Earnings Release Highlights
- GAAP Net Income of $2.58 per share and Adjusted (non-GAAP)
Operating Earnings of $1.68 per share for the second quarter of
2024
- Raising full-year 2024 Adjusted (non-GAAP) Operating Earnings
guidance range to $7.60-$8.40 per share
- Delivering on our commitment to shareholders, repurchased
approximately $500 million of our common stock in the second
quarter; cumulatively we have repurchased $2.0 billion since
2023
- Released our 2024 Sustainability Report and hosted our second
annual Youth Energy Summit, providing students a weeklong STEM
educational experience
- Earned 2024 Great Place to Work® certification for the second
year in a row
Constellation Energy Corporation (Nasdaq: CEG) today reported
its financial results for the second quarter of 2024.
“During one of the hottest summers on record, our carbon-free
nuclear fleet has again performed at industry leading levels.
Combined with the rest of our generation fleet, we are helping to
keep American families and businesses cool, the U.S. economy
running strong and our communities thriving,” said Joe Dominguez,
president and CEO, Constellation. “This world class performance is
only possible because of the dedicated, talented people who work
here 24/7/365, which is why I am proud that we have once again been
certified as a Great Place to Work.”
“Our ability to help American businesses and the performance of
our reliable generation fleet resulted in another strong quarter
and raises our expectations for the remainder of the year,” said
Dan Eggers, chief financial officer, Constellation. “We reported
GAAP net earnings of $2.58 per share and adjusted (non-GAAP)
earnings of $1.68 per share, which was $0.04 per share higher than
a year ago. Based on our performance to date, we are raising our
full-year adjusted (non-GAAP) earnings guidance to $7.60 to $8.40
per share from our previous guidance of $7.23 to $8.03 per share.
In addition, we accelerated our share repurchase program in the
second quarter, completing an additional $500 million of
repurchases on top of the $500 million of repurchases executed
earlier in the year.”
Second Quarter 2024
Our GAAP Net Income for the second quarter of 2024 increased to
$2.58 per share from $2.56 per share in the second quarter of 2023.
Adjusted (non-GAAP) Operating Earnings for the second quarter of
2024 increased to $1.68 per share from $1.64 per share in the
second quarter of 2023. For the reconciliations of GAAP Net Income
(Loss) to Adjusted (non-GAAP) Operating Earnings, refer to the
GAAP/Adjusted (non-GAAP) Operating Earnings Reconciliation section
below.
Adjusted (non-GAAP) Operating Earnings in the second quarter of
2024 primarily reflects:
- Favorable net market and portfolio conditions, nuclear PTC
portfolio revenue and impacts of nuclear outages; partially offset
by unfavorable labor, contracting, and materials expense and ZEC
revenues in 2024 compared to 2023.
Recent Developments and Second Quarter Highlights
- Delivering on Our Capital Allocation Promises: We've
continued our share repurchase program, buying back approximately
$500 million of our common stock in the second quarter of 2024.
Since our Board of Directors approved our share repurchase program
we have successfully repurchased approximately $2 billion of our
common stock. As of the end of the second quarter we have
approximately $1 billion of remaining authority to repurchase under
the program.
- 2024 Sustainability Report and Youth Energy Summit:
We've issued our 2024 Sustainability Report, showcasing our
sustainable business strategy focused on accelerating the Nation’s
transition to a carbon-free energy future, responding to the
climate crisis and delivering long-term value for customers,
communities, employees and shareholders. Our Sustainability Report
details key progress in our work to lead the clean energy
transition by providing the most important commodity in the world
today – energy that is emissions-free and always on. We also hosted
our second annual Youth Energy Summit, bringing 66 students from
five states to Baltimore for a weeklong STEM educational
experience.
- 2024 Great Place to Work Certification: For the second
year in a row we were Certified™ by Great Place To Work®. The
designation is based on how our employees rate their experience
working at Constellation. In a survey of about 5,000 of our
employees, 89% of those who responded said it is a great place to
work – about 32 points higher than the average U.S. company. Great
Place To Work® is acknowledged worldwide as a global benchmark for
workplace culture, employee experience and the leadership behaviors
proven to deliver strong market performance, employee retention and
increased innovation.
- Nuclear Operations: Our nuclear fleet, including our
owned output from the Salem and South Texas Project (STP)
Generating Stations, produced 45,314 gigawatt-hours (GWhs) in the
second quarter of 2024, compared with 41,895 GWhs in the second
quarter of 2023. Excluding Salem and STP, our nuclear plants at
ownership achieved a 95.4% capacity factor for the second quarter
of 2024, compared with 92.4% for the second quarter of 2023. There
were 49 planned refueling outage days in the second quarter of 2024
and 94 in the second quarter of 2023 for sites we operate. There
were 3 non-refueling outage days in the second quarter of 2024 and
25 in the second quarter of 2023 for sites we operate.
- Natural Gas, Oil, and Renewables Operations: The
dispatch match rate for our fleet was 98.0% in the second quarter
of 2024, compared with 99.1% in the second quarter of 2023.
Renewable energy capture for our fleet was 96.6% in the second
quarter of 2024, compared with 96.1% in the second quarter of
2023.
GAAP/Adjusted (non-GAAP) Operating Earnings
Reconciliation
Unless otherwise noted, the income tax impact of each
reconciling adjustment between GAAP Net Income (Loss) Attributable
to Common Shareholders and Adjusted (non-GAAP) Operating Earnings
is based on the marginal statutory federal and state income tax
rates, taking into account whether the income or expense item is
taxable or deductible, respectively, in whole or in part. For all
adjustments except the NDT fund investment returns, which are
included in decommissioning-related activities, the marginal
statutory income tax rate was 25.1% for both the three months ended
June 30, 2024 and 2023. Under IRS regulations, NDT fund investment
returns are taxed at different rates for investments if they are in
qualified or non-qualified funds. The effective tax rates for the
unrealized and realized gains and losses related to NDT funds were
66.9% and 54.9% for the three months ended June 30, 2024 and 2023,
respectively. Adjusted (non-GAAP) Operating Earnings for the second
quarter of 2024 and 2023, respectively, does not include the
following items (after tax) that were included in our reported GAAP
Net Income (Loss):
(In millions,
except per share data)
Three Months Ended June 30,
2024
Earnings Per Share(1)
GAAP Net Income (Loss) Attributable to
Common Shareholders
$
814
$
2.58
Unrealized (Gain) Loss on Fair Value
Adjustments (net of taxes of $136)
(405
)
(1.28
)
Plant Retirements and Divestitures (net of
taxes of $9)
26
0.08
Decommissioning-Related Activities (net of
taxes of $3)
36
0.11
Pension & OPEB Non-Service (Credits)
Costs (net of taxes of $—)
1
—
Separation Costs (net of taxes of $1)
4
0.01
ERP System Implementation Costs (net of
taxes of $1)
2
0.01
Change in Environmental Liabilities (net
of taxes of $18)
55
0.17
Noncontrolling Interests (net of taxes of
$—)
(2
)
(0.01
)
Adjusted (non-GAAP) Operating
Earnings
$
531
$
1.68
(In millions,
except per share data)
Three Months Ended June
30, 2023
Earnings Per Share(1)
GAAP Net Income (Loss) Attributable to
Common Shareholders
$
833
$
2.56
Unrealized (Gain) Loss on Fair Value
Adjustments (net of taxes of $108)
(320
)
(0.99
)
Plant Retirements and Divestitures (net of
taxes of $—)
1
—
Decommissioning-Related Activities (net of
taxes of $64)
(3
)
(0.01
)
Pension & OPEB Non-Service (Credits)
Costs (net of taxes of $3)
(10
)
(0.03
)
Separation Costs (net of taxes of $9)
27
0.08
ERP System Implementation Costs (net of
taxes of $2)
7
0.02
Change in Environmental Liabilities (net
of taxes of $—)
1
—
Noncontrolling Interests (net of taxes of
$—)
(1
)
—
Adjusted (non-GAAP) Operating
Earnings
$
535
$
1.64
_______ (1) Amounts may not sum due to rounding. Earnings per
share amount is based on average diluted common shares outstanding
of 316 million and 325 million for the three months ended June 30,
2024 and 2023, respectively.
Webcast Information
We will discuss second quarter 2024 earnings in a conference
call scheduled for today at 10 a.m. Eastern Time. The webcast and
associated materials can be accessed at
https://investors.constellationenergy.com.
About Constellation
A Fortune 200 company headquartered in Baltimore, Constellation
Energy Corporation (Nasdaq: CEG) is the nation’s largest producer
of clean, carbon-free energy and a leading supplier of energy
products and services to businesses, homes, community aggregations
and public sector customers across the continental United States,
including three fourths of Fortune 100 companies. With annual
output that is nearly 90% carbon-free, our hydro, wind and solar
facilities paired with the nation’s largest nuclear fleet have the
generating capacity to power the equivalent of more than 16 million
average homes, providing about 10% of the nation’s clean energy. We
are further accelerating the nation’s transition to a carbon-free
future by helping our customers reach their sustainability goals,
setting our own ambitious goal of achieving 100% carbon-free
generation by 2040, and by investing in promising emerging
technologies to eliminate carbon emissions across all sectors of
the economy. Follow Constellation on LinkedIn and Twitter.
Non-GAAP Financial Measures
We utilize Adjusted (non-GAAP) Operating Earnings (and/or its
per share equivalent) in our internal analysis, and in
communications with investors and analysts, as a consistent measure
for comparing our financial performance and discussing the factors
and trends affecting our business. The presentation of Adjusted
(non-GAAP) Operating Earnings is intended to complement and should
not be considered an alternative to, nor more useful than, the
presentation of GAAP Net Income.
The tables above provide a reconciliation of GAAP Net Income to
Adjusted (non-GAAP) Operating Earnings. Adjusted (non-GAAP)
Operating Earnings is not a standardized financial measure and may
not be comparable to other companies’ presentations of similarly
titled measures.
Due to the forward-looking nature of our Adjusted (non-GAAP)
Operating Earnings guidance, we are unable to reconcile this
non-GAAP financial measure to GAAP Net Income given the inherent
uncertainty required in projecting gains and losses associated with
the various fair value adjustments required by GAAP. These
adjustments include future changes in fair value impacting the
derivative instruments utilized in our current business operations,
as well as the debt and equity securities held within our nuclear
decommissioning trusts, which may have a material impact on our
future GAAP results.
Cautionary Statements Regarding Forward-Looking
Information
This press release 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,” “believes,” “seeks,”
“estimates,” “predicts,” and variations on such words, and similar
expressions that reflect our current views with respect to future
events and operational, economic, and financial performance, are
intended to identify such forward-looking statements.
The factors that could cause actual results to differ materially
from the forward-looking statements made by Constellation Energy
Corporation and Constellation Energy Generation, LLC, (the
Registrants) include those factors discussed herein, as well as the
items discussed in (1) the Registrants' 2023 Annual Report on Form
10-K in (a) Part I, ITEM 1A. Risk Factors, (b) Part II, ITEM 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations, and (c) Part II, ITEM 8. Financial
Statements and Supplementary Data: Note 19, Commitments and
Contingencies; (2) the Registrants' Second Quarter 2024 Quarterly
Report on Form 10-Q (to be filed on August 6, 2024) in (a) Part II,
ITEM 1A. Risk Factors, (b) Part I, ITEM 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations, and
(c) Part I, ITEM 1. Financial Statements: Note 13, Commitments and
Contingencies; and (3) other factors discussed in filings with the
SEC by the Registrants.
Investors are cautioned not to place undue reliance on these
forward-looking statements, whether written or oral, which apply
only as of the date of this press release. Neither Registrant
undertakes any obligation to publicly release any revision to its
forward-looking statements to reflect events or circumstances after
the date of this press release.
Constellation Energy
Corporation
GAAP Consolidated Statements
of Operations and
Adjusted (non-GAAP) Operating
Earnings Reconciling Adjustments
(unaudited)
(in millions, except per share
data)
Three Months Ended June 30,
2024
Three Months Ended June 30,
2023
GAAP (a)
Non-GAAP Adjustments
GAAP (a)
Non-GAAP Adjustments
Operating revenues
$
5,475
$
(193
)
(b),(c)
$
5,446
$
(212
)
(b),(c)
Operating expenses
Purchased power and fuel
2,292
408
(b)
2,887
(202
)
(b)
Operating and maintenance
1,645
(145
)
(c),(d),(f),(g),(i)
1,477
(89
)
(c),(d),(f),(i)
Depreciation and amortization
296
(61
)
(c),(g)
274
(51
)
(c),(g)
Taxes other than income taxes
142
—
139
—
Total operating expenses
4,375
4,777
Operating income
1,100
669
Other income and (deductions)
Interest expense, net
(142
)
2
(b)
(103
)
(2
)
(b)
Other, net
6
8
(b),(c),(e)
605
(588
)
(b),(c),(e)
Total other income and (deductions)
(136
)
502
Income (loss) before income
taxes
964
1,171
Income (benefit) expense
154
(103
)
(b),(c),(d),(g),(i)
342
(163
)
(b),(c),(d),(e),(f)
Equity in losses of unconsolidated
affiliates
(1
)
—
(5
)
—
Net income (loss)
809
824
Net income (loss) attributable to
noncontrolling interests
(5
)
1
(h)
(9
)
1
(h)
Net income (loss) attributable to
common shareholders
$
814
$
833
Effective tax rate
16.0
%
29.2
%
Earnings per average common
share
Basic
$
2.58
$
2.57
Diluted
$
2.58
$
2.56
Average common shares
outstanding
Basic
315
324
Diluted
316
325
__________ (a)
Results reported in accordance with
GAAP.
(b)
Adjustment for mark-to-market on economic
hedges and fair value adjustments related to gas imbalances and
equity investments.
(c)
Adjustment for all gains and losses
associated with Nuclear Decommissioning Trusts (NDT), Asset
Retirement Obligation (ARO) accretion, Asset Retirement Cost (ARC)
Depreciation, ARO remeasurement, and any earnings neutral impacts
of contractual offset for Regulatory Agreement Units.
(d)
Adjustment for certain incremental costs
related to the separation (system-related costs, third-party costs
paid to advisors, consultants, lawyers, and other experts assisting
in the separation), including a portion of the amounts billed to us
pursuant to the transition services agreement (TSA).
(e)
Adjustment for Pension and Other
Postretirement Employee Benefits (OPEB) Non-Service credits.
(f)
Adjustment for costs related to a
multi-year Enterprise Resource Program (ERP) system implemented in
the first quarter of 2024.
(g)
Adjustments related to plant retirements
and divestitures.
(h)
Adjustment for elimination of the
noncontrolling interest related to certain adjustments.
(i)
Adjustment for changes in environmental
liabilities.
Constellation Energy
Corporation
GAAP Consolidated Statements
of Operations and
Adjusted (non-GAAP) Operating
Earnings Reconciling Adjustments
(unaudited)
(in millions, except per share
data)
Six Months Ended June 30,
2024
Six Months Ended June 30,
2023
GAAP (a)
Non-GAAP Adjustments
GAAP (a)
Non-GAAP Adjustments
Operating revenues
$
11,637
$
(258
)
(b),(c)
$
13,011
$
(1,142
)
(b),(c)
Operating expenses
Purchased power and fuel
5,709
523
(b)
8,616
(1,428
)
(b)
Operating and maintenance
3,131
(200
)
(c),(d),(f),(g),(i)
2,908
(181
)
(c),(d),(f),(i)
Depreciation and amortization
602
(125
)
(c),(g)
542
(101
)
(c),(g)
Taxes other than income taxes
282
—
271
—
Total operating expenses
9,724
12,337
Gain on sales of assets and
businesses
—
—
26
(26
)
(g)
Operating income
1,913
700
Other income and (deductions)
Interest expense, net
(269
)
—
(210
)
3
(b)
Other, net
368
(331
)
(b),(c),(e)
919
(881
)
(b),(c),(e)
Total other income and (deductions)
99
709
Income (loss) before income
taxes
2,012
1,409
Income tax (benefit) expense
318
(203
)
(b),(c),(d),(e),(f),(g),(i),(j)
472
(201
)
(b),(c),(d),(e),(f),(g),(i)
Equity in losses of unconsolidated
affiliates
(2
)
—
(11
)
—
Net income (loss)
1,692
926
Net income (loss) attributable to
noncontrolling interests
(5
)
3
(h)
(3
)
3
(h)
Net income (loss) attributable to
common shareholders
$
1,697
$
929
Effective tax rate
15.8
%
33.5
%
Earnings per average common
share
Basic
$
5.37
$
2.85
Diluted
$
5.35
$
2.84
Average common shares
outstanding
Basic
316
326
Diluted
317
327
__________ (a)
Results reported in accordance with
GAAP.
(b)
Adjustment for mark-to-market on economic
hedges and fair value adjustments related to gas imbalances and
equity investments.
(c)
Adjustment for all gains and losses
associated with NDTs, ARO accretion, ARC Depreciation, ARO
remeasurement, and any earnings neutral impacts of contractual
offset for Regulatory Agreement Units.
(d)
Adjustment for certain incremental costs
related to the separation (system-related costs, third-party costs
paid to advisors, consultants, lawyers, and other experts assisting
in the separation), including a portion of the amounts billed to us
pursuant to the TSA.
(e)
Adjustment for Pension and OPEB
Non-Service credits.
(f)
Adjustment for costs related to a
multi-year ERP system implemented in the first quarter of 2024.
(g)
Adjustment related to plant retirements
and divestitures.
(h)
Adjustment for elimination of the
noncontrolling interest related to certain adjustments.
(i)
Adjustment for changes in environmental
liabilities.
(j)
Adjustment to deferred income taxes due to
changes in forecasted apportionment.
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Paul Adams Corporate Communications 667-218-7700
Emily Duncan Investor Relations 833-447-2783
Constellation Energy (NASDAQ:CEG)
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