Text

Forwards Baltimore Gas & Electric Co,Annual Rept,1991, Quarterly Financial Statements as of 920630 & Internal Cash Flow Projection,As Guarantee of Payment of Deferred Premiums for Plant Reactors
	ML20099D881
Person / Time
Site:	Calvert Cliffs
Issue date:	07/31/1992
From:	Creel G; BALTIMORE GAS & ELECTRIC CO.
To:	; NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
	NUDOCS 9208070146
	Download: ML20099D881 (2)
	v • d • e

{{#Wiki_filter:_ / D ALTIMORE' GAS AND ELECTRIC 1650 CALVERT CUFFS PARKWAY e LUSBY, MARYLAND 20657 4702 Otonot C. Cnte.L vier Passiotut July 31,1992 nuac.acwtaar f ado) #60-4 468 U. 3. Nuclear Regulatory Commission Washington, DC 20555 ATTENTION: Director, Nuclear Reactor Regulation

SUBJECT:

Calvert Cliffs Nuclear Power Plant Unit Nos.1 & 2; Docket Nos. 50-317 & 50-318 Guarantee of Retro 3nective Premium Gentlemen: In accordance with j he requirements of 10 CFR 140.21, we are submitting our guarantee of payment of deferred premiums for our Calvert Cliffs Nuclear Power Plant reactors. Accordingly, we are enclosing herewith: Exhibit 1 A copy of the 1991 Annual Report to Shareholders of Baltimore Gas and Electric Company containing certified financial statements. A copy of quarterly financial statements as of June 30,1992. Exhibit 11 Exhibit til - A copy of Projected Cash Flow for the twelve months ended July 31, 1993. Exhibit IV - Narrative tstement on curtailment / deferment of capital expenditures (if any) to ensure that retrospective premiums up to $10 million per reactor per year for each nucicar incident would be available for payment. Should you have any further questions regarding this matter, we will be pleased to discuss them with you. Very truly yo s, M '/ GCC/DWhl/bjd M () Enclosures i6 0,i ~. [ 9208070146 920731 PDR ADOCK 05000317 \\ l PDR

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[ Our f511 t 1H051 corfordte, God l is e ulltinnons imfrvUcment. ln order 10 !clYe (Qns%tsen $UbMdQ, L llr( [(;f jyjg jgSf3 of'oy; 3l,grg hof,l(rS, (19janj(y y, (pyj,ln;((g, gyj g pyjyyyylly, ;;f gyg y gg WJHf 10 fCrf H1n dntllT IYcogt!iml di d Wolltl tl.lSN rnergT conipdny. Tl'c lrst . Management s %dy 7 T Gin dcl'icVc ll'Jf god lin in ITdh rn! var coninllt!!!cul (U iliStome! 35 DMussson nd Anglysts 5ctTuY dnsllcdtlct?l'If. l.l'Jt JYdll117ndflun is it,c lonnddtion vl our plJuning. $0 R In Ibc fidlnwingpdge z;T'll>bdre rithyou var Vivion ofthe Wtbc Report of Akar$gegnent. Strdregics we bclicVe wdl continue to set us Jpdrt. II Vrc prepdringJi>r the \\.-l So neport of .s dcanlc to coint by lun.l<ling on ourfrt'H<!pd>t. ' dependent Aud% i Sig ...fbtwohdated ,J 5tateepents of income 'c ,37, q J Consglidated s sarance nheets < % * ,J r' - 34. t On the cover., (onsondMed On the evening of June 11,1816, Rembrandt Peale astonished a oowd gathered in Statemertts of Cash I' low 6. Q

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Consohdated j " ring beset with gems of hght." Cas was proclaimed the fuel of the future less 4 tater $etts O(Ccimmon i' than a year later, I'eale went on to use ha stunning gas lamps to hght the streets Shy *ehol h 4 @. ' I Sirects (now Ba!timore and Holhday). of Baltimore He began with one lamp on a dark <orner at Market and Lemmon $d ~ ConfobdSted. h Today, fla'timore's gems of hght are electric ed spillinto every (orner of the .,l}h CitV4 DVt ai we look forward to the 2ht century. natural gas temams as much a g. -t-f uel Of the future as manuf actured gas was in Peale's day The gas and electric ~ ((i technology we develop today will make our hves more ef fioent, conveni?nt, and 2 4. Codsoltstated - a . g,g q g, g environmentaHy sound in the f utute. 5 d h.[ ' k.n { WotesW Gonwicated, m FinaiWalstatepeq$ 'f , g,

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liighlights O ,.. _......... ~.. t (la mikns, aup ju sarr smann) pcreent 1941 1990 Change Common Stock Data Earninp per Share i ~ Utility Operatiem. S 2A0 5 1.921 25.0 % Dhernfied Attivities. .1 1 ' .18 08.9)% Total.. 5 2.51 S 2.10 19.5 % Dnidenils Decl. ired per Share.,. 5 10 5 210 Average Shares Outstanding.. 84.1 H2A 2.1 % Return on Average Cominon Equity.. 9.9 % 8A% llook Wlue per Sh.u e-Year i nd.. $25.5'l $24,87 2.5 % Market Price per Share-Year End Close. 34% 28 22.3 % financial Data Hevenues Electric. 51,994 S',713 16.5 % Gn.. 358 m (4.1)% Diversified Activities. -107 102 5.0 % Ton). $2,459 $2,188 12 l % Net incorne... S 253 S 214 lb.9 % Earninp Applicable to Conunon Stock.. $ 21I s 173 21.H % . Mis Utility.. 56,078 $5.669 7.2 % Dive n.ified.. 1,001 _ l.041 (3.8)% Tot al..... 57,079 56,710 S.5 % UtCty Construction Expenditures... S 456 S 535 (14.H)% i llG& E lnvestment in Cutellation Co.npanics... S 280 $ 253 10.9 % Utility Sales Data - Electric Sales-meg.nvatthours.. 26,7 25.5 4H% Gu Saln4lcLathenm.. 101.5 101.1 UA %

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4 Chirirrististi Letter in Shirrebulifers Q i l l l l l I inricenouni ty o.no dearly repre, ental a step ._J in the right direction for our unhty business.1)cspite the deep IN ewinn in out tett strity, our I l finanti.d pu fornunce impnn ol l l ner Uno with the help of higher a ,3 I senhe ates and inont sununct 4 u edillel. ()sfist didateil ca! lungs were S2.51 per share, a 5 41 increase from 1990. L 'obty opera- ^ dons contuhuted $2.40, a 5.48 C i inn ease over 1990 1)is ersified e ? business aeth ities added S.11 a e sharc, a 5.07 decline fmm last year. I I The ho.ud of duertors maintained l the tonunon tock dhidends at the [ annual rate of $2.10 per share. This George V. McGowan f m.u ks the N2nd consen.th e s car of Chairman of the Board l l snimen.eptcat.shaidaenin > " m"* - *e ** r our n.n m u,n,ha, m As gratify ing as the impios ement Clif ts is running u cil. We had The NRC renun cd Cahert Chifs in the hottom line is, the most ses eral significant accomphshinents from its watch int. While this was unportant staries lie behind the fig-at the plant: We reccis cd improved an ituponant n ent, n u as not a sig-ures. We at hics ed tu o nnior ooiec-perfonnam e awcuments froin the nal to ruas our efforts. Our work at e tiVes in lU9ll ($.ah ett ( lll 4 Nuclear llhtitute (if Nuclear Pow er ()pera-(:alvet t (:htf, as tiiioughout Power Plant iesumed its role as the tors and the Nuclear Regulatory 1 ( a E, is geared to one goah con-bat Lhone of our generation sysicm, Conunissi n (NRC). We had tu o tinuous impnnement. We uant to producing 32"o of our electucity; successfull) planned and esecuted Lecp getting better, no matter hou i and u c placed lirandon $hoics outages. We set plant records for good w e are at any gn en time. Unit 2 into senice in May. These radiation safety and hours worked The fact that Cahert Chifs was tuo plants helped auiid schabihty u nhout a lost-time an ident, All operating for much of 1991 llowed problenw through a s ery hot of these at hics ements reflect the us to reduce substanticdir our sununct.1. noting to the future, simple fact that Cahen Chtts is defen cJ. fuel balance. The fuel-rate l'm aintident that we are in good doing its job, case for the reon cry of replace-l l shape to meet the capacity needs in l'chruar3 of thn 3 car, u c mcor encra uists as a rc. ult of the f I of om territory. recen ed some longe aired recog. Cahen C'esoutagess emo w l i r I I or the llrst tilne in sescral n1 thin of die ' dant's if nprin L Illent. stdl undef' u.ly. \\tfh e (bCre [s no { ) 3 eari.. I can tell you that Cah ert stannory hunt on the tune allowed j D i l i 4 t '- ~ - w a w, w v. _ <wm.,w-,--.,. ew.rn-.c-.re,,---,-.------

O "Our strutegy is to ensure steudy long-terin growth by providing consuiners with new choices in energy products und services. " for that procenhng, we do root meam greater opponunities to our Perryman project in llarford know w hen it will be resob ed, purchase gunver. Over the long County, unlcw - third party better -In scrim of other rate iwucs, term, conservation and non utility meets our customers' nents. These 1991 eainings reflect electric rate - generation will be options that increased optiom give us greater i inctcases effectice in December complement our comtruction of choice: they don't shift the burden 1990, as well as the increase associ-new generating plants, of responsibility. - atnl with lirandon Shores l' nit 2 I want to add a word of caution 1.ooking back on 1991 from a being placed in service in Atay here, though, about the relatmnship corporate perspective,it was,in most 1991, it also reflects our purchase ofindependent power projects and u sys, the Lind of year 1 enjoy report-of nwer, beginning in October utilities. Through our Comtellation ing. We completed a number of i 1991, from Penmylvania Pou er & Energy Group, we terve a, an inde. im;mrtant projects. We continued to 1.ight Company's Smquehanna pendent power pnnlucer on the streamline and unprove our organi-nuclear plant. On the gas side, the national level. In fact, we see the ration. We strengthened our carn-Public Sen ee Commiwion of energy field as the primary focus for inn. Ahhough the penonnance of d = Alaryland authorired a $4 rnillion Comtellation's future growth. As our Comtellation subshhario, as a increase in our gas rates, hepinning pleased as I am to see the growth of whole was disappoir..ing, their October 1991, This represents a _ the independent pow er market, I'm results do ccrrespond with the reces- - 1 % increase in annual gas revenues. also very aware that the utility hears sionary economy. This is panico-Towant the mhldte of this the responsibility to provide rehable larly in line with a downturn in decade, Central Alar > land will med senice. That is u hy we proceed cc.tain financial im estments and the additional generating capacity. The cautiously w hen talling to indepen-severely depressed real esiate market i <guestion of how to supply that gen-dent producers. Not every proposal in the llakimore-Washi"Fton area. eration has become a far more presented by a non-utility generator _ Alore iir.ponant in terms of Constel-complex issue than it usnl to be, is good for our customers. We hw3L lation's ultimate direction, the because we have more optiom to for projects that meet our needs in Energy Group continued to expand. factor into our integrated resource tenus of timing, hication, reliability, Although its 1991 resuhs w cre lower pLut On the demand side, and cost. If a thini-party pniducer than w e had hoped, this was caused improvements in technokigy mean-can meet those needs, then we're in part by a delay in the recognition L - that conservation can play a grow-interested. That was the case with ofincome on certain projects 'that l ing role, We are committed to the AEWorporation.'We recently will appear as 1992, rather than si ned a contract with them to - 1991, income. From out perspective marketing conservation nluipment F aggressively ad to working with develop; construct, and operete a as both a utility and an independent the state and the community to 300-megawatt coablirni plant in the p<m er pnniueer, the energy business

develop a con.prehensive northern part of our tenitory.

has a bright future. . consetration strategy. On the sup-It's still our job as a utility to The current ecmiomic slow down, ply side, the opening of the power-select the most cost-effective option how ever, means that it will tale production business to a greater for our emtomers. We will build a longer for us to realize the gnmth nmnber and variety of players plant ourselves, as w e are doing with we emision. Ilarring a repeat oflast i n ~,_------mm- - - ~ ~,.. .--,-m -~r .,v 1--

li l l O I i l l t I r-i from the lef t: i Bruce M. Amtiler President and Chief Executive Ofbcer, i Constellation rootdings, Inc. i l Christian H Poindexter, ~ 6 w Hce Cl airman of thi board l e f ,a President-Utihty Cperations i Edward A Crooke, [ 1 g. [ a l i f ~ ' 111uch (if the u(ifid HHpund us face r (d' scure coinomie problems. In gml s cmes. rve cessca ihai m e are an s, e illipf'rtant part (if (stir colnintinity, 5 i U aIH t lat is flu [ st ) f) bat'd tillies. As a home-grow n (ompany, w e feel a responsibihty, not only to provide I senice, but to continue the leader- ~ i i ~ silip af..l Mlpl Mitt MatTland has t Oline to espect f. I hlm us. l ummer's record brcaLing heats increased quality of senim and For the near term, our primary ( 1992 e' etric sales will be fairly hat. customized solutions to special challenge is managmg this business l We are tespon hog to the changing needs. Our marketit. dnision is through a tronhled economy. For ( cronomy in tn o wap. On the cost-ah cady identifymg new trends, anJ our managers. that rup..res maling control ide, cady 1,,i 3 car u e u e are developing technologies to hard (hoices and learning to do hegan a corporate self-assessment. meet those needs. ()ur pas business better with less. For all our people, This pnicess refocuses our corpo. uill play a big par t in our futun. it requires an ntra measure of ded-rate energies on continuous The C;ean Air Act has spaile<1 con-ieatuin, Oexibility, and conunitment itnpn n ement in safety and quahty sumer interest in natural gas as an to customer senice. I tr.ow 1 has e the support of everyone at of operations and senice--in shoit, alternatise to electricity aml: a in curything w e do. This indudes s chicular fuel We are aggressively 11GA E as w e work through these hohling the line against budget piomoting our gas business and uill difficuh economic times to tne increases and stream!Ining our Enthh!uce malkOf based pricing growth we foresce. u orkforce through attrition and w herever appropriatt. Our strategy early ictirements, in o y mind, is to ensure steady long-tenu /<,'\\,, p/ / W ~ ~ continuous imImn ement is the grow th by punidmg con,umers ( v' 3 best u ay for us to contain wsts. with new choices in energs d@P 16V l L,- The other side of cost contiol is products and wnicet U l f a search foi expanded revennet We I;GN F is a trong, sound com-George V..\\1cGowan [ ee a wide raticty of opportunities pan 3. The conununiiics u e sen e, Chiirman oft /v /kard ahead as mstomers demand the countn u e in e in, and, in fact, and Clut Ihr utia O/ Err p I chruan' 18.1992 l I l

O Corporate Profile P O9 altimore Gas and Electric Com]uny is an investor-owned company that combines its core ^ utility business with disersified non-utility operations. As the first gas utility and one of the first electric utilities in the United States, we have a long tradition of superior service and reliability. Our utility strategy for the future focuses on maintaining both that tradition and our position as one of the hrvest-cost producers in the mid-Atlantic region. Our diversified activities, under the direction of Constellation Iloldings, are designed to provide meaningful earnings support to the Company while alknving us to take advantage of new business opportunities that use our expertise and experience. Constellation Iloldings hohls the stock of three companies that are involved in four lines of business: power generation proi: cts, real estate development, senior living alnl health care, and investments and financial services. IING, Inc., another wholly owned subsidiary of the Company, invests in natural gas reserves and obtains gas froin nontraditional sources. The Company and its wholly owned subsidiaries have mi e than 9,000 employees. ~ u lhe PG&E utility servke g[ gg area includes Baltimore y,qt coun,y City and all or part of m' nine Central Maryland gg counties. The area served 5-fM Nbb]iwith ey served 7,,n,,, with electricity approxl. h :- (inc8ty j k h territory served mates 2,300 square miles g [' with 2,528,000 residents, 1 p&2 w'th ea$ while the area served with gas includes 616 square miles with a population of 1,910,000, .g # Montgo h county PermWwanse g, ysy ,p wc a

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'l O I 6 Utility Operations IMrim"rr Gar an./ //n tro Gmt.mJ Intuuinnection th.n anonk us (lt ntral Alanland onto)s a dncisc an e's 18 6 p' k ded cap u lt) t ul l g / econoiny that plusides a hroad base fasorable torint for our hauness. 'l o wn e its elec-We meet sirtually all ou (uu tric nt cds, IM i A E operates 10 cler-toiners' pas ruiuironents throuch flic pcncrJllnp jdallts in ( entral plirtbdWs fit ull pi}Wilf, slippbers Atar3 and. including the Cahert and natural gas producers. As a sup-1 Chffs Nucleas Power Plant, w hic h plement to ilus supply of rutual produces the lowest cost dectncity g., f;jy7, y gas, w e m.unt.nn facihties at three generated by 1 G A1:. We also plants in Central.\\laryland for the maintain shared ow nership of ihrcc a produc er < J hydroch ctric pou u. prodot tion and storage of ih uitied l generating facihties in Penns3 a-In addnion, u e i,clong to,he natural gas and propane. h r nia: tuo mniemouth plants and Safe Penns3h ania-New Jersc3-Alar 3 and ()thu husme., nuludes the sale 1 llarhor Water Power Corporation, of gas and eketnc apphant et Diversified Actidties Gn.tc//stion /Miing - ll p ine wnu.r-hiing ana r g} strength md staininy to The opconi:g compa-4 nies in the (:nnstella-N health-care m n Lei. y iion gn,un focus on i c;unca with a nanon_ tour maior business all) known prosider of linet Through our ~, heahh-care sen it es, w e and two retiicment 2 3 power generation i pithtT!s inil klM(dcL*- f?ggp ggj [g'pgj f}7gfp fgpp3fgggff clunnlunItleA Inent in 2D ct sntTacts l[hDTDhM(4fs/ (Itir pt hitit*Hs in bir (sps r.itif uh and lHVCstlMUnts ant! lilun-nuintenance scnices, this segment shopping centers to land assembliges c.al wn u es let us blend currcm tif our busillew is fitit ont) ponduc-ulli proside a idend of(inptlilly Ind.ine ulth the ong-terin, I ing ( urrent income, u c.n e aho rental income as util as potentul capital-appreciation-type proiccts in gainmg uluable experience m the pains on future sales. Our Real our other huuness hncs to produce w holesale power get.cra, nurlet-. l' state Gtoup is aho im oh ed in pro-the desired toul corporate resuh. ()ar M ical estaic proiccts are gets associated spuiiically with the The broadly dn crsified ira esunent henity concentrated within the rapidly grow ing oucr-M segment of portfolin is designed to po nide mid-Atlanne region. 'I his disersi-our population. Through inint s en-S car-to-> car core income for all tied portfolio ranging from tures, ut ha c brought our financul Constellation actnincs. ounpletcJ ofth c buihhngs and i t pw.,.,.,~4.-._-,-.w--,rv.,3--y..,. ,,_y..f-,,_.-.._y,-,.y,,.,.,.,ww.,,,.. ,,__,._,,e,..,.

@ FinancialReview e Earnings Dt mifrd llus'rm ictiatics On pnuarv i7,1992, the 'I he Company's carnings per share Earnings inim dis ersified business Company's lloard of I)irectors + for 199I Mefe b2.51, a b.41 increase actiVitie% uhich prnnat dy represcrit aitluntred a three-fi>r-tw o canninon over the 1990 les el of $2.10.1:arn-the operations of Constellation stock split suhicot to sharehohler ings are summarized as follow s; llohlings, Inc. and its subsidiaries appros al of an increase in the (collecth cly, the Constellation authorized number of common 1991 1990 (:otnpanies), decreased during shares f. rom 100 inillion shares to Utility Operations... $2.40 51.92 pjy j,1 his u as due ni h>u er earn-175 mulion shares. If approved at Dh crsified ings from the fmancial im estna nt the annual meeting of shareholders ilusiness Activities.. .II .18 portfolio and the continued soft-on April I 5,1992, sharehohlen of $2.$ 1 $2.10 ness in the real estate market. In record on April 23,19V2, will 1991, the Constellation Companies recen e one athlitional share of ree(Ilded a Miite-dou n (d cel'tain OululHFI st(sck Iiar e,Rb two shJres Urdity financialimestments and real estate ou ned.The sto(L split is designed Utility earnings increased during properties w hich resuhed in a net to adjust the price of a share of 1991 as a resuh ofinercased sales loss from cun ent-> car operations. IL A E conunon stock to a les el during the 1991 summer, due to I his loss ua, offset by the etTeet of that makes it moie attractise to a warmer u cather as compared to the change in the method of broad base of imestors. 1990, and higher resenues inun the accounting for income tases electne base-rate increases autho-described on page 9. (See page 27 rired by the Public Senice Conunis-for more det.nis concerning Con-a Rate Matters sion of Alaryland (Manland stellation Companies earnings.) In addition to an inucediate electric Conunission)in December 1990. base-rate increase of 577 million in Wanner w cather during the sununer annual electric resenues, the Alary- ~ results in more demand for electrie-a Common Stock Dividends land Conunission, in its order dated ity to pow er co< ding systems. These During 1991, conunon stock December 17,1990, also authorized factors u ere partially of fset by disidends were ileclared at the a lu.e-rate increase u hen the 640-higher operations and maintenance quarterly rate of 5 5 25 per share, megauatt lirandon Shores Unit 2 cipenses, higher fmancing costs, and equivalent to the annual rate of w as placed uno conunercial service, wanner weather during the 52.10 per share. IlG A E has paid On Alay 28 the Company imple-heating season, a cash dividend in each year mented a $' 24 million annual dee-since 1910. tric base-rate increase that pnnided for a cash return on the im esuneet

.___m 1 0 in the plant and the reemery of (FASil 96),"Accousying for The utility's 1992 construction current annual operating expenses. Income Taxes " This requires a expenditures are currently At the same time, a SSN million change in the method of account-estimated at 5525 million,includ-decrease in annual electric fuel rate ing for income taxes. As a result of ing 525 million in AFC. revenues became effective, reHect. adopting FASil 96, net income of The most.significant project in ing estimated fuchaiings from the the Constellation Companies the construction program is the

plant's operation.

increased by $20 million, or $.23 planned capauy additions at the The Alaryland Conmuv. ion aho per common share.This increase Perryman site. Other electric authmiicd a surcharge to electric reaccts the res ersal of that part of construction projects include base rates beginning on October 1, the liability for future income taxes impnn ements to llG& E's existing 1991 to provide for the reem ery of that had been recorded in prior generating plants and to its trans-1 B 553 inillion of purchased capacity years at higher tax rates. Changes mission and distribution facilities. l costs that began at that time, in the utility's liability for future On September 18, the Ataryland - income taxes, as a result of this l Commission issued an order adopt-change in accounting, did not affect

ilnancing Matters ing a settlement agreement that utility carnings. For a more detailed Utility financing activities during

- had been fonnulated between discussion of FASil 96, see Note 1 1991 consisted ofissuing $241 mil-IIG& E amlinten ening parties. in the notes to convdidated finan-tion oflong-term debt,535 million This concluded llG& E's gas base-cial statements on page 40. of redeemable preference stock, rate case filed on April 2,1991, and $32 million of common stock. 1 Under this agreement, llG& E was During the year, retirements of allownl to increase gas base rates to

Utility long-tenn debt totalled $316 mib pnxluce an additional $4 million in Construction Expenditures lion, and 523 million of preference annual gas revenues, effective with During 1991, the utility's construc-stock was redeemed.

. service rendered beginning Octo-tion expenditures amounted to During 1991, Constellation ber 1,1991,This represented a 1% $456 million,inchuling $37 million iloldings, Inc, privately placed $95 increase in annual gas revenues. in Allowance for Funds Used - million of debt with maturities of During Construction (AFC). four to six years, and $167 million - i Construction expenditures for oflong-term debt was repaid. l

Change in Accounting electric facilides nre $406 million, Financing matters are discussed in During 1991,'the Company and $50 million was spent on more detail on page 29.

adoptal Statement of Financial gas facilities. i" __ Accounting Standards No. 96 l l [ t v 1 6 P A f l-. -,,

O Utility Operations anel Can.stellation Cumpanies Review

Utility the Cahert Cliffs Nmlear Plant, anal incentives in demand-side

/Jearic Sdn u hich operated at full p<mer management programs, regulatory Ahhough ch.;tric sales to nistomers most of the sununer, and the new policy, and program design, moni. in 1991 rwe by 4.7% this increase lirandon Shores Unit 2. This toring. and naluation. We hase repte.. a wrge in usage during 640-megau att coal-6ted unit developed conservation programs last sununer's record. breaking heat. entered service in Alay on sthedule for all customer classes and Gled Knidential ulcuose US, and and within budget. Cah ert Cliffs them uith the Conunission in wnunercial and industrial sales performed reliably and safely: Our December for impleraentation in rose 2.1 % On July 2 3, u e set sis people there esceeded 5 million 1992. These and future programs new hourly peals for electricity work-hours without a lost. time will blend with our menu of consumption, finally rexhing accident and set a plant record Ihr demand-da options offered under 5,910 megawatts at ru)0 p.m. This radiation ufety. Cu 4cn e 2(X)h. IW the end of the figure surpassed not only ourJuly During the pc iod in 1989-90 year 2(MML we exptet conservation 1990 peak, but aho the peak set w hen Calvert Cliffs u e out of ser-to reduce our summer peak load by four days earlier. vice, w e relied heavily on fmsil units nnre than 750 megawatts. Adjusted for the weathet,1991 budt in the earl;, lo40s and '50s. electric ules rn cal the effect of the We aie now in the procos of G.u recession on our business. Os erall retiring the ohlest of these units, Toial gas sales increced less than sales grew by less than 1% Rni-because it is not cost effectis e to 1% from 1990, re6ecting both the dential sales grew by only 2.2% continue their long-term operation. prevailing economy and inihl win. Commercial and industrial sales We retired Riverside Unit 1, ter u cather early in 1991. Residen-increased marginally by 0.2% liar. apprmimately 60 megau atts, in tial sales increased 4.3% w hile ring another sununer of recont-October 1991. Ris erside Units 2,3 commercial and industrial sales breating weather, we expect only a and 5 (about 200 mcgawatts total) decreased 1.7% Over the short small increase in 1992 sales. We will be tetired by the end of 1993 as term, gas sales will mirror eco-l are respanding to the enmomic wdl Units 3 and 4 at Westport. nomic conditions, but as the decade downturn by concentrating on progresses and we pursue new impiming productivity, quality, Comoration markets for gas, we expect and cost comrol. In Ap il 1991, liGNE signed an revenues uill increase, agreement with etw Public Senice On the national level, the natu. Gennation ' Commission of Alaryland, Of6ce of ral gas industry is in a period of Our generating and transmission the People's Counsel and customer transition. The Federal Eacrgy systems alhm ed us to meet last and environmental groups, estab-Regulatory Comniission (FERC) L summer's demand comfortably, lishing a collaborath e process to has issued a notice of proposed without using our Energy Alanagrr promote energy conservation. The rulemaking on gas-industry senice Program. The tw o Ley factors collaimrative is addressing a range obligations that we see as athersely l behind that comfort manin wcre ofissues. including cost recm ery-affecting the dependability of gas

i l 1 l l l k l l yv I ()lfsetting these reduttions, hou- ~ ~ cu 1. the Comp.my has.ulopted the i. ~ i mancial Aununting Stainlards f lloard's $tati nit nt of l'inancial An nuntme No. 96, Accounting for i I le.. Inwme Tases This rule reciuires k' i .~ the tellection ofileictreti tases at current tas lates. G, G. '. Although 1991 results are L f.o e.. W7' dwiomtig du,v do not du t m Comtellation's staung power or long tctm potential. ()perationalh', (Hir blisinc%cs perblMntd w ell, s connothng costs and fut using on Constellation's 96-megawatt ACE prou th opportumucs. Weir j co-generation project in Cahfornia (lcarly identified power production has completed its first year of regulatt d distribunon coinpany, as (...mstdlation s primary husinew. j commercial operation. Using a cir-culating fluidized bed boiler to u r oppose any n gulations that The l'ncrg) (iroup is establishing butn coal, the plant met all of its unpede our obligation to scne itself as a nationalleader in that reliabibty and environmental our couomen. 6dd it is mminuig a utmg of l targets for the year and proved to be a suuessful investment ior " '"" " E " " # 1 " "'" P d " Constellation as well as an ef fi.

Constellation Companies ment to the dnelopment, manage-cient generator of electricity.

l'iom a Gnam ial perspt.ctice,1091 ment, and operation ofindepen-As a general partner in the ACE u n a dihicult and disappointing 3 car (lent power producing facil ties. project, Constellation is a partial .on c non... u lun iling in real t state, w e intend to hold owner of the plant and also operates ACE through a joint econouiy has staHed septuents of our on to our properties until n e can venture with Pyropower. tt al estate busincw, causing us to obtain s alues that make merall eco-u rite dou n cert.un real estate pro-nomic sense. Chimately, w e plan to senice anil, therciore, the dn clop-iectt We has e also w ritten dow n reduce the percentage of our assets ment of the industry. We aie certain financialim estments to their in the real estate business. Without com erned that i 11C has not eartent mar ket salue.1) day s in the tjucsuon, results reflect the dow n-suf6dently considered w hether recognition of mcome on certam tuin m the real estate market. its proposal pioinutes adopiate encrev proints resuhed in a shift of Constellation was designed as a and reliable gas scnice u hde income from 1991 to 1992. Taken long-term business, hou n ct, and III.unf ainifig iust and reas< mable t< >gether, thesc fact <>rs u cir the liriri-it is ptc;iated til withstarut these rates to cust< uacts. \\s a state-tipal reason for the drop in carnings. dit6euh times. i

l V O Our Visionfor the '90s-Buildingfor the Future he utility industry traces technology revolves around elec-planning Central.\\laryland's future . its origins to the tricity generated in large p mer pou cr supply. Within that contest, 19th-century desire to plants and natural gas. Tomor.ow, we see non-utility generation as a nuror e the quality and p oductiv-it may include dispersed genera-po itis e trend. We stand ready to hy oflife. FulEllment of that des;re tion, solar, fuel celk. photm oltaics, tmild or buy pou er, based on the is ct ll the role of energy today and and ensgy management senices. best interests of our customers and for the future. Our business plan Our strategy is fundamentah We our Company. Our generation for the '90s is to give our custotaers are staying ahead of the technologi-planning has always been customer choices to help impnn e the quality cal cune and keeping a careful eye oriented: If a decision makes eco-oflife and work. on the marketplace so u c can con-nomic sense for our customers, it BG& E is truly an energy com-tinue to offer our customers the will make sense for the Company pany. As a combination eleoric and choices they want among the prod-and its shareholders as a ell. gas utihty with broad technological ucts and senices they need. Through our Constellation wh-expertise, we can reach a broad sidiary, w e function as an indepen-market with a variety of alterna-

The Electric Business dent p<mer producer, building and tives. Talay, commercial energy cl Changing Induxny operating a variety of plants across The electric p<m er generation the country. As a utility, we have business is in transition. Tuo long bought energy and capacity closely related questions highlight w hen the right opportunities occur.

ph the ongoing changes: Il 7v rillbuild During 1991, u e signed a contract .=gs. l f \\p. pew plants in thc[uture? and il 7,o uith AES Corporation, a maior can use utility tranrmitsionficilirics!' independent producer, to build a M Underhing both these questions is plant for senice later in this a deener xue: Il 7m rillbcar the decade. At the same time, we are w,. y rnponsibility fhr enturing a rcliaNc proceeding with plans to build a pawcr supply, a responsibility tradstion-HO-megawatt combined-cycle M44. ally belonging to utilitied T!n plant a* our Perryman site in the ansu ers to all three quevrions will northeastern part of nur territory, compact determine the form and function of w here h>ad grow th has been strong. -fluorescent bulbs our industry in the years to come. Although this plant has been chal-like the one above emit tF r le d by a co-generator, we are equivalent light of standad incan-convinced that Perrvman presents Ana .wtur descent bulbs but use 75% less energy. They also last an average Utihties were once the unques-the most economical option for of 10 times longer than incandes-tioned builders of pow er plants. our customers. ant bulbs. Over its lifetime, one of Todas, independent pow er pmduc-Utility-built generation o!scs ti.-se new bult:5 will sase its user d Out $48 and eliminate the need en and co-genennon am seding cumunen the Gexibility of tailoring to burn appioximately 'iOO pounds to sunplant our role. IlG& Ffs posi. capacity addinons to meet load -of coal. tion is clear: We are responsible for requirements. When the

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OO Nt.. N wq H 6-10-tnegau att coal-fired lirandon economical senice to our cus- [F %j }f,' y Shores Unit 2 began senice in tomers. Congress is considering spring 1991,it gave our customers legislation that u ould open trans-1 Q j cost-effecth e pow er esactly u hen mission access to non-utility gener-e r 'N so they needed it. To accomplish t'nat ators. As both a utility and an we sell r. -- w goal, we adjusted the plant's sched-independent producer, we believe electric-f j@ ule over a period of nearly two voluntary access is the best w ay to ity used %, _.,y ff decades, ultimately completing the espand the market without sacrific, during off-peaH Ng y hours-evenings and weeken proicct witlu.n budget, independent ing either the rehability of the at a reduced rate to our time-of-use producers, on the other hand, often nation's electrical sy stem or the customers because of f-peak usage espect to deliver a completed plant best imerests of our customers. helps with load management. u hether or not load grow th contin _ Smart House technology will make it easy to get the most s. t of time-ucs to warrant the additional Gmscwati,m-Il,c. Irc Iking it Right of-use rates. But customers don't - power. That is part of the reason Advances in energy-efficient t h-need futuristic home automction w hy u e rescrw the right to hnild m.byv make it possible for us to to save mony on electricity. When new capacity and u hy, when ue espand our.uccessful demand-side custome igns up for time-of-use rates, we install a computerized seek to purchase generation, we management programs mro a com-meter to measure how much choose partners who share our cus-prehensne conservation effort electricity is used and when. tomer orientation. Our flexible called Conserve 2000. The.\\lary-pou er-purchase contract uith land Public Service Commission, Pennsylvania Pow er & l.ight Com-responding to widespread pubhc expect it to reduce our peak pany epitomires our commitment and governmental commitment to demand growth by about 35% to providing ratepayers (he lowest-conservation, is working with us over the next 15 years. cost source of electricity w hile to compensate llGN E for loss in ensuring reliability. resenues. Ily tinding a new solution <lir Quality-ll'c're in G,oJ Wre to providing a return on im est-Our projection ofIlG& E's fuel mis li'c Kina i hhwrary ment, enhghtened reFidation will during the '90s calls for 50% coal. Transminion clarxy allow us to achieve the promise we We've worked hard in the past to The development of the inat pen-see in consen ation. meet stringent air quality regula-l dent power market depemis on the We are participating in a collah-tions, and, as a result, we are in a answer to the question of u ho can oration of regidators, environmen-good position to comply with the use utility tracsmission facilitics. tal g oups, and customers, working initial requirements of the Clean We have auctioned our escess to identify and implement the most A4 Act of 1990. Over the long transmission capabihty in the past. effecth e conservation programs for term, though, u e will face addi-We are cager to effer tr;,smission our territory. Although Consene tional costs to reduce sulfur dioxide senice in the futuref but only when 2000 is only a part of the total nic-and nitrogen oxide emiss.ons tn the it does not interfoe with our pri-ture, it w ill play a vital role in our levds mandated by later stages of mary responsibility to prodde long-term resource planning. We the Cican Air Act. i

O(G Although it will es entually

The Gas Business gas fuel pmups in gosernment fleet increase generation costs, the Clean For many reasons, the time is right yards. Within three to four years, Air Act has stimulated growth in (br growth in the natural gas busi-w e hope to has e 20 filling stations

( our gas busine.,s and may also pro-ness. Gas is competitively priced, in senice. vide marketing opportunities for domestically as ailable, clean burn-The Clean Air Act also makes our electric business in the form of ing, and ef0cient. Technological natural y an attraeth e fuel ihr ahernatively fueled vehicles. improvements make it safer, easier, electric generation. our Perryman Through the Electric Power and less cepensive to install. And project is designed to born gas. By Research Institute, w e are partici-many businestes are converting to the end of this decade we may be pating in research on electne cars. gas equipment to help them satisfy using small, on-site gas-fueled elec-l We will be prepared to offer our environmental regulations. tric generation units to supply indi-customers that option should the since namral gas vehicles emit vidual commercial or industrial mtomotive industry make electric fewer pollutants than their users or to relier reliability prob-vehicles available. gasoline-powered counteiparts, lems.1.ast fall, we began testing a they can help flect owners comply unit in a hotel complex in suburban Nudcar Purer--II'r're with provisions of the Clean Air Baltimore. The bottom line for gas Continu.dly Improving Act of 1%d. We expect to build a m the '90s is this: It vastly increases Over the past several years, w e have natural pas fueling station in 1992, our options and those of our cus-been engaged in a thorough mod-In addition, plans call for similar tomers therefore, we are actively erni7ation of our Calvert Cliffs stations in future years. We also expanding our gas business. Nuclear Plant. This assures that have made arrangements with the For the past ses eral years, w e Calvert Cliffs will remain our core State of AlaryLad to place natural have t cen investing in our infra-producer of electriuty well into the structure to make gas a realistic next century, Despite the demands choice for more people. Over the ofits physical and organizational nest live 3 cars u e project a total sep9,} new-home market share of 201 overhaul, Calvert Cliffs continues to 1&.mre.' ' Ily makmg gas widely available and he an enormous asset for our cus-WNc ^ yj p Q, ;,i '.[> ( marketing it aggressively, w e expect Gh]qgA]M tomers, saving $5 billion in fuel cas technoloeies to provide a mean-costs since it began ser ice in the n n.m ~ j ], 77 % .ngitd source of new revenue fbr mid '70s. chc '"~rc-X WGk 3[,g.5 %g - @ M.m..,.4 - ja W . The Changing Marketplace - This brochu c, available to a!! our customers. Y"bN describn the programs included in Conserve $ h,;:.1j As technological advances present 3[l;d...?.... 20% our comprehensive plan to help customers new and better ways to use energy, 3 3,' N,g,$' our business is becoming increas-save energy and money and aho help protect n s the environment. Conserve 2000 is for everyone Q/. y g, --individuals, businesses, schools, and institutionsf g.Q co % ' g' j! j# ingly competitive. To grow in such We can all contribute, and we can all save.

f .a The growth of the natural yg-- p:w7y-; ~ gas %dustry provkles new { / ' commercial opporturdties ' 9i for ut qltrwenience and L "y;; ' ~ and clear advantages for savings fdr our customers. ^ 4'; 3 y. fg 7; - the environment. M can ,g#,.;. y a - piant, a k small co-generation urst. a vehicle, or sh air condi-j p., tiener. Under our Con-serve 2000 program, we W,- a,e wo,uir, s ee .s 5 1-I]/ State of Maryland in a. j g G y-gt pilot program to evaluate the performance of vans / @#j.U,>- [#i Ike the one shown Geft). an nath comorgssed and ligstfied' natural gas. Our goalisJo 19ssen Mary-Band's, dependence on imported oil and ease pollution by reducing, the,numbetast pine-powiyed vehictes on the roads. chiners offer 6ur large copmercial and indietrial customerta km-cost s is _ - alternative to ineet cool-kaseds.'A chiller like the one qhown Onset) 6n a ddwntown taltimore, bank, can reduce estergy ~

cop by 30% and pay for themseldes in le'ss than three As a by-prod-uct, heat thh engine

, makes hot water for use 1 w:m W (- s g 4.I I i 1,' N. c

h[_ N .6 I , h f uR 4 r 4 4 b ) l ev ~s g s m. L . %-'9*- g ~ n/ t . p m + $ Q. % t, t ' .e Re< or%st, combined jft 'h V". s with wveral wvere -

w;. "

y 3 ~ i / .a.1 j storms made the sum .y rner of 1991 a contenu ( 'l "m c_ 1 c'- s ous < hallenge for our 4- { . QMribution Devmon in 'q 'g I August, just as we fin s kshed pstoring service -4 g after {torms in our own j W + e> 3 terrrtory, we receeved an V {/- emergency call from,the 3 ,. m. m. - - -~ Edeson institute's Mutual ~ PE' '- -_ y f 4 9 Assistanc;e Group H' fH-p p J OW-u + ~ cane Bob had left 70% '~t E, FM.

Mb, b d

? e ,v. of.the Cape Cod penin-T M 6 sula without electrKity. Mtwe than 100 SGaE r-volunteers and 50 vehi , deyagjuding our new, mobile command center g $dyn (below), went to help in % 0[h N##"'"" QM f **, !it ' g y?% ; j a (d j addition to reimburw -( .}1 M ment'for our tosts from '= t- + w n. the.New England piectrK [,7meJA,jj]*[ {T /- y 1 compan,ies, we received . valuable expertence W UW@., working in eIttrerne con-f%[ 4 + ditions (right) as well as d N S M >c w c ar u jm- , an outpour g of grati y i P- ,4 g QQ [gh _7< k ; . 1. w. lVlM g(, \\. tude from the people we HNk s e- --m helped While Hurricane M.%"" y i j?,' ? w.,M 3 nary event, the perfor NN hhk?};[$ M _,. *, ' " 4 = '~

L Bob was an extraordi-i

++ mance of que people K; ~ 4 -~ ' %v _ a '] 4 s was not. We are commit n. s - ted to supeript customer apW* _ J &4 savice en everything wd 1 Ja

6 do it3 our job to listen -

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a marketplace, we have to compete mentally sound, our terntory is share an obligation to leave the aggressis cly for customers by feeling the effects of gournment Company and our conununity bet-developing new markets, new prod-hudget shortfalls and the economy, ter than they found it. Our employ-ucts, and new senices. To focus further accentuating the need for ces are active in economic our efforts in that direction, w e strict cost controls and greater pro-deselopment efforts, civic organiza-testructured our organitation to ductivity m all our atthities. tions, the arts, and a wiile range of create a marketing thvision. To ensure that our organintion non-profit group,. With corporate Consene 2000 represents the is functioning as effectively as pos-supimrt and enthusiasm behind first phase of our long-range mar-sible, we have undertaken a htmd-them, our employees are amorg the Leting strategy. For the near term, l,ased corporate self-assessment conununity's most aethe wlun-we are promoting energy conserva-effort. Onc overall goal is to per-teers..\\laryland is our home. Other tion technolog3, emphasizing the form and be recognimi as a world-businesses may comt and go, but builuing shell as u ell as the appli-class enerer company. To reach I!G AE is here to stay. ances and equi unent. Our promo-that goal we have embarked on a Senice and leadership-they're l tions offer rebates and inechtives process ofincor}mrating contim-at the heart of our past and central for the design and application of ous improsement in es crything w e in our building for the future. energy-efficient technology. ily the do. We are examining our mission, mid>90s, we uill begin to focus on our values, our managemem sys-markets for new technology, tems, and our strategic goals, and including gas-fired heat pumps, we are absolutely clear about our . c. residential p.h air-conditioning s'orporate priorities. We ask -[([h, systems, and imlo% atise gas and oursch es these questions: circ rc r , ~. electric al po tCesses. !!!CCtlHg iht CYfn1JtIGHS 0)'Ditr h _- e, dS in all our pl mning, our pri-(HSro/#rrI-lHlff 71d/ d#d (Ytr77td[?.-if f ' 9 f-mary marketing goal is to anticipate re proud "fthejob re're d.mg? Cui At BG&E and respond to the needs of our re think ifa ray to do thejob better? every employee is customers. Our role is basically the Far more than the answers them. responsible for identifying and resp nd ng to customer needs-same as it has alw ays been: to offer sches, these questions hohi the key and our people are old hands at new sohitions to our customers to our competith e future

it. Service pins like the one problems.

This process will undoubtedly above are prized syrrbols of result in new directions for us. For ca.nmitment to the company and its values.

The Corporation instance, w e are plannm.g more The challenge of planning grow th results-oriented management syv in a changbg industry is only part tems. The quest for imprmement is of ournory. As widi(verv Ameri-a !!G& F tradition, u much a part can corporation, u e an managing a of our value 3ystem as our commit-business in a recessian u hile plan-ment to outstanding customer ser-mng for the future. While funda-vice and leadership. 06r employees

& Corponite and ' Utility OJJicers nainun,rr nas aa ucarie conin,n aa su+suiaries Ef George V. AlcGowan Chairinan of tbc BoarJ and Chief Kreactive Officer Christian 11. Poindexter I

ice Chairman cf t[e T>oard Edward A. Crooke Mr. McGowan President - Utilir *)perations s

Ej I

ice President, 3 lark < ting

o Thomas F. Brady f

(( h.' . g I

ice Prois nt, Customer Sctrice and. lavanting AlichaelJ. Chesser Ilerbert D. Coss,Jr.

Mr. Poindexter Mr. Crooke Mr. Brady l' ice President, [Jectric interconnection and Transmission George C. Creel Vice President, Nuc! car Energ g i f George D. England ~ l' ice President, Dictribution Jon Al. F;1es Mr. Cheuer Mr, Coss Mr. Creel Iice President, Alanagement Snrices . gin,. G. Dow ell Schwartz,Jr. ~ + [ Iice President, Genend Sarices . a;. Charles W. Shivery f Vice Periident, Corporate Finance. Treastarr, and Secretary ~ ' Joseph A.Tiernan 'd Mt. England Mr.Fsle- _ Mr. Schwartt Iice Prvsident. Corforate d))lirS ., #4 ~' - w.. J. Thomas Wellener s. .g. .s k; ~.g. Iice President. Faud Enery P 'W' leffrev I.. Davis As tant Sect etary n Thomas E. Rusiin,Jr. Mr. Shivery Mr. Twinan Mr. Wellener Mcsistant Tirasurer

Baltimpor Gar and I:learic Company and Subsiddeles $50GirlofDirectors 0 George V. AlcGowan-Jerome W. Geckle Chainnan ofthe Ikard and Chicf thrcutive OJH+ cr Chainnan ofthe HaarJ (Ret.), P1III Corporation (vehide, relocation, andfiscilitics manaqcment services), Baltimore Chn. t.s aan 11. Po. dexter m l'ia Chainaan ofthe Hoard Paul G. AlilIer Ii. l'urtong Ilalduin CI'ainnan qfthe Buani Supenwnputasynons, Inc. (Jnign, j Chainnan ofthe Board and ChiefEruutive Of]iar, manuj: auring, and ni!c ofsupercomparm), Baltimore Alarantile Banksharn Corporation (hank holdi"X George G. Radcliffe i company 1, Baltimorr Fonner Cl, airman qfthe BoarJ and Chiefihraaire OD:ar, J. Ou en Cole The Baltimore 1.ife Insurana Company (insurance), Baltimere Chairman qfthe l'recutive Cmnmittee, Fir-t Alaryland 9 y_ g_g; y Barcorp (bank holding company), Baltimore p,,, p, .y3,,,7 g,p,,4 g,y,,, Dan A. Colussy '^*'U' Chainnan of the Board, Persident, and Chicfihrastive Of5rr, President and Chieftheanice OJ)lar, Aleny-Go-Round UNCIncorporatcJ f aviation smias), Anna;><Jis, Ala.. Entaprhes, Inc (speciaky retailing),Joppa, AlJ. Edward A. Cn>oke Bernant C. Trueschler orsident - Utility Operarians Chainnan afthe lheastive Cummittee I.estic 11. Dishanion fonner Chairman ofthe Board anJ President, IIarry N. Wells Alonumenta! Corporation (insurana), Baltimore Chainnan ofthe lhard (Retired), AlcConnick & Company, Inc. I*" #$' #I'#"' # ' Sister Kathleen Feeley, S&N.D. Pasident, Cellege qfNotre Dame ofAI.nyland (educatirm), Raltimort Comrnittees of the Board Changes in Directors Audit Committee Conunittee on Alanagement During the year, Willard Hackerman reached normal l-Alr. RadclitTe, Chainnan Alr. Geckle, Chainnan retirement age and did not stand for reelection at the Alt. Italdwin Alt. Cole Annual Shareholders Aleeting on April 19,1991, Alr. Cole - .\\lt. Dishanion Air. Russell Alr. Sullivan EffectiveJanuary 1,1992: l Dan A. Colussy, Chairman of the Board, President l Exceutive Committee Comntittee on Nuclear and Chief Executive Officer of UNC, Inc., was elected Air. Trueschler, Chainnan Power to the Board of Directors of the Baltimore Gas and j; Alt. Cn >oke - Alt. Wells, Chainnan Electric Company. Air. Disharoon Alt. Colossy Alichael D. Sullivan, President and Chief Executice Sister Feeley Sister Feeley Officer of Alerry-G<>-Round Enterprises, Inc., was Alr; AlcGowan Air. A! iller-elected to the Board of Directors of the Baltimore Gas Alr. Poindnter Alr. Poindetter and Electric Company. Alr RadclitTe l

Q Constellation Subsidiaries nari~n cas ara nari< o,-pany a,a sasuiaries - 1 Officers N$ d George V. AlcGouan ( Chairman vf the HoarJ, Constellation iIvilings, Inc. s l Bruce $1. Ambler President and Chief Evecutive OjHcer, Constellation Iloidings, Inc. Mr.McGowan IIruce A1. Ambler f?' '} clai>>g Preshlent, ConsteHation Real Errate Group inc. p J, Itichard O'Connell ? D Presidea, 'lhe K\\lS Group, Inc. i Terry L. Ogletree Praident, Constellition Energy, Inc. Mr. Ambler Mr. O'Connell Mr. Og!ctree fV' President, Constellation Ilealth Services, Inc.

i M

Steven D. h'esler A b 1%sicient, Constellation investments, Inc, l Itobe-t E. Windham President, Church Street Station, Inc. Mr. Jef fcoat Mr. Kester Mr. Windham Constellation Holdings Cor stellation Real Estate Group Const(llation iloidings provides direction to all ofi:s This is the parent company of several businesses-operating subsidiaries and furnishes them with legal, including Church Street Station in Orlando, Florida-fmancial, tax, accounting, and personnel services. In that operate projects in several real estate categories, addition, decisions on all new im estments are The IWS Group performs development, construction, controlled from Constellation I toldingt and operational activities, and Constellation Ilealth Scn-ices, through joint s entures, ow ns senior-living Constellatinn Energy and retirement cotamunities, as well as nursing Fhis is the senior member of our Energy and facilities fnr the elderly. Emironmental Grour.. Under the auspices of Constellation Energy, the company participates in Constellation investments a number of alternatise energy and co-generation Constellation Investments serves as the primary proiccts producing electricity for ele to other utihties, provider of current income from its invesonents in The Encegy company is actively imohed with dnel ping, various securities, investment partnerships, and arranging financing, building. and >perating a number of fmancial-service companies, u holesale pow er projects throughout the couno y.

Baltimore Gas and Elatric Company and Subsidiarici Constellation Subsidiaries O . Board of Directors George V. McGowan Jerome W. Geckle Chairman of the BoarJ, Constellarion HolJings, Inc.; Chairman ofthe R l(Ret.), PHH Corpcration Chairman ofthe Board and ChiefEreastive Of]icer, .,,g y,, Baltimore Gas ar.J Elcaric C.mpany Former Co-Chairman and ChiefOperating Of]icer, 11ruce A1. Ambler Ernst & Young lyesident and ChiefErecutive Oficer, Paul G. Miller Const:llation Holdings,Inc. Chairman of the Board, Supercomp. iter Systems, Inc. IL Furlong Llaldwin Christian H. Poindexter Chairman ofthe Board and ChiefExcastire Of]icer, Vice Chainnan ofthe BoarJ, Metrantile Bankshares Curporation Baltimore Gas and Electric Company Leslie B. Disharoon Bern.rd C. Tnseschler Forwer Chainnan of the Board and President, Chairman ofthe Erwutive Committee, Monumental Corporation Baltimore Gas and Elearic Company Committees of the Board Change in Director Audit Committee Committee on Management During the year, Willard Hackerman reached normal - Mr. Kay, Chainnan Mr. Geck!c, Chairman retireinci.t age and did not stand for reelection on April 19,1991. Mr.11aldwin - Mr. Disharw Mr. Miller l

D Selected Financial Data Wrr Gas and Darric Compny and Subsidiaries 1991 - 1990 1989 1988 1987 (NNr Arn mnts in ^!h..marwk berpt Per Wrc /,mounto . Summary of Operations Total Revenues.. ., $2,459,493 $2,187,562 $2,032,009 S1,921,241 51,878,970 Expenws Other Than Iiterest and Income Taxes. 1,958,038 1,854.183 1,555,424 1,424.291 1,356.848 - income From Operatiom. 501,455 333.379 476.585 496,950 -- 522,122 Other 1neome Allowance for equiry funds used dudng construction.. 23,596 27,086 IS,564 16,056 16,870 - Other income - 3,031 9,589 12,364 7,498 7,276 Total other income. 26,627 36,675 30,928 23,554 24,146 Income Before Interest and income Taws.. 528,cH2 370,054 507,513 520,504 546,268 I Interest Expeme f Interest charges.. 221,098 200,922 164.369 136,071 129,871 l Allow ance for brrowed funds

uwd during construction..

(13,870) (26.266) (14,776) (12,075) (14,069) Net interest expenw.. 207,228 _174,656 149,593 123,996 115,802 l Income Before income Taxes.- 320,854 195,398 ?H,920 396,508 430,466 Income Before Cumulative Effect of Changes 81,629 93,096 130.368 Income Taxes.... 87,173 iV,952 ~ in Accounting Alethods... 233,631 17!,146 276,291 303,412 300,098 Cumulatise Effect of Clunge in the Alethod of Accounting for income Taxes. 19,745 Cumulative Effect of Change in the Alethod cf Accounting for Unbilled Revenues, Net of Taxes.. 37,754 Net income.. 253,426 213,200 276.291 303,412 300,098 Preferred and Preference Stock Dividends.. 42,746 40,261 32,381 29,375 26,406 Earninp Applicable to Common Snxt... $ 210,680 S 172 939 $ 243,910 $ 274.037 5 273.692, Earning Per Share of Common Stock Before Cumulative Effect of Changes in Accounting Alethods.. S2.28 $1.64 $3.05 $3.47 $ 3.47 - Cumulative EtTect of Change in the Alethod of Accounung for income Taxes... .23 Cumulative Effect of Change in the Alethod of Accounting for Unbilled Revenues.. .46 T, l Earning Per Share of Common Stock.., S2.51 - 52.10 53.05 53,47 SL47 Dividends Declared Per Share of Common Stock - $2.10 $2.10 $2.075 $1.775 $1.875 R.itio of Earnings to Find Charges.. 2.43 1.96 3.12 3.83 4.22 - ~ Ratio of Earnings to Fixed Charges and Preferred and Preference Stock Disidends Combined. 1.93 1.61 2.50 3.01 3.29 Financial Statistics at Year End Total Assets.. 57,078,847 56.710,375 55.985,679 $5,126.362 S4.780.167-tCapitalization Long-term debt.. - $2,390,115 52,193,844 $2,076,620 $1,769,066 $1,707,407 Preferred stock.' 59,185 59,185 59,185 59,185 59,185 Redeemalde preference stock.- 398,500 365,000 322.800 229,600 '186,400 Preference stock not subject to l mandatory redemption....-. ...m i10,000 110,000 110,000 110,000 - 110,000 Common shareholders

equity...

2,153,306 2.073,158 2.001.188 1,F85,245 'i,755,368 Total capitahnuon.. $ 5.111,106 $1.801,187 54.569.793 $4.053.096 $ !.818.360 liook Value Per Share of Conunon Stock-S25.50 $24.87 524.91 S23.77 $22.24 Nundwr of Conunon Sharehold rs.. 67,303 68,689 70.395 73,785 75,682 - Certamprnyar amowsts hace bem rrrtsteJto cupmr sth ar cunrntyeds pysmutux

Managernent's Discrission and Analysis of sanimre an aranur,ic canny a,a smaria Financial Condition and Resnits of Operations O ~. -.. The 6nancial condition and retults of operations of llattunore Gas financial Data, and Utihty Operating Statistics seuions of this and Electric. Company (IK a E) and Subsidiaries teollectively, the Annual Reimrt. Factors signifkantly affecting resuhs of opera-Company) are set forth in the Consolidated Financut Statemenn, tiom, hquidity, and capital resources are discussed below. Notes to Comolidated Financial Statements (Notes), Selected Results of Operations Earnings The Company % consobdated earninp per share for 1991 were offset by higher operations and mamtenance expcmes and higher $2.51, which represents an increase of S.41 from the 1WO inel of financmg costsJfhe decrease in utility earninp during 1990 is pri-S2.10.The canungs per share are sununari<ed as follows: marily attributable to higher operations and nuintenance expenses, 1993 pjyo 1939 particularly at the Calvert Cliffs Nuclear Power Plant, higher Utihty busincy financing costs, and lower sales during the IWO winter due to Current-year operatiom - $2.40 StJ4 S2.81 wanner weather as compared to the prior y car. Wanner weather Provision for possible during the winter res'dts in less denund for electricity and gas to dnallow ance of replacement fuel heating systems. In addition, the decrease in 1990 ref'ccts energy cost.s (see Note 11).. (.28) increased costs from the purchase of whhtional generating capacity Camulative effect of chance in and from lower sales of high voltage transmission capabihty. the mechcal of accountinh E. mig bm udty qwrade m AcW by de aguMm for unbilled rnenues (see Note 1).. .46 of IIG& E's rates by the Alaryland Conumssion and by the effect on eu>nons ang w cather ronditions. Durine 1991, deteriorat-Total utility businesi. 2.40 _1.92_ _2.81.- int economic condmons m the Company's service territory hne ~ Diversified business acticines reiluced the growth in sales, and operations and nuintenance Current-yee operations.. (.12) 18 .24 upenses haie continued to increase above leveh pnnided for in the Cmnulative effect of change in December 1990 base rate increase. If cur:ent economic conditions the methral of accounting for in the Company's service territory continue, electric and gas sales income taxes (see Note 1).. .23 growth will aho be reduced m 1992. The loor economic climate Total diversilied business activnies.. .11 .1 H .24 (including revenue shortfalls at the state and local levels) could Total 52.5I $5.10 ' Si.05 inhibit the Company's abihty to obtain timely rate relief and may cause IW2 earnmgs to dechne trom 1991 levels. In addition, there Uribr> carnin mereawd during IW1 primarily as a resuh of ay currently sueral fuel rate cases pending before the Alaryland ' higher revenues thsom the electric base rate increases authorized by '"*"""*"' *Y'scussed in Notes I and i 1, w hich could unpact the Public Service Commission of Alaryland (Ataryland Comm6- '"'"f" F"" ** """ P-sion)in Deccinber IWO and increased sales duriw the IW1 nbp fnun hembeQudnew activitio, w hich primarily % "' 3"d

I
"k" 5"" I "P"9 **N""ly the Constellation Companies) decreased summar due to wanner weather as coirpared to t6e prior year.

su Wane ollectn e Wanner weather during the summer resuhs in more demimd for electiicity to fuel coohne sy sicms. These increases w ere partiallv during luithycars I he reasons for the decreases in diversitled busmess acuvmes earnings are disemsed on page 27. IlG& E Utility llevenues and Sales Electric rev:nues increased during IW1 and 1990 as a result of the growth in the number of cwtomers in each class. These increases followir g 6ctors: were partially offset by decreascd usage of electricity due to lew 1991 1990 6vorable economie conditions. Jn addition, sales to large commer-cial and industrial customers during 1991 reflect lower sales vo!- on mg l Changes in sales volumes m customeru $ 59.0 5 d.0) umes to the Company's largest customer, liethlehem Steel, due to l increased base rates.. 176.4 3L6 a lengthy planned outage to improve merations at its hot strip mill. l ' increased fuel rates.. 38.5 13L5 1alcuo residential customen in (WO.eflect the negatite effects of warmer winter werher as compared to 19%, partialh offset by t Sales to cmtomers.. 273.9 162.1 gmwth in the number of customers. Sales to small coImmercial - Changes m other revenues.. H.2 LJ customers retiect growth m the number of customers in 1WO. ~1he j Total increases in rnenues.. $282.1 $16L3 decrease in sales to large commercial and industrial cestmners in 1990 reflects lower steel production by lle hichem Steel, w hich The changes in electne sala volumes to customen were as follows completed a planned maintenance outage at its IJiast Fanuce 1991 990 during 1990 Ilase rate rnenun increased in 1991 as a re uit of the Alaryland Rotdentuk .~.. H.8mm (1.8yL Comnnssmn's December 1990 rate order, which authorized ain rg tut i IIm[1 indmtnal. immediate electne bee rate increase of $77 miPion, a 5124 mdlion Total 4.7 ilJi ime rare increase to provide rate recogmrion for ilG&ls s imest- = ment and operanny expen es at Ilrandon Shores Omt 2 effective The increases m s. des during IW1 reflect the posidve effects of with that 1.~ nit's initial commer cial operation in.\\ lay 1991, and a wanner wather during the IWI summer as compared to 1990 and S5 3 milhon surcharFe to base rates effectise in October 1991 to

_.m __. _. _ - ~- .i 'OQ Baltimre Gas and Eletric (;rmtpany and Subsidiarirs i recover certain purchased capacity charges. Increased base rate The thanges in gas sak t volumes were as follow s: revenues for 1990 reflect the Alan 3 and Commission's December 1993 i999 j t 1989 rare orders hich authoriud a $21.5 million electric base rate Rem. 4.3 % (12.0)% increase, and a $10 milhon surcharge, effeaiveJune 1990 through N"'",1ntiat-.. " annmemal-R2 W) Alay 1991, to recover a portion of porcha ed capacity charget Electric base rate revenues are expected to increase in 1992 e a I.arge comniaci 1 and industrial. (1.8) (6.4) I ""I" ~~ E4 M ] roult of the renuining effects of the electric ba e rate increases which became effective in 1991. .the m.ereased siles to residental and small commercial cus- ) ~1he increases in fuci rate revenues for 1 oth periods resulted from the operathe of the electric fuel rate formtda. (See Notes I tmnen w ne annimtaWe m colder weather during the 1991 wintec . and i1.) Increased fuel rate revenues in 1991 muhed from lugher a mmpared to 1990. Cohler weather during the winter results m sales volumes, perially offset ' y a red tetion in the fuel rate ordered nore demand for gas to fuel heatmg systems. The decrease m nles by the Alaryland Commissir.4 in Alar 1991 to reflect $58 million of m large namnacial and industaal customers was attributable pn-

^"I m lo*~er usage per customer due to less favorable econonuc expected anmtal fuel coa savings reElting from the comnwrcial T

mndm.ons. In addition, a decrene m the volumes of steel procassed operation oflirandon Shores Unit 2. ~lhe increase in fuel rate rev-enues in 1990 wn due to a more costly twenty.four-month genera by liethlehem Steel resuhed fmm a planned outage to imp.ove non mix reflected in the fuct rate formula as emnpared to the prior operatmns at its hot strip mal during 1991. Sales to residential and unaH commercal customers in 1990 decreased as a resuh of the year. Electne fuel rate revenues are expected to decrease during 1992 as a result of a continuing less costly generation mix due to neMe effens of unner weather during the winter as compared the operation of both units at the Calvert Cliffs Nudcar Power to IW. Ge decrea,e in ules to large commercial and industnal . Plant the remaining effects of the Alay 1991 fuel rate reduction, customers during 1990 refleets lower steel pnwiuction by and the expiration in October 1991 of a surch;rge to the electric flethlehem Steel s nd decreased utilinthn of dehvery sern,ce fuel rate. by cenani customus. Gas revenues decreased nunpared to the respective prior years Base rate tsvenues increayed in 1991 as a result of a 54 million gas base rate increase authorned oy the Ataryland Commission as a result of the following factors: effective October 1,1901. The decreased base rate rewnues in ~1991 1990 19 0 reflect the Alar >iand Commission % De(ember 1989 rare muw Changes in sales vohunes.. $ 5.6 $(13.5) onta which lowcred hw rates by $3.5 millios The remaining effect f the Octolv 1991 gas base rate mcrease will act to increase Changes in base rates. la d.1) - Decreases in p cost adjustments...... (20.1) (21.o) ps base rate revenues in 1992. Decreases in other rn enues.. (2.0) (0.2) The decreases m gas cost a@stments in each yur resultyd from the operation of the purchased gas adjustment clause (See i, "e 1), .l'otal decreases in rewnues... 5(15.2) $(38.4) in ad& tion, the decreases in both years reflect a settlement m certain take+r-pay issues with BG&Ei principal as riipehne F suppliers. Take-or. pay costs reftmded to BG&E are passed on to customers thmugn the purchased gas adjustment clam.e. llG& E Utility Operating Expenses Electric fuel and purchased enerFy expense was as follows: lasted most o 199R Calvert Cliffs Unit 2 went out of senice on r Alarch 18,1%9, remained out of senice throughout the remainder 1991 1990 1989~ wuna of 1989 and all of 1990, and returned to seni e on Alay 4, IW1. Aitm'. costs... $492.6 $659.2 5636.1 Cahert Chih Unit I went out of senice on Alay 6,1989, continued Net recovav (deferral) of onts out of sernce for the remainder of that year, and u as in operanon under cledric fuel rate for only 80 days in 1990. In that nuclear generanon rt presents the clause (see Note 1),. 105.6 (107.8) (238.1) low est emt power generated by UG&E, outages at the Calvert Chffs Total expense.. $598.2 $551.4 1 7 plant have a substantial effect en fuel costs ( ee Note 1IL As dtscussed in Note 11, dering t wo BG& E recorded a provi-The decrease in actual electric fuel and purchased energy costs son of W mE n for the poqihte disallowance of certain repace-during 1991 was due primarily to a less costly generanon mix as a ment eneposts ass (iated with the extended outages at the Calvert Chifs plant. e result ofincreased output from the operanon of the Calvert ClitTs I d'O"I 35 * *P** "~"* *' I"U""* F - Nuclear Pow'r Plant - he imtial cmmnercial operation of Brandon Shores Unit 2, and toe commencement of the Pennsylvania Power _1991 y 1990 1989 and Light Energy and Capacity Purchase Agreement. The iccrea<e Chu in actual electric fuel anj u2 chased energy costs in 1090 was due Actual costs.. $185.1 $181.1 $233.9 p prunadly to a more cosdy generation mix and the purchase of addj_ Net recovery (deferral) of costs tional generating capacuy to meet I,G& E's r quirements under the under purchased ga3 adiustment - Pennsylvania New Jctsey.Alaryland Interconnecuan Agreement cimse bec Note 11- _ 3.6L _ _193 (10.4) ( All of these factors arose as a recuh of the exten&d maintenance Total expense. $181.5 5200.8 $223.5 and repair outaFes at the Calvert Chth Nuclear Power Plant, which

- Baltimore Gas and Hearic Compny and Suhridiarier h The increase in actual purchased gas costs for 1991 reflects higher leveis of depreciable plant in sen ice, including lirandon i - Increased output due to the cohler weather during the 1991 winter $hores Unit 2, which began <ommercial operation in May 1991. a compared to 1990, while the deccaw in 1990 refiera lower out-Depreciation exneme for 1991 and 1990 also ref cts annual . put due to the wanner weather during the 1990 wmter as compared increases of $1.2 million and $2.9 million in nudcar decommis-

to 1989.

sioning accruah.s authorized by the Maryland Conuniwion in its Operations and tuaintenance expenses increased in both years December IWO and December 1989 rate orders, respectively. due primanly to higher costs at the Cah ett Chifs Nuclear Power Taxes other than income ines incr-ased in 1991 and 1990 Plant as a result of significant expenditures m upgrade the plant due primanly to higher property, public seuice company franchise, U equipment and procedures to the high staahrds n aired at newer and payroll taxes attributable to increased property awessment- , nuclear facihties/lhe 1991 increase also reflects higher payroll and utihty revenues, and wages, respectively. fringe benefit costs. The Company anticipates that operations and Inflation affects the Company through increased operari~ er, mainterunce expemes wili level offin IW2. Increased costs associ-penses and higher replacement costs for utility plant assets. Altimugh. ated with the commercial operauon of Ilrandon Shores Unit 2 and the effects of mflation can be mitigated through timely rate relief, the higher heakh care cuts are expected to be offset by lower payndl regidatory process imposes a time lag during which increased costs emts. The expened decrease in payroll rosts reflects a Company-may not be recovered. Ttus regulatory lag is attribut; ble in part to rate ~ ide objective to restrain Frowth in operating expenses by means relief being based o past costs rather than projecrea costs. It lus been w of budget limitations attrition, and planaed workforce reductions the Maryland Commission's practice to pennit rectwery of the cost of as a remit or the implemertation of a Vohmtary Special Fady replacing pl.mt assets, together with the opportunity to earn a fair Retirement Program (see Note 9). return thereon, beginning at the tiine of replacunent. Depreciation expeme incieased in luth years as a result of m.,..._ _ _... _. ~.. _ _ Dhersi6cd Business Acti ides Earnings Earning per share from diver;ified bminess aethities were as folkm: tially all of w hich subsequently w ere sold. This write-down w as 1991 1990 logg bawd on the Omstellation Companies' evaluation that the market = Diverufied business activities value of thee secunties (predominantly financial senices compa- . Power generation systems.... S.05 S.10 ' S.M nics) would not recover to their cost levels in the near ternt invest- ' Finincialinvotments.,. .01 '.12 .16 ment earnings aho were lower in 1901 due to a $?.I million charge. Real estate and senior on two financial hmited partnerships (banking and financial semees) livmg facilitiesJ _.. -. (.16) (.03) .05 that were adjusted to reflect market value when the partnerships - Other - (.02) (.01) (.03) were reclawified from long-term to shm t-term investments in antic-I""***"* **""pm of theimms during the next tweive mcnths pt n exp a ' Currentpar operations..a (.12) 18 .24 "P * * I"O'*I"'#d"'

d' '#*U"#*"?" "I Cumula'we effect of change in the invesunent portfolio to emphasiee more liquid but low er yield-the method of accounting for InF securities and a dechne m the size of the im;es ment portfoho

' income tnes (pee Note 1).. .23 followmg the sale of sebeted assets to prmide hquahty for ongoing Total diversified business activities... . 1 11 $.18 S.24 activides'of the Constellation Companies. These decreases were off- - set somewhat by improved performance in certab ftnancial limited L - Earnings per sh,re from the ComteUation Companies decreased . partnerships 'ihe performance of the Constellation Compnies' during IW1 due to the absence of tu credits from new power gener portf(dio of financial investments was adversely affected in IWO h, armn projects, lower earnings from the financial im estment portfolio, the troubled banking and fmancial senices industries, offset some-t and the continued softness in the real estate toitket, as discussed in what by the perfornunce in >ther parts of the diversitled portftdio, derail below, 'The Constellation Comptnies' real estate development business ; The Constellation Companies' power generation ptems business. includes land under development, office buihhnp, retail pmiects, includes the denlopreent, ownership, maiugement, and opration of commerrbi pruiccts, an entertainment, dining and retail complex in wholesale power generating projects in which the Comtenation OrlandoJ1orida, and a mixed-use nLnned unit development . Companies hold ownersh;p imerest, as weh as b riding suvices to Anne Arundel County, Maryland The maiority of these proj-ets are power generation proier - der operah_ and maintenance con. in the lialtinmre-Washington corridor and have been adserselv - tracts. EanLp from the umsrep,tior. Companies' pow er Fenera. affected by the depressed'real estate and economic markets, result- ? tion bminess decreased during IWl, reflecting the absence of tu ing ra reduced demand fc.r the purchase or lease of av.ilable land, credits from new power generatim projects, partiah offset by office, and retail spce, as well as the inability to complete antici/ . income from energy proicct3 in which the Constellation Cmnpanies Pared sales and leases of real estate projects. Due to these conditions, ^ luve an equny interest, income from operaurig energy projects on ir.1991 the Constellation Companies reconled write-downs aggre-ctmtractual insis and the sale of a limited parmership ircerest in one - gating $10.0 tr Jian on certain real estate projects and a $3.6 million pmject. Earninp increased in 1000 as a result of the utilizat on of reserve for Lans where the value of the couateral was determined to i l' - energy tax credits when certain proiects begm service. - he leu &n the outstandmgloan balancei Additioru!!y, the Con-l' Earninp from the Constellation Companies' portfolio of tinancial stellation Companies' real estate portfolio has experienced ermtinu-invemnents inchide capital gains and losses, dividends, income from - ing carrymg costs and depreciation, and during 1991, the Constella-Onancial limited prtnersh p, and income fmm financial guaranty tion Compans began expeming rather than capitalizitTg interest on imurance compani-es. Investment earmugs were lower in 1991 du'e to certain undeveloped land w here development activities are at mini-a Sio.$ million write down to reflect the marLet value of certam of trullevds. All of thne factors have negatively impacted 1991 earn-E the Constellation Companies' marketable e qmtv securities, suhstan-inn ami are expected *o continue to do so until the current market condidons i.nprove. Cash thm imm real estr e operations has been j i l I. t. ~ m.,

_ _ _. ~ _- h Mrtmore Gas and Dcrn Compny and Suhndiaries

inst.fficienc to cover the debt senice requireme* ts of certain of th3e growtb and until exce% inventory in the market in the Baltimore-projects Resuhing ca4.h shortfalls base been satisfied thrcagh equity hhington corridor is reducedJeal estate values are not antici-infusioni and loans f> om Constellation 1loidmp, Inc., w hich obtained pated to improve. If the C<mstellation Companies uere to sell real 4

the fur'ds dm4 a combination of cr.h flow geneiated by other estate projects in the current depressed market, kisses in amounts Constelladon Companws and its corporate borrowings. As long as the difficult to deternd:- u ould occur. Depending upon market condi-real estate market and kral economic conditions remain soft, candngs tions, future sales aho cauld rem't ia losses. from real estate activit es are expected to remain deprnsed. In addnion, were the Consallation Companies to change their The Constellation Companies plan to hold real estne projects intent about any project frm an intent to hold until market condi-until the ma Let is willing to pay a reasonable value. This wndaion is tions improve to an intent to sell, applicable accounting rules woc'd a function of market demand,intuen rues, credit availability, and require a w nte-down of the gr, ject to nurket value at the time of the strength oithe economy in general The Constellation Compa-such change in intent if mar ct value is below book value. rdes' Management believes that until the et momy shows sustained 0.her Income and Expenses The allowance for funds used during nmstruction (AFC) decreased due to low er earnmgs fnc rchandising operatior's and increased in 1991 due to the 'ompletion and commercia? op ration ofIlrandon in 1990 as a result of gam ihe sale of certain utihty proprrty. Shores Unit 2. *Ihis decrease was partially offset by the me of a pre-The increases in inte - arges far lx>di years prirnarily reflect tax AFC rate of 9.94% effectiveJanuary 1,199! in connection with increased les eh of debt e idmg, partially offset by low er interest tlw adoption of the liability method of accounting for income taxes rates in 1991. The incres cbt levels are attributable to continu. und-r Statemen of Financial Accounting Sundards No. 9u. Qw-ing c<mstruction expenE .laring both years and increased ever, net income is not afTected by this change in recording AFC. deferred electric fuel cce mg 1990. Interest m. et egweted Under Statement No. 95, income taxes represented by the difference to increase in 1992 due e cased Jevels of d( u.nated wuh the between a pre-tax and net-of-tax AFC rate are recorded as a compo-Company's capital reque a and the disco a vion ofintettst nent ofincome tax expense sa her than as a reduction of AFC. capitalization on certain v Constellation Comiu... ' real estate AFC increased in 1990 due to the construction ofIlrandon projects. Shores Unit 2 and other major electric projects. The increase in Income tax pense incremi during 1991 as a residt of higher AFC for 1990 abo reflects the Maryland commission's December pre-tas earnings and the implementation of the habibry method of 1989 rate order w hich incrmsed the ner-of-tax AFC rate to H.80% ucounting for income taxes. Under the liability method, deferred and reinstated in the AFChase certain expenditures related to income taxes previously recorded as a reduct'un of AFC are ircorded I!randon Shores Unit 2. AFC will decrease in 1992 due to the as a comoonc,' ofincome tax expense, income tax expense decreased remaining elTect of the cuation of AFC accruah on Brandon Shores during 1990 due m lowe pre-tax cart.ines. Unit 2. Preferred und preference stock dividends increased in bo:h years Net othet income md deductions decrea. sed in 1991 primarily as a result of greater amounts of puference surk outsunding, Liquidity and Capital Resources - The Company's capital requirements reflect the capital-intensive through 1991, alung with esnmated munts for 1992 through nature of the utility business. Actual capital requirements for 1989 1994, are shown beimv. 1989 1990 1991 1992 1993 1994 tdiiii2J ~ - i Utility llusiness Construction expenditures (ncluding AFC) Electric. S30' $362 S 328 $391 5 437 5458 Gas..-... 27 39 43 46 48 50 Common, 80 81 48 63 70 82 L Total construction expenditures. 414 482 419 500 555 390 AFC._ .~. 33 54 37 25 35 34 Deferred nuclear expendmacs..-. 10 28 23 27 13 10 Nuclear fuel (uranium purchases and processing charges) 17 '21 2 21 -t 5 44 . Retirement oflong erm debt and rettemption of preference stock.. 51 60 339 '5 291 124 Total unhty. business. 527 644 820 648 _ 930 802_ Dnersified Utuinos Activities i. Retirement oflong term debt. .~. - 80 8 16' 220 87 3 investment requiremer ts._. 113 122 100 71 42 44 Total diversified busines, activities. 202 130 276 291 129 47 Total._ $f29 Usi.096 3U9 $1.068 $849

. -. ~. --- - ~ - - ,r -3 l Batimore Gas and Dertric Capany and Sul ridiarier D .m i hsG&E (Jtility Capital llequirements . IlGbJ's construction program inubject to cornnuum review and expenditures and kw er net income. During the three-year perimi moncstion, and actual expendirures may vary fmm tbe estimates 1992 throuFh 1994 approximately 55% of'the funds required for ~ 4 on page 28.1he increase in estimated construcuan expenditures es constructioo, nuclear fuel, and deferred nuclear expenditures are compared to prior estimates is attributable to the evpanskm amt mpected to be pmvided through utibty operations. upgreding ofIlG&E's transndwion and distrilmtion facilities and Utility capital requirements not mei Amugh the internal gener-nxxliGcanons;to existing generating facihties. ation of cash are met through the issuance of debt and equity securi-The nmst significant ptoject in the construction pn> gram is the ties. During the three-year peruxi ended December 31, IWI, 'tw6 phased-combined cycle units at the Penyman site. Exch.dmg UG& E's issuances oflong-tenn Abt. preferred ar d preference ' AFC.catruction expenditures for Perryman totaled $34 milhon stock, and common smck w cre $866 million, $200 million, and $152 over the 1989-1991 period, and such expenditures are expected to milhon, respectively. During the same three-y ear!ierimi, llG& E total approximately $175 million over the 1992-1994 period, Other retirements oflong-ter n debt and redemptions o preferred and -- electric construction exsenditures are primarily attributable to preference stock were $416 ndlhon and $M million, respectively. . improvements to BG& E's existir generating plants and to its _ InJanuary 1992, BG&E sold $125 milhon of 7M% Series due transmission and distribution facilities.,i.e Ceny currently January 15,2007 First Refunchng Mvtgage llonds. Aho inJanuary estimates th t expenditures for compliance wi.h the u, % 2; t 1902, IlG&E Oled with the Securities and Exchange Commksion L of 1990 will total appnnimately $50 million thmugh 1995. a registration statement for the issuance of up to five million shares

During 1991,1990, and 1989, the internal generation of cash of ad.litiom! common stc,ck and shelf registrations for $250 nullion (mm utility operatiom provided 74%,14%, and H% respectively, of additional First itefunding Mortgage Ibnds, $200 million of of the ftmds rnptired for construction, nuclear fuel, and deferred addnional Medium-Term Notes, and 900,000 sinres of additional

' nuclear capenditures lle significant increase in the 1991 level ir Preference Stock (S100 pas valuel 11G& E has_S36.9 million of due to a reduction in deferred electdc fuel emts, lower construction Medium-Term Notes available under an existing shelf registration. - expenditures, and higher net incomcJIhe low leveh h.1990 and Ihe amount and timing of the sales of these sentrities will depend 11989 rc0cet increased deferred electne fuel costs and ennstruction primarily upon market conditions and llG&E's needs, iDisenired llusiness Aetisities - M j Liquklity And Capital Requirements ~ ' Deh - indebtedness to achieve longer maturities 011 also intends to pay During 1991, the aggregme ammmt avadable under Constellation down outstanding debt through internally geacrated cash which 6~ Doldmgs, Inc 's (Cl10 trank debt facilities was reduced fmm - includes cash that may be generated from operations, maturing of $315 nulhon to $261 million, and the amount outstanding was. Tunneial limited partnenhips, sales from the securities portfblio, the reduced nomrdingly. The maturity dates of these facihties were aho s.de of other assets, and cash generated by tax benefits earned by extended to Alay 1,1992. An ad iitional $41 million was paid down Cl11 and its subsidiaries. In the esent that the real estate market con the lunk facilities debt, and,in addition,545 miPion of GII pri. relmunds and Cl11 can obtain reasonable value for the pmperties, (varely pheed debt was redeemed pursuant to regular sinking fund add'tional cash may become available thmugh the rate of pmjects pavments and maturitia. Aho, during 1991, $27 million in debt of (for additional information, see the discussion of the real estate busi-L subsidiaries of Cl11 toat n setwed by project assets ("proiett debt") - ness aad market on page M under the headmg 'Divenified Ilusiness was repaid, and the maiority dates of $94 million in pmject debt Activities Eamings")flhe ability of G 11 to sell or liquidate the - = wer extended to the yean 1994 thmugh 1996. During 1991, an - awets described above will depend on market conditions, and na additional $95 milhon in QIl primtely placed debt with maturities assurances can le given that such sales or liquidations can be nede. ~ - of 4-.6 years was issued to insurance companies. The proceeds from ' C ft and its subsiduries are negotiating the refmancing of all issumg this debt wrre used to reduce uisting debt as discussed alxr,c. ihdebtedness as it matures id order m satisfy ongoing capital

Clil achieved rate ash antages during past y ears by utilizing debt requiremenu No assurances can 1.e prmided that CHI and its stdr -

^ - with short tent mamrities. Uncetmir ties in the banking enviruni sidiatics_will be successful' extending the existing credit facilities m ment and tighter lending requirenvnts, coupled with higher dcht and obtaining additi. mal imnuwings fmm institutionai lerdersc 1 = lesek and the decline in operating income at the Constellation (Companies, resuhed in ddfkulty in obtaining fmm banks either new Imurment Refuiremens commiuuents or commitments to extend the matunty dates of ihe - The investmot requirements shown on page 28 include Clllher-Webt on trans acceptable to the Comtellation Companies. tion of equity hmding to conuuitted pmjects under development as i During 1992, $273 million of debt is scheduled to mature. Of this well as net Imns made to project partnerships. The investment amoimt. $220 million is CIII bank debt,553 million ofwhich is clas-

requirements for past perimh reflect actual funding of projects, sified as shote-term debt; $30 million is QII pnvately placed dehti w hereas invesunent requirements for the years 199249W reflect -

and $23 milllon is pmicct debt. O 11 is presently negotiating to the Constellation Companies' estimate of funding during such peri- . extend the mamrity date of the funk debt until later yrars but, due to mh far ongoing and anticipated p.oiects. the factnrs discussed in the have paragraph,is unable to predict Estimates of the Constellation Companies' investment require - w hether it Wil t,e able to do so, ments are subject to continuous review and moMcation. Actual - During 1993, $R7 million of debt is scheduled to mature. Of this investment requirements may,ary significantly from th" mounts amount, S40 million is CIil pdvately placed debt and $47 millinn is -on page 28 due to the type and number of pmjects selecs * * < - pmject debt; Daring 1994, S1 million of project debt is eheduled to Orlopnor, the impact of market conditions or thnse projects, the mature, in 1905. and later years,5224 milhon of debt is scheduled to abdity to ehtain financing, and the availabihty of mte - slly gener-mature. Oithis amount, $95 nullion is privately p aced debt and ared cash. The Constellation Companies

im estmen-,uirements l

-~ $129 million is pniect debt. been met in the past thmugh the internal generation of cash [" ~ Cl11 will atteinpt to continue, thmugh pnvw piremena and mmugh immmings from institutional lenders. further refinanemg af matming indebminess,r-resmwture in L

& Neport afb $(IHHgelHent Ibhimarc G.n d Flatric Compny and hul-aduria i Coopers & 1;f nind, independent auditors, are engaged to h Alanagement a responsible for the inforr.uiion and representa. tions contained m the Company's finanti;d statements The finan-audit the tinancul statements and apress their opmion ther:on. cial statemenn are prepued in an ordance with generally,wcepted ~1 heir au(ht is made in accordance with generally au epted audit-accounting principles based upon currently availaide facts and cir-ing standud, w hith mdude a review of intenul t ontrols. nunstances and Atanagement's best rsurnates and judgmentiof Ihe Audit Committet of the P>oard of Dirtctors, which cou-know n condaions. snts of four outside Directors, meets perimlically w nh Alanage The Company nuintains an accounting systen and relved sys-ment, internal au hton, and Coopers & Lyhrand to ruieu the tem of internal tontroh w hi(h are designed to prmide revoidde actnincs of each in discharging their responsibilities. The intenul audit maff and Coopers & L hrand have free access to the Audit assurance that the financial records are auurate and that the 3 Compary's assets are pn.tetted.The Company's staff ofinternal Comndtter, audnors, whah reports directly to the Chainnan of the Huard, (onducts penmhc resiew s to nuintain the effnin coess ofintenul L control pn.cedures. Report ofIndependent Auditors s To al c Slurriw!Jm of thirimore Gas and ik rnc Campny We base audited the accompanying consolidated balance sheets in our opinion, the tinancial statements referred to ah ne and statements of capitalitation of llahimore Gas and Eletnic present fairly. hi ail nuterial respects, the consohdated financial Company and Subsidiaries at December 31, IW1 and lWO, and position of llaltimore Gas and Elcetric Company and Subsidiaries the related consolidated statemn ofincome, cash tiows, com-at Decemt.er 31,lWI and UNO, and the consolidated resuhs cf mon sharehohlers' aputy, and taxes for ea(h of the th ce years in their uperations and their cash flows far each of the three yen,in the perital ended December 11, lWL These finan(ial statements the period ended December 31, IW1 in conformity with generally ate the responubihty of the Company's Alanagement. Our accepted accounting prinoples. responsdtility is to express an op,nion on these financial state-As disc., sed in Note 1I to the consolidated (mancial state-ments I ased on our an. hts. ments, the Public Senice Commission of Alaryland is currently We conducted our audits in accortlante w nh generally reviewing the replacement energy costs resuhing from the accepted au(hting standards. Those standards require that we plan ounges at the Company's nudear pow cr plant, and the Company cud perform the ausht to obtain reasonable assurance about provided a resene of SM milhon in IWO for the possible thsal-whether the thuncial stateme: is are free of nutenal miwtatement. kmance of replacement energy costs. The uhinute outcorne of An aucht includes eumining, on a test basis, evidence supporting the fuel rate proceedmgs. how eser, cannot be detenuined but nuy the amounts and dndosures in the finanti.d statenents. An auda resuh in a disallowance in excess of the resene prosided. also indudes awessing the accounting pnneiples used and signiti-As dncussed in Note I to the consohdated tinancial statements, cant estinutes nude by Alanagement, as well as cvaluating the the Company changed w method oiaccounting for mcome ines metall finanent sutement presentation. We behete that our in UNI and changed its methm 6 e nunting for unbilled audits provide a reason ihle basis for our opmion. resenues m UML _G )[Ql/ / ( h opcts & Ly hrnnd II.ihunore, Alaryland lanaan 16, IW2 I

Mrimser Gar ud Harrh Compny aJ Subsidiaries Consolida*cd Statements ofincome Q l Year Ended December 31, 1991 1990 1989 on muek Ixept l'er wre Ammntu Revenues Electric. $1,994,';2 5 51,712,453 51,547,167 Gas.. 358,195 373,419 411,bol Dhersificd actinties.. 106,773 101,690 73,041 Total revenues.. 2,459,493 2,187,562 2,032,009 Espenses Other Than Interest and income Tues Electric fuel and purt hved energy. 598,208 551,385 398.ON Provi, ion for posuble disallowance of replacement coergy costs (tec Note I1).. 35,000 Gas purchased for resa'.e., .I81,455 200,762 223,462 Operations.. 634,309 576,271 478,194 Maintenance.. 173,648 163,4s7 149,014 Depreciation 199,637 170,586 156,546 Taxes othet than mcome taxes,. 170,781 156,722 150,204 Total expenses other than interest and income taxes., 1,958,038 1,854,183 1,555,424 Income from Operations. 501,455 333,379 476,585 Other Income Allowance for equity funds used during construction.. 23,596 27,086 18,564 Equity in earninp of Safe ilarbor Water Powc r Corporation. 4,388 4,000 5,176 Net other income and deductions.. (1,357) 4,689 7,188 Total other income,.. 26,627 36,675 30,92 H lacmne Before Interest and Income Tases.. 528,082 370,054 507,513 Interest Expense Interest charges.. 221,098 200,922 164,369 Allowance for borrowed funds used dunng construction. (13,H70) (26.266) (14,776) Net interest expense. 207,228 174.656 149,593 income Before income Taxes.. 320,854 195,398 357,920 Income Tases.. 87,173 19,952 81,6]_9, Income liefore Cumulathe Effect of Changes in Accounting Methods. 233,681 175.446 276,291 ~ Cumulathe EfTect of Change in the Method of Accounting for income Tases (See Note 1).. 19,745 Cumulathe Effect of Change in the Method of Actuunting far Unbilled Resenues, Net of Taxes (See Note 1)._ 37,754 _ Net Income.. 253,426 213,200 276,291 e Preferred and Preference Stock Disidends. 42,746 40,261 32,3H1 Eantinp Applicable to Common Stock. 5 210*HO $ 172,H 9 5 243,910 Average Shares of Common Stock Outstanding... 114,662 x2,366 79,997 Earnings Per Share of Common Stock llefor e cumuletive effect of chanFes in accounting methods.. $2.28 S t.64 $ 3.05 Cumulatne effect of change in the method of accounting for income taxes. .23 Cumulatne ef fect of changt' in the method of accountmg for unhil'ed reunues.. .46 Total carning per share of coinmon stock 52 51 $2.10 $Loi Na Na te C,mnMa;.41%saat wuments Certare f*knyca amm,nts kwr Frcn vrnated to av6m nte th amrs:yeari p nevurwn

C);consoitaates satance sh:cis ui r, c.t nsa-t c c.mr,.nss.8 isis,ic At December 31, 1991 1990 (in Thana) Assets Current Awets - Cash and cash equivalents ; $ 17.417 $ 39,879 Accounts recchable (net of allowance for uncollectib!cs).. 304,802 268,392 Accrued unhuled rev-nues.... 60,429 49,813 Fuel stads.. 71,493 18,533 Materials and supplies 128,892 119,835 - Income taxes refundable.. 44,720 ' Prepaid taxes other than income taxes.. 46,121 43,453 Other prepayments,. 30,194 30.759 Other:- ..~.. 6,675 9,237 Total current awets.. 666,023 _ 684,623 Investments and Other Assets Real estate projects.- 448/161 412,983 . Financialinvestments - 248,258 322,532 Power generation systems., 215,757 171,922 Safe Ilarbor Water Power Corporation 34,229 34,241 Nuclea* decomrnissioning trust fund.... -31,969 21,335 l Semor living facilities. .25,857 26,944 L Other....... 67,175 54.517 Total investments and other assets. 1,071,906 1,044.474 Utility Plant Plant in senice Electrie. 5,t 57,619 4.230,88I Gas........ 494,950 496.6A3. Cammon. 446,200 410,518 Total plant in senice,. 6,098,769 5,138,022 Accumulated depreciation. (1,803,506) (1,694.166) Net plant in senice. 4,295,263 3,443,856 Construction work in progress.. 307,765 861,734 Nuclear fuel (net of anv rtization) - 152,882 - 189,895 Plant held for future ust. 17,990 17,614 i Net utility plant.,. 4,773,900 4,513,099 t Deferred Charges L . Deferred fuel costs (net of resene for gwnsible disallowance). 287,021 389,775 Income cases recowrable through future rates. 178,640 Deferred nuclear crpenditures (net of amortizatic,n) 63,724 43,182 l Other. 37,633 35,222 - Total deferred charges - 567,018 468,179 Total Assets....... $7.078.847 $6.710.375 Se Nera to Cmmid.oteJ FmamklSt.itence

unimm aar aa nui,* a,,garay aa suwiasin . Consolidated Balance Sheets O At Decemic 31, 1991 1990 On huumb) Liabilities and Capitalization Cu: Tent IJabilities $ 212,170 5 227,70 Short-term lorrowings.. Current portions oflong. term debt and preference sn,ck..... 294,507 452,912 - Accounts payable.. I85,782 202,928 Customer delmits - 14,573 13,176 Accrued taxes.. 29,612 23,982 49,173 46,249 Accrued interest 54,914 54,334 Dividends declared.. Accrued vacation costs.. 30,142 27,050 Other...... I1,619 14,262 Total current liabilities - 882,492 1,062,593 Deferred Credits and Other Liabilities Dcferred income taxes.. 879,417 647,312 Deferred imestment tax credits.. 174,442 180,591 Other.. 31,390 i H.092 Total deferred credits and other liabilities...-.. JC85,249 846,595 Capi:alliation 2,390,1I5-2,193,844 1.ong-term debt....-.. .= Preferred stock... ' 59,185 . 59,185 Redeemable preference stock -... 398,500 365,000 Preference stock not subject to mandatory redemption. .I10,000-I10,000 .c c.._... 2,153,306 2.073,158

Cormnon shareholders' equity.

..;.-.......,y Total capitalitation.. 5,111,106~ 4,801,187 5 Commitments, Guarantees, and Contingencies - See Note 1i L i i. I-L L l 57,078,847 56.710.375 Tdta! Liabilities and Capitalisation. i-l Set Notr$ to CwAklared l'iwrci.alStatemeruts. l-

W Consolidated Statements of Cash Flows a,nm he wa nas cenen.wa suuan-in Year Ended Dntmber 31, 1991 1990 1989 on mmmM Cash Flows From Operating Activities

Net income...

S 253A26 $ 213,200 5 276,291 i .. ~....... Adjusunents to reconcile m net cash pnnided by operating activities Cumulative effn. of age in the method of accounting for inanne taxes... (19,745) Cumulative effect of change in the method of accounting for unbilled revenues., (37,754) Depreciation and aniortization.. 242,390 179,793 170,706 Deferred income taxes., 32,351 56,995 136,388 ',estment tax credit adjustments. (6,225) (4A50) (1,478) Ocferred fuel asts.. ..7.., 102,754 6 9,671) (248d72) Provision for possible disalbwunce of replacemen energy costs.. 35,000 Write-down of fmanci.d investmems. 13,575 Write.down of real estate projects.. 9,988 Allowance for equi:y funds used during construction._ ..~. (23,596) (27,086) (18,564) Equity in carning., of affthates and joint ventures (net) _. ..~. 8,708 14,029 (6,449) . Changes in current assets and current liabilities . Accounts receivable. (36,410) 15,698 (51,030) r Accrued unbilled revenues,. c. (10,616) 9,580. Materials, supphes, and fuel stock;... (2,015) (41,228) (5,075) Income taxes refundable:- 44,720 29,169 (73,144) Accounts payable (17,146) (53,8 4 ) 124,011 (. Accrued taxes'.. 5,630 609) (1,824) Other current assers and current liabilities.. 3,247 (12,837) 17,969 ll~ Other.. (8,862) (10.376) 1,095 - Net cash provided by operating activities... _ 592,174 285,509 320A24 Cash flows Frum Financiag Activitics - Proceeds from issuance of Short-term bormwings (net). (15,510) 103,893 44,382 Long-tenu debt.... 1,015,950 1,987d26 - 1,296,310 Preference stock, 34,801 64,342 98,860 . Common snxk... -32,263 86,881 32,H5 Reacquisuion oflong-term debt. (959,379) (1,595d63) (1,020,029) Redemption ofpreference stock ; (22,800) (6,800) - (6,800) Common stock dnidends paid; -(176,007) (171,623) (163,534) Preferred and preference stock divi ' ends paid.. (42,743) (38,490) 0 1,151) Ot her.-.., L.. (442) (34) (94) - Net ca h (used in) provided by financing activities -_ 133,887) 430,132 250,389 ( - Cash llows From imesting Artisities Utility construction expenditures.. (456,244) (535,116) (447,339) Allowance for equity fundimed during construction ~ -.. -. -. ~.. 23,596 27,086 18,564 Nuclear fuel expenditures. .- (1,8 54) (20,519) (17d31) Deferred nuclear expenditures.. (22,681) (27,755) (9,605) Nudear deconmtiniumng trust fimd. .. ~... (8,900) (8,108) (6,968) financialinvestments. 67,282 (9,907) (1,048) Real estate proints., (45,322) (49,745)' -(40,282) Power generation systems... ... ~. (33,204) (62d94) (65,702) Senior hving facihties., (737) -(2392) (4,390) y.... Othe r,. (2,685) (5312) (11,608) Net cash med in investing actidties,, (480,749) (694.662) . (58i,809) Net (Decrease) Increase in Cash and Cash Equivalents.-... (22A62) 20,979 (14,996)- u . Cash and Cash Fquivalents at lleginning of Year _ 39,879 18,900 33,R96 i-Cash and Can Fquivalents at End of Year.. $ 17A17 5 39.879 $ 18,900 Other C. ash Flow inform ation I- ' Cash paid during the year for: Interet (net of amounts capitalized).. S 199,911 5 166.723 5 150,178 Income taxes - S 16,078 $ (56,937) $ 14,390 l-l l Sn Nern to Cwdd.std Fin.rn,uiSwm,n1 l . Grum pmrmar amm bare km wwc.! twvlhmt turb tk mmns yw's pmarwun.

. Consolidated Staternents of

Baltimore Gas anJ Flectnc Compay and Subsidiaries

. Conunon Shareholders' Equity O. Years Ended December 31,1991,1990, and 1989 Net Unrealized Premium on - Loss on Common Stock Preferred Retained Alarketable Total S_ hares Amount Stock Earning Securities Amount GW N uuna) Italance at December 31,1988...... 79,298 $829,462 $157 $1,062,421 $ (6,795) $ 1,885,245 i Net income - 276,291 276,291 Dividends declared Preferred and preference stock (32,381) (32,381) Common stock ($2.075 per share).. (166 067) (166,067) Common stock issued under Dividend Reinvestment and Stock Purchase Plan-...._ 860 26,465 26,465 Employee Stock Ownenhip Plan..... 190 5,980 5,980 Cmts associated with issuance of redeemable preference stock.....-- (1,140) (1,140) Change in net unrealized loss on marketable securities. 6,795 6.795 Italance at December 31,1989._.. 80.348 860,767 157 1,140,264 2,001,188 Net income.. 213,200 213,200 Dividends declared, (40,261) (40,261) Preferred and preference stock... Common stock ($2.10 per share). _ (173;2M) (173,204) Common stock issued under Public offering., 2,000 57,062 57,062 Dividend Reinvestment and Stock Purchase Plen 936 27,474 27,474 Emphpe Savings Plan.. 75 2,345 2,345 Costs associated with iuuance of redeemable preference stock (658) (658) = _. - Change in net smrealized loss on marketable securities (13,988) (13,988) llalance at December 31,1990... 83,359 946,990 157 1,139,999 (13,988) 2.073,158 Net income.. 253.426 253,426 ' Dividends dedared Preferred and preference stock........- (42,746) (42,746) Common stock ($2.10 per share) - I176,584) (176,584) Comruon stock issued umler - Dividend Reinvesonent and Stock Purchase Plan.. 1,010 29,747 29,747 Employee Sasings Plan.. 91 2,516 2,516 - Cose assxiated with issuante of Jraleemable preference stock.. (199) (199). Change in net unrealized loss on marketable securitics. 13,988 13,988 TIlalance at December 31,1991.... -. . 84.460 $979,054 S157 51,174.095 $2,153,306 See Nares to Cem>M.mJ rumulStatemmts. l l

& Consolidated Statemmts of Capitalization m w aacmxccmmpasawm I, At December 31, 1991 1990 an h>.,mu long-Term Debt first refunding mortgage bonds 44% Series, due Jtuy 15,1992. 5 24,726 $ 24,751 4% Series, due March 1,199L 24,061 24,070 44% Series, dueJuly 15,1994........ 29,921 29,921 94% Senes due October 15,1995.. 200,000 200,000 5W% Series,due April 15,1996.. 26,585 26,585 HM% Series,dueJune 15, lW7... 99,500 99,500 6K% Series, due August 1,1997.. 24,957 24,958 SM% imtallment Series, due August 15,1998.. 53,000 55,155 7% Series, duc December 15,1998. 28,638 28,646 22,062 22.077 8%% Series, due September 15,1999.. 100,000 100,000 8.40% Series, due October 15,1999.. I1,338 11,138 84% Series due September 15,2000.. 7M% Series, due April I 5,2001. 59,919 59,919 84% Series, due August 15,2001... 125,000 7%% Series, due Septendier 1,2001.. 59,985 59,985 7x% Series, dueJanuary 1,2002.. 49,999 49,999 7M% Series, due July 1,2002..,......~ _.... 49,985 49,985 %% Installment Series, due July 15,2002.. 12,500 12,500 7WX. Series, due Septemla 15,2002, 49,990 49,990 8%% Series, due February 1,2004..... 74,983 74,983 6.K0% Series, due Septemlwcr 15,200L 20,000 20,000 84% Series due September 1S. 2006. 74,960 74,960 8%% Series, due September 15,2007. 75,000 75,000 9X% Seties, due July 1,2008.. 29,995 43,894 6M)% installment $crie,, due Septetuber 15,2009 55,000 55,000 94% Series, due March 1,2016. 98,000 98,000 Total tirst refunding mortgage bonds.. 1,480,104 1,371,216 Other long-tenu debt loans under unsecured credit facibties... 175,000 25,000 Imans under revolving credit agreements..... 175,000 Medium-term notes, Series A.. 100,000 47.000 Medium-tenn notes, Senes IL 63,100 9M% Notes due May 1,1993.. 100,000 10M OO 100,000 iloating rate notes, duc july 1,1995..... -.. 100,000 100.000 Floating rate notes, due October 15,1995 Series II.. Pollution euntrol loan, duc July 1,2011..... 36,000 36,000 Port facibties loan, ducJune 1,20lL................ 48,000 48,000 Adimtable rate polluuon control loan, dueJuly 1,2014.. 20,000 20,000 Et.momic development hian, due December i,2018.. 35,000 3 5,0(X) Total other long-term debt.-. 677,100 686.000 Loneterm debt of Constellation Companics Mortgage ;ma construction loam and other collateralind notes 8.875% due June 30,1991.. 21,250 10.50% due June 30,1991....... 53,300 Wriable rates, due through 1996 - 181,532 98,278 1031%,due Aunnt 1,1997. 18,877 19,128 industrial p.trk facilities 1,mds.. 750 1,450 Imam under resohing credit agree.r.ents. 167,330 265,996 Unsecured notes 8.875%, due Augmt 10,1991.. 15,000 8J0%, due April 12, I99L 70,000 100,000 8.35% due August 28,1995.. 20.000 8.71% due August 28,1996.. 23,000 8.93% due Aucut 28.1997 52.000 Total long-term debt of Comtelbrion Companies.. 533,489 574.402 Una.nonind discount and prentium.. (7.571) ~ (7.662) Curtem ponion of long-term debt (293,007)_ _ j430,1,11) Total long-tenn debt.. 2,390,11,5_, _ _2,17 3_,p44 Ser Mw te Gmsaku.i i manaal wew,w. l -= s

utimere ca ea nam a,mi-vra saauiarin Consolidated Statements ofCapitalization O At December 31, 1991 1990 tle Tbmando ' Preferred Stock Cunvdative, S100 par value, 1,000,00(hhares authorized Series II,4M%. 222.921 shares outstanding, callable at 5110 per share. 5 22,292 5 22,292 Series C,4% 6H,V28 si ares outstanding, callabic a* S105 per eare.. 6,893 6,893 Series D,5 A0% 300,000 shares outstandmg, callable at 5101 per dare. 30,000 30,000 Total preferred stock.. 59,185 59,185 Preference Stc,A Cumulative, $1Off j,ar value,6,000,000 shares authorized ReileenuW preference stock 12 % 1981 Series A,68,000 shares outstanding in 1990 .i,800 12% 19H1 Series B, 160,000 shares outstandmg in 1990................ 16,000 7.50% 1986 Senes,500,000 shares outstanding, callable at $105 per share prior to October 1,1996 and at lesser amounts thereafter... _....... 50,000 50,000 6.75% 1987 Series,500,00(hhares outstanding,callalk at $106.75 per share prior to April 1,1992 and at leuer amounts thereaft.r.. 50.000 50,000 6.95% i987 Series,500,000 shares outstanding..................._. 50,000 50,000 7.64% 1988 Series,500 V shares outstanding, callable at $107.64 per share ptior toJuly 1,1993. ' 4; sser amounts thereafter.. 50,000 50,No 7.80% 1989 Series, St4'** st ~s outstanding.. 50,000 50 000 8.25 % 1989 Series,500,000 x.es outstanding.. 50,000 50,000 8.625% 1990 Series,650,000 shares outstanding... 65,000 65,000 7.Hi% 1991 Series,350,000 shares outstanding in 1991.. 35,000 Current portion of redeemable preference stod - (1,500) (22,800) Total redeemable preference stock. 398,500 365,([00 Preference stock not subject to mandatory redemption 7.88% 197i Series,500,000 shares outstanding, callable at $101 per share... 50,000-50,000 7.75 % 1972 Series,400,000 shares outstarding, callable at $101 per share....- 40,000 - 40,000 7.78% 1973 Series,200,000 shares outstanding, callable at $101 per share. 20,000 - 20,000 Total preference stock not subject to mandatory redemption.. _ !!0,000 I10,001( Common Shareholders' Equity w Common stock-without par value-100,000,000 shares authorized,84,459382 and ' g,a g. 83,359,464 shares issued and outstanding at December 31,1991 and 1990, - t respectively. (At December 31,1991,31't,503 shares were resened for the ..\\ mE 'N ^ Q c Emplovce Savings Plan and 2,242,73 I shares were reserwd for the 1 /: 1 Diudend Reinvestment and Suwk Purchase Plan.)....;a.<,..... ..;.a. -... 4.. t 979,054" , 946,990 Premium on preferred stock.. .. 1., _,.......,..i3,....' 157 ;. '157 i Net unrealized loss on marketable secunties.'.: ; ' 1....... 't . 1,174,095

1,

<!,139 999, ... -... ~.....

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Retained eartunes,. (IM8,8),g Total common sharehohlers' equity. ..[... 1..,;,I.... , D,.;.:..d...c,.... ;.., '1- ' ' i 2,153,306 :

2,073.t58

. -u + ~ l. Total Capitatiration.. ..l.L..f.....;. i .u,.. ;..,_ ' li.... 55.11'1,106 ',$4.801.187 t op s,. n s {p (Q ~. [2 s C l ' ~ s Su Nota to Consoldatcd FinancialStatemenu. { O^, ' F - r-u s s. p q- . n g ) ", b 4 { . t*I, -+ i -[ -^ 4 ir~+3r ,h I~ \\ ". ' 'y + )

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Q JConsolidated Statements ofTaxes uria awa uarric c-pan, sra sasisiarics Year Ended December 31, I991 1990 1989 (Dolbr Aneunts in huumb) Income Taws Current Regular tax..... S 46,844 $ (65,130) S (78,617) Ahernative minimum tu. I4,203 31,792 25,336 Total current tues -- _ 61,047 (33.3_38) (53,281) Deferred Accelerated depreciation., 79,147 70,639 64,540 Deferred fuct costs...... (34,936) 27,088 84,481 ' Provision for lusible disalkrwance of replacement energy costs.. (11,900) Ahernative minimum en.... (14,203) (31,792) (25,336) Tax rate differential attributable to tu net operating loss.. (20,258) 5,744 15,325 Tax credit carryforward offset. 1,522 (8d10) Unbilled revenues. 12.952 (9,420) Deferred nuclear expendimres... 6,984 9,117 3,259 C<nnputer softw are development cmts. (1,045) 6,885 7,790 Contributions in aid of construction._,. (2,798) (2,7N) (2,785) Leveraged leases..,..= (1,041) (943) 4,877 Other.- (766) 513 (6,343) Total deferred tues. 12,606 77,189 136.388 . Investment tax credit adjustments Current tu credits deferred _ 3,119 2,887 6,428 Amortization of deferred tu credits.. (9,344) _ 7,337) (? 906). ( Investm-et tax e:Jt adjustments.. (6,225) (4,450) (1 A., Total income tnes _ _ 6.,428 39,401 81,629 %come tues included in cmnulathe erkct of change in methiwl of accounting for income tues.....,., _ 19,745 Income tues included in cumulative effect of change in mc thod of accounting for unbilled revenues.. (19.449)

Income tnes per Consolidated Statements ofIncome..

S 87,173 S 19.952 5 81.629 L Reconciliation ofIncome Taxes Gnnputed at Statutory Federal Rate to Total Incmne Tnes Income before income taes (including ounulathe effect of acmunting changes).. 5320,854 5252,601 $357,920 Statutory federalincu.ne tu rate. 34 % 34 % 34 % Income taxes computed at statutory fede> A rate. 109,090 85,884 121,693 Increases (decreases) in income taes due to Depreciation dilTerences not normalized on_ regulated actlvities 8,082 4,301 4,610 Allowance for equity fimds used dunng construction.. . (8,023) (18,140) (I1,336) - Amortization ofdelerred investment tu credes...... _... 4 (9,344) (7.337) (7,906) Tu credits flowed through to income.. (1,335) (15,283) (10.219) Dividends received de(hntion..... -..-.. Equity in earnings of Safe liarbor Water Power Corporation. (2,108) (4,352) (i,11!) (1,492) (1/>66) (1,760) Lms on disposinon of assets.. (3,295) (1,892) (2,230) - Amortir.ation of deferred ta rate differential on regulated aetnities. (5,024) (3,062) (2,673) ' Reveral of deferred tues on nonregulated activities.. (19,745) J Other.- 622 448 (3,439) Total inemne tnes...._...- 5 67,428- - $ 39.401 - S 81.629 EtTective federalincome tn rate.. 21.0 % 15.6 % 22.8 % Taws Other han income Tues Real and personal property. S 89,379 S 85,172 S 82,939 1%blic service company franchise... 46,041 42.812 3 R,293 Social secunty... 33,121 30.344 27,843 Other.. 9.026 6,770 7,094 -Total tues other than income tues.. 177,567 165,298 156.189 ~ Amounts inchuled alxwe charyed to acomnts other than tues.. (6,7t'6) 18.576) (5.985) Tues other than income tnes per Con <ohdated Statements of Income.. ~ $170,781 S156.722 5i50.204 Sn & o Cedard Fm.v.>aat swrnm

w,-annuscwena sunric Notes to Consolidated Financial Statements @ m.-._..._ 1 Note 1. Significant Accounting Policies Nature of the liasiness interconnection services to be reported as electric resenues rather Bahimore Gas and Electric Company (11G&l3 and Sulnidiaries than as a reduction of electric fuel and purchased energy expense. (collectively, the Company)is prinunty an electric and gas utdity Pnor-year amounts have been restated to conform with the sening a tertitory whkh encompasses flaitimore City and all or current year's presentation of these revenues. Revenues from part of nine Central Alaryland countics.The Company h aho interchange sales of electricity are included in the electric fuct rate engaged in diversified business acthities as further described in formula as a reduction of electric fuel and purchased energy costs Note 3, and, accordingly, do not contribute to income from operations. Principles of Consolidation Fuel and Purchased Energy Costs The consolidated tinancial statements include the accounts of Subject to the appnnal of the Ataryland Commission, the cost of IlG& E and all subsidiaries in u hich IIGA E ow ns directly or inde fuel used in generating electricity and the cost of gas sold may be rectly a majority of the mting stock Intercompany balances and recovered through zero-based elettric fuel rate (see Note 11) and transactions hre been eliminated in consolidation. Corporate joint purchased gas adlustment clauses. To the extent actual fuel costs ventures, partnerships, and affiliated companies in w hich a 50% or differ from revenues under the clauses,11G& E defers the fuci less voting imerest is helJ are accounted for under the equity or costs and accumulates them on the balance sheet to be recovered cost methoik Under this puhey, the accounts of Constellation from or refunded to customers in future periods. I toldinp, Inc. and its subsidiaries (collectively, the Constellation As implemented by the Alar >iand Commission, the electric Companies) and llNG, Inc. are consolidated in the fmancial state fuel rate formula is based upon the htest twenty-four-month,,en-ments, and Safe i brbor Water Power Corporation is reported eration mis and the latest three-month average fuel cost for each under the equity method. lmrstments in power generation systems generating unit. EffecnveJune 1,1990, the Alaryland Comuus-and certain financialinvestments represent ownership interests of sion modified the electric fuel rate formula and ordered l!Gs E to 2l% to 50% and are accounted for umler the equiry method. include a minimum lesel of nuclear generation in its twenty-four-month generation utix. The fuel rate does not change unless the Regulation of Utility Operations calculated rate is more than 5% above or below the rate then in llG&E's utility operations are subject to regulation by the Public effect. In addition, liG&E recovered deferred electric fuel costs of Senice Commission of Air pand ( Alaryland Commission). The $14,798,000, $17,179,000, and $17,301,000 in 1991,1990, and accounting for utility operations is in accorir,ce with the 1989, respetthely, through a surcharge to the electne fuel rate Uniform System of Accounts prescribed by the Federal Energy u hich npired as scheduled in October 1991. Repdatory Conunission and adopted by the Alaryland Commis-The purchased gas adjustment is based on recent annual ml-sion. The accounting policies and practices used in the determina-umes of gas and the related current prices charged by PG& E's gas tion of senice rates are also generally used for financial reporting supphers. As authori7ed by the Alaryland Commk, ion, any purposes in accordance with generally accepted accounting - Jeferred u.iderrecoveries or overrecoveries of purchased gas costs principles for repdated industries. for the twelse months ended November 30 each > ear are charged er credited to customers over the ensuing calendar year. Utility Res enues The underrecovered costs deferred under the fuel cbuses were l EffectheJanuary 1,1990, hG& E changed its revenue recognition as f<dlou s; policy to provide for the accrual of revenue for service rendered but At December 31, unbilled as of the end of each month. Prior to 1990 rewmies uere 1991 19 % recognized at the time customers' meters w ere read on a monthly gn_3 - cycle basis. The new polig was adopted in order to provide a gje<1nc l . better matching of revenues and expenses and to conform with the Costs deferred - $322,064 $428,632 I~ predominant practice within the utility industry.This change in Reserve for possible puhey restdted in an increase in 1990 net income of $31,675,000, dmilowance of replacement i l_ or 38e per common share. This increase conshted of an inercase of enerp costs (see Note 1I).. ~(35,000) (M,000) $17,734,00br 46e per common share, attnbutable to the cunntla-

-- T N.et electric..

287,064 393AL t L tive effect of the change at January 1,1990, partially of fset by a l decrease of $6,079,000, or He per common share, in the December 31,1990 atcrual. lf the current policy had been in effect in 1989, Total - _ $287,021 $ M9,m_ net income would haw been increased by $6,046,000, or 8c per common share, At December 31,1991 and 1990, the amount of electric EffectiveJanuary 1, lo91, hG A E implemen'e[1 an accounting deferred fuel emts icluded in tate base by the Alaryland Commission for raremaking purposes was $72,79BM order of ths. Federal Enerp Repdatory Commission which requires revenue frbm meerchange sales of Icctrisity and !~ l

9 si 6 U '6S N S$ U EbHIo$llr1 s$, $W A r t al ( dh c6 Gn i,iu m a_ m m u1dm,mnu - ay,nuiem.mnmu % i flu tne January I. Pol, the Congian) a,I ; tt d Sutomt m of uln and mienonnernon u rus ts a subin t to the \\1n3 and 1 6 pubhc serue uim;un3 rantiose in m in u of a uaic munnt in. f l'inant ul An ounting ht,uulanh No W., hmung for Inu.mr 'IM." w hh h t> <pntn the use of the luhihiy mt thod of at o.unnng I he irani hne tn n nuladot m tan otha ilun incotne taes m f-muitne tan s. l'nder the balnht) nwthod, the de ferttd in hahd-the (;onsohdated Statt menn of Inu eme. iry tepn senn the tu ( flect of tropoearphtiettnin brtu t en the lh fvtred mcoine tnes hat not la en ptmidcd on the fituntial tutontot atulin lusn of assen an i habihan and n naa-SiWu# n luonon of I;(iN I N mu sma nt ia safe liaibor Watt r surel uung pr t ntly enx ted tn rates. 't he Compann tunpoor) Power Corpotanon septesennng xcumubtnl undntnhuted urn-ddicioun unnne prunird of tunmg d!iturm n between inumn mys lo thi f utm o d the undstohutui carnings u ric renutted. 3 and trpensn ior fmanual statement and income in purposo, th< 11( hI would hicur muime tau s of $1,1? Nun alhaunte for funds u ul dunng umsinn tiot, ami defent I onesi-s ment in unhtv Clungt* m 1;(iN IT dt ferred munne tun aromy ! menton Valuation from the muial appin anon of Statement No 46 reprnent inonne l'oel studs and mau ruh aint sup;ihn att ginerally cated at ines Ituni raldC throVgb IutWO tJtn and but beta f rLonlul e a M Cf apt lost. n gulatory asso nn the balaine shett. Ih fenol inunne in t qit nse n pu soin the tut t hange m th. atfiin d in lutnhty and regulaton imntments autt ihmng the pat. As a inuit of in (flu t on nomegulatnl auni. \\1arLctable nputy sus tns are sutui at the lower of aggrtgne tws, the t umulatne tileu of the dungt in au ountmg for moinw unt oi market uluo e',.h r ucurinn att stated at unt. Whert tnts anuh.d m an mi to ne m nrt munne of 519,7U#in, or app oprute, < ' i d.. ,unortvauon of prennom and darount 14 por t ommon slut c, due to the innul of defoint munne comptoni on.. str,nght-line hasa ( onm and hnses on the vie of tun atuued m pnor gan at ta tatn in tuns of the proently mtnanent secuntws ate mt laded m rnenues from dactsdied enattulin rate. x tn mn on the uunine sutement and are reuigniicd upon p Ptior to IWl,difurulincome tnes were gennally pr nidnl on n thron on a sprofk dennihanon basiv all tnmng thfierenu s htturen rnenon and i ywmes for finanual statena nt,md income tn putposn i u rpt for timmy ddfuent es l'iihty Plant, Depreci nion, and DetonunMioning petuining to au clrutnl depruianon on per 1976 propony l'ohty p' ant in scrute n state, u origmal tost, whu h unludn

ahhtions, materul,lahur, u.nurutnon m u 5 cad costs and, v heir.ipphra.

Tbc PI91 un n nl in OpCnse unOW'S of a n pular tn and ahrr-ble, an allo % aN e tur funth Ushi thnlOp uanst rutnon. ComtruC-nathe minunum in 0\\\\11't 'lhe FM 9 and Unu tunuit in tetunds tion uork in progrns, plant hohl for 6.ture use, and nudur fod uimki of a regular tai rtfund redtned by the A\\1T.Thne regular vestatnlatcost.

n rotunds represent pnnopally the in be nr61 of net operaung ihhtn.as to unhty plant and replacena nu of umb of property inues (NOl,s) mcun ut in uM9 and 1990 u hk h have W en ranied are opiulved to unhty plant accounts. The origaul cost of plant had to truner t.un prr c.ady paid in Ind6 and PM at fedcral tn unre i n renu n ed from unhty pla.t, and suth cmt, plus renun al rain of 46"1 and 40%, resiwcto cly, The AMT lulohon can he ur-rost, leu whage ulut,is charged to the accumulated pon nion t md foru ard indefautcl n in urdos to future yan in whkh the for depreciation. Malmenane and repun of property and 3

regular tn lubihty ncreds the AM 1 halnhn. As of I)nuoher 31, nplatments of nuns of pnc :rty httnnined to be less than a 1991,ihn carry tors anl touled M2,;0tpn A Deconher 31,1991, mut of propeny are charged to numtenance tywme. the Coinp.my had a capitallou otr3 oru,ud of MOC#io for in peptcriation n gencrally compur.J mmg comp %te st:arpht-f return pmion u hu h opirn m the par lu% and r, adshnunal hne rates, apphed to the nerage imt-tn ont m dawn of depru ia-upi al lou car)toru ad h r finanual quctuent purposn ble property. The composne deprecianon rain by das of depre-t ofR071Mn ciabic propeny are 2.d0% kn the Calvert Chffs Nude n Pouer ~1 he imntment in credit (lTC) esociated with UGN IPs regu-Plant,17% for the lhandon Shorn Powt r Pbnt, L2u, for lated utihty operatium n defened and anuinued to mcome raubh other dectnc plant, t iS for gas plant, and 4 02"< for common met the Inn of the subirci propert3. I'lC and other in crnha plant othet thn ithides Vehidn are deprecuted heed on thur associated u nh nonterdated dwerutied b"uncu evtn uin other estimat. d use ful htn. thm lcteraged Iren m Cov - ' thinugh to inuime. I or lederal meome in purposn, ai 1)ces.. wr 31. PNI, the Company had in unht arry tonunh of $6,m,000 whuh npae in the pars 2tm and 2006

Italtkwr Gaund IJntru Compny and %Jwrw Nudcar decommimoning onts are accrued by and tron ue i raie aic reo>nled a a component of income tu expense rather through a sinting fund methmlology. In its Decende r 1990 rate than as a redutuon of Al C The pic-tas Al C rate of 9.9n a onlet, the Ataryland Cornmission granted hGA1 addit onal eqWvalent to the N 69 L after-tat Al C rate.Thut the use of a rn enue to pnnide for an inc reaw in it', nudcar deoimmtwinning pic-tax MC rate dm s not aneet net income. autualin otder to acommlate a rnent o'5273 milhon in 1989 Ik C natellation Conyunin capitahie mterett on qualifying dollars by the end of Cahen Chffv wnice hfe. The total decom-real ntate deulopment projem Capitahied inttrest totaled iniuioning te erte of $64310, w and $42,026fA0 a: Deandwr $16.410/po, $26,982.000, and $442fKO in 1991 H/90, and

L 1991 and 1990, etspectively, n mduded in arcumu;ated depte F/89, rnpectnely, and is indodt d as a reduction of internt intion in tic Conwhdated llalante %ects.

charyn in the Conmhdated Statements ofincome. A sipufkant ICA E h requirni by regulanonuif the Nulur liegelatory gortion of the inucase in capitahred internt in 1990 was the Comtniwinn (NitC) to pr ovide finantial aim ance that decom-rnuh of consohdatmg sneral real estate projects w ha h had previ-miwioning funds in an amount at least equal:o an N1(C. oudy been accounted for undet the cymty teethod (see Note 4). prneribed ininimum levd w dl be accumulated mer the retnammg wrvice hie of the Cahert Chffs plant Acconhngly,llG&l: hu Nudt at rud otahinhnt a taequahficJ decommnsioning trust to e ha h a Nudear fuel nl% nthturn are capitahied and amortized as a com-portion of deconuni%ioning uts accrued hat e been wntributed. ponent of actual fud costs based on the energy produc ed mer the ( hfe of the fuel. I en f a the future dnposal of spent fuel are paid Allowante for i unds Used During Corntruction quarterY to the Departtnent : 1.ncrgy and are acenwd based on and Capitalised !nternt the idowateh< un of dectri ity generated. Nudear fud exinnso 'lhe allow ame for funds used during constnu. tie.n (Al C)is an are subint to remvery through the electric fuct rate. secounting procalute w herrby the cost of funds uwd to finante jhty comtructmo project, is capitalired as part of unhty plant on Deferred Nudear Espenditures the balance sheet and is crnhted as a noncnh item on the income Deferred nudtar npenditurn re;wnent the net unamonized hat statement. 'lhe cost of borrowed and equity fun h is t,cgregated ante of tertin operations and maintenance msa which,in auor-between internt npense and other mcome, ropectncly. IlG A E dance uith orden of the Maryland Comnuwinn, hae been recoven the capitahred Al C and a return thereon after the rdated d ferred, mduded in rate base, and are being amorured m er the unhty plant is plas ed in service and induded in depreciable assen remaining hfe of the Cahert Chffs Nudear Power Plant.These and rate base. Al'C o-n not represent uuble income, and the opendnuto consist of rosa incurred 60m 1979 through 1982 for depieciation of capiahied Al'C h not a taedeductible opense. mspecting and repairing seismic pipe supports, npemhtures During the periodJanuary through December 15,1989,an incurred dunng P 89 through 1991 awouated wnh nonrecurring after-tas Al C rate of H.55% compounded annually, was apphed phases of tertain nudcar opcrations pmks, and expenditurn m all tuaior electric pnieets. FJiecdve Decernher 15,1989, a rate incurred duong 1990 for investigating leaks in the presmnrer order of the Mar >iand Commiuinn resuhed in the after-tu AFC heater sleeu s. rate bemg increased to 8.80% mmooundal annually, and $44J41,000 of comtruction npendourn on llrandon Shorn long-Term Deb + Unit 2, wNch previoudy had been renuned from the Al'C hne, The dncount or prem,um and npense ofiwuance awociated with being reinstatnl in the Al C bne. Effvstive December 17, IV90, a long term debt are deferrni and amortized over the hvn of the raic order of the Maryland Conumwinn inluent the atter-tn rnpectiv: debt iuun. Gams and lowes on the reacquisition of AFC rate to 8 6V% compounded annually. debt are amortised over the remaining oripnallives of the Effer L uary 1, P/91, the Mar >!and Comminim. autho-iwoances. rirnt th mpany to bepn aanung Al C at a pt etax rate of 9.94% in omnection with the adoption of the habihty method of Cash 11ow s accounting for income ines under Statement of Omancial For the pmpose of regurting cash (bws highly bquhlinvntments Accounnng Standar h No. % Under Statement No. 96, w hk h purcheed with a maturhy of three months or leu are considered prolubia ntt-of tu accounting and reporting, income tues repre-to be ush equivalentt sented by the ddierence bctueen a pre-tu and net of-in Al C

1:shnerr Gas an i!Jorru Com;,ary an.i Auhi.hann Note 2. Segment Information Year I nded December 31, Ivwv 1991 19W on h.na, l'Irottit lievenun,. $1,994,525 $1.712,4 h $1,547 P Income hom opetauons 446,157 264,k l 4 36,o 1 imome from optrations net of mtome tun 3 52,3 H 5 213,k63 107,300 Ocpret ution.. 171,722 146,188 135,735 Cumulathe effect of(nange in the inttheid of accounnng for unbilled en enun.. 30,173 Comtruction expenditutn bruludmg Al C).. 406,008 4 N2,529 406,410 idenafiable assets at Dntmher 31. 4,966,619 4,796,542 4,2 79,3tn Gas Rcycnun.. $ 35H,195 $ 373,419 5 411,801 locome from operationt. 35,607 35,919 55,230 Insome froin operanons net of income tuts.. 'O.944 10,654 42,343 Deprn iation.. 13896 17,243 16,169 Cumulative effect of change m the method of accounting for unbilled rntnues.. 7,581 Comtna tion tiptnditurn.. 50,236 52,7M7 40,929 jdenafiable avets at Datoder 11. 457,003 +47,292 431,24M Dhersitini Acthitles kn enun.. $ 106,773 $ 101,tho $ 73341 income froin operauons.. 19,691 12,646 13,284 InColnC blHit tipClations Htt of if$toine latn.. 30,953 48,910 45,11) Depm lation.. 9,019 7,155 4,642 Cumulaute effect of thanye in the inrthoil of acto nting for menme tars.. 19,745 l&nufiable aucts at Decend.cr 31. 1,001,313 1 A41,365 816,530 Total Reunun.. $2,459,493 $2,1 H7,562 $2,012#09 ~ income from operations. 501,455 333,179 476,585 Income froni operations net ofincome inn.. 414,2H2 313,427 394,956 Depreciation.. 199,637 170,5 h6 156,546 Cumulative c ffect of(hange in the inethout of actinmong for incotne tuet. 19,745 Cumulathe tricct of(hange in the methral of accounting for unbilled revennn.. 37,754 Cmwtrwtion npenihtitro (including Al C).. 456,244 535,1i6 447,339 ldemifiable antis at Detttuber 31. 6,424,955 6,285,199 5,449,177 Other asets at Dertmber 31. 653,892 425,176 436 502 Total aw<:ts at Decendier i1. 7,078,H47 (.,710,175 5,9d5,679 Cown prim 9rar rmounts 1,u:r Fan roweJ n surfa vnb the cwtrnipar'q.rneraanin

llairmure GamliJo tr u Compan and %hnen 0 Note 3. Subsidiary information Dnenified bminns actionn conmt of the optr9iom of method. Tim mvnnnent repirwnn two.thitds of safe livhor's (kmtellanon I tol<hnp,Inc. and m subsaharies AaJ IV \\ 'm-total capital not L intluding ofic. half of dit s oting um L, arni a ( kmtellation Ilohhns, Inc., a w holly ow twd sMuir, kh tw o-thints internt in its retav.ed earninp. all of the um L of three other subsidurb, Coratellation kcal i.uate The foHow ing i, o mdensni financial information for Constella-Group, Inc.. Oimtellauon 1:ner gy, Inc., and Comtellation Imnt - tion ilohhnp, Inc. and in subsuharin and $afe liubot Water menu, Inc. Thew n.mpanin are e opged in real ntate operatiom Po.ur Girpiration. Smular infonnation is not prnented for llNG, and dnekepment and ow nenhip of wnior ining fardnin; dn dop-Inc as m finanaal mition bhareholder's equity of $5.5 nulhon) i mtnt, ownership, and operation of power generu.) sntems. and and rouhs of oprianom (contribution of t e prr common share fmancial im ntments. to the Compm/s 1991 carninp) are inunaterial to the wnu di-IING,Inc. is a wholly ow ned sulnidury

hich im nts in natural dated financial catements. 'I he condemed fmanualinfontution gn rewn n and obtains gu fm.n nontr adnional souven.

for the 0,nueHation Companin then not reflut the dimination llG& I 's mtnunent in Safe liarbor Water Pmeci Corporation, ofintrecompany balanen or tranwruom w hich are cluninated in o a pmimer of hydroclntric power, b reported under the equity the Comp.my's comohd.ned (manti.d statementt 2 ' 1991 1990 1%9 ila i U u m h ih qd 5 M EE kn e Si' ~ Comiellatiott llohlings,Inc and hubsidiacin income Statemenn ltrvenun licai ntate proiern.. 5 H5,H45 5 H2/i87 5 5 3.MI 1 Pow a r pnerauon systetm.. 17,732 3,328 301 1 inanaal im ntmenito. H,059_ _ j fA160_ _ _ _ _ ji/Q5 Total rn enues, 1 I l/,16 106,175 77,787 ihpemn other than internt and income inn.. 91,84 H_ _ _ _ ],5 l'_ __. _ _44.966 m .m.. locome fmm oper atium.. 19,7HN 12/d8 32,N21 Minority intetnt.. 3,550 952 340 Intt roi npeme. 43,57H 37,345 28.709 income as npeme (bene 6t)........... -........... (9,005) (17,M 9) (14,678)- Cumulacre titect of Gnc in the method of accounting for incoue taws.. , 19,745_ _ _ _,14.104 5 19.110 Net inconn. 5 H,510 5 Omtribu on to the Company's earning per share of conunon stal. i .10 .17 5 .24 n llalance Sheets Cutnot aucts. $ 20,461 5 71,H 3 7 - 5 6855H Noncurrent awets.. . 76,1_79 _._ _ __964,095_. _ _. - ~.. - _ 9 760/M 49. D nIIent ia k n., 4 N 5,130 5 4 tv,6M 7 > 2 6, y. <36 A Noncurrein liabihties. 411,370 343/,02 551 482 Shareholder's equity, 280,142_ _ _ 252/ 41 _ 251.}2H t Total liabilinn and shatcholder's equity. 5996.642 $ 1,015.932 5829,546 Safe llaibor Water Power Corpoution income Statements llevenun...._..-. 5 28,059 $ 28.791 S 28,713 1%penws other than internt and inuime tan.. .~.. 13,46H_ 13,164 _ 12(337 income fmm operatiom.. 14,591 1%/du 16J76 .. ~.. (Itber inctime.I 42H 721 700 - Internt opeme..- 4,695 4 ~02 4,700 Inmme tnen 3,742 -4,299 4,612-Net income. u. 5 6,5 H2 5 7350 5 7,764 IIG&l;'s equity in ear nings. 5 4.3 N8 S 4.vun 5

5. I '6 I)iudends paid to llGAil by Safe 1Iarler Water Power Corporation,

% 4,570 5 i1,u u _ S 3.14 llafan c hhern - (11irrrot awch i $ I.I,51' 5 I O.NO.I 5 15,4 M Noncunent auch. _ 120,472.. - _. - - -. - -.. - _ 5-122/k44 1N,932 Total awets - $ 133.9H9 112 A47 5140396 t'.un ent liabihties S 3,409 s 3 A.s S 3,801 Noncurrent liahditin J 79,235 7'/66 75,06.1 Shar(holden' equity - , 5134) _. _ __ j lJ63__ 60/,q Total habihties and shareholden* equit).. 5133.989 5 132A47 5140396 llG A E's im otment- $ 34,229 S 34.241 5 40.421 l

IMumor e Ga< and hearu Compny anJ W kna I Note 4. Real Estate Projects and Financialinvestrnents Iteal ntate projects ummtcd of the follou mg im otments held by I mancial investnietits t onsnitd of the follow tiig irnntivit-nts htid the Constellatmn Gimiuoice by the GinstcIlation Comp.uner At Dnember 31, At Dnember 31, 1991 1990 1991 1990 dane,m X oJn;, Z ~ ~ Pental ami operatmg propertin Ahrletalde uluity wrution (net of auumul. led At t ost.. 5 3H,Hl7 $ H2,051 depr ecianon). 5212,154 $219,778 Net unrealized lou. (13,%9 Pmpt rtin under dnelopment. 213.439 190/>77 At lowtr of aggregate cosi ~~ ~ ~ Other teal ntate sentures.. 3,06H 2,52N or tnatlet ulue. 3 H,H17 6H/W3 (4 hu secunties.. 16,767 17,659 t Total - 544Hf,61 5412,98; i inancial limited partnerships. 67,269 123,711 Imorant e companics.. 85,307 72 />03 In 1991, a subshhary of L.onuellanon llohhn s Inc. 1.n er aged leasn.. 40,098 40.496 recogmini a low of 5,1,WH,000 to w rite-dow n the (artpng ulut Tot al.. 524H.25H 5122,512 of (ertain opet sting pr opertin and pn.perties under do elopnu nt to sefint the deprnsed real ntate and economic marLets. In July 1990, a subsidury of Cointtilation Ilohhnn, Inc. In 1991, a subsahary of Consttiianon Ilohhngs, Inc. recog-obtained contnd of wvtral teal utaic pannerships wilit h had pre. nited a low of $1030U100 to w rite-dow n the carning value of sioudy been aununted for undo the equity method. fmancul annunents to reflect previoudy unreaheed town on t er-Acuirihngly, the fmantial statements trucct awets totahng tam marittahic equity wcuntin. Substannally all of the secuntin 515 5,63 5,000, includmg 5154,182M)0 of real ntatt ptoperty, wonen-doo n wcre subsniuently sold The Ginsttilation Compa-and liihihiin totahng $76,277,0tK), int luthng $74,7.I4,000 of fun aho recogniin! a low of S1,07IJKIO on two fmanciallimnut long-teon &bt,in place of the pinious $793 58,04WI equity pannenhips (hanking and financial senicn) that w(re adjmted to ~ redert nurket ulue w ben the partnerships were reclawified e im nonent. short -t enn inmunMTtt in Augmt 19H9, a subsidury of Consttllabon Ilobhng% luc. As of December 11.1991, grms umealind gaim apphcable to . anpiited substantully all of the aswts and liabihties of a real estate partnenhip in wluch'it had prniously behl a 50% equity miernt. ma:Letable equity seumtin totaled $3,022,000. Net reahied losscs from fmancial imestments included in net income totaled 'ihe aweti, acquirni totaled 566,9 54,000, intimhng 569 4Mio of *al estate property, and the habihon awumnl totaled $11J93,0lkn in 1991. Net realked gains totaled $1J99100, and $50,406Mxt i:nla ling 54LO60Mio oflong-tenu debtflhe acqui. SW6,000 in 1990 and 1%9 inpettncly. Mtion w.1% f ruirdal ming the part hase method of accountmg. Note 5. Jointly Owned Electric utility Plant itGA 1; owm an undnided interest m the Nevstone and The following data reprnent ilG Ali share of the jointly owned Conenuugh nune mouth clntric generating phmts hicated in properties at Dnen-der 31,1991: western Penn9h ania, as wt11 as in the tramm;ssion hne w hich Transmission transports the pbnts' output to the joint owners' wnice ternm. Ke,tfone_ Copemaugh Lme _ tin,l'inanemg and aconmtmp for these properties are the wne as dun A+m u in Nuna (w w holly ou ned uuhty phnt. IlG Al A share of the direct Ownenhip interes, 20 99 % ' 10,$ 6% 7.00 % npemn and awets.md habthtin of the joint property is incluy ed Uriht} plant in seaire. $79,174 542d74 $!dS6 a l in the corrnpm,hng wetiom of the Lonvdidated $tatements of Amunubini deprecution.. 24,046 15JW 683 Income and Consohdated Iblance Shcets. Construction work in progreu. 3,312 3,1(W

Balomare Gat and I'larric Company ar,J MJ nJwirs Note 6. $hort. Term Borrowings ISurmion concenung commercial pago noen and hno of t onyienutu.g balam n w hu h have no withdraw al intrwoont credit in act furth bdow. In uipport of the bnn of cretht, the flotrowinp under the hnn are at the lunki. prune tates, baw Company payuonunitment frn and,in some caws maintains internt rates,or at various numey nurlet ratn. 199' pno 1989 41Mhr Am.mnis m man,lo IlG& E's Commetrial Paper Notes llorrow mp outstanthng at De(ember 31. $159,$00 $161,700 $117, 00 Weighted ne rage internt rate of noin outstandmg at Deu tnher 31. 4.73% 7.91 % KU/% Unused hnn of credit supponing rotemercial papet notes et Decembet 31. $303,000 $225,ux) $2iKl.0(X) Matimutn borrowinp during the year.. $3 36,200 $144,200 $212,150 Average daily bontming, during the y ear (a).. $210,8H3 $218,642 $ 87,025 Weighted incrage intetest rate for the > car t ).... 6.PH% K29% 9.26% h Constellatiott Compandes 1.ines of Credit flottow mp outstanding at Decemhet 31. $ 52,670 $ 64JKO 5 6.307 Weighted aver e intetest rate of borrowinp outstanding at Dueinber 31. 5.94 % 8*9% 10.65 % Unuwd hnn u. credit at Dece* tiber 31. $ H,000 $ 10,M O $ 7,493 Matimum borrowinp dunng the year.. $ 75,000 $ 64,000 $ 7,130 Average dady lu,now mp dunny the yeat (a).. $ 61,860 $ 38.932 $ $,58N Weighted average internt raic for the year (bl.. 7.19 % K9PL 11.12 % (a) 7hr. nmo of Jhr day ofvuutanhng Imviring dwideJ br the riumba efJay un the pernd @) 7btal rnrrrest anned Junng rbe pcnod dicided h cetage dadr hmmriny Note 7. Long Term Debt payable each ear are as followx l'irst Refunding Mortgage llonds of IlG& E 3 Substantially all of the principal propernes and it anchises ou ned g,a i,,

n,a is g,m by llG&E, as w cil as the capital stal of Comtellation Ilokhnp, y

,m> w Inc., Safe Ilarbor Water Pow er Corporation, and UNG, Inc., are

o. m,saw

'n suhicot to the lien of the mottgage under which IIG&l,. s out-I""' S 3'U00 standing First Refunthng Mongage Bond

have been iwued.

I"" DU $ UU On August i of each year UG&l'is required to pay to the IW"+ 3'U"U M mongage truster an annual sinLing fund payment equal to 1% of lVM" 3'(m 605 the largnt pnncipai amotmt of Mortgage lionds outstanding i "d l U9? 4 605 under the inoltpage dunng the [ucceding 14 elve inonths. Such I"" 3Wi 6W furids are to be used, as prosided in the mortgage, for the purchase I"" ^* and retirement by the trustee of Mortgage lionds of any series other than she Installment Senn of 1995, h02, and 2009, the 200 and 2001. M 2N2" ^'72 3 9A% Serin of 199h the R40% Series of 1999, the 84% Serin of 2001, and the 6 80% Series of 2004. Purthaws tnay be made by 2mM duough h $ L250 2*E U "O the trustee in the open market and/or thc:mgh responsn to imita-nons for scaled propa ah if pun haws are peihic at or below the apphcable redemption price, or dacctly through the tedemption Other lamg-Term Dcht ofIlG&E provisions to u hith the Mortgage llonth are subic(t if puuhnes 'lhe loans under d. unecured emht f.uihties nuture during UN2 at a more favorable price are not pmble. itG& E ne, purchase 'these h um base been dassified as h eng-term smce liG& E is able to re6 nance die c los on a long-tenn lusis w uM.e $1N nubon of outs.tandmg Mongage Bonds Inun time to t me and may submit its sealed proposal for the sale of such Mongage Bonds to the unuwhapdty un&nhnevoMng wht agreenunn A Now. BG& E mainuins reuddng (redit agreements pnn uhng for bor. inm-e for the sintine fund. '" * '" P "I " P '" ' '"I " ""u"" U unous tunes dunng 1991 through 19%. tlne apeemenn upne at T Te principal ambunts oilmtalhuent Senn Martpge llond., nder the terun of the agreements BGR E nuy, at its option, obtam loans at urious inter-est ratet. A commiunent fee is pani on the daily nerage of the

Q ik/wnar G.o an.IIJotti, Gom and Nehduw unborrowed porm,n of the conmitnn n!. At 1)at nda r 31, IWI, I ht 5'n indhon of K m t umenuul notn an wb,co to a !! Gall had no bor row ny um!ct thne rn ohing u edit agnements nunhtot3 smtmg fund undo wlath 5m millnin of the ponapal and had aaihble 517 5 imlhon of unuu d t alucin sindet time amount u dl be roleemed t par m IW2, u nh the remamu:g SW ~ agr ee menn.. ""II".n twing rnleemed at lur m IYR The Medmm tron Noto %enn A muute at unous darn from January 1992 through libruary lun. ihe wughted anare meer. Weighted Aurage Internt Itates for Variable Rate Debt nt rate for notn outstandmg n Detanhcr it,1991 h 7 h 'the v eichtui netage intunt rain b er unable rate &bt danng 'I he Medmm-tenn Notek Soies 11 matme at ut,om datn Itom Umi and IWn were e follow t July IW8 theough September 2006. 'l be unghtnl autage mternt twl 1WO 9 for notn outstandmg at Oncmhcr 51, lW1 is NW g( al: ~ Internt ratn on the 5100 milhon of Iloatmg Kate N"'" 1,oam ufukt unsecorrd t rnht in ihnes. H.H i % Kkl% Senn Il due 1995 are deternunot quarterly base I on the 91-day Loam un&r reudtmp vinht agrn unnto 6.93 8 44 Ticeuty ihil auction rate (nptnsed on a toimbtquhakot basM l loatmg,,te notn.. g.00 9 32 p!m 1.12 5L 1he intnest rate n sulnco to a mmimutn and mau. I loating rate noin S( nes II. 7,92 8W nnun of 7 9% and 11.9% respectnvly, per annum-Pollotmn u.ntrol loan. 4.42 5 54 Port faubon io. a. 4 43 5.91 long-Tenn Debt of Comtellation Companin Adnistable ute pollutmn cono of lo;m.. 5.4H 6.15 'lhe inonnage and mmtruoion loans and other milatt rahud linnomie dculoluntnt loan.. 4.69 6.05 notn had urying tenm.Of the SINI.H2/KKlof uriable rate Constrlianon Companin notn,5144.69x,000 tequun montidy imetut only paynients w nh Mong.gr and comttucuan loans uriom matuntin nom Aprd 1992 through.lanuary 19% and and other conatcralized noin. H.95 9E9 516,834J00 requirrunonthly papnents of prinupd and intciest Iaum un&r unht agreunentu 7.65 K56 with %lrnfus inattllttles hom Aprd IW1 thniugh Aprd 19"6. 'I he 51H,877joo,1011% mortgage note requitn monthly piinapal Aggregate Maturitiu and internt payments through Septendier lW7 'lhe unnhined appegate maturitin and sinkmg fund requirements 'the Industrial Park i aohtin lion & tequne a hnal uinapal for all of the Compan3',long tenu lunmwings for each of the nnt l payment of S750hdo in 1992. Internt h.uyable senn-annually th e u ns ne as fonowv at a wtighted nerage sate of 10.2 5% yu Ropuremenn. ComteU4 tion Ilohlmgs, Inc. (Cl11) nointains rn,h ing onht ugm agreements that npire m May 1992 and per..ut loam at unom g 7 intant rato. Lornnutment fen are paid on the dag actage of the unbormwed porunn of the mmnuunents At Dn ember 31 34,3 g 5 IWI, Cl11 had borrowed 5167 mdhon under thne rrmhmg (rnht 19"h II lym 4 WO., agreements, an 1 $U milhon of unmed uparity was aui1a1iie umler 9 thne agreementt Note 8. Redeemable Preferente Sto<k The 6,9%,1987 Soin,md the '.80% 1989 Senn are sub ni to The mmhmed aggrepue iedemption n quirements for all i mandato 3 reden.puun in their entinty at par on Ooober 1, IWi serin of rtdernuble pu ference sud for cAh of the not the and.luly 1,1997, inpectialy. 3 can are as tidlow s. The tollow mg series are subiect to an at nual mandatory Yeu redemption of the num%r of sh.ucuhow n be low at par begm- -- Requiremeno, 3 n,_o nmg in the 3ar show n below. At IKal"s option. an aJdmonal g, g gg numbt r of shares, not tu ncred the sune number as are nunda-P 0 tu 3, nuy lye rtdeemed at par m 1n3 3 rar, conuuenony m the ,) e wme 3 ar m winch the nunatory redemption begmt I he gg" ,g H 2 5%.1989 Senn, the K62 M, IWO Senn, and the 7.85 % p>v6' - ' '000 16 1991 Serin hsted below are not udeenulde acept throm'h operation of a sinking fund . h itgani to papnent of th 1dena or assets auilable in the it gn.umuy 51ui n 'Y emr cunt of hqmdasn, pn farnt sn6 ranb pnar to picference and . Serin- - - - conunon sud all mun of preferene ta L, whether sulaut to 7.50m,1986 Senn.. 15,n00 IW2 nundere rManpnan or -

t. unk g,dp and all pu ference 6.7 W,198 7 Senes..

1;.000 PM M unb pnm m com-M 7fi4't,IV%S S nies,. 100,0f 0 IW4 E2 5% 19W SetiN.. 100,00() IW5 8 62 5% IWO Senn.. 130JW IW6 M %,l W 1 Serieu 70.On Kl PN7

khrmer Gas amiIk ok Gmjay and Wudwsrs Note 9. Pension and Other Postretirement Benefits The Company spomon snual nom ontnhotory de finut hent fit ( >n t hu mber 20, IWI, itG AlJs !!oant of ihrecton apprm ed pernion plant the lat got of whah (the h nwin Plan) eusen a Yohmtary Sprualliarly Rttittment Prnytam (the Program) her substantially all !!MI. rmplop a and t ertam (niphiyers of the those unployen w ho it tue during tht pervid l'ebruary 1, lW2 Comidlation Compama Tht other plans w hah are not mau rnd through Apnl 1, lW2 Tole thf h!c, an unployee inust he at m ane,unt, proside supplenu ntd lanefits to t ertain key unplo)- kast aye 35 aml hau at least 20)ean of wnne as of Aptd 1, (n. lieru fits under the plam are gent talh bawd on aye,) rats of IW2. In acronlance uith Statena nt ofI mataial Accounung Stan-sets ic e, and t omtectnation lettls. dards No. bM,"limploytri Acuiunung for iettlunents and Cur-s Pnor st ruce v6t asmaated with ruroattac plan amendments t ulments oilhfinul!!rtnfit Pensum Plans and for Tornunatan is Arnorutt d on a straight hne hadsiner the neraye temairung lient fits" the one-time (ost of te imination la nttits amciated serse period of at tne employtet with the Program u dl he tru,gfuied in lW1 "I he Company'k fun:hng pohc) is to uintribute annually the I he followum tahin set forth the comluned futated statm of om of the Pendon Plan as determinul under the aggngate tost the plam and the t omposito,n of otal m t penuon cost. 'l he t !".ethod. Plan awets at Durmher 31,1991 tonsotul primarily of anmunti shown below are not affnted b) the Program dncuwed matLc table fisc 1imome and equity wruntiet group annmt) ahns t. uintras ts and short tum imotments At Deu ndu r 31, . 1991..- IWO _ < t t.h W,c m 1 Nwna At tuatial jurwnt salut of YntcJ oenefit oblQation. 5(4iH,170) 5077,818) Nmwnted henchi ohhganon.. (l1,372). fi1._2N3) Arrumulated benefit ohhyation. (429,542) (189,101) Propertnl brorfits niated to iru rease in future tonua mation in th. (94,176) (8 4,M)O Projected 1(nefit ohhpation.. ($ 21,71 H) (472,90 4 Plan aswts at lair tatue 516,967 474/M Plan awen ins proiccted benttit obbgation. (6,751) 1,784 Untruigmied pnot un tre cost.., 19.112 10.497 Umeuigmini m t ga. (12,015) (I8,h60) Unamoruird net aswt from adoption of 1 ASil Statunt nt No 87. (2,265) (2,492) At cnied penuon uist.

5. (1,919) 5 (H.971)

Awumpnom Div ount rate.. 9.0% 9.24% Au rage inurase m lutmr uimpematmn letds. 4.5% 43 % lhptT tCd h shp-trrm rate (if it(Lrn on aMts., 9.5 % 9.5 % itar1:adul D n cinher 11, 1991 1990 1989 dn AMU (:omponents of not punion tost Sen ne t ost - hench runtJ during the perio L 51I?29 $ 11,2 4 7 $ 10.kV3 Interrst cost on proin ted benefit ohhpaoon.. 41,141 40 445 E04: Actal return on plan awetL.. 156,737) (1H,881) (64.59 0 Net amortiranon and defcml.. 12.,H 1.,,0._._ _ 2 3.,%N.. _,_, 24,407_.4 g g _ _1, Q7) __t_l.237) Amount capitahred as comtruction rust-(2,500) ( Amour,t ( har ged in expt nse.. 5 9A45 5 8.188 $ 7M2 In chhtion a prouding penuon hent6ts certam heahh we Statement No.106 is adopted (tratnition ohhyatinn) may be and llIe insur3Dc0 Df nCbh are pTmidCd for rrtir0d Id OI trCognllLd UntnediatCh or on a dr}aynl bJsi. os er the Js eragJ t.luplo)CO and Of ttJin retifCd e!Uph on of the (SoMttllation rrmalning Vnue ptrH41 of aClise p!an participants. ln that the Compames The cost of these benefits n generally recognierd n iranunun ohhgation is npected to nceed $'eu nullion, the Com-the henc6ts are paid and totaled $14.054.000 for IW1 and pany npeen to elect delayed recogniaon of the tramition ohhg+ $11,464_tal foi IWO The ont of roudmg these benefm tot tion The Company aho plam to request the Mai) land Comnus-I 3 ran prior to PD0 is not separable from the unt of prou1hng uon to proside current rate reontry for any increased costs.n a umdar bene 6ts for acto e rmploy en rnuit of adopting Statement Na 106 and to authorue &ft n al of Staivment of I'mancial Atuiuntsy Standank No.106, w hu b any mt reased rosn tor which sen ne ratn are not pro,ided cur-rend unda the prouuons of $tatanent No. ?! for regulated linbt be adoptrd liy M rM]utres a (hangs in the method of 3 wcounnng for posut turment benttin other than penuum from enttr.rm t heret'orr, the adopnon of Statunent No.106 n not the prnent luy-aeyou-go method to an accru

method. The opnted to has e a ugm6 cant impatt on the Compan)i finanaal acoruulated postret>tement benetit ohhgation custing at the time stairmenu.

ILhnni Ga, and Il<ar, Com;>,ws and S JnJurm Note 10. (estes The Cienpany, as Inste, t ontt aca for u it.iin fauhuts,ani eqmp-Ce rtam of the ( onut llanon Compnoes, a lessor, b.n e intrit un& r Icee nyttenn nn w nh tanous npitauon dato and i utt rul mto opt t anng leasn for otTa r arul tuml spu r. Tbne ICnCn dl Optu nts I h ansisf r"4 with tht rt ful Att.ry tirattnrnt, It bt It'a'n t RlHf C m t f perl'Els tanping trum j to 2 5 )CJrs, w nh t tpnGns ~ papm nts for operating arul upnallean for unhry operanons are to : :ntu. 'lhe net to a ulut of proptrt3 unar operating h an w n 5191,962,Mio no 51h7,449#M at 1)eu enber 41,1991 an i (harged to npense m the Conuilblatol Statunents of Inuonc. a

1. case nptnst u n as folle for the thru y on (n,Inl 19 'o, rop.auly. I he future muumura rintah to >e inchol 1)nunist il:

unir operaung lea-s m ef h tt at 1)nunher it,1991 are e foll"4 pj93 ppg > pg; Yar 'n :im,,,, e dn 16~nM ()peratmg lenn. 12, 4 % (513,249 515,011 Ca pit al leasn.. 274 1to 169 1991 $ 9,W Total lose opt nse, u ! f.U' si M 70 514. W. 1"9 L 9 M9 1994.. 8,597 1995-IM4 papnent 4 at 1)n cinhrr 11,1991 for The future nunne lonctulu nonone nn are as follow s-UN'- LW Thr ra. %,714 ( )per a t mp (..aptal l"ul nn untun n i;tah. W W. Year l a nn l usn an nu.umu pr/2 5 3,709 $ 196 l 'h l., lym 92 199 L 2,19W w, 1995,. 2,147 H pFM,. l,9 3 9 M Thcluft er, 1,2 k 3 4hl Nal unnunnin tone papneno, Sl6A04 51.021 Interest porunn.. (%N) l'enent ulor of prt tumimum 5 u4 lene papnents, Note 11 Comrr.tments, Guarantees, and Contingencies Ovnunittnents ur ItGAli hn nude subsuntul uinuninnenn m runnection wnh as ann,wna t i mttrOCul en l1h tg r^all.. T 1992 Jihl Ml!^Oigut*nt ) Call in alldation, g.pg g yg BG A 1 h.u ntered into tw o long-tenu contiacts for the percnase p,y ; 99 of clvttric genetaung capauty and energ3.'l he upacay (ontracts Un4 69,9ui npire in 2001 and 2011. Total paquenn under thne contrach g yy g,, gy9; were $2 4,716/% 517,457,000, and $12,922Juhlurmg 1991, pf g 74gy 1990, and IW9, i rsperth tly, At 1)n ru.hcr 31,1991, the nii-1 hemdm "t> U 12 tnated futur pay rucnts for tajuuty and uiu gv that P,(; Ali n, 2 I""I "H"'"" SIA P ohhgurd to buy under 'bese connats are as followe

h Ii/ (' r e a l d f 9 b b f C,,mnomeum m onComp hm mmmin<ame. dmn.up e,a, th~ m-mmmmr_. nG A u% tribute whhoonal t aptal and to malt a.hhoonalloam to attam that ik resolut nin of thew nmten willint hue a matenal dicct on attdutn. p unt u nture., and panm rships m whit h they hne an its (mansial posituin or resuh3 of operanons inttrett. A+. of Dn embt r i L P"), the total amount of mvrument .o car Inuiran(c

cqunonenn oanmined to by the (vnstubuon Cornpanies is

$101 nulhon. k""""'"'""""^'""'*"'""""I' Not h at Power Phnt muh! hne a subsuntut adu rae e:feu on Guarantees IM i A li'l he pronarv runtmgracie nulung (toin an inddent at the UG& l: has ytcut to yuarat.ite two tha.o of witam imlehtoinms Cahot Lldh pbnt woull unolu the phpical danuge to the plant, incurred by Nate lla hor Watei Powtr Corporation. The amount of the remu rahday of replamnent power msn, and I; gal"s habihty sm h indebtednew totah 550 imiko., of wlmh STU mdhon repir-to third part es for proprity damage and bothly mjury. Although scuts I GA l A sh ne 4f the guaramee. IX i A 11 awrun that the nd of FG&l' m.untams +he vanous imnram e pohcin tunently avnbble mate rial low on the imm guarann cd h minnnal to pnnide entrage for putmm of these uinungennes, DG All does As of Da ember 11.1991, the total outstandmg loam guarama d not comider the as adable msurana to be adequate m cover the by the ( hmtellation Gompuurs were 5% millnin. Aho, the Comtrl-costs that couhl rouh fnun a nuior anident or so estemini onnge buon Compamn hn e agter I to guarantre iertain borrow mp of at either of the Cahert Chfis units. variou, pow or yt neration arul teal estate proitett 'ihe ComteHat on in inkhnon,in the n ent of an int utent at any commutial tmdcar Companies awow that the ask of mattoallow on the loans guaran-power plant in the oiuntry, IL A1: could be awewed for a pinion of any third urt> <bims awociated w nh the inddent. Under the teed n minimal f pniuuom of the Pnce Anderson At t, d third pany chims relating Emironmental Atatten to such an mddent estcol $20n milhon (the amount of primary The (:Ican Air Au of 1*4 -. 9 et) mntams pnnisnim deugned to imurante), BG& f. viold tw awewed up to $132 tidllion per imi-tolme m! fur dioude and nitoigen mide cmksium fnan dn tnc gt n-dem, payable at a rate of $2n milhon per year, for third party daimt oranng statiom in two separate pha,et Under Phase I of the Aa, llG A E and other opuators of tonuneroal nodrar pmir pbnts w hit h mmt be implementnl by 1095, llG Al; opects to incur opn-in the Uniin! Stain are requned to punbase msurante toim er daurn of approumatdy 550 milhon, most of whith is amibouhic to daint, of urtam nudcar wot kort Othet non-pourmm ntal e om-m portion of the cmt of mstalhng a liue gas deudforvanon system at mercial nudcar farihacs may ahn pun base m h insurance. Cm er-the Conemanyh mine-mouth ponerating station,in whit h UG A E art of up to S mo nothon, prouded 'or daum agamst 10 A E or owns a 10 5t& imerest. I!G A E cannot presently detenmne w hat others insured by these pohties for iathation intunes. If attain at tmm 9 di be rtqmrtd in order to comply with Phne 11 of the Act, danns u tre made unir thne pohcies, BG A F and all pohn hohltrs u huh mmt be implemented by 20n0. Ilowever. IlG A I anmipates tocht be awnsed, with BG AI?s shne bemg up to 5ft i nulhon in that compham c w di be anained by some mmbmation of fuci sw m h-any om > car. t-)g, Ilue fatdrsulf uri/ation, unit telurmf nt% of allow anir tradmf. for phpital d.UnJge to Cabe!! bbffs, NGh E bM h2.bl 5 bi! bon At tlus tune, pbm for comph mg with mtrogen onir WO, h on-of propeny insurame,indutbag 51.25 billion from an industry tud trquirements under the Act are Icw t ertain becausc..uplement-mutual msurance comp..ny. If an aaident at any imuted plant ing reyubtium hne not ytt been fmalued by the you rnment it is causes a shonfall of funds at the indmtry mutual, HU A E and all expected that by the 3 ear 2000 these rendatium wdi require a&h-pihey holders touhl be assessed, w uh IX i Al?s share bemy up to tional NO, controh for ;u id ram abatement at IX iA E's generating RI nulhon_ pbnts and onine no, m.unment at au DG Al. fatiht es. 'lhe mntrok If an outare at Cahtri Chffs is caused by an insured phyucal u,H rnuit in albtional npenduurn that are af0cuh in prr&ct pnur damage lou and bsts nmre than 21 wveks, itG Al. has up m SW to the swuance of suth repdatiom. Ibsed on propmed acid rain reg-nn! bon per unit of msuram e, prmided by a ddferent mdustry obtions, DGAI currrntly ntim.nn that the acul ram compliame mutual msuramc company foi repar ucnt pmu r costt if an out-NO, tonuoh w di cmt apprmmutd> 540 unlhon. As no preg ned agt at any in und pbni t anses a shonfall of funds at the inda,try mu ual, ilGA 1 and all pohc3 olJrn muld be aucued, with mont nonanainment iegubtiom have bevn hsued,11GN I h cur-h rently un6. to predict the cost of mmplunce wnh the 2d&tional DG&17s share bemg up to $10 milbon per year tegmroments at other BGNl' faohnes. I!GN1 has beto notihed by the I nvironmental Prmecuon Wmverability of I lectric I ud Cmts Agem y 0.PA) and sntral sute apencies that it is bemg conudered a By stanae, aunal tirane hirl costs are retourable so long n the panthily iey uwele pany with r spec to the dean-up of cert.nn Alanbnd Comrnmon finds thu BGS E demomtrates that, atoong enuronnrnully contaminned sites owned and operated by third mher ihmes a lus numtained the pnidaane capauty of us gener-pania thhtionaHy, t o tain l'G A 11 pmputin ronuin substancn anng pbots at a reasonable few!. ~lLe Wry iud! Con.nmsion and designated by the 11PT e huantom to hunun heahh. Ahhough the %n bndi L:yhest appdbre < ourt hn e inn rpreted this as innnit-

i i pencratmg plants to determme whethi r or not 1;G AI had imple-on thn ictord, the ( bder totaluded thr:e u as sutfica m cause m mented all tessonah!c and tosi elfci en e mamiename and oper, tmg etense any aundable faduin to mamtain pn=luctne capitity at tontrol prmuluies appropriate for precentmy tht ouuge. I f n tive hgher les ch. January 1,19C, the Atar) land Commnsion authonnd the ntai.hsh-1)ormg 190, l'"n, and 1991, BGN E ctpenent eil t vended ment of Gemraung Umt Ptrionnante Program (GUPP) to mu-ouuges at us Fahett Chth Nudut Pow et Plant. In the Spnng of sur, annuall), unhty uimphant e with maintaming the pn.duttne 19W, a leak was dncmeted arourJ the Umt 2 presst riat huter capanty of generating plants at reasonable leu h by estabbshmg a sleeses donng a refachny outge. BGal shut dow a Unit I as a system w nie generatmg pufonnan(t targtt and indiu lual perfor-preuunonary measurc c n Ala) a,19s9 to inspr.t for smular leaks mnte targets for em h base load generatmg umt. In tuture fuel rate and none were found,llown er,l mt I was out of serice for the heanngs actual gt naatmp perfonnan(c atttr a<hmtment for planned remamder of 1989 and 2M days of Pon to undergo nuintenante outages w di he unnpared to the systeneuide target and,if met, and mmhfit anon w rk to cetun,t the et habihty of sarious safet) 3 systems to repair equipment. and to pe.torm required periwhe shoukt sigmf that liga L has < omphed wnh the requiremc, s Mar 3 md law. l'admt: to meet the sptem wnic taigt t w di resuh in sunullance tests. Umt 2, u hith returntd to senice on May 4 1 tesiew of cat h unni aihmied actual generatmg perfonnance sersus 1991, renumed out of senice for the tenuinder of 1989,1990, its puformaru e taryt t in detennming comphvue with the law and and the fint part of 1991 to repair the preuunar, perform mWu-the hasn for possibly impodng a penahy on BGA E. Parnes m fuel tenante and moibfiunon uoil, and (omph te the refueling. The rate brannys may soll <pieshon the pnnluue of ItG Alli aetn m or replau. ment encrp unt aw(uttd w nh these cuended outages inat m>m u nh topect to any gnen generatmq plant outage, w hu h lor both umts at Cahtrt Chi's, condudmg with the return to ser-u>uld result in the dnallow ante of replacemtnt energy costs by the uce of Umt 2. k crtmuted to be SUN tudhon. Mm bad Conunimon, in a 1)ecember 1990 o der hsued by the Maryland Crmunw C Since the two unitut itG& 1"s Calu rt ChfTs Nmlear Power sion in a itGN1 hase rate parenhny, the Mar > bnd Commission Plant produce the lowest omt power generated by I;GN E, repl.nc-found that t ertain operations arni maintenante es}x nses incurred ment energy emts awriated with outapn at these units un be sig-at Cahett Chtts during the test 3 car shouhl not be reemeted from m6eant. IlGA E cannot estituate the amount of replacement energy ratepayert 'Ihe Maryland Conunission found that ihn work, costs that couhi he t hallenged v dnallow ed in future fuel rate pro-w hich w as performed during ihe 1%9-1900 Unit I outage and fdl tredings but suth amo ts t on!d he inatenal, wnhin the test 3 car, w as amid ble and caused by 1 GN 1: actions in Ottoher 198H. l!GAE fded its first fuel rate apphean m for a w hit h w ere deficient. thange in its electnt fue' rate under the GUPP program. The rnul-The Comnuwinn noted in ibe order that its reuew and 6nd-tam caw before the Mar 3 :nd Comnuwion emas 1:GN Ei operat-ings on thne Wsun penain to the seasonablenns of IM ihl"s tnt 1 ing performanec in < alendar 3 car f us7, and llGAI"s til.ng demon- > car operations and maintenance npenses for purpmes of setting strated that a met the vptem< ide anu Nhudual nmlear plant per-base ratn and not to the responsihiht3 or repbcenn nt powtr f fonnante taigets for 1987. In Nmember it@ int; mony was (ded costs aw(ut.:d with the outages at Cahert Chih Ihe Manbnd on is half of Maryland Peoplei Coumd allegmg tk.* so en outages Comnussion suted that its decidon m the luse iate case ui;l hase at the f 'ahert Chtfs obnt m 1987 uere due to management impru-no mjuAara (binthng) ettet t m the tud rare pnweedmg eumin. dent and that the replacement energy usts assocuted w hh those ing the 1989-1991 outae' ~ The umh charauerned as aundable outagn shnubt be daallowe.! ; y the Comnmsmn. Total repbtement sigm6eantly increased the duranon of the Unit 1 outage. Despite enetp msts amwiated wuh the 1987 ouuges were approumatdy the Mary bnd ComnumonN statement reganhng no hmdmg 5 0 indlion. efket, IM ;N E recognves that the views nptnsed by the Mary-In May 1989, liGNE tded its tuel rate case m which 19W land Commnuun make the full reemery of all of the repbcement performame u as comined. HGN1: met the sptem-wide and nudcar energy wsts assmiated uith the Unc. I outage doubtful. pbni perfomunce tcgets in 1988. Peoplei Conmel alleged that llased upon a renew of all of the umL performed dunng the llG&l: impnntently nunaged sn cral outages at Cah ett Chffs ana 19k9-1991 outages at both units at Calvert Chffs by BGN E pet-IIG ail ntinutn that the total repbtemem energy tmts amwiated sonnel as wdi as mdependent consultants BGN E recorded a pro-with these 1988 outages were approumatdy 52 milhon. On Nmem-cision of 50 nuthon agamst the powihle disallowanee of repbce- - ber 14,1991, a 1leanng Examinn at the Man-bnd Comnuwion ment energy costs meuned during thne ouuges which ruluced issued a proposed Order, which ht came tinal on Det ember 17,1991 1990 carnings by 28e per common art,4GN E cannot deter-and wnduded that no dnaHow ante w as w arranted. The ileanng mine whether repbcement energs c as nuy be dmuowed in the Lununer found that IM i Ai mainuined t% pratucti.r capauty of present fud rate pnwenhngs in i seess of the pnwision. but suth the Pbnt at a reasoiuhic levd, noting that

pox!uced a near ret-mi amounts couid be material.

liahane e Gan as.>,1 })o tro (.unyn, and Mskin us h Note 12. Quarterly financial Data (Unaudited) P l be htllf p% illy <!atJ J10 unJudtCd but. In the < tunnin i,f Atanagt - perhuis gt nerauy <a oiiring ihiring the suinmet azul w tritet turnt, mt hule all ad usOnents nu nsary for a f.ur ptot ntan in. months. Auonhngly, uimpnimm among quarters of a year i 14 i A l'.i taihty business n seamnal in nature w nh the pral salo nuy not he mdk atn e of metall trena and thango in o;wratmns. roe r rnLj _ w i i,ai d h h 41 Jan 4 wpww a W t h om A, e D thira b r il s lu 16 unls I tt t pt Ps1 Vuer b4 unM 1901 llevenon. 5591/a,4 5567,1 W 5702,04x SW5,592 52,4W,493 Im ome from opriatio:,s. ks /.2 3 11 W,7 89 225,120 68,723 501,455 Int ome lefore unnulath e Wect of dunge in anoontmg methml.. 41,110 59,192 '16,671 16,708 23MW1 Cumulatne riftet of thange m the method of au ounnng for income t.nn 19.74; 19,743 Net income.. 60,H 5 5 59,192 116/i?1 16.708 253d26 1 arnity app'wahle to ronunon stod. 50,2 M 48,164 106,097 6,134 210 6'.0 l'arninp pct share of common soit L Ik fotr rtunnlath e cHu t of (hanpc m aciounting method. O.46 0.57 1.26 0.07 2.28 Cutnulatne effu t of t hwyc in auounting for :ntome tasn.. 0.24 0.21 'I otal carning por shate of tonunon stot L. 0 60 0.57 1.26 0 07 2.51 1990 Ro rnun. 5550.921 5491,2M $619M7 5425,719 52,l M7,562 Income from opcratiom. 7',179 74,771 17 h007 ~J20 444,179 income before cumulatnt (O'ert of(hange m arrounting mahod.. M.775 38,859 100,120 0 08) 175,446 Cumulith e (tft ct of chanye in the methal of atcounting for unbilled te vnun, net of tasen 37,754 37,754 Net int onie.. 74,529 3hM9 10M20 (50 9 21.?,209 1 arninp apphcahk to t onunnn stock. . M,156 29,112 89,749 t i l.0781 172,939 lEarninp per share of(onmion stt(L llefore annulatne oIfett of thange in eurounting methmi. 034 035 1.08 (.13 ) L64 Cumulative encet of thange in the mtthoil of accounting for unbilled t nvnues. 0.47 0 46 Total raininp per share of cmrunon stink. O kl 034 1.08 U 1, 2 10 Quartals,veunti ihr i %l bart fu n rrwed to rrtlrct a dey m she m,tLuiefa,mmrun f >r man t.no des 1.ar m.s.k in I)cemtw I%i eflntta Jew, I, knl ba In.n las was,m of My ly QwinG amm,nn be !Oi,ond Inn F.rve ban vor.ncl to n Gat a day m il>r upug ofm rome him miad my uln ofckan.oy ,mlnarrumneann.rnun 6a i Na, Rem er m n m efDer IL Rau!n jx the t uJedjkrth quarte,s ofIvsI oetha t!v n:vre-. den of t e CanmlLitim Compain in: owicnu m sertau_finan.bl wwtments h F and a tal owe pnyw, nfnin t.) (a hm # ik!r fa t'r Fwsb pera ef IM a)l,a the perwn fx a lsJk,lokuun.r of ref uement may cua (n Lie i!). l lle rum of the qwona h unnno pa J.at,ummtr mas na rqualthe tat.dl* tbr p de en.beger m the cump num!cr ethru i out--t nhn thnam n,t the sc e 1

@ Utility Operating Statistics v.s-mn,manc c~n n annuuno l991 lt//O 19p9 19 =' h j9M7 flectric Operating Statistics Itn enun (In 'l humands) Residental.. 5 NH2,591 5 718.012 6a 6 4 W,N 5 620/,60 $ 594,2 A t $nuh CononcicuL 246,669 120,6C 194374 17 k,72 ' I?5N2 large Conunen ul arn81nd usuial.. M 16,213 7423U 666.042 62(i,4 0 615,721 Llcs to Customen 1,945,493 1/ 71,s i6 1,4 ",4 W 1,425.687 1,385,328 Inten bange $ala. 2 3,H4 5 26.629 17,802 44,919 3 2,16K Uthe r. 2 5,l H7 14.2 % 19,k6' 22N8 18,264 Tool. 51,994,525 $1,712,45 4 51 347,167 51,492.144 51,415,960 Sa!n tin t housamls)- sta n Rnidentul-10,097 9.251 V,4 51 9,196 4321 'e Snull Conuncreial-2,673 2,561 2.461 2 293 2,139 l.arge Conuncnial and Indusuial-12,742 _ 12,514 12,NT9 12,491 11,915 %1n to Customers.. 25,512 2437x 24.791 21,9k0 22375 0 Intenlunge Salo, 1,l_66 1,0x 8

95 2.052 I,2_66 Toul.

__. 26,67H 2(,466 25,386 26,032 23,841 (.U5tt HHerh itesniential.. 939,734 930,8x0 913,0!O 895,8 W 1 876,826 Snull Commca ul 93,80H 92.102 90/>47 87,u D 83,247 1.arge Conmien ial an i Indosu ul. H,010 _ 7/nl __ 7,587 _ N,17 5 _ _ _ 8,395 I out. 1,041,572 1,010.973 1,012,144 991,10; 968,4 % Accrage use per Re:,idential Customer - taen.. 10, ~ '" 10.061 10,448 10,162 4,837 .hcrage Rate per Aun (culmhng imenhange valcQ - e.. 7.to 6.86 6 09 5.45 6.14 Peal l a ud (one-hour) - stw. 5,910 5,4 ' ? 5304 5381 5,190 Caiululay it Summer Peak - me. 6,608 6,159 6.164 5,930 5,888 Gas Operating Statistics Ru cnues (In Thousand0 Rrudemial.. 5 220,65.3 $ 218,067 5 242389 S 225,045 5 242,?40 Snull CommercuL 33,53 H i4.622 40,011 36,394 38,548 1.at ce Conuners ul and Indosu ul lhcluAng 1)cIn cr3 Senwe ,7,506 87,389 00,9S3 02,617 103,7 M ikhs cry Sen itv. 17,119 21.156 27,069 19,161 23,442 (hhcr. 9,179 11,2 4__ 11,349 bJ 06 _ 7,421 Toul-5 3 5H,195 S 373,419 5 4 tl,x01 S 381,4 6 $ 41 <,4 56 Sain (In Thousandsb o ni Residemial. 36,519 15.026 19,806 40,140 38,142 $ null ConunercuL 6,154 6,144 6,889 6,792 6,l M larye Couuncrcut and Indasuul the!admg l)ebscry Sen ice.. 18,138 19J24 18,772 21,' 0 18,345 l)cIn cry SeMce. 40,673 4039i 44,230 40,827 40,118 Toul. 101,434 101,0s7 110,697 109,s29 102,011 Custumen NesNisintial,. 482,085 482,6s0 442,53N -+ H 2,011 482,023 Snull Commet rial 32,136 11,% 1 31,hs t 11,i82 31,10s I arge Commercul and Inousuial. 5,61 J ',371 4,107 i.160 5,001 Tota' 520.031 420.014 (19,'26 418,751 518,132 .h crage use per Roldeniul Cnstomer - Therms. 757.1 ~2n 4 x2 M > 3 2.8 791.2 -b crage Rate p< r Thenn (emlading dehvery sened-5 .55 .56 .57 42 . t.1 Peak 1)a3 $cndout - D i u.. 610,200 651l% 661.200 669,5 N 616,000 Peak l)ay Capaldla3 - o ni, S17,000 851,000 761,W 701,000 731,000 Coum fra -yw enssom he e h en mured k m-lm 1:nh he,ynrnt W3 p ven:nn t

um,,-mn a.a nars c-ww.a ssa,.,nn Shareholder Infbrmation co-n um O,. d # cme w s j49l l#/94 l I)hidend Price t hush nd Pnce Dulated liigh low I)ahrol Ibgh low l irst Quatu r.. %.525 $29% 525; 5 324 1444 %2'u ho ornl yu u ter.. .525 2W 28% .525 W4 2D Th ml Ouart er.. .525 32 2% 32s 2'u l'onnh Quartet. .525 34% 31% 325 294 254 'l otah. 5 2.10 5210 'I he mmnuin stal is enth d to duidrosh a hen.,ml as teclued 'I he annual ma nog of shan holden w di hc hcht at to 60 Am. by the lhotd of ihrutort There are no hmitaiions m any miten-on Apol 15,19"2. m the Ilunt Whey liallo om of \\tarriotti ture or other agreements on paymem ut ihsi&n.h, how tur, Ilum Lilcy inn. 245 Shawan Rott dM at Nhaw an Romb, hohkn of prcfctrni stmL tfiro) aml hohten of preferem c tmL IIont Lil 3, Alarybml. (ncu) ne enntled w in en e, wht n and as &chred, from the surplus or net prolik, t umnLthe parl; dni&nds at the fned f m ru W v prefnemi ! rate sp(n6cd for cach wnes and no mme. pay ahic Qmn atitten request, the Company will furnish, without quanctly, and to inen c w hen due the app 6 able pnfornic charge, a copy ofits l'onn 10-K annual reimrt, including finan-sto L rntonpuon pa3no nis, bt fait any dn uh nd on the ounmon cial statements, after it is fik d with the Securities and l'.uhange stm L sh di be pani or si t apart,1)nian& hne han pmd on the Conuniwion in Alan h 1992. Requests should he ahlreued to cononon su n L ointinaousl sint e 1910. I'mu-dn i& n& depend Chatles W. Shhcry, Vice President, Secretary, and Treasnrer, 3 upon futme canungs. the faunaal, on,hn n of the Company. P.O. Ilm 1475, Ibitimote, Slagland 21203-f 475, 1 a,al other buon.Quanctly hu&rnh u o e dn bred on the uim-roon stmL durmg Pnl and 1990in the amounts su fonb.d nc. Auu m i:oolwrs & l.3 rand b ammon Mod Dwidenci Octi s Necorti d itet are noIlt;aN) inn (ht 10th i>f Alart h,Jime. hepicin-r w s utivi t. f f u s s bcr, an 1 ?) cumber Qunteth dniinds arc o:stomanly maiteil Gas and Liconc lhnkhng to en h sharthohh-r on or enut dic 1st of Apn!,Juh, October. ( '.ha r h, n nte r anil J anua ry. Ihltinuc, Alaryl nd 2I;01 M ail-P.O. IW 147; Dme.d h meatunt ad sts PurcN iblamon, ALnbnd 2120bl475 ,t he (..ompany s lhudenil Rnmestme nt and Stml Pon hase Pbn pro. ides an opportumty for hohlen of the omp my's v, .A + s' o y o - m i Ostm uitumon stm k to a quh e adh..nonal 5,hnes of smh sun k m a Nhatchm,ders desiring awhtante w hh lost or stokn so n L certifi-romenient and nonomical m.mner, l'articipants in the Plan cates or daidend cheds. nune chances andrew chanets, stock inay trunest ca sh dnido A on all or a p,ution of their shares nansten, or oths r nutten should tall the hhareholir S.enwcs of t ononon sto. L an.1/or nuke aptional ush nonents. Krpecwntathes on our tolMrce etlephone numhtrt 'l be following toll-free tricphone rmmhen are avaibbie s t oO. Mn', darhg our bemcw hours,

On a m.o 14s. n.m

.I he (.vmpa s annmon sn= L, w hch h traded unir the ti Ler nud,ol llGl; h inted on the New York Abdwest. and lbhnnore MetropMan h a W 920 Pacific stra vhanges and has unhstoliradmg priulcres Within Mary bnd W KL492.161 on the lloston, Cinonnati, and Phda&lpho cu banyc, Outsuk of Ru)lu'd M00 N 4W ,b of Dornd cr 11.1991. that w tre 67,40 4 Conunut. Wriurn mmmumcation shoald be addrewed tu. Wrchohlen of record. lialumore Gas and I leonc Compan3 hharthohkr kruces its Ar A w xd i, P.O l b 1642 s

Mary laa.l Narn ind ibnk. lbhum ire Ibium,,t e,.\\b ry l.md 21201-1642

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t.' EXillBIT II Quarterly Financial Summary June 1992 i l Inquiries concorr ing this summary should be directed to: Charles W. Shivery Baltimore Gas and Electric Gompany Vice President, Gas and Electric Building Treasurer,' and Secretary Charles Oenter (410) 234 5511 P.O. Box 1475 Baltimore, Maryland 21203 Kevin J. Miller

Director, Corporate Financia! Planning (410) 234 5434

Consolidated Statements of Income (unauttiod) 1hree Months Ended Clx Months Ended twelve Months Ended June 30 June 30, June 30, 1992 1991 1992 1991 1992 1991 tu ihousanos,br#pt he t,' me Amounis) llevoques l lutric $446,030 $478E89 $ 934.099 $ 903,375 $ 2.019248 $ 1.833.048 Gas., 07,238 02,919 218.751 203.232 373 714 361,08/ Divertlhed stetivlhes, 29,062 25,381 61,671 4924G 119.198 112 491 i Total tevenues. ~Mi5 sb7,189 1114,f20 1,161,853 2.512.100 2,307,229 tispontes Othn 1han inimest a411,ame innen Elactric luol and po'chasett onorgy, 12 %999 144244 2A5,220 2912b2 f 09.1P ? $80.502 Provisinn for possible deatwance of 35.000 replacern(*til enerpy Costs Ons purchastrd for tesato. 30,210 28,333 114.955 t on,182 108228 188,411 OparaHons,. 143,718 148,300 296,385 290,170 640.524 596.328 MmntenarK e, f 2,877 42,434 94,37. B3.694 184.327 109,310 Depreciation, 55,401 48,$40 110.954 93,320 215200 181,342 T ann other than ircome tares 40.009 30 542 89,012 82 817 170 975 162 597 t 1 lotal expensee other than Interest and income lanes., _4_4 9J 7,9 _ 448,401 990,905 954,441 1,9 }1.502 1,918.490 locome rtom OperaHons, _ 93_ 171 118J88 223.615 207,412 _ 517.058 _ 36823g Other incomo, Allowance for equity funds used duilng construction., 3.205 7220 0,302 19.525 10.433 35.981 Equity in camings of Safe liarbot Water Power Corpornbon. 1,084 1,103 2,168 2,200 4.349 4,581 039 1,377 J579) _000 _866 Not other locome and deduchons. _ Id73 _ 9.067 9 S07 21,1R 15 382 3M28 T otal o: hot inctee. 5.462 locome 14efoto Interest snrj locome iaKPs _99d33 128,455 233,522 2[8,504 533.040 428,167 Interce,t E xponen Intnretit charges. 51,073 53,613 103.588 108.853 215.834 215,470 Allowance tot bonowed funds used during ~ . construction, _{1 J00)_ 14,062) (3,619) (t t,4801 p.006) g5y0) Nol intmest erpenne. 49,313 48 951 99,972 97J 73 209 K8 190@0 t locome liefore Incomo lanes. 50,120 79,504 133,550 131,191 3?3 212 23 7,ff07 locome Taxen

Cuneni, 2,827 2,520

'11,260 823 91.484 (10,359) Deferred. 11.370 18,723 9,516 32 000 9K6 53,714 investmmit tax terdit adjustments. jM20) (937}. (4poLJL93(_ J8 819] 15,063) lottJ income taves _1_2J 71 20,312 36,248 30,88e 'U 531 37,692 locome erfore Ct'mulatwe Effect of Change in 38,049 59,192 97,302 100,303 230.681 200,115 Accounhng Method Cumulative Elfact of Change in the Method of Accounhng for income l anes. 19 745 19J45 Nnt income, 38,049 59,192 97,302 120,048 230 681 219.860 42294 42J41 Prelef ted and Pic!crence Stock Dividends, _ 10 574 11$28 21 147_ 21493 . 188.387 $ 177,119 1 Eamings Applicable to Common Stock,, $ 27,475 $ 48,164 i 16,150 $ 98,449 Averago Shares of Cmnmon Stock Outstanding. 135,321 125.9'2 132,f;55 125,693 129.574 125,257 Eamings Pet Share of Comnen Stock Ubidy opotahons. 50 18 $0 37 $0 52 $0 62 1149 $ 1.30 Provision for possible disationnte of (0j8_) re;-dacement energy costs. 1 otal utibty operations. 0.18 0 31 0 52 0 02 1.49 1 12 Dtve,13hed acuv!bes, 0 02 0 01 0 05 (0 04) 0 13 Cumulativo ellect of changn in the meuiod of accounhng lot income taxes. 0,16

0. lfi lotal Wyetsitted activaies.

0 02 0 01 0 05 0 16 (0 04) Op lotal camangs per shave of common stock, $0 20 $0 38 $0 57, $0 78 $145 $141 Constellation Companies Itavenues. $30.440 $20.935 $G4,333 151.843 $ 124.126 $ t 17,228 2,736 1,143 7,095 20.242 (4,637) 35,704 Net income. lo'al Assets-End d Period. 1,009f 23 1.043.952 1,tB9.623 if 43.952 1.009.623 1.043.952 (1GMPs investment-End (1 f'esiod 287,237 280,834 287237 280,831 E87237 280,834 M per shee amovms re c<t t!m 3 kir 2 cmvnen skxk st+t M shaiehovers of rectxd as o'ka 231992. Nss amowsfs hv #99 9 fw e tven restated fo renect the r (fWye$ Art (fse thefi4WS of Acmpnh%. Air hCa,De totes aqd hitefthanp# 5#458 uf ich pe's ad@ led in LVCP#t@@r f 99 f Ffferf%9 A'hM t. tW t. bi rteta!apa k.y the fe< tele # Alan C(vyptif t (ivt tw*, reflect fon30hdafify ebwtafsvig for Werrorgq bAMqces p.1d f>ent4dois o Ihe inkr#ft # Avit'Afiori rev1fAbe t he*P"I FPN(PS a(YNvikwWf*Pnet gnd p OmAfe4 el $0mp # ems (t.hecf #9 fWt/ A$t$lreertiAf (he (MWM.U a ey end EP4p/fg kW ;'ifcW twMt p*vh rest te (;,rm ) n7tyincggt (4 weAfher (twd! pit p<p npf neretta% kgWA%c pf tem As to tv coper!ed kw art entra )ew

Consolidated Balance Sheets wnaumem June 30, 1992 1991 (In t housande) ASSE1S Current Assets 47.007 5 Cr,tPi Cash and cash equivalents i Accounta receivable (net of a!!awance for uncollechtm). 20tn11 292.074 Au. rued unbilled revenues. 74185 72,027 fAaterials, supphes, and fuel stocks. 206.702 1 r:3.603 Income lanes telundable. 0190 $787 32.413 2%S95 Prepsytnents 4td olhaf lotal cunent anets. 63231 B~ ~ ~ ~ ~054.4S7~ investments and Other Anots 4 %' 036 4.ib.rQ 7 floal estate puiects. F inancial tovestments. 231817 257.772 PtsM9 191.r,9 7 Power gennrntion systems. Safa liarbo' Water Power Corporshon. 31237 31f47 flottant deconwmnhning trust fund 37.35? 20 454

.031 pr,302 Senku living f acihties.

72345 06 n07 Other. 1 M9I90 10tallovestments and othnt assets - 1.0/6 067' 'c nt 5ti ~66d.n6/ Utahty I'lant. Accumuinind depreciahon. ji 8 7 t_ n9 7), 31.73i 301) Het utilHy plant. 4,82a.900 4 cw100 = Deletted Chatges Delened fuel costs (not nf reserve tot ponible disallownnte). PION 90 as t.669 treomo inves recovernb's theough future intes. 103,137 174 309 Delened nutient esponditutes (net of emortstehon). 70.04B %?.4B2 40 389 31SR6

Other, 512.572 010 4 t$

lotal delened chmges, $ 7.042.517 %0 900 37y lotal Assets. UAlllullES NIO CAPl! Al.lZAllON Cunent LtbAlies 76.150 $ ??0.900 Shoit term tetronings Cur'ent pothons of long term debt and pref eronce stock. 495.300 473.672 134.009 142 800 Accounts payable. 3.400 2.463 Accrued taxes. Accrund into, ?st and dividends doctarc J. 104 851 100,838 55,?07 49,960 Other. l otal cuttent liab!!!hes. 8 74,$31 990.740 Delened Credits nrvi Other uabihties 893 430 074.734 Defened locomo taxes, Defetted hwestnwnt tax credits. 109.9El !78.691 41.011 43.193 Other. T c'el detetted eretbis and other habihties 3I0 dO4 .10953I5 i 1 l ing lerm Debt Muitgtge bonds. 1,605.104 1.309.001 497,850 770,000 Other king torm debt $83.513 500,676 1.ong term debt of Constellahon Companies Unamortired descount and premium. (9281) (7,40c) Cunent port on of long term debt. je92.306L _ jg892) T otat lory term dabt, _22 64.080 .,2go9,4 3 7 59.105 59,185 Pietened Stock. ilednemable Preferenco Stock 400 000 402 000 Cunent poihon of f edeemable preferenen stock _ Q OOO) 122f00) Total tedeemable pete!ence stock, 397.000 400.000 110 000 110 000 Pielemnce Stock Not Sutiect to Mendatory fledemt bon. Common Shmehekiers' Equity 1,157252 963.062 Common stock. 157 157 Premium on prefoned stock. fleinined camings 1,154.308 1,150,419 Not un.calized loss on marketable secuiities. J1 i.040) lotal common shatchelders' equity. yt til 7 2 103.398 T otal uabat,es and Capricrahon. $ 7.0 te s u s e 9m27e

i L 1 Consolidated Statements of Cash Flows (unaumd) Sir tAonthe Ended Twelve f.tonthe Ended June 30, June 30, 1992 1991 1992 1991 (in t housantte) Cash I k3ws I rom Operating A( tivinen $ 97.302 $ 120.040 $ 230.081 $ 219,000 f Jef incomo. Arljustments in eo(x3ncila io net cesh provided b/ opermiing activities CumutaWo effect of change in the method of l19,745) (19,745) htcounting for Income tant 4. 132.497 110.550 264,330 203 954 Depreciation arxl amortiration 9,$10 32,000 9,Br,0 53.714 Defened irromo inv es. investment tas credit adjustments. (4,528) (1,935) (B,A 19) (5.003) 70.023 38,100 140,071 (18,672) Deferre far:t costs.. l'invidon fw pmlbte disallowance of reptatemant 35.000 energy cotts. Wille dnwn of financial hvestmon's. 13.575 Wnte down of 'ent estale projects. 9,990 (6.302) (19,525) (10,433) (33.981) Allowance for equity funds used du.Ity contteuction. 700 21,449 (11,972) 20.305 Equity in enmings of offiliates and joint vontures (nett. Charges in cunent assets and cuttent liabilities 35.901 (23.632) 23,103 (49,212) Accounts loceivable (13,855) (??213) (2258) (10,540) Accrued unbilled sevenues. M sterials, supphes, and fuel stocks. (6.397) 4.867 (13.279) (15.383) (0,590) 38.933 (2.001) 22.848 locome taxes refundable, (51.173) (00,030) lA2A1) (0.925) Accoun's paynt le. (20104) (21.522) 948 (374) Accrued Innes. 59,790 53,705 9,340 2,715 Other cutter,l nuets and cunent fiabihties. J0J50} 17,53 A G8 r.61)_ j11204) flet cash provided by operating nchvities. J04,00 7 263 'ie / _01pyB2 _ _3vg4 7, Other. Cash Nows f rom financing Attivities Proceeds liom issuance of (75,350) (0,000) (84.080) (67.100) Short intm tnnowtigs (not), 325.033 510.005 e?%118 1.092.433 long terrn debt. 34.8?9 ( 2 00 34.737 Ptoletence stock, 178,190 _ t 7.043 19141B 31.0F0 Common Stock. (391.108) l481,3h5) 1872,tB21 (1234,180) floacqutr Ton of long term debt. 92 BM flodempiton of preference s%ck. Common -tock divHonds paki. ?).552) (87,711) (179,8 0) (174.827) ~ hetened and pielerence stock dividerids paid. (21,% 7) (21,1411 U2.749) (41.45R) _p30} J{ } __ p)_,_ _ty 7) Other. _(7(43pj_Q5 /5L jiOl/d8Lj30290 lint cash (unod in) provkled by financing achvibes. Cesh Inown reom Invesbng Activibes (161,88B) (210,159) (413 974) (503.754) Utihty constmctinti cuppoddures. 0.362 19.525 10.433 33.991 Allowance fur equity funds used dudng construrbon, (9,425) (445) (10.834) (19,972) tiucient tual egenditures. (7.733) (10245) (20.109) (3 m ) Detened nociaar expenditures. fluclear decommissioning trust fund. (4,450) (4,450) t8.9no) (8.09?) (7.908) ($69) (10.828) (569) Opinrred conservation euponditutes. 21.814 53.844 35251 65.847 f in.tocial investments, (12 000) (20,786) (29224) (56,136) fleal estato riojorts. (3,103) (24,702) (11,004) (41,061) Power generation systs.ms, 39 (404) (294) (1.002) Seniot Irdng f acthbes M11,52) 4 jy MiOL,,_ ] @ Obt, (2R710) (4524B) (572.019) tiet cash used M Investing activities. 1182 981} 24.590 25242 (23.114) 56.956 Net inctease (Decrease)in Cnsh and Cash E qwynients. t 7,417 39 879 65,121 _Bj05 . Cash and Cash Equivalents at (legwung of I'etici $ 42,007 $ 6512i $ dA007 $ 65,121 Cash and Cash Equivalents al Ond of Period. Othei Cn th Ikw In!< tmWon Cash paid during tte pe%1 tor: $ 99.532 $ 96.500 $ 201.935 $ 182,521 Intoiest piet of amounts enpitafiind) $ 47,029 $ 14.393 $ 48,f.53 $ 19,002 Income taues. l j ^~

Utility Operating Statistics Three Months Ended Six fAonthe Ended Twelve Months Ended June 30, June 30 June 30, Et I Gif uC 1992 1991 1992 1991 1997 1991 lievenues (In 1 housar*) Herwinntiak houschnai ng $ 74.995 $ 73.695 $ 187,844 $ 172.219 $ 360,750 $ 313 505 sther. 111J132 131,594 ??5,515 "35140 521,736 474,694 - tola1. 106.827 PO5,209 413,359 407,465 8R8.406 788 279 1 mall t.ommernal. 59.199 61,454 116,709 116,710 ?47,667 233185 (n<ga corr >morcml and irKloshial 196,311 200,?01 364.0G2 369.819 811,477 774.611 Sales tn cutlomms 4 3' ' ' 6 466,944 691,130 891,994 1,947130 1,790,175 Inteichango snies. 1., 2 6,H30 32,504 7,382 48,907 18.000 Ot9r 3M9 3,115 7_,464 9,999 22.691 182 3 1oint 5446030 $ 4 78,809 $ 934]M~$ 909,375 $ 2,019,24 8 $ 1,033.048

stes (In 1housands)-tMit iles*ntial ~houst heahng 873 857 2,372 2.231 4,434 4,095

-other. 1,174 1,419 2.407 2,671 5.621 5.568 - total. 2.017 2270 4,859 4,902 10.055 0.663 Dmall commeraal. 606 634 1,305 1,291 2.687 2.610 t rogn comrnnttial ntvt industdal 3.020 3,177 6215 6.211 12,746 1290 Galet to customers 5.673 6,047 12,379 12,404 25,408 24.971 Inter (lange sales 480 307 1,615 375 2.456 753 lotal. _ 6 10i._ 6)>4 13 994 12,729 2/ 944 2,5J24 1 1 1 GAS Pevenues (Irt T hovnands) flowinnbal-houseboabng. $ 32,806 $ 30,368 $ 113,730 $ 104.959 $ 192.175 $ 100,161 -other. ,__7J 53

_7J08, 2h448

[0.370 _ 38.315 30 pn0 -trial. 41,559 39.070 135,176 1/5.339 230,490 217,077 !, mall comnwre:ial. 6,030 5,724 20,647 19,P05 34,981 33 258 l nrgo comtnertjal and Indor.hini --0 xcluilmg delivery servire. 13,169 /,7 7^ 50,061 45,079 83207 79.156 - Llekvor serwco. 4,575 4 274 9,095 8,853 17.591 20.151 -l otal, 17,744 17,053 59.94S $3$32 101838 99.30/ 1 2.0% 2,982 4,7 5G 7,405 12.010 lotal. j3,905 Other 030 $ _ 62,919 $JJ51 U@3_2 IMMTNi[Uj Sales (in lhousanris)-Dill) flesidenbab househeating 5.493 4,703 20,211 17,980 33,282 29.76% w ther. 1,090 1$55 3.330 _ _ _ _ 3 043 _ fM 64 _ _5 ?74 - total. 0.509 t,756 P3,549 21,023 39 046 35 OB Gmati cummercial. 1,074 901 3,972 3,52/ 6,599 5.978 L mye conwnegial and industdal -l.ncluding tiebvery service. 3,16G 2.920 12,417 10,344 00211 17.600 -Dohvory r,e vica _1L012 101P2 2be% 21p85 41,037 42,714 1 -l otal, 14,170 13,042 33,867 31,4?9 61J48 00.57l 1 01:41. _ 21,841 19J01 (1gno $5,9 79 10htn3 101 M 1 Electric Generation Statistics Iwelve Months Ended Juve 30, Purchased Powee fJet of flydro hstechange Nuclear Coal Ott & nas sales Total Generahon tsy f uel lype (%) 1992. 40 2 49 4 PB 27 49 100 0 1991. 15 9 43 8 ft 7 59 P7 0 100 0 1housands of MWH 1992. 10,f 10.312 750 737 1,327 ?6 961 1991. 4 11.085 1,784 1,541 7,405 PS 65 7 As et ayi Cost ol l' oct (Cents pnf M&o Olu; iaa?. 4709 15858 752 13 114 P4

193, 51 07 157 42 314 56 158 75

Supplemental Financial Statistics Twelvo Months Ended June 30, 1992 1991 Conschwed Copilahiation Long terin dr4td. 47 5*, 47.7% Ghort teun truinwings 14' 40% Preferred anci perfmente stock 10 1 % 10 09 Comnion equhy 41 0 % 37.7% f teturn on Avorage Connnon Equity. 05. 8 5. Ihuo of Entnings (SEC MettwKf) lo tired clarDes. ? 48 2 07' in fired charges and preferred a'id preference divklends combined. 1 W. 1 70* A C is a % of Earnings Applicabta la Common Stock 87-33 4% ~ 0flective inn hate. 28 0' / V., Utility Construction E sponditures inckiding AFC, f Jucionr l'uel, Detened ihn: lent E ytnditores. nrvi De'ened Cont,ervabon Espenditures (1housands of Dollars). $ 4EBP, $554.301

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Common Stock Data Three Months Ended Twelve Months Ended June 30, June 30, 1992 1991 1992 1991 Comnwin Stock Dividonds -Declarad, $.36 $ 35 $141 $140 - Pakt. $.35 $.35 $140 $ 1.40 Market Valut. Per Shara -lbgh. 22 % 19 % 73 % 19 % -tow. 19 % 18h 19 % 16 % -Closo, 22 % 19 % "2 % 19 % Shares Outstanding -End of Period (in Ibousands), t 35.305 125.948 135.300 105,948 DoA Value por Shate-End of Period. $17 09 $16.70 $17 08 $16 70 Mpen shee enwis neneet the 3 for 2 conwt swA st+r to shmehoksers of recmf es vi Acre 23, t 9N f 10?92

Exhibit III Page 1 of 2 Internal Cash Flow Projection For Calvert Cliffs Nuclear Power Plant Percentage Dwnership in all Operating Calvert Cliffs Unit No, 1 100.00% Nuclear Units Calvert Cliffs Unit No. 2 100.00% Maximum Total Contingent Liability (000) per Nuclear Incident $132,000 Payable at Per Year (000) $20,000 Twelve Months Twelve Months Eqded 6/30/92 Ended 7/31/93 Non-Cash Excenses (S000) Depreciation and Amortization S 254.542 280,848 Deferred Income Taxes and Investment Tax Credits ___JJL (6.223) Total ,?S4,577 274,625 Percentage of Total to Maximum Total Contingent Liability Payable Per Year 1,272.9% 1,373.1% Retulned Earnines ($000) Not Income Af ter Taxes 230,681 less Allowance for Funds l' sed During Construction 16,439 less Dividends Paid 222.598 4 Total (8,356) Total Internal Cash Flow 246.221 Percentage of Total Internal Cash Flow to Maximum Total Contingent Liability Payable Per Year 1,231.1% _i____.___i_____.____._______i___i.__. .i

Exhibit III Page 2 of 2 Baltin. pig _Q.itg_ and Electric Company Underivine. Atsumptions for Proiected Cash Flow (1) Projected cash flow does not include an estimate of retained earnings. Ilowever, internally generated funds without retained earnings are well in excess of the maximum possible retrospective premiums. (2) Depreciation accruals are based on composite straight line rates of 3.26% for electric property other than nuclear and Brandon Shores Power Plant. 2.80% for nuclear property, 2,75% for Brandon Shores, 3.12% for gas, and 4.02% for common utility property, other than vehicles. Vehicles are depreciated based on their estimated useful lives. (3) Estimates of Federal incoae taxes and other tax expense are based upon existing tax laws and any known changes thereto. (4) Accounting policies are consistent with those in effect June 30, 1992. I l 1

Exhibit IV B11timore Cam and Electric Company Curtailment of Canital Expenditures Estimated construction expenditures including nuclear

fuel, deferred nuclear expenditures, Allowance for Funds Used During Construction, and conservation expenditures for the twelve months ended July 31, 1993 are $659 million.

To insure that retrospective premiums under the Price Anderson Act would be available during the aforementioned twelve month period without additional funds from external sources, construction curtailments would af fect all construction expenditures rather than impacting a specific project.}}

ML20099D881

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SUBJECT:

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