stellation Energy (US:CEG)2025-08-07 16:04PART I FINANCIAL INFORMATION Financial Statements This section presents the unaudited consolidated financial statements for Constellation Energy Corporation (CEG Parent) and Constellation Energy Generation, LLC for the quarterly period ended June 30, 2025, including statements of operations, cash flows, balance sheets, and changes in equity, along with combined notes detailing accounting policies and disclosures Constellation Energy Corporation Financial Statements For the six months ended June 30, 2025, Constellation Energy Corporation reported operating revenues of $12,889 million and net income attributable to common shareholders of $957 million, or $3.05 per diluted share, with total assets at $53,038 million and net cash from operating activities as a source of $1,584 million Constellation Energy Corporation - Consolidated Statement of Operations Highlights | Metric | Three Months Ended June 30, 2025 (Millions USD) | Three Months Ended June 30, 2024 (Millions USD) | Six Months Ended June 30, 2025 (Millions USD) | Six Months Ended June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $6,101 Millions | $5,475 Millions | $12,889 Millions | $11,637 Millions | | Operating Income | $951 Millions | $1,100 Millions | $1,402 Millions | $1,913 Millions | | Net Income Attributable to Common Shareholders | $839 Millions | $814 Millions | $957 Millions | $1,697 Millions | | Diluted EPS | $2.67 (USD) | $2.58 (USD) | $3.05 (USD) | $5.35 (USD) | Constellation Energy Corporation - Consolidated Cash Flow Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,584 Millions | ($1,336 Millions) | | Net Cash from Investing Activities | ($1,758 Millions) | $2,650 Millions | | Net Cash from Financing Activities | ($893 Millions) | ($1,385 Millions) | | Increase (Decrease) in Cash | ($1,067 Millions) | ($71 Millions) | Constellation Energy Corporation - Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | | :--- | :--- | :--- | | Total Current Assets | $9,233 Millions | $10,776 Millions | | Total Assets | $53,038 Millions | $52,926 Millions | | Total Current Liabilities | $6,256 Millions | $6,846 Millions | | Total Liabilities | $39,235 Millions | $39,387 Millions | | Total Shareholders' Equity | $13,446 Millions | $13,166 Millions | Constellation Energy Generation, LLC Financial Statements Constellation Energy Generation, LLC's operating financial results mirror its parent company, reporting $12,889 million in operating revenues and $962 million in net income for the six months ended June 30, 2025, with total assets of $52,994 million, while financing activities and equity structure reflect its subsidiary status Constellation Energy Generation, LLC - Consolidated Statement of Operations Highlights | Metric | Three Months Ended June 30, 2025 (Millions USD) | Three Months Ended June 30, 2024 (Millions USD) | Six Months Ended June 30, 2025 (Millions USD) | Six Months Ended June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenues | $6,101 Millions | $5,475 Millions | $12,889 Millions | $11,637 Millions | | Operating Income | $951 Millions | $1,100 Millions | $1,402 Millions | $1,913 Millions | | Net Income Attributable to Membership Interest | $839 Millions | $814 Millions | $957 Millions | $1,697 Millions | Constellation Energy Generation, LLC - Consolidated Cash Flow Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,502 Millions | ($1,350 Millions) | | Net Cash from Investing Activities | ($1,758 Millions) | $2,650 Millions | | Net Cash from Financing Activities | ($819 Millions) | ($1,368 Millions) | | Distributions to member | ($793 Millions) | ($1,220 Millions) | Combined Notes to Consolidated Financial Statements These notes detail accounting policies and financial figures, covering the proposed Calpine acquisition, revenue recognition, segment performance, nuclear Production Tax Credit (PTC) impact, changes to the accounts receivable financing facility, derivative usage, debt, credit facilities, and the share repurchase program - The company entered into an agreement to acquire Calpine Corporation in a cash and stock transaction, which includes assuming approximately $12.7 billion of Calpine's debt. Regulatory approvals from PUCT, NYPSC, and FERC were received in June and July 20254748 - For the June 2025 through May 2026 planning year, the company recognized $201 million of revenue for Zero Emission Credits (ZECs) delivered in prior years, with payment expected in Q3 202657 - The company's nuclear units are eligible for a Production Tax Credit (PTC) through 2032. For the six months ended June 30, 2025, the company recognized an estimated nuclear PTC benefit of approximately $45 million in Operating revenues, down from $712 million in the same period of 20247172 - In December 2024, the company amended its accounts receivable financing facility, increasing its size to $1.5 billion and extending the maturity to December 2027. The structure changed from selling receivables to a secured revolving loan facility143 - The company's Board of Directors has authorized a $3 billion share repurchase program. As of June 30, 2025, approximately $540 million of authority remained. In June 2025, the company initiated a $404 million Accelerated Share Repurchase (ASR) agreement180183 - In July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, which preserves key federal tax credits from the IRA, including the 45U nuclear PTC through 2032 and 45Y for new nuclear projects through 2035, reinforcing the long-term economic viability of the company's nuclear assets216 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) This MD&A provides management's perspective on financial condition and operations, highlighting legislative support for nuclear energy, a 20-year PPA with Meta, and the strategic Calpine acquisition, while detailing performance drivers, liquidity, capital resources, and credit matters Executive Overview, Significant Transactions and Developments, and Other Key Business Drivers This section outlines the company's role as the largest U.S. carbon-free energy producer, highlighting the One Big Beautiful Bill Act (OBBBA) supporting nuclear energy, a 20-year PPA with Meta for the Clinton Clean Energy Center, and the strategic acquisition of Calpine to expand generation capacity and retail supply, while monitoring tariffs, nuclear fuel supply risks from the Russia-Ukraine conflict, and environmental regulations - The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, preserves and enhances federal tax credits from the IRA, reinforcing the long-term economic viability of the company's nuclear generation assets219 - A 20-year PPA was signed with Meta Platforms, Inc. for the output of the Clinton Clean Energy Center, supporting its relicensing and continued operations. The deal includes a 30 MW plant uprate expected to be complete in 2029220 - The proposed acquisition of Calpine will add over 27 GW of generation capacity (natural gas, geothermal, battery storage, solar) and a retail platform serving 60 TWhs of load annually, creating the nation's leading competitive retail electric supplier221222 - The company is actively managing risks from the Russia-Ukraine conflict related to nuclear fuel supply by working with a diverse set of suppliers and increasing fuel inventory, in light of the U.S. ban on Russian uranium imports effective August 2024225 Financial Results of Operations For Q2 2025, GAAP Net Income slightly increased to $839 million, while the six-month GAAP Net Income decreased to $957 million from $1,697 million year-over-year, primarily due to lower Nuclear PTC revenues and unfavorable unrealized hedging results, partially offset by favorable ZEC revenues and improved market conditions, with Adjusted (non-GAAP) Operating Earnings for Q2 2025 rising to $599 million ($1.91/share) from $531 million ($1.68/share) GAAP vs. Adjusted (non-GAAP) Operating Earnings | Metric (in millions) | Three Months Ended June 30, 2025 (Millions USD) | Three Months Ended June 30, 2024 (Millions USD) | Six Months Ended June 30, 2025 (Millions USD) | Six Months Ended June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | GAAP Net Income Attributable to Common Shareholders | $839 Millions | $814 Millions | $957 Millions | $1,697 Millions | | Adjusted (non-GAAP) Operating Earnings | $599 Millions | $531 Millions | $1,272 Millions | $1,110 Millions | - The primary drivers for the $740 million decrease in year-to-date GAAP Net Income were unfavorable net unrealized losses on economic hedges, lower Nuclear PTC revenues ($45M in YTD 2025 vs. $712M in YTD 2024), and higher net unrealized losses on equity investments241244261 - Offsetting factors included favorable ZEC revenues (due to recognition of prior period deliveries), higher capacity revenues, and better margins on load contracts240244 Nuclear Fleet Capacity Factor | Period | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | Three Months Ended June 30 | 94.8% | 95.4% | | Six Months Ended June 30 | 94.5% | 94.4% | Liquidity and Capital Resources The company maintains a strong liquidity position, with $9.5 billion in aggregate bank commitments and $7.2 billion of available capacity as of June 30, 2025, and net cash from operating activities significantly improved to $1,584 million for the first six months of 2025, sufficient to meet all requirements, though a credit downgrade could trigger approximately $2.4 billion in incremental collateral Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,584 Millions | ($1,336 Millions) | | Net Cash from Investing Activities | ($1,758 Millions) | $2,650 Millions | | Net Cash from Financing Activities | ($893 Millions) | ($1,385 Millions) | - As of June 30, 2025, the company had access to $9.5 billion in aggregate bank commitments with $7.2 billion of available capacity280 - A loss of investment grade credit rating (requiring a three-notch downgrade) would trigger an estimated incremental collateral requirement of approximately $2.4 billion282283 - The company declared quarterly dividends of $0.3878 per share for the first three quarters of 2025279 Quantitative and Qualitative Disclosures About Market Risk This section details the company's market risk exposures, including commodity prices, counterparty credit, interest rates, and equity prices, managed through hedging, the nuclear PTC, long-term nuclear fuel contracts, master netting agreements, and collateral requirements, with disclosures on variable-rate debt and Nuclear Decommissioning Trust (NDT) funds - The company's commodity price risk is significantly mitigated by the nuclear PTC, which provides increasing support as unit revenues decline. A hypothetical $5/MWh reduction in energy prices would not have a material impact on earnings for 2025 and 2026298299 - The company manages nuclear fuel supply risk through long-term contracts. For the period 2025-2030, approximately 35% of uranium concentrate requirements are supplied by three suppliers. The company is diversifying its supply chain to mitigate geopolitical risks, such as the Russia-Ukraine conflict300301 - A hypothetical 25 basis point increase in interest rates and a 10% decrease in equity prices would result in a $981 million reduction in the fair value of the company's Nuclear Decommissioning Trust (NDT) assets as of June 30, 2025316 Controls and Procedures The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the second quarter of 2025 - As of June 30, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective319 - No material changes to internal control over financial reporting occurred during the second quarter of 2025320 PART II OTHER INFORMATION Legal Proceedings The company is involved in various lawsuits and regulatory proceedings in the ordinary course of business, with further details on material legal matters provided in Note 13 of the financial statements - The company is involved in various legal and regulatory proceedings in the ordinary course of business. For details on material cases, refer to Note 13 — Commitments and Contingencies322 Risk Factors As of June 30, 2025, the company's risk factors have not materially changed from those described in its 2024 Annual Report on Form 10-K - As of June 30, 2025, there were no material changes to the risk factors previously disclosed in the company's 2024 Form 10-K323 Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase activities, including a $3 billion authorized program, a $404 million Accelerated Share Repurchase (ASR) agreement initiated in June 2025 resulting in an initial delivery of 1,099,580 shares, and approximately $540 million remaining for repurchase as of June 30, 2025 - In June 2025, the company initiated a $404 million Accelerated Share Repurchase (ASR) agreement, receiving an initial delivery of 1,099,580 shares326330 - As of June 30, 2025, the approximate dollar value of shares that may yet be purchased under the authorized program is $540 million330 - There were no open market share repurchases during the six months ended June 30, 2025325 Other Information During the second quarter of 2025, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements for the purchase or sale of the company's securities - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the three months ended June 30, 2025332