Constellation Energy Corporation

Good morning, ladies and gentlemen, and welcome to the Constellation Energy Corporation first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, this call may be recorded. I would now like to introduce your host for today's call, Tim Fladamesh. Vice President, Investor Relations. You may begin.

Thank you, Daniel. Good morning, everyone, and thank you for joining Constellation Energy Corporation's first quarter earnings call. Leading the call today are Joe Dominguez, Constellation's President and Chief Executive Officer, and Shane Smith, Constellation's Chief Financial Officer. They are joined by other members of Constellation's senior management team who will be available to answer your questions following our prepared remarks. We issued our earnings release this morning along with the presentation, all of which can be found in the investor relations section of Constellation's website. The earnings release and other matters which are discussed during today's call contain forward-looking statements and estimates regarding Constellation and its subsidiaries that are subject to various risks and uncertainties. Actual results could differ from our forward-looking statements based on factors and assumptions discussed in today's materials and comments made during this call. Please refer to today's 8 and Constellation's other SEC filings for discussions of risk factors and other circumstances and considerations that may cause results to differ from management's projections, forecasts, and expectations. Today's presentation also includes references to adjusted operating earnings and other non-GAAP measures. Please refer to the information contained in the appendix of our presentation and our estimates on our earnings release for reconciliations between non-GAAP measures and the nearest equivalent GAAP measures. I'll now turn the call over to Joe.

Thanks, Tim. Good morning, everyone. I hope you enjoyed a wonderful Mother's Day celebrating the great moms in our lives. Thanks for joining us today and for your continued interest in Constellation. Our prepared remarks this morning will be relatively brief. We spent a good amount of time with you just over a month ago when we shared our business and earnings outlook so we could be more efficient with your time today. I'll begin by summarizing the key messages from the business update and then talk about the quarter, some of our generation development activities, and the PJM regulatory landscape. First and foremost, I want to remind you that our long-term outlook is compelling with a base earnings growth rate that exceeds 20% through 2029. anchored by highly visible drivers that include the nuclear production tax credit, which grows with inflation, long-term contracts with high-quality counterparties, and durable customer margins supported by the nation's largest commercial and industrial retail platform. We also have conviction that we could grow the business at a long-term rolling 10% plus base EPS growth rate. which we see as a common characteristic of high quality and well-valued companies. Further, our outlook is arguably conservative through 2029 with considerable levers to drive upside that are quantified on page 13 of this deck. You will see that this is an updated version of page 23 of the business update that we reviewed last month, which so many of our owners told us that they liked. As Shane will cover in more detail, some of the opportunities include additional long-term off-takes for data center customers at our nuclear and gas plants, as well as with customers wanting clean, firm, and reliable power with price visibility. Higher utilization of our gas fleet due to rising around-the-clock demand. Positive gearing to higher than 2% inflation through the nuclear PTC construct. And finally, the benefit of higher returns on our strong and growing free cash flow. The second big storyline here is the mix of our base and enhanced earnings. The Calpine business brings high quality, visible earnings to Constellation, supporting our growth outlook, and reinforces the value of bringing these two companies together. Lastly, I would call out here the free cash flow outlook. which upon reflection we could have probably done a better job of when we provided the business outlook, but we've provided the updated numbers now on page 13. Much like the strong EPS growth, we see similar growth in our free cash flow outlook with the 26-27 period producing a forecasted $8.4 billion and the 28-29 period rising to $11.5 to $13 billion before the levers I just mentioned. We will have significant opportunity to productively deploy capital over the balance of the decade to drive value. Turning to slide six and the quarterly results, I want to, as I always do, first start out by thanking the women and men here at Constellation for their dedication and for delivering another strong operational and financial performance quarter. We posted first quarter gap earnings of $4.49 per share and adjusted operating earnings of $2.74 per share. Based on our performance year to date and our outlook for the remainder of the year, we are affirming our full year adjusted operating earnings guidance range of $11 to $12 per share. Shane will cover the details in his section. Since we last spoke, we moved quickly to get back into the market, buying our stock in a pretty narrow window. Over the past few weeks, we have successfully repurchased approximately 1.2 million shares at an average price of roughly $285 per share for a total of 335 million of purchases. These purchases underscore our commitment to discipline capital allocation and our confidence in the long-term value of the business. The buyback was an intentional statement from management and our board that we are excited about the growth opportunities ahead, but that at these prices we see our stock as a compelling use of our cash. We were excited to be named Barron's 2026 most sustainable U.S. company in the quarter, ranking number one among the thousand largest publicly traded companies in the United States. This recognition is based on an evaluation of more than 230 performance indicators, measuring how companies treat a broad range of stakeholders, including their employees, their owners, customers, communities, and of course, the environment. Being recognized by Barron's as the most sustainable U.S. company is a very, very big deal to us, and it validates our approach to doing business. At Constellation, we have a culture of doing hard things and doing them well. Despite an increasingly challenging market environment for new development, this quarter we successfully delivered two new generation projects to the grid, demonstrating our ability to execute and deliver when it matters. First, we placed the 105 megawatt Pastoria solar project into service. This solar project is next to a combined cycle machine of over 750 megawatts at the same location. And it's the first part of a combined solar and battery storage project that supports the California Department of Water Resources' goal of achieving carbon neutrality by 2035. And it further strengthens Constellation's leading position as the largest producer of carbon-free energy in the country. we commence commercial operations at our 460 megawatt Pin Oak Creek natural gas peaking facility in Texas. Designed for rapid startup, Pin Oak Creek will provide critical peak demand support and enhance grid reliability during periods of elevated electricity demand. Together, these projects demonstrate Constellation's ability post the Calpine acquisition to execute on complex development efforts and deliver new generation that meets the evolving needs of both our customers and the grid. On the transaction front, last week we received PUCT approval of the net metering agreement associated with our powered land deal with Cyrus One at the Freestone Energy Center. This approval is an important signal to the market regarding expectations for co-located projects going forward. Construction is currently underway on the substation that will enable power delivery to the data center, which we expect to be energized in the fourth quarter of this year. Turning to slide seven, we are making good progress on regulatory clarity in PJM. PJM has put forward a market-based solution to address the incremental capacity needs driven by large load customer growth. creating a pathway with options for customers to manage their capacity requirements and cost exposure. There have been constructive conversations with stakeholders since the release of the initial proposal. While we expect to see further refinements over the coming weeks, PJM has established a proposed timeline for providing clarity on when it expects to vote on the final framework with the goal of submitting the proposal to FERC in June. Frankly, this is faster than we had hoped, and having this defined timeline and a pathway to final rules will provide greater certainty for market participants as they plan and invest. Clarity is critical to unlocking economic expansion across the Mid-Atlantic and Midwest regions by providing a clear path for new large loads to connect to the grid. We think this is a great opportunity opportunity for robust economic development in our states, providing the benefits of meaningful construction jobs, ongoing employment, property tax, and local community support, while helping to advance the most important economic and national security we have as a country. We are also excited for the customers in our states, both residential and commercial who are paying the high cost of fixed grid infrastructure. By bringing on these large loads and by being more dynamic in managing peak usage, we have a real opportunity to improve system utilization and lower the average hourly usage costs for all customers. On the contracting front, customer engagement has varied as PJM works through these policy issues. As I mentioned during our last update, some customers have been willing to continue advancing project discussions and agreement negotiations, while others have chosen to pause and wait for regulatory clarity. That's why I'm pleased to see PJM moving forward so quickly to address this need for clarity. The backstop proposal needs to happen on the timeline PJM has laid out, and PJM has to replicate that timeline on the co-location document. Last year, there was a prevailing concern that Senate Bill 6 in Texas would significantly constrain data center development in ERCOT. Instead, once the requirements were established for co-locating new load with generation, we began to see transactions come forward. We expect to see the same thing in PJM. The bottom line is that customers want to get their data centers online as quickly as they can. They need regulatory clarity for that to happen. And once the options are understood, they will make the decisions that work for their specific needs. We will continue to work with PJM to help shape the rules to support economic growth, protect residential customers, and to stabilize and perhaps actually lower costs for all Americans. Turning to slide eight, one point that has remained clear is that demand for additional compute, and by extension, additional power, has not slowed from hyperscaler customers. In fact, projected spending levels for 2026 are nearly 75% higher than last year and continue to be revised upward. There is also a growing recognition that reliability must be supported and done in a way that does not burden existing customers. Constellation is well positioned to provide solutions for our customers. We have submitted approximately 5,000 megawatts of new capacity resources into PJM's interconnection queue, including unique nuclear upgrades, new natural gas generation, and new battery storage projects. As customers look to contract new capacity to offset incremental demand at peak, we have a diverse set of projects that align well with PJM's proposed framework and can meet those needs. If a customer prefers to participate in demand response or enable participation through third parties, we can provide those solutions as well through our retail business. We are highly motivated to identify and provide workable capacity solutions for both customers and for the broader market. Ultimately, our objective is to unlock the full value of our clean, firm energy and associated attributes in a way that benefits all stakeholders. Turning to slide nine, while we continue to engage with customers and regulators in PJM, It is important to recognize that our opportunity to drive meaningful upside to our outlook extends beyond any single region. We have a demonstrated track record of delivering powered land solutions to customers in ERCOT, and we see additional opportunities across our broader fleet to build on that success. Importantly, we have sites with available land and a path to grid interconnection along with a proven ability to successfully navigate the regulatory framework, positioning us well to continue advancing customer solutions. At our three data center projects in Texas, we have customers addressing their reliability commitments, both by bringing firm backup generation to cover peak constraints, and in another instance, accepting full curtailability during times of grid stress. These gas adjacent powered land deals command a meaningful privilege in their own right. And importantly, they allow full access to the grid. So customers could pair them with purchases of firm carbon-free energy from grid connected nuclear plants. And we are working with customers on those offerings. Now, before I turn to Shane, I want to share an observation about this slide and the Pastoria and Pinot Creek development projects that I covered back on slide six. Obviously, all of this good work was underway at Calpine when we bought the company. And when we announced the Calpine transaction a little more than a year ago, we talked about the compatibility and complementary nature of the commercial and retail businesses. We talked about Calpine's industry-leading natural gas and geothermal assets. And of course, we talked about its terrific people. But we also shared with you that in the future we saw coming, CALPINE would help to supplement Constellation's existing skills in new natural gas, solar, and battery storage development, as well as Constellation's abilities in connection with natural gas data center transactions. And as you reflect on the regulatory requirements in PJM and ERCOT and in other places, I trust that you can now see how supplemental development and commercial capabilities will help us to unlock the value of Constellation's amazing and unique fleet of nuclear and natural gas assets in a way that help our customers and America grow while stabilizing and potentially reducing costs for everyday American families. With that, let me turn the call over to Shane to talk a little bit more about our financial performance in the first quarter. Shane?