Shortbus begs to differ with BGE parent Constellation Energy's report of "adjusted" earnings of $1.82 per share for the second quarter. This figure is supposed to reflect ongoing profits and doesn't include irregular, extraordinary costs that distort the future picture.

However, as Shortbus points out, irregular and extraordinary are absolutely routine at Constellation Energy Group.

In other words, the non-GAAP [adjusted] earnings omit non-recurring charges in order to provide a picture of "normal" operations. In Constellation's case, the exception is the rule and a quarter without extraordinary charges would be an anomaly. Clearly, these figures are used being used to justify senior management's looting of the treasury and to deceive unwary investors.

[This is Jay. I don't know for a fact that the pay of Mayo Shattuck and other execs is tied to non-GAAP measures. I've asked CEG for comment.]

On the other hand, perhaps I'm being narrow-minded with respect to Constellation's accounting practices. Since I have a current $128 Constellation electric bill in front of me, I can't think of a better opportunity to practice some of Shattuck's "outside the box" methodology. Thus, I see no reason not to submit $4.74, which is a 27 time reduction that represents, in the judgement of Shortbus management, a truer picture of my power consumption.

UPDATE: CEG spokesman Rob Gould refers us to a regulatory document that talks about why the company reports adjusted earnings per share. He doesn't directly address the question of whether management is paid at least partly based on adjusted results, so presumably the answer is yes. The excerpt below implies that they are, saying, "adjusted EPS is an appropriate measure for senior executives..."

In the attached link, go to page 28…..it lays out in the middle of the page………”Adjusted EPS is publicly reported quarterly by CEG. We believe this view of adjusted EPS reflects results that are comparable among periods since it excludes the impact of items such as workforce reduction costs or gains and losses on the sale of assets, which may recur occasionally, but tend to be irregular as to timing. We believe this view of adjusted EPS is consistent with how our investors view our business, and that adjusted EPS is an appropriate measure for senior executives given their company-wide responsibility.”