-----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, Ct1JEtDX2FpsrZ53OEh6dpJtO62t2zrgal6fipz9ymRCgzlqJowquWrUN7DBa4Fw BXhJfjbIaMHBvB6p63ndbA== 0000009466-97-000039.txt : 19970725 0000009466-97-000039.hdr.sgml : 19970725 ACCESSION NUMBER: 0000009466-97-000039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970724 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970724 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: 97644980 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): July 24, 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 - --------------------- Earnings - -------- Our consolidated earnings were: o $ .05 per share for the quarter ended June 30, 1997, o $ .48 per share for the six months ended June 30, 1997, and o $1.36 per share for the 12 months ended June 30, 1997. See the press release attached to this 8-K as Exhibit 99 which includes details about second quarter financial performance. These earnings reflect the $31.9 million after-tax write-down discussed below. $31.9 Million Real Estate Project Write-Down - -------------------------------------------- Our Constellation Companies' real estate portfolio includes a mixed-use, planned-unit development named Piney Orchard. The development, located in the Baltimore-Washington corridor, has been economically hurt by a prolonged period of low economic growth in the corridor. While the project is successful operationally, delays in the rebound of the real estate market caused delays in completion of phases of the development and sales which drove up project costs, specifically carrying costs which include interest expenses. As previously disclosed, under applicable accounting rules we are required to write down the value of a real estate investment if expected cash flow from the project is less than the investment in the project. The expected cash flow from the Piney Orchard project is less than the Constellation Companies' investment in the project due primarily to carrying costs which include interest expenses. As a result, our second quarter financial statements will reflect an after-tax write-down of $31.9 million. The Constellation Companies remaining book investment in the project is $97.8 million. 2 ITEM 7. Financial Statements and Exhibits - ------------------------------------------ (c) Exhibit No. 99 News Release of Baltimore Gas and Electric Company dated July 24, 1997. 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 July 24, 1997 /s/ D. A. Brune ------------- ---------------- D. A. Brune, Vice President on behalf of the Registrant and as Principal Financial Officer 3 EXHIBIT INDEX Exhibit Number ------ 99 News Release of Baltimore Gas and Electric Company dated July 24, 1997. 4 EX-99 2 NEWS RELEASE Exhibit 99 ---------- Arthur J. Slusark Baltimore Gas and Electric Company Director of Public Information 39 W. Lexington Street Room 1100 Baltimore, Maryland 21202 410 234-7433 24 hours a day N e w s R e l e a s e July 24, 1997 FOR IMMEDIATE RELEASE REAL ESTATE WRITE-DOWN AND MILD WEATHER - --------------------------------------- RESULT IN BGE SECOND QUARTER EARNINGS DECLINE - --------------------------------------------- Baltimore Gas and Electric Company today reported common stock earnings of $7,096,000 for the three months ended June 30, 1997, equivalent to $.05 per common share. This compares with earnings of $52,449,000, or $.36 per share, for the second quarter of 1996. The primary reason for the decline in 1997 second-quarter earnings was a write-down of $32 million after-tax, or $.22 per share, on Piney Orchard, a planned community being developed by BGE subsidiary Constellation Real Estate Group. For the six months ended June 30, 1997, earnings on common stock were $71,323,000, equivalent to $.48 per share. This compares with earnings of $143,566,000, or $.97 per share for the six months ended June 30, 1996. The 1997 six-month figures include the $.22 Piney Orchard write- down as well as an $.08 per share write-down on Church Street Station, an entertainment complex in Florida also operated by Constellation Real Estate Group. (more) 1 Earnings per share for the Company's utility operations and for its diversified businesses were as follows: Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1997 1996 1997 1996 ---- ---- ---- ---- Utility Operations $.23 $.26b $.62 $.83b Diversified Businesses (.18)a .10 (.14)c .14 ---- --- ---- --- Total $.05 $.36 $.48 $.97 ==== ==== ==== ==== Note - ---- a Includes the impact of the $.22 per share write-down of the Piney Orchard Planned Community, a real estate project. b Reflects the $.03 per share disallowance of replacement energy costs incurred during an outage at Calvert Cliffs in 1987. c Reflects the $.22 per share write-down of the Piney Orchard Planned Community and the $.08 per share write-down for the possible sale of Church Street Station. Mild weather conditions during the first half of 1997 that contrasted sharply with the weather experienced during the first six months of 1996 impacted utility earnings. According to George C. Creel, Executive Vice President and Acting Chief Operating Officer, "So far this year, we have had a very mild winter and spring. Unfortunately, the nice weather is not so nice for earnings, especially when compared to our earnings during the first half of 1996 when we experienced intemperate weather conditions." In 1997, there were 35% fewer cooling degree days and 9% fewer heating degree days than in the first half of 1996. Total electric sales to customers decreased nearly 5% during the first two quarters of 1997 compared to the same period in 1996. Residential sales decreased more than 10% despite a 1% growth in customers, while commercial and industrial sales each decreased 1%, primarily as a result of the weather. 2 Total gas sales to customers for the first six months of 1997 were 3% below sales during the first half of 1996. Sales to residential gas customers were down 12% and commercial sales decreased 1% as a result of the weather. These decreases were partially offset by 2% customer growth and an 8% increase in industrial sales. Earnings from diversified businesses during the first half of 1997 were lower than earnings during the first six months of 1996 as a result of two real estate write-downs. An $.08 per share write-down was taken on Church Street Station during the first quarter and a $.22 per share write-down was taken during the second quarter on Piney Orchard, a 1,525-acre, planned community in Anne Arundel County. Excluding the write-downs, which total $44 million after-tax, Constellation Holdings, Inc. increased earnings $3.9 million. Bruce M. Ambler, President - Constellation Holdings, said "although the Piney Orchard project is successful operationally, delays in the rebound of the real estate market caused delays in development and sales that drove up our project costs." In addition, BGE Home Products & Services contributed $2.3 million to the diversified business earnings. (more) 3 BALTIMORE GAS AND ELECTRIC COMPANY AND SUBSIDIARIES Consolidated Financial Information June 30, 1997 (In Thousands, Except Per Share Amounts) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1997 1996 1997 1996 ---- ---- ---- ---- Revenues: Electric $498,066 $517,780 $1,015,362 $1,072,224 Gas 92,338 93,515 306,046 312,779 Diversified Businesses 156,032 120,412 312,714 208,034 ------- ------- ------- ------- Total $746,436 $731,707 $1,634,122 $1,593,037 ======== ======== ========== ========== Net Income $14,970 $64,553 $87,081 $165,334 Earnings Applicable to Common Stock $7,096 $52,449 $71,323 $143,566 Average Common Shares Outstanding 147,667 147,527 147,667 147,527 Earnings Per Share of Common Stock Utility Operations $.23 $.26b $.62 $.83b Diversified Businesses (.18)a .10 (.14)c .14 ---- --- ---- --- Total $.05 $.36 $.48 $.97 ==== ==== ==== ==== Note - ---- a Includes the impact of the $.22 per share write-down of the Piney Orchard Planned Community, a real estate project. b Reflects the $.03 per share disallowance of replacement energy costs incurred during an outage at Calvert Cliffs in 1987. c Reflects the $.22 per share write-down of the Piney Orchard Planned Community and the $.08 per share write-down for the possible sale of Church Street Station. - ### - 4 -----END PRIVACY-ENHANCED MESSAGE-----