CEG » Topics » About Constellation Energy

This excerpt taken from the CEG 8-K filed Feb 22, 2010.

About Constellation Energy

 

Constellation Energy (www.constellation.com) is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers. It owns a diversified fleet of generating units located in the United States and Canada, totaling approximately 7,100 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the United States. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. A FORTUNE 500 company headquartered in Baltimore, Constellation Energy had revenues of $15.6 billion in 2009.

 

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This excerpt taken from the CEG 8-K filed Oct 30, 2009.

About Constellation Energy

 

Constellation Energy (www.constellation.com) is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers. It owns a diversified fleet of generating units located throughout the United States, totaling approximately 9,100 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the United States. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. A FORTUNE 500 company headquartered in Baltimore, Constellation Energy had revenues of $19.8 billion in 2008.

 

6



 

This excerpt taken from the CEG 8-K filed Jul 31, 2009.

About Constellation Energy

 

Constellation Energy (www.constellation.com) is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers.  It owns a diversified fleet of generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the United States.  The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.  A FORTUNE 500 company headquartered in Baltimore, Constellation Energy had revenues of $19.8 billion in 2008.

 

6



 

These excerpts taken from the CEG 10-Q filed May 8, 2009.

Constellation Energy

Constellation Energy had bank and other lines of credit under committed unsecured credit facilities totaling $6.2 billion at March 31, 2009 for short-term financial needs. We enter into these facilities to ensure adequate liquidity to support our operations.

        Our liquidity requirements are funded with credit facilities and cash. We fund our short-term working capital needs with existing cash and with our credit facilities, which support direct cash borrowings and the issuance of commercial paper, if available. We also use our credit facilities to support the issuance of letters of credit, primarily for our merchant energy business.

        These facilities can issue letters of credit, commercial paper, if available, and/or cash borrowings up to approximately $6.2 billion as shown below. As of March 31, 2009, we had approximately $3.4 billion in letters of credit issued and borrowed approximately $700 million against those facilities. The weighted-average effective interest rate for this outstanding borrowing was 3.15% at March 31, 2009. At April 30, 2009, we had approximately $3.1 billion in letters of credit issued and borrowed approximately $350 million against those facilities.

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        We have also included the pro forma effect on our credit facilities, which are reduced or terminated upon the occurrence of certain events, of closing the transactions contemplated by the Investment Agreement with EDF, which is expected to occur in the third quarter of 2009:

Facility Expiration
  Facility
Size

  Facility Size
Upon Completion
of the EDF
Transaction

 
   
 
  (In billions)
 

July 2012

  $ 3.85   $ 2.32  

November 20091

    1.23      

June 20092

    0.60      

September 2013

    0.35      

December 2009

    0.15      
   

Total

  $ 6.18   $ 2.32  
   

Constellation Energy

At March 31, 2009, we had approximately $6.2 billion in committed credit facilities available as shown below. We have also included the pro forma effect on our credit facilities, which are reduced or terminated upon the occurrence of certain events, of closing the EDF transactions:

Facility Expiration
  Facility
Size

  Facility Size
Upon Completion
of the EDF
Transactions

 
   
 
  (In billions)
 

July 2012

  $ 3.85   $ 2.32  

November 20091

    1.23      

June 20092

    0.60      

September 2013

    0.35      

December 2009

    0.15      
   
 

Total

  $ 6.18   $ 2.32  
   

1 Size of facility may be reduced by proceeds received from certain securities offerings or asset sales.
2 This facility terminated during April 2009 as a result of the EDF put arrangement becoming effective.

        Collectively, these facilities currently support the issuance of letters of credit and/or cash borrowings up to approximately $6.2 billion as of March 31, 2009. At March 31, 2009, we had approximately $3.4 billion in letters of credit issued, and we borrowed approximately $0.7 billion under one of our credit facilities, and we had no commercial paper outstanding. During the month of April 2009, Constellation Energy issued no commercial paper. We may utilize commercial paper as a primary source of short-term debt if market conditions return to normal.

        In connection with the Investment Agreement with EDF, EDF has provided us with up to $2 billion pre-tax, or approximately $1.4 billion after-tax, of additional liquidity pursuant to a put arrangement that will allow us to require EDF to purchase certain non-nuclear generation assets. The amount of after-tax proceeds will be impacted by the assets actually sold and the related tax impacts at that time.

        During April 2009, we received regulatory approvals and consents for the majority of the assets covered by the put arrangement. As of April 30, 2009, we have approximately $1.1 billion after-tax of liquidity becoming available. We expect to receive regulatory approval for an additional asset in the third quarter of 2009, which will increase the net after-tax liquidity to $1.4 billion. The $600 million interim backstop liquidity facility provided by EDF terminated as a result of the put arrangement becoming available. The put arrangement will expire at the

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earlier of December 31, 2010 or the termination of the Investment Agreement by EDF in the event of a breach of contract by us.

        Certain credit facilities of Constellation Energy contain a provision requiring Constellation Energy to maintain a ratio of debt to capitalization equal to or less than 65%. At March 31, 2009, the debt to capitalization ratios as defined in the credit agreements were no greater than 56%.

        Our $1.23 billion credit facility requires us to maintain consolidated earnings before interest, taxes, depreciation, and amortization to consolidated interest expense ratio of at least 2.75 when our Standard and Poors (S&P) senior unsecured debt rating is BBB- or lower and our Moody's senior unsecured debt rating is Baa3 or lower. Compliance with the covenant is not required as of April 30, 2009 as S&P's senior unsecured debt rating is above BBB-.

        The terms of the Series B Preferred Stock allow us to issue debt without the consent of the holders of the majority of the Series B Preferred Stock only if, after issuance of such debt, we maintain a ratio of debt to capitalization equal to or less than 65%.

        Under our $3.85 billion and $1.23 billion credit facilities, we will be required to grant a lien on certain generating facilities and pledge our ownership interests in our nuclear business to the lenders upon the earlier of (i) the closing of the Investment Agreement with EDF or (ii) the date on which both the Investment Agreement is terminated and our S&P or FitchRatings senior unsecured debt credit rating is below BBB- or our Moody's senior unsecured debt credit rating is below Baa3.

This excerpt taken from the CEG 8-K filed May 5, 2009.

About Constellation Energy

 

Constellation Energy (www.constellation.com) is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers. It owns a diversified fleet of generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the United States. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. A FORTUNE 500 company headquartered in Baltimore, Constellation Energy had revenues of $19.8 billion in 2008.

 

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These excerpts taken from the CEG 10-K filed Feb 27, 2009.

Constellation Energy

At December 31, 2008, we had approximately $6.2 billion in committed credit facilities available as shown below. We have also included the pro forma effect on our credit facilities, which are reduced or terminated upon the occurrence of certain events, of closing the EDF transactions:

Facility Expiration
  Facility
Size

  Facility Size
Upon Completion
of the EDF
Transactions

 
   
 
  (In billions)
 

July 2012

  $ 3.85   $ 2.32  

November 2009 (A)

    1.23      

June 2009 (B)

    0.60      

September 2013

    0.35      

December 2009

    0.15      
   

Total

  $ 6.18   $ 2.32  
   
(A)
Size of facility may be reduced by proceeds received from certain securities offerings or asset sales.

(B)
We discuss this facility provided by EDF in more detail in Note 8 to Consolidated Financial Statements. Terminates at the earliest of satisfying conditions to exercise the put on assets having a value of at least $600 million under the put arrangement discussed in Note 8 to Consolidated Financial Statements, receipt of alternative financing of $600 million, or June 2009.

        Collectively, these facilities currently support the issuance of letters of credit and/or cash borrowings up to $6.2 billion. In late September 2008, we were unable to issue commercial paper to replace maturing commercial paper and meet other obligations. Instead, we borrowed $485.7 million under one of our credit facilities to secure funds. At December 31, 2008, we had no commercial paper outstanding. During the month of January 2009, Constellation Energy issued no commercial paper. We may utilize commercial paper as a primary source of short-term debt if market conditions return to normal.

        In connection with the Investment Agreement with EDF, EDF has provided us with up to $2 billion pre-tax, or approximately $1.4 billion after-tax, of additional liquidity pursuant to a put arrangement that will allow us to require EDF to purchase certain non-nuclear generation assets.

        Our ability to exercise the put arrangement is contingent on certain regulatory approvals that we expect will be received

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for all assets covered by the arrangement by April 2009, except for Safe Harbor Water Power Corporation, which is expected by the third quarter of 2009. In addition, exercise of the put option is conditioned upon third-party consents, the absence of any material liens on such assets, and the absence of a material adverse effect, as defined in the Investment Agreement. The put arrangement will expire at the earlier of December 31, 2010 or the termination of the Investment Agreement by EDF in the event of a breach of contract by us.

        Certain credit facilities of Constellation Energy contain a provision requiring Constellation Energy to maintain a ratio of debt to capitalization equal to or less than 65%. At December 31, 2008, the debt to capitalization ratios as defined in the credit agreements were no greater than 57%.

        Our $1.23 billion credit facility requires us to maintain consolidated earnings before interest, taxes, depreciation, and amortization to consolidated interest expense ratio of at least 2.75 when our Standard and Poors senior unsecured debt rating is BBB- or lower and our Moody's senior unsecured debt rating is Baa3 or lower.

        The terms of the Series B Preferred Stock allows us to issue debt without the consent of the holders of the majority of the Series B Preferred Stock only if, after issuance of such debt, we maintain a ratio of debt to capitalization equal to or less than 65%.

        Under our $3.85 billion and $1.23 billion credit facilities, we will be required to grant a lien on certain generating facilities and pledge our ownership interests in our nuclear business to the lenders if the Investment Agreement with EDF has closed or been terminated and our Standard & Poors Rating Group or FitchRatings senior unsecured debt credit rating is below BBB- or our Moody's senior unsecured debt credit rating is below Baa3.

Constellation Energy



At December 31, 2008, we had approximately $6.2 billion in committed credit facilities available as shown below. We have also included
the pro forma effect on our credit facilities, which are reduced or terminated upon the occurrence of certain events, of closing the EDF transactions:






































































































Facility Expiration
 Facility

Size

 Facility Size

Upon Completion

of the EDF

Transactions

 
  
 
 (In billions)
 

July 2012

 $3.85 $2.32 

November 2009 (A)

  1.23   

June 2009 (B)

  0.60   

September 2013

  0.35   

December 2009

  0.15   
  

Total

 $6.18 $2.32 
  




(A)
Size of facility may be reduced by proceeds received from certain securities offerings or asset sales.


(B)
We discuss this facility provided by EDF in more detail in Note 8 to Consolidated Financial Statements. Terminates at the earliest of satisfying
conditions to exercise the put on assets having a value of at least $600 million under the put arrangement discussed in Note 8 to Consolidated Financial Statements, receipt of
alternative financing of $600 million, or June 2009.


        Collectively,
these facilities currently support the issuance of letters of credit and/or cash borrowings up to $6.2 billion. In late September 2008, we were unable to issue
commercial paper to replace maturing commercial paper and meet other obligations. Instead, we borrowed $485.7 million under one of our credit facilities to secure funds. At December 31,
2008, we had no commercial paper outstanding. During the month of January 2009, Constellation Energy issued no commercial paper. We may utilize commercial paper as a primary source of
short-term debt if market conditions return to normal.



        In
connection with the Investment Agreement with EDF, EDF has provided us with up to $2 billion pre-tax, or approximately $1.4 billion after-tax, of
additional liquidity pursuant to a put arrangement that will allow us to require EDF to purchase certain non-nuclear generation assets.



        Our
ability to exercise the put arrangement is contingent on certain regulatory approvals that we expect will be received



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for
all assets covered by the arrangement by April 2009, except for Safe Harbor Water Power Corporation, which is expected by the third quarter of 2009. In addition, exercise of the put option is
conditioned upon third-party consents, the absence of any material liens on such assets, and the absence of a material adverse effect, as defined in the Investment Agreement. The put arrangement will
expire at the earlier of December 31, 2010 or the termination of the Investment Agreement by EDF in the event of a breach of contract by us.



        Certain
credit facilities of Constellation Energy contain a provision requiring Constellation Energy to maintain a ratio of debt to capitalization equal to or less than 65%. At
December 31, 2008, the debt to capitalization ratios as defined in the credit agreements were no greater than 57%.



        Our
$1.23 billion credit facility requires us to maintain consolidated earnings before interest, taxes, depreciation, and amortization to consolidated interest expense ratio of at
least 2.75 when our Standard and Poors senior unsecured debt rating is BBB- or lower and our Moody's senior unsecured debt rating is Baa3 or lower.



        The
terms of the Series B Preferred Stock allows us to issue debt without the consent of the holders of the majority of the Series B Preferred Stock only if, after issuance
of such debt, we maintain a ratio of debt to capitalization equal to or less than 65%.



        Under
our $3.85 billion and $1.23 billion credit facilities, we will be required to grant a lien on certain generating facilities and pledge our ownership interests in our
nuclear business to the lenders if the Investment Agreement with EDF has closed or been terminated and our Standard & Poors Rating Group or FitchRatings senior unsecured debt credit rating is
below BBB- or our Moody's senior unsecured debt credit rating is below Baa3.



Constellation Energy

Constellation Energy had bank and other lines of credit under committed unsecured credit facilities totaling $6.2 billion at December 31, 2008 for short-term financial needs. We enter into these facilities to ensure adequate liquidity to support our operations. In addition, we had other uncommitted credit facilities, which had letters of credit of $17 million outstanding at December 31, 2008.

        Our liquidity requirements are funded with credit facilities and cash. We fund our short-term working capital needs with existing cash and with our credit facilities, which support direct cash borrowings and the issuance of commercial paper, if available. We also use our credit facilities to support the issuance of letters of credit, primarily for our merchant energy business.

        These facilities can issue letters of credit, commercial paper, if available, and/or cash borrowings up to approximately $6.2 billion as shown below. As of December 31, 2008, we had $3.6 billion in letters of credit issued and borrowed $485.7 million against those facilities. The weighted-average effective interest rate for this outstanding borrowing was 0.79% at December 31, 2008. At January 31, 2009, we had $3.5 billion in letters of credit issued and borrowed $1.2 billion against those facilities. We have also included the pro forma effect on our credit facilities, which are reduced or terminated upon the occurrence of certain events, of closing the transactions contemplated by the Investment Agreement with EDF, which is expected to occur in the third quarter of 2009:

Facility Expiration
  Facility
Size

  Facility Size
Upon Completion
of the EDF
Transaction

 
   
 
  (In billions)
 

July 2012

  $ 3.85   $ 2.32  

November 2009 (A)

    1.23      

June 2009 (B)

    0.60      

September 2013

    0.35      

December 2009

    0.15      
   

Total

  $ 6.18   $ 2.32  
   
(A)
Size of facility may be reduced by proceeds received from certain securities offerings or asset sales.

(B)
We discuss this facility provided by EDF in more detail in the Other Sources of Liquidity section on the next page. Terminates at the earliest of satisfying conditions to exercise the put on assets having a value of at least $600 million under the put arrangement discussed on the next page, receipt of alternative financing of $600 million, or June 2009.

Constellation Energy

In June 2008, we closed on the following transactions:

    Issued $250.0 million of Zero Coupon Senior Notes due June 2023. Interest, compounded semi-annually, will be paid at maturity or when redeemed. The yield on these notes based on the original maturity date of June 2023 is 6.96%. These notes include a put option, which allows the holder to sell the notes back to us on the put option dates at a price equal to the principal amount plus accrued interest. The put option dates commence in June 2010 and occur yearly at that time through maturity, except for 2012 and 2015. As a result of the put option feature, these notes will be classified as a current liability beginning in June 2009.
    Issued $450.0 million of Series A Junior Subordinated Debentures at 8.625% due June 15, 2063, but which can be automatically extended to no later than June 15, 2068 at our discretion. Interest is payable quarterly in March, June, September, and December. However, we may choose at any time to defer interest payments on these debentures for up to ten consecutive years. During this deferral period, interest will continue to accrue, compounded quarterly, and the deferred interest payments will accrue additional interest at a rate equal to the interest rate on these debentures.

        In connection with this offering, Constellation Energy executed a replacement capital covenant (RCC) for the benefit of holders of Constellation Energy's 7.60% Notes due April 1, 2032. Under the terms of the RCC, Constellation Energy may not redeem, purchase or defease any subordinated debentures on or before June 15, 2033, or, if the maturity date is extended, the date which is 30 years prior to the maturity date of the subordinated debentures (but not later than June 15, 2038), unless a specified amount of qualifying securities are issued to non-affiliates in a replacement offering during the 180 days prior to the redemption, purchase or defeasance date. Qualifying securities include those that have equity-like characteristics that are the same as, or more equity-like than, the applicable characteristics of the subordinated debentures at the time of redemption, purchase or defeasance.

Mandatorily Redeemable Series B Preferred Stock

On December 17, 2008, Constellation Energy entered into an Investment Agreement with EDF. We discuss the Investment Agreement in more detail in Note 15. Simultaneously with the execution of the Investment Agreement, Constellation Energy issued 10,000 shares of 8% Series B Preferred Stock (Series B Preferred Stock) to EDF for $1 billion, which was restricted for

130


the repayment of our 14% Senior Notes. If EDF completes the purchase of the 49.99% interest in our nuclear generation and operation business pursuant to the Investment Agreement, at the closing of that acquisition EDF will surrender to Constellation Energy all of the shares of the Series B Preferred Stock as partial payment for the purchase of the interest in our nuclear generation and operation business. As discussed in Note 15, we expect the transaction to close and the Series B Preferred Stock to be redeemed by the third quarter of 2009.

        Because of the mandatory redemption provision, we accounted for the Series B Preferred Stock as debt and included it in the "Current portion of long-term debt" line on our Consolidated Balance Sheets. We report dividends in the "Interest expense" line on our Consolidated Statements of Income (Loss).

        If the Investment Agreement is terminated, the Series B Preferred Stock will be redeemed at the later of the date of termination or December 31, 2009 for $1 billion aggregate principal amount of 10% Senior Notes of Constellation Energy due June 30, 2010.

        So long as any shares of the Series B Preferred Stock are outstanding, Constellation Energy and its subsidiaries may not, without the consent of holders of at least a majority of then outstanding shares of the Series B Preferred Stock, undertake certain actions. Such actions include amending or revising our organizational documents, issuing equity senior or equal to the Series B Preferred Stock, authorizing a liquidation, incurring certain types of indebtedness, paying certain dividends, redeeming or repurchasing shares of capital stock, and entering into affiliate transactions.

        The terms of the Series B Preferred Stock allow us to issue debt without the consent of the holders of the majority of the Series B Preferred Stock only if, after issuance of such debt, we maintain a ratio of debt to capitalization equal to or less than 65%.

Mandatorily Redeemable Series A Convertible Preferred Stock

On September 19, 2008, Constellation Energy entered into an Agreement and Plan of Merger with MidAmerican and, on December 17, 2008, Constellation Energy and MidAmerican mutually agreed to terminate the merger agreement. We discuss the termination of the merger agreement in more detail in Note 15. In connection with the merger agreement, Constellation Energy issued 10,000 shares of 8% Series A Convertible Preferred Stock (Series A Preferred Stock) to MidAmerican for $1 billion.

        Upon termination of the merger agreement, the Series A Preferred Stock converted into $1 billion aggregate principal amount of 14% Senior Notes of Constellation Energy and the right for MidAmerican to receive the equivalent of 19.9% of the outstanding common shares. However, since regulatory approval to issue all of the required outstanding common shares was not received, in accordance with the terms of the Series A Preferred Stock, Constellation Energy issued the following to MidAmerican:

    19,897,322 shares of our common stock (equivalent to 9.99% of the outstanding common shares) and,
    a cash payment of $418.2 million, equivalent to the $26.50 merger price per share multiplied by the portion of the total shares that could not be issued because all necessary regulatory approvals were not received.

        The Senior Notes were repaid in full on January 12, 2009 together with accrued and unpaid interest through that date of approximately $5 million.

Constellation Energy



Constellation Energy had bank and other lines of credit under committed unsecured credit facilities totaling $6.2 billion at
December 31, 2008 for short-term financial needs. We enter into these facilities to ensure adequate liquidity to support our operations. In addition, we had other uncommitted credit
facilities, which had letters of credit of $17 million outstanding at December 31, 2008.



        Our
liquidity requirements are funded with credit facilities and cash. We fund our short-term working capital needs with existing cash and with our credit facilities, which
support direct cash borrowings and the issuance of commercial paper, if available. We also use our credit facilities to support the issuance of letters of credit, primarily for our merchant energy
business.



        These
facilities can issue letters of credit, commercial paper, if available, and/or cash borrowings up to approximately $6.2 billion as shown below. As of December 31,
2008, we had $3.6 billion in letters of credit issued and borrowed $485.7 million against those facilities. The weighted-average effective interest rate for this outstanding borrowing
was 0.79% at December 31, 2008. At January 31, 2009, we had $3.5 billion in letters of credit issued and borrowed $1.2 billion against those facilities. We have also
included the pro forma effect on our credit facilities, which are reduced or terminated upon the occurrence of certain events, of closing the transactions contemplated by the Investment Agreement with
EDF, which is expected to occur in the third quarter of 2009:






































































































Facility Expiration
 Facility

Size

 Facility Size

Upon Completion

of the EDF

Transaction

 
  
 
 (In billions)
 

July 2012

 $3.85 $2.32 

November 2009 (A)

  1.23   

June 2009 (B)

  0.60   

September 2013

  0.35   

December 2009

  0.15   
  

Total

 $6.18 $2.32 
  




(A)
Size of facility may be reduced by proceeds received from certain securities offerings or asset sales.


(B)
We discuss this facility provided by EDF in more detail in the Other Sources of Liquidity section on the next page. Terminates at the earliest of satisfying
conditions to exercise the put on assets having a value of at least $600 million under the put arrangement discussed on the next page, receipt of alternative financing of $600 million,
or June 2009.


Constellation Energy



In June 2008, we closed on the following transactions:





    Issued
    $250.0 million of Zero Coupon Senior Notes due June 2023. Interest, compounded semi-annually, will be paid at maturity or when redeemed. The yield
    on these notes based on the original maturity date of June 2023 is 6.96%. These notes include a put option, which allows the holder to sell the notes back to us on the put option dates at a price
    equal to the principal amount plus accrued interest. The put option dates commence in June 2010 and occur yearly at that time through maturity, except for 2012 and 2015. As a result of the put option
    feature, these notes will be classified as a current liability beginning in June 2009.
    Issued
    $450.0 million of Series A Junior Subordinated Debentures at 8.625% due June 15, 2063, but which can be automatically extended to no later than
    June 15, 2068 at our discretion. Interest is payable quarterly in March, June, September, and December. However, we may choose at any time to defer interest payments on these debentures for up
    to ten consecutive years.
    During this deferral period, interest will continue to accrue, compounded quarterly, and the deferred interest payments will accrue additional interest at a rate equal to the interest rate on these
    debentures.



        In
connection with this offering, Constellation Energy executed a replacement capital covenant (RCC) for the benefit of holders of Constellation Energy's 7.60% Notes due April 1,
2032. Under the terms of the RCC, Constellation Energy may not redeem, purchase or defease any subordinated debentures on or before June 15, 2033, or, if the maturity date is extended, the date
which is 30 years prior to the maturity date of the subordinated debentures (but not later than June 15, 2038), unless a specified amount of qualifying securities are issued to
non-affiliates in a replacement offering during the 180 days prior to the redemption, purchase or defeasance date. Qualifying securities include those that have
equity-like characteristics that are the same as, or more equity-like than, the applicable characteristics of the subordinated debentures at the time of redemption, purchase or
defeasance.



Mandatorily Redeemable Series B Preferred Stock



On December 17, 2008, Constellation Energy entered into an Investment Agreement with EDF. We discuss the Investment Agreement in more detail in Note 15. Simultaneously with the
execution of the Investment Agreement, Constellation Energy issued 10,000 shares of 8% Series B Preferred
Stock (Series B Preferred Stock) to EDF for $1 billion, which was restricted for



130









the
repayment of our 14% Senior Notes. If EDF completes the purchase of the 49.99% interest in our nuclear generation and operation business pursuant to the Investment Agreement, at the closing of
that acquisition EDF will surrender to Constellation Energy all of the shares of the Series B Preferred Stock as partial payment for the purchase of the interest in our nuclear generation and
operation business. As discussed in
Note 15, we expect the transaction to close and the Series B Preferred Stock to be redeemed by the
third quarter of 2009.



        Because
of the mandatory redemption provision, we accounted for the Series B Preferred Stock as debt and included it in the "Current portion of long-term debt" line on
our Consolidated Balance Sheets. We report dividends in the "Interest expense" line on our Consolidated Statements of Income (Loss).



        If
the Investment Agreement is terminated, the Series B Preferred Stock will be redeemed at the later of the date of termination or December 31, 2009 for $1 billion
aggregate principal amount of 10% Senior Notes of Constellation Energy due June 30, 2010.




        So
long as any shares of the Series B Preferred Stock are outstanding, Constellation Energy and its subsidiaries may not, without the consent of holders of at least a majority of
then outstanding shares of the Series B Preferred Stock, undertake certain actions. Such actions include amending or revising our organizational documents, issuing equity senior or equal to the
Series B Preferred Stock, authorizing a liquidation, incurring certain types of indebtedness, paying certain dividends, redeeming or repurchasing shares of capital stock, and entering into
affiliate transactions.



        The
terms of the Series B Preferred Stock allow us to issue debt without the consent of the holders of the majority of the Series B Preferred Stock only if, after issuance
of such debt, we maintain a ratio of debt to capitalization equal to or less than 65%.



Mandatorily Redeemable Series A Convertible Preferred Stock



On September 19, 2008, Constellation Energy entered into an Agreement and Plan of Merger with MidAmerican and, on December 17, 2008,
Constellation Energy and MidAmerican mutually agreed to terminate the merger agreement. We discuss the termination of the merger agreement in more detail in
Note 15. In connection with the merger
agreement, Constellation Energy issued 10,000 shares of 8% Series A Convertible Preferred Stock
(Series A Preferred Stock) to MidAmerican for $1 billion.



        Upon
termination of the merger agreement, the Series A Preferred Stock converted into $1 billion aggregate principal amount of 14% Senior Notes of Constellation Energy and
the right for MidAmerican to receive the equivalent of 19.9% of the outstanding common shares. However, since regulatory approval to issue all of the required outstanding common shares was not
received, in accordance with the terms of the Series A Preferred Stock, Constellation Energy issued the following to MidAmerican:





    19,897,322
    shares of our common stock (equivalent to 9.99% of the outstanding common shares) and,
    a
    cash payment of $418.2 million, equivalent to the $26.50 merger price per share multiplied by the portion of the total shares that could not be issued because all
    necessary regulatory approvals were not received.



        The
Senior Notes were repaid in full on January 12, 2009 together with accrued and unpaid interest through that date of approximately $5 million.




Constellation Energy

On March 31, 2008, our merchant energy business sold its working interest in 83 oil and natural gas producing wells in Oklahoma to CEP, an equity method investment of Constellation Energy, for total proceeds of approximately $53 million. Our merchant energy business recognized a $14.3 million gain, net of the minority interest gain of $0.7 million on the sale and exclusive of our 28.5% ownership interest in CEP. This gain is recorded in "Gains on Sales of Assets" in our Consolidated Statements of Income (Loss).

Constellation Energy



On March 31, 2008, our merchant energy business sold its working interest in 83 oil and natural gas producing wells in
Oklahoma to CEP, an equity method investment of Constellation Energy, for total proceeds of approximately $53 million. Our merchant energy business recognized a $14.3 million gain, net
of the minority interest gain of $0.7 million on the sale and exclusive of our 28.5% ownership interest in CEP. This gain is recorded in "Gains on Sales of Assets" in our Consolidated
Statements of Income (Loss).



This excerpt taken from the CEG 8-K filed Feb 18, 2009.

About Constellation Energy

 

Constellation Energy (www.constellation.com) is a leading supplier of energy products and services to wholesale and retail electric and natural gas customers. It owns a diversified fleet of generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity, and is among the leaders pursuing the development of new nuclear plants in the United States. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland. A FORTUNE 500 company headquartered in Baltimore, Constellation Energy had revenues of $19.8 billion in 2008.

 

8



 

These excerpts taken from the CEG 8-K filed Dec 17, 2008.

About Constellation Energy

Constellation Energy (http://www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation’s largest competitive supplier of electricity to large commercial and industrial customers and the nation’s largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

About Constellation Energy

Constellation Energy (http://www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation’s largest competitive supplier of electricity to large commercial and industrial customers and the nation’s largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totalling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

Constellation Energy

  ¿ $750 million expiring December 2008
  ¿ $380 million expiring December 2008
  ¿ $1.23 billion expiring November 2009
  ¿ $150 million expiring December 2009
  ¿ $3.85 billion expiring July 2012
  ¿ $350 million expiring September 2013
This excerpt taken from the CEG DEFA14A filed Dec 8, 2008.

About Constellation Energy

 

Constellation Energy (http://www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation’s largest competitive supplier of electricity to large

 



 

commercial and industrial customers and the nation’s largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totalling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

 

This excerpt taken from the CEG 8-K filed Dec 4, 2008.

About Constellation Energy

Constellation Energy (http://www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation’s largest competitive supplier of electricity to large commercial and industrial customers and the nation’s largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totalling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

This excerpt taken from the CEG DEFA14A filed Dec 3, 2008.

About Constellation Energy

 

Constellation Energy (http://www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation’s largest competitive supplier of electricity to large commercial and industrial customers and the nation’s largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totalling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through the Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

 

This excerpt taken from the CEG DEFA14A filed Nov 25, 2008.
Constellation Energy

 

Constellation Energy (www.constellation.com), a FORTUNE 125 company with 2007 revenues of $21 billion, is the nation’s largest competitive supplier of electricity to large commercial and industrial customers and the nation’s largest wholesale power seller. Constellation Energy also manages fuels and energy services on behalf of energy intensive industries and utilities. It owns a diversified fleet of 83 generating units located throughout the United States, totaling approximately 9,000 megawatts of generating capacity. The company delivers electricity and natural gas through Baltimore Gas and Electric Company (BGE), its regulated utility in Central Maryland.

 

4



 

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