Constellation Energy Corporation · NASDAQ:CEG
Constellation Energy — Q2 2024 Earnings Presentation
31 slides from Constellation Energy's earnings presentation, Aug 6, 2024
Slide 1: Earnings Conference Call Second Quarter 2024
Earnings Conference Call Second Quarter 2024 August 6, 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 Q2 GAAP earnings of Raising full-year $2.58 per share (1) Adjusted Operating Earnings* Q2 Adjusted Operating guidance range to Earnings* of $1.68 per share (1) $7.60 - $8.40 per share (2) Repurchased ~$500M of Released 2024 Constellation shares; bringing YTD cash Sustainability Report de
Slide 6: Benefits of Co-Locating Data Centers
Benefits of Co-Locating Data Centers “By utilizing the existing infrastructure of a nuclear power plant, co-location presents an unprecedented economic opportunity for local and state government, upwards of $10 billion in investment for this envisioned data center alone, without unduly shouldering c
Slide 7: Capacity Factor
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: 95.4% • Operated production of 41.4 TWhs 44 95% • Completed three refueling outages in Q2. 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) Q2 2024 Electric Load Served by Region (TWhs) Wholesale Retail 90% 17 75% 6 11 11 1 4 33% 6 10 11 2 4 12% 7 4 C&I Power New C&I Gas New C&I Power Customer C&I Gas Customer Mi
Slide 9: 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 10: Raising Full-Year Adjusted Operating Earnings Guidance Range to $7.60 - $8.40 Per Share
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 $7.23 – Successful op
Slide 11: 2025/2026 PJM Capacity Auction
2025/2026 PJM Capacity Auction 2025/2026 Enhanced Adjusted Operating Earnings* Uplift ($/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 12: Financing and Liquidity Update
Financing and Liquidity Update 2024 Target Credit Metrics (1) Current Credit Ratings 45% Moody’s Baa1; stable outlook S&P BBB+; stable outlook 35% < 2.0x Share Repurchase Update • Repurchased ~2.6 million shares (2) for ~$500 million since the Q1 2024 Earnings Call, bringing YTD cash deployed to ~$1
Slide 13: 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 14: Additional Disclosures
Additional Disclosures —— <= Constellation.
Slide 15: 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 16: 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 $15.00/MWh; the PTC amount is reduc
Slide 17: Long-Term Debt Maturity Profile
Long-Term Debt Maturity Profile (1) As of 6/30/2024 Long-Term Debt Balances (2) ($M) Recourse $7.0B Non-Recourse $1.4B Total Long-Term Debt $8.4B $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: Illinois Zero Emission Credit (ZEC) Overview
Illinois Zero Emission Credit (ZEC) Overview • The Zero Emission Standard, passed in December 2016, requires the Illinois Power Agency (IPA) to procure contracts with zero emission facilities for ZECs • The program has a 10-year duration that commenced with the 2017/2018 planning year and runs throu
Slide 19: Modeling Slides
19 Modeling Slides —— <= Constellation.
Slide 20: 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 21: 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 $34.09 n/a off
Slide 22: Modeling Tools for Base Earnings
Modeling Tools for Base Earnings 2024 2025 Quantity Prices Quantity Prices Adjusted Gross Margin* (Base Only) (1) (million MWhs) ($/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 $44.75 Nu
Slide 23: Detailed Modeling Inputs for Base Earnings
Detailed Modeling Inputs for Base Earnings (1) Expected Generation (million MWhs) Nuclear 2024 2025 2026 2027 2028 IL CMC Units 54 54 53 23 - NY Units 25 26 25 26 25 Remaining Units 102 102 102 132 159 Total Nuclear 181 183 180 181 184 (1) Number of Planned Refueling Outages 15 12 15 15 12 Price ($/
Slide 24: 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) $45 Natural Gas, Oil, Other 20 18 Representative spark sp
Slide 25: Additional Modeling Inputs and Information
Additional Modeling Inputs and Information Other Modeling Inputs ($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 $0.50 Performance Incentive Adjusted O&M* Percentage of Nuclear Fleet in PTC Zon
Slide 26: Appendix Reconciliation of Non-GAAP Measures
Appendix Reconciliation of Non-GAAP Measures 26
Slide 27: GAAP to Non-GAAP Reconciliations for Credit Metrics
GAAP to Non-GAAP Reconciliations for Credit Metrics (1) FFO (a) CFO (Pre-WC) (c) S&P FFO/Debt (2) = Moody’s CFO Pre-WC/Debt (3) = Adjusted Debt (b) Adjusted Debt (d) S&P FFO Calculation (2) Moody’s CFO Pre-WC Calculation (3) GAAP Operating Income Cash Flow From Operations + Depreciation & Amortizati
Slide 28: GAAP to Non-GAAP Reconciliations for Credit Metrics
GAAP to Non-GAAP Reconciliations for Credit Metrics (1) Adjusted Debt (a) S&P Debt/EBITDA (2) = EBITDA (b) S&P Adjusted Debt Calculation (2) Long-Term Debt + Short-Term Debt + Purchase Power Agreement and Operating Lease Imputed Debt + Pension/OPEB Imputed Debt (after-tax) + AR Securitization Impute
Slide 29: GAAP to Non-GAAP Reconciliation – Adjusted Operating Earnings
GAAP to Non-GAAP Reconciliation – Adjusted Operating Earnings* Three Months Ended June 30, 2023 2024 Adjusted Operating Earnings* Reconciliation Earnings Per Earnings Per ($M except per share data) Share Share GAAP Net Income (Loss) Attributable to Common $833 $2.56 $814 $2.58 Shareholders Unrealize
Slide 30: GAAP to Non-GAAP Reconciliation – Adjusted O&M
GAAP to Non-GAAP Reconciliation – Adjusted O&M* Adjusted O&M* Reconciliation ($M) 2024 2025 GAAP O&M $6,000 $5,525 Decommissioning-Related Activities (1) ($150) ($150) Direct cost of sales incurred to generate revenues for ($225) ($250) certain Commercial and Power businesses (2) Change in Environme
Slide 31: Contact Information
Contact Information InvestorRelations@constellation.com Links Events and Presentations ESG Resources Reports & SEC Filings Constellation Sustainability Report ESG Investor Presentation Nuclear 101 31