Constellation Energy Corporation · NASDAQ:CEG
Constellation Energy — Q1 2023 Earnings Presentation
30 slides from Constellation Energy's earnings presentation, May 4, 2023
Slide 1: Earnings Conference Call First Quarter 2023
Earnings Conference Call First Quarter 2023 May 4, 2023
Slide 2: 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,” “will,” “targets,” “goals,” “projects,” “intends,” “plans,” “b
Slide 3: 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 measures, including: • Adjusted
Slide 4: 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 baseline operating performance by excluding items that are considered by management to be not directly related to the ongoing operations of
Slide 5: Constellation is Uniquely Positioned to Create Value for Shareholders
Constellation is Uniquely Positioned to Create Value for Shareholders 5 • Best-in-class nuclear operations • Largest producer of carbon-free, clean electricity • Largest provider of electricity to C&I customers Unmatched, Premium Assets in the U.S. • Downside commodity price risk protected by U.S. g
Slide 6: Best-in-Class Nuclear Operations
Best-in-Class Nuclear Operations (1,2) • Nuclear Capacity Factor: 92.8% • Owned and operated production of 40.3 TWhs • Completed three refueling outages (RFOs) in Q1. Average refueling outage duration of completed outages in Q1 is less than 21 days. 6 Strong Operations Deliver Reliable and Affordabl
Slide 7: Attractive Market Conditions Driving Strong Commercial Business Results
Attractive Market Conditions Driving Strong Commercial Business Results 7 (1) Other includes New England, South and West Leading Customer Operational Metrics (TTM) Q1 2023 Electric Load Served by Region (TWhs) 9 11 3 4 7 3 7 5 Midwest Other (1) 18 Mid-Atlantic 12 4 ERCOT New York 12 Wholesale Retail
Slide 8: Q1 2023 Adjusted EBITDA Financial Results
Q1 2023 Adjusted EBITDA* Financial Results 8 Quarter Results Exceeded Plan • Strong wholesale and retail performance with margin expansion • Successful optimization of the portfolio to capture benefits from volatility • Estimate of net performance benefit from Winter Storm Elliott increased from $10
Slide 9: Gross Margin Update
Gross Margin* Category ($M) (1) 2023 2024 2023 2024 Open Gross Margin* (including South, West, New England, Canada hedged gross margin) $4,500 $5,550 ($2,500) ($850) Contracted Revenues (Capacity, ZEC and IL CMC Plant Revenues) (2) $2,850 $2,750 $50 - Mark-to-Market of Hedges (3) $450 ($200) $2,750
Slide 10: Financing and Liquidity Update
Financing and Liquidity Update 10 35% 45% Moody’s CFO Pre-WC/ Debt* S&P FFO / Debt* Net Debt / EBITDA* (2) 2.2x 1.8x Book Excluding Non-Recourse (1) Credit metrics forecast as of Fourth Quarter 2022 Earnings Conference Call disclosure (2) 2023 forecasted year-end net debt is $6.7 billion 2023E Credi
Slide 11: Constellation's Value Proposition
Constellation’s Value Proposition 11
Slide 12: Additional Disclosures
Additional Disclosures — = Constellation
Slide 13: ESG
E S G Environmental: • Clean Energy Leadership: Continue to be the cleanest supplier of power in the U.S. and maintain leadership through our climate commitment to own 100% carbon-free generation by 2040. • Investing in a Clean Energy Economy: Leverage our platform to impact customers through enabli
Slide 14: Constellation's Climate Commitment
Constellation’s Climate Commitment 14 100% 100% 100% Of our owned generation will be carbon-free by 2040 Reduction of our operations- driven emissions by 2040 (1) Of C&I customers provided with specific information about how to meet GHG reduction goals Clean Energy Supply: Clean Electricity Suppl
Slide 15: Q1 2023 Adjusted EBITDA
15 Q1 2023 Adjusted EBITDA* $42 $38 ($111) Q1 2022 Nuclear Outages ($104) Labor, Contracting and Materials Capacity Revenues ($47) Market and Portfolio Conditions PJM Performance Bonuses, Net ($26) Other Q1 2023 $866 $658 ($M)
Slide 16: Long-Term Debt Maturity Profile
Long-Term Debt Maturity Profile (1,2) 16 Note: Items may not sum due to rounding (1) Maturity profile excludes non-recourse debt, P-Cap facility, securitized debt, capital leases, fair value adjustments, unamortized debt issuance costs and unamortized discount/premium (2) Excludes the $435 million t
Slide 17: PTC Provides Support for Nuclear Units When Revenues Fall Below $43.75/MWh
20 25 30 35 40 45 50 55 60 20 25 30 35 40 45 50 55 60 Market Revenues ($/MWh) M ar ke t R ev en u es + P T C ( $ / M W h ) 17 PTC Provides Support for Nuclear Units When Revenues Fall Below $43.75/MWh Illustrative Payoff Dynamics for Non-State-Supported Units in 2024 • The PTC provides support of up
Slide 18: Maximum PTC, Gross Receipts Threshold and Power Price at Which PTC=$0
Maximum PTC Gross Receipts Threshold Power Price At Which PTC=$0 Maximum PTC Gross Receipts Threshold Power Price At Which PTC=$0 Maximum PTC Gross Receipts Threshold Power Price At Which PTC=$0 2024 15.00$ 25.00$ 43.75$ 15.00$ 25.00$ 43.75$ 15.00$ 25.00$ 43.75$ 2025 15.00$ 26.00$ 44.75$ 15.00$ 26.0
Slide 19: Commercial Disclosures March 31, 2023
Commercial Disclosures March 31, 2023 19
Slide 20: Gross Margin Category Definitions
Open Gross Margin* •Generation Gross Margin* at current market prices, including ancillary revenues, nuclear fuel amortization and fuel expense •Power Purchase Agreement (PPA) Costs and Revenues •Provided at a consolidated level for all regions (includes hedged gross margin* for South, West, New Eng
Slide 21: Gross Margin Category and Reference Prices
Gross Margin Category ($M) (1) 2023 2024 2023 2024 Open Gross Margin (including South, West, New England & Canada hedged GM)* $4,500 $5,550 ($2,500) ($850) Contracted Revenues (Capacity, ZEC and IL CMC Plant Revenues) (2) $2,850 $2,750 $50 - Mark-to-Market of Hedges (3) $450 ($200) $2,750 $850 Power
Slide 22: Expected Generation Footnotes
22 (1) Expected generation is the volume of energy that best represents our commodity position in energy markets from owned or contracted for capacity based upon a simulated dispatch model that makes assumptions regarding future market conditions, which are calibrated to market quotes for power, fue
Slide 23: Gross Margin Sensitivities
Sensitivities - with existing hedges ($M) (1,2) 2023 2024 2023 2024 2024 2024 NiHub ATC Energy Price + $5.00/MWh ($5) $55 ($5) ($10) ($60) ($60) - $5.00/MWh $5 ($55) $5 $10 $75 $45 PJM-W ATC Energy Price + $5.00/MWh ($5) $70 ($5) $10 ($40) ($40) - $5.00/MWh $5 ($70) $5 ($10) $115 $115 NYPP Zone A AT
Slide 24: Illustrative Example of Modeling 2024 Total Gross Margin
Illustrative Example of Modeling 2024 Total Gross Margin* 24 (1) Mark-to-market rounded to the nearest $5M (2) Uses the Midwest hedge ratio that excludes the CMC plant volume and hedges (3) Spark spreads shown for ERCOT (4) Plants included in PTC value are Calvert Cliffs, LaSalle, Limerick and Peach
Slide 25: Additional Constellation Modeling Data: Total Gross Margin Reconciliation
Additional Constellation Modeling Data 25 Total Gross Margin* Reconciliation ($M) (1) 2023 2024 Adjusted Operating Revenues* (2) $28,175 $31,825 Adjusted Purchased Power and Fuel* (2) ($19,275) ($22,325) Nuclear PTC Value for Plants Not Supported by State Programs (3) N/A ($100) Wind PTCs ($25) ($25
Slide 26: Appendix Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures 26
Slide 27: S&P FFO/Debt and Moody's CFO Pre-WC/Debt Calculations
S&P FFO/Debt (2) = FFO (a) Moody’s CFO Pre-WC/Debt (3) = CFO (Pre-WC) (c) Adjusted Debt (b) Adjusted Debt (d) S&P FFO Calculation (2) Moody’s CFO Pre-WC Calculation (3) GAAP Operating Income Cash Flow From Operations + Depreciation & Amortization +/- Working Capital Adjustment = EBITDA - Nuclear Fue
Slide 28: Net Debt/EBITDA Calculations
Net Debt/EBITDA = Net Debt (a) Net Debt/EBITDA Excluding Non-Recourse = Net Debt (c) Adjusted EBITDA* (b) Adjusted EBITDA* (d) Net Debt Calculation Net Debt Calculation Excluding Non-Recourse Long-Term Debt (including current maturities) Long-Term Debt (including current maturities) + Short-Term Deb
Slide 29: Adjusted EBITDA Reconciliation
Three Months Ended March 31, Adjusted EBITDA* Reconciliation ($M) 2022 2023 GAAP Net Income (Loss) $106 $96 Income Taxes ($53) $131 Depreciation and Amortization $280 $267 Interest Expense, Net $56 $107 Unrealized Loss on Fair Value Adjustments (1) $118 $297 Plant Retirements & Divestitures - ($27)
Slide 30: Contact Information
Contact Information InvestorRelations@constellation.com (833) 447-2783 Links Events and Presentations ESG Resources Reports & SEC Filings