of Non-GAAP Measures 61
Slide 62: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (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 & Amortization +/- Working Capi
Slide 63: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations (1) Adjusted Debt (a) S&P Debt/EBITDA (2) = EBITDA (b) S&P Adjusted Debt Calculation (2) Long-Term Debt + Short-Term Debt + Purchase Power Agreement and Operating Lease Imputed Debt + Pension/OPEB Imputed Debt (after-tax) + AR Securitization Imputed Debt - Off-Credit
Slide 64: GAAP to Non-GAAP Reconciliation – Adjusted Operating Earnings
GAAP to Non-GAAP Reconciliation – Adjusted Operating Earnings* Three Months Ended June 30, 2023 2024 Adjusted Operating Earnings* Reconciliation Earnings Per Earnings Per ($M except per share data) Share Share GAAP Net Income (Loss) Attributable to Common $833 $2.56 $814 $2.58 Shareholders Unrealize
Slide 65: GAAP to Non-GAAP Reconciliation – Adjusted O&M
GAAP to Non-GAAP Reconciliation – Adjusted O&M* Adjusted O&M* Reconciliation ($M) 2023 2024 2025 GAAP O&M $5,675 $6,000 $5,525 Decommissioning-Related Activities (1) ($100) ($150) ($150) Direct cost of sales incurred to generate revenues for ($250) ($225) ($250) certain Commercial and Power business
Slide 66: Contact Information
Contact Information InvestorRelations@constellation.com Links Events and Presentations ESG Resources Reports & SEC Filings Constellation Sustainability Report ESG Investor Presentation Nuclear 101 66
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