Earnings Release Highlights
- GAAP Net Loss of ($36) million and Adjusted EBITDA (non-GAAP)
of $1,137 million for the fourth quarter of 2023. GAAP Net Income
of $1,623 million and Adjusted EBITDA (non-GAAP) of $4,025 million
for the full year 2023, exceeding the top end of our guidance range
of $3,800 million to $4,000 million
- Delivered on our commitments to shareholders:
- Expanded the nation's largest, highly reliable, carbon-free
nuclear fleet by acquiring a partial ownership stake in the South
Texas Project Nuclear Generating Station
- Completed our initial $1 billion of share repurchases and
authorized an additional $1 billion in continuation of the program,
reinforcing our commitment to return value to shareholders
- Our issuer credit rating was upgraded by Standard & Poor’s
(S&P) for the second time since separation, from BBB to BBB+,
reflecting our improving financial measures and risk profile
- Doubled the annual per share dividend from the 2022 level
- Commenced our $350 million project to expand our renewable
energy portfolio by completing the repowering of Criterion and
beginning the repowering of our Missouri wind generation
facilities
- Recognized by Just Capital in its "Just 100" annual ranking
that reflects the performance of America’s largest publicly traded
companies based on a variety of key factors
- Ranked the No. 1 producer of carbon-free energy and have the
lowest rate of carbon dioxide emissions for the 10th consecutive
year amongst our peer group
- Received the Community Partnership Award from The Center for
Energy Workforce Development for our work in building a skilled
energy workforce that represents the diverse communities we
serve
- Earned 2023 Great Place to Work® certification based on
positive ratings from our employees on their experience working at
Constellation
Constellation Energy Corporation (Nasdaq: CEG) today reported
its financial results for the fourth quarter and full year
2023.
“We had extremely strong financial and operational performance
as our nuclear fleet continued to achieve unmatched reliability,
allowing us to deliver carbon-free energy to our customers in all
hours of the day under some of the harshest weather conditions in
decades,” said Joe Dominguez, president and CEO of Constellation.
“Our generation fleet was matched by an industry-leading commercial
business serving the most competitive large industrial customers
and three-fourths of the Fortune 100 last year, including top names
in technology and other industries seeking to drive economic growth
with clean energy across our nation. We took a disciplined approach
to growing our business in 2023, completing our acquisition of a
partial stake in the South Texas Project nuclear plant, repowering
our wind assets, taking steps to extend the life of our nuclear
plants and investing in new equipment to increase their output. We
are delivering our hourly-matched carbon-free energy product to top
sustainability leaders, and our results reflect growing
acknowledgement by our customers that nuclear energy delivers
unique value that can’t be matched anywhere in the
marketplace.”
“Our high investment grade balance sheet and the competitive
advantage of our integrated generation and commercial business
delivered exceptional financial performance in 2023, earning $4.025
billion in adjusted EBITDA, up from $2.667 billion in the previous
year and over $900 million above the midpoint of our original
guidance,” said Dan Eggers, chief financial officer of
Constellation. “We continue to invest in organic and inorganic
growth opportunities, while doubling our dividend, completing our
$1 billion share repurchase program and authorizing a second $1
billion repurchase program in December.”
Investor and Analyst Webcast Information
We will host a virtual investor and analyst event via webcast to
highlight Constellation’s business and earnings outlook for 2024
and beyond, scheduled for tomorrow at 8:30 a.m. Eastern Time. The
webcast and associated materials can be accessed at
https://investors.constellationenergy.com.
Fourth Quarter 2023
Our GAAP Net Loss for the fourth quarter of 2023 was ($36)
million, down from $34 million GAAP Net Income in the fourth
quarter of 2022. Adjusted EBITDA (non-GAAP) for the fourth quarter
of 2023 increased to $1,137 million from $605 million in the fourth
quarter of 2022. For the reconciliations of GAAP Net Income (Loss)
to Adjusted EBITDA (non-GAAP), refer to the tables beginning on
page 4.
Adjusted EBITDA (non-GAAP) in the fourth quarter of 2023
primarily reflects:
- Favorable market and portfolio conditions partially offset by
unfavorable labor, contracting, and materials, decreased ZEC
revenues, decreased capacity revenues, and unfavorable impacts of
nuclear outages
Full Year 2023
Our GAAP Net Income for 2023 was $1,623 million, compared to
($160) million GAAP Net Loss in 2022. Adjusted EBITDA (non-GAAP)
for 2023 increased to $4,025 million from $2,667 million in
2022.
Adjusted EBITDA (non-GAAP) for the full year 2023 primarily
reflects:
- Favorable market and portfolio conditions partially offset by
unfavorable labor, contracting, and materials, decreased capacity
revenues, and unfavorable impacts of nuclear outages
Recent Developments and 2023 Highlights
- Delivering on Our Capital Allocation Promises: Through
our strong free cash flows we delivered on our commitments
announced last year to grow the business and return capital to
shareholders. We grew our nuclear fleet with our acquisition of an
undivided ownership interest in the South Texas Project Nuclear
Generating Station, a 2,645-megawatt, dual-unit nuclear plant
located about 90 miles southwest of Houston, for $1.65 billion,
further expanding our contribution to a carbon-free future. We
completed our initial $1 billion of share repurchases, buying back
nearly 10.6 million shares. In December our Board of Directors
approved expanding the program for an additional $1 billion,
reinforcing our continued commitment to return value to
shareholders. We received our second issuer credit rating upgrade
from S&P since separation, from BBB to BBB+, reflecting their
view that the financial risk has significantly improved with the
nuclear production tax credit (PTC). We doubled our dividend from
the 2022 level. During the year we also commenced our previously
announced $350 million effort to increase the output and lifespan
of our renewable energy portfolio, beginning with the repowering of
our Criterion and Missouri wind facilities.
- No. 1 Producer of Carbon-Free Energy: For the 10th
consecutive year we are the nation’s largest producer of
carbon-free energy and have the lowest rate of carbon dioxide
emissions among the 20 largest private, investor-owned power
producers in the United States, according to an independent
analysis based on publicly reported 2021 air emissions data. The
annual Benchmarking Air Emissions of the 100 Largest Electric Power
Producers in the United States report showed that the next cleanest
company among the group of 20 had more than four-and-a-half times
the rate of carbon dioxide emissions as Constellation.
- Just Capital "Just 100": Just Capital recognized
Constellation in its “Just 100,” an annual ranking that reflects
the performance of America’s largest publicly traded companies
based on a variety of issues deemed by Americans to be most
important in business today. Key factors for selection range from
how a company invests in its employees and communities, to how it
treats customers and minimizes environmental impact.
- Community Partnership Award: We received the Community
Partnership Award from The Center for Energy Workforce Development
(CEWD) for our work in building a skilled energy workforce that
represents the diverse communities we serve. The award recognizes
our multi-faceted efforts to establish lasting and impactful
relationships with our local community — including educators,
minority facing organizations, workforce development nonprofits and
others — to fuel the energy talent pipeline. We also teamed up with
CEWD to sponsor its Energy Industry Fundamentals 2.0 program. The
interactive, 120-hour curriculum for high school and technical
school students aims to provide expanded energy education and
career awareness to 500,000 students over the next decade.
- 2023 Great Place to Work Certification: In the third
quarter 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, 81% of
those who responded said it is a great place to work – about 24
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 45,563 gigawatt-hours (GWhs) in the
fourth quarter of 2023, compared with 44,436 GWhs in the fourth
quarter of 2022. Excluding Salem and STP, our nuclear plants at
ownership achieved a 95.1% capacity factor for the fourth quarter
of 2023, compared with 95.4% for the fourth quarter of 2022. There
were 56 planned refueling outage days in the fourth quarter of 2023
and 65 in the fourth quarter of 2022. There were seven
non-refueling outage days in the fourth quarter of 2023 and three
in the fourth quarter of 2022.
- Natural Gas, Oil, and Renewables Operations: The
dispatch match rate for our gas and hydro fleet was 97.5% in the
fourth quarter of 2023, compared with 96.1%1 in the fourth quarter
of 2022. Energy capture for the wind and solar fleet was 96.3% in
the fourth quarter of 2023, compared with 96.7%1 in the fourth
quarter of 2022.
GAAP/Adjusted EBITDA (non-GAAP) Reconciliation
Adjusted EBITDA (non-GAAP) for the three and twelve months ended
December 31, 2023 and 2022 does not include the following items
that were included in our reported GAAP Net Income:
Three Months Ended December
31,
Twelve Months Ended December
31,
(in millions)
2023
2022
2023
2022
GAAP Net Income (Loss) Attributable to
Common Shareholders
$
(36
)
$
34
$
1,623
$
(160
)
Income Tax (Benefit) Expense
158
133
840
(339
)
Depreciation and Amortization
288
272
1,096
1,091
Interest Expense, Net
139
64
431
251
Unrealized Loss (Gain) on Fair Value
Adjustments
1,002
413
658
1,058
Asset Impairments
—
—
71
—
Plant Retirements and Divestitures
—
(7
)
(28
)
(11
)
Decommissioning-Related Activities
(439
)
(306
)
(716
)
820
Pension & OPEB Non-Service Credits
(14
)
(31
)
(54
)
(116
)
Separation Costs
17
41
101
140
Acquisition Related Costs
9
—
12
—
ERP System Implementation Costs
5
6
25
22
Change in Environmental Liabilities
15
(2
)
43
10
Prior Merger Commitment
—
—
—
(50
)
Noncontrolling Interests
(7
)
(12
)
(77
)
(49
)
Adjusted EBITDA (non-GAAP)
$
1,137
$
605
$
4,025
$
2,667
________ 1Prior year dispatch match and energy capture was
previously reported as 96.6% and 95.9%, respectively. The update
reflects a change to include the Conowingo run-of-river
hydroelectric operational performance within renewable energy
capture, and remove the performance from dispatch match.
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 16 million 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.
Non-GAAP Financial Measures
In analyzing and planning for our business, we supplement our
use of net income as determined under generally accepted accounting
principles in the United States (GAAP), with Adjusted EBITDA
(non-GAAP) as a performance measure. Adjusted EBITDA (non-GAAP)
reflects an additional way of viewing our business that, when
viewed with our GAAP results and the accompanying reconciliation to
GAAP net income included above, may provide a more complete
understanding of factors and trends affecting our business.
Adjusted EBITDA (non-GAAP) should not be relied upon to the
exclusion of GAAP financial measures and is, by definition, an
incomplete understanding of our business, and must be considered in
conjunction with GAAP measures. In addition, Adjusted EBITDA
(non-GAAP) is neither a standardized financial measure, nor a
presentation defined under GAAP and may not be comparable to other
companies’ presentations or deemed more useful than the GAAP
information provided elsewhere in this press release and earnings
release attachments. We have provided the non-GAAP financial
measure as supplemental information and in addition to the
financial measures that are calculated and presented in accordance
with GAAP. Adjusted EBITDA (non-GAAP) should not be deemed more
useful than, a substitute for, or an alternative to the most
comparable GAAP Net Income measure provided in this earnings
release and attachments. This press release and earnings release
attachments provide reconciliations of Adjusted EBITDA (non-GAAP)
to the most directly comparable financial measures calculated and
presented in accordance with GAAP and are posted on our website:
www.ConstellationEnergy.com, and have been furnished to the
Securities and Exchange Commission on Form 8-K on February 27,
2024.
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, (Registrants)
include those factors discussed herein, as well as the items
discussed in (1) the Registrants' 2023 Annual Report on Form 10-K
(to be filed on February 27, 2024) 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, and (2) 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 of the
Registrants 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 EBITDA (non-GAAP)
Reconciling Adjustments
(unaudited)
(in millions, except per share
data)
Three Months Ended December
31, 2023
Three Months Ended December
31, 2022
GAAP (a)
Non-GAAP Adjustments
GAAP (a)
Non-GAAP Adjustments
Operating revenues
$
5,796
$
(84
)
(b),(c)
$
7,333
$
(713
)
(b),(c)
Operating expenses
Purchased power and fuel
4,018
(898
)
(b)
5,708
(1,125
)
(b)
Operating and maintenance
1,422
(83
)
(c),(d),(f),(l),(n)
1,375
(86
)
(c),(d),(f),(g),(l)
Depreciation and amortization
288
(288
)
(h)
272
(272
)
(h)
Taxes other than income taxes
134
—
138
—
Total operating expenses
5,862
7,493
Gain (loss) on sales of assets and
businesses
(1
)
—
(12
)
—
Operating income (loss)
(67
)
(172
)
Other income and (deductions)
Interest expense, net
(139
)
139
(i)
(64
)
64
(i)
Other, net
349
(326
)
(b),(c),(e),(m)
383
(367
)
(b),(c),(d),(e),(f),(g),(j),(m)
Total other income and
(deductions)
210
319
Income (loss) before income
taxes
143
147
Income tax (benefit) expense
182
(182
)
(j)
116
(116
)
(j)
Equity in income (losses) of
unconsolidated affiliates
—
—
(4
)
—
Net income (loss)
(39
)
27
Net income (loss) attributable to
noncontrolling interests
(3
)
7
(k)
(7
)
12
(k)
Net income (loss) attributable to
common shareholders
$
(36
)
$
34
Effective tax rate
127.3
%
78.9
%
Earnings per average common
share
Basic
$
(0.11
)
$
0.10
Diluted
$
(0.11
)
$
0.10
Average common shares
outstanding
Basic
320
328
Diluted
321
329
__________ (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, 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 Other
Postretirement Employee Benefits (OPEB) Non-Service credits.
(f)
Adjustment for costs related to a
multi-year ERP system implementation.
(g)
Adjustments related to plant retirements
and divestitures.
(h)
Adjustment for depreciation and
amortization expense.
(i)
Adjustment for interest expense.
(j)
Adjustment for income taxes.
(k)
Adjustment for elimination of the
noncontrolling interest related to certain adjustments.
(l)
Adjustment for certain changes in
environmental liabilities.
(m)
Adjustment includes amounts contractually
owed to Exelon under the TMA.
(n)
Adjustment for acquisition related
costs.
Constellation Energy
Corporation
GAAP Consolidated Statements
of Operations and
Adjusted EBITDA (non-GAAP)
Reconciling Adjustments
(unaudited)
(in millions, except per share
data)
Twelve Months Ended December
31, 2023
Twelve Months Ended December
31, 2022
GAAP (a)
Non-GAAP Adjustments
GAAP (a)
Non-GAAP Adjustments
Operating revenues
$
24,918
$
(1,404
)
(b),(c)
$
24,440
$
1,184
(b),(c)
Operating expenses
Purchased power and fuel
16,001
(2,365
)
(b)
17,462
138
(b)
Operating and maintenance
5,685
(343
)
(c),(d),(f),(l),(o),(p)
4,841
(28
)
(c),(d),(e),(f),(g),(l),(n)
Depreciation and amortization
1,096
(1,096
)
(h)
1,091
(1,091
)
(h)
Taxes other than income taxes
553
—
552
(2
)
(d)
Total operating expenses
23,335
23,946
Gain (loss) on sales of assets and
businesses
27
(27
)
(g)
1
1
(g)
Operating income (loss)
1,610
495
Other income and (deductions)
Interest expense, net
(431
)
431
(i)
(251
)
251
(i)
Other, net
1,268
1,184
(b),(c),(e),(m)
(786
)
845
(b),(c),(d),(e),(g),(j),(m)
Total other income and
(deductions)
837
(1,037
)
Income (loss) before income
taxes
2,447
(542
)
Income tax (benefit) expense
859
(859
)
(j)
(388
)
388
(j)
Equity in income (losses) of
unconsolidated affiliates
(11
)
—
(13
)
—
Net income (loss)
1,577
(167
)
Net income (loss) attributable to
noncontrolling interests
(46
)
77
(k)
(7
)
49
(k)
Net income (loss) attributable to
common shareholders
$
1,623
$
(160
)
Effective tax rate
35.1
%
71.6
%
Earnings per average common
share
Basic
$
5.02
$
(0.49
)
Diluted
$
5.01
$
(0.49
)
Average common shares
outstanding
Basic
323
328
Diluted
324
329
__________ (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, 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 implementation
(g)
Adjustments related to plant retirements
and divestitures.
(h)
Adjustment for depreciation and
amortization expense.
(i)
Adjustment for interest expense.
(j)
Adjustment for income taxes.
(k)
Adjustment for elimination of the
noncontrolling interest related to certain adjustments.
(l)
Adjustment for certain changes in
environmental liabilities.
(m)
Adjustment includes amounts contractually
owed to Exelon under the tax matters agreement.
(n)
Reversal of a charge related to a prior
2012 merger commitment.
(o)
Adjustment for an asset impairment.
(p)
Adjustment for acquisition related
costs.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240226437222/en/
Emily Duncan Investor Relations 833-447-2783
investorrelations@constellation.com Paul Adams Corporate
Communications 667-218-7700 paul.adams@constellation.com
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