Constellation Energy Corporation · NASDAQ:CEG
Constellation Energy — Q1 2024 Earnings Presentation
30 slides from Constellation Energy's earnings presentation, May 9, 2024
Slide 1: Earnings Conference Call First Quarter 2024
Earnings Conference Call First Quarter 2024 May 9, 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: Key Updates
Key Updates GAAP earnings of $2.78 per share (1) Adjusted Operating Earnings* of $1.82 per share (1) Affirming full-year Adjusted Operating Earnings* guidance range of $7.23 - $8.03 per share (2) Board authorized additional $1 billion in share repurchases Credit rating upgraded by Moody’s to Baa1 Is
Slide 6: Support For Nuclear Continues to Build
Support For Nuclear Continues to Build States Recognizing States Incentivizing States Removing Nuclear as a Clean Nuclear Technology Barriers and Signaling Energy Source and Supply Chain Support Federal Funding Financial Community Corporate PPAs for For Domestic Support Existing Nuclear Enrichment a
Slide 7: Constellation Provides Reliable and Available Carbon-Free Power
Constellation Provides Reliable and Available Carbon-Free Power Historical Nuclear Fleet Capacity Factor (1,2) Best-in-Class Nuclear Operations (1,2) 48 100% • Nuclear Capacity Factor: 93.3% • Operated production of 41.1 TWhs 44 95% • Completed three refueling outages in Q1. Average refueling Capaci
Slide 8: Leading Customer Platform Enables Businesses to Meet Their Energy and Sustainability Needs
Leading Customer Platform Enables Businesses to Meet Their Energy and Sustainability Needs Customer Operational Metrics (TTM) Q1 2024 Electric Load Served by Region (TWhs) Wholesale Retail 89% 17 72% 6 13 11 1 5 35% 5 11 4 9 2 12% 7 3 C&I Power New C&I Gas New C&I Power Customer C&I Gas Customer Mid
Slide 9: Q1 2024 Results
Q1 2024 Results $/share Year-over-Year Adj. Operating Earnings* Drivers $2.78 • Continued strong commercial performance through portfolio optimization and customer margins • First quarter of nuclear PTC being in effect and of sharing the $1.82 benefit with states • Higher nuclear output • Lower cost
Slide 10: Constellation's Strong Balance Sheet Recognized by Moody's Upgrade
Constellation’s Strong Balance Sheet Recognized by Moody’s Upgrade Current Credit Ratings Share Repurchase Update Moody’s Upgrades Constellation’s • Repurchased ~1.7 million shares (3) for ~$350 million since the Credit Rating to Baa1 February 2024 Business and Earnings Outlook call, bringing Q1 cas
Slide 11: 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) Deployed ~$500M through March 31, 2024 ($0.9) Remaining Authorization from December 2023 ($0.5) ($0.5) Additional Authorization FCFbG* $5.7 - $6.1 in April 2024 ($1.0) ($2.0) ($2.1 - $2.5) Beginning Cash
Slide 12: 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 13: Additional Disclosures
Additional Disclosures —— <= Constellation.
Slide 14: 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 15: 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 $15.00/MWh; the PTC amount is reduc
Slide 16: States Taking Action for Nuclear
States Taking Action for Nuclear Exploring Nuclear Technology Connecticut, Indiana, Kentucky, Louisiana, Maryland, Michigan, Ohio, with Studies, Working Groups, Tennessee and Texas Commissions and Task Forces Recognizing Nuclear as a Clean Idaho, Michigan, Minnesota, North Carolina, Tennessee and Ut
Slide 17: Long-Term Debt Maturity Profile
Long-Term Debt Maturity Profile (1) As of 3/31/2024 Long-Term Debt Balances (2) ($M) Recourse $7.0B Non-Recourse $1.5B Total Long-Term Debt $8.5B $23 $334 $900 $900 $900 $900 $750 $788 $600 $500 $350 $79 2026 2029 2036 2039 2044 2054 2031 2032 2033 2045 2027 2037 2040 2050 2024 2034 2046 2048 2049 2
Slide 18: Modeling Slides from Business and Earnings Outlook Call February 27, 2024
Modeling Slides from Business and Earnings Outlook Call February 27, 2024 18
Slide 19: 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 ($7.23 - $8.03) 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 20: Visible 10%+ Adjusted Operating Earnings Growth on Base Earnings
Visible 10%+ Adjusted Operating Earnings* 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 $34.09 n/a off
Slide 21: Modeling Tools for Base Earnings
Modeling Tools for Base Earnings 2024 2025 Quantity Prices Quantity Prices Adjusted Gross Margin* (Base Only) (1) (million MWhs) ($/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 $44.75 Nu
Slide 22: Detailed Modeling Inputs for Base Earnings
Detailed Modeling Inputs for Base Earnings (1) Expected Generation (million MWhs) Nuclear 2024 2025 2026 2027 2028 IL CMC Units 54 54 53 23 - NY Units 25 26 25 26 25 Remaining Units 102 102 102 132 159 Total Nuclear 181 183 180 181 184 (1) Number of Planned Refueling Outages 15 12 15 15 12 Price ($/
Slide 23: Detailed Modeling Inputs for Base Earnings (continued)
Detailed Modeling Inputs for Base Earnings (continued) Expected Generation (million MWhs) Modeling Prices (1) Non-Nuclear (Energy) 2024 2025 ($/MWh) Wind/Solar 5 5 Historical renewable contracts $60 - $70 Hydro 2 2 Hydro revenue price ($/MWh) $45 Natural Gas, Oil, Other 20 18 Representative spark sp
Slide 24: Additional Modeling Inputs and Information
Additional Modeling Inputs and Information Other Modeling Inputs ($M) 2024 2025 Additional Information 2024 2025 Adjusted Gross Margin* (Enhanced Only) $675 - $950 $575-$850 Retail Power Margins Above 13-year Average $1.75 $0.50 Other Revenues $75 $50 Percentage of Nuclear Fleet in PTC Zone 87% 82%
Slide 25: Appendix Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures 25
Slide 26: GAAP to Non-GAAP Reconciliations for Credit Metrics
GAAP to Non-GAAP Reconciliations for Credit Metrics (1) FFO (a) CFO (Pre-WC) (c) S&P FFO/Debt (2) = Moody’s CFO Pre-WC/Debt (3) = Adjusted Debt (b) Adjusted Debt (d) S&P FFO Calculation (2) Moody’s CFO Pre-WC Calculation (3) GAAP Operating Income Cash Flow From Operations + Depreciation & Amortizati
Slide 27: GAAP to Non-GAAP Reconciliations for Credit Metrics
GAAP to Non-GAAP Reconciliations for Credit Metrics (1) Adjusted Debt (a) S&P Debt/EBITDA (2) = EBITDA (b) S&P Adjusted Debt Calculation (2) Long-Term Debt + Short-Term Debt + Purchase Power Agreement and Operating Lease Imputed Debt + Pension/OPEB Imputed Debt (after-tax) + AR Securitization Impute
Slide 28: GAAP to Non-GAAP Reconciliation – Adjusted Operating Earnings
GAAP to Non-GAAP Reconciliation – Adjusted Operating Earnings* Three Months Ended March 31, 2023 2024 Adjusted Operating Earnings* Reconciliation Earnings Per Earnings Per ($M except per share data) Share Share GAAP Net Income (Loss) Attributable to Common $96 $0.29 $883 $2.78 Shareholders Unrealize
Slide 29: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Adjusted O&M* Reconciliation ($M) 2024 2025 GAAP O&M $5,650 $5,525 Decommissioning-Related Activities (1) ($150) ($150) Direct cost of sales incurred to generate revenues for ($275) ($250) certain Commercial and Power businesses (2) Change in Environmental Liabilities
Slide 30: Contact Information
Contact Information InvestorRelations@constellation.com Links Events and Presentations ESG Resources Reports & SEC Filings Constellation Sustainability Report ESG Investor Presentation Nuclear 101 30