Constellation Energy Corporation · NASDAQ:CEG
Constellation Energy — Q1 2022 Earnings Presentation
31 slides from Constellation Energy's earnings presentation, May 12, 2022
Slide 1: Earnings Conference Call First Quarter 2022
= Constellation Earnings Conference Call <a =| First Quarter 2022 kk —— May 12, 2022 ——————_
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 baseline operating performance by excluding items that are considered by management to be not directl
Slide 5: Carbon-Free Generation Fleet and Industry Leading Customer Business
5 ane aaa ae Carbon-Free Generation Fleet: #1 provider of carbon-free 24/7 energy in the United States + Lowest carbon emissions and carbon intensity generator in the United States + 32,400 MWs of total generating capacity + =124 million metric tons of carbon avoided through our nuclear fleet ® + 94
Slide 6: Accomplishments Since Separation
Accomplishments Since Separation jues to demonstrate excellence as a standalone, publicly d company... er Academy Field Trip
Slide 7: Q1 2022 Generation Operating Highlights
Q1 2022 Generation Operating Highlights Continued Best-in-Class Performance by Our Nuclear Strong Performance Across Our Renewable and Fleet (2) Natural Gas Fleet + Nuclear Capacity Factor: 93.0% + Power Dispatch Match: 99.4% + Owned and operated production of 40.4 TWh - Texas fleet performed well d
Slide 8: Q1 2022 Commercial Business Highlights
Q1 2022 Commercial Business Highlights Customer Operations Metrics (Trailing Twelve-Months) Qi 2022 Electric Load Served by Region (TWh) 79% 80% Ml Retail Wholesale 7 ae 4 6 5 7 31% | | = | ' : : a Power New Gas New Customer Retail Power Natural Gas Customer Midwest Mid- ERCOT New Other Customer Win
Slide 9: Advancing Solutions to Solve the Climate Crisis
Advancing Solutions to Solve the Climate Crisis Hydrogen: + Working with diverse set of public and private sector partners to support a bid for DOE hydrogen hub funding under infrastructure bill using nuclear power + Nine Mile Point Pilot Project with DOE in New York on track to produce H2 next year
Slide 10: Disciplined Capital Allocation Strategy Designed to Deliver Value for Our Shareholders
10 Disciplined Capital Allocation Strategy Designed to Deliver Value for Our Shareholders Maintain Strong Investment Grade Credit Metrics Organic and Inorganic Growth Consistent with Role as America’s Leading Clean Energy Company Delivering Value to Our Shareholders Annual Dividend with Targeted 10%
Slide 11: Q1 2022 Adjusted EBITDA
u Q1 2022 Adjusted EBITDA* ($ in millions) $40 = $866 $175 Ga i (S13) a ($465) $1,216 Q12021 Impacts of Market and Nuclear Fuel Capacity Nuclear Outages Other Q12022 Feb 2021 Portfolio Costs Revenues Weather Event Conditions ® Reaffirming full year guidance of $2,350M - $2,750M — (rnicen rete snig e
Slide 12: Market and Hedging Update
Market and Hedging Update Henry Hub ($/Mmbtu) PJM-West (ATC $/MWh) 2022 — 2023 — 2024 — 2025 = 2022 — 2028 — 2004 — 2025 $65 $380 $70 $5 > | $60 $4 $50 $40 $3 4 f $30 s24 . 1 $20 + Jan-21 Mar-2i May-21 © Juk2l_Sep-21_Nov-2l Jan-22 Mar-22 May-22 Jan-21 © Mar-2l May-21 Jul21—Sep-21Nov-21. Jan-22 Mar-2
Slide 13: Gross Margin Update
B Gross Margin* Update Q @ @ @) 6) © March 31, 2022 Change from November 30, 2021 Gross Margin Category ($M) 2022 2023 2022 2023 Ging Sut West Neglect gross mary ore 200 une ae Contracted Revenues (Capacity, ZEC and IL CMC Plant Revenues) “) $2,450 $2,800 ($50) Mark-to-Market of Hedges © ($3,400) ($
Slide 14: Financing and Liquidity Update
4 Financing and Liquidity Update 2022E Credit Metrics 50% 40% 30% 20% 10% 0% Wl Book — — Downgrade Threshold I Excluding Non-Recourse ene 3.0 35% 20 a : | 0.0 Moody's CFO S&P FFO/ Debt* Pre-WC/ Debt* Liquidity Facility Summary ($B) @ 2.0x 15x Net Debt / EBITDA® 2022 YTD Activity Liquidity Facility D
Slide 15: Constellation's Value Proposition
5 Constellation’s Value Proposition Enduring Businesses Ready to Meet the Climate Crisis ‘* World-Class nuclear operator and largest generator of 24/7 carbon-free firm electricity with ability to extend asset lives ‘Largest provider of energy and solutions to commercial and industrial customers ‘* S
Slide 16: Additional Disclosures
16 Additional Disclosures — = Constellation
Slide 17: Constellation's Climate Commitment
Constellation’s Climate Commitment 100% 100% 100% Of our owned generation will be Reduction of our operations- Of C&I customers provided with carbon-free by 2040 driven emissions by 2040 © specific information about how to meet GHG reduction goals. v Clean Energy Supply: * Clean Electricity Supply:
Slide 18: New York ZEC Program
New York ZEC Program Program Overview Forward Strip of the Tranche 4 Index + Created in 2016, the program provides zero emission credits for 12 years with the Zero Emission Credit (ZEC) level set every two years (6 two-year “tranches”) $445 + Before each tranche, the ZEC level is determined based on
Slide 19: Long-Term Debt Maturity Profile
19 Long-Term Debt Maturity Profile “2) LT Debt Balances (12) As of 3/31/2022 ($M) Recourse $3.08 Non-Recourse $1.78 Total LT Debt $4.78 qe © = 8 © BS & @ &© a@ & @ F 8 S&S B&B @ @ © ¥F QQ 8 & & & € & B QB 8 8 8 Ss 8 $8 & 8 8 gs g s Ceeeceeo).|6lUlClC8 s 3s 8 S$ 3S 8 8 3 8 8 8 38 4 s 86 & 8S & &S§ &
Slide 20: Commercial Disclosures
20 Commercial Disclosures March 31, 2022 — = Constellation
Slide 21: Portfolio Management Strategy
a1 Portfolio Management Strategy + Our portfolio starts in a position of already : partially hedged, via longer term state programs earnings such as the CMC in IL * + Aligns hedging progr: financial outlook Strategic Policy Alignment n financial policies and Establish minimum hedge targets to meet :
Slide 22: Components of Gross Margin Categories
22 Components of Gross Margin* Categories a ; Gross margin* linked to power production and sales other business activities ie Contracted “Power” New “Non Power” “Non Power” SCLC ETAT Revenues Business Executed New Business *Generation Gross +Expected contracted +Mark-to-Market +Retail, Wholesale +Re
Slide 23: Gross Margin
Gross Margin* March 31,2022 Change from November 30, 2021 Gross Margin Category ($M) © 2022 2023 2022 2023 Open Gross Margin (including South, West, New England & Canada hedged GM)* °?) $7,600 $6,200 $1,450 $1,750 Contracted Revenues (Capacity, ZEC and IL CMC Plant Revenues) ® $2,450 $2,800 : ($50)
Slide 24: Generation and Hedges
24 Generation and Hedges @ @) @ @ @ Change from November 30, March 31, 2022 2021 Generation and Hedges 2022 2023 2022 2023 Expected Generation (GWh) 196,600. 198,200 (2,400) 2,200 Midwest © 96.600 95,500 100 200 Mid-Atlantic 55,400 54,800 (300) 200 ERCOT 19.300 22,100 (2,100) 1800 New York 25,300 25
Slide 25: Hedged Gross Margin Sensitivities
Hedged Gross Margin* Sensitivities March 31, 2022 Change from November 30, 2021 Gross Margin* Sensitivities (with existing hedges) ° 2022 2023 2022 2023 Henry Hub Natural Gas ($/MMBtu) +$0.50/MMBtu : $135 ($65) ($5) . ~ $0.50/MMBtu $5 ($135) $50 E NiHub ATC Energy Price + $2,50/MWh ($5) $15 ($5) ($1
Slide 26: Illustrative Example of Modeling 2023 Total Gross Margin
26 Illustrative Example of Modeling 2023 Total Gross Margin* Row Item Midwest ® Mid-Atlantic ERCOT® New York (A) Start with fleet-wide open gross margin* $6.2 billion > (B) Contracted Revenues $2.8 billion = (©) Expected Generation (TWh) 415 54.8 221 25.8 (D) Hedge % (assuming mid-point of range) 81
Slide 27: Additional Constellation Modeling Data
27 Additional Constellation Modeling Data Total Gross Margin* Reconciliation (in $M) © 2022 2023 Adjusted Operating Revenues* (2) $18,950 $19,900 Adjusted Purchased Power and Fuel* 2) ($11,150) ($11,550) Other Revenues @) ($200) ($175) Toc em en Total Gross Margin* (Non-GAAP) $7,300 $7,950 Inputs 20
Slide 28: Appendix: Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures — = Constellation
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ® FFO (a) Adjusted Debt (b) S&P FFO/Debt @) = S&P FFO Calculation @) GAAP Operating Income Moody's CFO Pre-WC/Debt @) = Moody's CFO Pre-WC Calculation @) Cash Flow From Operations +/- Working Capital Adjustment = EBITDA Nuclear Fuel Capital Expenditures - Interest +/
Slide 30: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ® Net Debt (a) Debt/EBITDA = Net Debt Calculation Long-Term Debt (including current maturities) + Short-Term Debt Cash on Balance Sheet = Net Debt (a) Adjusted EBITDA* Calculation GAAP Operating Income + Income Tax Expense + Interest Expense, Net + Depreciation & Amo
Slide 31: GAAP to Non-GAAP Reconciliation
31 GAAP to Non-GAAP Reconciliation Three Months Ended March 31, Adjusted EBITDA* Reconciliation (in $M) 2021 2022 GAAP Net Income ($793) $106 Income Tax Expense ($179) ($53) Depreciation and Amortization $940 $280 Interest Expense, Net $72 $56 Unrealized (Gain)/Loss on Fair Value Adjustments @ ($131