Earnings Release Highlights
GAAP Net Income of $3.82 per share and Adjusted (non-GAAP) Operating Earnings of $2.74 per share for the third quarter of 2024
Raising midpoint and narrowing full-year 2024 Adjusted (non-GAAP) Operating Earnings guidance range to $8.00 – $8.40 per share
Announced the signing of a 20-year power purchase agreement with Microsoft that will support the launch of the Crane Clean Energy Center
Constellation Energy Corporation reported its financial results for the third quarter of 2024.
“The importance of AI and the data economy to America’s economic competitiveness and national security can’t be overstated, and Constellation will do our part to meet the moment. Our customers are looking for clean, emissions-free energy that they can rely on in every hour of every day, and nothing exemplifies that imperative more than our 20-year agreement with Microsoft to restart the Crane Clean Energy Center,” said Joe Dominguez, president and CEO, Constellation. “There is no more important commodity in the world today than clean energy that is there when you need it. We continue to see opportunities to add clean energy to the grid by extending the life and increasing the output of our nuclear fleet to meet the nation’s growing needs in a way that creates jobs, benefits grid reliability and protects the environment.”
“Our generation fleet performed exceptionally well during the quarter, and we are on track to beat our average refueling outage duration by more than 2 days which is more than 50% below the industry average,” said Dan Eggers, chief financial officer, Constellation. “Our commercial team continued to create exceptional value through optimizing both our generation and load businesses. As a result, we are raising Adjusted (non-GAAP) Operating Earnings guidance range for the full year to $8.00 – $8.40 per share, up from $7.60 – $8.40 per share. This guidance is built upon a strong financial foundation in the third quarter, including Adjusted (non-GAAP) Operating Earnings of $2.74 per share, up from $2.13 per share in the same quarter last year.”
Third Quarter 2024
Our GAAP Net Income for the third quarter of 2024 increased to $3.82 per share from $2.26 per share in the third quarter of 2023. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2024 increased to $2.74 per share from $2.13 per share in the third 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 third quarter of 2024 primarily reflects:
Favorable nuclear PTC portfolio results and favorable net market and portfolio conditions; partially offset by unfavorable labor (inclusive of incentives), contracting and materials, and impacts of nuclear outages in 2024 compared to 2023.
Recent Developments and Third Quarter Highlights
Announcing Crane Clean Energy Center: During the third quarter of 2024, we executed a 20-year PPA with Microsoft that will support the restart of Three Mile Island Unit 1, renamed as the Crane Clean Energy Center, which was retired in 2019 for economic reasons. Under the agreement, Microsoft will purchase the output generated from the renewed plant as part of its goal to help power its data centers in PJM with clean energy. We expect Crane will also be eligible for the technology-neutral clean electricity PTC (45Y) provided for by the IRA for its first 10 years of operations. We estimate the project will require approximately $1.6 billion of cash from operations for capital expenditures necessary to restart the plant, with an estimated in-service date of 2028. The restart of the plant and delivery of electricity under the PPA is subject to certain regulatory approvals, including the NRC comprehensive safety and environmental review, as well as permits from relevant state and local agencies. Additionally, through a separate request, we will pursue obtaining a renewed license that will extend operations at the plant to at least 2054.
Nuclear Operations: Our nuclear fleet, including our owned output from the Salem and South Texas Project (STP) Generating Stations, produced 45,510 gigawatt-hours (GWhs) in the third quarter of 2024, compared with 44,125 GWhs in the third quarter of 2023. Excluding Salem and STP, our nuclear plants at ownership achieved a 95.0% capacity factor for the third quarter of 2024, compared with 97.2% for the third quarter of 2023. There were 37 planned refueling outage days in the third quarter of 2024 and 20 in the third quarter of 2023 for sites we operate. There were 20 non-refueling outage days in the third quarter of 2024 and 10 in the third quarter of 2023 for sites we operate.
Natural Gas, Oil, and Renewables Operations: The dispatch match rate for our fleet was 98.2% in the third quarter of 2024, compared with 98.5% in the third quarter of 2023. Renewable energy capture for our fleet was 96.0% in the third quarter of 2024, compared with 96.6% in the third 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 25.5% and 25.1% for the three months ended September 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 54.6% and 52.6% for the three months ended September 30, 2024 and 2023, respectively. Adjusted (non-GAAP) Operating Earnings for the third quarter of 2024 and 2023, respectively, does not include the following items (after tax) that were included in our reported GAAP Net Income (Loss):
Webcast Information
We will discuss third 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.
