Good morning and welcome to the Constellation Energy Group’s fourth quarter and full year 2009 earnings conference call. (Operator Instructions) I will now turn the meeting over to the Executive Director of Investor Relations for Constellation, Carim Khouzami; sir, you may begin.

Welcome to our 2009 year end earnings call. We appreciate you being with us this morning. On slide two, before we begin our presentation, let me remind you that our comments today will include forward-looking statements which are subject to certain risks and uncertainties. For a complete discussion of these risks, we encourage you to read our documents on file with the SEC. Our presentation is being webcast and the slides are available on our website, which you can access at www.constellation.com under Investor Relations. On slide three, you will notice we will use non-GAAP financial measures in this presentation to help you understand our operating performance. We have attached an appendix to the charts on the website, reconciling non-GAAP measures to GAAP measures. With that, I would like to turn the time over to Mayo Shattuck, Chairman, President, and CEO of Constellation Energy.

Thank you Carim, good morning everyone and thank you for joining us today. This morning we reported full year 2009 GAAP earnings of $22.19 per share, reflecting the gain realized with the close of the EDF joint venture. On an adjusted basis were we to back out such one-time items, Constellation earned $3.36 per share consistent with our guidance of $3.25 to $3.45. Despite a challenging market environment, 2009 was a strong year for Constellation Energy. Through our active risk management and hedging program we adjusted our portfolio to address demand destruction and depressed commodity prices insulating the company’s results. Over the course of the year we completed the strategic initiatives announced in 2009 to de-risk and strengthen the company. We successfully closed our nuclear joint venture with EDF and divested our non core trading and marketing businesses. We more than doubled our net available liquidity with a focus on managing collateral exposure and entering into new liquidity facilities specifically tailored to our ongoing businesses. During the year we retired approximately $3.7 billion of outstanding debt and increased our cash position. Importantly three rating agencies reaffirmed Constellation’s investment grade rating. We completed these initiatives in less time and at a lower cost than originally anticipated. All of our core operating businesses performed well in 2009. Our generation business operated safety and efficiently throughout the year. We broke numerous records at our nuclear plants and completed major non nuclear generation projects. Our customer supply business locked in strong margins reflecting a shift in the way products are priced and collateral needs managed. At BGE we completed a number of efficiency programs such as our Smart Grid pilot aimed at providing customers the tools to better monitor and manage their energy usage. These projects are integral to meeting the empower Maryland goal…

Thank you Mayo, and good morning everyone. Turning to slide 11, I’ll review our financials for 2009. As Mayo mentioned full year 2009 adjusted earnings were $3.36 per share. Adjusting for $18.83 of special items realized during the year, our 2009 GAAP results were $22.19 per share. These special items included the close of the EDF nuclear joint venture, and this gain was partially offset by losses from the sale of our non core businesses, impairment losses, and the BGE customer credit. Details of all the special items can be found in the additional modeling section on slide 18. BGE contributed adjusted earnings of $0.80 per share in 2009 as compared to $0.85 in 2008 with the year over year decline driven primarily by share dilution. The merchant business reported adjusted earnings of $2.58 per share in 2009, down $0.11 as compared to adjusted earnings of $2.69 in 2008. Its important to note that year over year comparisons for the merchant business are difficult given the significant changes made during 2008 and 2009 including the reduction in risk capital deployed to support our marketing and trading operations, and the sale of our non core businesses. The net impact of these changes contributed a year over year positive variance of $0.09 per share. Within the ongoing merchant business our customer supply operation declined $0.19 as lower volumes were offset in part by higher margins on new business. Our generation operations favorable timing and duration of outages and higher hedge margins led to a $0.29 year over year improvement. In addition share dilution resulted in a year over year negative variance of $0.30 per share. Turning to slide 12, we’ll discuss overall liquidity, this past year Constellation’s net available liquidity balance shifted from an area of concern to one of strength. Our…

Before Q&A let me conclude with a few thoughts, during 2009 we successfully completed our stated objectives and strengthened Constellation. After divesting our non core businesses Constellation now consists of a strong regulated utility and a merchant business that has an attractive set of physical assets coupled with a nationally competitive retail and wholesale load serving business. Our balance sheet is strong and stable, with modest merchant debt and sizable cash balances. As asset prices decline we are poised to grow our generation fleet and balance our competitive footprint. The company is well positioned for continued growth and management is focused on delivering shareholder returns in the years to come. And with that I will turn it over for questions.

(Operator Instructions) Your first question comes from the line of Greg Gordon – Morgan Stanley Greg Gordon – Morgan Stanley : Couple of questions, the first one is when we look at the success you’ve had in [signing] up margins at the levels articulated in your release, what’s the average duration of those contracts.

I think your question was the average duration of the contracts roughly 18 months. Greg Gordon – Morgan Stanley : The second question is not really directly related to quarterly or annual earnings, but when you talk about the level of cash that you are committed to keeping on the balance sheet, what are we waiting for or what could change in terms of your collateral needs going forward that might cause you to reevaluate that. For instance if we get a better [codification] of the rules from the CFC, would that give you more clarity on whether that might be able to use other means to back up your business and use less cash.

With respect to the longer term working capital and cash requirements of the business as you rightly point out the CFTC proceedings that are looking at this very issue are important and significantly influence how we think about the levels of cash required to the business and this is a topic that we’ll cover in some detail at our investor day on March 29. Jim Connoughton will be speaking to this and other regulatory topics. In terms of the overall balances right now, we are keeping roughly a billion dollars on the balance sheet for the working capital needs of the business. To the extent we’re successful in acquiring generation we’d expect this number to come down. As far as ongoing operations further out the curve a working capital balance at the merchant segment or cash to support that of somewhere between $250 million to $500 million is probably the longer term the right level.

And I might add that we continue to work operationally on ways to reduce the collateral requirements of the business so every day we’ve got teams working on new ideas whether its new facilities on one side or through customer relationships or exchanges, etc., working on reducing the collateral requirements of the business. So this is pretty much of a daily exercise here but we are obviously working on the legislative issues, potential regulatory issues on that front and I think we will probably have a more fulsome view on March 29 when we all get together on that.

Your next question comes from the line of Angie Storozynski - Macquarie Research

Two questions, first about the competitive retail, you mentioned potential cost efficiencies in this business, any chance you could quantify them and also are they included already in the guidance for 2010 or 2011.

So the cost efficiencies, I’m not sure that we can definitively quantify them at this point. I do think as we have our investor day there’ll probably be a little bit more clarity in our segment reporting as we’ve talked about. So I think that’s all we can say at this point.

And the second question is about your hedge disclosure, slide 29, I think you managed to hedge your coal at significantly lower prices than what we saw during the third quarter, at the end of third quarter earnings disclosure and how did you manage to do that. It seems like you have a higher percentage of hedges but the prices are significantly lower.

With respect to the coal hedging as we’ve spoken before we, what is unique about our business is our ability to actively manage our portfolio. Its what we view as the key competitive advantage of our business. And with respect to coal, we’ve been very actively working with our coal suppliers to acknowledge the fact that we’ve had lower than expected burns, that our coal piles are higher than anticipated and we’ve been pushing forward deliveries and locking in lower prices on our hedges.

But did you unwind any of the hedges that you had in the past because it seems like the, especially for 2010 and 2011 you had significant percentage of hedges of significantly higher prices than the ones that you are showing now.

With respect to that active management the ability to move forward or extend at higher volumes and lower prices is certainly within the context of that active risk management.

And then about the basis differential, the premium versus PJM West, you were mentioning a BGE zone had the historically about 10% to 20% premium, do you think that this is sustainable given the completion or upcoming completion of the Trail transmission line.

I would say that forward prices consider the impact of Trail coming into the zone. This is in southwest [Mack] a very transmission constrained region in terms of getting power into this load pocket so I think our forwards do consider the impact of Trail and holding at that, the level we previously disclosed.

Your next question comes from the line of Gregg Orrill – Barclays Capital Gregg Orrill – Barclays Capital : Just coming back to the billion dollars of excess cash and your efforts to redeploy it, what are you seeing out there right now in terms of asset prices and what’s your sense of the timing to deploy that.

Well our expected timing as we stated earlier is next 12 to 24 months. We’re not going to press on the market in any kind of unnatural way but obviously we’re looking at all the possibilities that we think are available in the markets in which we have these load obligations. I would say there are some that are literally in auction format now, some that are in the zone of being likely troubled assets and then there’s the group of assets that I think are, would simply be opportunistic that we look at as being desirable but may not necessarily be on the market. So we’ve got a pretty comprehensive process looking at these and we would expect that particularly those that are pressed by financial obligations in the course of the next 12 to 24 months that certainly we’d be looking hard at and attempting to participate in.

Your next question comes from the line of Ali Agha – SunTrust Robinson Humphrey Ali Agha – SunTrust Robinson Humphrey : When I look at your EBITDA assumption for your generation business as you model it out currently, I compare that to the last data point you’ve given us at the end of the third quarter it appears to be a significant decline in total expenses, your assumptions this time around versus last time around. Can you tell us what’s causing that and how sustainable you deem those expense reductions will be.

To your point there has been a decline in operating expenses. I would say as we’ve moved forward with the efforts to redefine the segments of the business we’ve been looking more, in more detailed fashion at the services supporting the level of business and we’ve adjusted the internal score carding if you will of how we account for operating expenses at the generation fleet and shifted those expenses to other parts of the business. Ali Agha – SunTrust Robinson Humphrey : Just to be clear, what we’re going to find is expenses as a whole have not come down that significantly but the generation allocation has come down, is that what you’re saying.

Yes, the generation allocation has come down to more accurately reflect the services and support that underpin that business. Ali Agha – SunTrust Robinson Humphrey : And second question as you’re looking at [inaudible] more generating assets in the future, give us a sense of what your preference would be from a fuel, is it primarily coal and gas or nuclear, how would you prioritize the fuel side of it.

I think we have an open mind on that, obviously we have a new nuclear initiative that’s probably more likely to yield results than how we perceive the current state of existing plant. There hasn’t been a lot of movement in that arena in the last several years and we don’t really expect there to be in terms of companies interested in divesting. Obviously gas plants are very interest to us. I think they probably match our load requirements to a better degree than perhaps some other types. We are looking at renewables from a development standpoint particularly in Maryland and we’ve announced some moves in that respect. So I think that although we keep an open mind, I think region by region we have a slightly different hope with respect to the type of generation we have. We probably prefer to keep that to ourselves, but we’re, we do have a plan that matches particular types of generation or optimizes that to the kind of load we have in that region.

Your next question comes from the line of Paul Fremont - Jefferies & Company Paul Fremont - Jefferies & Company : Just to follow-up on Ali’s question, should we then assume that the shift in expense would be primarily towards the retail supply business.

That’s correct, it is effectively the corporate overhead and hedging services that are driving the reallocation of expenses. This is a topic that we’ll cover in some detail at the March investor day. And it’s a shift not a reduction. Paul Fremont - Jefferies & Company : And then the second question that I have is you’ve given sort of what you think are the normalized retail and wholesale supply margins and I assume the contribution historically has been about 50/50 from each of those businesses.

If you turn to slide 33 it will show in the additional modeling, it will show the breakdown of volume served at the retail and wholesale business and if you look at the business historically its been more heavily weighted to wholesale volumes. As we’ve realigned the sizing of that business its, and margins are attractive on the retail side, its shifted to more of a 50/50 business. Paul Fremont - Jefferies & Company : For the 2010 and 2011 guidance can you tell us with respect to sort of that normalized range whether the margins are, where those margins are for what you’ve assumed for 2010 and 2011.

We’ve modeled margins consistent with the $5 to $7 range that we’ve disclosed today. Paul Fremont - Jefferies & Company : So within the normalized ranges for both the retail and the wholesale businesses.

Yes, that’s correct.

Your next question comes from the line of Reza Hatefi – Decade Capital Reza Hatefi – Decade Capital : I guess you mentioned making investments over the next 12 to 24 months, billion dollars or so, if you’re unable to find enough attractive investments would a special dividend like a billion dollars is $5, would a special dividend of that kind be a possibility.

I think its fair to say that we would consider some form of return to shareholders if we were unsuccessful and of which that would be one option but I am anticipating that we’re going to find opportunities to deploy that capital during that timeframe. Reza Hatefi – Decade Capital : And I guess looking at slides 14, even after using a billion dollars of cash you’re still left with equity ratio that’s 65% to 70%, are you going to further use that balance sheet strength to add shareholder value or you’re comfortable staying in that range for the near to medium term.

I’d say with respect to that you rightfully point out that we have a very low debt to total cap ratio really reflecting the value attributed to the nuclear plants that, after the EDF transaction you see reflected on the balance sheet as we incorporated the current market value of those assets. With respect to the agencies, we find them far more focused on FFO to debt ratio and with respect to where we find ourselves clearly we’re at the upper end of their expectations for BBB in 2010 and 2011 and 2012 as we pointed out. We and others in the industry as hedges roll off face some headwinds on that FFO to debt side, but importantly we see ours improving back into that 30% range in 2013 and 2014. We will be as we contemplate asset acquisitions, working with the agencies to ascertain if there are opportunities to increase leverage as we deploy the billion and if we can use debt to help finance some of those opportunities, we’ll certainly consider it, but working very closely with the agencies and consistent with our desire to achieve that BBB stable rating.

Your next question comes from the line of Paul Patterson – Glenrock Associates Paul Patterson – Glenrock Associates : I just did notice on the balance sheet quarter over quarter the unamortized energy contracts seem to have gone up a bit, I was wondering what was causing that and how we should see that unwind.

As you point out they have gone up, really that’s the reflection of the PPA with the JV. So if you think about that $350 million of net present value, that’s accounting for how that, as that comes in over the next two years, that will amortize until it gets to zero.

Your next question comes from the line of [Vadula Murdy] – CVP US [Vadula Murdy] – CVP US : Wondering should asset opportunities not materialize on an economic basis that you’d be thinking about today, should we expect you to consider building regeneration in those markets to match up the load.

I don't think that that’s going to be something that’s forced on us. I think that our development opportunity is really focused on smaller renewable projects particularly in Maryland as well as whatever the outcome is on the new nuclear side and how much capital is deployed there. So I think that the idea would be that we are in a depressed commodity cycle, that the value of these assets some of which are completed and operating for many years, some of which are not even completed yet, that there will be sufficient opportunities in that realm for us to participate.

To Mayo’s point on the renewable side one of the real opportunities that we see perspectively is the ability to work with our customers on the retail side to participate and partner with them on renewables like roof top solar, it adds to customers stickiness, it deepens the relationship and we view that as an important objective for our business as we move forward. [Vadula Murdy] – CVP US : And as a follow-up, wondering if the timeliness of being able to match up assets owed are mismatched will you continue to operate through contracts and maintain that mismatch until things get equalized or would you consider in certain markets simply letting the retail book mature and just run itself off.

No I think that in fact I think overall the business will probably be somewhat mismatched going down into the future. This is an unusual opportunity because its not just a sort of collateral efficient opportunity for us to buy the physical assets but those physical assets in theory should be priced quite a bit lower in this part of the market cycle then others. So I think we’re marrying two concepts together that make the business more efficient and more profitable. It is not that we are uncomfortable with our ability to match the load in the markets that exist today which we’ve been doing for the last 10 or 12 years, so its really, its just a process that we’ve gone through to determine how to optimize the capital we deploy in that business and return higher returns.

Your final question comes from the line of Michael Goldenberg – Luminous Management Michael Goldenberg – Luminous Management : I just had a couple of questions about your financial statements, I’m trying to understand this [amortization] back out one-time, which line item is it listed in your income statement.

I think that’s something we can speak to you offline, we can walk through the financial statements. Michael Goldenberg – Luminous Management : Then as far as the UniStar loss being backed out is that something that you plan to do going forward 2010 and 2011 and can you give us an idea of what the cost of that JV are going to be in the meantime while you are developing the projects.

Right now given that we have not committed to moving forward with Calvert Cliffs 3 and as Mayo pointed out the DOE loan guarantee is a key hurdle in that decision to move forward with Calvert 3 we only have UniStar investments in our business plan model through 2010. To the extent that we’re successful in achieving that DOE loan guarantee, and we can satisfy a number of other objectives in the course of finalizing that project, moving forward we would then move that from a, how we’re treating it now is really a special item into the ongoing guidance of the company and into the ongoing operating results. The drag in 2010 from the UniStar joint venture is roughly $0.10 to $0.15.