2026 Constellation Energy Corp Business Update & Earnings Call

March 31, 2026

Operator: Good morning, ladies and gentlemen, and welcome to the Constellation Energy Corporation Business and Earnings Outlook 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 Florimich, Vice President, Investor Relations. You may begin.

Operator: Good morning, ladies and gentlemen, and welcome to the Constellation Energy Corporation Business and Earnings Outlook 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 Flottemesch, Vice President, Investor Relations. You may begin.

Speaker #1: 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 Flodemich, Vice President, Investor Relations.

Speaker #1: You may begin.

Speaker #2: Thank you, Carmen. Good morning, everyone, and thank you for joining Constellation Energy Corporation's business and earnings outlook. Leading the call today are Joe Dominguez, Constellation's President and Chief Executive Officer, and Shane Smith, Constellation's Chief Financial Officer.

Tim Florimich: Thank you, Carmen. Good morning, everyone, and thank you for joining Constellation Energy Corporation's Business and Earnings Outlook. Leading the call today are Joseph Dominguez, Constellation's President and Chief Executive Officer, and Dan Eggers, 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 a presentation in 8-K this morning, all of which can be found in the Investor Relations section of Constellation's website. The release and other matters which we discussed during today's call contained forward-looking statements and estimates regarding Constellation, 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 material and comments made during the call.

Tim Flottemesch: Thank you, Carmen. Good morning, everyone, and thank you for joining Constellation Energy Corporation's Business and Earnings Outlook. Leading the call today are Joseph Dominguez, Constellation's President and Chief Executive Officer, and Dan Eggers, 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 a presentation in 8-K this morning, all of which can be found in the Investor Relations section of Constellation's website. The release and other matters that we discussed during today's call contained forward-looking statements and estimates regarding Constellation, its subsidiaries, which 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 material and comments made during the call.

Speaker #2: 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 a presentation in 8-K this morning, all of which can be found in the Investor Relations section of Constellation's website.

Speaker #2: The release and other matters which we discussed during today's call contain forward-looking statements and estimates regarding Constellation and its subsidiaries that are subject to various risks and uncertainties.

Speaker #2: Actual results could differ from our forward-looking statements based on factors and assumptions discussed in today's material and comments made during the call. Please refer to today's 8-K 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.

Tim Florimich: Please refer to today's 8-K 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 information contained in the appendix of our presentation for reconciliations between non-GAAP measures and the nearest equivalent GAAP measures. I'll now turn the call over to Joe.

Tim Flottemesch: Please refer to today's 8-K 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 for reconciliations between non-GAAP measures and the nearest equivalent GAAP measures. I'll now turn the call over to Joe.

Speaker #2: Today's presentation also includes references to adjusted operating earnings and other non-GAAP measures. Please refer to information contained in the appendix of our presentation for reconciliations between non-GAAP measures and the nearest equivalent GAAP measures.

Speaker #2: I'll now turn the call over to Joe.

Speaker #3: Thanks, Tim. Thanks, Carmen, for getting us started. Good morning, everyone. Thank you for joining us, and thank you for your continued interest in Constellation.

Joseph Dominguez: Thanks, Tim. Thanks, Carmen, for getting us started. Good morning, everyone. Thank you for joining us, and thank you for your continued interest in Constellation. We're thrilled to be speaking with you for the first time since closing the Calpine transaction. As you can imagine, both companies are filled with people who just want to get on with it, and so we talked for a while and getting on with it is fun for us. We're excited to be where we are. As always, I want to start by thanking the 16,000 women and men across the combined companies for all the hard work that brought us to this moment. We couldn't be here without them. Let's begin on slide 6. Today, Shane and I intend to do more than provide 2026 guidance.

Joseph Dominguez: Thanks, Tim. Thanks, Carmen, for getting us started. Good morning, everyone. Thank you for joining us, and thank you for your continued interest in Constellation. We're thrilled to be speaking with you for the first time since closing the Calpine transaction. As you can imagine, both companies are filled with people who just want to get on with it, and so we talked for a while, and getting on with it is fun for us. We're excited to be where we are. As always, I want to start by thanking the 16,000 women and men across the combined companies for all the hard work that brought us to this moment. We couldn't be here without them. Let's begin on slide 6. Today, Dan and I intend to do more than provide 2026 guidance.

Speaker #3: We're thrilled to be speaking with you for the first time since closing the Calpine transaction. As you can imagine, both companies are filled with people who just want to get on with it, and so we talked for a while, and getting on with it is fun for us.

Speaker #3: We're excited to be where we are. As always, I want to start by thanking the 16,000 women and men across the combined companies for all the hard work that brought us to this moment.

Speaker #3: We couldn't be here without them. Let's begin on slide six. Today, Shane and I intend to do more than provide 2026 guidance. We're going to provide a longer-term and more comprehensive update on the business, describe what makes Constellation special, and explain why we think Constellation has unmatched opportunities to grow beginning with a 20% kegger on base earnings growth through 2029.

Joseph Dominguez: We're gonna provide a longer term and more comprehensive update on the business, describe what makes Constellation special, and explain why we think Constellation has unmatched opportunities to grow, beginning with a 20% CAGR on base earnings growth through 2029. As you will see, this longer-term visibility into how we see our earnings through 2029 admittedly uses some conservative assumptions. What we're trying to do here is establish a baseline and then quantify and describe for you some of Constellation's many actionable opportunities to improve earnings materially beyond this baseline and ultimately to repeat double-digit annual base earnings growth into the next decade. In his part of today's talk, Shane will walk you through some of the EPS sensitivities that we think you will find very interesting.

Joseph Dominguez: We're gonna provide a longer-term and more comprehensive update on the business, describe what makes Constellation special, and explain why we think Constellation has unmatched opportunities to grow, beginning with a 20% CAGR on base earnings growth through 2029. As you will see, this longer-term visibility into how we see our earnings through 2029 admittedly uses some conservative assumptions. What we're trying to do here is establish a baseline and then quantify and describe for you some of Constellation's many actionable opportunities to improve earnings materially beyond this baseline and ultimately to repeat double-digit annual base earnings growth into the next decade. In his part of today's talk, Dan will walk you through some of the EPS sensitivities that we think you will find very interesting.

Speaker #3: As you will see, this longer-term visibility into how we see our earnings through 2029, admittedly uses some conservative assumptions, but what we're trying to do here is establish a baseline and then quantify and describe for you some of Constellation's many actionable opportunities to improve earnings materially beyond this baseline and ultimately to repeat double-digit annual base earnings growth into the next decade.

Speaker #3: In his part of today's talk, Shane will walk you through some of the EPS sensitivities that we think you will find very interesting. Before we move into the business update, though, I want to say that we're not going to be announcing a new data economy deal today.

Joseph Dominguez: Before we move into the business update, though, I wanna say that we're not going to be announcing a new data economy deal today, nor can I comment much on Amazon's community night last week in Maryland, where they described a large data center project next to our Calvert Cliffs clean energy center. I recognize that the last time we spoke, I indicated that we expected to be done with an important transaction by this call, but we're not ready to announce anything today. There are two reasons for this. First, there is clearly more scrutiny on data center development, and so we think it's really important that data center announcements occur when all stakeholders, including supportive policymakers and community leaders, are present and prepared to discuss the elements of these important transactions so that all of the community benefits are clearly understood.

Speaker #3: Nor can I comment much on Amazon's community night last week in Maryland, where they described a large data center project next to our Calvert Cliffs Clean Energy Center.

Speaker #3: I recognize that the last time we spoke, I indicated that we expected to be done with an important transaction by this call, but we're not ready to announce anything today.

Speaker #3: There are two reasons for this. First, there is clearly more scrutiny on data center development, and so we think it's really important that data center announcements occur when all stakeholders, including supportive policymakers and community leaders, are present and prepared to discuss the elements of these important transactions, so that all of the community benefits are clearly understood.

Speaker #3: Obviously, earnings calls give us a limited opportunity to do that. Second, since our last call, and as you're aware, hyperscalers have announced a new pledge in response to President Trump's executive order, which required us to rethink and renegotiate some of the terms of the PPAs we were working on to anticipate any outcomes of the PGAM rulemaking process.

Joseph Dominguez: Obviously, earnings calls give us a limited opportunity to do that. Second, since our last call, and as you're aware, hyperscalers have announced a new pledge in response to President Trump's executive order, which required us to rethink and renegotiate some of the terms of the PPAs we were working on to anticipate any outcomes of the PJM rulemaking process. With regard to President Trump's executive order and the resultant PJM regulatory proceedings, our sense is that data center development will benefit from regulatory clarity, and we now have strong momentum to get just that. All of you know regulatory clarity helps deals get done. Importantly for you, our owners, we're not waiting on regulatory clarity or certainty. Regardless of how the PJM proceedings resolve, Constellation can structure deals now to power America's growth in AI with our firm and clean nuclear power.

Speaker #3: With regard to President Trump's executive order and the resultant PGAM regulatory proceedings, our sense is that data center development will benefit from regulatory clarity, and we now have strong momentum to get just that.

Speaker #3: All of you know regulatory clarity helps deals get done. Importantly for you, our owners were not waiting on regulatory clarity or certainty. Regardless of how the PGAM proceedings resolve, Constellation can structure deals now to power America's growth in AI with our firm and clean nuclear power.

Speaker #3: But not every deal is going to look the same because our customers are expressing different approaches to how they intend to manage future regulatory requirements.

Joseph Dominguez: Not every deal is gonna look the same because our customers are expressing different approaches to how they intend to manage future regulatory requirements. Some of our customers will meet future regulatory requirements by pairing our nuclear power with Constellation's ability to bring incremental capacity through batteries, demand response, uprates, and gas-fired generation. I'll talk a little bit more about that capacity in a moment. This combination gives customers the clean, firm power and price certainty they want and also allows them to meet any new regulatory requirement for peak energy capacity. Other customers are willing to pay for backstop capacity from PJM and buy power and attributes from us. This is the way we typically contract with our C&I customers, where they buy capacity from the PJM market and buy energy and attributes directly from us.

Speaker #3: Some of our customers will meet future regulatory requirements by pairing our nuclear power with Constellation's ability to bring incremental capacity through batteries, demand response, uprates, and gas-fired generation. I'll talk a little bit more about that capacity in a moment.

Speaker #3: This combination gives customers the clean, firm power and price certainty they want, and also allows them to meet any new regulatory requirement for peak energy capacity.

Speaker #3: Other customers are willing to pay backstop for backstop capacity from PJM and buy power and attributes from us. This is the way we typically contract with our CNI customers, where they buy capacity from the PJM market and buy energy and attributes directly from us.

Speaker #3: Finally, some customers are willing to flexibly respond or curtail during peak hours by using onsite backup generation or by reducing demand. And what excites us is that the very AI technology that we're powering is now being used to better dispatch the power system and manage data center load at peaks.

Joseph Dominguez: Finally, some customers are willing to flexibly respond or curtail during peak hours by using on-site backup generation or by reducing demand. What excites us is that the very AI technology that we're powering is now being used to better dispatch the power system and manage data center load at peaks. You might have seen an announcement we made with NVIDIA, Emerald AI, and other companies last week, where we are pioneering new technology that will allow the data centers to move data projects from one data center to another at a peak. For example, if you have a data center operating in Philadelphia and you're approaching a peak demand hour, you would transfer that work through, at the speed of light, through fiber optics to other data centers around the country that aren't in a region that's experiencing a peak energy demand.

Joseph Dominguez: Finally, some customers are willing to flexibly respond or curtail during peak hours by using on-site backup generation or by reducing demand. What excites us is that the very AI technology that we're powering is now being used to better dispatch the power system and manage data center load at peaks. You might have seen an announcement we made with NVIDIA, Emerald AI, and other companies last week, where we are pioneering new technology that will allow the data centers to move data projects from one data center to another at peak. For example, if you have a data center operating in Philadelphia and you're approaching a peak demand hour, you would transfer that work through, at the speed of light, through fiber optics to other data centers around the country that aren't in a region that's experiencing a peak energy demand.

Speaker #3: You might have seen an announcement we made with NVIDIA Emerald AI and other companies last week where we are pioneering new technology that will allow the data centers to move data projects from one data center to another at a peak.

Speaker #3: So, for example, if you have a data center operating in Philadelphia and you're approaching a peak demand hour, you would transfer that work at the speed of light through fiber optics to other data centers around the country that aren't in a region that's experiencing a peak energy demand.

Speaker #3: So, we think these companies are evolving in the way they're able to manage their demand at peak through a lot of different resources. And it's important to get this right, because there have been a number of recently released studies—the Brattle Group put out one just this last month—that say the best way we can make bills more affordable for all customers is by ensuring that the grid is better utilized during the 99% of the hours of the year when there's surplus wires and generation capacity.

Joseph Dominguez: We think these companies are evolving in the way they were able to manage their demand at peak through a lot of different resources. It's important to get this right because there have been a number of recently released studies. The Brattle Group put out one just this last month that says that the best way we can make bills more affordable for all customers is by ensuring that the grid is better utilized during the 99% of the hours of the year when there's surplus wires and generation capacity, while at the same time providing flexibility during these less than 1% of the hours when system demand is at its highest.

Speaker #3: While at the same time providing flexibility during these less than 1% of the hours when system demand is at its highest. According to Brattle, getting this right could unlock tens of billions of dollars in annual consumer savings, and we believe it will result in a paradigm shift in how policymakers and customers view data center development.

Joseph Dominguez: According to Brattle, getting this right could unlock tens of billions of dollars in annual consumer savings, we believe will result in a paradigm shift in how policymakers and customers view data center development. Changing the perception of data centers from cost causers to potentially cost reducers. Although sometimes it seems longer, we have to keep in mind that we remain in the early stages of the AI data center boom. People naturally question the durability of the demand and strategies like ours. From DeepSeek to FERC's rejection of the Talen interconnection agreement, and now the executive order, we've had bumps in the road, where enthusiasm and value momentum either stalls or retrenches. We see this as the natural course of things. It's important that in each instance, we and our partners found solutions and momentum resumed.

Speaker #3: Changing the perception of data centers from cost causers to potentially cost reducers. Although sometimes it seems longer, we have to keep in mind that we remain in the early stages of the AI data center boom.

Speaker #3: People naturally question the durability of the demand and strategies like ours. From Deep Seek to FERC's rejection of the Talent interconnection agreement and now the executive order, we've had bumps in the road.

Speaker #3: We're enthusiastic and value momentum, even when it stalls or retrenches. We see this as the natural course of things. But it's important that in each instance, we and our partners found solutions and momentum resumed.

Joseph Dominguez: Two things are occurring simultaneously that give us great confidence. First, the growth we're seeing is like nothing we've seen before. Second, the cost of replacement megawatts for any kind of firm power generation is now multiples of what it was less than a decade ago. You're gonna see this in one of our later slides. I talked in a previous earnings call about combined cycle machines having replacement costs at around $2,500 a kW. I now see that more like $3,000 based on what I'm hearing at CERAWeek and other conferences. We think both the demand being real and the cost of replacement generation means that an incumbent coast-to-coast fleet of the best and most unique assets like ours are gonna do exceptionally well. That's what we have here.

Joseph Dominguez: Two things are occurring simultaneously that give us great confidence. First, the growth we're seeing is like nothing we've seen before. Second, the cost of replacement megawatts for any kind of firm power generation is now multiples of what it was less than a decade ago. You're gonna see this in one of our later slides. I talked in a previous earnings call about combined cycle machines having replacement costs at around $2,500 a kW. I now see that more like $3,000 based on what I'm hearing at CERAWeek and other conferences. We think both the demand being real and the cost of replacement generation means that an incumbent coast-to-coast fleet of the best and most unique assets like ours is gonna do exceptionally well. That's what we have here.

Speaker #3: Two things are occurring simultaneously that give us great confidence. First, the growth we're seeing is like nothing we've seen before. And second, the cost of replacement megawatts for any kind of firm power generation is now multiples of what it was less than a decade ago.

Speaker #3: You're going to see this in one of our later slides. I talked in a previous earnings call about combined cycle machines having replacement costs at around $2,500.

Speaker #3: A KWI. And now see that more like $3,000, based on what I'm hearing at Sierra and other conferences. And we think both the demand being real and the cost of replacement generation means that an incumbent coast-to-coast fleet of the best and most unique assets like ours are going to do exceptionally well.

Speaker #3: And that's what we have here. Constellation's industry-leading balance sheet also gives us a competitive advantage in serving customers and protecting against increases in the cost of debt.

Joseph Dominguez: Constellation's industry-leading balance sheet also gives us a competitive advantage in serving customers and protecting against increases in the cost of debt. We have the ability to opportunistically grow through M&A and fund growth capital projects like our uprates that easily exceed 10% unlevered IRRs. Finally, our balance sheet and strong cash flows give us the ability to return value to you in the form of more buybacks. Today, I'm pleased to share that Constellation's board has approved an increase in our buyback authority to $5 billion, underscoring our confidence in the strategy. The path ahead is exciting, the demand is real, and our competitive position is excellent. We're excited about the future we're building and confident in our ability to deliver. Turning to slide seven.

Speaker #3: We have the ability to opportunistically grow through M&A and fund growth capital projects like our uprates that easily exceed 10% unlevered IRRs. Finally, our balance sheet and strong cash flows give us the ability to return value to you in the form of more buybacks.

Speaker #3: Today I'm pleased to share that Constellation's board has approved an increase in our buyback authority to $5 billion, underscoring our confidence in the strategy.

Speaker #3: The path ahead is exciting. The demand is real, and our competitive position is excellent. We're excited about the future we're building and confident in our ability to deliver.

Speaker #3: Turning to slide seven, while market attention understandably focuses on the large hyperscaler deals, the value of nuclear energy is not limited to any single customer segment.

Joseph Dominguez: While market attention understandably focuses on the large hyperscaler deals, the value of nuclear energy is not limited to any single customer segment. That value is broadly accessible, and recent developments in New York reinforce that point. Since we last spoke, Governor Hochul in the State of New York extended the Zero-Emission Credit program, recognizing both the value of nuclear energy and the essential role that our upstate facilities play in meeting New York's climate and reliability goals. This extension preserves more than 3,000MW of clean, reliable energy that will power New Yorkers through at least 2050. This is a meaningful development, and the average pricing, which is shared in our appendix, is an important validation of the long-term value of our nuclear fleet to ordinary families and businesses, as well as to data economy customers.

Speaker #3: That value is broadly accessible, and recent developments in New York reinforce that point. Since we last spoke, Governor Hochul and the state of New York extended the zero-emission credit program.

Speaker #3: Recognizing both the value of nuclear energy and the essential role that our upstate facilities play in meeting New York's climate and reliability goals, this extension preserves more than 3,000 megawatts of clean, reliable energy that will power New Yorkers throughout at least 2050.

Speaker #3: This is a meaningful development and the average pricing, which is shared in our appendix, is an important validation of the long-term value of our nuclear fleet to ordinary families and businesses as well as to data economy customers.

Speaker #3: As I mentioned at the outset today, we want to give you a baseline for Constellation's performance through 2029 as if we did nothing more.

Joseph Dominguez: As I mentioned at the outset, today, we wanna give you a baseline for Constellation's performance through 2029 as if we did nothing more in the way of hyperscaler deals, in the way of contracting, investing growth, buybacks, or refining our Calpine synergies. Of course, we expect to do more on all of these fronts. We know that signing long-term deals is a focus for our investors, and it's our focus too, and we will execute. We think our historic performance in executing these contracts is the best indicator of future results. We show here on this slide that Constellation and Calpine have executed deals for over 10,000MW of our fleet, serving a wide range of customers, all at compelling prices that provide the reliability and price visibility our customers are looking for, as well as the revenue certainty that we desire.

Speaker #3: In the way of hyperscaler deals, in the way of contracting, investing growth, buybacks, or refining our Calpine synergies. But of course, we expect to do more on all of these fronts.

Speaker #3: We know that signing long-term deals is a focus for our investors, and it's our focus too, and we will execute. We think our historic performance in executing these contracts is the best indicator of future results.

Speaker #3: So we show here on this slide that Constellation and CalPine have executed deals for over 10,000 megawatts of our fleet, serving a wide range of customers.

Speaker #3: All at compelling prices that provide the reliability and price visibility our customers are looking for as well as the revenue certainty that we desire.

Speaker #3: These deals are not concentrated in one region or one type of customer. They span multiple generation technologies, deal configurations, customer types, and markets. But it shows here that we have a proven ability in our teams to structure long-term agreements, particularly when it comes to clean megawatts.

Joseph Dominguez: These deals are not concentrated in one region or one type of customer. They span multiple generation technologies, deal configurations, customer types, and markets. It shows here that we have a proven ability in our teams to structure long-term agreements, particularly when it comes to clean megawatts. We have now signed long-term agreements with multiple hyperscalers, commercial customers, the US government, the State of New York, and municipal and utility customers across America. This is a level of customer diversity that reinforces the strength and flexibility of our platform. Our natural gas fleet has added even more optionality, and you saw that in some announcements from Calpine. We have successfully delivered solutions at both ends of the spectrum to meet speed to power and grid connection for data economy customers to long-term capacity and reliability agreements for our end use customers.

Speaker #3: We have now signed long-term agreements with multiple hyperscalers, commercial customers, the U.S. government, the state of New York, and municipal and utility customers across America.

Speaker #3: This is a level of customer diversity that reinforces the strength and flexibility of our platform. Our natural gas fleet has added even more optionality.

Speaker #3: And you saw that in some announcements from Calpine. We have successfully delivered solutions at both ends of the spectrum to meet speed-to-power and grid connection for data economy customers to long-term capacity and reliability agreements for our end-use customers.

Speaker #3: And while no deal is the same, all deals share two defining characteristics. First, trust. Customers trust that we're going to be able to deliver for decades.

Joseph Dominguez: While no deal is the same, all deals share two defining characteristics. First, trust. Customers trust that we're gonna be able to deliver for decades. Second, fair and premium value. Each agreement reflects a tailored solution that meets a specific customer need and solutions that solve real problems in return for good pricing. Moving to slide 8. Over the past year, we have reached agreements for an additional 36 million MWh of our clean energy that will flow in 2030. As you see in this update, we've increased the total amount of energy we will have under long-term contract in 2030 from 12 million MWh to 48 million MWh, or roughly 25% of our available clean firm output. Even after that, we still have about 47 million MWh available for contracting, an opportunity no one else can match.

Speaker #3: Second, fair and premium value. Each agreement reflects a tailored solution that meets a specific customer need and solutions that solve real problems and return for good pricing.

Speaker #3: Moving to slide eight, over the past year, we have reached agreements for an additional 36 million megawatt-hours of our clean energy that will flow in 2030.

Speaker #3: As you see in this update, we've increased the total amount of energy we will have under long-term contract in 2030 from 12 million megawatt-hours to 48 million megawatt-hours, or roughly 25% of our available clean firm output.

Speaker #3: But even after that, we still have about 147 million megawatt-hours available for contracting and opportunity no one else could match. Indeed, if you combined all of the available nuclear power owned by all of the other competitive market participants in the U.S., the total amount would be about half of what Constellation still has available for clients.

Joseph Dominguez: Indeed, if you combined all of the available nuclear power owned by all of the other competitive market participants in the US, the total amount would be about half of what Constellation still has available for clients. As we move forward and integrate Constellation and Calpine commercial teams this year, we're bringing together under one roof two of the preeminent teams in the business when it comes to meeting clients' needs with tailored long-term contracts. Clearly, they're gonna have plenty of megawatts to work with. I would ask that you bear a few additional points in mind as you wait for this opportunity to manifest. First, all of our contract and nuclear generation is supported by the production tax credit, which grows with inflation and is guaranteed by the federal government.

Speaker #3: As we move forward and integrate Constellation and CalPine commercial teams this year, we're bringing together under one roof two of the preeminent teams in the business when it comes to meeting clients' needs with tailored long-term contracts.

Speaker #3: And plenty and clearly, they're going to have plenty of megawatts to work with. I would ask that you bear a few additional points in mind as you wait for this opportunity to manifest.

Speaker #3: First, all of our contract and nuclear generation is supported by the production tax credit, which grows with inflation and is guaranteed by the federal government.

Speaker #3: This structure ensures stable, predictable revenue regardless of near-term economic conditions or market volatility, while at the same time allowing us to retain the optionality to fully participate in market upside as supply-demand fundamentals continue to improve.

Joseph Dominguez: This structure ensures stable, predictable revenue regardless of near-term economic conditions or market volatility, while at the same time allowing us to retain the optionality to fully participate in market upside as supply-demand fundamentals continue to improve. Second, as we face potentially higher inflationary environmental drivers, the PTC automatically adjusts for inflation, making Constellation stock a unique and safe investment in a pro-inflationary environment. The baseline of earnings growth that we're showing you today conservatively assumes 2% inflation. If instead of 2% inflation were 3% or 3.5%, as some are predicting in light of the Iran contract, the PTC cap for 2031, for example, would move from $50.88 per MWh to $52.88 at 3% and $56 at 3.5% inflation.

Joseph Dominguez: This structure ensures stable, predictable revenue regardless of near-term economic conditions or market volatility, while at the same time allowing us to retain the optionality to fully participate in market upside as supply-demand fundamentals continue to improve. Second, as we face potentially higher inflationary environmental drivers, the PTC automatically adjusts for inflation, making Constellation stock a unique and safe investment in a pro-inflationary environment. The baseline of earnings growth that we're showing you today conservatively assumes 2% inflation. If, instead of 2% inflation were 3% or 3.5%, as some are predicting in light of the Iran contract, the PTC cap for 2031, for example, would move from $50.88 per MWh to $52.88 at 3% and $56 at 3.5% inflation.

Speaker #3: Second, as we face potentially higher inflationary environmental drivers, the PTC automatically adjusts for inflation, making Constellation's stock a unique and safe investment in a pro-inflationary environment.

Speaker #3: The baseline of earnings growth that we're showing you today conservatively assumes 2% inflation. But if, instead of 2%, inflation were 3% or 3.5%, as some are predicting in light of the Iran contract, the PTC cap for 2031, for example, would move from $50.88 per megawatt hour to $52.88 at 3% and $56 at 3.5% inflation.

Speaker #3: A more than 5.5 megawatt-hour jump in the tax credit available to our full open position. The third factor I'd like you to keep in mind is that the demand is real.

Joseph Dominguez: A more than $5/MWh jump in the tax credit available to our full open position. The third factor I'd like you to keep in mind is that the demand is real, and it's so big that really smart people are literally discussing shooting data centers into space to solve for energy and infrastructure constraints. I can assure you that despite some of the PJM rulemaking complexities, we have far more efficient and achievable solutions than launching data centers into outer space. Fourth, we think the climate imperative is not gonna go away. There is enduring value for being clean and being able to provide firm and clean energy together. Large customers are not wavering on their long-term commitments to clean, and no one can better serve that need than Constellation. Moving to slide 9.

Joseph Dominguez: A more than $5/MWh jump in the tax credit available to our full open position. The third factor I'd like you to keep in mind is that the demand is real, and it's so big that really smart people are literally discussing shooting data centers into space to solve for energy and infrastructure constraints. I can assure you that despite some of the PJM rulemaking complexities, we have far more efficient and achievable solutions than launching data centers into outer space. Fourth, we think the climate imperative is not gonna go away. There is enduring value in being clean and being able to provide firm and clean energy together. Large customers are not wavering on their long-term commitments to clean, and no one can better serve that need than Constellation. Moving to slide 9.

Speaker #3: And it's so big that really smart people are literally discussing shooting data centers into space to solve for energy and infrastructure constraints. I can assure you that, despite some of the PJM rulemaking complexities, we have far more efficient and achievable solutions than launching data centers into outer space.

Speaker #3: Fourth, we think the climate imperative is not going to go away. There is enduring value in being clean and being able to provide firm and clean energy together.

Speaker #3: Large customers are not wavering on their long-term commitments to clean, and no one could better serve that need than Constellation. Moving to slide nine, the quality and diversity of our agreements demonstrate our flexibility, placing megawatts where they create the greatest value.

Joseph Dominguez: The quality and diversity of our agreements demonstrate our flexibility to place megawatts where they create the greatest value, and I fully expect the team to continue reaching agreements with customers in multiple ways. For hyperscalers and data center developers, our offerings include virtual PPAs or co-located data centers at our site. If customers need load-enabling support, whether through new supply, demand response, or transitional power, we have the ability to answer that call. For enterprise-wide C&I customers, we offer long-term contracting options at scale that help them meet their sustainability goals with dependable zero carbon power. We can provide long-term energy capacity and clean energy agreements for states, utilities, government, and co-op customers that desire visibility.

Joseph Dominguez: The quality and diversity of our agreements demonstrate our flexibility to place megawatts where they create the greatest value, and I fully expect the team to continue reaching agreements with customers in multiple ways. For hyperscalers and data center developers, our offerings include virtual PPAs or co-located data centers at our site. If customers need load-enabling support, whether through new supply, demand response, or transitional power, we have the ability to answer that call. For enterprise-wide C&I customers, we offer long-term contracting options at scale that help them meet their sustainability goals with dependable zero-carbon power. We can provide long-term energy capacity and clean energy agreements for states, utilities, government, and co-op customers that desire visibility.

Speaker #3: And I fully expect the team to continue to reaching agreements with customers in multiple ways. For hyperscalers and data center developers, our offerings include virtual PPAs or co-located data centers at our site.

Speaker #3: If customers need load-enabling support, whether through new supply, demand response, or traditional power, we have the ability to answer that call. For enterprise-wide CNI customers, we offer long-term contracting options at scale.

Speaker #3: That helps them meet their sustainability goals with dependable zero-carbon power. We can provide long-term energy capacity and clean energy agreements for states, utilities, government, and co-op customers that desire visibility.

Speaker #3: Taken together, this is the broadest and most capable suite of energy solutions available in the competitive market today and it gives us multiple pathways to place our clean megawatts at a premium.

Joseph Dominguez: Taken together, this is the broadest and most capable suite of energy solutions available in the competitive market today, and it gives us multiple pathways to place our clean megawatts at a premium. Turning to slide ten. I want to pivot here to PJM. As I mentioned at the top of the call, there's a need for regulatory certainty, and we're finally seeing greater alignment among stakeholders on core priorities that need to be addressed. We see an engaged FERC that's rightly pushing for clarity on the rules, and we see a visible timeline for resolution this year. We all agree on some key points. Demand forecasts have to be accurate. We need to ensure that large load customers cover their infrastructure costs. We need to provide avenues for competitive solutions, understanding that utilities alone can't do this. We know that customers need to be flexible at peak.

Joseph Dominguez: Taken together, this is the broadest and most capable suite of energy solutions available in the competitive market today, and it gives us multiple pathways to place our clean megawatts at a premium. Turning to slide 10. I want to pivot here to PJM. As I mentioned at the top of the call, there's a need for regulatory certainty, and we're finally seeing greater alignment among stakeholders on core priorities that need to be addressed. We see an engaged FERC that's rightly pushing for clarity on the rules, and we see a visible timeline for resolution this year. We all agree on some key points. Demand forecasts have to be accurate. We need to ensure that large load customers cover their infrastructure costs. We need to provide avenues for competitive solutions, understanding that utilities alone can't do this. We know that customers need to be flexible at peak.

Speaker #3: Turning to slide 10, I want to pivot here to PJN. As I mentioned at the top of the call, there's a need for regulatory certainty.

Speaker #3: And we're finally seeing greater alignment among stakeholders on core priorities that need to be addressed. We see an engaged fork that's rightly pushing for clarity on the rules and we see a visible timeline for resolution this year.

Speaker #3: We all agree on some key points. Demand forecasts have to be accurate. We need to ensure that large load customers cover their infrastructure costs.

Speaker #3: We need to provide avenues for competitive solutions, understanding that utilities alone can't do this. And we know that customers need to be flexible at peak.

Speaker #3: We're on a path between PJM and FERC to have these core issues resolved. We are also seeing efforts underway at EPA to alleviate constraints on the use of backup generation so that data centers could better manage peaks and agree to curtail at peaks.

Joseph Dominguez: We're on a path between PJM and FERC to have these core issues resolved. We are also seeing efforts underway at EPA to alleviate constraints on the use of backup generation so that data centers can better manage peaks and agree to curtail at peaks. Make no mistake, as we await regulatory clarity, customers are moving forward and we have solutions available that anticipate any reasonable outcome, from providing backstop generation to simply incorporating a PJM backstop capacity cost in our agreements. Moving to slide 11. At the top of the call, I spoke about the importance of managing peak energy demand while taking advantage of the surplus we have in wires and generation capacity that exists in the system about 99% of the time.

Speaker #3: But make no mistake: as we await regulatory clarity, customers are moving forward, and we have solutions available that anticipate any reasonable outcome—from providing backstop generation to simply incorporating a PJM backstop capacity cost in our agreements.

Speaker #3: Moving to slide 11, at the top of the call, I spoke about the importance of managing peak energy demand while taking advantage of the surplus we have in wires and generation capacity that exists in the system about 99% of the time.

Speaker #3: This chart shows PJM's load duration curve and illustrates the point that the system has massive unused capacity for most hours of the year. Last year, half of all hours saw more than 40% of available generation sitting idle.

Joseph Dominguez: This chart shows PJM's load duration curve and illustrates the point that the system has massive unused capacity for most hours of the year. Last year, half of all hours saw more than 40% of available generation sitting idle, and 80% of the time, 30% of our resources were unused. The same is true for the wire system, where transmission capacity is designed, as you know, for a handful of peak hours, and therefore by definition is vastly underutilized when the system is not at peak. The Brattle report that I mentioned shows how small improvements in system utilization could drive meaningful benefits for existing customers, extrapolating that a mere 10% improvement in system utilization could yield up to $17 billion of annual utility bill savings. These are huge numbers for American families and businesses.

Joseph Dominguez: This chart shows PJM's load duration curve and illustrates the point that the system has massive unused capacity for most hours of the year. Last year, half of all hours saw more than 40% of available generation sitting idle, and 80% of the time, 30% of our resources were unused. The same is true for the wire system, where transmission capacity is designed, as for a handful of peak hours, and therefore by definition is vastly underutilized when the system is not at peak. The Brattle report that I mentioned shows how small improvements in system utilization could drive meaningful benefits for existing customers, extrapolating that a mere 10% improvement in system utilization could yield up to $17 billion of annual utility bill savings. These are huge numbers for American families and businesses.

Speaker #3: And 80% of the time, 30% of our resources were unused. The same is true for the wire system, where transmission capacity is designed, as you know, for a handful of peak hours and therefore by definition is vastly underutilized when the system is not at peak.

Speaker #3: The Brattle report that I mentioned shows how small improvements in system utilization could drive meaningful benefits for existing customers, extrapolating that a mere 10% improvement in system utilization could yield up to $17 billion of annual utility bill savings.

Speaker #3: These are huge numbers for American families and businesses. The shadow box explains Brattle's point in her own words, but basically what they're modeling here is spreading, like peanut butter, some of the fixed costs of the system—whether they be wires or generation—among many more kilowatt hours.

Joseph Dominguez: The shadow box explains Brattle's point in their own words, but basically what they're modeling here is spreading like peanut butter some of the fixed costs of the system, whether they be wires or generation, among many more kilowatt hours. The reason we want to make you aware of these studies is because obviously there's this growing narrative that data centers are bad for customers. It's based on the peak energy power issues we've been talking about. That negative reaction is causing policymakers and investors to worry about grid-connected data centers. We think that's an overreaction. We think a more nuanced view is that if we do this right, the opposite is true, that data centers could actually bring costs down. I'm pleased to see this message starting to go through the policymaker communities. Turning to slide 12.

Joseph Dominguez: The shadow box explains Brattle's point in their own words, but basically what they're modeling here is spreading like peanut butter some of the fixed costs of the system, whether they be wires or generation, among many more kilowatt hours. The reason we want to make you aware of these studies is that obviously there's this growing narrative that data centers are bad for customers. It's based on the peak energy power issues we've been talking about. That negative reaction is causing policymakers and investors to worry about grid-connected data centers. We think that's an overreaction. We think a more nuanced view is that if we do this right, the opposite is true, that data centers could actually bring costs down. I'm pleased to see this message starting to go through the policymaker communities. Turning to slide 12.

Speaker #3: And the reason we want to make you aware of these studies is because, obviously, there's this growing narrative that data centers are bad for customers.

Speaker #3: It's based on the peak energy power issues we've been talking about. And that negative reaction is causing policymakers and investors to worry about grid-connected data centers.

Speaker #3: But we think that's an overreaction. We think a more nuanced view is that if we do this right, the opposite is true—that data centers could actually bring costs down. And I'm pleased to see this message starting to go through the policymaker communities.

Speaker #3: Turning to slide 12, it's all about bringing solutions at peak, and Constellation is willing to bring new megawatts to the grid, and Constellation has and will continue to do its part.

Joseph Dominguez: It's all about bringing solutions at peak, and Constellation is willing to bring new megawatts to the grid, and Constellation has and will continue to do its part. Last year alone, we placed 7,750MW of battery storage, renewable resources, and expanded geothermal capacity into service. Calpine brings us that ability to use batteries and other devices we weren't fully using at Constellation. Looking at just the balance of the decade, we have the flexibility to add new megawatts through multiple channels. I'm not going to dwell on this, but you could see here the license extensions. You see Crane. I'm going to talk about Crane a little bit more here in a moment. We have 400MW of new gas generation coming online this year, plus another 1,400MW of idled turbines. We have 1,100MW of uprates.

Speaker #3: Last year alone, we placed 7,750 megawatts of battery storage, renewable resources, and expanded geothermal capacity into service. CalPRIME brings us that ability to use batteries and other devices we weren't fully using at Constellation.

Speaker #3: Looking at just the balance of the decade, we have the flexibility to add new megawatts through multiple channels. I'm not going to drain this, but you could see here.

Speaker #3: The license extensions—you see CRANE. I'm going to talk about CRANE a little bit more here in a moment. We have 400 megawatts of new gas generation coming online this year, plus another 1,400 megawatts of idle turbines.

Speaker #3: We have 1,100 megawatts of uprates, we have 9,600 megawatts of additional batteries we could deploy, and we're trying to get to 1,000 megawatts of demand response that is actionable for data center customers to reduce peak demand concerns.

Joseph Dominguez: We have 9,600MW of additional batteries we could deploy, and we're trying to get to 1,000MW of demand response that is actionable for data center customers to reduce peak demand concerns. On Crane, we talked this week about PJM studies that indicate interconnection could be delayed into the 2030s. I want to assure you we are working on that with PJM, and we continue to expect to start this unit in 2027. Today, we will be filing a FERC request to be able to transfer capacity injection rights from our Eddystone unit to Crane to facilitate restart in 2027, according to our plan. David Dardis is here and can talk more about that to the extent anyone has questions.

Speaker #3: On CRANE, we talked this week about PJM studies that indicate interconnection could be delayed into the 2030s. I want to assure you we are working on that with PJM, and we continue to expect to start this year in 207.

Speaker #3: Today we will be filing a FERC request to be able to transfer capacity injection rights from our Eddystone unit to CRANE to facilitate restart in 207, according to our plan.

Speaker #3: David Dardis is here and could talk more about that, to the extent anyone has questions. But taken together, CRANE and all of our capabilities have the inherent ability to add about 10 gigawatts of support to the grid at exactly the right moment.

Joseph Dominguez: Taken together, Crane and all of our capabilities have the inherent ability to add about 10GW of support to the grid at exactly the right moment. We're excited to be able to offer this to our data center customers to pair with our clean and firm nuclear power. Now, moving on to the next slides. Before I turn it over to Dan, I want to use the next few slides to remind you of the capability and scale we have at Constellation post the Calpine acquisition. Starting with integration, our efforts are well underway, and the enthusiasm across both teams is tremendous. The energy and engagement we're seeing gives us real confidence in what we're going to be able to accomplish together. With the combination, we now have true coast-to-coast scale and a platform that is the envy of every other player in the market.

Speaker #3: And we're excited to be able to offer this to our data center customers to pair with our clean and firm nuclear power. Now, moving on to the next slides before I turn it over to Shane, I want to use the next few slides to remind you of the capability and scale we have at Constellation post the CalPRIME acquisition.

Speaker #3: Starting with integration, our efforts are well underway, and the enthusiasm across both teams is tremendous. The energy and engagement we're seeing gives us real confidence in what we're going to be able to accomplish together.

Speaker #3: With the combination, we now have true coast-to-coast scale—and a platform that is the envy of every other player in the market. That reach, paired with the quality of our assets and the duration of our assets, gives us a great foundation for growth.

Joseph Dominguez: That reach, paired with the quality of our assets and duration of our assets, gives us a great foundation for growth. Our leadership team is aligned and moving quickly. A top priority is capturing the best of both organizations, aligning operational and commercial best practices to elevate performance across the board. This includes finding new ways for our commercial platforms to give customers unique and innovative solutions. We're already realizing the benefits of upgrading Calpine's credit profile. Beyond lowering borrowing costs that Dan Eggers will talk about, an investment-grade balance sheet allows us to pursue commercial opportunities that were previously out of reach for the Calpine commercial team. In short, integration is progressing as planned. The momentum is real, the teams are energizing, and we're ahead of schedule. Turning to slide 15, this chart shows you what being the most important player in every market looks like.

Joseph Dominguez: That reach, paired with the quality of our assets and duration of our assets, gives us a great foundation for growth. Our leadership team is aligned and moving quickly. A top priority is capturing the best of both organizations, aligning operational and commercial best practices to elevate performance across the board. This includes finding new ways for our commercial platforms to give customers unique and innovative solutions. We're already realizing the benefits of upgrading Calpine's credit profile. Beyond lowering borrowing costs that Dan Eggers will talk about, an investment-grade balance sheet allows us to pursue commercial opportunities that were previously out of reach for the Calpine commercial team. In short, integration is progressing as planned. The momentum is real, the teams are energized, and we're ahead of schedule. Turning to slide 15, this chart shows you what being the most important player in every market looks like.

Speaker #3: Our leadership team is aligned and moving quickly. A top priority is capturing the best of both organizations. Aligning operational and commercial best practices to elevate performance across the board.

Speaker #3: This includes finding new ways for our commercial platforms to give customers unique and innovative solutions. And we're already realizing the benefits of upgrading CalPRIME's credit profile.

Speaker #3: Beyond lowering borrowing costs, which Shane will talk about, an investment-grade balance sheet allows us to pursue commercial opportunities that were previously out of reach for the CalPRIME commercial team.

Speaker #3: In short, integration is progressing as planned. The momentum is real. The teams are energized, and we're ahead of schedule. Turning to slide 15, this chart shows you what being the most important player in every market looks like.

Speaker #3: We are the unrivaled leader in serving commercial industrial customers, delivering more than 190 million megawatt hours of energy. Nearly twice as much as the next largest supplier in the competitive market.

Joseph Dominguez: We are the unrivaled leader in serving commercial and industrial customers, delivering more than 190 million MWh of energy, nearly twice as much as the next largest supplier in the competitive market. We serve more than 80% of the Fortune 100. These are strategic customers, and they want a partner who could solve complicated challenges in multiple jurisdictions for firm, low, and zero carbon energy. That's exactly what our platform delivers. Our suite of solutions from short or long-term carbon offerings, access to renewables through our core product, or innovative demand response participation with partnerships with GridBeyond and others, gives us strategic capability to meet regulatory requirements as well as customer needs. We can meet customers wherever they are on their sustainability journey. Importantly, demand for these advanced offerings continues to grow.

Joseph Dominguez: We are the unrivaled leader in serving commercial and industrial customers, delivering more than 190 million MWh of energy, nearly twice as much as the next largest supplier in the competitive market. We serve more than 80% of the Fortune 100. These are strategic customers, and they want a partner who can solve complicated challenges in multiple jurisdictions for firm, low, and zero carbon energy. That's exactly what our platform delivers. Our suite of solutions from short or long-term carbon offerings, access to renewables through our core product, or innovative demand response participation with partnerships with GridBeyond and others, gives us strategic capability to meet regulatory requirements as well as customer needs. We can meet customers wherever they are on their sustainability journey. Importantly, demand for these advanced offerings continues to grow.

Speaker #3: We serve more than 80% of the Fortune 100. These are strategic customers and they want to partner who could solve complicated challenges in multiple jurisdictions for firm, low, and zero-carbon energy.

Speaker #3: And that's exactly what our platform delivers. Our suite of solutions—from short- or long-term carbon offerings, access to renewables through our core product, or innovative demand response participation with partnerships with GridBeyond and others—gives us strategic capability to meet regulatory requirements as well as customer needs.

Speaker #3: We can meet customers wherever they are on their sustainability journey. And importantly, demand for these advanced offerings continues to grow. Compared to 2024, we saw a 300% year-over-year increase in carbon-free product placements, a clear signal that our product offerings are appealing to the customers that need these services.

Joseph Dominguez: Compared to 2024, we saw 300% year-over-year increase in carbon-free product placements, a clear signal that our product offerings are appealing to the customers that need these services. Turning to slide 16. Constellation is now the largest private sector power producer in the world, generating nearly 300 million MWh annually, with two-thirds of that being carbon-free. We produce over 35% more carbon-free firm power than the next largest producer, whose output includes intermittent renewables. Importantly, even after integrating the largest natural gas portfolio, we still maintain the lowest carbon intensity among the top 10 power producers in the country. The reason for that is our nuclear assets, as well as the fact that the assets that we bought from Calpine are efficient machines. This is a special portfolio of assets that provides a foundational competitive advantage that's durable for the long term.

Joseph Dominguez: Compared to 2024, we saw 300% year-over-year increase in carbon-free product placements, a clear signal that our product offerings are appealing to customers that need these services. Turning to slide 16. Constellation is now the largest private sector power producer in the world, generating nearly 300 million MWh annually, with two-thirds of that being carbon-free. We produce over 35% more carbon-free firm power than the next largest producer, whose output includes intermittent renewables. Importantly, even after integrating the largest natural gas portfolio, we still maintain the lowest carbon intensity among the top 10 power producers in the country. The reason for that is our nuclear assets, as well as the fact that the assets that we bought from Calpine are efficient machines. This is a special portfolio of assets that provides a foundational competitive advantage that's durable for the long term.

Speaker #3: Turning to slide 16, Constellation is now the largest private sector power producer in the world. Generating nearly 300 million megawatt hours annually with two-thirds of that being carbon-free.

Speaker #3: We produce over 35% more carbon-free firm power than the next largest producer, whose output includes intermittent renewables. Importantly, even after integrating the largest natural gas portfolio, we still maintain the lowest carbon intensity among the top 10 power producers in the country.

Speaker #3: The reason for that is our nuclear assets as well as the fact that the assets that we bought from CalPRIME are efficient machines. This is a special portfolio of assets that provides a foundational competitive advantage that's durable for the long term.

Speaker #3: Moving to slide 17, everything we do at Constellation is supported by the bedrock of operational excellence. And it applies to everything we do. For our nuclear fleet, we run these assets better than anyone.

Joseph Dominguez: Moving to slide 17. Everything we do at Constellation is supported by the bedrock of operational excellence, and it applies to everything we do. For our nuclear fleet, we run these assets better than anyone. We've been doing that for well over a decade, and we consistently outperform the industry in both capacity factor and outage duration. That operational excellence delivers real tangible value to the grid and to our owners. On a fleet of our size, outperforming the industry's average capacity factor by roughly 4% translates into roughly 8 million MWh of additional clean, reliable generation every single year. That's effectively the output of one nuclear unit. That's what happens when scale meets world-class operations, backed by a culture to keep doing it every single day. We're not just running our plants better, we're innovating too.

Speaker #3: We've been doing that for well over a decade, and we consistently outperform the industry in both capacity factor and outage duration. That operational excellence delivers real, tangible value to the grid and to our owners.

Speaker #3: On a fleet of our size, outperforming the industry's average capacity factor by roughly 4% translates into roughly 8 million megawatt-hours of additional clean, reliable generation every single year.

Speaker #3: That's effectively the output of one nuclear unit. And that's what happens when scale meets world-class operations, backed by a culture to keep doing it every single day.

Speaker #3: And we're not just running our plants better. We're innovating too. In 2028, Constellation will begin using new fuels to transition its remaining fleet of eight pressurized water reactors from 18-month refueling cycles to 24-month refueling cycles, significantly reducing future O&M costs for outages and increasing the amount of power available on the grid.

Joseph Dominguez: In 2028, Constellation will begin using new fuels to transition its remaining fleet of eight pressurized water reactors from 18-month refueling cycles to 24-month refueling cycles, significantly reducing future O&M costs for outages and increasing the amount of power available on the grid. Pending NRC regulatory approvals, in 2028, Constellation will load the first full core of accident-tolerant fuel, fulfilling a long-term promise that industry has made to America. Moving to slide 18, I want to talk a little bit more about the gas fleet and some opportunities we see here. On the left-hand side of the slide, you'll see that 80% of our natural gas fleet is comprised of modern combined cycle and cogen assets. These are highly efficient, low heat rate units that operate far more hours than traditional peaking resources, and they form the backbone of the flexibility of the grid.

Speaker #3: And pending NRC regulatory approvals in 2028, Constellation will load the first full core of accident-tolerant fuel fulfilling a long-term promise that industry has made to America.

Speaker #3: Moving to slide 18, I want to talk a little bit more about the gas fleet and some opportunities we see here. On the left-hand side of the slide, you'll see that 80% of our natural gas fleet is comprised of modern combined cycle and cogen assets.

Speaker #3: These are highly efficient, low heat-rate units that operate far more hours than traditional peaking resources. And they form the backbone of the flexibility of the grid.

Joseph Dominguez: As system conditions change, whether driven by load growth, renewable variability, or tightening reserve margins, this is the fleet that's uniquely positioned to respond, delivering reliable, cost-effective power precisely when it's needed. On the right-hand side of the chart, I wanna share an opportunity we see. Today, combined cycle units across the ERCOT system have excess capacity roughly 90% of the time. That underscores the point I just made, that these units today are underutilized. As new load comes on, particularly these large baseload data centers, CCGT utilization is expected to move significantly higher by 2030. This increase benefits the system by meeting rising demand in the most efficient way, while also providing upside for us through increased economic output. That represents a significant value-enhancing shift for assets that have more to contribute to the grid. Dan Eggers will quantify that sensitivity in his remarks.

Speaker #3: As system conditions change, whether driven by load growth, renewable variability, or tightening reserve margins, this is the fleet that's uniquely positioned to respond, delivering reliable, cost-effective power precisely when it's needed.

Speaker #3: On the right-hand side of the chart, I want to share an opportunity we see. Today, combined cycle units across the ERCOT system have excess capacity roughly 90% of the time.

Speaker #3: That underscores the point I just made, that these units today are underutilized. But as new load comes on, particularly these large base-load data centers, CCG utilization is expected to move significantly higher by 2030.

Speaker #3: This increase benefits the system by meeting rising demand in the most efficient way, while also providing upside for us through increased economic output. That represents a significant, value-enhancing shift for assets that have more to contribute to the grid.

Speaker #3: And Shane will quantify that sensitivity in his remark. Over time, that increased utilization and improved dispatch economics translate into meaningfully higher and durable earnings.

Joseph Dominguez: Over time, that increased utilization and improved dispatch economics translate into meaningfully higher and durable earnings. With that, I'm gonna turn it over to Dan Eggers to provide the financial update.

Speaker #3: With that, I'm going to turn it over to Shane to provide the financial update.

Speaker #1: Thanks, Joe. And good morning, everyone. Before I turn to the financial update, I want to take a moment to acknowledge our 2025 results. Last year, we delivered adjusted operating EPS of $9.39 that once again exceeded the midpoint of the guidance range we set at the beginning of the year.

Dan Eggers: Thanks, Joe, and good morning, everyone. Before I turn to the financial update, I want to take a moment to acknowledge our 2025 results. Last year, we delivered adjusted operating EPS of $9.39. That once again exceeded the midpoint of the guidance range we set at the beginning of the year. That marks 4 consecutive years, every year since becoming a public company, that we have beat. With 2025 now behind us, I also want to echo my appreciation for the collective effort of our teams that make these results possible, working tirelessly to position Constellation for long-term success. Beginning on slide 20, we are initiating our 2026 adjusted operating EPS guidance at $11 per share to $12 per share.

Speaker #1: That marks four consecutive years—every year since becoming a public company—that we have beat. With 2025 now behind us, I also want to echo my appreciation for the collective effort of our teams that make these results possible, working tirelessly to position Constellation for long-term success.

Speaker #1: Beginning on slide 20, we are initiating our 2026 adjusted operating EPS guidance at $11 per share to $12 per share. This range is consistent with the $2 of EPS accretion we shared when we announced the CalPINE deal, but it doesn't tell the full story.

Dan Eggers: This range is consistent with the $2 of EPS accretion we shared when we announced the Calpine deal, but it doesn't tell the full story. Our underlying business is performing better than originally projected, allowing us to overcome two headwinds related to the acquisition. First, as part of the settlement with the DOJ, we were required to divest more assets than we originally anticipated, notably the highly efficient York 2 and Jack Fusco Energy Center that are both meaningful earnings contributors. We are also assuming all of the asset sales closed in Q3 versus our original assumption of year-end, creating a bit of an earnings hole. Second, depreciation expense related to purchase accounting is higher than we expected at deal case, as we had to mark the acquired assets to fair value at the time of close.

Dan Eggers: This range is consistent with the $2 of EPS accretion we shared when we announced the Calpine deal, but it doesn't tell the full story. Our underlying business is performing better than originally projected, allowing us to overcome two headwinds related to the acquisition. First, as part of the settlement with the DOJ, we were required to divest more assets than we originally anticipated, notably the highly efficient York 2 and Jack Fusco Energy Center that are both meaningful earnings contributors. We are also assuming all of the asset sales closed in Q3 versus our original assumption of year-end, creating a bit of an earnings hole. Second, depreciation expense related to purchase accounting is higher than we expected in the deal case, as we had to mark the acquired assets to fair value at the time of close.

Speaker #1: Our underlying business is performing better than originally projected. Allowing us to overcome two headwinds related to the acquisition. First, as part of the settlement with the DOJ, we were required to divest more assets than we originally anticipated.

Speaker #1: Notably, the highly efficient York 2 and Jack Fusco stations that are both meaningful earnings contributors. We are also assuming all of the asset sales closed in the third quarter versus our original assumption of year-end, creating a bit of an earnings hole.

Speaker #1: Second, depreciation expense related to purchase accounting is higher than we expected at deal case, as we had to mark the acquired assets to fair value at the time of close.

Speaker #1: As we have all seen, the value of generation assets has increased considerably since we announced the transaction in January of 2025. And that higher value is resulting in higher non-cash depreciation expense.

Dan Eggers: As we have all seen, the value of generation assets has increased considerably since we announced the transaction in January 2025, and that higher value is resulting in higher non-cash depreciation expense. When we announced the deal, we also targeted at least $2 billion of annual incremental free cash flow, which we continue to expect even absent the cash flow from the additional asset sales. I'm also excited to share that we are increasing our share repurchase authorization to $5 billion, enabled by our strong balance sheet and significant free cash flow while still growing our dividend and reinvesting $3.9 billion in growth projects that deliver compelling returns of at least 10% on an unlevered basis. The increase in the buyback is a strong vote of confidence in the outlook for our business.

Speaker #1: When we announced the deal, we also targeted at least $2 billion of annual incremental free cash flow, which we continue to expect even absent the cash flow from the additional asset sales.

Speaker #1: I'm also excited to share that we are increasing our share repurchase authorization to $5 billion enabled by our strong balance sheet and significant free cash flow while still growing our dividend and reinvesting $3.9 billion in growth projects that deliver compelling returns of at least 10% on an unlevered basis.

Speaker #1: The increase in the buyback is a strong vote of confidence in the outlook for our business. Finally, Moody's and S&P reaffirmed our credit ratings, supported by our strong cash generation, long-term contracted cash flows, and clear deleveraging trajectory.

Dan Eggers: Finally, Moody's and S&P reaffirmed our credit ratings, supported by our strong cash generation, long-term contracted cash flows, and clear deleveraging trajectory. We remain committed to returning the balance sheet to our target credit metrics by the end of 2027. On the following slides, I will walk through our base and enhanced earnings outlook that now includes Calpine, how to think about upside earnings opportunities, and our capital allocation strategy. Turning to slide 21. I want to provide a short review of our base earnings framework and discuss how we are incorporating the Calpine portfolio. The goal of base EPS is to highlight our earnings that are consistent, visible, straightforward to calculate, and that will grow over time. The components of our base earnings are well-defined. First, long-term contracts from our generation fleet that provide durable and predictable cash flows.

Speaker #1: We remain committed to returning the balance sheet to our target credit metrics by the end of 2027. In the following slides, I will walk through our base and enhanced earnings outlook that now includes Calpine.

Speaker #1: How to think about upside earnings opportunities, and our capital allocation strategy. Turning to slide 21, I want to provide a short review of our base earnings framework and discuss how we are incorporating the CalPINE portfolio.

Speaker #1: The goal of base EPS is to highlight our earnings that are consistent, visible, straightforward to calculate, and that will grow over time. The components of our base earnings are well-defined.

Speaker #1: First, long-term contracts from our generation fleet that provide durable and predictable cash flows. Second, our available nuclear generation that is priced at the PTC floor, assuming a 2% inflation adjustment over time.

Dan Eggers: Second, our available nuclear generation that is priced at the PTC floor, assuming a 2% inflation adjustment over time. Third, for our non-nuclear fleet, we anchor to minimum expected gross margin and volume grounded in historical experience. Finally, commercial unit margins and volumes that use a 10-year historic and forward weighted average. Taken together, these elements provide a transparent and repeatable foundation that supports visibility today and growth over time. Detailed modeling tools for base earnings can be found starting on slide 32 in the appendix. Constellation's enhanced earnings capture value generated above our base assumptions that we will constantly deliver but is not always easily modeled as a P times Q.

Speaker #1: Third, for our non-nuclear fleet, we anchor to minimum expected gross margin and volume grounded in historical experience. And finally, commercial unit margins and volumes that use a 10-year historic and forward-weighted average.

Speaker #1: Taken together, these elements provide a transparent and repeatable foundation that supports visibility today and growth over time. Detailed modeling tools for base earnings can be found starting on slide 32 in the appendix.

Speaker #1: Constellation's enhanced earnings capture value generated above our base assumptions that we will confidently deliver, but is not always easily modeled as a P times Q.

Speaker #1: This portion of earnings reflects contributions from a variety of sources, such as revenues from power and capacity above the PTC floor for our nuclear output, higher spark spreads than our base assumptions, commercial margins above the 10-year average, and a host of other opportunities that come with the scale and depth of our portfolio and customer-facing business.

Dan Eggers: This portion of earnings reflects contributions from a variety of sources, such as revenues from power and capacity above the PTC floor for our nuclear output, higher spark spreads than our base assumptions, commercial margins above the 10-year average, and a host of other opportunities that come with the scale and depth of our portfolio and customer-facing business. In 2026, enhanced earnings will represent approximately 40% of total EPS. Over time, we expect enhanced earnings to represent more like 30% to 35% as base EPS grows and enhanced contributes less on a relative basis. Turning to slide 22.

Speaker #1: In 2026, enhanced earnings will represent approximately 40% of total EPS. Over time, we expect enhanced earnings to represent more like 30% to 35% as base EPS grows and enhanced contributes less on a relative basis.

Speaker #1: Turning to slide 22, our base earnings are expected to grow from a range of $6.65 per share in 2026 to a range of at least $11.40 per share to $11.90 per share in 2029, representing at least a 20% compound annual growth rate over the period.

Dan Eggers: Our base earnings are expected to grow from a range of $6.65 per share in 2026 to a range of at least $11.40 per share to $11.90 per share in 2029, representing at least a 20% compound annual growth rate over the period. As we have discussed in prior guidance updates, our growth will not be linear. Year-to-year results will fluctuate based on the timing of long-term contracts going into effect, the roll-off of Illinois CMCs, inflationary adjustments to the PTC, and the impact of our nuclear refueling outages, which vary in number and cost depending on the year.

Speaker #1: As we have discussed in prior guidance updates, our growth will not be linear. Year-to-year results will fluctuate based on the timing of long-term contracts going into effect, the rolloff of Illinois CMCs, inflationary adjustments to the PTC, and the impact of our nuclear refueling outages, which vary in number and cost depending on the year.

Dan Eggers: Despite that variability, we have a highly visible path to base EPS growth at a 20% CAGR over the next 3 years and continued growth of at least 10% compounded annually on a rolling 3-year basis. Importantly, this outlook reflects only the long-term agreements for our nuclear and natural gas units that have already been announced. The base assumptions discussed on the prior slide and current market conditions for enhanced earnings. The optionality embedded in our fleet, which represents a meaningful upside opportunity, is not reflected in this guidance. Turning to slide 23, let me provide context and add dimension to the optionality that remains in our business beyond our base earnings starting point. Long-term contracts for our nuclear and natural gas generation command a market premium from customers seeking reliable megawatt hours, supported by the depth and strength of our portfolios.

Speaker #1: Despite that variability, we have a highly visible path to base EPS growth at a 20% CAGR over the next three years and continued growth of at least 10% compounded annually on a rolling three-year basis.

Speaker #1: Importantly, this outlook reflects only the long-term agreements for our nuclear and natural gas units that have already been announced, the base assumptions discussed on the prior slide, and current market conditions for enhanced earnings.

Speaker #1: The optionality embedded in our fleet, which represents meaningful upside opportunity, is not reflected in this guidance. Turning to slide 23, let me provide context and add dimension to the optionality that remains in our business beyond our base earnings starting point.

Speaker #1: Long-term contracts for our nuclear and natural gas generation command a market premium from customers seeking reliable megawatt-hours, supported by the depth and strength of our portfolios.

Speaker #1: To put that into perspective, a deal on each gigawatt of nuclear could increase our base earnings between $0.40 per share and $1.00 per share at full run rate, translating to a 1% to 3% increase to our growth rate over the period.

Dan Eggers: To put that into perspective, a deal on each gigawatt of nuclear could increase our base earnings between $0.40 per share and $1 per share at full run rate, translating to a 1% to 3% increase to our growth rate over the period. A reminder that the assumption in base earnings is at the PTC floor, so the sensitivity being reflected here is relative to that price, not to the forward curve. Our natural gas portfolio has significant optionality as well. Contracting an additional gigawatt through long-term agreements could also result in an incremental $0.20 to $0.50 of base earnings per share, adding another 1% to 2% to the growth rate. Additionally, as Joe Dominguez discussed earlier, in a period of increased load growth, grid needs will be increasingly met through higher utilization across our fleet, driven by dispatch economics.

Speaker #1: A reminder that the assumption in base earnings is that the PTC floor, so the sensitivity being reflected here is relative to that price not to the forward curve.

Speaker #1: Our natural gas portfolio has significant optionality as well. Contracting an additional gigawatt through long-term agreements could also result in an incremental 20% to 50% of base earnings per share adding another 1% to 2% to the growth rate.

Speaker #1: Additionally, as Joe discussed earlier, in a period of increased load growth, grid needs will be increasingly met through higher utilization across our fleet, driven by dispatch economics.

Dan Eggers: A modest 1% to 2% increase in natural gas fleet capacity factors would lift base EPS by $0.10 to $0.20, which is roughly 1% to our growth rate. This higher utilization translates directly into stronger and more durable earnings while also improving overall grid efficiency. As demand continues to grow, we expect more customers to seek clean megawatt hours and reliability solutions, both of which are in high demand, yet of finite availability. The optionality of our fleet, including the ability to combine clean generation with natural gas solutions, is unmatched, and it is a key reason for bringing Calpine onto the Constellation platform. Similarly, expanding the adoption of premium-priced products and cross-selling opportunities across our commercial business can drive higher unit margins that could have a meaningful impact on our 2029 base earnings and growth rates.

Speaker #1: A modest 1% to 2% increase in natural gas fleet capacity factors would lift base EPS by $0.10 to $0.20, which is roughly 1% to our growth rate.

Speaker #1: This higher utilization translates directly into stronger and more durable earnings, while also improving overall grid efficiency. As demand continues to grow, we expect more customers to see clean megawatt-hours and reliability solutions, both of which are in high demand yet of finite availability.

Speaker #1: The optionality of our fleet, including the ability to combine clean generation with natural gas solutions, is unmatched and it is a key reason for bringing CalPINE onto the Constellation platform.

Speaker #1: Similarly, expanding the adoption of premium-priced products and cross-selling opportunities across our commercial business can drive higher unit margins that could have a meaningful impact on our 2029 base earnings and growth rates.

Speaker #1: The nuclear PTC inflation adjustment, a unique protection backstopped by the U.S. government and particularly valuable in the current market environment, could provide a meaningful tailwind if inflation remains above 2%.

Dan Eggers: The nuclear PTC inflation adjustment, a unique protection backstopped by the US government and particularly valuable in the current market environment, could provide a meaningful tailwind if inflation remains above 2%. A 100 basis point increase to our 2% inflation assumption would add approximately 100 basis points to EPS CAGR through 2029. Continued investment in compelling growth projects alongside disciplined share repurchases has the potential to drive meaningful value creation in a relatively short period of time. We are actively working to execute across all of these levers to deliver results beyond our current projections. Turning to slide 24. Constellation's disciplined approach to capital allocation has been a hallmark of our success over the past four years.

Speaker #1: A 100 basis point increase to our 2% inflation assumption would add approximately 100 basis points to EPS CAGR through 2029. Continued investment in compelling growth projects alongside disciplined share repurchases has the potential to drive meaningful value creation in a relatively short period of time.

Speaker #1: We are actively working to execute across all of these levers to deliver results beyond our current projections. Turning to slide 24, Constellation's disciplined approach to capital allocation has been a hallmark of our success over the past four years.

Speaker #1: Since our time as a public company, we have consistently demonstrated an ability to create shareholder value while preserving the financial flexibility required to pursue strategic opportunities as they arise.

Dan Eggers: Since our time as a public company, we have consistently demonstrated an ability to create shareholder value while preserving the financial flexibility required to pursue strategic opportunities as they arise. This balanced approach has also allowed us to navigate evolving market conditions, address regulatory requirements, and invest in growth at compelling returns. It also strengthens the long-term durability of the business. Going forward, we will continue to apply the same principles that have guided our decisions to date. Maintaining balance sheet strength, prioritizing growth at double-digit unlevered returns, and returning capital to our owners through dividends and share repurchases. This continuity reflects both our confidence in the strategy and the results it has delivered.

Speaker #1: This balanced approach has also allowed us to navigate evolving market conditions, address regulatory requirements, and invest in growth at compelling returns that also strengthen the long-term durability of the business.

Speaker #1: Going forward, we will continue to apply the same principles that have guided our decisions to date. Maintaining balance sheet strength, prioritizing growth at double-digit unlevered returns, and returning capital to our owners through dividends and share repurchases.

Speaker #1: This continuity reflects both our confidence in the strategy and the results it has delivered. On slide 25, the portfolio we own and operate today is significantly larger and more diverse than where we started four years ago, and we are confident we can deploy growth capital organically and through strategic acquisitions at compelling returns.

Dan Eggers: On slide 25, the portfolio we own and operate today is significantly larger and more diverse than where we started four years ago, and we are confident we can deploy growth capital organically and through strategic acquisitions at compelling returns. Our strategic acquisitions of Calpine and the South Texas Project have expanded our generation fleet, increased scale, and enhanced our ability to serve a broader and more diverse customer base. We are growing organically through the restart of the Crane Clean Energy Center, nuclear uprates, and operating license extensions, reinforcing our commitment to delivering clean, reliable, and dispatchable power. These investments are particularly important as demand accelerates across a more data-driven and increasingly electrified grid, where reliability, carbon-free electricity, and long-term price certainty are becoming increasingly valued by customers. Looking ahead, our growth capital plan remains firmly anchored in value creation.

Speaker #1: Our strategic acquisitions of Calpine and the South Texas Project have expanded our generation fleet, increased scale, and enhanced our ability to serve a broader and more diverse customer base.

Speaker #1: We are growing organically through the restart of the Crane Clean Energy Center, nuclear upgrades, and operating license extensions, reinforcing our commitment to delivering clean, reliable, and dispatchable power.

Speaker #1: These investments are particularly important as demand accelerates across a more data-driven, increasingly electrified grid where reliability, carbon-free electricity, and long-term price certainty are becoming increasingly valued by customers.

Speaker #1: Looking ahead, our growth capital plan remains firmly anchored in value creation. We expect to invest approximately $3.9 billion during 2026 and 2027 to add new megawatts and enhance the performance and longevity of the existing fleet across all fuel types.

Dan Eggers: We expect to invest approximately $3.9 billion during 2026 and 2027 to add new megawatts and enhance the performance and longevity of the existing fleet across all fuel types. In addition to the nuclear investments, we are placing more than 600MW of new natural gas, battery, wind, and solar capacity into service in 2026, further diversifying our portfolio and supporting growing customer demand. Collectively, these investments reflect our continued focus on capital efficiency, asset optimization, and long-term earnings durability while continuing to strengthen our unique position in the market. Turning to slide 26. Our strong free cash flow over the next two years has some unique characteristics related to the acquisition. Let me take a minute to walk through 2026 and 2027 and then explain how to think about it on a forward basis.

Speaker #1: In addition to the nuclear investments, we are placing more than 600 megawatts of new natural gas, battery, wind, and solar capacity into service in 2026, further diversifying our portfolio and supporting growing customer demand.

Speaker #1: Collectively, these investments reflect our continued focus on capital efficiency asset optimization, and long-term earnings durability while continuing to strengthen our unique position in the market.

Speaker #1: Turning to slide 26, our strong free cash flow over the next two years has some unique characteristics related to the acquisition. Let me take a minute to walk through 2026 and 2027 and then explain how to think about it on a forward basis.

Speaker #1: When accounting for the expected after-tax proceeds from the sales of the PJM and ERCOT assets, we expect to have $13.6 billion to deploy over the next two years.

Dan Eggers: When accounting for the expected after-tax proceeds from the sales of the PJM and ERCOT assets, we expect to have $13.6 billion to deploy over the next two years. I spoke to the $3.9 billion of identified growth that will be accretive to long-run base EPS next year. Additionally, we will continue to grow our dividend at 10% per annum, and we have earmarked $3.4 billion to delever the Calpine debt stack to meet target consolidated credit metrics by the end of 2027. We have authorization for $5 billion in share repurchases, which for planning purposes, we assume to happen by the end of 2027. We of course retain flexibility on execution, especially as we continue to prospect for strategic and accretive growth opportunities.

Speaker #1: I spoke to the $3.9 billion of identified growth that will be accretive to long-run base EPS CAGR. Additionally, we will continue to grow our dividend at 10% per annum, and we have earmarked $3.4 billion to deliver the CalPINE debt stack to meet target consolidated credit metrics by the end of 2027.

Speaker #1: We then have authorization of we then have authorization for $5 billion in share repurchases which, for planning purposes, we assume to happen by the end of 2027.

Speaker #1: We, of course, retain flexibility on execution, especially as we continue to prospect for strategic and accretive growth opportunities. On a forward basis, we expect free cash flow before growth to follow the trajectory of our base EPS.

Dan Eggers: On a forward basis, we expect free cash flow before growth to follow the trajectory of our base EPS. After rightsizing the balance sheet by year-end 2027, we expect to have additional leverage capacity supported by increasing cash from operations while maintaining our Baa1 and BBB+ leverage profile. Turning to slide 27. We have long highlighted our investment-grade balance sheet as a core competitive advantage, one that enables us to capitalize on market opportunities and execute complex transactions. We have seen two recent tangible examples of how this strength continues to differentiate Constellation. In January 2026, as part of the $2.75 billion issuance to replace Calpine sub investment-grade debt at the Constellation level, we issued a 40-year tranche with a 5.75% coupon.

Speaker #1: After right-sizing the balance sheet by year-end 2027, we expect to have additional leveraged capacity supported by increasing cash from operations, while maintaining our Baa1 and BBB+ leverage profile.

Speaker #1: Turning to slide 27, we have long highlighted our investment-grade balance sheet as a core competitive advantage. One that enables us to capitalize on market opportunities and execute complex transactions.

Speaker #1: We have seen two recent, tangible examples of how this strength continues to differentiate Constellation. In January 2026, as part of the $2.75 billion issuance to replace CalPINE's sub-investment-grade debt at the Constellation level, we issued a 40-year tranche with a 5.75% coupon.

Speaker #1: This is certainly unique in the competitive power sector, demonstrating the strong vote of confidence from fixed income investors in the long-term cash flow generation and risk profile of Constellation.

Dan Eggers: This is certainly unique in the competitive power sector, demonstrating the strong vote of confidence from fixed income investors in the long-term cash flow generation and risk profile of Constellation. An additional vote of confidence came from the US Department of Energy in its $1 billion loan in support of the historic restart of the Crane Clean Energy Center. The DOE highlighted Constellation's financial strength as a key determining factor in the award and underscores continued federal support for nuclear energy as a critical source of clean and reliable power. Finally, as expected, S&P and Moody's affirmed Constellation's credit ratings, reflecting the combined company's strong cash generation and our clear plan to deleverage by 2027.

Speaker #1: An additional vote of confidence came from the US Department of Energy in its $1 billion loan in support of the historic restart of the Crane Clean Energy Center.

Speaker #1: The DOE highlighted Constellation's financial strength as a key determining factor in the award and underscores continued federal support for nuclear energy as a critical source of clean and reliable power.

Speaker #1: Finally, as expected, S&P and Moody's affirmed Constellation's credit ratings reflecting the combined company's strong cash generation and our clear plans to deleverage by 2027.

Speaker #1: In addition, CalPINE's ratings were upgraded to investment-grade following the close of the transaction. The rating agency's emphasized the geographic diversification irreplaceable asset base and the strength of the combined portfolio as well as Constellation's track record of disciplined capital deployment and commitment to balance sheet targets.

Dan Eggers: In addition, Calpine's ratings were upgraded to investment grade following the close of the transaction. The rating agencies emphasize the geographic diversification, irreplaceable asset base, and the strength of the combined portfolio, as well as Constellation's track record of disciplined capital deployment and commitment to balance sheet targets. While expected, these favorable assessments position us well to pursue additional strategic opportunities going forward. Thank you all for your time today. 2026 marks the beginning of another new and exciting chapter for Constellation. I think we have a truly unique investment thesis. A highly visible and predictable trajectory for base earnings to grow 20% on a compounded basis through 2029. A coast-to-coast fleet of nuclear, gas-fired, and geothermal generation assets ideally positioned to meet growing customer demand.

Speaker #1: While expected, these favorable assessments position us well to pursue additional strategic opportunities going forward. Thank you all for your time today. 2026 marks the beginning of another new and exciting chapter for Constellation.

Speaker #1: I think we have a truly unique investment thesis—a highly visible and predictable trajectory for base earnings to grow 20% on a compounded basis through 2029.

Speaker #1: A coast-to-coast fleet of nuclear, gas, fired, and geothermal generation assets ideally positioned to meet growing customer demand. And growing free cash flow that can continue to be deployed to create value for our owners.

Dan Eggers: growing free cash flow that can continue to be deployed to create value for our owners, whether or both via accretive growth and by being returned to owners via buybacks and dividends. Put all this together, and you can see why we have a truly compelling growth story into the next decade. With that, I will now turn the call back to Joe.

Speaker #1: Whether or both be accretive growth and by being returned to owners via buybacks and dividends. Put all this together and you can see why we have a truly compelling growth story into the next decade.

Speaker #1: With that, I will now turn the call back to Joe.

Speaker #2: Thanks, Shane. Good job. So, folks, we couldn't be more excited about where Constellation is headed. We're built on a foundation of strong growth, unmatched scale, geographic reach, and truly irreplaceable assets.

Joseph Dominguez: Thanks, Shane. Good job. Folks, we couldn't be more excited about where Constellation is headed. We're built on a foundation of strong growth, unmatched scale, geographic reach, and truly irreplaceable assets, all supported by a commercial platform that sets us apart. Our base earnings will grow more than 20% through 2029, and as Shane said, we intend to replicate double-digit growth after that. We see a number of meaningful opportunities even through 2029 to improve and outperform our trajectory. We'll continue to take a disciplined, practical approach to capital allocation, deploying our substantial free cash flow in ways that create long-term value for you. We'll keep executing with customers across the data economy and beyond, securing durable, premium-priced agreements for our clean, reliable megawatts. We'll expand the contributions of our natural gas fleet, meeting customer needs in ways that were not possible before.

Joseph Dominguez: Thanks, Dan. Good job. Folks, we couldn't be more excited about where Constellation is headed. We're built on a foundation of strong growth, unmatched scale, geographic reach, and truly irreplaceable assets, all supported by a commercial platform that sets us apart. Our base earnings will grow more than 20% through 2029, and as Dan said, we intend to replicate double-digit growth after that. We see a number of meaningful opportunities even through 2029 to improve and outperform our trajectory. We'll continue to take a disciplined, practical approach to capital allocation, deploying our substantial free cash flow in ways that create long-term value for you. We'll keep executing with customers across the data economy and beyond, securing durable, premium-priced agreements for our clean, reliable megawatts. We'll expand the contributions of our natural gas fleet, meeting customer needs in ways that were not possible before.

Speaker #2: All supported by commercial platform that sets us apart. Our base earnings will grow more than 20% through 2029. And as Shane said, we intend to replicate double-digit growth after that.

Speaker #2: And we see a number of meaningful opportunities, even through 2029, to improve and outperform our trajectory. We'll continue to take a disciplined, practical approach to capital allocation, deploying our substantial free cash flow in ways that create long-term value for you.

Speaker #2: We'll keep executing with customers across the data economy and beyond, securing durable premium priced agreements for our clean, reliable megawatts. We'll expand the contributions of our natural gas fleet, meeting customer needs in ways that we're not possible before.

Speaker #2: We will preserve and expand generational supply in the markets we participate in. And we will keep working closely with federal, state, and local policymakers and market regulators to drive common-sense solutions—solutions that will allow America to grow and also reduce the burden on American families.

Joseph Dominguez: We will preserve and expand generation supply in the markets we participate. We will keep working closely with federal, state, and local policymakers and market regulators to drive common sense solutions that will allow America to grow and also reduce the burden on American families. Thanks for your time. We have the whole management team here, and we look forward to your questions.

Speaker #2: Thanks for your time. We have the whole management team here, and we look forward to your questions.

Operator: Thank you. Ladies and gentlemen, if you have a question at this time, press star one one on your telephone and wait for your name to be announced. To remove yourself, press star one one again. One moment for our questions. Our first question is from David Arcaro with Morgan Stanley. Please proceed.

Operator: Thank you. Ladies and gentlemen, if you have a question at this time, press star 1, 1 on your telephone and wait for your name to be announced. To remove yourself, press star 1, 1 again. One moment for our questions. Our first question is from David Arcaro with Morgan Stanley. Please proceed.

Speaker #1: Thank you, ladies and gentlemen. If you have a question at this time, please press *11 on your telephone and wait for your name to be announced.

Speaker #1: To remove yourself, press star 11 again. One moment for our questions. Our first question is from David Arcaro with Morgan Stanley. Please proceed.

Joseph Dominguez: Morning, David.

Speaker #2: Morning, David.

David Arcaro: Thanks so much. Good morning. You know, Joe, could you maybe comment on, in maybe a little bit more detail, if you could, just what's the status of discussions you're having with other hyperscalers? You did mention, you know, one maybe possible opportunity in Maryland here, but just more broadly, if you could touch on what's the status, how close, how advanced, you know, how broad across your portfolio, that you're in discussions here for, in terms of data center contracting.

David Arcaro: Thanks so much. Good morning. Joe, could you maybe comment on, in maybe a little bit more detail, if you could, just what's the status of discussions you're having with other hyperscalers? You did mention one maybe possible opportunity in Maryland here, but just more broadly, if you could touch on what the status is, how close, how advanced, how broad across your portfolio, that you're in discussions here for, in terms of data center contracting?

Speaker #3: Hey, thanks so much. Good morning. Morning. Joe, could you maybe comment on in maybe a little bit more detail if you could? Just what's the status of discussions you're having with other hyperscalers?

Speaker #3: You did mention one that may be a possible opportunity in Maryland here, but just more broadly, if you could touch on what's the status—how close?

Speaker #3: How advanced? How broad across your portfolio are you in discussions here for, in terms of data center contracting?

Speaker #2: Well, I want to avoid, David, promising delivery dates here because we all know that there are bumps that unexpected and otherwise that occur. In these transactions.

Joseph Dominguez: Well, I want to avoid, David, promising delivery dates here because we all know that there are bumps that unexpected and otherwise that occur in these transactions. I think it's fair to say that there continues to be strong interest in clean and reliable power. Look, the data economy customers are very conscious of either being flexible at peak using backup generation, some of the AI technologies that move data demand around. You know, we're certainly seeing that in our conversations. I think there could be a point in time where the flexibility that data centers have at peak will be substantially greater than what we've seen historically. We have ongoing conversations with customers that just want to buy energy and capacity from us. They'll absorb whatever the backstop proposal is.

Joseph Dominguez: Well, I want to avoid, David, promising delivery dates here because we all know that there are bumps that unexpected and otherwise that occur in these transactions. I think it's fair to say that there continues to be strong interest in clean and reliable power. Look, the data economy customers are very conscious of either being flexible at peak using backup generation, some of the AI technologies that move data demand around. we're certainly seeing that in our conversations. I think there could be a point in time where the flexibility that data centers have at peak will be substantially greater than what we've seen historically. We have ongoing conversations with customers that just want to buy energy and capacity from us. They'll absorb whatever the backstop proposal is here's what I would say.

Speaker #2: But I think it's fair to say that there continues to be strong interest in clean and reliable power. But look, the data economy customers are very conscious of either being flexible at peak, using backup generation, or some of the AI technologies that move data demand around.

Speaker #2: And so we're certainly seeing that in our conversations. I think there could be a point in time where the flexibility that data centers have at peak will be substantially greater than what we've seen historically.

Speaker #2: And then we have ongoing conversations with customers that just want to buy energy and capacity from us. They'll absorb whatever the backstop proposal is.

Joseph Dominguez: You know, here's what I would say. I would say that those conversations grew more complicated after the executive order as we found solutions and delayed some of the transactions, but I see the momentum resuming.

Speaker #2: And here's what I would say. I would say that those conversations grew more complicated after the executive order, as we found solutions and delayed some of the transactions.

Joseph Dominguez: I would say that those conversations grew more complicated after the executive order as we found solutions and delayed some of the transactions, but I see the momentum resuming.

Speaker #2: But I see the momentum resuming.

Speaker #3: Got it. Thanks. That's helpful. And a bit of a follow-up on your comments there too. Is flexibility and/or additionality, is that really the path forward here?

David Arcaro: Got it. Thanks. That's helpful. A bit of a follow-up on your comments there too. You know, is flexibility, you know, and/or additionality, is that really the path forward here? I'm curious if, you know, as we maybe think about the backstop procurement, just how does that interact with the potential to bring, you know, new megawatts onto the grid or being flexible?

David Arcaro: Got it. Thanks. That's helpful. A bit of a follow-up on your comments there too. is flexibility, and/or additionality, is that really the path forward here? I'm curious if, as we maybe think about the backstop procurement, just how does that interact with the potential to bring, new megawatts onto the grid or being flexible?

Speaker #3: I'm curious if as we maybe think about the backstop procurement, just how does that interact with the potential to bring new megawatts onto the grid or being flexible?

Speaker #2: Yeah. I think it is. David, I think there has been since we announced this strategy overhang of do we have enough peak capacity in the system?

Joseph Dominguez: Yeah, I think it is, David. I think, you know, there has been, since we announced this strategy, overhang of do we have enough peak capacity in the system. That ambiguity is gonna be addressed hopefully here by FERC in a way that gives our customers clear line of sight that if they're gonna rely on the backstop capacity auction, what the cost of that is gonna be and what the terms are gonna be for that. Other customers are going to look at the ability to either bring batteries, demand response, new gas-fired generation, or some of this AI flexibility I just mentioned into play to manage the peaks. If you manage the peaks, right, what we're really talking about is the capacity slice of what we have to offer.

Joseph Dominguez: I think it is, David. I think, there has been, since we announced this strategy, overhang of do we have enough peak capacity in the system. That ambiguity is gonna be addressed hopefully here by FERC in a way that gives our customers clear line of sight that if they're gonna rely on the backstop capacity auction, what the cost of that is gonna be and what the terms are gonna be for that. Other customers are going to look at the ability to either bring batteries, demand response, new gas-fired generation, or some of this AI flexibility I just mentioned into play to manage the peaks. If you manage the peaks, right, what we're really talking about is the capacity slice of what we have to offer.

Speaker #2: And so that ambiguity is going to be addressed, hopefully, here by FERC in a way that gives our customers clear line of sight that, if they're going to rely on the backstop capacity auction, what the cost of that is going to be, and what the terms are going to be for that.

Speaker #2: Other customers are going to look at the ability to either bring batteries, demand response, new gas-fired generation, or some of this AI flexibility I just mentioned into play to manage the peaks.

Speaker #2: But if you manage the peaks, right, what we're really talking about is the capacity slice of what we have to offer. And I see a potential where we're going to do the same thing we've been doing with CNI customers historically, and that is we sell our capacity into the market, and our customers are buying a capacity product from PJM.

Joseph Dominguez: I see a potential where we're gonna do the same thing we've been doing with C&I customers historically, and that is we sell our capacity into the market. Our customers are buying a capacity product from PJM that could be that backstop capacity, or they could bring their own capacity or flexibility, as I mentioned. What is uninterrupted is the other 99% of the hours, the energy and the attributes they need to meet their goals for firm and reliable and clean power.

Speaker #2: That could be that backstop capacity or they could bring their own capacity or flexibility, as I mentioned, but what is uninterrupted is the other 99% of the hours, the energy and the attributes they need to meet their goals for firm and reliable and clean power.

Speaker #3: Okay. Great. Thanks so much.

Steve Fleishman: Okay, great. Thank you so much.

David Arcaro: Okay, great. Thank you so much.

Speaker #2: Thank you.

Joseph Dominguez: Thank you.

Speaker #1: Thank you. Our next question comes from Stephen Fleischman with Wolfe Research. Please proceed.

Operator: Thank you. Our next question comes from Steve Fleishman with Wolfe Research. Please proceed.

Joseph Dominguez: Morning, Steve.

Speaker #2: Morning, Steve.

Speaker #4: Yeah. Hey, good morning, Joe. Just I'm sure there'll be other questions on that topic so let me just maybe move to a different one.

Steve Fleishman: Yeah. Hey, good morning, Joe. Just, I'm sure there'll be other questions on that topic, so let me just maybe move to a different one. The capital allocation. So one point of clarity. In the plan to 2029 and outlook that you have, what are you assuming or doing with cash in 2028 and 2029? Just in the plan, the growth rates and all, et cetera. Yeah.

Steve Fleishman: Hey, good morning, Joe. Just, I'm sure there'll be other questions on that topic, so let me just maybe move to a different one. The capital allocation. One point of clarity. In the plan to 2029 and outlook that you have, what are you assuming or doing with cash in 2028 and 2029? Just in the plan, the growth rates and all, et cetera.

Speaker #4: The capital allocation, so one point of clarity in the plan to 29 and outlook that you have, what are you assuming or doing with cash in 28 and 29?

Speaker #4: Just in the plan, the growth rates and all, etc.? Yeah.

Dan Eggers: Hey, Steve, it's Dan. There's nothing planned with regard to accretion relative to that free cash flow. That's all upside opportunity for how we deploy it. It's essentially earning interest income at the current assumption.

Speaker #2: Hey, Steve. It's Shane. There's nothing planned with regard to accretion relative to that free cash flow, so that's all upside opportunity for how we deploy it.

Speaker #2: It's essentially earning interest income at the current assumption.

Steve Fleishman: You're just having it sit in cash effectively. Any use of capital better than that is accretive.

Speaker #4: You're just having it sit in cash, effectively. So any use of capital better than that is accretive.

Dan Eggers: Correct. That's right.

Speaker #2: Correct. That's right. Correct. That's what leads to the $0.50 upside you see on the sensitivity table, as we think there's a meaningful opportunity to find opportunities above that low threshold.

Steve Fleishman: Okay.

Dan Eggers: Correct. That's what leads to the $0.50 upside you see on the sensitivity table as we think there's a meaningful opportunity to find opportunities, you know, above that low threshold.

Dan Eggers: Correct. That's what leads to the $0.50 upside you see on the sensitivity table as we think there's a meaningful opportunity to find opportunities, above that low threshold.

Steve Fleishman: That's helpful. Then maybe related to that then, Joe, over the last 3, 6, 9 months, you've mentioned renewables a couple times. You did talk again here a little bit about new nuclear. Could you just maybe on those specific topics or others other than new gas that, you know, you could talk to kind of what are you seeing there? How are you looking at that?

Steve Fleishman: That's helpful. Then maybe related to that then, Joe, over the last 3, 6, 9 months, you've mentioned renewables a couple times. You did talk again here a little bit about new nuclear. Could you just maybe on those specific topics or others other than new gas that, you could talk to kind of what are you seeing there? How are you looking at that?

Speaker #4: That's helpful. And then maybe related to that, Joe, over the last three, six, nine months, you've mentioned renewables a couple of times. You did talk again here a little bit about nuclear.

Speaker #4: Could you just maybe on those specific topics or others other than new gas that you could talk to kind of what are you seeing there?

Speaker #4: How are you looking at that?

Joseph Dominguez: Yeah, Steve-

Speaker #2: Yeah, Steve.

Joseph Dominguez: Steve-

Steve Fleishman: Yeah.

Speaker #4: And yeah.

Speaker #2: No, no. I'm sorry. Complete your question. I thought you were.

Joseph Dominguez: No, no, I'm sorry. Complete your question. I thought you were-

Steve Fleishman: No, no, that's it. I'll leave it there. Thanks.

Speaker #4: No, no. That's it. I'll leave it there. Thanks.

Speaker #2: Okay, yeah. So, look, on new nuclear, we're continuing to look at both large reactors and small modular reactors. I think the last time we talked, I commented that we have to have really clarity on three things.

Joseph Dominguez: Okay. Yeah. Look, on new nuclear, we're continuing to look at both large reactors and small modular reactors. I think the last time we talked, I commented that we have to have real clarity on three things. One is what's it gonna cost and what the schedule is gonna be, obviously. A number of the new reactor designs, particularly on SMRs, still have a bit of work to be done in their design and regulatory approval journey. We've got to get to the other side to make sure that we understand that. We need to understand the operating costs of these machines. While we continue to chip away at that, I am not yet at a confidence level where I could say to you that, you know, we are committed on a path to new nuclear.

Joseph Dominguez: Okay. Look, on new nuclear, we're continuing to look at both large reactors and small modular reactors. I think the last time we talked, I commented that we have to have real clarity on three things. One is what it's gonna cost and what the schedule is gonna be, obviously. A number of the new reactor designs, particularly on SMRs, still have a bit of work to be done in their design and regulatory approval journey. We've got to get to the other side to make sure that we understand that. We need to understand the operating costs of these machines. While we continue to chip away at that, I am not yet at a confidence level where I could say to you that, we are committed on a path to new nuclear.

Speaker #2: One is, what's it going to cost, what the schedule is going to be. Obviously, a number of the new reactor designs, particularly on SMRs, still have a bit of work to be done in their design and regulatory approval journey.

Speaker #2: We've got to get to the other side to make sure that we understand that. We need to understand the operating costs of these machines.

Speaker #2: And while we continue to chip away at that, I am not yet at a confidence level where I could say to you that we are committed on a path to new nuclear.

Speaker #2: I think we just we need a lot more data before we could get there. And some of that is just going to have to play out over time.

Joseph Dominguez: I think we need a lot more data before we could get there, and some of that is just gonna have to play out over time. In the case of renewables, what I'm really looking for here, Steve, is to have the capability with battery storage and other renewables as well as gas-fired gen to really facilitate these transactions that are the core of our growth strategy, these deals with hyperscalers and C&I customers. What we're thinking about there is capability that gives us some peak capability or some incremental new capability that is a deal sweetener. That's kind of our focus on renewables. What platforms might we add to the business that give us that incremental capability to do the things our customers want?

Speaker #2: In the case of renewables, what I'm really looking for here, Steve, is to have the capability with battery storage and other renewables as well as gas-fired gen.

Speaker #2: To really facilitate these transactions that are the core of our growth strategy—these deals with hyperscalers and CNI customers. So what we're thinking about there is capability that gives us some peak capability or some incremental new capability that is a deal sweetener.

Speaker #2: And that's kind of our focus on renewables. What platforms might we add to the business that give us that incremental capability to do the things our customers want?

Speaker #2: It is a secondary objective to have another means of deploying some of the vast amounts of free cash flow that Shane alluded to. But I've said this before, and I stick with it.

Joseph Dominguez: It is a secondary objective to have another means of deploying some of the vast amounts of free cash flow that Dan Eggers alluded to. You know, I've said this before, and I stick with it. The returns on renewables are often underwhelming when we're looking at some of these deals. In order for a platform to be something we're gonna want, it has to come with it, the ability to unlock our essentially contracting of 147 million MWh of nuclear. That's where we see some potential value. I don't yet see a platform that is attractive enough and is gonna meet our threshold for 10% unlevered IRRs. We'll continue to search for that opportunity, but we're not there.

Joseph Dominguez: It is a secondary objective to have another means of deploying some of the vast amounts of free cash flow that Dan Eggers alluded to. I've said this before, and I stick with it. The returns on renewables are often underwhelming when we're looking at some of these deals. In order for a platform to be something we're gonna want, it has to come with it, the ability to unlock our essentially contracting of 147 million MWh of nuclear. That's where we see some potential value. I don't yet see a platform that is attractive enough and is gonna meet our threshold for 10% unlevered IRRs. We'll continue to search for that opportunity, but we're not there.

Speaker #2: The returns on renewables are often underwhelming when we're looking at some of these deals. So, in order for a platform to be something we're going to want, it has to come with it the ability to unlock our essentially contracting of 147 million megawatt-hours of nuclear.

Speaker #2: And that's where we see some potential value. But I don't yet see a platform that is attractive enough and is going to meet our threshold for 10% unlevered IRRs.

Speaker #2: We'll continue to search for that opportunity, but we're not there.

Steve Fleishman: Right. I have one last question on the capital allocation, and I'll then turn it to others. Just in going back to, obviously, your free cash, 2028, 2029, you're just leaving in cash. How about just like balance sheet targets? Because your EBITDA is going up a lot, 2028, 2029. Just what should we be using? Because there could be just balance sheet cash or leverage capability too that grows. Just any view of kind of leverage targets?

Speaker #4: Right. I have one last question on the capital allocation, and I'll then turn it to others. Just going back to—so obviously, your free cash '28, '29, you're just leaving in cash.

Speaker #4: How about just balance sheet targets? Because your EBITDA's going up a lot in '28, '29. So just what should we be using? Because there could be just balance sheet cash or leverage capability too.

Speaker #4: That grows. Just any view of kind of leverage. Targets?

Dan Eggers: Yeah. I mean, we'll continue in the long run. I think it's fair to assume that 2x debt to EBITDA, Steve. With that rising EBITDA, that'll, you know, to follow the base EPS trajectory, if you will, from your modeling, you can assume that if we're levering at 2x EBITDA, we'll have significantly more leverage capacity in 2028 and 2029 than we're reflecting in 2027.

Tim Flottemesch: I mean, we'll continue in the long run. I think it's fair to assume that 2x debt to EBITDA, Steve. With that rising EBITDA, that'll, to follow the base EPS trajectory, if you will, from your modeling, you can assume that if we're levering at 2x EBITDA, we'll have significantly more leverage capacity in 2028 and 2029 than we're reflecting in 2027.

Speaker #2: Yeah. I mean, we'll continue in the long run, kind of—I think it's fair to assume that two times debt to EBITDA, Steve. So, with that rising EBITDA, that'll follow the base EPS trajectory, if you will, from your modeling. You can assume that if we're leveraging at two times EBITDA, we'll have significantly more leverage capacity in '28 and '29 than we're reflecting in '27.

Steve Fleishman: Thank you.

Speaker #4: Thank you.

Dan Eggers: Thank you.

Joseph Dominguez: Thank you.

Speaker #2: Thank you.

Operator: Thank you. Our next question comes from Shar Pourreza with Wells Fargo. Please proceed.

Operator: Thank you. Our next question comes from Shahriar Pourreza with Wells Fargo. Please proceed.

Speaker #1: Thank you. Our next question comes from Shar Puriza with Wells Fargo. Please proceed.

[Analyst] (Wells Fargo): Hi, Constantine. It's actually Constantine here for Char. Thanks for taking the questions. You know the 9GW of additionality, including the nuclear relicensing, do you see that as enough offering for hyperscalers looking to contract? Maybe is there a rule forming around matching new and existing capacity one-to-one, or is there a lower mix palatable similar to the Vistra deal earlier this year?

Shahriar Pourreza: Hi, Constantine. It's actually Constantine here for Shar. Thanks for taking the questions. The 9GW of additionality, including the nuclear relicensing, do you see that as enough offering for hyperscalers looking to contract? Maybe is there a rule forming around matching new and existing capacity one-to-one, or is there a lower mix palatable similar to the Vistra deal earlier this year?

Speaker #5: Hi, Shar. It's actually Constantine here for Shar. Thanks for taking the questions. You noted nine gigawatts of additionality, including the nuclear relicensing. Do you see that as enough offering for hyperscalers looking to contract?

Speaker #5: And maybe is there a rule forming around matching new and existing capacity one-to-one? Or is there a lower mixed palatable similar to the Vistra deal earlier this year?

Joseph Dominguez: Yeah, I think on what's gonna ultimately come out of the PJM process, I think we're still going to await clarity. I think it's more about just managing the peak and whether the customer is willing to take interruptible service or not. As to whether the 10GW is enough, I think there's gonna be instances where we'll partner with another party. We've shown that with DR, for example, where they bring the incremental capacity, and we have another company that's partnering with Constellation. I could see that happening with natural gas development projects or other things where we'll be more aggressively working with other companies that have a queue position in a particular area, and then we're gonna fill in our energy and our attributes into that contract.

Joseph Dominguez: I think on what's gonna ultimately come out of the PJM process, I think we're still going to await clarity. I think it's more about just managing the peak and whether the customer is willing to take interruptible service or not. As to whether the 10GW is enough, I think there's gonna be instances where we'll partner with another party. We've shown that with DR, for example, where they bring the incremental capacity, and we have another company that's partnering with Constellation. I could see that happening with natural gas development projects or other things where we'll be more aggressively working with other companies that have a queue position in a particular area, and then we're gonna fill in our energy and our attributes into that contract.

Speaker #2: Yeah, I think on what's going to ultimately come out of the PJM process, I think we're still—we're going to still await clarity. I think it's more about just managing the peak.

Speaker #2: And whether the customer is willing to take interruptible service or not. As to whether the 10 gigawatts is enough, I think there's going to be instances where we'll partner with another party.

Speaker #2: We've shown that with DR, for example, where they bring the incremental capacity, and we have another company that's partnering with Constellation. I could see that happening.

Speaker #2: With natural gas development projects or other things, where we'll be more aggressively working with other companies that have an acute position in a particular area, and then we're going to fill in our energy and our attributes into that contract.

Joseph Dominguez: In answer to your question, I'm not sure that the 10GW is enough or rightly placed. We may have to supplement that. I spoke a moment ago in response to Steve's question about continuing to search out, you know, platforms, renewable battery storage platforms that may add some incremental capabilities. I think it's a hell of a good start, but I don't think it's a finished story.

Joseph Dominguez: In answer to your question, I'm not sure that the 10GW is enough or rightly placed. We may have to supplement that. I spoke a moment ago in response to Steve's question about continuing to search out, platforms, renewable battery storage platforms that may add some incremental capabilities. I think it's a hell of a good start, but I don't think it's a finished story.

Speaker #2: So in answer to your question, I'm not sure that the 10 gigawatts is enough or rightly placed. We may have to supplement that. And I spoke a moment ago in response to Steve's question about continuing to search out platforms renewable battery storage platforms that may add some incremental capabilities.

Speaker #2: So I think it's a hell of a good start, but I don't think it's a finished story.

[Analyst] (Wells Fargo): Excellent. Thanks for that. In regards to the 147 million MWh that you called out, obviously a really big number, is there kind of a level of interest that you would highlight in more immediate term versus long term and maybe an order of preference by region, especially as you mentioned, with the kind of reforms going on at PJM?

Shahriar Pourreza: Excellent. Thanks for that. In regards to the 147 million MWh that you called out, obviously a really big number, is there kind of a level of interest that you would highlight in more immediate term versus long term and maybe an order of preference by region, especially as you mentioned, with the kind of reforms going on at PJM?

Speaker #4: Excellent. Thanks for that. And in regards to the 147 million megawatt-hours that you called out—obviously, a really big number—is there kind of a level of interest that you would highlight in more immediate term versus long term, and maybe an order of preference by region?

Speaker #4: Especially as you mentioned, with the kind of reforms going on at PJM.

Joseph Dominguez: I don't think we could get into that level of detail here yet. You know, there's interest in kind of across the board in different places, and it's different types of interest that we get. But we don't, you know, we don't yet have, you know, "Hey, this is the number of megawatts we're gonna be able to do at this point in time in a particular geography.

Speaker #5: I don't think we I don't think we could get into that level of detail here yet. There's interest in kind of across the board in different places, and it's different types of interest that we get.

Joseph Dominguez: I don't think we could get into that level of detail here yet. there's interest in kind of across the board in different places, and it's different types of interest that we get. But we don't, we don't yet have, "Hey, this is the number of megawatts we're gonna be able to do at this point in time in a particular geography.

Speaker #5: But we don't—we don't yet have, 'Hey, this is the number of megawatts we're going to be able to do at this point in time in a particular geography.'

[Analyst] (Wells Fargo): Maybe just a quick follow-up on PJM. Is there kind of a level of interest in the reserve backstop auction? What's CEG's position, kind of going into the potential procurement, later part of the year? Thanks.

Shahriar Pourreza: Maybe just a quick follow-up on PJM. Is there kind of a level of interest in the reserve backstop auction? What's CEG's position, kind of going into the potential procurement, later part of the year? Thanks.

Speaker #4: And maybe just a quick follow-up on PJM. Is there kind of a level of interest in the reserve backstop auction? What's SEG's position going into the potential procurement later part of the year?

Speaker #4: Thanks.

Joseph Dominguez: Yeah, I would simply say I think there's certainly a level of interest in it, but we have to see the details.

Joseph Dominguez: I would simply say I think there's certainly a level of interest in it, but we have to see the details.

Speaker #2: Yeah, I would simply say I think there's certainly a level of interest in it, but we have to see the details.

[Analyst] (Wells Fargo): Okay. Perfect. Thanks so much.

Shahriar Pourreza: Okay. Perfect. Thanks so much.

Speaker #4: Okay. Perfect. Thanks so much.

Operator: Our next question comes from Angie Storozynski with Seaport. Please proceed.

Speaker #1: Our next question comes from Angie Storosinski with Seaport. Please proceed.

Angie Storozynski: Thank you. My first question is about the free cash flow generation. I'm just wondering what kind of assumptions you're making about cash taxes in that $8.4 billion free cash flow assumption for 2026 and 2027.

Speaker #6: Thank you. So my first question is about the free cash flow generation. I'm just wondering kind of assumptions you're making about cash taxes, and that 8.4 billion free cash flow assumption for 26 and 27?

Dan Eggers: We're in the low teens from an overall effective cash tax rate in the front two years, Angie.

Speaker #2: We're in the low teens from an overall effective cash tax rate in the front two years, Angie?

Angie Storozynski: Okay. I mean, that low teens as in, like, based on net income? So-

Speaker #6: Okay. I mean, low teens as in based on net income? So, yeah. Okay.

Dan Eggers: Yeah.

Angie Storozynski: Yeah. Okay.

Angie Storozynski: Okay.

Dan Eggers: Essentially, yeah, if you convert. Instead of using your book tax rate, if you used a cash-

Speaker #2: Essentially, yeah. If you convert—instead of using your book tax rate—if you use the cash tax rate, it would essentially be at that lower, in the low teens.

Dan Eggers: Yeah

Dan Eggers: Tax rate, it would essentially be that lower in the low teens.

Angie Storozynski: Okay. Because that number looks a little bit low, no? It's just that I was looking at your free cash flow generation for Constellation standalone. You were already in around, I think, $3.5 billion range on average per year. So the Calpine accretion with some again tax benefits should have been, you know, should have boosted the free cash flow generation more. I mean, so what am I missing? Is it the interest expense? Is it that there are no tax efficiencies related to this transaction?

Angie Storozynski: Okay. Because that number looks a little bit low, no? It's just that I was looking at your free cash flow generation for Constellation standalone. You were already in around, I think, $3.5 billion range on average per year. So the Calpine accretion with some again tax benefits should have been, should have boosted the free cash flow generation more. I mean, so what am I missing? Is it the interest expense? Is it that there are no tax efficiencies related to this transaction?

Speaker #6: Okay. Okay. Because that number looks a little bit low, no? It's just that I was looking at your free cash flow generation for Constellation standalone.

Speaker #6: You were already in around, I think, three and a half billion dollar range on average per year. So the CalPine accretion with some tax benefit should have been should have boosted the free cash flow generation more.

Speaker #6: I mean, so what am I missing? Is it the interest expense? Is it that there are no tax efficiencies related to this transaction?

Dan Eggers: Yeah. I think one, the 3.5 is probably a little bit too high. Two, there's still some ongoing CTAs regarding the integration in the front years that we need to be mindful of. Three, there might be higher maintenance CapEx than you may have had in your model. Those are a few of the variables that I think are leading to some of that delta, but it's not off of what we anticipated.

Dan Eggers: I think one, the 3.5 is probably a little bit too high. Two, there's still some ongoing CTAs regarding the integration in the front years that we need to be mindful of. Three, there might be higher maintenance CapEx than you may have had in your model. Those are a few of the variables that I think are leading to some of that delta, but it's not off of what we anticipated.

Speaker #2: Yeah. I think, one, the three and a half is probably a little bit too high. Two, there's still some ongoing CTAs regarding the integration in the front years that we need to be mindful of.

Speaker #2: Three, there might be it's probably higher maintenance CapEx than you may have had in your model. So those are a few of the variables that I think are leading to some of that delta.

Speaker #2: But it's not off of what we anticipated.

Angie Storozynski: Okay. Secondly, when I'm looking at slide 32, the assumptions, the modeling assumptions for 2026 and 2027. Just wondering how you flow through the sale of PJM assets. It doesn't seem like it's having any benefit on either O&M or other, like, cost items. Is it just because, again, you're picking an additional time for Calpine's ownership and thus higher costs? Because I would have expected that there's some cost benefit by divesting these assets.

Speaker #6: Okay. And then secondly, when I'm looking at site 32, the assumptions, the modeling assumptions for 26 and 27. So just wondering how you flow through the sale of PJM assets.

Speaker #6: It doesn't seem like it's having any benefit on either O&M or other cost items? Is it just because, again, you were picking an additional time for Calpine's ownership, and that's higher costs?

Speaker #6: Because I would have expected that there's some cost benefit by divesting these assets.

Dan Eggers: Yeah, there's a little bit of a lumpiness year to year on O&M for some one-time things. It's dependent upon nuclear fuel outages and things like that. It's not always easy to look at just a two-year view and say, "Well, if these are coming out, you know, I wouldn't see this material delta year over year." There's some more intricacies to it, that create some lumpiness besides just looking at, you know, two years and trying to adjust for inflation.

Dan Eggers: there's a little bit of a lumpiness year to year on O&M for some one-time things. It's dependent upon nuclear fuel outages and things like that. It's not always easy to look at just a two-year view and say, "Well, if these are coming out, I wouldn't see this material delta year over year." There's some more intricacies to it, that create some lumpiness besides just looking at, two years and trying to adjust for inflation.

Speaker #2: Yeah, there's a little bit of a lumpiness year to year on O&M for some one-time things. It's dependent upon nuclear fuel outages and things like that.

Speaker #2: So it's not always easy to look at just a two-year view and say, "Well, if these are coming out, I wouldn't see this material delta year over year." So, there's some more intricacies to it that create some lumpiness, besides just looking at two years and trying to adjust for inflation.

Angie Storozynski: Okay. Then just one more, a big picture question, Joe. I mean, we've had a lot of announcements, semi announcements about new build in PJM. How do you see those potential capacity additions? I mean, as you said, the cost basis is pretty high. I'm not quite sure if there is offtake agreement behind this potential CapEx on the gas-fired side. Are you concerned that there could be some, I don't know, non-competitive entrants into the PJM market, which in turn would suppress both energy and capacity prices?

Speaker #6: Okay. And then just one big picture question, Joe. I mean, we've had a lot of announcements that my announcements about new build in PJM.

Speaker #6: How do you see those potential capacity additions? I mean, as you said, the cost basis is pretty high. And I'm not quite sure if there is an off-take agreement behind this potential CapEx on the gas-fired side.

Speaker #6: But are you concerned that there could be some, I don't know, non-competitive entrance into the PJM market, which in turn would suppress both energy and capacity prices?

Joseph Dominguez: Yeah, Angie, I think two things have happened in that space. We saw kind of a wave of interest in legislation that would allow the utilities to return to building generation, and I thought that was a risk to the market. I think favorably, we haven't really seen that gain traction anywhere, and people seem to be rejecting that idea. Since the last time we talked, probably improvement in terms of that risk factor. There have been announcements for things that are, at least based on what we understand about the projects, that are gonna exist off the grid. There doesn't seem to be, to us, any meaningful impact that those things will have on energy and capacity markets, but we're still looking at that.

Joseph Dominguez: Angie, I think two things have happened in that space. We saw kind of a wave of interest in legislation that would allow the utilities to return to building generation, and I thought that was a risk to the market. I think favorably, we haven't really seen that gain traction anywhere, and people seem to be rejecting that idea. Since the last time we talked, probably improvement in terms of that risk factor. There have been announcements for things that are, at least based on what we understand about the projects, that are gonna exist off the grid. There doesn't seem to be, to us, any meaningful impact that those things will have on energy and capacity markets, but we're still looking at that.

Speaker #2: Yeah, Angie, I think two things have happened in that space. We saw kind of a wave of interest in legislation that would allow the utilities to return to building generation.

Speaker #2: And I thought that was a risk to the market. I think favorably, we haven't really seen that gain traction anywhere. And people seem to be rejecting that idea.

Speaker #2: So, since the last time we talked, probably improvement in terms of that risk factor. There have been announcements for things that are—at least based on what we understand—about the projects that are going to exist off the grid.

Speaker #2: And so, there doesn't seem to be, to us, any meaningful impact that those things will have on energy and capacity markets. But we're still looking at that.

Joseph Dominguez: Frankly, you know, what we have on some of this stuff is just press releases and not much more. You know, a more fulsome answer would require us to kind of understand what's going on. You know, I don't know what's real or not real. There's a lot of press release activity going on all over the place about different things that I, you know, I think you correctly point out might add some non-competitive supply of energy and capacity into the market. Who knows how long it's gonna take to actually build that stuff or frankly, whether it's real and it has offtake agreements yet. You know, we're saying the same thing, but I can't really give you anything meaningful on that because I don't understand the details yet.

Joseph Dominguez: Frankly, what we have on some of this stuff is just press releases and not much more. a more fulsome answer would require us to kind of understand what's going on. I don't know what's real or not real. There's a lot of press release activity going on all over the place about different things that I, I think you correctly point out might add some non-competitive supply of energy and capacity into the market. Who knows how long it's gonna take to actually build that stuff or frankly, whether it's real and it has offtake agreements yet. we're saying the same thing, but I can't really give you anything meaningful on that because I don't understand the details yet.

Speaker #2: Frankly, what we have on some of this stuff is just press releases and not much more. So more fulsome answer would require us to kind of understand what's going on.

Speaker #2: And I don't know what's real or not real. There's a lot of press release activity going on all over the place about different things.

Speaker #2: That, I think you correctly point out, might add some non-competitive supply—whether energy or capacity—into the market. But who knows how long it's going to take to actually build that stuff?

Speaker #2: Or frankly, whether it's real and if it has off-take agreements yet. We're seeing the same thing. But I can't really give you anything meaningful on that because I don't understand the details yet.

Angie Storozynski: Okay. Thank you.

Speaker #6: Okay. Thank you.

Operator: Thank you. Our next question comes from James West with Mizuho Research. Please proceed.

Speaker #1: Thank you. Our next question comes from James West with Melius Research. Please proceed.

Joseph Dominguez: Morning, James.

Speaker #2: Good morning, James.

James West: Hey, Joe. Thanks for all the great detail this morning. One of the things I wanted to ask about that I think gets underrecognized by the market overall is the increased demand on your capacity is leading to much better durability in your earnings. I wonder if you could comment on that and if you—one, if you agree with that, but two, if you could comment on how that is creating durability and how we should think about that durability.

Speaker #7: Hey, Joe. Thanks for all the great detail this morning. One of the things I wanted to ask about, that I think gets underrecognized by the market overall, is that the increased demand on your capacity is leading to much better durability in your earnings.

Speaker #7: And I wonder if you could comment on that. And one, if you agree with that. But two, if you could comment on how that creates is creating durability and how we should think about that durability.

Joseph Dominguez: Yeah, I mean, I think about it in a few ways. On the nuclear side, you all understand what we're doing. We're taking the production tax credit, and we're modeling that as the base earnings. There's obviously, you know, what we're seeing is power prices in certain regions exceeding that, and so giving us some additional opportunity above the production tax credit floor price. We're seeing a bit of that. We're also seeing it in terms of the gas-fired generation being dispatched more often. That would translate into what I would think of as a tailwind for enhanced earnings more than for base earnings.

Joseph Dominguez: I mean, I think about it in a few ways. On the nuclear side, you all understand what we're doing. We're taking the production tax credit, and we're modeling that as the base earnings. There's obviously, what we're seeing is power prices in certain regions exceeding that, and so giving us some additional opportunity above the production tax credit floor price. We're seeing a bit of that. We're also seeing it in terms of the gas-fired generation being dispatched more often. That would translate into what I would think of as a tailwind for enhanced earnings more than for base earnings.

Speaker #2: Yeah, I mean, so I think about it in a few ways. On the nuclear side, you all understand what we're doing. We're taking the production tax credit.

Speaker #2: And we're modeling that as the base earnings. So, obviously, what we're saying is power prices in certain regions are exceeding that, giving us some additional opportunity above the Production Tax Credit floor price.

Speaker #2: So we're seeing a bit of that. We're also seeing it in terms of the gas-fired generation being dispatched more often. So that would translate into what I would think of as a tailwind for enhanced earnings, more than for base earnings.

Joseph Dominguez: Where it kind of converges, though, is that in long-term contracting, in the mind of the customer, ultimately, it's about doing better than they're gonna do over the long term with the variability in the market. I think the fundamentals that you're talking about are actually driving people to wanna secure long-term contracts at prices that we would then put into base earnings and making the base earnings, you know, more durable in that sense. I really think the way we've explained it here is probably the best way, and that's to give you this baseline that we think of as durable and then quantify for you some additional opportunities on top of that.

Joseph Dominguez: Where it kind of converges, though, is that in long-term contracting, in the mind of the customer, ultimately, it's about doing better than they're gonna do over the long term with the variability in the market. I think the fundamentals that you're talking about are actually driving people to wanna secure long-term contracts at prices that we would then put into base earnings and making the base earnings, more durable in that sense. I really think the way we've explained it here is probably the best way, and that's to give you this baseline that we think of as durable and then quantify for you some additional opportunities on top of that.

Speaker #2: Where we kind of converge, though, is that in long-term contracting, in the mind of the customer, ultimately it's about doing better than they're going to do over the long term with the variability in the market.

Speaker #2: So I think that the fundamentals that you're talking about are actually driving people to want to secure long-term contracts at prices that we would then put into base earnings and making the base earnings more durable in that sense.

Speaker #2: But I really think the way we've explained it here is probably the best way. And that's to give you this baseline that we think of as durable, and then quantify for you some additional opportunities on top of that.

Joseph Dominguez: In terms of the way I kinda simply think about the stock and the value we're trying to deliver to owners is we're taking a look at the S&P and we're saying, what's the average multiple in that S&P? Underneath that, what are the growth rates for different companies? What are their cash flow capabilities? What's their long-term durability to have assets that are gonna be around for decades? That's where we're trying to distinguish ourselves as always being better than that average. That's the philosophy of the company. That when we show up and we present to you, look, in a very conservative way, we see a 20% CAGR.

Speaker #2: And in terms of the way I kind of simply think about the stock and the value we're trying to deliver to owners is, we're taking a look at the S&P and we're saying, "What's the average multiple in that S&P?" And then underneath that, what are the growth rates for different companies?

Speaker #2: What are their cash flow capabilities? What's their long-term durability to have assets that are going to be around for decades? And that's where we're trying to distinguish ourselves as always being better than that average.

Speaker #2: That's the philosophy of the company. So that when we show up and we present to you, 'Look, in a very conservative way, we see a 20% CAGR.' What we're saying is, 'Go look for other opportunities in the S&P, and we bet that our opportunity is going to be better than other things that you could find.' And then you layer on top of that kind of catalyst for even better performance.

Joseph Dominguez: What we're saying is, "Go look for other opportunities in the S&P, and we bet that our opportunity is gonna be better than other things that you could find." Then you layer on top of that kind of catalyst for even better performance, some of which would land in base earnings like PTC increases as a result of inflation. Some of it would land in enhanced earnings. To give you know, a page here, and page 23 does this to say, "Look, here are the opportunities we're going after, and if we realize those opportunities, here's what it's gonna mean on top of what we just talked about.

Joseph Dominguez: What we're saying is, "Go look for other opportunities in the S&P, and we bet that our opportunity is gonna be better than other things that you could find." Then you layer on top of that kind of catalyst for even better performance, some of which would land in base earnings like PTC increases as a result of inflation. Some of it would land in enhanced earnings. To give a page here, and page 23 does this to say, "Look, here are the opportunities we're going after, and if we realize those opportunities, here's what it's gonna mean on top of what we just talked about.

Speaker #2: Some of which would land in base earnings like PTC, increases as a result of inflation. Some of it would land in enhanced earnings. But to give you a page here on page 23 does this to say, "Look, here are the opportunities we're going after.

Speaker #2: And if we realize those opportunities, here's what it's going to mean on top of what we just talked about.

James West: Okay. Makes sense. Maybe just a quick follow-up for me, Joe. You've mentioned, you know, the PJM clarity. When do you expect to have clarity, you know, in that market? I mean, I know you're very close, and you're working with the federal government and all state regulators, and everybody's trying to come to that moment. When do you expect to see that happen?

James West: Okay. Makes sense. Maybe just a quick follow-up for me, Joe. You've mentioned, the PJM clarity. When do you expect to have clarity, in that market? I mean, I know you're very close, and you're working with the federal government and all state regulators, and everybody's trying to come to that moment. When do you expect to see that happen?

Speaker #7: Okay. Okay. Makes sense. And then maybe just a quick joke, a quick follow-up for me. You've mentioned the PJM clarity. When do you expect to have clarity in that market?

Speaker #7: I mean, I know you're very close and you're working with the federal government and all the state regulators and everybody's trying to come to that moment.

Speaker #7: When do you expect to see that happen?

Joseph Dominguez: Look, I expect to see that this year. I mean, that again, these things are out of Constellation's control. What I'm seeing is a FERC that's highly motivated to get this done. An administration that believes that leading in the data economy and this important part of innovation is essential to America going forward. They wanna have this clarity. Then obviously, you have other market participants like us, the utilities. Everybody's pushing for some clarity here, so we know the rules of the road going forward. Look, I'm hoping all of that pressure drives us to a place where we get that clarity from FERC this year, and it clears up questions in the minds of customers and others.

Speaker #2: Look, I expect to see that this year. I mean, again, these things are at Constellation’s control. But what I’m seeing is a perk that’s highly motivated to get this done.

Speaker #2: An administration, that believes that leading in the data economy and this important part of innovation is essential to America going forward. So they want to have this clarity.

Speaker #2: And then, obviously, we have other market participants like us—the utilities. Everybody's pushing for some clarity here, so we know the rules of the road going forward.

Speaker #2: And so, look, I'm hoping all of that pressure drives us to a place where we get that clarity from FERC this year, and it clears up questions in the minds of customers and others.

James West: Got it. Thanks, Joe.

Speaker #7: Got it. Thanks, Joe.

Operator: Thank you. Our last question comes from Julien Dumoulin-Smith with Jefferies. Please proceed.

Speaker #1: Thank you. Our last question comes from Julian Dumoulin-Smith with Jefferies. Please proceed.

Joseph Dominguez: Good morning.

Julien Dumoulin-Smith: Excellent. Hey, good morning. Can you guys hear me okay?

Speaker #2: Good morning.

Speaker #7: Excellent. Hey, good morning. Can you guys hear me okay?

Joseph Dominguez: Absolutely. Loud and clear, Julien. Good morning.

Speaker #2: Absolutely. Loud and clear, Julian. Good morning.

Julien Dumoulin-Smith: Hey, good morning, guys. Thank you. I appreciate the question here. A couple things real quickly. First, some of the nuances here. I think it says that 2027 assumes average shares outstanding are held flat. Are you guys assuming this $5 billion buyback is executed in the core EPS? I just wanna clarify that real quickly. Then separately, I think Steve got at this a little bit, but how are you thinking about capital allocation and further buybacks as maybe a policy for beyond this 2027 period, like 2028, 2029? Is there a ratio? Is there a payout? Is there something that you give people as a heuristic on that front? I got a quick follow-up.

Speaker #7: Hey, good morning, guys. Thank you, I appreciate the question here. A couple of things real quickly. First, some of the nuances here. I think it says the '27 assumes average shares—average shares outstanding are held flat.

Speaker #7: Are you guys assuming this $5 billion buyback is executed in the core EPS? I just want to clarify that real quickly. And then, separately, I think Steve got at this a little bit, but how do you think about capital allocation and further buybacks as maybe a policy for beyond this '27 period, like '28, '29?

Speaker #7: Is there a ratio? Is there a payout? Is there something that you give people as a heuristic on that front? I've got a quick follow-up.

Dan Eggers: Hey, Julien, it's Shane. Let me take the first part. I mean, we did not reflect an assumption on how many shares we would repurchase in 2026, in part to not overly signal to the market what our strategy is here. We wanna preserve flexibility there. I trust you all can make some assumptions on how we would probably allocate that over the next 21 months or so. Our 2027 share count is not reflected on an assumption of what we take out before year-end 2026. Secondly, let me make sure-

Dan Eggers: Hey, Julien, it's Dan. Let me take the first part. I mean, we did not reflect an assumption on how many shares we would repurchase in 2026, in part to not overly signal to the market what our strategy is here. We wanna preserve flexibility there. I trust you all can make some assumptions on how we would probably allocate that over the next 21 months or so. Our 2027 share count is not reflected on an assumption of what we take out before year-end 2026. Secondly, let me make sure-

Speaker #8: Hey, Julian. It's Shane. So, let me take the first part. I mean, we did not reflect an assumption on how many shares we would repurchase in '26, in part to not overly signal to the market what our strategy is here.

Speaker #8: We want to preserve flexibility there, so I trust you all can make some assumptions on how we would probably allocate that over the next 21 months or so.

Speaker #8: But our 27 share count is not reflected on an assumption of what we take out before year-end '26. Secondly, let me make sure I hit your question there, but I think it's consistent with what we've done to date.

Julien Dumoulin-Smith: Got it.

Dan Eggers: You know, I hear your question there, but I think it's consistent with what we've done to date. I mean, as Joe hit on, we think we have a number of opportunities to bring new megawatts to the grid in a variety of different areas. We obviously are looking, you know, for some policy clarity here, as well as customers that want the long-term contracts. Our priority is on identifying growth at double-digit unlevered returns. To the extent that doesn't present itself as an opportunity, we're very comfortable acquiring our shares at this price. We think we have a lot of cash flow ultimately to end up doing both. We won't, you know, make an ill-informed investment decision because we feel the money's gotta go somewhere. We're very confident in reacquiring our shares.

Julien Dumoulin-Smith: Got it.

Dan Eggers: I hear your question there, but I think it's consistent with what we've done to date. I mean, as Joe hit on, we think we have a number of opportunities to bring new megawatts to the grid in a variety of different areas. We obviously are looking, for some policy clarity here, as well as customers that want the long-term contracts. Our priority is on identifying growth at double-digit unlevered returns. To the extent that doesn't present itself as an opportunity, we're very comfortable acquiring our shares at this price. We think we have a lot of cash flow ultimately to end up doing both. We won't, make an ill-informed investment decision because we feel the money's gotta go somewhere. We're very confident in reacquiring our shares.

Speaker #8: I mean, as Joe hit on, we think we have a number of opportunities to bring new megawatts to the grid in a variety of different areas.

Speaker #8: We obviously are looking for some policy clarity here, as well as customers that want the long-term contracts. And so our priority is on identifying growth that delivers double-digit unlevered returns.

Speaker #8: To the extent that doesn't present itself as an opportunity, we're very comfortable acquiring our shares at this price. And we think we have a lot of cash flow, ultimately, to end up doing both.

Speaker #8: But we won't make an ill-informed investment decision because we feel the money's got to go somewhere. We're very confident in reacquiring our shares.

Julien Dumoulin-Smith: Awesome. The EPS guidance per se doesn't include the buyback, but the 20% EPS CAGR in a more in the broader sense does. Then if I can, just to follow up on this, you have this 10% rolling CAGR. Can you describe a little bit about how to think about that? Obviously, you talk about a base EPS number there too. Is this 10% rolling supposed to be like off of that 29 that you should be thinking about is implicitly growing 10% from 29 onwards? Or is this more, hey, next year when you roll the plan from '27 to 2030, you should be kind of thinking about it being more in the 10% zip code? I just wanna clarify how you're thinking about that.

Speaker #7: Awesome. So, the EPS guidance per se doesn't include the buyback, but the 20% EPS CAGR in the broader sense does. And then, if I can just follow up on this, you have this 10% rolling CAGR.

Speaker #7: Can you describe a little bit about how to think about that? And obviously, you talk about a base EPS number there too. Is this 10% rolling supposed to be off of that $29 that you should be thinking about implicitly growing 10% from $29 onwards?

Speaker #7: Or is this more, 'Hey, next year when you roll the plan from '27 to 2030, you should be kind of thinking about it being more in the 10% zip cut'?

Speaker #7: I just want to clarify how you're thinking about that. I think I get the concept, but I want to make sure we're crystal clear about what you're suggesting here.

Julien Dumoulin-Smith: I think I get the concept, but I wanna make sure we're crystal clear about what you're suggesting here. Is growth kind of implied beyond 29?

Speaker #7: Is growth kind of implied beyond '29?

Dan Eggers: Sure. Let me clarify on your first point. There is no benefit in the 20% base EPS CAGR from capital allocation for the share repurchase. That is all upside.

Speaker #2: Sure. So let me clarify on your first point. There is no benefit in the 20% base EPS CAGR from capital allocation for the share repurchase.

Julien Dumoulin-Smith: Perfect.

Dan Eggers: That's all reflected in the 50-cent upside on slide 23. Secondly, when we recalibrated the base EPS CAGR of 20% on a three-year view, we're projecting to roll that forward in a commitment to essentially grow base EPS CAGR at 10% each rolling three-year cycle. That's kind of our minimum target, Julien. What I'd say is, again, that slide 23 that shows the optionality, we're assuming that we're gonna execute on some of those levers and ideally have a higher growth rate than the 10%. We're saying we have great line of sight that if you start, you know, next year, looking at following three years and so forth, that we have good line of sight into a rolling three-year view of a 10% base EPS CAGR.

Dan Eggers: That's all reflected in the 50-cent upside on slide 23. Secondly, when we recalibrated the base EPS CAGR of 20% on a three-year view, we're projecting to roll that forward in a commitment to essentially grow base EPS CAGR at 10% each rolling three-year cycle. That's kind of our minimum target, Julien. What I'd say is, again, that slide 23 that shows the optionality, we're assuming that we're gonna execute on some of those levers and ideally have a higher growth rate than the 10%. We're saying we have great line of sight that if you start, next year, looking at following three years and so forth, that we have good line of sight into a rolling three-year view of a 10% base EPS CAGR.

Speaker #2: So that is all upside. That's all reflected in the $0.50 upside on slide 23. Secondly, when we recalibrated the base EPS CAGR of 20% on a three-year view, we're projecting to roll that forward in a commitment to essentially grow base EPS CAGR at 10% each rolling three-year cycle.

Speaker #2: And that's kind of our minimum target, Julian. What I'd say is, again, that slide 23 that shows the optionality—we're assuming that we're going to execute on some of those levers.

Speaker #2: And ideally, have a higher growth rate than the 10%. But we're saying we have great line of sight that if you start next year looking at the following three years and so forth, that we have good line of sight into a rolling three-year view of a 10% base EPS CAGR.

Julien Dumoulin-Smith: All right, perfect. Again, stress no buyback reflected in any of this 2026 onwards. More to the point, the rolling piece is truly genuinely a rolling three-year average, and that's a minimum here. If you thought about 2027 to 2030 here, again, obviously you've got a plus at the end of that 10%. Don't necessarily take it too literally.

Speaker #7: All right. Perfect. So again, stress: no buyback reflected in any of this—'26 onwards. More to the point, the rolling piece is truly, genuinely a rolling three-year average.

Speaker #7: And that's a minimum here. But if you thought about '27 to 2030 here, again, obviously, you've got a plus at the end of that 10%.

Speaker #7: Don't necessarily take it too literally.

Dan Eggers: I think you've got it.

Julien Dumoulin-Smith: Awesome. All right. Excellent, guys. Thank you very much. I really appreciate it.

Speaker #2: I think you've got it.

Speaker #7: Awesome. All right. Excellent, guys. Thank you very much. I really appreciate it.

Joseph Dominguez: Thanks, Julien.

Operator: Thank you. This concludes the Q&A session, and I will turn it back to Joseph Dominguez for closing comments.

Speaker #2: Thanks, Julian.

Speaker #1: And thank you. This concludes the Q&A session, and I will turn it back to Joe Dominguez for closing comments.

Joseph Dominguez: Great. Well, thank you again all of you for joining us. We've got a lot of work still in front of us to integrate Calpine. The future is very bright. Hopefully, we've given you something here this morning that allows you to understand what the baseline strategy is for the company and what we intend to return to our owners in terms of value, and the many upside opportunities. Thanks again for participating, and have a great day.

Speaker #2: Great. Well, thank you again, all of you, for joining us. We've got a lot of work still in front of us to integrate Calpine. The future is very bright.

Speaker #2: Hopefully, we've given you something here this morning that allows you to understand what the baseline strategy is for the company and what we intend to return to our owners in terms of value.

Speaker #2: And the many upside opportunities. Thanks again for participating, and have a great day.

Operator: Ladies and gentlemen, thank you for participating in today's call. This concludes today's program. You may all disconnect. Everyone, have a great day.

2026 Constellation Energy Corp Business Update & Earnings Call

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