-----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, GUu4oHXnW07l8feVQ7DFN5nEh48O+s8yZSMD0esZuKY7wUe2VoM1RPU94Abrydeh 41rRszoTH4phE3i4LF+bCQ== 0000009466-97-000020.txt : 19970409 0000009466-97-000020.hdr.sgml : 19970409 ACCESSION NUMBER: 0000009466-97-000020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970407 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970407 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01910 FILM NUMBER: 97575786 BUSINESS ADDRESS: STREET 1: GAS & ELECTRIC BLDG STREET 2: CHARLES CTR CITY: BALTIMORE STATE: MD ZIP: 21201 BUSINESS PHONE: 4107835920 8-K 1 CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 7, 1997 BALTIMORE GAS AND ELECTRIC COMPANY (Exact name of registrant as specified in its charter) Maryland 1-1910 52-0280210 (State of incorporation) (Commission (IRS Employer File Number) Identification No.) 39 W. Lexington Street Baltimore, Maryland 21201 (Address of principal executive offices) (Zip Code) 410-783-5920 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) 1 ITEM 5. Other Events - ------- ------------ UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION - ------------------------------------------------------------ The following unaudited pro forma condensed financial information combines the historical consolidated balance sheets and statements of income of Baltimore Gas and Electric Company (BGE) and Potomac Electric Power Company (PEPCO), including their respective subsidiaries, after giving effect to the proposed merger (the Merger) of the two companies into Constellation Energy Corporation. As previously disclosed by BGE, the Merger is expected to close after all necessary regulatory approvals are obtained. As of the date of this filing, the Merger has not closed. The unaudited pro forma combined condensed balance sheets at December 31, 1996 and 1995 give effect to the Merger as if it had occurred at December 31, 1995. The unaudited pro forma combined condensed statements of income for each of the three years ended December 31, 1996, 1995, and 1994, give effect to the Merger as if it had occurred at January 1, 1994. These statements are prepared on the basis of accounting for the Merger as a pooling of interests and are based on the assumptions set forth in the notes thereto. The registrant, Constellation Energy Corporation, was formed September 22, 1995, and has no assets or operations. Therefore, the registrant has no financial statements and, in turn, there has been no audit of such statements. The PEPCO income statement for the twelve month period ended December 31, 1995 includes a $110 million one-time, non-cash, after-tax charge to earnings recorded in the second quarter of 1995 in connection with the plan to sell 13 aircraft owned by its subsidiary, Potomac Capital Investment Corporation, as part of the adoption of a plan to end investment in the aircraft equipment leasing business. Income for the twelve months ended December 31, 1995 also includes a nonrecurring charge of $12 million ($0.11 per share) relating to valuation of two aircraft under a master lease agreement which expired in September 1995. The following pro forma financial information has been prepared from, and should be read in conjunction with, the historical consolidated financial statements and related notes thereto of BGE and PEPCO, which are contained in their respective 1934 Act reports for prior periods. The following information is not necessarily indicative of the financial position or operating results that would have occurred had the Merger been consummated on the dates, or at the beginning of the periods, for which the Merger is being given effect nor is it necessarily indicative of future financial position or operating results. The following unaudited pro forma combined condensed financial information of Constellation Energy Corporation is set forth in this Form 8-K: Balance Sheet as of December 31, 1996 Balance Sheet as of December 31, 1995 Income Statement for the Twelve Months Ended December 31, 1996 Income Statement for the Twelve Months Ended December 31, 1995 Income Statement for the Twelve Months Ended December 31, 1994 Notes to Consolidated Financial Statements The following financial information of PEPCO is also set forth in this Form 8-K: Reclassifying Balance Sheet as of December 31, 1996 Reclassifying Balance Sheet as of December 31, 1995 Reclassifying Statement of Income for the Twelve Months Ended December 31, 1996 Reclassifying Statement of Income for the Twelve Months Ended December 31, 1995 Reclassifying Statement of Income for the Twelve Months Ended December 31, 1994 OTHER INFORMATION - ----------------- Both BGE and PEPCO file annual and quarterly reports with the Securities and Exchange Commission (SEC). These are available at the SEC's public reference rooms in Washington, D.C. and New York, New York (call 1-800-SEC-0330 for more information); and at the SEC's web site at http://www.sec.gov. BGE's reports are also available at BGE's web site at http://www.bge.com. 2 CONSTELLATION ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DECEMBER 31, 1996 (IN THOUSANDS) BGE PEPCO Pro Forma Pro Forma (As Reported) (As Reclassified) Adjustments Combined ------------- ----------------- ------------ -------- ASSETS (See Note 5) Current Assets Cash and cash equivalents ............................. $ 66,708 $ 2,978 $ 69,686 Accounts receivable - net ............................. 419,479 231,646 651,125 Materials and supplies ................................ 147,729 137,773 285,502 Prepayments and other ................................. 268,282 38,815 307,097 ------- ------ ------- Total current assets ........................... 902,198 411,212 1,313,410 Investments and Other Assets Notes receivable ...................................... -- 93,403 93,403 Real estate projects .................................. 525,765 67,940 593,705 Power generation systems .............................. 379,130 880 380,010 Financial investments ................................. 124,937 -- 124,937 Marketable securities ................................. 46,231 377,237 423,468 Investment in finance leases .......................... 33,275 484,972 518,247 Operating lease equipment - net ....................... -- 199,124 199,124 Assets held for disposal .............................. -- 10,300 10,300 Other investments ..................................... 363,827 124,182 488,009 ------- ------- ------- Total investments and other assets .................... 1,473,165 1,358,038 2,831,203 Utility Plant Plant in service Electric ........................................... 6,514,950 6,232,049 12,746,999 Gas ................................................ 776,973 -- 776,973 Common ............................................. 523,485 -- 523,485 ------- --------- ------- Total plant in service ............................. 7,815,408 6,232,049 14,047,457 --------- --------- ---------- Accumulated depreciation .............................. (2,613,355) (1,897,489) (4,510,844) Construction work in progress ......................... 221,857 62,469 284,326 Nuclear fuel - net .................................... 132,937 -- 132,937 Other plant - net ..................................... 25,503 26,220 51,723 ------ ------ ------ Net utility plant ............................ 5,582,350 4,423,249 10,005,599 --------- --------- ---------- Deferred charges Regulatory assets ..................................... 512,279 469,778 982,057 Other ................................................. 80,978 168,651 249,629 ------ ------- ------- Total deferred charges .......................... 593,257 638,429 1,231,686 ------- ------- --------- Total Assets ............................................... $ 8,550,970 $ 6,830,928 $ 15,381,898 ============ ============ ============ See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements
3 CONSTELLATION ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DECEMBER 31, 1996 (IN THOUSANDS) BGE PEPCO Pro Forma Pro Forma (As Reported) (As Reclassified) Adjustments Combined --------- ---------------- ----------- -------- LIABILITIES AND CAPITALIZATION (See Note 5) Current Liabilities Short-term borrowings ....................................... $ 333,185 $ 183,040 $ 516,225 Current portion of long-term debt, preferred stock, and preference stock .................... 280,772 353,267 634,039 Accounts payable ............................................ 172,889 224,354 397,243 Other ....................................................... 230,253 103,907 334,160 ------- ------- ------- Total current liabilities .............................. 1,017,099 864,568 1,881,667 --------- ------- --------- Deferred Credits and Other Liabilities Deferred income taxes ....................................... 1,300,174 1,034,710 2,334,884 Capital lease obligations.................................... -- 162,936 162,936 Pension and postemployment benefits ......................... 169,253 -- 169,253 Other ....................................................... 104,062 48,716 152,778 ------- ------ ------- Total deferred credits and other liabilities .................... 1,573,489 1,246,362 2,819,851 --------- --------- --------- Capitalization Long-term debt .............................................. 2,758,769 2,563,008 5,321,777 Preferred stock ............................................. -- 267,798 267,798 Preference stock ............................................ 344,500 -- 344,500 Common shareholders' equity ................................. 2,857,113 1,889,192 4,746,305 --------- --------- --------- Total capitalization ................................. 5,960,382 4,719,998 10,680,380 --------- --------- ---------- Total Liabilities and Capitalization ............................. $ 8,550,970 $ 6,830,928 $15,381,898 =========== =========== =========== See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements
4 CONSTELLATION ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DECEMBER 31, 1995 (IN THOUSANDS) BGE PEPCO Pro Forma Pro Forma (As Reported) (As Reclassified) Adjustments Combined ------------- ----------------- ----------- -------- ASSETS (See Note 5) Current Assets Cash and cash equivalents ............................. $ 23,443 $ 7,438 $ 30,881 Accounts receivable - net ............................. 400,005 260,625 660,630 Materials and supplies ................................ 145,900 133,700 279,600 Prepayments and other ................................. 236,430 43,817 280,247 ------- ------ ------- Total current assets ........................... 805,778 445,580 1,251,358 ------- ------- --------- Investments and Other Assets Notes receivable ...................................... -- 62,175 62,175 Real estate projects .................................. 479,344 71,025 550,369 Power generation systems .............................. 358,629 626 359,255 Financial investments ................................. 128,815 -- 128,815 Marketable securities ................................. 41,475 530,323 571,798 Investment in finance leases .......................... 35,551 438,795 474,346 Operating lease equipment - net ....................... -- 272,947 272,947 Assets held for disposal .............................. -- 104,370 104,370 Other investments ..................................... 268,154 132,626 400,780 ------- ------- ------- Total investments and other assets .................... 1,311,968 1,612,887 2,924,855 --------- --------- --------- Utility Plant Plant in service Electric ........................................... 6,360,624 6,041,203 12,401,827 Gas ................................................ 692,693 -- 692,693 Common ............................................. 522,450 -- 522,450 ------- --------- ------- Total plant in service ............................. 7,575,767 6,041,203 13,616,970 --------- --------- ---------- Accumulated depreciation .............................. (2,481,801) (1,760,063) (4,241,864) Construction work in progress ......................... 247,296 93,047 340,343 Nuclear fuel - net .................................... 130,782 -- 130,782 Other plant - net ..................................... 25,552 26,124 51,676 ------ ------ ------ Net utility plant ............................ 5,497,596 4,400,311 9,897,907 --------- --------- --------- Deferred charges Regulatory assets ..................................... 637,915 471,102 1,109,017 Other ................................................. 63,406 123,663 187,069 ------ ------- ------- Total deferred charges .......................... 701,321 594,765 1,296,086 ------- ------- --------- Total Assets ............................................... $ 8,316,663 $ 7,053,543 $ 15,370,206 ============ ============ ============ See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements Certain amounts have been reclassified to conform with the 1996 presentation.
5 CONSTELLATION ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET DECEMBER 31, 1995 (IN THOUSANDS) BGE PEPCO Pro Forma Pro Forma (As Reported) (As Reclassified) Adjustments Combined ------------- ---------------- ----------- -------- LIABILITIES AND CAPITALIZATION See Note 5) Current Liabilities Short-term borrowings ....................................... $ 279,305 $ 481,815 $ 761,120 Current portion of long-term debt, preferred stock, and preference stock .................... 146,969 263,979 410,948 Accounts payable ............................................ 177,092 225,345 402,437 Other ....................................................... 231,789 106,806 338,595 ------- ------- ------- Total current liabilities .............................. 835,155 1,077,945 1,913,100 ------- --------- --------- Deferred Credits and Other Liabilities Deferred income taxes ....................................... 1,311,530 995,504 2,307,034 Capital lease obligations.................................... -- 165,235 165,235 Pension and postemployment benefits ......................... 148,594 -- 148,594 Other ....................................................... 99,263 47,875 147,138 ------ ------ ------- Total deferred credits and other liabilities .................... 1,559,387 1,208,614 2,768,001 --------- --------- --------- Capitalization Long-term debt .............................................. 2,598,254 2,626,862 5,225,116 Preferred stock ............................................. 59,185 268,810 327,995 Preference stock ............................................ 452,000 -- 452,000 Common shareholders' equity ................................. 2,812,682 1,871,312 4,683,994 --------- --------- --------- Total capitalization ................................. 5,922,121 4,766,984 10,689,105 --------- --------- ---------- Total Liabilities and Capitalization ............................. $ 8,316,663 $ 7,053,543 $15,370,206 =========== =========== =========== See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements
6 CONSTELLATION ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT TWELVE MONTHS ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Pro BGE PEPCO Forma Pro Forma (As Reported)(As Reclassified) Adj Combined ------------- -------------- --- -------- (See Note 5) Revenues Electric ....................................................... $2,208,744 $2,010,311 $4,219,055 Gas ............................................................ 517,292 -- 517,292 Diversified businesses ......................................... 427,211 116,421 543,632 ------- ------- ------- Total revenues .............................. 3,153,247 2,126,732 5,279,979 Operating Expenses Electric fuel and purchased energy ............................. 547,414 789,556 1,336,970 Disallowed replacement energy costs ............................ 95,369 -- 95,369 Gas purchased for resale ....................................... 284,443 -- 284,443 Operations ..................................................... 526,424 223,326 749,750 Maintenance .................................................... 174,141 91,524 265,665 Diversified businesses expenses ................................ 311,053 58,130 369,183 Loss on assets held for disposal ............................... -- 12,744 12,744 Depreciation and amortization .................................. 330,191 223,016 553,207 Taxes other than income taxes .................................. 214,747 200,365 415,112 ------- ------- ------- Total operating expenses ......................... 2,483,782 1,598,661 4,082,443 --------- --------- --------- Income From Operations .............................................. 669,465 528,071 1,197,536 Total Other Income .................................................. 6,130 12,400 18,530 ----- ------ ------ Income Before Interest and Income Taxes ............................. 675,595 540,471 1,216,066 Net Interest Expense ................................................ 198,438 223,124 421,562 ------- ------- ------- Income Before Income Taxes .......................................... 477,157 317,347 794,504 Income Taxes ........................................................ 166,333 80,387 246,720 ------- ------ ------- Net Income .......................................................... 310,824 236,960 547,784 Preferred and Preference Stock Dividends ............................ 38,536 16,604 55,140 ------ ------ ------ Earnings Applicable to Common Stock ................................. $ 272,288 $ 220,356 $ 492,644 ========== ========== ========== Average Shares of Common Stock Outstanding (Note 2) ................. 147,560 118,497 265,701 Earnings Per Share of Common Stock .................................. $1.85 $1.86 $1.85 See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements
7 CONSTELLATION ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT TWELVE MONTHS ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Pro BGE PEPCO Forma Pro Forma (As Reported)(As Reclassified) Adj Combined ------------- ------------- ---- -------- (See Note 5) Revenues Electric ....................................................... $2,229,774 $1,876,102 $4,105,876 Gas ............................................................ 400,504 -- 400,504 Diversified businesses ......................................... 304,521 134,257 438,778 ------- ------- ------- Total revenues .............................. 2,934,799 2,010,359 4,945,158 Operating Expenses Electric fuel and purchased energy ............................. 578,801 674,814 1,253,615 Gas purchased for resale ....................................... 198,069 -- 198,069 Operations ..................................................... 550,811 224,030 774,841 Maintenance .................................................... 168,269 92,859 261,128 Diversified businesses expenses ................................ 220,573 84,686 305,259 Loss on assets held for disposal ............................... -- 170,078 170,078 Depreciation and amortization .................................. 317,417 205,490 522,907 Taxes other than income taxes .................................. 205,167 202,708 407,875 ------- ------- ------- Total operating expenses ......................... 2,239,107 1,654,665 3,893,772 --------- --------- --------- Income From Operations .............................................. 695,692 355,694 1,051,386 Total Other Income .................................................. 8,819 10,402 19,221 ----- ------ ------ Income Before Interest and Income Taxes ............................. 704,511 366,096 1,070,607 Net Interest Expense ................................................ 196,977 227,974 424,951 ------- ------- ------- Income Before Income Taxes .......................................... 507,534 138,122 645,656 Income Taxes ........................................................ 169,527 43,731 213,258 ------- ------ ------- Net Income .......................................................... 338,007 94,391 432,398 Preferred and Preference Stock Dividends ............................ 40,578 16,851 57,429 ------ ------ ------ Earnings Applicable to Common Stock ................................. $ 297,429 $ 77,540 $ 374,969 ========== ========== ========== Average Shares of Common Stock Outstanding (Note 2) ................. 147,527 118,412 265,584 Earnings Per Share of Common Stock .................................. $2.02 $0.65 $1.41 See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements
8 CONSTELLATION ENERGY CORPORATION UNAUDITED PRO FORMA COMBINED CONDENSED INCOME STATEMENT YEAR ENDED DECEMBER 31, 1994 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Pro BGE PEPCO Forma Pro Forma (As Reported) (As Reclassified) Adj Combined ------------- ------------- ---- -------- (See Note 5) Revenues Electric ....................................................... $2,126,581 $1,823,074 $3,949,655 Gas ............................................................ 421,249 -- 421,249 Diversified businesses ......................................... 235,155 146,951 382,106 ------- ------- ------- Total revenues .............................. 2,782,985 1,970,025 4,753,010 Operating Expenses Electric fuel and purchased energy ............................. 542,314 693,936 1,236,250 Gas purchased for resale ....................................... 224,590 -- 224,590 Operations ..................................................... 552,817 206,106 758,923 Maintenance .................................................... 164,892 92,614 257,506 Diversified businesses expenses ................................ 167,430 66,401 233,831 Depreciation and amortization .................................. 295,950 179,986 475,936 Taxes other than income taxes .................................. 199,733 206,080 405,813 ------- ------- ------- Total operating expenses ......................... 2,147,726 1,445,123 3,592,849 --------- --------- --------- Income From Operations .............................................. 635,259 524,902 1,160,161 Total Other Income .................................................. 32,365 8,123 40,488 ------ ------ ------ Income Before Interest and Income Taxes ............................. 667,624 533,025 1,200,649 Net Interest Expense ................................................ 190,154 211,910 402,064 ------- ------- ------- Income Before Income Taxes .......................................... 477,470 321,115 798,585 Income Taxes ........................................................ 153,853 93,953 247,806 ------- ------ ------- Net Income .......................................................... 323,617 227,162 550,779 Preferred and Preference Stock Dividends ............................ 39,922 16,437 56,359 ------ ------ ------ Earnings Applicable to Common Stock ................................. $ 283,695 $ 210,725 $ 494,420 ========== ========== ========== Average Shares of Common Stock Outstanding (Note 2) ................. 147,100 118,006 264,752 Earnings Per Share of Common Stock .................................. $1.93 $1.79 $1.87 See Accompanying Notes to Unaudited Pro Forma Combined Condensed Financial Statements
9 PEPCO RECLASSIFYING BALANCE SHEET DECEMBER 31, 1996 (IN THOUSANDS) PEPCO PEPCO PEPCO (As Reported) (Reclasses) (As Reclassified) ------------- ----------- ----------------- ASSETS Current Assets Cash and cash equivalents .................................. $ 2,174 $ 804 $ 2,978 Accounts receivable - net .................................. -- 231,646 231,646 Customer accounts receivable - net ......................... 128,600 (128,600) -- Other accounts receivable - net ............................ 38,490 (38,490) -- Accrued unbilled revenue ................................... 70,214 (70,214) -- Materials and supplies ..................................... -- 137,773 137,773 Fuel .................................................... 68,232 (68,232) -- Construction and maintenance ............................ 69,541 (69,541) -- Prepayments and other ...................................... -- 38,815 38,815 Prepaid taxes .............................................. 34,202 (34,202) -- Other prepaid expenses ..................................... 4,613 (4,613) -- ----- ------ ------- Total current assets ..................... 416,066 (4,854) 411,212 Investments and Other Assets Notes receivable ........................................... -- 93,403 93,403 Real estate projects ....................................... -- 67,940 67,940 Power generation systems ................................... -- 880 880 Marketable securities ...................................... -- 377,237 377,237 Investment in finance leases ............................... -- 484,972 484,972 Operating lease equipment - net ............................ -- 199,124 199,124 Assets held for disposal ................................... -- 10,300 10,300 Other investments .......................................... -- 124,182 124,182 ------ ------- ------- Total investments and other assets .............. -- 1,358,038 1,358,038 Utility Plant Plant in service Electric ................................................ 6,232,049 -- 6,232,049 Construction work in progress ........................... 62,469 (62,469) -- Electric plant held for future use ...................... 4,152 (4,152) -- Nonoperating property ................................... 22,921 (22,921) -- ------ ------- -------- Total plant in service .................................. 6,321,591 (89,542) 6,232,049 Accumulated depreciation ................................... (1,898,342) 853 (1,897,489) Construction work in progress .............................. -- 62,469 62,469 Other plant - net .......................................... -- 26,220 26,220 -------- ------ ------ Net utility plant ...................... 4,423,249 -- 4,423,249 Deferred Charges Regulatory assets .......................................... -- 469,778 469,778 Income taxes recoverable through future rates, net ......... 238,467 (238,467) -- Conservation costs, net..................................... 233,793 (233,793) -- Unamortized debt reacquisition costs ....................... 55,552 (55,552) -- Other ...................................................... 159,139 9,512 168,651 ------- ----- ------- Total deferred charges .................... 686,951 (48,522) 638,429 Nonutility Subsidiary Assets Cash and cash equivalents .................................. 804 (804) -- Marketable securities ...................................... 377,237 (377,237) -- Investment in finance leases ............................... 484,972 (484,972) -- Operating lease equipment - net ............................ 199,124 (199,124) -- Assets held for disposal ................................... 10,300 (10,300) -- Receivables - net .......................................... 87,745 (87,745) -- Other investments .......................................... 193,002 (193,002) -- Other assets ............................................... 12,436 (12,436) -- ------ ------- ------- Total nonutility subsidiary assets .............. 1,365,620 (1,365,620) -- --------- ---------- ------- Total Assets .................................................... $ 6,891,886 $ (60,958) $6,830,928 =========== ========== ==========
10 PEPCO RECLASSIFYING BALANCE SHEET DECEMBER 31, 1996 (IN THOUSANDS) PEPCO PEPCO PEPCO (As Reported) (Reclasses) (As Reclassified) ------------- ----------- ----------------- LIABILITIES AND CAPITALIZATION Current Liabilities Short-term borrowings ........................................ $ 131,390 $ 51,650 $183,040 Current portion of long-term debt and preferred stock ....................................... 152,445 200,822 353,267 Accounts payable and accrued expenses ........................ 179,289 45,065 224,354 Capital lease obligation due within one year ................. 20,772 (20,772) -- Other ........................................................ 83,135 20,772 103,907 ------ ------ ------- Total current liabilities .................... 567,031 297,537 864,568 Deferred Credits and Other Liabilities Deferred income taxes ........................................ 973,642 61,068 1,034,710 Deferred investment tax credits .............................. 60,958 (60,958) -- Capital lease obligations..................................... -- 162,936 162,936 Pension and postemployment benefits .......................... -- -- -- Other ........................................................ 35,658 13,058 48,716 ------ ------ ------ Total deferred credits and other liabilities ........... 1,070,258 176,104 1,246,362 Other Noncurrent Liabilities Capital lease obligations .................................... 162,936 (162,936) -- ------- -------- --------- Total other noncurrent liabilities ................ 162,936 (162,936) -- Capitalization Long-term debt ............................................... 1,767,598 795,410 2,563,008 Preferred stock .............................................. -- 267,798 267,798 Serial preferred stock ....................................... 125,298 (125,298) -- Redeemable serial preferred stock ............................ 142,500 (142,500) -- Common shareholders' equity .................................. -- 1,889,192 1,889,192 Common stock ................................................. 118,500 (118,500) -- Other common equity .......................................... 1,770,692 (1,770,692) -- --------- ---------- --------- Total capitalization ....................... 3,924,588 795,410 4,719,998 Nonutility Subsidiary Liabilities Long-term debt ............................................... 996,232 (996,232) -- Short-term notes payable ..................................... 51,650 (51,650) -- Deferred taxes and other ..................................... 119,191 (119,191) -- ------- -------- --------- Total nonutility subsidiary liabilities ............. 1,167,073 (1,167,073) -- --------- ---------- --------- Total Liabilities and Capitalization .............................. $6,891,886 $ (60,958) $6,830,928 ========== ========= ==========
11 PEPCO RECLASSIFYING BALANCE SHEET DECEMBER 31, 1995 (IN THOUSANDS) PEPCO PEPCO PEPCO (As Reported) (Reclasses) (As Reclassified) ------------- ----------- ----------------- ASSETS Current Assets Cash and cash equivalents .................................. $ 5,844 $ 1,594 $ 7,438 Accounts receivable - net .................................. -- 260,625 260,625 Customer accounts receivable - net ......................... 137,456 (137,456) -- Other accounts receivable - net ............................ 36,765 (36,765) -- Accrued unbilled revenue ................................... 73,622 (73,622) -- Materials and supplies ..................................... -- 133,700 133,700 Fuel .................................................... 63,203 (63,203) -- Construction and maintenance ............................ 70,497 (70,497) -- Prepayments and other ...................................... -- 43,817 43,817 Prepaid taxes .............................................. 36,255 (36,255) -- Other prepaid expenses ..................................... 7,562 (7,562) -- ----- ------ ------- Total current assets ..................... 431,204 14,376 445,580 Investments and Other Assets Notes receivable ........................................... -- 62,175 62,175 Real estate projects ....................................... -- 71,025 71,025 Power generation systems ................................... -- 626 626 Marketable securities ...................................... -- 530,323 530,323 Investment in finance leases ............................... -- 438,795 438,795 Operating lease equipment - net ............................ -- 272,947 272,947 Assets held for disposal ................................... -- 104,370 104,370 Other investments .......................................... -- 132,626 132,626 ------- ------ ------ Total investments and other assets .............. -- 1,612,887 1,612,887 Utility Plant Plant in service Electric ................................................ 6,041,203 -- 6,041,203 Construction work in progress ........................... 93,047 (93,047) -- Electric plant held for future use ...................... 4,082 (4,082) -- Nonoperating property ................................... 22,771 (22,771) -- ------ ------- --------- Total plant in service .................................. 6,161,103 (119,900) 6,041,203 Accumulated depreciation ................................... (1,760,792) 729 (1,760,063) Construction work in progress .............................. -- 93,047 93,047 Other plant - net .......................................... -- 26,124 26,124 --------- ------ ------ Net utility plant ...................... 4,400,311 -- 4,400,311 Deferred Charges Regulatory assets .......................................... -- 471,102 471,102 Income taxes recoverable through future rates, net ......... 244,181 (244,181) -- Conservation costs, net..................................... 230,412 (230,412) -- Unamortized debt reacquisition costs ....................... 58,360 (58,360) -- Other ...................................................... 138,619 (14,956) 123,663 ------- ------- ------- Total deferred charges .................... 671,572 (76,807) 594,765 Nonutility Subsidiary Assets Cash and cash equivalents .................................. 1,594 (1,594) -- Marketable securities ...................................... 530,323 (530,323) -- Investment in finance leases ............................... 438,795 (438,795) -- Operating lease equipment - net ............................ 272,947 (272,947) -- Assets held for disposal ................................... 104,370 (104,370) -- Receivables - net .......................................... 74,957 (74,957) -- Other investments .......................................... 176,418 (176,418) -- Other assets ............................................... 15,659 (15,659) -- ------ ------- ------- Total nonutility subsidiary assets .............. 1,615,063 (1,615,063) -- --------- ---------- ------- Total Assets .................................................... $ 7,118,150 $ (64,607) $ 7,053,543 =========== =========== =========== Certain amounts have been reclassified to conform with the 1996 presentation.
12 PEPCO RECLASSIFYING BALANCE SHEET DECEMBER 31, 1995 (IN THOUSANDS) PEPCO PEPCO PEPCO (As Reported) (Reclasses) (As Reclassified) ------------- ----------- ----------------- LIABILITIES AND CAPITALIZATION Current Liabilities Short-term borrowings .................................... $ 258,465 $ 223,350 $ 481,815 Current portion of long-term debt and preferred stock ................................... 26,280 237,699 263,979 Accounts payable and accrued expenses .................... 162,039 63,306 225,345 Capital lease obligation due within one year ............. 20,772 (20,772) -- Other .................................................... 86,034 20,772 106,806 ------ ------ ------- Total current liabilities ................ 553,590 524,355 1,077,945 Deferred Credits and Other Liabilities Deferred income taxes .................................... 892,544 102,960 995,504 Deferred investment tax credits .......................... 64,607 (64,607) -- Capital lease obligations................................. -- 165,235 165,235 Pension and postemployment benefits ...................... -- -- -- Other .................................................... 35,089 12,786 47,875 ------ ------ ------ Total deferred credits and other liabilities ....... 992,240 216,374 1,208,614 Other Noncurrent Liabilities Capital lease obligations ................................ 165,235 (165,235) -- ------- -------- -------- Total other noncurrent liabilities ............ 165,235 (165,235) -- Capitalization Long-term debt ........................................... 1,817,077 809,785 2,626,862 Preferred stock .......................................... -- 268,810 268,810 Serial preferred stock ................................... 125,325 (125,325) -- Redeemable serial preferred stock ........................ 143,485 (143,485) -- Common shareholders' equity .............................. -- 1,871,312 1,871,312 Common stock ............................................. 118,495 (118,495) -- Other common equity ...................................... 1,752,817 (1,752,817) -- --------- ---------- --------- Total capitalization ................... 3,957,199 809,785 4,766,984 Nonutility Subsidiary Liabilities Long-term debt ........................................... 1,047,484 (1,047,484) -- Short-term notes payable ................................. 223,350 (223,350) -- Deferred taxes and other ................................. 179,052 (179,052) -- ------- -------- --------- Total nonutility subsidiary liabilities ......... 1,449,886 (1,449,886) -- --------- ---------- --------- Total Liabilities and Capitalization .......................... $ 7,118,150 $ (64,607) $7,053,543 =========== ========== ==========
13 PEPCO RECLASSIFYING STATEMENT OF INCOME TWELVE MONTHS ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) PEPCO PEPCO PEPCO (As Reported) (Reclasses) (As Reclassified) ------------- ----------- ----------------- Revenues Electric .......................................................... $ 2,010,311 $ -- $2,010,311 Gas ............................................................... -- -- -- Diversified businesses ............................................ -- 116,421 116,421 ---------- ------- ------- Total revenues ................................. 2,010,311 116,421 2,126,732 Operating Expenses Electric fuel and purchased energy ................................ -- 789,556 789,556 Fuel .............................................................. 327,792 (327,792) -- Purchased energy .................................................. 335,978 (335,978) -- Capacity purchase payments ........................................ 125,786 (125,786) -- Operations ........................................................ 223,326 -- 223,326 Maintenance ....................................................... 91,524 -- 91,524 Diversified businesses expenses ................................... -- 58,130 58,130 Loss on assets held for disposal .................................. -- 12,744 12,744 Depreciation and amortization ..................................... 223,016 -- 223,016 Income taxes ...................................................... 134,085 (134,085) -- Taxes other than income taxes ..................................... 200,365 -- 200,365 ------- -------- ------- Total operating expenses ............................ 1,661,872 (63,211) 1,598,661 --------- ------- --------- Income From Operations ................................................. 348,439 179,632 528,071 Other Income (Loss) Nonutility subsidiary income ...................................... 114,966 (114,966) -- Loss on assets held for disposal .................................. (12,744) 12,744 -- Expenses, including interest and income taxes ..................... (85,328) 85,328 -- ------- ------ -------- Net earnings from nonutility subsidiary .................... 16,894 (16,894) -- Allowance for other funds used during construction and capital cost recovery factor ........................... 6,572 -- 6,572 Other, net ........................................................ 4,458 1,370 5,828 ----- ----- ----- Total Other Income (Loss) ............................ 27,924 (15,524) 12,400 ------ ------- ------ Income Before Interest and Income Taxes ................................ 376,363 164,108 540,471 Interest Charges Interest on debt .................................................. 133,106 -- 133,106 Other ............................................................. 13,833 -- 13,833 Subsidiary interest expense ....................................... -- 83,721 83,721 Allowance for borrowed funds used during construction and capital cost recovery factor ........................... (7,536) -- (7,536) ------ ----- ------ Net Interest Charges .............................. 139,403 83,721 223,124 ------- ------ ------- Income Before Income Taxes ............................................. 236,960 80,387 317,347 Income Taxes Income taxes-utility .............................................. -- 134,085 134,085 Income taxes-nonoperating ......................................... -- 1,061 1,061 Income taxes-subsidiary ........................................... -- (54,759) (54,759) ------- ------- ------- Total Income Taxes ............................... -- 80,387 80,387 ------- ------ ------ Net Income ............................................................. 236,960 -- 236,960 Preferred Dividends .................................................... 16,604 -- 16,604 ------ ------- ------ Earnings Applicable to Common Stock .................................... $ 220,356 $ -- $220,356 =========== ========= ======== Average Shares of Common Stock Outstanding ............................. 118,497 118,497 Earnings Per Share of Common Stock ..................................... $ 1.86 $ 1.86
14 PEPCO RECLASSIFYING STATEMENT OF INCOME TWELVE MONTHS ENDED DECEMBER 31, 1995 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) PEPCO PEPCO PEPCO (As Reported) (Reclasses) (As Reclassified) ------------- ----------- ----------------- Revenues Electric .......................................................... $ 1,876,102 $ -- $1,876,102 Gas ............................................................... -- -- -- Diversified businesses ............................................ -- 134,257 134,257 --------- ------- ------- Total revenues ................................. 1,876,102 134,257 2,010,359 Operating Expenses Electric fuel and purchased energy ................................ -- 674,814 674,814 Fuel .............................................................. 355,453 (355,453) -- Purchased energy .................................................. 193,592 (193,592) -- Capacity purchase payments ........................................ 125,769 (125,769) -- Operations ........................................................ 224,030 -- 224,030 Maintenance ....................................................... 92,859 -- 92,859 Diversified businesses expenses ................................... -- 84,686 84,686 Loss on assets held for disposal .................................. -- 170,078 170,078 Depreciation and amortization ..................................... 205,490 -- 205,490 Income taxes ...................................................... 128,460 (128,460) -- Taxes other than income taxes ..................................... 202,708 -- 202,708 ------- -------- ------- Total operating expenses ............................ 1,528,361 126,304 1,654,665 --------- ------- --------- Income From Operations ................................................. 347,741 7,953 355,694 Other (Loss) Income Nonutility subsidiary income ...................................... 134,493 (134,493) -- Loss on assets held for disposal .................................. (170,078) 170,078 -- Expenses, including interest and income taxes ..................... (88,812) 88,812 -- ------- ------ ------- Net loss from nonutility subsidiary ........................ (124,397) 124,397 -- Allowance for other funds used during construction and capital cost recovery factor ........................... 6,155 -- 6 155 Other, net ........................................................ 682 3,565 4,247 ----- ----- ------ Total Other (Loss) Income ............................. (117,560) 127,962 10,402 -------- ------- ------ Income Before Interest and Income Taxes ................................ 230,181 135,915 366,096 Interest Charges Interest on debt .................................................. 131,620 -- 131,620 Other ............................................................. 14,938 -- 14,938 Subsidiary interest expense ....................................... -- 92,184 92,184 Allowance for borrowed funds used during construction and capital cost recovery factor ........................... (10,768) -- (10,768) ------ ------- ------ Net Interest Charges .............................. 135,790 92,184 227,974 ------- ------ ------- Income Before Income Taxes ............................................. 94,391 43,731 138,122 Income Taxes Income taxes-utility .............................................. -- 128,460 128,460 Income taxes-nonoperating ......................................... -- 1,884 1,884 Income taxes-subsidiary ........................................... -- (86,613) (86,613) ------ ------- ------- Total Income Taxes ............................... -- 43,731 43,731 ------ ------ ------ Net Income ............................................................. 94,391 -- 94,391 Preferred Dividends .................................................... 16,851 -- 16,851 ------ ------- ------ Earnings Applicable to Common Stock .................................... $ 77,540 $ -- $77,540 ======== ======== ======= Average Shares of Common Stock Outstanding ............................. 118,412 118,412 Earnings Per Share of Common Stock ..................................... $ 0.65 $ 0.65 Certain amounts have been reclassified to conform with the 1996 presentation.
15 PEPCO RECLASSIFYING STATEMENT OF INCOME TWELVE MONTHS ENDED DECEMBER 31, 1994 (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) PEPCO PEPCO PEPCO (As Reported) (Reclasses) (As Reclassified) ------------- ----------- ----------------- Revenues Electric .......................................................... $ 1,823,074 $ -- $1,823,074 Gas ............................................................... -- -- -- Diversified businesses ............................................ -- 146,951 146,951 --------- ------- ------- Total revenues ................................. 1,823,074 146,951 1,970,025 Operating Expenses Electric fuel and purchased energy ................................ -- 693,936 693,936 Fuel .............................................................. 392,730 (392,730) -- Purchased energy .................................................. 173,384 (173,384) -- Capacity purchase payments ........................................ 127,822 (127,822) -- Operations ........................................................ 206,106 -- 206,106 Maintenance ....................................................... 92,614 -- 92,614 Diversified businesses expenses ................................... -- 66,401 66,401 Depreciation and amortization ..................................... 179,986 -- 179,986 Income taxes ...................................................... 119,859 (119,859) -- Taxes other than income taxes ..................................... 206,080 -- 206,080 ------- ------- ------- Total operating expenses ............................ 1,498,581 (53,458) 1,445,123 --------- ------- --------- Income From Operations ................................................. 324,493 200,409 524,902 Other Income Nonutility subsidiary income ...................................... 147,006 (147,006) -- Expenses, including interest and income taxes ..................... (127,918) 127,918 -- -------- ------- ------- Net earnings from nonutility subsidiary .................... 19,088 (19,088) -- Allowance for other funds used during construction and capital cost recovery factor ........................... 12,610 -- 12,610 Other, net ........................................................ (1,902) (2,585) (4,487) ----- ------ ----- Total Other Income ................................... 29,796 (21,673) 8,123 ------ ------- ------ Income Before Interest and Income Taxes ................................ 354,289 178,736 533,025 Interest Charges Interest on debt .................................................. 127,401 -- 127,401 Other.............................................................. 11,809 -- 11,809 Subsidiary interest expense ....................................... -- 84,783 84,783 Allowance for borrowed funds used during construction and capital cost recovery factor ........................... (12,083) -- (12,083) ------ ------ ------ Net Interest Charges .............................. 127,127 84,783 211,910 ------- ------ ------- Income Before Income Taxes ............................................. 227,162 93,953 321,115 Income Taxes Income taxes-utility .............................................. -- 119,859 119,859 Income taxes-nonoperating ......................................... -- (2,995) (2,995) Income taxes-subsidiary ........................................... -- (22,911) (22,911) -------- ------- ------- Total Income Taxes ............................... -- 93,953 93,953 -------- ------ ------ Net Income ............................................................. 227,162 -- 227,162 Preferred Dividends ................................................... 16,437 -- 16,437 ------ ------- ------ Earnings Applicable to Common Stock .................................... $ 210,725 $ -- $210,725 =========== =========== ======== Average Shares of Common Stock Outstanding ............................. 118,006 118,006 Earnings Per Share of Common Stock ..................................... $ 1.79 $ 1.79 Certain amounts have been reclassified to conform with the 1996 presentation.
16 NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS 1.The revenues, expenses, assets, and liabilities of PEPCO's nonregulated subsidiaries have been reclassified to conform with the presentation utilized by BGE. The effect of accounting policy differences are immaterial and have not been adjusted in the pro forma combined condensed financial statements. 2.Pro forma per common share amounts give effect to the conversion of each share of BGE and PEPCO Common Stock into 1 share and .997 share, respectively of Constellation Energy Corporation Common Stock. The pro forma combined condensed financial statements are presented as if the companies were combined during all periods included therein. 3.The allocation between BGE and PEPCO and their customers of the estimated cost savings resulting from the Merger, net of the costs incurred to achieve such savings, will be subject to regulatory review and approval. None of these estimated cost savings, the costs to achieve such savings, or transaction costs have been reflected in the pro forma combined condensed financial statements. 4.Intercompany transactions between BGE and PEPCO during the periods presented were not material and, accordingly, no pro forma adjustments were made to eliminate such transactions. 5.The PEPCO reclassifying information reflects the reclassifying entries necessary to adjust PEPCO's consolidated balance sheet and statement of income presentation to be consistent with the presentation expected to be used by the Constellation Energy Corporation. 17 ITEM 7. Financial Statements and Exhibits (c) Exhibit No. 2* Registration Statement on Form S-4 of Constellation Energy Corporation, as amended, which became effective February 9, 1996, Registration No. 33-64799. *Incorporated by Reference. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BALTIMORE GAS AND ELECTRIC COMPANY (Registrant) Date April 7, 1997 /s/ D. A. Brune D. A. Brune, Vice President on behalf of the Registrant and as Principal Financial Officer 18 EXHIBIT INDEX Exhibit Number 2* Registration Statement on Form S-4 of Constellation Energy Corporation, as amended, which became effective February 9, 1996, Registration No. 33- 64799. *Incorporated by Reference. 19 -----END PRIVACY-ENHANCED MESSAGE-----