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Constellation Energy Reports First Quarter 2011 Results

Company reaffirms 2011 earnings guidance range of $3.10 to $3.40 per share and 2012 guidance of $2.40 to $2.70 per share



BALTIMORE, MD - Constellation Energy (NYSE: CEG) today reported adjusted earnings of $0.63 per share for the first quarter of 2011, compared with adjusted earnings of $1.43 per share in the same period last year. Adjusted earnings exclude the cumulative effects of changes in accounting principles, discontinued operations and special items (which are defined as significant items that are not related to the company's ongoing, underlying business or which distort comparability of results). On a Generally Accepted Accounting Principles (GAAP) basis, Constellation Energy reported earnings of $0.35 per share in the first quarter of 2011, compared with earnings of $0.95 per share in first quarter 2010.

Constellation Energy reaffirmed its 2011 earnings guidance range of $3.10 to $3.40 per share and its 2012 guidance range of $2.40 to $2.70 per share.

"Our continuing strategy to grow assets and expand our industry-leading, customer-driven business got off to a fast start in 2011, beginning with our integration of Boston Generating's fleet of gas plants in January and continuing with our recent expansion into the residential competitive electric market in Illinois," said Mayo A. Shattuck III, chairman, president and chief executive officer of Constellation Energy.

"During the quarter, our NewEnergy segment continued to win new business with its integrated approach to serving customers' energy needs, and included a significant expansion of our public-sector operation serving state and federal institutions," Shattuck said. "In March, we announced a 20-year agreement to provide electricity to the U.S. Department of State that will encourage substantial investments in solar and wind energy. The first-of-its-kind agreement is structured to help the federal government achieve its clean-energy goals set by statute and executive order. This transaction demonstrates the value that new and existing customers are finding in our ability to deliver multi-product energy solutions.

"In Maryland, Baltimore Gas and Electric (BGE), our regulated utility, continues its strong track record of safe and reliable electricity service," Shattuck said. "During the quarter, BGE invested $160 million on critical infrastructure that will lead to improvements in reliability and efficiency, as well as contribute to future earnings growth. In addition, BGE residential customers continue to benefit from declining energy prices, with utility electric rates projected to fall by 11 percent starting in June.

"Looking ahead, we see significant opportunity to accelerate the growth of our customer base and build enterprise value as we execute the proposed merger we announced last week with Exelon," Shattuck said. "This transaction marks the beginning of a new chapter in the history of both our companies and will combine our leading customer-facing businesses with one of the nation's cleanest and lowest-cost power generation fleets. We'll make our initial filings in the coming weeks as part of the regulatory review process and begin integration planning to ensure a smooth transition for all of our stakeholders."

The following table summarizes adjusted earnings per share and earnings per share reported in accordance with GAAP for the company's business segments and provides a reconciliation to total company reported earnings (see full press release below).


BGE reported adjusted earnings of $0.39 per share, an increase of $0.07 per share compared with first-quarter 2010 adjusted earnings of $0.32 per share. The improved year-over-year earnings are the result of higher transmission revenue and the deferral of storm-related costs, which will be recovered through customer rates in accordance with the detailed rate case order issued by the Maryland Public Service Commission in March.


The Generation segment reported adjusted earnings of $0.34 per share, down from adjusted earnings of $0.57 per share in the first quarter of 2010. The decline was partly the result of the February ice storms and severe weather in Texas, which caused our Colorado Bend and Quail Run gas plants to go offline.  The units were unavailable to hedge NewEnergy, resulting in a loss of $0.06 per share. The remaining year-over-year variance is primarily the result of higher costs associated with our recently acquired generation assets.


Our NewEnergy segment reported an adjusted loss of $0.08 per share in first quarter 2011, down from adjusted earnings of $0.54 per share in the first quarter of 2010. The decline in adjusted 2011 earnings is due in part to the extreme weather event in Texas, which resulted in a loss of $0.08 per share. In addition, the year-over-year change was partly due to the timing of certain contract assignments related to our divested international commodities operation.

Financial Statements

Download the financial statements and supplemental information.
Adjusted Earnings

Constellation Energy presents adjusted earnings per share (adjusted EPS) in addition to reported earnings per share in accordance with generally accepted accounting principles (reported GAAP EPS). Adjusted EPS is a non-GAAP financial measure that differs from reported GAAP EPS because it excludes the cumulative effects of changes in accounting principles, discontinued operations and special items (which we define as significant items that are not related to our ongoing, underlying business or which distort comparability of results) included in operations.

We present adjusted EPS because we believe that it is appropriate for investors to consider results excluding these items in addition to our results in accordance with GAAP. We believe such a measure provides a picture of our results that is more comparable among periods, since it excludes the impact of items such as impairment losses, work force reduction costs or gains and losses on the sale of assets, which may recur occasionally, but tend to be irregular as to timing, thereby distorting comparisons between periods. However, investors should note that this non-GAAP measure involves judgment by management (in particular, judgment as to what is classified as a special item to be excluded from adjusted earnings). This non-GAAP measure is also used to evaluate management's performance and for compensation purposes.

Constellation Energy also provides its earnings guidance in terms of adjusted EPS. Constellation Energy is unable to reconcile its guidance to GAAP earnings per share because we do not predict the future impact of special items due to the difficulty of doing so. In the past, the impact of special items has been material to our operating results computed in accordance with GAAP.  We note that such information is not in accordance with GAAP and should not be viewed as a substitute to GAAP information. 
SEC Filings

Constellation Energy plans to file its Form 10-Q on or about May 9, 2011. 

Forward-Looking Statements

We make statements in this news release that are considered forward-looking statements within the meaning of the Securities Exchange Act of 1934. These statements are not guarantees of our future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to be materially different from those we project. For a full discussion of these risks, uncertainties and factors, we encourage you to read our documents on file with the Securities and Exchange Commission, including those set forth in our periodic reports under the forward-looking statements and risk factors sections. Except as required by law, we do not intend to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information and Where to Find it

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  Exelon intends to file with the SEC a registration statement on Form S-4 that will include a joint proxy statement/prospectus and other relevant documents to be mailed by Exelon and Constellation Energy to their respective security holders in connection with the proposed merger of Exelon and Constellation Energy. WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION about Exelon, Constellation Energy and the proposed merger.  Investors and security holders will be able to obtain these materials (when they are available) and other documents filed with the SEC free of charge at the SEC's website,  In addition, a copy of the joint proxy statement/prospectus (when it becomes available) may be obtained free of charge from Exelon Corporation, Investor Relations, 10 South Dearborn Street, P.O. Box 805398, Chicago, Illinois 60680-5398, or from Constellation Energy Group, Inc., Investor Relations, 100 Constellation Way, Baltimore, MD 21202. Investors and security holders may also read and copy any reports, statements and other information filed by Exelon, or Constellation Energy, with the SEC, at the SEC public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or visit the SEC's website for further information on its public reference room.

Participants in the Merger Solicitation

Exelon, Constellation Energy, and their respective directors, executive officers and certain other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Exelon's directors and executive officers is available in its proxy statement filed with the SEC by Exelon on March 24, 2011, in connection with its 2011 annual meeting of shareholders, and information regarding Constellation Energy's directors and executive officers is available in its proxy statement filed with the SEC by Constellation Energy on April 15, 2011, in connection with its 2011 annual meeting of shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.