NuScale Power Corporation Class A

Good morning and welcome to New Scale Power's first quarter 2022 business update conference call. Today's call is being recorded. All participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again press the star one. A replay of today's conference call will be available at approximately 1 p.m. Eastern time today, accessible on NuScale's website at ir.nuscalepower.com. The web replay will be available for 30 days following the earnings call. A telephone replay will also be available for seven days through a registration link, also accessible on NuScale's website. At this time, for opening remarks, I would like to turn the call over to Diane Hughes, Vice President, Marketing and Communications. Please go ahead, Ms. Hughes.

Thanks, Rod. Welcome to NuScale's 2022 First Quarter Business Update Conference Call. With us today are President and Chief Executive Officer John Hopkins and Chief Financial Officer Chris Colbert. Because the merger with Spring Valley closed on May 2nd, NuScale was not a publicly traded company during the first quarter and did not file a quarterly report on Form 10-Q. However, NuScale's unaudited first quarter financials were filed on a current report on Form 8K on May 16 and are included in the registration statement on SEC Form S1 that was filed on May 13. To keep you all informed as shareholders of our newly public company, we are hosting this business update call in which we'll discuss business developments at NuScale during the first quarter and pro forma financial performance. Starting with NuScale's second quarter results, we'll file a 10-Q and report results in the standard manner. We issued the business update press release earlier today, which can be found in the investor relations section of our website at ir.nuscalepower.com. We will reference the update while conducting today's call. Before getting started, I'd like to refer you to our Safe Harbor disclaimer regarding forward-looking statements, which is included in the press release. During today's call, we'll be making forward-looking statements which reflect our current views of existing trends and information. There's an inherent risk that actual results and experience could differ materially. You can find a discussion of our risk factors, which could potentially contribute to such differences from our form S-1, which NuScale filed with the SEC. Also during this call, we may discuss certain non-GAAP financial measures. Reconciliations of these amounts to the comparable GAAP measures are included in our business update release. I'll now turn the call over to John Hopkins, NuScale President and Chief Executive Officer. John?

Thank you, Diane, and good morning, everyone. I and the entire NuScale team are really excited to be here today reporting to you as a public company. I'll provide an overview of our more notable recent business developments and lay out our near-term strategic objectives. Then my colleague, Chris Colbert, NuScale CFO, will provide a detailed update on our capital structure and financial position as well as reaffirm our outlook. Let me start by explaining our enthusiasm about the future of nuclear power and our role in it. The energy industry is entering what many are calling a new nuclear renaissance, as people realize that nuclear is the only solution for cost-effective, 100% carbon-free baseload power. This pressing need for more clean energy and energy security and resiliency became more urgent in recent months with the impact of geopolitical events. These tailwinds are clearly reflected in the business update I'll walk you through shortly. Each company around the world has a unique path towards decarbonization based on a country's energy resources and infrastructure. It is important that the policies of multilateral institutions recognize nuclear zero carbon reliable energy benefits. To name just a few of the recent headlines from around the world that support this notion, a recent study published by the United Nations Economic Commission for Europe concluded that energy, nuclear energy, not only has the lowest overall greenhouse gas emissions, but also has the cleanest life cycle profile of all sources of electricity production. On the other side of the globe, the U.S.-Japan Competitive and Resilience Partnership recently launched the Clean Energy and Energy Security Initiative to accelerate innovation and marketization of clean energy technologies, including nuclear power. In addition, the government of Indonesia has joined this partnership with Japan and the U.S. in utilizing tools to increase interest in renewable investment, including SMR nuclear energy. Elsewhere in Asia, the U.S.-South Korea Leaders' Joint Statement knows that the leaders of both countries recognize the importance of nuclear energy and commit to greater collaboration, accelerating development, and global deployment of advanced reactors and SMRs. To that end, the Republic of Korea joined the U.S.-led Foundational Infrastructure for Responsible Use of Small Module Reactor Technology, or FIRST, program. Although NuScale is newly public, remember, we are no by any means just a new company. It follows that we are uniquely positioned to win in this nuclear renaissance. NuScale was founded in 2007, and our transformational small-module reactor reflects decades of investment and development through the expertise of scientists and technologists who have dedicated their careers to this endeavor. We've built a strong competitive position when customer mandates infirmly establish themselves as a first mover in a large global and largely untapped market. We did this through a deliberate, meticulous, and disciplined approach. Now let's take a moment to consider where we are today. NuScale technology is the first and only SMR to receive approval from the U.S. Nuclear Regulatory Commission, giving us a significant competitive advantage. We have a robust and growing customer development pipeline. This includes 18 signed and active MOUs or agreements in 10 countries. Our Cornerstone agreement is a project with a major regional utility customer here in the United States. For that customer, the Utah Associated Municipal Power Systems, or UAMPS, field work and licensing is currently underway, and we expect their first SMR plant to go live by 2029. But that's not all. We have an early works agreement in place with KGHM in Poland. We're making progress in other markets and moving from memorandum of understanding to substantive contracts. We have an extensive and diverse supply chain and substantial global fabrication capacity that we can access today. Importantly, we have an attractive high-margin business model that we believe can monetize our intellectual property through SMR sales and technology licensing fees, while driving reoccurring revenues through critical operations and maintenance services over the life cycle of a plant. We're off to a good start as the first publicly traded SMR technology provider and are eager to build on its momentum. Despite heightened volatility across global capital markets, we executed a successful combination with Spring Valley Acquisition Corporation and brought $341 million of fresh capital into our coffers. Redemption Performance that is, the historic Spring Valley shareholders had a right to redeem their stock before the merger closed, was encouraging in light of the current market environment. In a period in which many high-quality deals were seeing redemption rates well over 90%, Spring Valley redemptions were only 37.5%. The assets in trust plus our upsized pipe yield us significant capital to fund our growth plan over long term. Turning now to the remainder of this year, We're focused on five key milestones. First, we intend to secure our next committed customer, similar to UAMPS by year end. Second, we intend to issue long lead material specifications for the reactor pressure vessel. Third, we intend to complete the reactor building design. Fourth, we intend to submit a standard design approval application to the NRC for the Voyager 6 six-module power plant that UAMPS plans to deploy. And fifth, We intend to complete our standard plan design, or SBD for short. Now let me cover the new news of the business now that we're midway through the second quarter. I'll comment on developments in customers, partnerships, technology, and regulation. First, let's look at customers. We have a very successful building out, we're very successful in building out a pipeline beyond our anchor customer UAMs in the U.S., and now have four active relationships around the world. This reflects our effort to transition customers from MOUs to substantive contracts. In Romania, we are encouraged to develop efforts with Nucleo-Electric SA, known as SNN. We signed a multi-party MOU with them and the owner of their preferred site for a NuScale Voyager 6 plant in Docești, Romania. Our team traveled to the country in the first quarter to meet with the SNN and Romanian regulator, CNCAN, and a couple weeks ago, we returned to Romania to sign this MOU. We held a press conference with representatives from the Romanian government, the U.S. Departments of State, Energy, and Commerce, and discussed next steps for this project. We are developing a licensing basis document that will outline the codes and standards to which a NuScale plant will be licensed and constructed in Romania. In Poland, we signed a landmark early works agreement with KGHM, a leading copper and silver mining conglomerate and large industrial energy user. They will work to deploy a new-scale Voyager power plant in Poland as early as 2029. We are engaging with KGHM on several options for pre-licensing activities and other project planning assessment activities. During the first quarter, we provided familiarization training to the KGHM team. They will develop the initial preliminary safety analysis report chapters for licensing in Poland. Back in the U.S., we signed a memorandum of understanding with Dairyland Power Cooperative in Wisconsin to jointly evaluate the potential deployment of a new-scale SMR-based power plant. Dairyland is a power generation and transmission cooperative providing wholesale electricity for 24 distribution cooperatives and 17 municipal utilities. They supply power to more than half a million people in four states in the Upper Midwest. Meanwhile, our anchor customer UAMS also made substantial progress, successfully and safely completing its field investigation activities at the site. This is a major milestone for this project. This phase of field work involved detailed geotechnical surface and subsurface investigation to characterize the geological properties underlying the site. It also established a groundwater monitoring network to support protection of the eastern Snake River Plain Aquifer and commissioned an on-site meteorological monitoring station to collect site-specific atmospheric data. In parallel, the project has also progressed to the development of a combined license application, or COLA, We are currently analyzing data collected from comprehensive site investigations in a two-year monitoring process, which will be presented in the COLA to address key safety and environmental considerations. The COLA will also provide additional project-specific facility design information, which will support the Nuclear Regulatory Commission's safety and environmental reviews, as well as public consultations. Let's discuss partnerships, which are critical to our commercialization strategy. Just after the close of the first quarter, we announced deals with Nucor, America's largest steel producer, and the Japan Bank for International Cooperation, or J-BEC. Both companies made investments in NuScale, Nucor directly, and J-BEC through the purchase of equity from Floor. The Nucor investment is especially interesting. Nucor was a late pipe investor in NuScale. In addition to fresh capital, we believe this relationship can expand the industrial market for us. Leanne Tapalinian, the president and CEO of Nucor, understands the importance of sustainability and safe power generation. He noted that they invested in NuScale because SMRs can ensure our nation has carbon-free baseload power. We see growing interest from industrial customers seeking to use our SMRs for carbon-free process heat in addition to generating electricity. The JPEG investment is important because it builds on our presence in Japan. We already have strategic investments from JGC Holdings Corporation and IHI Corporation. And despite the after effects of Fukushima, Japan is a promising market for nuclear power due to their need for energy security and high dependence on imported fuels. But it's also rooted in understanding the safety of our SMR technology. In fact, Fukushima elevated safety to the forefront for regulators and the Japanese people. Safety is an attribute in which our SMR technology is unrivaled. J-BEC noted that the government of Japan is promoting R&D and SMR technology. In addition, U.S.-Japan Climate Partnership and a new Competitiveness and Resilience Partnership recognize advanced needs of power as one of the fields of cooperation between our two countries. I just recently returned from a trip to Japan in Korea. And while in Japan, our strategic investors made clear their interest in supporting deployment of new scale plants. Similar to Japan, Korea is renewing its commitment to nuclear energy. One of our early strategic investors, Doosan, returned to make an additional investment in 2021. Doosan knows our sector. They are one of the world's leaders in nuclear equipment manufacturing. They are one of the key partners in our ecosystem. We welcome this further strengthening of our relationship as we work towards commercial deployment of Voyager SMR power plants. While in Korea, we signed another memorandum of understanding with Doosan Inertability that paves the way for full-scale equipment manufacturing of new-scale SMRs by the later half of 2023. We also signed an MOU with our strategic investors Doosan GS Energy, and Samsung C&T. The Samsung relationship in particular demonstrates the growing importance of the Korean market. We also met with the CEO of Korea Ex-Im Bank, Bang Ki, to discuss financial support for new-scale plants on a global basis, including potentially for our SMR demonstration project in Idaho. This high-level activity is just a start, in our opinion. We expect to see more activity in North Asia in the quarters ahead. Turning now to our SMR technology, we remain in the advanced stages of our commercialization process to continue to make significant progress here today. This process finalizes the standard plant design information needed for construction and manufacture of new scale supplied equipment. In general, we are far along in technology and production process development. We are ordering long lead equipment now. which we believe is a significant competitive advantage. The list of technology development highlights year-to-date is long. In particular, Doosan completed its dimensional inspection non-destructive examination and anti-current testing for the steam generator helical coil tube. Also, the steam generator flow-induced vibration test vessel was delivered to the testing laboratory. We initiated FXM-19 forging trials with both domestic, international, forging sources. The decay heat removal characterization testing campaign was completed at our own NuScale hydraulic test facility known as NIST, which is located in Corvallis, Oregon. We are on track to complete all NIST testing by year end. Paragon Energy Solutions completed the first hardware build of the safety display and indication system prototype for our NuScale control room. The 60% design review for the reactor building crane was completed in January, and physical testing was completed this March. This testing demonstrates the crane's ability to perform post-control needed for precise module placement during refueling operations for the new scale power modules. And finally, standard plant design progressed. Over 50 SPD deliverables reviewed and accepted. Now let's wrap up with the latest regulatory developments. In addition to the UAM's co-work I mentioned earlier, we're busy with licensing activities with the U.S. Nuclear Regulatory Commission. I'm pleased to share that the NRC has approved the building design and analysis licensing topic report in line with our expected timeframe. Meanwhile, three other topic reports were accepted for NRC review, including a rod ejection accident methodology licensing topic report revision, Inferamitone fuel applicability topical report supplement, as well as the critical heat flux topical report supplement. With all that being said, I'd like to now turn it over to Chris Colbert, our CFO, to cover financial results.