SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2000
Commission file number: 1-12869
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Constellation Energy Group, Inc.
Employee Savings Plan
Address same as issuer
B. Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office:
Constellation Energy Group, Inc.
250 W. Pratt St.
Baltimore, Maryland 21201
SIGNATURES
The Plan: Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
CONSTELLATION ENERGY GROUP, INC.
EMPLOYEE SAVINGS PLAN
Date: June 28, 2001 By:/s/ Richard D. Honaker
------------------- -------------------------
Richard D. Honaker
Plan Administrator
2
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator of the
Constellation Energy Group, Inc.
Employee Savings Plan
We have audited the accompanying statements of net assets available for
benefits with fund information of the Constellation Energy Group, Inc. Employee
Savings Plan (the Plan), formerly the Baltimore Gas and Electric Company
Employee Savings Plan, as of December 31, 2000 and December 31, 1999 and the
related statements of changes in net assets available for benefits with fund
information for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan as
of December 31, 2000 and 1999, and the changes in net assets available for
benefits for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of
financial information for the year ended December 31, 2000 is presented for the
purpose of additional analysis and is not a required part of the basic financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The fund information in the statements
of net assets available for benefits and the statements of changes in net assets
available for benefits is presented for purposes of additional analysis rather
than to present the net assets available for benefits and changes in net assets
available for benefits for each fund. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule and fund
information have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ Mitchell & Titus L.L.P.
---------------------------
Mitchell & Titus L.L.P.
Washington, DC
June 22, 2001
3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses of
Constellation Energy Group, Inc. on Form S-3 and Form S-8 (File Nos. 333-36380,
333-59601, 33-57658, 333-56572, 333-24705, 33-49801, and 333-56572 and 33-59545,
333-45051, 333-46980, and 33-56084, respectively) of Constellation Energy Group,
Inc. of our report dated June 22, 2001 on the financial statements and
supplemental schedule of the Constellation Energy Group, Inc. Employee Savings
Plan for the year ended December 31, 2000, which report is included in this
Annual Report on Form 11-K.
/s/ Mitchell & Titus L.L.P.
---------------------------
Mitchell & Titus L.L.P.
Washington, DC
June 22, 2001
4
Constellation Energy Group, Inc.
Employee Savings Plan
Statement of Net Assets Available for Benefits
December 31, 2000
Constellation
Energy Interest Income Mutual
Total Common Stock Fund Fund Funds Loan Fund
-------------- -------------- -------------- -------------- --------------
Assets
Value of securities
held in trust $754,987,098 $471,659,544 $0 $283,327,554 $0
Value of guaranteed
investment contracts 113,798,992 0 113,798,992 0 0
Loans outstanding to
plan participants 27,822,772 0 0 0 27,822,772
Short-term investments 3,711,030 364,822 3,303,490 42,718 0
Accrued dividends
receivable 4,444,809 4,428,749 16,060 0 0
Accrued interest
receivable 1,086 0 0 0 1,086
Accounts receivable 435,320 2,323 391,871 0 41,126
-------------- -------------- -------------- -------------- --------------
Total 905,201,107 476,455,438 117,510,413 283,370,272 27,864,984
-------------- -------------- -------------- -------------- --------------
Liabilities
Accounts payable 408,242 382,949 25,293 0 0
-------------- -------------- -------------- -------------- --------------
Total 408,242 382,949 25,293 0 0
-------------- -------------- -------------- -------------- --------------
Net assets available
for benefits $904,792,865 $476,072,489 $117,485,120 $283,370,272 $27,864,984
============ ============ ============ ============ ============
See accompanying notes to the financial statements.
5
Constellation Energy Group, Inc.
Employee Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1999
Constellation
Energy Interest Income Mutual
Total Common Stock Fund Fund Funds Loan Fund
-------------- -------------- -------------- -------------- --------------
Assets
Value of securities
held in trust $581,222,786 $320,936,562 $0 $260,286,224 $0
Value of guaranteed
investment contracts 121,803,873 0 121,803,873 0 0
Loans outstanding to
plan participants 27,666,731 0 0 0 27,666,731
Short-term investments 4,974,611 607,177 4,349,368 18,066 0
Accrued dividends
receivable 4,626,840 4,626,840 0 0 0
Accrued interest
receivable 1,086 0 0 0 1,086
Accounts receivable 274,704 2,180 252,524 20,000 0
-------------- -------------- -------------- -------------- --------------
Total 740,570,631 326,172,759 126,405,765 260,324,290 27,667,817
-------------- -------------- -------------- -------------- --------------
Liabilities
Accounts payable 239,541 69,642 169,899 0 0
-------------- -------------- -------------- -------------- --------------
Total 239,541 69,642 169,899 0 0
-------------- -------------- -------------- -------------- --------------
Net assets available
for benefits $740,331,090 $326,103,117 $126,235,866 $260,324,290 $27,667,817
============ ============ ============ ============ ============
See accompanying notes to the financial statements.
6
Constellation Energy Group, Inc.
Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2000
Constellation
Energy Interest Income Mutual
Total Common Stock Fund Fund Funds Loan Fund
-------------- -------------- -------------- -------------- --------------
Additions and Net
Investment Activity
- -------------------
Contributions:
Participant eligible
pay contributions $36,725,447 $6,489,691 $5,370,877 $24,864,879 $0
Net participant rollover
contributions 501,831 44,244 177,107 280,480 0
Employer matching
contributions
Company stock fund 10,760,781 10,760,781 0 0 0
-------------- -------------- -------------- -------------- --------------
47,988,059 17,294,716 5,547,984 25,145,359 0
-------------- -------------- -------------- -------------- --------------
Income:
Dividends
Stock 48,757,441 15,978,490 0 32,778,951 0
Employee stock account 1,935,381 1,935,381 0 0 0
Interest 7,337,994 0 7,337,994 0 0
Interest on participant loans 2,560,262 0 0 0 2,560,262
-------------- -------------- -------------- -------------- --------------
60,591,078 17,913,871 7,337,994 32,778,951 2,560,262
-------------- -------------- -------------- -------------- --------------
Participant loan repayments 0 4,904,303 2,068,148 6,966,510 (13,938,961)
-------------- -------------- -------------- -------------- --------------
0 4,904,303 2,068,148 6,966,510 (13,938,961)
-------------- -------------- -------------- -------------- --------------
Participant interfund
transfers (net) 0 (14,383,163) (2,104,229) 16,487,392 0
-------------- -------------- -------------- -------------- --------------
0 (14,383,163) (2,104,229) 16,487,392 0
-------------- -------------- -------------- -------------- --------------
See accompanying notes to the financial statements.
(continued on next page)
7
Constellation Energy Group, Inc.
Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 2000
(Continued)
Constellation
Energy Interest Income Mutual
Total Common Stock Fund Fund Funds Loan Fund
-------------- -------------- -------------- -------------- --------------
Additions and Net
Investment Activity (Continued)
- -------------------------------
Net appreciation (depreciation)
of investments:
Net appreciation
of common stock $168,749,916 $168,749,916 $0 $0 $0
Net depreciation
of mutual funds (27,720,204) 0 0 (27,720,204) 0
-------------- -------------- -------------- -------------- --------------
141,029,712 168,749,916 0 (27,720,204) 0
-------------- -------------- -------------- -------------- --------------
Total additions and net
investment activity 249,608,849 194,479,643 12,849,897 53,658,008 (11,378,699)
-------------- -------------- -------------- -------------- --------------
Distributions:
Withdrawal and distribution
payments to participants (85,147,074) (39,894,951) (19,711,583) (24,889,506) (651,034)
Loans to participants 0 (4,615,320) (1,889,060) (5,722,520) 12,226,900
-------------- -------------- -------------- -------------- --------------
Total Distributions (85,147,074) (44,510,271) (21,600,643) (30,612,026) 11,575,866
-------------- -------------- -------------- -------------- --------------
Change in net assets 164,461,775 149,969,372 (8,750,746) 23,045,982 197,167
Net assets available
for benefits,
beginning of year 740,331,090 326,103,117 126,235,866 260,324,290 27,667,817
-------------- -------------- -------------- -------------- --------------
Net assets available
for benefits,
end of year $904,792,865 $476,072,489 $117,485,120 $283,370,272 $27,864,984
============ ============ ============ ============ ============
See accompanying notes to the financial statements.
8
Constellation Energy Group, Inc.
Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999
Constellation
Energy Interest Income Mutual
Total Common Stock Fund Fund Funds Loan Fund
-------------- -------------- -------------- -------------- --------------
Additions and Net
Investment Activity
- -------------------
Contributions:
Participant eligible
pay contributions $34,255,491 $6,554,830 $6,054,151 $21,646,510 $0
Net participant rollover
contributions 1,384,200 227,393 0 1,156,807 0
Employer matching
contributions
Company stock fund 10,382,558 10,382,558 0 0 0
-------------- -------------- -------------- -------------- --------------
46,022,249 17,164,781 6,054,151 22,803,317 0
-------------- -------------- -------------- -------------- --------------
Income:
Dividends
Stock 39,644,622 16,242,718 0 23,401,904 0
Employee stock account 2,195,217 2,195,217 0 0 0
Interest 7,471,095 38,011 7,433,084 0 0
Interest on participant loans 2,520,620 0 0 0 2,520,620
-------------- -------------- -------------- -------------- --------------
51,831,554 18,475,946 7,433,084 23,401,904 2,520,620
-------------- -------------- -------------- -------------- --------------
Participant loan repayments 0 5,420,824 2,601,272 6,574,131 (14,596,227)
-------------- -------------- -------------- -------------- --------------
0 5,420,824 2,601,272 6,574,131 (14,596,227)
-------------- -------------- -------------- -------------- --------------
Participant interfund
transfers (net) 0 6,988 (1,504,766) 1,497,778 0
-------------- -------------- -------------- -------------- --------------
0 6,988 (1,504,766) 1,497,778 0
-------------- -------------- -------------- -------------- --------------
See accompanying notes to the financial statements.
(continued on next page)
9
Constellation Energy Group, Inc.
Employee Savings Plan
Statement of Changes in Net Assets Available for Benefits
For the Year Ended December 31, 1999
(Continued)
Constellation
Energy Interest Income Mutual
Total Common Stock Fund Fund Funds Loan Fund
-------------- -------------- -------------- -------------- --------------
Additions and Net
Investment Activity (Continued)
- -------------------------------
Net (depreciation) appreciation
of investments:
Net depreciation
of common stock (18,252,868) (18,252,868) 0 0 0
Net appreciation
of mutual funds 6,519,227 0 0 6,519,227 0
-------------- -------------- -------------- -------------- --------------
(11,733,641) (18,252,868) 0 6,519,227 0
-------------- -------------- -------------- -------------- --------------
Total additions and net
investment activity 86,120,162 22,815,671 14,583,741 60,796,357 (12,075,607)
-------------- -------------- -------------- -------------- --------------
Distributions:
Withdrawal and distribution
payments to participants (44,084,900) (21,890,408) (10,063,170) (11,526,928) (604,394)
Loans to participants 0 (4,407,985) (2,147,588) (4,899,526) 11,455,099
-------------- -------------- -------------- -------------- --------------
Total Distributions (44,084,900) (26,298,393) (12,210,758) (16,426,454) 10,850,705
-------------- -------------- -------------- -------------- --------------
Change in net assets 42,035,262 (3,482,722) 2,372,983 44,369,903 (1,224,902)
Net assets available
for benefits,
beginning of year 698,295,828 329,585,839 123,862,883 215,954,387 28,892,719
-------------- -------------- -------------- -------------- --------------
Net assets available
for benefits,
end of year $740,331,090 $326,103,117 $126,235,866 $260,324,290 $27,667,817
============ ============ ============ ============ ============
See accompanying notes to the financial statements.
10
CONSTELLATION ENERGY GROUP, INC.
EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1.GENERAL DESCRIPTION OF THE PLAN
- ---------------------------------
Baltimore Gas and Electric Company (BGE) established the Baltimore Gas and
Electric Company Employee Savings Plan and Trust Agreement on July 1, 1978.
Effective April 30, 1999, BGE shareholders approved the formation of a holding
company - Constellation Energy Group, Inc. (the Company) and the Baltimore Gas
and Electric Company Employee Savings Plan was amended, restated and renamed as
the Constellation Energy Group, Inc. Employee Savings Plan (Plan). There were no
other significant Plan changes made at that time. T. Rowe Price Trust Company
(T. Rowe Price) is the trustee (Trustee). In addition, TRP Retirement Plan
Services, Inc., is the provider of administrative services for the Plan.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA). Employees become eligible to make contributions
one month after date of hire. After meeting this eligibility requirement,
participants are allowed to contribute up to 15% of their eligible pay through
regular payroll deductions, under a deferred compensation option and/or a thrift
option. Participant contributions under the deferred compensation option are
excluded from current year's taxable income, whereas participant contributions
under the thrift option are included in current year's taxable income. The
Company contributes one-half of the first 6% of eligible pay contributed by
participants.
The Plan accepts rollovers of employees' eligible rollover distributions
from other qualified plans.
There are eleven investment fund choices offered for participant
contributions: the Constellation Energy Common Stock Fund (formerly the BGE
Common Stock Fund), the Interest Income Fund and nine mutual funds. The Interest
Income Fund is managed by T. Rowe Price Stable Asset Management, Inc. The mutual
funds consist of the T. Rowe Price Balanced Fund, the T. Rowe Price Equity
Income Fund, the T. Rowe Price Equity Index 500 Fund, the T. Rowe Price Growth
Stock Fund, the T. Rowe Price International Stock Fund, the T. Rowe Price
Mid-Cap Growth Fund, the T. Rowe Price New Horizons Fund, the T. Rowe Price New
Income Fund, and the T. Rowe Price Small Cap Value Fund (mutual funds). All
Company contributions are initially invested by the Trustee in the Constellation
Energy Common Stock Fund.
11
1.GENERAL DESCRIPTION OF THE PLAN (Continued)
- ---------------------------------------------
Participant and Company matching contributions are sent, each pay period,
to the Trustee, who invests participant contributions as designated, either in
(1) the Constellation Energy Common Stock Fund for the purchase (on the open
market) or other acquisition (as described in Note 2) of shares of the Company's
common stock; (2) the nine T. Rowe Price mutual funds; or (3) the Interest
Income Fund, as more fully described below.
Dividends and earnings received on any shares held in participants'
accounts, except for the shares of Company common stock held in their employee
stock accounts, whether in the Constellation Energy Common Stock Fund, or the
mutual funds are automatically used to purchase or otherwise acquire additional
shares for reinvestment in the corresponding fund, and all earnings on each
participant's investment in the Interest Income Fund are automatically
reinvested in that fund.
Dividends received on shares of Company common stock held in a
participant's employee stock account are invested by the Trustee in
income-producing investments. Annually, a check is sent to the participant
representing the total dividends credited to the participant's employee stock
account. Any income earned on the dividends is not paid out annually, but is
used to purchase or otherwise acquire additional shares of Company common stock
for reinvestment in the participant's employee stock account.
The total number of common stock or mutual fund shares purchased for any
participant depends upon: (1) the participant's eligible pay; (2) the amount of
the participant's eligible pay that is contributed; (3) the amount of that
contribution which is designated for investment in the Constellation Energy
Common Stock Fund or the mutual funds; (4) the amount of Company matching
contributions invested in the Constellation Energy Common Stock Fund; (5) the
reinvested dividends and earnings on each investment fund; and (6) the price of
common stock or mutual fund shares, at the time of purchase, for each investment
fund.
12
1. GENERAL DESCRIPTION OF THE PLAN (Continued)
- ----------------------------------------------
Amounts held in the Interest Income Fund are invested in contracts issued
by insurance companies or other financial institutions and in short term
investments. Each contract specifies a fixed or variable rate of interest for a
certain period of time. The interest rate earned by the Interest Income Fund is
a blend of the rates under the various investments. The annual effective rates
for 2000 and 1999 were 6.25% and 6.20%, respectively. The crediting interest
rates for the investment contracts as of December 31, 2000 and 1999 were 6.15%
and 5.74%, respectively. At December 31, 2000 and 1999, there were no
investments in the individual contracts of any issuer in the Interest Income
Fund which exceeded 5% of net assets available for benefits. Contracts included
in the Interest Income Fund have been reported at their contract value, which
approximates fair market value. All the investments in this fund are held for
purposes other than trading.
Participants have the right, once a month, to change the amount of their
payroll deductions. Participants also have the right to change, on a daily
basis, the percentage of their future contributions being invested in each of
the eleven investment funds as provided in the Plan.
In addition, participants are allowed to initiate, on a daily basis, a
transfer of the value of their contributions, including earnings, among the
eleven investment funds. Furthermore, as of the beginning of the calendar year
in which participants reach age 56, they may initiate, on a daily basis, a
transfer of the value of their Company contributions and employee stock account
among the eleven investment funds.
Under a loan program, participants may borrow up to one-half of their total
account balance, with a minimum of $1,000 and a maximum of $50,000. Participants
may elect up to five years to repay the loan, unless the loan is used for the
purchase of a principal residence, in which case they may elect up to thirty
years for repayment. Participants are allowed to have up to two loans
outstanding at any time. Principal and interest are repaid through regular
payroll deductions or by direct payment. The interest rate on amounts borrowed
is set at the time the loan is executed and remains in effect for the duration
of the loan. The interest rate for loans is equal to the prime rate plus 1% on
the last day of the month preceding the month the loan is initiated.
The Plan allows participants to postpone, until withdrawal or distribution,
any income tax liability on (1) all Company contributions; (2) participant
contributions under the deferred compensation option; and (3) earnings on their
contributions and Company contributions. Participant contributions under the
thrift option are included in current year's taxable income.
13
1.GENERAL DESCRIPTION OF THE PLAN (Continued)
- ---------------------------------------------
Withdrawals of thrift contributions and Company contributions, including
earnings, are allowed to be initiated on a daily basis. All contributions held
in participants' accounts are immediately 100% vested. However, participants who
withdraw unmatured basic contributions (contributions of up to the first 6% of
the participant's eligible pay that had not remained in the Plan for two full
calendar years) are suspended from making payroll contributions to the Plan for
twelve months.
Distributions to participants who retire or terminate active employment are
automatically deferred until they either reach age 65 or cease active
employment, whichever is later, unless they request an earlier or later
distribution. Generally, participants who reach age 70 1/2 must begin receiving
their Plan distribution by April 1 of the following year. Furthermore, active
employees who attain age 59 1/2 may request to receive a distribution of their
deferred compensation account balances.
The Plan is administered by the Director - Benefits, Human Resources
Division of Constellation Energy Group, Inc., as Plan Administrator.
Administrative fees charged by institutions, which issue contracts for the
Interest Income Fund, are reflected in the effective rate earned by the fund.
The Company currently pays all other fees and expenses of the Plan, including
those of the Trustee. Brokerage fees, commissions and transfer taxes associated
with the purchase, sale, or transfer of shares of common stock for the
Constellation Energy Common Stock Fund and mutual fund shares for the nine
mutual funds are borne by those funds.
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------
The financial statements of the Plan are prepared under the accrual method
of accounting.
Shares of common stock for participant contributions and Company matching
contributions currently are purchased for the Constellation Energy Common Stock
Fund on the open market, through new issuances or by other acquisition. Mutual
fund shares for the T. Rowe Price Mutual Funds are purchased on the open market,
except the Trustee may purchase from time to time a small number of shares at
current market value from participants making withdrawals or interfund transfers
or obtaining loans from the Plan. The cost of shares sold from the Constellation
Energy Common Stock Fund and the T. Rowe Price Mutual Funds, as a result of
participant distributions, withdrawals, interfund transfers or loans, is
determined under the average cost method.
14
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
- --------------------------------------------------------
Withdrawals and distributions to participants are recorded when paid.
Leveraging provisions are included in the Plan, but these provisions have
not yet been utilized.
Shares of common stock in the Constellation Energy Common Stock Fund held
by T. Rowe Price Trust Company are valued as of December 31, 2000 and 1999,
using the quoted closing market price as reported by the "NYSE--Composite
Transactions" published in the eastern edition of The Wall Street Journal.
Mutual fund shares held in the T. Rowe Price Mutual Funds, are valued as of
December 31, 2000 and 1999 respectively, using the net asset value price of such
shares as quoted by the "Mutual Fund Quotations" for such date in the eastern
edition of The Wall Street Journal. Participant loans are valued at cost, which
approximates fair value.
The Plan's investments are stated at fair value except for the various
contracts issued by insurance companies or other financial institutions, under
the Interest Income Fund, which are fully benefit-responsive and are stated at
contract value. Contract value is equal to the aggregate of the net
contributions and earnings thereon.
The Plan presents in the Statement of Changes in Net Assets Available for
Benefits the net appreciation (depreciation) in the fair value of its
investments which consists of realized gains or losses and unrealized
appreciation (depreciation) on those investments.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates.
15
3.INVESTMENTS
- -------------
The following presents investments that represent 5 percent or more of the
Plan's net assets.
December 31
2000 1999
------------ ---------------
Constellation Energy Group Common
Stock Fund, 10,458,562 and
11,066,049 shares respectively $476,072,489* $326,103,117*
Interest Income Fund $117,485,120 $126,235,866
T. Rowe Price Equity Income Fund
2,903,619 and 3,430,936 shares
respectively $ 71,632,563 $ 85,127,910
T. Rowe Price Growth Stock Fund
2,986,869 and 2,306,220 shares
respectively $ 81,265,025 $ 76,733,563
- ---------------------
*Includes participant and non-participant-directed investments.
4.SECURITIES HELD IN TRUST
- --------------------------
Shown below are the shares, with respective fair value and cost, which were
held in trust in the Constellation Energy Common Stock Fund and the mutual funds
on December 31, 2000 and 1999.
SHARES HELD MARKET
IN TRUST VALUE COST
------------ ------------- -------------
CONSTELLATION ENERGY COMMON STOCK FUND
December 31, 2000 10,458,562 $471,659,544 $258,328,484
December 31, 1999 11,066,049 $320,936,562 $256,006,961
T. ROWE PRICE BALANCED FUND
December 31, 2000 601,194 $ 11,524,890 $ 10,353,190
December 31, 1999 585,540 $ 11,529,283 $ 9,642,835
T. ROWE PRICE EQUITY INCOME FUND
December 31, 2000 2,903,619 $ 71,632,290 $ 66,697,119
December 31, 1999 3,430,936 $ 85,121,511 $ 78,459,508
T. ROWE PRICE EQUITY INDEX 500 FUND
December 31, 2000 844,447 $ 29,977,886 $ 29,774,049
December 31, 1999 691,153 $ 27,331,992 $ 22,883,803
16
4.SECURITIES HELD IN TRUST (Continued)
- --------------------------------------
SHARES HELD MARKET
IN TRUST VALUE COST
------------ ------------- -------------
T. ROWE PRICE GROWTH STOCK FUND
December 31, 2000 2,986,869 $81,242,840 $88,071,408
December 31, 1999 2,306,220 $76,717,938 $66,590,043
T. ROWE PRICE INTERNATIONAL STOCK FUND
December 31, 2000 1,219,955 $17,713,743 $19,102,949
December 31, 1999 905,842 $17,238,179 $13,302,404
T. ROWE PRICE MID-CAP GROWTH FUND
December 31, 2000 699,572 $27,835,961 $26,567,685
December 31, 1999 375,553 $15,070,928 $12,679,897
T. ROWE PRICE NEW HORIZONS FUND
December 31, 2000 804,607 $19,222,053 $22,620,637
December 31, 1999 177,592 $ 4,889,109 $ 4,279,046
T. ROWE PRICE NEW INCOME FUND
December 31, 2000 232,856 $ 1,979,274 $ 2,007,224
December 31, 1999 264,652 $ 2,159,562 $ 2,337,749
T. ROWE PRICE SMALL CAP VALUE FUND
December 31, 2000 1,159,802 $22,198,617 $22,834,973
December 31, 1999 1,147,998 $20,227,722 $22,987,594
5. TAX STATUS
- -------------
The Company has received the latest favorable determination letter from the
Internal Revenue Service, dated May 2, 1997, with respect to the Plan as
restated effective June 30, 1995, qualifying the Plan as a stock bonus plan
under Section 401 of the Internal Revenue Code (Code) and an employee stock
ownership plan under Section 4975(e)(7) of the Code and exempting the Plan from
federal income tax under Section 501 of the Code.
17
6.RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
- -----------------------------------------------------
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500:
December 31,
2000 1999
Net assets available
for benefits per the
financial statements $904,792,865 $740,331,090
Amounts requested by
participant's for
withdrawals and
distributions at
December 31, but paid
in subsequent years (55,862) (246,010)
------------- -----------
Net assets available
for benefits
per the Form 5500 $904,737,003 $740,085,080
============= ============
The following is a reconciliation of withdrawals and distributions paid to
participants per the financial statements to the Form 5500:
Year ended
December 31, 2000
Withdrawals and distributions paid
to participants per the
financial statements 85,147,074
Add:
Amounts requested by participants for
withdrawals and distributions at
December 31, 2000 but paid in 2001 55,862
Less:
Amounts requested by participants for
withdrawals and distributions at
December 31, 1999 but paid in 2000 (246,010)
-----------
Withdrawals and distributions to
participants per the Form 5500 $84,956,926
===========
Withdrawals and distributions to participants recorded on the Form 5500 for
benefit claims include amounts that have been processed and approved for payment
prior to December 31 but not yet paid as of that date.
18
7.Current Corporate Strategy
- ----------------------------
On October 23, 2000, the Company announced three initiatives to advance
growth strategies. The first initiative is that we entered into an agreement
(the "Agreement") with an affiliate of The Goldman Sachs Group, Inc. ("Goldman
Sachs"). Under the terms of the Agreement, Goldman Sachs will acquire up to a
17.5% equity interest in the domestic merchant energy business, which will be
consolidated under a single holding company ("Holdco"). Goldman Sachs will also
acquire a ten-year warrant for up to 13% of Holdco's common stock (subject to
certain adjustments.) The warrant is exercisable six months after Holdco's
common stock becomes publicly available. Goldman Sachs is acquiring its interest
and the warrant in exchange for $250 million in cash (subject to adjustment in
certain instances) and certain assets related to the power marketing operation.
At closing, Goldman Sachs' existing services agreement with the Company's power
marketing operation will terminate.
The second initiative is a plan to separate the domestic merchant energy
business from the remaining businesses. The separation will create two
stand-alone, publicly traded energy companies. One will be a merchant energy
business engaged in wholesale power marketing and generation under the name
"Constellation Energy Group" after the separation. The other will be a regional
retail energy delivery and energy services company, BGE Corp., which will
include BGE, other nonregulated businesses, and an investment in Orion Power
Holdings, Inc.
As a result of the separation, shareholders will continue to own all of the
Company's current businesses through their ownership of the stock of the new
Constellation Energy Group and BGE Corp.
As a result of the separation, the Company intends to follow a
"split-and-clone" approach, retaining the existing Employee Savings Plan for BGE
Corp. and adopting a mirror plan for the new Constellation Energy Group.
Participants in both Plans will be allowed to retain their investment in both
companies stock. However, participants in the BGE Corp. Plan, will be restricted
from purchasing any additional new Constellation Energy Group stock, and
participants in the new Constellation Energy Group Plan will be restricted from
purchasing any additional BGE Corp. stock. No other Plan changes are anticipated
at this time.
19
7.Current Corporate Strategy (Continued)
- ----------------------------------------
The third initiative is a change in the Company's common stock dividend
policy effective April 2001. In a move closely aligned with the separation plan,
the annual divided was reduced to $.48 per share. After the separation, BGE
Corp. expects to pay initial annual dividends of $.48 per share. Constellation
Energy Group, as a growing merchant energy company, initially expects to
reinvest its earnings in order to fund its growth plans and not to pay a
dividend.
The closing of the transaction with Goldman Sachs and the separation are
subject to customary closing conditions and contingent upon obtaining regulatory
approvals and a Private Letter Ruling from the Internal Revenue Service
regarding certain tax matters. The transaction and separation are expected to be
completed by late 2001.
20
Constellation Energy Group (EIN 52-0280210)
T. Rowe Price, Trustee - Constellation Energy Group, Inc.,
Employee Savings Plan
Schedule H - Financial Information
December 31, 2000
Current Maturity
Identity of Issue Description of Asset Cost Value Date
*
Group Annuity Contract with Insurance Company Guaranteed
Allstate Life Interest Contract -
Company (GA-6240) Guaranteed Interest - 7.29% $3,226,155 $3,226,155 10/15/2004
Group Annuity Contract with Insurance Company Guaranteed
Bayerische Landesbnk Interest Contract -
Company (98-005) Guaranteed Interest - 5.95% 3,053,160 3,053,160 9/13/2002
Group Annuity Contract with Insurance Company Guaranteed
Bayerische Landesbnk Interest Contract -
Company (98-005-B) Guaranteed Interest - 5.92% 3,091,226 3,091,226 6/25/2003
Group Annuity Contract with Insurance Company Guaranteed
GE Life & Annuity Interest Contract -
(GS-2987) Guaranteed Interest - 7.25% 7,789,251 7,789,251 4/1/2002
Group Annuity Contract with Insurance Company Guaranteed
GE Life & Annuity Interest Contract -
(GS-3169) Guaranteed Interest - 5.79% 2,278,001 2,278,001 12/15/2002
Group Annuity Contract with Insurance Company Guaranteed
John Hancock Life Interest Contract -
(GAC-14474) Guaranteed Interest - 5.69% 4,455,297 4,455,297 8/15/2003
Group Annuity Contract with Insurance Company Guaranteed
John Hancock Life Interest Contract -
(GAC-8444) Guaranteed Interest - 5.81% 6,529,438 6,529,438 3/15/2001
Group Annuity Contract with Insurance Company Guaranteed
Metropolitan Life Interest Contract -
(GAC-25037) Guaranteed Interest - 5.57% 3,327,162 3,327,162 10/15/2003
Group Annuity Contract with Insurance Company Guaranteed
Monumental Life Interest Contract - 50% 2/15/2003
(MDA00008FR) Guaranteed Interest - 5.71% 4,466,127 4,466,127 Balance 4/15/2003
Group Annuity Contract with Insurance Company Guaranteed
Monumental Life Interest Contract - 50% 4/15/2002
(BDA00729FR) Guaranteed Interest - 6.82% 4,409,520 4,409,520 Balance 6/14/2002
Group Annuity Contract with Insurance Company Guaranteed
New York Life Interest Contract -
(GA-31015) Guaranteed Interest - 6.78% 3,019,946 3,019,946 4/15/2004
Group Annuity Contract with Insurance Company Guaranteed
New York Life Interest Contract -
(GA-31015-002) Guaranteed Interest - 6.85% 2,723,641 2,723,641 9/15/2004
Group Annuity Contract with Insurance Company Guaranteed
New York Life Interest Contract -
(GA-31015-003) Guaranteed Interest - 6.97% 2,027,134 2,027,134 3/17/2005
(Continued on next page)
* Current Value of the guaranteed interest contracts equal contract value.
21
Constellation Energy Group (EIN 52-0280210)
T. Rowe Price, Trustee - Constellation Energy Group, Inc.,
Employee Savings Plan
Schedule H - Financial Information
December 31, 2000
Current Maturity
Identity of Issue Description of Asset Cost Value Date
*
Group Annuity Contract with Insurance Company Guaranteed
Pacific Mutual Life Interest Contract -
(G-26263.01) Guaranteed Interest - 7.31% 8,167,545 8,167,545 6/14/2001
Group Annuity Contract with Insurance Company Guaranteed
Protective Life Interest Contract -
(GA-1348) Guaranteed Interest - 6.77% 2,995,437 2,995,437 1/15/2002
Group Annuity Contract with Insurance Company Guaranteed
Protective Life Interest Contract -
(GA-1391) Guaranteed Interest - 7.31% 3,888,449 3,888,449 4/15/2002
Group Annuity Contract with Insurance Company Guaranteed
Protective Life Interest Contract -
(GA-1662) Guaranteed Interest - 7.80% 2,007,009 2,007,009 12/15/2004
Group Annuity Contract with Insurance Company Guaranteed
SAFECO Life Interest Contract - $2.1 Mil 11/19/2001
(LP1055917-01-02) Guaranteed Interest - 7.00% 8,419,332 8,419,332 Balance 12/19/2001
Group Annuity Contract with Insurance Company Guaranteed
SAFECO Life Interest Contract -
(LP1055917-03) Guaranteed Interest - 6.85% 4,354,055 4,354,055 9/18/2001
Group Annuity Contract with Insurance Company Guaranteed
Security Life Denver Interest Contract -
(FA-0494) Guaranteed Interest - 6.82% 3,243,295 3,243,295 2/14/2002
Group Annuity Contract with Insurance Company Guaranteed
Sun America Life Interest Contract -
(4873) Guaranteed Interest - 5.98% 2,204,567 2,204,567 1/15/2004
Group Annuity Contract with Insurance Company Guaranteed
Sun America Life Interest Contract -
(4930) Guaranteed Interest - 6.85% 2,723,146 2,723,146 6/15/2004
Investment Contract with Synthetic Investment Agreement
State Street Bank and Trust Co. Interest Contract
(98255) Variable Interest - 5.984% initially 20,390,204 20,390,204 None
Travelers Life Insurance Company Guaranteed
(GR-17825) Interest Contract -
Guaranteed Interest - 6.78% 5,009,895 5,009,895 9/20/2005
---------- -----------
$113,798,992 $113,798,992
(Continued on next page)
* Current Value of the guaranteed interest contracts equal contract value.
22
Constellation Energy Group (EIN 52-0280210)
T. Rowe Price, Trustee - Constellation Energy Group, Inc.,
Employee Savings Plan
Schedule H - Financial Information
December 31, 2000
Current Maturity
Identity of Issue Description of Asset Cost Value Date
*
** Constellation Energy Group, Inc. Common Stock - no par 258,328,484 471,659,544 -
T. Rowe Price Balanced Fund Mutual Fund 10,353,190 11,524,890 -
T. Rowe Price Equity Income Fund Mutual Fund 66,697,119 71,632,290 -
T. Rowe Price Equity Index 500 Fund Mutual Fund 29,774,049 29,977,886 -
T. Rowe Price Growth Stock Fund Mutual Fund 88,071,408 81,242,840 -
T. Rowe Price International Stock Fund Mutual Fund 19,102,949 17,713,743 -
T. Rowe Price Mid-Cap Growth Fund Mutual Fund 26,567,685 27,835,961 -
T. Rowe Price New Horizons Fund Mutual Fund 22,620,637 19,222,053 -
T. Rowe Price New Income Fund Mutual Fund 2,007,224 1,979,274 -
T. Rowe Price Small Cap Value Fund Mutual Fund 22,834,973 22,198,617 -
** Loan Fund (Interest) Participant Loan Fund - 27,822,772 -
Interest Range 8.00 - 10.50%
T. Rowe Price Prime Reserve Fund Money Market Mutual Fund 3,300,194 3,300,194 -
T. Rowe Price Short Term Money Market Bank Account 354,974 354,974 -
Settlement Account
T. Rowe Price Short Term Money Market Bank Account 55,862 55,862 -
Distribution Account
------------ ------------
Total $663,867,740 $900,319,892
============ ============
* Current Value of the guaranteed interest contracts equal contract value.
** Parties-in-Interest
23