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Constellation EnergyQ3 2006 Earnings
October 27, 2006
2
Forward-looking Statements DisclaimerCertain statements made in this presentation are forward-looking statements and may contain words such as “believes,” “anticipates,” “expects,”“intends,” “plans,” and other similar words. We also disclose non-historical information that represents management’s expectations, which are based on numerous assumptions. These statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to be materially different from projected results. These risks include, but are not limited to: the timing and extent of changes in commodity prices for energy including coal, natural gas, oil, electricity, nuclear fuel, and emissions allowances; the timing and extent of deregulation of, and competition in, the energy markets, and the rules and regulations adopted on a transitional basis in those markets; the conditions of the capital markets, interest rates, availability of credit, liquidity and general economic conditions, as well as Constellation Energy’s and BGE’s ability to maintain their current credit ratings; the ability to attract and retain customers in our competitive supply activities and to adequately forecast their energy usage; the effectiveness of Constellation Energy’s and BGE’s risk management policies and procedures and the ability and willingness of our counterparties to satisfy their financial and other commitments; the liquidity and competitiveness of wholesale markets for energy commodities; uncertainties associated with estimating natural gas reserves, developing properties and extracting gas; operational factors affecting the operations of our generating facilities (including nuclear facilities) and BGE’s transmission and distribution facilities, including catastrophic weather-related damages, unscheduled outages or repairs, unanticipated changes in fuel costs or availability, unavailability of coal or gas transportation or electric transmission services, workforce issues, terrorism, liabilities associated with catastrophic events, and other events beyond our control; the inability of BGE to recover all its costs associated with providing electric residential customers service; the effect of weather and general economic and business conditions on energy supply, demand, and prices; regulatory or legislative developments that affect deregulation, transmission or distribution rates, demand for energy, or that would increase costs, including costs related to nuclear power plants, safety, or environmental compliance; the actual outcome of uncertainties associated with assumptions and estimates using judgment when applying critical accounting policies and preparing financial statements, including factors that are estimated in applying mark-to-market accounting, such as the ability to obtain market prices and in the absence of verifiable market prices, the appropriateness of models and model impacts (including, but not limited to, extreme contractual load obligations, unit availability, forward commodity prices, interest rates, correlation and volatility factors); changes in accounting principles or practices; losses on the sale or write-down of assets due to impairment events or changes in management intent with regard to either holding or selling certain assets; our ability to successfully identify and complete acquisitions and sales of businesses and assets; cost and other effects of legal and administrative proceedings that may not be covered by insurance, including environmental liabilities; Given these uncertainties, you should not place undue reliance on these forward-looking statements. Please see our periodic reports filed with the SEC for more information on these factors. These forward-looking statements represent estimates and assumptions only as of the date of this presentation, and no duty is undertaken to update them to reflect new information, events or circumstances.
3
Use of Non-GAAP Financial MeasuresConstellation Energy presents adjusted earnings per share (adjusted EPS) in addition to its 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, 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, the impact of certain economic, non-qualifying hedges, and synfuel earnings. The mark-to-market impact of these hedges is significant to reported results, but economically neutral to the company in that offsetting gains or losses on underlying accrual positions will be recognized in the future. 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 measures provide a picture of our results that is comparable among periods since it excludes the impact of items such as workforce 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 these non-GAAP measures involve judgments by management (in particular, judgments as to what is classified as a special item or an economic, non-qualifying hedge to be excluded from adjusted earnings). These non-GAAP measures are 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, economic, non-qualifying hedges or synfuel earnings due to the difficulty of doing so. The impact of special items, economic, non-qualifying hedges, or synfuel earnings could be 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 an alternative to GAAP information. A reconciliation of pro-forma information to GAAP information is included either on the slide where the information appears or on one of the slides in the Non-GAAP Measures section provided at the end of the presentation. Please see the Summary of Non-GAAP Measures included to find the appropriate GAAP reconciliation and its related slide(s). These slides are only intended to be reviewed in conjunction with the oral presentation to which they relate.
4
Merger Termination
• Reached joint and amicable agreement with FPL Group to terminatemerger– Termination request initiated by Constellation– Tremendous respect for FPL Group
• Risks and uncertainties in Maryland too significant to overcome– Created potential for protracted and open-ended merger review process– Company minimized distractions from merger process and focused on
delivering results in the interim– Imprudent to expose commercial businesses to indefinite uncertainty
• Termination not driven by any single or isolated event– Recognition that no clear path led to merger completion– No events on the horizon would create certainty in the near term
• Right decision for shareholders to focus Constellation’s efforts on growth that the company can control
• Working constructively to balance needs of Maryland and maintaining a financially healthy utility
5
Q3 2006 Adjusted EPS Summary
$1.10 - $1.25Q3 Earnings Guidance
(0.08)(0.11)Synfuel Earnings
$1.08$1.56Adjusted Earnings
-0.08Special Items
See Appendix
0.13(0.20)(Gain) / Loss on Economic Non-Qualifying Hedges
$1.03 $1.79GAAP Earnings
Q3 2005Q3 2006($ per share)
A proven business model, crisp execution and rigorous risk management has enabled Constellation to deliver 20 consecutive
quarters of meeting or exceeding management guidance
6
Q3 2006 Operating Highlights• Merchant business delivered exceptional results in all areas
– Commodities
Delivered strong new business growth via power and portfolio management and trading
Sustained pattern of adding to backlog of future earnings
– NewEnergy
Continued gross margin improvement driven by improved pricing and lower costs to serve load
Strong third quarter sales volumes and high retention rates
– Generation
Improving results driven by roll off of below-market sales from the fleet
On target to achieve full-year productivity target for 2006
• BGE performing in line with expectations
• S&P upgraded CEG senior unsecured debt rating to BBB+ from BBB
7
Sale of Gas-fired Merchant Plants• Announced sale of gas-fired generation plants to Tenaska Power Fund L.P. on
October 11, 2006, for $1.635 billion in cash– Plants sold on a merchant basis– After-tax proceeds expected to be approximately $1.5 billion
– Expect closing by end of 2006 or in early 2007
• Continuation of a consistent pattern to evaluate owned and prospective assets and buy or sell when values are attractive
• If proceeds used to repurchase debt and equity proportional to existing capital structure, transaction would be neutral in 2007 and accretive thereafter
• Proceeds expected to be applied to debt reduction – Should reach long-term target net debt to total capital ratio of 40% upon completion of divestiture– Balance of proceeds and future free cash flow will be available to invest in growth businesses or to
repurchase debt and equity to maintain long-term leverage ratio
• Including effect of de-levering, transaction will be modestly dilutive through 2009 and accretive thereafter
• Continue to evaluate opportunities to grow our asset base
8
Strategic Fundamentals
• Business built on foundation of low-cost baseload fleet
– High quality assets located in high-value markets
• Industry-leading intermediation businesses
– Significantly leveraging the value of our physical asset base
– Provide high-value products and services to customers
• Strong cash flow generation and solid balance sheet enables deployment of capital to continue growth
– Solid track record of managing capital investment to achieve above-hurdle rate returns throughout the commodity cycle
9
Long-term Growth
Expiration of hedges established in 2004 and early 2005 for 2006-2007 imply growing 2008 and 2009 margins
Expiration of Nine Mile Point PPA in 2009 and 2011Roll off of Below-Market Fleet Sales
Generate strong cash flowInvest in above hurdle rate projectsIf none identified – return cash to shareholders as possible
Reinvestment of Cash Flow
Specific targets, detailed plansPattern of executionGinna Uprate
Productivity
WholesalePattern of building backlogModerating new business growth
Retail (commercial & industrial)Realistic switched market growthModest market share gainsModestly improving margins
Growing Market Share as Commodities Intermediary
Fundamental Growth Drivers
Supportive Long-term Commodity Price Outlook
10
Solid Base of Growing Earnings
Note: Includes gas-fired merchant plants, except High Desert
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2004 2005 2006 2007 2008
EBIT
DA (
$ bi
llion
s)
Utility Generation Retail Businesses Commodities - Backlog at 9/30 Commodities - New Business
BGE
Generation Fleet
Retail Businesses
Commodities Backlog at 9/30
Commodities New Business
• Earnings from low-risk sources represent 87% of 2007 EBITDA and 86% of 2008 EBITDA- Base of utility earnings- Highly hedged generation output- Retail businesses (NewEnergy) with high customer retention rates- Strong Commodities backlog of already-originated transactions
11
Long-term Earnings Outlook
(1) Adjusted for the effect of special items, certain economic, non-qualifying hedges and synfuel earnings(2) Adjusted for the effect of special items, certain economic, non-qualifying hedges, synfuel earnings, and impacts of gas-fired generation plant
sales
3.28
3.65 - 3.80
4.40 - 4.65
5.25 - 5.75
$2.00
$3.00
$4.00
$5.00
$6.00
2005 2006E 2007E 2008E
See Appendix
• Business outlook for Constellation Energy continues to gain momentum• Raising 2006 earnings guidance to $3.65 - $3.80 per share from $3.35 - $3.65 per share
excluding impact of gas-fired generation sale• Increasing confidence in ability to deliver on 2007 and 2008 guidance
EPS GuidanceAdjusted EPS (1)
2.90
3.30 - 3.45
4.30 - 4.65
5.25 - 5.75
$2.00
$3.00
$4.00
$5.00
$6.00
2005 2006E 2007E 2008E
Adjusted EPS (2) EPS Guidance
Earnings per Share(Excluding Impact of Plant Sale)
Earnings per Share(Including Impact of Plant Sale)
($ p
er s
hare
)
Financial Overview
E. Follin Smith
13
Q3 2006 Adjusted EPS Summary
(0.08)(0.11)Synfuel Earnings
$1.10 - $1.25Q3 Guidance
$1.08$1.56Adjusted Earnings
-0.08Special Items
See Appendix
0.13(0.20)(Gain) / Loss on Economic Non-Qualifying Hedges
$1.03 $1.79GAAP Earnings
Q3 2005Q3 2006($ per share)
14
Q3 2006 Segment Earnings Per Share (1)
$1.10 - $1.25
(1) Excludes special items, certain economic, non-qualifying hedges and synfuel earnings
NM0.02-0.02Other Non-regulated
See Appendix
Q3 2006 Earnings Guidance
44%$0.48$1.08$1.56Adjusted Earnings Per Share
60%0.500.841.34Merchant
(17%)($0.04)$0.24$0.20BGE
%EPSQ3 2005Q3 2006
Change($ per share)
15
$0.17 - $0.22$0.20Adjusted Earnings
GuidanceActual
Q3 2006Adjusted Earnings vs. Guidance($ per share)
BGE
($0.04)
Change
$0.24$0.20Adjusted Earnings
Q3 2005Q3 2006
Adjusted Earnings vs. Prior Year ($ per share)
See Appendix
16
$0.90 - $1.05$1.34Adjusted Earnings
GuidanceActual (1)
Q3 2006Adjusted Earnings vs. Guidance($ per share)
Merchant
+17¢ Mid-Atlantic Price / CTC
+14¢ New Energy
See Appendix
(1) Excludes special items, certain economic, non-qualifying hedges and synfuel earnings
+3¢ Generation and Headquarters Productivity
-18¢ Inflation, Interest, Other+34¢ Commodities New Business / Backlog / Lower Cost to Serve Load
Variance Primarily Due to:
$0.50$0.84$1.34Adjusted Earnings (1)
ChangeQ3 2005Q3 2006Adjusted Earnings vs. Prior Year($ per share)
17
Merchant – Income Statement (1)
110%5752109NewEnergy
134%165123288Wholesale Competitive Supply
5%12122Qualifying Facilities/Other
(3%)(7)234227 Plants with PPAs
23%$54$231$285 Mid-Atlantic Fleet
1%17675D & A
60%$ 92$152 $244 Net Income
(67%)(64)95159Income Tax
63%156247403Pre-Tax Income
(33%)(12)4052Net Interest Expense
59%168287455EBIT
(28%)(102)374476Total Costs below Gross Margin
(1)
(102)
270
$B / (W)
Change
(3%)
(40%)
41%
%
3839Other Expense
260362O & M
661931Gross Margin
Q3 2005Q3 2006($ in millions)
(1) Excludes special items, certain economic, non-qualifying hedges and synfuel earnings See Appendix
18
Wholesale Competitive Supply (1)
New Business
17053223Total New Business Realized (2)
(1) Excludes special items, certain economic, non-qualifying hedges and synfuel results(2) Includes power, gas (non-project), and coal gross margin and gas project margin (projected revenue less operating, depreciation, depletion and interest expenses
incurred at the project level). Including gas project-level expenses of $14 million in Q3 2006 and $8 million in Q3 2005, total wholesale competitive supply gross margin in Q3 2006 and Q3 2005 was $288 million and $123 million respectively.
9330123Portfolio Management & Trading
See Appendix
139%$160$115$275Total Contribution Margin (2)
7723100Originated & Realized (2)
($10)$62$52Total Already Originated Business (2)
%$Q3 2005Q3 2006
Change($ in millions)
19
Wholesale Competitive Supply: Origination
$152
88
$64
Q3 2005
$322
142
$180
Q3 2006
(1) Includes power, gas (non-project), and coal gross margin and gas project margin (projected revenue less operating, depreciation, depletion and interest expenses incurred at the project level)
(2) Includes gross margin originated to be realized in the current year and future years
104%113%% of Revised Total Origination Target Achieved
75%113%% of Revised Current Year Target Achieved
Total Wholesale Competitive Supply Origination Value to be Realized (1)
$504$908Total Origination Target (2)
$268$536Current Year Target
322425Future Years
$522$1,029Total Originated
$200$604Current Year
To Be Realized In:
Q1 – Q3 2005Q1 – Q3 2006 ($ in millions)
20
Wholesale Competitive Supply Backlog
(1) Includes power, gas (non-project), and coal gross margin and gas project margin (projected revenue less operating, depreciation, depletion and interest expenses incurred at the project level)
(2) Includes portfolio value changes for downstream gas and coal(3) Reflects portfolio pricing on 12/15/05
Backlog (1)
(as of 9/30/06)
300 241 194
604
209
98
$0
$250
$500
$750
$1,000
2006 2007 2008
$ in
mill
ions
New Business Since12/31/05
Value as of 12/31/05(3)
(2)
21
NewEnergy: Improving Performance
Electric Volume Delivered (GWh)
0
25
50
75
3rd Quarter YTD
2005 2006
Realized Electric Gross Margin (GM / MWh)
$1.00
$3.00
$5.00
3Q04 1Q05 3Q05 1Q06 3Q06
Retention Rates
50%
75%
100%
3Q05 4Q05 1Q06 2Q06 3Q06
Including Return to Utility Excluding Return to Utility
Market Share (MW)
0
4,000
8,000
12,000
16,000
Q4 2003 Q4 2004 Q4 2005 Q3 2006
NewEnergy ReliantTXU Great PlainsSUEZ Direct Energy (US Only)Pepco Hess Corp. Sempra
22
NewEnergy: Retail MWh Backlog
Contracted Retail MWh (as of 9/30/06)
6451
16
4019
0
20
40
60
80
100
2005 2006 2007 2008
MW
hs
in m
illio
ns
Delivered Backlog
91% of 2006 plan MWhs delivered or contracted
23
Limiting Variability – Portfolio Management
$0.03
0.06
($0.03)
86%
89%
2007
Percent Hedged as of 9/30/06
0.060.04Fuel down $0.10/MMBtu, Power unchanged
($0.08)($0.05)Power down $1/MWh, Fuel unchanged
59%80%Fuel
($0.02)
Sensitivity to Price Changes as of 9/30/06 ($ per share)
($0.01)Power down $1/MWh, Fuel down $0.10/MMBtu
83%Power 70%
20092008
• Accrual portfolio managed to reduce exposure of future earnings to changes• MTM portfolio VaR levels remain low at average of $13.9 million in Q3 2006
Note: Percent hedged includes Mid-Atlantic Fleet, Plants with PPA’s, and wholesale and retail competitive supply power businesses. Does not include gas businesses or international coal business.
24
Cumulative Productivity
50
(40)
150
89 (1)
(100)
(50)
0
50
100
150
200
2004 2005 2006 2007
Pre-
tax
Earn
ings
($
mil
lion
s)
Realized Target
Productivity
• Year-to-date, realized $39 million, or 98% of our 2006 productivity target• Since announcing our long-term productivity initiatives, we have added $89
million pre-tax to ongoing annual profits(1) 2006 Productivity target of $40 million; achieved year-to-date productivity of $39 million
25
(235)(10)(78)(147)Capital Expenditures & Investments
148115879Depreciation & Amortization
(68)Dividends
15Equity Issuances – Benefit Plans
959(193) (1)143Working Capital & Other
33Pension Adjustment (pre-tax)
$225Net Cash Flow before Debt Issuances/(Payments)
$278$64($178)$359Free Cash Flow
(87)1(20)(68)Net CapEx
$323$4$35$284Net Income Before Special Items
TotalOther
Non-RegUtilityMerchant($ in millions)
Q3 2006 Consolidated Cash Flow
See Appendix
(1) Includes $176m of deferrals related to the BGE Rate Stabilization Plan
26
Significant Excess Liquidity
-0.51.01.52.02.53.03.54.04.55.05.5
($ b
illi
ons)
Cash & Bank Lines Bank Line Usage
31-Dec-01 (1) 31-Dec-02 31-Dec-03 31-Dec-04 31-Mar-05 30-Jun-05 30-Sep-05 31-Dec-05 31-Mar-06 30-Jun-06 30-Sep-06 (2)
Excess Liquidity
• Excess liquidity of $2 billion at the end of third quarter 2006• Pro forma for additional $1 billion credit facility, excess liquidity at the end of the
third quarter 2006 of more than $3 billion
Historical Excess Liquidity
(1) Excludes $2.5 billion bridge facility(2) Pro Forma for $1 billion bank line established on 10/24/2006
27
Balance Sheet
$10.4$10.4Total Capital
4.54.4Equity (1)
0.30.23rd Party Cash Collateral
See Appendix
(1) Includes preferred stock and minority interest(2) Related to cash flow hedges of commodity transactions(3) Excludes AOCI Balance related to cash flow hedges of commodity transactions and 3rd Party Cash Collateral
1.31.2Add Back: AOCI Balance (2)
44.3%45.9%Adjusted Net Debt to Adjusted Total Capital (3)
4.44.7Net Debt
$4.8$4.9Total Debt
Actual
$0.1$0.150% Trust Preferred
Capital
(0.3)(0.2)Less: Cash
Debt
9/30/066/30/06($ in billions)
28
Credit Metrics
Projected (1)
43.7%
$2.1
12/31/05
50.6%
$1.9
12/31/03
See Appendix
(1) Assumes sale of gas-fired merchant plants completed by FYE 2006(2) Net debt adjusted to exclude 3rd party collateral. Total capital adjusted to exclude AOCI balance related to cash flow hedges of commodity transactions, 3rd
party collateral and AOCI balance related to changes in pension and post-retirement accounting
40 %54.8%Adjusted Net Debtto Capital (2)
$3.0+ $0.6Excess Liquidity ($ billions)
12/31/0612/31/01
Actual
• S&P upgraded CEG senior unsecured debt rating to BBB+• Credit metrics continue to strengthen• Additional liquidity provided by $1 billion credit facility activated upon termination
of merger with FPL
29
Projected 2007 Merchant Gross Margin & EBITDA
(2,650)-(2,600)NPV of Hedges (2)
2,700
950
1,750
20
165
600
350
700
-
-
-
-
-
-
-
-
4,200
950
3,250
50
505
1,000
675
1,150
-
-
-
-
-
-
-
-
900900Negative Impact of Hedges (2)
$2,550$ 3,950Total Merchant - Unhedged
1,6503,050Total Merchant
1540QFs/Other
140435NewEnergy
500800Wholesale Competitive Supply
300575Plants with PPAs
$ 600$ 1,000Mid-Atlantic Fleet
EBITDA (1)Gross Margin (1)($ millions)
NOTE: The Merchant Segment is managed using an integrated portfolio approach. To support investors’ analytical work, Constellation has made assumptions on the allocation of costs and expenses to the various components of the Merchant Segment in order to support analytics around valuation. All calculations exclude High Desert Gas Plant.(1) Includes Nuclear Fuel Amortization for Mid-Atlantic Fleet and Plants with PPAs(2) Represents hedges on Mid-Atlantic Fleet and Plants with PPAs
30
17% - 21%$5.25 - $5.75$4.40 – $4.65$3.35 - $3.65$3.28Prior Adjusted Earnings (2)
GuidanceActual
3.65 – 3.80 17% - 21%5.25 - 5.754.40 - 4.653.28Adjusted Earnings (2)
(1) Preliminary guidance(2) Excludes special items, certain economic, non-qualifying hedges and synfuel earnings(3) Excludes special items, certain economic, non-qualifying hedges and synfuel earnings, and High Desert earnings, which will be classified as discontinued
operationsSee Appendix
$5.25 - $5.75
-
2008
(0.10)(0.34)(0.38)High Desert
22% - 26%$4.30 - $4.65$3.30 - $3.45$2.90Adjusted Earnings excluding High Desert (3)
GAGR2007 (1)20062005($ per share)
Long-term Earnings Outlook
31
Q4 2006 Earnings Per Share Guidance
$0.97$0.85 - $1.00Adjusted Earnings Per Share including High Desert (2)
0.720.65 – 0.80Merchant including High Desert
$0.87$0.75 - $0.90Adjusted Earnings Per Share (1)
$0.10
-
0.25
$0.62
Actual Q4 2005
0.01 – (0.01)Other
(1) Excludes special items, certain economic, non-qualifying hedges and synfuel earnings, and High Desert earnings, which will be classified as discontinued operations(2) Excludes special items, certain economic, non-qualifying hedges and synfuel earningsSee Appendix
$0.04Synfuels
0.19 – 0.25BGE
$0.55 - $0.70Merchant
Guidance Q4 2006($ per share)
Additional Modeling Information
33
Gas-fired Plants – Divestiture Accounting• Financial statement impacts in Q4 2006 – all plants classified as held for sale
– All assets and liabilities to be disposed will be reclassified as current in the balance sheet
– Depreciation discontinued immediately– Hedge accounting discontinued immediately, and prior deferred hedge gains or losses
removed from accumulated other comprehensive income (equity) and recognized in earnings
• Presentation of operations beginning in Q4 2006– High Desert – discontinued operations (determined to be a component for which cash
flows and operations will be eliminated)Single income statement line item including both operating results and gain on saleAll prior periods in the income statement will be reclassified to conform
– Other plants not classified as discontinued operations (due to the lack of separately identifiable cash flows and sales of a commodity in a liquid market)
Operations prior to closing and gain on sale reported in operating results
Divestiture will affect financial statements beginning in Q4 2006
34
Discontinued Operations – High Desert• High Desert results will be reclassified to discontinued operations for all
periods presented beginning with 2006 Form 10-K
• Estimated fourth quarter impact of discontinued operation is ($0.10)• Estimated total 2006 impact of discontinued operations is ($0.34)
(1) Excludes effects of cash flow hedges and gain on sale
20062005
$2.56
(0.24)
$2.80
YTD
$0.62
(0.06)
$0.68
Q1
$0.47
(0.09)
$0.56
Q2
$1.47
(0.09)
$1.56
Q3
$2.90$0.87$0.98$0.50$0.55Revised
(0.38)(0.10)(0.10)(0.09)(0.09)Discontinued Operations (1)
$3.28$0.97$1.08$0.59$0.64As reported
Adjusted EPS
Q4Q3Q2Q1 YTD
See Appendix
35
Gas Plants – Gain on Sale and Proceeds• Gain on sale of approximately $258 million pre-tax will be recognized at closing
• Actual proceeds and net assets sold subject to adjustment prior to closing
258Gain – pre-tax
$1,453Estimated after-tax cash
164– after-tax
1,374Net assets at 9/30/06
$1,632Total estimated proceeds
( $ in millions)
36
$(167) $(80)$154$(321)$(401)Cash Collateral Held
$(33)
(84)
(238)
(19)
($219)
Q3 Change B / (W)
$543 ($477)$762$285Exchanges
(99)185166863rd Parties
(576)947709371Subtotal Posted
Collateral Posted
(656)626542(30)Net Cash Posted Subtotal
($5)Change in Total Collateral Posted
651 $1,835$1,802$2,486Letters of Credit Posted
Change vs. Year-End B / (W)9/30/066/30/0612/31/05($ in millions)
Collateral Positions
Shift from letters of credit to cash collateral has had little impact on our liquidity
37
Synfuel Update (1)
(58)(53)(37)(6)Current period credit phase-out
$0.16
$29
($42)
-
$11
42%
$71
129
35
($94)
2006 Estimate
$0.12
$22
($28)
-
$9
42%
$50
91
25
($67)
YTD 09/30/06
$0.14
$24
($48)
-
$10
42%
$72
142
42
($111)
2007 Estimate
Tax credit phase-out percentage
$0.11Net synfuel EPS
$20Net synfuels income
-Production expenses, net of tax
Impact of phase-out
Pre-phase-out:
$13
19
$8
15
5
($12)
Q3 2006
Net income impact of phase-out
Phase-out catch-up prior quarters
Net income pre-phase-out
Tax credits before phase-out
Tax benefit of pre-tax loss
Pre-tax loss on production
($ in millions, except per share amounts)
(1) Numbers may not sum due to rounding
38
South Carolina Synfuel (1)
(1) Numbers may not sum due to rounding
In mid-September, South Carolina increased production from 80,000 tons to full production of 250,000 –300,000 tons/month
3.02.81.90.4Production (tons in millions)
(37)(34)(24)(5)Current period credit phase-out
$0.09
$16
($31)
-
$4
42%
$47
84
24
($62)
2006 Estimate
$0.07
$12
($21)
-
$3
42%
$33
59
16
($42)
YTD 09/30/06
$0.07
$13
($33)
-
$4
42%
$46
92
29
($74)
2007 Estimate
Tax credit phase-out percentage
$0.07Net synfuel EPS
$13Net synfuels income
($1)Production expenses, net of tax
Impact of phase-out
Pre-phase-out:
$6
12
$7
12
3
($9)
Q3 2006
Net income impact of phase-out
Phase-out catch-up prior quarters
Net income pre-phase-out
Tax credits before phase-out
Tax benefit of pre-tax loss
Pre-tax loss on production
($ in millions, except per share amounts)
39
Pace Synfuel (1)
(1) Numbers may not sum due to rounding
In October, Pace synfuel facilities resumed production of approximately 150,000 tons/month
1.71.51.10.1Production (tons in millions)
(21)(18)(13)(1)Current period credit phase-out
$0.07
$13
($11)
-
$7
42%
$24
45
1
($32)
2006 Estimate
$0.05
$10
($7)
-
$6
42%
$16
32
9
($25)
YTD 09/30/06
$0.06
$11
($15)
-
$6
42%
$26
50
13
($37)
2007 Estimate
Tax credit phase-out percentage
$0.04Net synfuel EPS
$8Net synfuels income
$1Production expenses, net of tax
Impact of phase-out
Pre-phase-out:
$7
7
$1
3
1
($3)
Q3 2006
Net income impact of phase-out
Phase-out catch-up prior quarters
Net income pre-phase-out
Tax credits before phase-out
Tax benefit of pre-tax loss
Pre-tax loss on production
($ in millions, except per share amounts)
Non-GAAP Appendix
41
Summary of Non-GAAP Measures
Slide(s) Where Used Slide Containing Non-GAAP Measure in Presentation Most Comparable GAAP Measure Reconciliation
Adjusted EPS Reported GAAP EPSQ306 Actual 5, 13, 14, 15, 16 42Q305 Actual 5, 13, 14, 15, 16 42EPS Guidance 5, 11, 13, 14, 15, 16, 30, 31 422005 YTD Actual 11, 30 43Q1, Q2, Q3, and 9 months 06 Actual 34 43Q1, Q2, Q3, and Q4 05 Actual 34 43Q405 Actual 31 44
Q306 Merchant Gross Margin 17, 18 Income from Operations / Net Income 45Q305 Merchant Gross Margin 17, 18 46Q306 Merchant Below Gross Margin 17 45Q305 Merchant Below Gross Margin 17 46
Net Cash Flow before Debt Issuances/(Payments) 25 Operating, Investing and Financing Cash Flow 47Free Cash Flow 25 47
Debt to Total Capital 27, 28 Debt Divided by Total Capitalization 48Projected Debt to Total Capital 28 48
42
Adjusted EPS Q306 and Q305We exclude special items and certain economic, non-qualifying fuel adjustment clause and gas transportation and storage hedges 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 have also adjusted earnings to exclude synfuel results due to the potential volatility and phase-out of the tax credits. We believe such a measure provides a picture of our results that is comparable among periods since it excludes the impact of items, which may recur occasionally, but tend to be irregular as to timing and magnitude, thereby distorting comparisons between periods. However, investors should note that this non-GAAP measure involve judgment by management (in particular, judgments as to what is or is not classified as a special item). We also use this measure to evaluate performance and for compensation purposes.
RECONCILIATION:Merchant Regulated Regulated OtherEnergy Electric Gas BGE Nonreg. Total
A B C D = (B+C) E F =(A+D+E)
3Q06 ACTUAL RESULTS:
Reported GAAP EPS 1.57$ 0.24$ (0.04)$ 0.20$ 0.02$ 1.79$ GAAP MEASURE
Special Items, Non-qualifying Hedges, and Synfuel Results Included in Operations:
Non-qualifying hedges 0.20 - - - - 0.20
Synthetic fuel facility results 0.11 - - - - 0.11
Workforce reduction costs (0.07) - - - - (0.07)
Merger-related costs (0.01) - - - - (0.01)
Total Special Items, Non-qualifying Hedges, and Synfuel Results 0.23 - - - - 0.23
Adjusted EPS 1.34$ 0.24$ (0.04)$ 0.20$ 0.02$ 1.56$ NON-GAAP MEASURE
3Q05 ACTUAL RESULTS:
Reported GAAP EPS 0.78$ 0.28$ (0.04)$ 0.24$ 0.01$ 1.03$
Income from Discontinued Operations - - - - 0.01 0.01 GAAP MEASURES
0.78 0.28 (0.04) 0.24 - 1.02
Special Items, Non-qualifying Hedges, and Synfuel Results Included in Operations:
Non-qualifying hedges (0.13) - - - - (0.13)
Synthetic fuel facility results 0.08 - - - - 0.08
Workforce reduction costs (0.01) - - - - (0.01)
Total Special Items, Non-qualifying Hedges, and Synfuel Results (0.06) - - - - (0.06)
Adjusted EPS 0.84$ 0.28$ (0.04)$ 0.24$ -$ 1.08$ NON-GAAP MEASURE
EARNINGS GUIDANCE Constellation Energy is unable to reconcile its earnings guidance excluding special items, non-qualifying hedges, and synfuel results to GAAP earnings per share because we do not predict the future impact of special items such as the cumulative effect of changes in accounting principles, the disposition of assets, economic, nonqualifying hedges or synfuel results.
EPS Before Discontinued Operations
43
Adjusted EPS – Prior PeriodsWe exclude special items and certain economic, non-qualifying fuel adjustment clause and gas transportation and storage hedges 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 have also adjusted earnings to exclude synfuel results due to the potential volatility and phase-out of the tax credits. We believe such a measure provides a picture of our results that is comparable among periods since it excludes the impact of items, which may recur occasionally, but tend to be irregular as to timing and magnitude, thereby distorting comparisons between periods. However, investors should note that this non-GAAP measure involve judgment by management (in particular, judgments as to what is or is not classified as a special item). We also use this measure to evaluate performance and for compensation purposes.
RECONCILIATION:2005 YTD
Q1 05 Q2 05 Q3 05 Q4 05 Total Q1 06 Q2 06 Q3 06 Sept 06
ACTUAL RESULTS:
Reported GAAP EPS 0.68$ 0.68$ 1.03$ 1.09$ 3.47$ 0.63$ 0.52$ 1.79$ 2.94$
Income from Discontinued Operations - High Desert 0.09 0.09 0.10 0.10 0.38 0.06 0.09 0.09 0.24 GAAP MEASURES
Income from Discontinued Operations - Others 0.01 0.02 0.01 0.09 0.13 - - - 0.01
Cumulative Effects of Changes in Accounting Principles - - - (0.04) (0.04) - - - -
0.58 0.57 0.92 0.94 3.00 0.57 0.43 1.70 2.69
Special Items and Non-qualifying Hedges Included in Operations:
Non-qualifying hedges (0.04) (0.02) (0.13) 0.06 (0.14) (0.06) - 0.20 0.14
Merger related transaction costs - - - (0.09) (0.09) (0.01) (0.03) (0.01) (0.05)
Workforce reduction costs - - (0.01) - (0.01) - - (0.07) (0.08)
Total Special Items and Non-qualifying Hedges (0.04) (0.02) (0.14) (0.03) (0.24) (0.07) (0.03) 0.12 0.01
Adjusted EPS 0.62 0.59 1.06 0.97 3.24 0.64 0.46 1.58 2.68 NON-GAAP MEASURE
Synthetic fuel facility earnings 0.07 0.09 0.08 0.10 0.34 0.02 (0.01) 0.11 0.12 Adjusted EPS excluding Synfuel results 0.55$ 0.50$ 0.98$ 0.87$ 2.90$ 0.62$ 0.47$ 1.47$ 2.56$ NON-GAAP MEASURE
EPS Before Discontinued Operations and Cumulative Effects of Changes in Accounting Principles
44
Adjusted EPS 4Q05We exclude special items and certain economic, non-qualifying fuel adjustment clause and gas transportation hedges 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 have also adjusted earnings to exclude synfuel results due to the potential volatility and phase-out of the tax credits. We believe such a measure provides a picture of our results that is comparable among periods since it excludes the impact of items, which may recur occasionally, but tend to be irregular as to timing and magnitude, thereby distorting comparisons between periods. However, investors should note that this non-GAAP measures involve judgment by management (in particular, judgments as to what is or is not classified as a special item). We also use these measures to evaluate performance and for compensation purposes.
RECONCILIATION:Merchant Regulated Regulated OtherEnergy Electric Gas BGE Nonreg. Total
A B C D = (B+C) E F =(A+D+E) 4Q05 ACTUAL RESULTS:Reported GAAP EPS 0.78$ 0.17$ 0.05$ 0.22$ 0.09$ 1.09$ Income from Discontinued Operations * 0.10 - - - 0.09 0.19 GAAP MEASURESCumulative Effects of Changes in Accounting Principles (0.04) - - - - (0.04)
0.72 0.17 0.05 0.22 - 0.94 Special Items, Non-qualifying Hedges, and Synfuel Results Included in Operations:
Synthetic fuel facility results 0.10 - - - - 0.10
Non-qualifying hedges 0.06 - - - - 0.06 Merger related transaction costs (0.06) (0.02) (0.01) (0.03) - (0.09) Total Special Items and Non-qualifying Hedges 0.10 (0.02) (0.01) (0.03) - 0.07
Adjusted EPS 0.62$ 0.19$ 0.06$ 0.25$ -$ 0.87$ NON-GAAP MEASURE
* Merchant includes the reclassification of High Desert to Discontinued Operations
EPS Before Discontinued Operations and Cumulative
45
Q306 Merchant Gross Margin and Below Gross MarginWe utilize the non-GAAP financial measure of Gross Margin to highlight the relationship between the costs of and prices for energy in our Merchant Energy business categories (i.e., Mid-Atlantic Fleet, Plants with PPAs, Wholesale Competitive Supply, NewEnergy, and QFs/Other). We believe this non-GAAP measure helps investors to better understand the changes in the level of our Merchant Energy operating results for these categories from period to period.
RECONCILIATION:GAAP Adjustments Merchant
GAAP Fuel & Purchased In Arriving Gross MarginMerchant Revenue & Expense Categories Revenues Energy Expenses Difference At Gross Margin Notes (Non-GAAP)
($ millions)Mid-Atlantic Fleet 1,002.2$ 605.3$ 396.9$ (112)$ a, b, c 285$ Plants with PPAs 255.0 16.8 238.2 (11) a 227 Wholesale Competitive Supply 1,668.9 1,469.0 199.9 88 a , d, e 288 **NewEnergy 2,094.8 1,964.9 129.9 (20) d 109 QFs / Other 28.1 - 28.1 (7) e, f 22
Total Merchant 5,049.0$ 4,056.0$ 993.0$ (62)$ 931$
Adjustments Merchant Below Arriving At Merchant Gross Margin
Total Merchant: GAAP Below Gross Margin (Non-GAAP)Revenues less fuel and purchased energy expenses 993.0$ 931$ Operations and maintenance expenses (372.6) 11 g, h, i (362) Workforce reduction costs (21.7) 22 j - Merger-related costs (2.5) 3 j - Depreciation, depletion, and amortization (72.9) (2) h, i (75) Taxes other than income taxes (32.6) 33 k - Accretion of asset retirement obligations (17.1) 17 k -
Income From Operations 473.6 494 Other income / (expense) 3.8 (43) b, k, l (39)
EBIT N/A 455 Fixed charges (51.1) (0) i, l (52)
Income Before Income Taxes 426.3 403 Income tax expense (141.5) (18) i, j, m (159)
Net Income 284.8$ 244$
Details of Adjustments Made in Arriving at Merchant Gross Margin:a Adjustment to remove ($115 million) gain from Mid-Atlantic Fleet and ($11 million) gain from Plants with PPA's of estimated gross margin created through active portfolio
management more appropriately categorized as a competitive supply activity.b Adjustment to remove ($5 million) of decommissioning revenues from non-GAAP gross margin measure and included in Other Income. The offsetting decommissioning
expense was recorded in accretion of asset retirement obligations.c Adjustment to remove $8 million of other indirect costs from non-GAAP gross margin as they are more appropriately categorized as operating expenses.d Adjustment to remove ($39 million) gain in Wholesale Competitive Supply and ($20 million) gain in NewEnergy related to economic, non-qualifying hedges of gas transport contracts.e Adjustment to remove synfuel losses from Wholesale Competitive Supply gross margin of $1 million and Other gross margin of $3 million.f Adjustment to reflect ($10 million) of direct costs in Other for purposes of non-GAAP gross margin measure.
Details of Adjustments Made in Arriving at Merchant Below Gross Margin:g Adjustment detailed in "c" and "f" above are offset by adjustments made to O&M costs. h Adjustment to reclassify certain allocated costs totaling $8 million from O&M to Depreciation and Amortization.i Adjustment to remove Synfuel results, which are not included in determining Merchant Below Gross Margin - $1 million in O&M, $6 million in D&A, $2 million in Fixed Charges, and ($32 million) from income tax expense.j Adjustment to remove Special Items and related taxes, which are not included in determining Merchant Below Gross Margin.k Adjustment to reflect management's view of these items as Other Income / Expense.l Adjustment to move Interest Income of $2 million recorded in Other Income / Expense to Fixed Charges (to show a fixed charge amount net of interest income).m Adjustment to remove tax expense of $23 million related to gains on economic, non-qualifying hedges of gas transportation and storage contracts.
** Excludes $13 million of operating expenses, depreciation, depletion and amortization, and interest expense associated with our Upstream Gas properties
PROJECTED GROSS MARGIN AND RESULTS BELOW GROSS MARGIN:Constellation Energy is unable to reconcile its projected gross margin or results below gross margin to GAAP because we do not predict the future impact of reconciling items or special items such as the cumulative effect of changes in accounting principles and the disposition of assets.
Quarter Ended September 30, 2006
46
Q305 Merchant Gross Margin and Below Gross MarginWe utilize the non-GAAP financial measure of Gross Margin to highlight the relationship between the costs of and prices for energy in our Merchant Energy business categories (i.e., Mid-Atlantic Fleet, Plants with PPAs, Wholesale Competitive Supply, NewEnergy, and QFs/Other). We believe this non-GAAP measure helps investors to better understand the changes in the level of our Merchant Energy operating results for these categories from period to period.
RECONCILIATION:GAAP Adjustments Merchant
GAAP Fuel & Purchased In Arriving Gross MarginMerchant Revenue & Expense Categories Revenues Energy Expenses Difference At Gross Margin Notes (Non-GAAP)
($ millions)Mid-Atlantic Fleet 746.7$ 563.8$ 182.9$ 48$ a, b 231$ Plants with PPAs 254.6 23.7 230.9 3 a 234 Wholesale Competitive Supply 1,383.0 1,252.5 130.5 (8) a , c, d, e 123 **NewEnergy 1,990.1 1,938.0 52.1 - 52 QFs / Other 22.8 - 22.8 (2) d, e 21
Total Merchant 4,397.2$ 3,778.0$ 619.2$ 41$ 661$
Adjustments Merchant Below Arriving At Merchant Gross Margin
Total Merchant: GAAP Below Gross Margin (Non-GAAP)Revenues less fuel and purchased energy expenses 619.2$ 661$ Operations and maintenance expenses (273.4) 13 f, g, h (260) Workforce reduction costs (3.9) 4 iDepreciation, depletion, and amortization (74.3) (2) g, h (76) Taxes other than income taxes (31.3) 31 j - Accretion of asset retirement obligations (15.8) 16 j -
Income From Operations 220.5 325 Other income / (expense) 9.7 (46) b, j, k (38)
EBIT N/A 287 Fixed charges (43.8) 4 k (40)
Income Before Income Taxes 186.4 247 Income tax expense (44.7) (51) h, i, l (95)
Income from Continuing Operations 141.7 152 Loss from discontinued operations (0.2) 0.2 m -
Net Income 141.5$ 152$
Details of Adjustments Made in Arriving at Merchant Gross Margin:a Adjustment to remove losses of $53 million from Mid-Atlantic Fleet and losses of $3 million from PPAs of estimated gross margin created through active
portfolio management more appropriately categorized as a competitive supply activity.b Adjustment to remove ($5 million) of decommissioning revenues from non-GAAP gross margin measure and included in Other Income. The offsetting
decommissioning expense was recorded in accretion of asset retirement obligations.c Adjustment to remove $36 million loss related to economic, non-qualifying hedges of fuel adjustment clauses and gas transport contracts.d Adjustment to remove synfuel losses from Wholesale Competitive Supply gross margin of $5 million and Other gross margin of $8 million.e Adjustment to remove indirect costs $8 million in Wholesale Competitive Supply and reflect ($10 million) in Other for purposes of non-GAAP gross margin measure.
Details of Adjustments Made in Arriving at Merchant Below Gross Margin:f Adjustment detailed in "e" above are offset by adjustments made to O&M costs. g Adjustment to reclassify certain allocated costs totaling $8 million from O&M to Depreciation and Amortization.h Adjustment to remove Synfuel results, which are not included in determining Merchant Below Gross Margin - $2 million in O&M, $6 million in D&A, and ($34 million) from income tax expense.i Adjustment to remove Special Items and related taxes, which are not included in determining Merchant Below Gross Margin.j Adjustment to reflect management's view of these items as Other Income / Expense.k Adjustment to move Interest Income of $4 million recorded in Other Income / Expense to Fixed Charges (to show a fixed charge amount net of interest income).l Adjustment to remove tax benefit ($15 million) related to losses on economic, non-qualifying hedges of fuel adjustment clauses and gas transport contracts.m Adjustment to remove loss from discontinued operations which is treated as a special item.
** Excludes $8 million of operating expenses, depreciation, depletion and amortization, and interest expense associated with our Upstream Gas properties
PROJECTED GROSS MARGIN AND RESULTS BELOW GROSS MARGIN:Constellation Energy is unable to reconcile its projected gross margin or results below gross margin to GAAP because we do not predict the future impact of reconciling items or special items such as the cumulative effect of changes in accounting principles and the disposition of assets.
Quarter Ended September 30, 2005
47
Cash FlowsThe following is a reconciliation of the non-GAAP financial measures of Net Cash Flow before Debt Issuances/Payments and Free Cash Flow for the nine months ended September 30, 2006. We utilize these non-GAAP measures because we believe they are helpful in understanding our ability to reduce debt by existing cash.
RECONCILIATION:
QTD SEPTEMBER ACTUAL RESULTS:Net cash used in operating activities (GAAP measure) 582 Adjustment for derivative contracts presented as financing activities under SFAS 149 (5) Adjusted Net Cash Used in Operating Activities 577$ NON-GAAP MEASURE
Net cash used in investing activities (GAAP measure) (300)
Net Cash Used in Financing Activities (Excl. Debt-Related Sources & Uses) *Common stock dividends paid (68) Proceeds from issuance of common stock 15 Net proceeds from acquired contracts - Other financing activities, excluding SFAS 149 activities included in operating 1 Adjusted Net Cash Used in Financing Activities (52)
Net Cash Flow before Debt Issuances/(Payments) 225 NON-GAAP MEASURE
Less: Proceeds from issuance of common stock (15) Add: Common stock dividends paid 68
Free Cash Flow 278$ NON-GAAP MEASURE
* Total GAAP Cash Used in Financing Activities (incl. debt-related sources & uses) was $189 million QTD SEPTEMBER 06.
PROJECTED CASH FLOWS:Constellation Energy is unable to provide a reconciliation of these measures for Projected 2006 because it does not prepare a forecasted statement of cash flows on a GAAP basis.
2006($ millions)
48
Debt to Total CapitalDebt to Total CapitalDebt to Total Capital is a non-GAAP ratio that excludes unamortized discounts and premiums, reduces debt by our cash balance, and includes minority interests in equity. In addition, we reflect a 50 percent equity credit for our trust preferred securities and remove the non-economic impact commodity hedges and cash collateral held, similar to the evaluation performed by major credit rating agencies. Management believes this non-GAAP measures provide investors useful information on our leverage because it is consistent with the evaluation performed by rating agencies, takes into account minority equity interests in our consolidated affiliates and cash available to reduce debt, and facilitates comparability between periods.
RECONCILIATION:
Total long-term debt (gross of current portion) 4,449.5$ 4,449.5$ 4,590.9$ 4,590.9$ 4,610.9$ 4,610.9$ 5,134.9$ 5,134.9$ 3,874.4$ 3,874.4$
Fair value decrease in fixed to floating rate swap included in long-term debt 0.4 21.7 0.9 - -
6.20% deferrable interest subordinated debentures due
October 15, 2043 to BGE wholly owned BGE Capital
Trust II relating to trust originated preferred securities 257.7 257.7 257.7 257.7 257.7 257.7 257.7 257.7 250.0 250.0 50% Equity credit to trust preferred securities - (125.0) - (125.0) - (125.0) - (125.0) - (125.0) Adjustment to include High Desert Lease on Balance Sheet at December 31, 2001 - - - - - - - - - 221.0 Short-term borrowings 185.0 185.0 155.0 155.0 0.7 0.7 9.6 9.6 975.0 975.0 Unamortized discount and premium (5.2) - (6.0) - (8.0) - (10.2) - (5.2) - Subtotal 4,887.0 4,767.6 4,997.6 4,900.3 4,861.3 4,745.2 5,392.0 5,277.2 5,094.2 5,195.4 LESS: Cash - 320.7 - 228.1 - 813.0 - 721.3 - 72.4 Total Net Debt 4,887.0 4,446.9 48.8% 4,997.6 4,672.2 50.7% 4,861.3 3,932.2 42.8% 5,392.0 4,555.9 49.9% 5,094.2 5,123.0 54.6%
BGE Preference Stock Not Subject To Mandatory Redemption 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 190.0 Minority Interests - 21.9 - 21.6 - 22.4 - 113.4 - 101.8 Common shareholders' equity 4,329.6 4,329.6 4,208.5 4,208.5 4,915.5 4,915.5 4,140.5 4,140.5 3,843.6 3,843.6
Subtotal 4,519.6 4,541.5 4,398.5 4,420.1 5,105.5 5,127.9 4,330.5 4,443.9 4,033.6 4,135.4 50% Equity credit to trust preferred securities - 125.0 - 125.0 - 125.0 - 125.0 - 125.0
Total Equity 4,519.6 4,666.5 51.2% 4,398.5 4,545.1 49.3% 5,105.5 5,252.9 57.2% 4,330.5 4,568.9 50.1% 4,033.6 4,260.4 45.4%
Total Capitalization 9,406.6$ 9,113.4$ 100.0% 9,396.1$ 9,217.3$ 100.0% 9,966.8$ 9,185.1$ 100.0% 9,722.5$ 9,124.8$ 100.0% 9,127.8$ 9,383.4$ 100.0%
Exclude commodity hedge AOCI Balance from common shareholders' equity 1,333.1 1,157.0 323.0 (9.6) (30.0) Counterparty cash collateral held reflected as a reduction of cash balance (328) (167) (388) (120) - Adjusted Net Debt to Total Capital 44.3% 45.9% 43.7% 50.6% 54.8%
PROJECTED LEVERAGE RATIOS:Constellation Energy is unable to provide a reconciliation of this measure for Projected 2006 because it does not prepare a forecasted balance sheet on a GAAP basis.
($ millions)
December 31, 2005
GAAP Balances Non-GAAP Ratio GAAP Balances Non-GAAP Ratio
December 31, 2001
GAAP Balances Non-GAAP Ratio
December 31, 2003
GAAP Balances Non-GAAP Ratio
September 30, 2006
GAAP Balances Non-GAAP Ratio
June 30, 2006