-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FMOKPUyidbc0Jcr48GZ3C6aiwNc0xXRgsS57kFhlD+iQkjWAfk+R17o/vUY5/H0E dgB7oL3yaPaDjAuibUFaTw== 0000009466-96-000009.txt : 19960701 0000009466-96-000009.hdr.sgml : 19960701 ACCESSION NUMBER: 0000009466-96-000009 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BALTIMORE GAS & ELECTRIC CO CENTRAL INDEX KEY: 0000009466 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 520280210 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01910 FILM NUMBER: 96588758 BUSINESS ADDRESS: STREET 1: GAS & ELECTRIC BLDG STREET 2: CHARLES CTR CITY: BALTIMORE STATE: MD ZIP: 21201 BUSINESS PHONE: 4107835920 11-K 1 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1995 Commission file number 1-1910 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Baltimore Gas and Electric Company 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: Baltimore Gas and Electric Company Gas and Electric Building, Charles Center 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 plans) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. BALTIMORE GAS AND ELECTRIC COMPANY EMPLOYEE SAVINGS PLAN _____________________________________ Date ______________________ _____________________________________ Diane L. Featherstone Plan Administrator - 2 - REPORT OF INDEPENDENT ACCOUNTANTS To the Plan Administrator of the Baltimore Gas and Electric Company Employee Savings Plan We have audited the accompanying statements of net assets available for benefits of the Baltimore Gas and Electric Company Employee Savings Plan as of December 31, 1995 and 1994 and the related statements of changes in net assets available for benefits 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 generally accepted auditing standards. 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 as of December 31, 1995 and 1994, and the changes in net assets available for benefits for the years then ended in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions for the year ended December 31, 1995 are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and regulations for Reporting and Disclosures 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 of each fund. The supplemental schedules 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. Coopers & Lybrand L.L.P. Baltimore, Maryland June 25, 1996 - 3 - CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in the Prospectuses prepared in accordance with the requirements of Form S-8 (File Nos. 33-56084 and 33-59545) and Form S-3 (File Nos. 33-61297,33-57658, 33-49801, 33-33559 and 33-45260) and the Prospectus of Constellation Energy Corporation prepared in accordance with the requirements of Form S-4 (File No. 33-64799) of our report dated June 25, 1996 accompanying the financial statements and supplemental schedules of the Baltimore Gas and Electric Company Employee Savings Plan as of December 31, 1995 and 1994 and for the years then ended, included in this Annual Report on Form 11-K of Baltimore Gas and Electric Company. Coopers & Lybrand L.L.P. Baltimore, Maryland June 27, 1996 - 4 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Net Assets Available for Benefits December 31, 1995
Investment Funds BGE Common Interest Income Mutual Total Stock Fund Fund Funds Loan Fund ----------- ----------- -------------- -------------- -------------- Assets Value of securities held in trust $364,272,880 $304,105,431 $0 $60,167,449 $0 Value of guaranteed investment contracts 123,879,233 0 123,879,233 0 0 Loans outstanding to plan participants 26,097,091 0 0 0 26,097,091 Short-term investments 2,261,069 109,889 2,134,696 16,484 0 Accrued dividends receivable 4,136,819 4,136,819 0 0 0 Accrued interest receivable 1,093 0 1,093 0 0 Accounts receivable 216,732 215,716 928 0 88 -------------- -------------- -------------- -------------- -------------- Total 520,864,917 308,567,855 126,015,950 60,183,933 26,097,179 -------------- -------------- -------------- -------------- -------------- Liabilities Accounts payable 0 0 0 0 0 -------------- -------------- -------------- -------------- -------------- Total 0 0 0 0 0 -------------- -------------- -------------- -------------- -------------- Net assets available for benefits $520,864,917 $308,567,855 $126,015,950 $60,183,933 $26,097,179 ============ ============ ============ ============ =============
The accompanying notes are an integral part of the financials. (continued next page) - 5 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Mutual Funds Included in Assets Available for Benefits December 31, 1995 (Continued)
Mutual Funds Total T. Rowe Price T. Rowe Price T. Rowe Price T. Rowe Price T. Rowe Price Mutual Balanced Equity Growth Small Cap International Funds Fund Income Fund Stock Fund Stock Fund Stock Fund -------------- -------------- -------------- -------------- -------------- -------------- Assets Value of securities held in trust $60,167,449 $1,247,428 $37,622,250 $15,610,682 $3,977,965 $1,709,124 Value of guaranteed investment contract 0 0 0 0 0 0 Loans outstanding to plan participants 0 0 0 0 0 0 Short-term investments 16,484 0 11,328 3,817 1,339 0 Accrued dividends receivable 0 0 0 0 0 0 Accrued interest receivable 0 0 0 0 0 0 Accounts receivable 0 0 0 0 0 0 -------------- -------------- -------------- -------------- -------------- -------------- Total 60,183,933 1,247,428 37,633,578 15,614,499 3,979,304 1,709,124 -------------- -------------- -------------- -------------- -------------- -------------- Liabilities Accounts payable 0 0 0 0 0 0 -------------- -------------- -------------- -------------- -------------- -------------- Total 0 0 0 0 0 0 -------------- -------------- -------------- -------------- -------------- -------------- Net assets available for benefits $60,183,933 $1,247,428 $37,633,578 $15,614,499 $3,979,304 $1,709,124 ============ ============ ============ ============ ============= ============
The accompanying notes are an integral part of the financial statements. - 6 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Net Assets Available for Benefits December 31, 1994
Investment Funds Vanguard/ BGE Common Fixed Morgan Total Stock Fund Rate Fund Growth Fund Windsor Fund Loan Fund ---------- ---------- ---------- --------- --------- --------- Assets Value of securities held in trust (Note 3) $263,550,725 $229,768,037 $0 $8,661,727 $25,120,961 $0 Value of guaranteed investment contracts 119,090,095 0 119,090,095 0 0 0 Loans outstanding to plan participants 23,878,730 0 0 0 0 23,878,730 Short-term investments 2,925,088 1,918,785 601,888 114,096 290,319 0 Accrued dividends receivable 3,929,198 3,929,198 0 0 0 0 Accrued interest receivable 9,053 5,102 3,302 137 512 0 Accounts receivable 2,967,355 158,791 1,389,384 134,521 183,707 1,100,952 ---------- ----------- ---------- --------- --------- --------- Total 416,350,244 235,779,913 121,084,669 8,910,481 25,595,499 24,979,682 ---------- ----------- --------- -------- ----------- --------- Liabilities Accounts payable 6,768,146 1,287,566 838,234 288,447 2,099,636 2,254,263 ---------- ----------- ----------- --------- --------- --------- Total 6,768,146 1,287,566 838,234 288,447 2,099,636 2,254,263 ---------- ----------- ---------- --------- --------- --------- Net assets available for benefits $409,582,098 $234,492,347 $120,246,435 $8,622,034 $23,495,863 $22,725,419 ========== =========== ========== ========= ========= =========
The accompanying notes are an integral part of the financial statements. - 7 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1995
Investment Funds BGE Common Interest Income Mutual Total Stock Fund Fund Funds Loan Fund -------------- -------------- -------------- -------------- -------------- Additions and Net Investment Activity - ------------------- Contributions: Participant eligible pay contributions $26,079,146 $9,041,608 $9,875,045 $7,162,493 $0 Participant rollover contributions 616,695 37,346 134,922 444,427 0 Employer matching contributions Company stock 8,680,502 8,680,502 0 0 0 -------------- -------------- -------------- -------------- -------------- 35,376,343 17,759,456 10,009,967 7,606,920 0 -------------- -------------- -------------- -------------- -------------- Income: Dividends Stock 18,088,315 13,016,962 0 5,071,353 0 Employee stock account 2,795,421 2,795,421 0 0 0 Interest 7,583,637 75,414 7,505,395 2,828 0 Interest on participant loans 1,958,587 0 0 0 1,958,587 -------------- -------------- -------------- -------------- -------------- 30,425,960 15,887,797 7,505,395 5,074,181 1,958,587 -------------- -------------- -------------- -------------- -------------- Participant loan repayments 0 4,852,461 3,265,736 1,562,918 (9,681,115) Participant interfund transfers (net) 0 (5,572,246) (1,021,356) 6,593,602 0
The accompanying notes are an integral part of the financials. (continued on next page) - 8 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Changes in Mutual Funds included in Net Assets Available for Benefits For the Year Ended December 31, 1995
Total T. Rowe Price T. Rowe Price T. Rowe Price T. Rowe Price T. Rowe Price Mutual Balanced Equity Growth Small Cap International Funds Fund Income Fund Stock Fund Value Fund Stock Fund ------------ -------------- -------------- -------------- -------------- -------------- Additions and Net Investment Activity - ------------------- Contributions: Participant eligible pay contributions $7,162,493 $132,251 $4,118,307 $2,276,163 $394,511 $241,261 Participant rollover contributions 444,427 89,484 93,638 139,108 54,529 67,668 -------------- ------------ ---------- -------------- -------------- -------------- 7,606,920 221,735 4,211,945 2,415,271 449,040 308,929 -------------- ------------ -------- -------------- -------------- -------------- Income: Dividends 5,071,353 22,759 3,707,069 1,114,438 177,889 49,198 Interest 2,828 0 1,462 1,366 0 0 -------------- -------------- -------------- -------------- -------------- ------------- 5,074,181 22,759 3,708,531 1,115,804 177,889 49,198 -------------- -------------- -------------- -------------- -------------- -------------- Participant loan repayments 1,562,918 27,796 954,332 444,336 86,771 49,683 Participant interfund transfers (net) 6,593,602 966,438 (549,677) 1,498,202 3,358,183 1,320,456
The accompanying notes are an integral part of the financials. (continued on next page) - 9 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1995 (Continued)
Investment Funds BGE Common Interest Income Mutual Total Stock Fund Fund Funds Loan Fund -------------- -------------- -------------- -------------- -------------- Additions and Net Investment Activity (Continued) - -------------------- Appreciation of investments: Net appreciation of common stock $68,094,218 $68,094,218 $0 $0 $0 Net appreciation of mutual funds 10,933,250 0 0 10,933,250 0 -------------- -------------- -------------- -------------- -------------- 79,027,468 68,064,218 0 10,933,250 0 -------------- -------------- -------------- -------------- -------------- Total additions and net investment activity 144,829,771 101,021,686 19,759,742 31,770,871 (7,722,528) -------------- -------------- -------------- -------------- -------------- Distributions: Withdrawal and distribution payments to participants (33,546,952) (20,540,987) (10,313,506) (1,975,160) (717,299) Loans to participants 0 (6,405,191) (3,676,721) (1,729,675) 11,811,587 -------------- -------------- -------------- -------------- -------------- Total Distributions (33,546,952) (26,946,178) (13,990,227) (3,704,835) 11,094,288 -------------- -------------- -------------- -------------- -------------- Change in net assets 111,282,819 74,075,508 5,769,515 28,066,036 3,371,760 Net assets available for benefits, beginning of year 409,582,098 234,492,347 120,246,435 32,117,897 22,725,419 -------------- -------------- -------------- -------------- -------------- Net assets available for benefits, end of year $520,864,917 $308,567,855 $126,015,950 $60,183,933 $26,097,179 ============ ============ ============ ============ ============
The accompanying notes are an integral part of the financial statements. - 10 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Changes in Mutual Funds included in Net Assets Available for Benefits For the Year Ended December 31, 1995 (Continued)
Total T. Rowe Price T. Rowe Price T. Rowe Price T. Rowe Price T. Rowe Price Mutual Balanced Equity Growth Small Cap International Funds Fund Income Fund Stock Fund Value Fund Stock Fund -------------- -------------- -------------- -------------- -------------- -------------- Additions and Net Investment Activity (Continued) - ------------------- Appreciation (depreciation) of mutual funds Net appreciation (depreciation) of mutual funds 10,933,250 23,735 8,402,164 2,550,812 (49,520) 6,059 -------------- -------------- -------------- -------------- -------------- -------------- 10,933,250 23,735 8,402,164 2,550,812 (49,520) 6,059 -------------- -------------- -------------- -------------- -------------- -------------- Total additions and net investment activity 31,770,871 1,262,463 16,727,295 8,024,425 4,022,363 1,734,325 -------------- -------------- -------------- -------------- -------------- -------------- Distributions: Withdrawal and distribution payments to participants (1,975,160) (3,704) (1,507,665) (442,889) (11,701) (9,201) Loans to participants (1,729,675) (11,331) (1,081,915) (589,071) (31,358) (16,000) -------------- -------------- -------------- -------------- -------------- -------------- Total Distributions (3,704,835) (15,035) (2,589,580) (1,031,960) (43,059) (25,201) -------------- -------------- -------------- -------------- -------------- -------------- Change in net assets 28,066,036 1,247,428 14,137,715 6,992,465 3,979,304 1,709,124 Net assets available for benefits, beginning of year 32,117,897 0 23,495,863 8,622,034 0 0 ------------- -------------- -------------- -------------- -------------- -------------- Net assets available for benefits, end of year $60,183,933 $1,247,428 $37,633,578 $15,614,499 $3,979,304 $1,709,124 ============ ============ ============ ============ ============ ============
The accompanying notes are an integral part of the financial statements. - 11 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1994
Investment Funds Vanguard/ BGE Common Fixed Morgan Total Stock Fund Rate Fund Growth Fund Windsor Fund Loan Fund -------------- -------------- -------------- -------------- -------------- -------------- Additions and Net Investment Activity - ------------------- Contributions: Participant eligible pay contributions $26,246,887 $10,143,982 $10,050,245 $2,043,839 $4,008,821 $0 Participant rollover contributions 146,932 48,786 40,135 4,569 53,442 0 Employer matching contributions Company stock fund 8,314,402 8,314,402 0 0 0 0 -------------- -------------- -------------- -------------- -------------- -------------- 34,708,221 18,507,170 10,090,380 2,048,408 4,062,263 0 -------------- -------------- -------------- -------------- -------------- -------------- Income: Dividends Stock funds 12,876,824 12,449,901 0 77,497 349,426 0 Employee stock account 2,975,897 2,975,897 0 0 0 0 Interest 7,376,717 0 7,374,091 0 2,626 0 Pooled funds 163,672 108,749 47,340 2,324 5,259 0 Interest on participant loans 1,696,287 0 0 0 0 1,696,287 -------------- -------------- -------------- -------------- -------------- ------------ 25,089,397 15,534,547 7,421,431 79,821 357,311 1,696,287 -------------- -------------- -------------- -------------- -------------- -------------- Participant Loan repayments 0 4,457,533 2,877,017 326,272 804,586 (8,465,408) -------------- -------------- -------------- -------------- -------------- ------------ 0 4,457,533 2,877,017 326,272 804,586 (8,465,408) -------------- -------------- -------------- -------------- -------------- -------------- Participant interfund transfers (net) 0 (1,508,766) 101,465 (138,783) 1,546,084 0 -------------- -------------- -------------- -------------- -------------- -------------- 0 (1,508,766) 101,465 (138,783) 1,546,084 0 -------------- ------------- -------------- -------------- -------------- --------------
(continued on next page) - 12 - Baltimore Gas and Electric Company Employee Savings Plan Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 1994 (Continued)
Investment Funds Vanguard/ BGE Common Fixed Morga Total Stock Fund Rate Fund Growth Fund Windsor Fund Loan Fund -------------- -------------- -------------- -------------- -------------- -------------- Additions and Net Investment Activity (Continued) - -------------------- Depreciation on investments: Net depreciation of common stock $(32,866,909) $(32,866,909) $0 $0 $0 $0 Net depreciation of mutual funds (2,988,235) 0 0 (472,214) (2,516,021) 0 -------------- -------------- -------------- -------------- -------------- -------------- $(35,855,144) $(32,866,909) 0 (472,214) (2,516,021) 0 -------------- -------------- -------------- -------------- -------------- -------------- Total additions and net investment activity 23,942,474 4,123,575 20,490,293 1,843,504 4,254,223 (6,769,121) -------------- -------------- -------------- -------------- -------------- -------------- Distributions: Withdrawal and distribution payments to participants (40,216,331) (24,533,926) (12,861,369) (392,064) (1,442,893) (986,079) Loans to participants 0 (5,301,963) (3,323,427) (340,854) (971,994) 9,938,238 -------------- -------------- -------------- -------------- -------------- -------------- Total Distributions (40,216,331) (29,835,889) (16,184,796) (732,918) (2,414,887) 8,952,159 -------------- -------------- -------------- -------------- -------------- -------------- Change in net assets (16,273,857) (25,712,314) 4,305,497 1,110,586 1,836,336 2,183,038 Net assets available for benefits, beginning of year 425,855,955 260,204,661 115,940,938 7,511,448 21,656,527 20,542,381 -------------- -------------- -------------- -------------- -------------- -------------- Net assets available for benefits, end of year $409,582,098 $234,492,347 $120,246,435 $8,622,034 $23,495,863 $22,725,419 =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements. - 13 - BALTIMORE GAS AND ELECTRIC COMPANY EMPLOYEE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS 1. GENERAL DESCRIPTION OF THE PLAN Baltimore Gas and Electric Company (the Company), established the Baltimore Gas and Electric Company Employee Savings Plan (Plan) and Trust Agreement, with Bankers Trust Company as trustee on July 1, 1978. Effective June 30, 1995, the Company removed Bankers Trust as trustee under the Trust Agreement, terminated the Trust Agreement, and discontinued Bankers Trust Company's Plan administrative services. Effective July 1, 1995, the Company appointed T. Rowe Price Trust Company (T. Rowe Price) as successor trustee (Trustee). In addition, TRP Retirement Plan Services, Inc., became the provider of administrative services for the Plan. Significant Plan amendments adopted effective July 1, 1995 include: (1) Expanding and changing the investment fund choices for participant contributions to eliminate the Morgan Fund, which was replaced by and the assets transferred into, the T. Rowe Price Growth Stock Fund, to eliminate the Windsor Fund, which was replaced by and the assets transferred into, the T. Rowe Price Equity Income Fund, to include the Interest Income Fund (formerly the Fixed Rate Fund), to add three additional T. Rowe Price mutual funds and to retain the BGE Common Stock Fund. Effective March 31, 1995, T. Rowe Price Stable Asset Management Inc. took over management of the Fixed Rate Fund assets. (2) Monthly valuation was replaced with daily valuation. As a result of this change, participants can request transfers among investment funds, withdrawals, distributions, and loans more frequently than once a month. (3) The number of loans participants may have outstanding at any time was increased from one to two, and the loan interest rate was changed to the prime rate plus 1%. (4) The period of time before an employee becomes eligible to make contributions was reduced from one year to one month (three months in the case of employees of certain subsidiaries of the Company). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). The Plan allows participants 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. - 14 - 1. GENERAL DESCRIPTION OF THE PLAN (Continued) There are seven investment fund choices offered for participant contributions: the BGE Common Stock Fund, the Interest Income Fund and five 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 Growth Stock Fund, the T. Rowe Price Small Cap Value Fund and the T. Rowe Price International Stock Fund (mutual funds). All Company contributions are initially invested by the Trustee in the BGE Common Stock Fund. Participant and Company matching contributions are sent, each pay period, to the Trustee, who invests participant contributions as designated, either in (1) the BGE Common Stock Fund for the purchase (in the open market) or other acquisition (as described in Note 2) of shares of the Company's common stock; (2) the T. Rowe Price Balanced Fund, the T. Rowe Price Equity Income Fund, the T. Rowe Price Growth Stock Fund, the T. Rowe Price Small Cap Value Fund and the T. Rowe Price International Stock Fund for the purchase of mutual fund shares; 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 BGE 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 BGE Common Stock Fund or the mutual funds; (4) the amount of Company matching contributions invested in the BGE 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. - 15 - 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 1995 and 1994 were 6.23 and 6.60%, respectively. The crediting interest rates as of December 31, 1995 and 1994 were 6.27% and 6.35%, respectively. At December 31, 1995, there were no investments in the aggregate contracts of any issuer which exceeded 5% of net assets available for benefits in the Interest Income Fund. At December 31, 1994, approximately 6.45% and 6.09% of net assets available for benefits in the Fixed Rate Fund were invested in contracts issued by Principal Mutual and New York Life respectively. 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 seven 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 seven investment funds. Furthermore, as of the beginning of the calendar year in which participants reach age 56, they may transfer, monthly, the value of their Company contributions and employee stock account among the seven 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. Loans are repaid through regular payroll deductions or by direct payments from the participants and two loans at a time are allowed for each participant. 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. - 16 - 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, whether or not they are actively employed. 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 Manager, Staff Services Department of the Company, 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. All other fees and expenses of the Plan, including those of the Trustee, are currently paid by the Company. Brokerage fees, commissions and transfer taxes associated with the purchase, sale, or transfer of shares of common stock for the BGE Common Stock Fund and mutual fund shares for the five 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. On September 25, 1995 the Company and Potomac Electric Power Company (PEPCO) announced plans to merge into a new company, Constellation Energy Corporation (CEC). The merger is expected to occur in 1997 after receiving approval from various regulatory agencies. Upon completion of the merger, Company shareholders, including participants in the Plan, will receive one share of CEC common stock for each share of Company common stock owned, while PEPCO shareholders will receive 0.997 shares of CEC common stock for each PEPCO share owned. Like the Company, PEPCO, currently offers their employees a defined contribution plan. The effect of the merger on the Plan has not yet been determined. - 17 - 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 BGE 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 that the Trustee purchases 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 BGE 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. 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 BGE Common Stock Fund held by T. Rowe Price Trust Company (previously Bankers Trust Company) are valued as of December 31, 1995 and 1994, 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 and the Vanguard Mutual Funds, are valued as of December 31, 1995 and 1994 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 (previously the Fixed Rate 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 generally accepted accounting principles 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. - 18 - 3. SECURITIES HELD IN TRUST Shown below are the shares, with respective market value and cost, which were held in trust in the BGE Common Stock Fund and the mutual funds on December 31, 1995 and 1994 . SHARES HELD MARKET IN TRUST VALUE COST BGE COMMON STOCK FUND December 31, 1995 10,670,321 $304,105,431 $211,081,564 December 31, 1994 10,384,996 $229,768,037 $199,145,551 MORGAN FUND December 31, 1995 0 0 0 December 31, 1994 762,475 $8,661,727 $9,127,698 WINDSOR FUND December 31, 1995 0 0 0 December 31, 1994 1,995,311 $25,120,961 $26,432,638 T. ROWE PRICE BALANCED FUND December 31, 1995 94,359 $1,247,428 $1,223,896 T. ROWE PRICE EQUITY INCOME FUND December 31, 1995 1,880,172 $37,622,250 $34,287,071 T. ROWE PRICE GROWTH STOCK FUND December 31, 1995 668,552 $15,610,682 $14,950,021 T. ROWE PRICE SMALL CAP VALUE FUND December 31, 1995 240,651 $3,977,965 $4,027,704 T. ROWE PRICE INTERNATIONAL STOCK FUND December 31, 1995 139,749 $1,709,124 $1,703,673 4. TAX STATUS The Company has received the latest favorable determination letter from the Internal Revenue Service, dated November 22, 1994, with respect to the Plan as restated effective June 30, 1994, 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. - 19 - 5. 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, 1995 1994 Net assets available for benefits per the financial statements $520,864,917 $409,582,098 Amounts requested by participants for withdrawals and distributions at December 31, but not yet paid (352,661) (1,659,655) _____________ _____________ Net assets available for benefits per the Form 5500 $520,512,256 $407,922,443 ============= ============= The following is a reconciliation of withdrawals and distributions paid to participants per the financial statements to the Form 5500: Year ended December 31, 1995 Withdrawals and distributions paid to participants per the financial statements $33,546,952 Add: Amounts requested by participants for withdrawals and distributions at December 31, 1995 but not yet paid 352,661 Less: Amounts requested by participants for withdrawals and distributions at December 31, 1994 but not yet paid (1,659,655) _____________ Withdrawals and distributions to participants per the Form 5500 $32,239,958 ============= 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. - 20 - Page 1 of 4 Baltimore Gas and Electric Company (EIN 52-0280210) T. Rowe Price, Trustee - Baltimore Gas and Electric Company Employee Savings Plan Item 27(a) - Schedule of Assets Held for Investment Purposes December 31, 1995
Current Maturity Identity of Issue Description of Asset Cost Value Date * Group Annuity Contract with Insurance Company Guaranteed Allstate Life Insurance Interest Contract - 50% 12/31/96 Company (GA 5285) Guaranteed Interest - 7.52% $6,593,942 $6,593,942 Balance 6/30/97 Group Annuity Contract with Insurance Company Guaranteed Allstate Life Insurance Interest Contract - 50% 4/1/96 Company (GA 5518) Guaranteed Interest - 4.53% 4,134,753 4,134,753 Balance 10/1/96 Group Annuity Contract with Insurance Company Guaranteed Canada Life Assurance Interest Contract - Company (P-45870) Guaranteed Interest - 7.20% 3,115,901 3,115,901 6/15/2000 Group Annuity Contract with Insurance Company Guaranteed Canada Life Assurance Interest Contract - Company (P-45904) Guaranteed Interest - 6.31% 6,083,049 6,083,049 12/15/2000 Group Annuity Contract with Insurance Company Guaranteed Canada Life Assurance Interest Contract - Company (P-45908) Guaranteed Interest - 6.23% 1,515,478 1,515,478 10/16/2000 Group Annuity Contract with Insurance Company Guaranteed Continental Assurance Interest Contract - Company (GP-24100) Guaranteed Interest - 6.32% 5,249,942 5,249,942 9/15/2000 Group Annuity Contract with Insurance Company Guaranteed 33% 9/30/96 CDC BRIC Interest Contract - 50% 3/31/97 Company (BR-154-01) Guaranteed Interest - 6.98% 10,171,520 10,171,520 Balance 9/30/97 Group Annuity Contract with Insurance Company Guaranteed Various Maturities Metropolitan Life Insurance Interest Contract - 3/31 - 9/30/97 (GA-13307-069) Guaranteed Interest - 5.75% 6,343,855 6,343,855 Balance 3/31/98 Group Annuity Contract with Insurance Company Guaranteed Various Maturities New York Life Interest Contract - 4/1/96 - 3/31/98 (GA-06750-001) Guaranteed Interest - 5.15% 13,660,057 13,660,057 Balance 09/30/98 Group Annuity Contract with Insurance Company Guaranteed Excess > $3.7 Mil New York Life Interest Contract - 9/30/98 (GA-06750-002) Guaranteed Interest - 6.35% 8,328,846 8,328,846 Balance 3/31/99 Group Annuity Contract with Insurance Company Guaranteed 33.3% 9/30/96 Peoples Security Life Interest Contract - 50% 3/31/97 (BDA00451FR) Guaranteed Interest - 7.04% 10,174,372 10,174,372 Balance 9/30/97 Group Annuity Contract with Insurance Company Guaranteed 33.3% 4/1/97 Principal Mutual Interest Contract - 50% 10/1/97 (4-05026-001) Guaranteed Interest - 5.85% 6,775,826 6,775,826 Balance 4/1/98 (Continued on next page)
* Current Value of the guaranteed investment contracts equal contract value. - 21 - Page 2 of 4 Baltimore Gas and Electric Company (EIN 52-0280210) T. Rowe Price, Trustee - Baltimore Gas and Electric Company Employee Savings Plan Item 27(a) - Schedule of Assets Held for Investment Purposes December 31, 1995
Current Maturity Identity of Issue Description of Asset Cost Value Date * Group Annuity Contract with Insurance Company Guaranteed Principal Mutual Interest Contract - 50% 06/30/98 (4-05026-002) Guaranteed Interest - 5.17% $16,454,053 $16,454,053 Balance 12/31/98 Group Annuity Contract with Insurance Company Guaranteed Protective Life Interest Contract - (1174) Guaranteed Interest - 7.18% 3,150,279 3,150,279 3/15/2000 Group Annuity Contract with Insurance Company Guaranteed Prudential Interest Contract - 50% 09/30/96 (GA-7088-212) Guaranteed Interest - 7.44% 6,311,371 6,311,371 Balance 09/30/97 Group Annuity Contract with Insurance Company Guaranteed Prudential Interest Contract - 50% 01/31/99 (GA-7088-213) Guaranteed Interest - 6.48% 8,028,440 8,028,440 Balance 05/31/99 Group Annuity Contract with Insurance Company Guaranteed Transamerica Occ. Interest Contract - 50% 09/15/99 (51266-00) Guaranteed Interest - 7.16% 7,787,549 7,787,549 Balance 12/15/99 **Baltimore Gas and Electric Company Common Stock - no par 211,081,564 304,105,431 - T. Rowe Price International Stock Mutual Fund 1,703,673 1,709,124 - T. Rowe Price Growth Stock Fund Mutual Fund 14,950,021 15,610,682 - T. Rowe Price Small Cap Value Fund Mutual Fund 4,027,704 3,977,965 - T. Rowe Price Balanced Fund Mutual Fund 1,223,896 1,247,428 - T. Rowe Price Equity Income Fund Mutual Fund 34,287,071 37,622,250 - **Loan Fund (Interest) Participant Loan Fund - 26,097,091 - Interest Range 8.25 - 9.75% T. Rowe Price Prime Reserve FundMoney Market Mutual Fund 1,908,391 1,908,391 - T. Rowe Price Short Term Money Market Bank Account 352,661 352,661 Distribution Account General Employee Benefit Trust Short-Term Investment Fund; of Bankers Trust Company - Fluctuating Interest Rates; Short-Term Investment Funds Valued at Book Value of fund at time of purchase 17 17 - ____________ ____________ Total 393,414,231 516,510,273 ========== ==========
* Current Value of the guaranteed investment contracts equal contract value. **Parties-in-Interest - 22 - Page 3 of 4 Baltimore Gas and Electric Company (EIN 52-0280210) T. Rowe Price, Trustee-Baltimore Gas and Electric Company Employee Savings Plan 27(d) Schedule of Reportable Transactions Cumulative Tranactions by Issue Exceeding 5% of Portfolio Value During Plan Year 1995
Number Number of of Security Description Sales Proceeds Gain Purchases Cost *Baltimore Gas and Electric Company Common Stock-no par 73 $22,966,211 $3,931,479 101 $39,358,705 Vanguard Windsor Fund 27 36,768,096 3,598,735 67 6,736,724 Directed Account Short-Term Investment Fund General Employee Benefit Trust 138 46,575,980 0 179 44,818,463 --- ----------- ---------- ----- ------------ Total 238 $106,310,287 $7,530,214 347 $90,913,892
*Parties-in-interest -23- Page 4 of 4 Baltimore Gas and Electric and Company (EIN 52-0280210) T. Rowe Price, Trustee-Baltimore Gas and Electric Company Employee Savings Plan 27(d) Schedule of Reportable Transactions Single Transactions Exceeding 5% of Portfolio Value During Plan Year 1995
Selling Cost of Current Value Net Party Involved/Security Name Price Asset of Asset Gain Miscellaneous/ Vanguard Windsor Fund 15.010 $26,774,999 $30,125,805 $3,350,806 2,007,049 Units ----------- ----------- ---------- Total $26,774,999 $30,125,805 $3,350,806
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