UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 18, 1999
BALTIMORE GAS AND ELECTRIC COMPANY
(Exact name of registrant as specified in its charter)
Maryland 1-1910 52-0280210
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(State of incorporation) (Commission (IRS Employer
File Number) Identification No.)
39 W. Lexington Street Baltimore, Maryland 21201
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(Address of principal executive offices) (Zip Code)
410-234-5511
(Registrant's telephone number, including area code)
Not Applicable
(Former name,former address and former fiscal year if changed since last report)
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ITEM 5. Other Events
Attached to this Current Report on Form 8-K as Exhibit 99 is a news release of
the Registrant which includes details about financial performance for the twelve
months ended December 31, 1998. These earnings reflect the $15.4 million ($.10
per share) after-tax write-down for Church Street Station taken during the
fourth quarter of 1998.
ITEM 7. Financial Statements and Exhibits
(c) Exhibit No. 99 News Release of Baltimore Gas and Electric Company
dated January 18, 1999.
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 January 21, 1999 /s/ D. A. Brune
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D. A. Brune, Vice President
on behalf of the Registrant and
as Principal Financial Officer
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EXHIBIT INDEX
Exhibit
Number
99 News Release of Baltimore Gas and Electric Company
dated January 18, 1999.
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EXHIBIT 99
DARCEL GUY Baltimore Gas and Electric Company
Director of Public Information 39 W. Lexington Street
Room 1100
Baltimore, Maryland 21201
N E W S 410 234-7433 24 hours a day
R E L E A S E
January 18, 1999
FOR IMMEDIATE RELEASE
BGE REPORTS EARNINGS FOR TWELVE MONTHS ENDED DEC. 31, 1998
Baltimore Gas and Electric Company today reported earnings on common
stock of $305.9 million for the 12 months ended December 31, 1998, equivalent to
$2.06 per share. This compares to 1997 earnings of $254.1 million or $1.72 per
share. However, both 1998 and 1997 earnings reflect one-time charges, which are
explained in the Notes to Financial Statements. Excluding the impact of the
non-recurring charges, earnings for 1998 were $2.20 per share compared to $2.28
for 1997. Earnings per share for the Company's utility operations and for its
diversified businesses were as follows:
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
---- ---- ---- ----
Utility $ .14 $ .32 $ 1.93 $ 1.94
Diversified Business .09 .06 .27 .34
---- ---- ------ -----
Total Current Year Operations $ .23 $ .38 $ 2.20 $ 2.28
Write-off of Merger Costs - (.25) - (.25)
Write-Downs of Real Estate
Investments (.10) (.01) (.10) (.31)
Write-Down of Energy Service
Investment (.04) - (.04) -
---- ----- ----- -----
Total $ .09 $ .12 $ 2.06 $ 1.72
===== ===== ====== ======
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Frank O. Heintz, Executive Vice President of Utility Operations, stated
"BGE continued to experience moderate customer growth during 1998. However,
earnings from utility operations were slightly lower this year as a result of
unfavorable weather experienced in the first and fourth quarters of 1998." In
addition, the utility's earnings from operations were further reduced as a
result of certain cost increases, including higher electric depreciation
expenses approved by the Maryland Public Service Commission and reflected in the
Company's operating results for the fourth quarter of 1998. In the fourth
quarter of 1997 the Company recognized a $37.5 million after-tax write-off ($.25
per share) of costs associated with the terminated merger of Baltimore Gas and
Electric Company and Potomac Electric Power Company. The write-off of merger
costs in 1997 resulted in lower reported earnings for the utility in 1997 versus
1998.
Total electric sales to customers in 1998 increased about 2.4%,
primarily reflecting customer growth and increased usage per customer. Sales to
residential customers were up almost 1.5%, while sales to commercial and
industrial customers increased 2.9%. Electric sales to customers decreased
during the fourth quarter compared to the same period in 1997 due to milder
weather experienced this year.
Total gas sales to customers in 1998 decreased 10.9% compared to 1997
sales levels due to the mild winter and fall weather experienced during 1998.
Sales to residential customers decreased 11.6%, while sales to commercial and
industrial customers decreased a little over 10.5%.
Robert E. Denton, Executive Vice President of Generation, pointed out
that BGE had another excellent year of operational performance. Calvert Cliffs
Nuclear Power Plant produced 13.3 million megawatt hours of electricity,
surpassing 1997's record setting pace by 1.5%. This is Calvert Cliffs' highest
production level since the plant began commercial operations more than 22 years
ago. He also noted, "Our combined fossil plants generated an all-time record
amount of energy, surpassing the previous record set in 1997."
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Earnings from diversified businesses operations (excluding the impact
of write-downs taken in 1998 and 1997) were $41.1 million ($.27 per share) in
1998, compared to $50.5 million ($.34 per share) earned in 1997. The earnings
from diversified businesses in 1998 were $20.2 million after reflecting the
write-down of Constellation Real Estate's investment in Church Street Station
that is being sold, and the write-off of an energy service investment. This
compares to $4.5 million in 1997 after reflecting the write-downs of two of
Constellation Real Estate's properties (see the Notes to Financial Statements).
Constellation Power, Inc., BGE's largest operating subsidiary, contributed $44.3
million ($.30 per share) toward earnings in 1998, compared to $36.6 million
($.25 per share) in 1997, and Constellation Power Source, BGE's newest operating
subsidiary weighed in with a $7.5 million ($.05 per share) contribution to
earnings. According to Edward A. Crooke, Chairman of Constellation Enterprises,
Inc. (CEI), "CEI's earnings during 1998 reflect good performance from various
energy projects and the success of Constellation Power Source. Unfortunately,
CEI's real estate business and investment portfolio suffered through some tough
market conditions during 1998."
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BALTIMORE GAS AND ELECTRIC COMPANY AND SUBSIDIARIES
Consolidated Financial Information
December 31, 1998
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended December 31, Twelve Months Ended December 31,
1998 1997 1998 1997
---- ---- ---- ----
Revenues
<S> <C> <C> <C> <C>
Electric $ 472,445 $ 500,009 $ 2,219,204 $2,191,709
Gas 124,725 154,599 449,417 521,547
Diversified Businesses 193,249 158,018 689,506 594,328
----------- ----------- ----------- -----------
Total $ 790,419 $ 812,626 $ 3,358,127 $3,307,584
========== ========== =========== ==========
Earnings
Current Year Operations $ 37,594 $ 63,849 $ 348,597 $ 66,276
Write-off of Merger Costs (a) - (37,495) - (37,495)
Write-downs of Real Estate
Investments (15,398) (2,092) (15,398) (46,030)
Write-off of Energy Service
Investment (c) (5,535) - (5,535) -
----------- -------- -------- --------
-
Net Income $ 16,661 $ 24,262 $ 327,664 $ 282, 751
Earnings Applicable to
Common Stock $ 13,189 $ 18,328 $ 305,899 $ 254,064
Average Common Shares Outstanding 149,216 147,667 148,523 147,667
Earnings Per Share of Common Stock
Current Year Operations
Utility $ .14 $ .32 $ 1.93 $ 1.94
Diversified Businesses .09 .06 .27 .34
--- --- --- ---
Total Current Year Operations $ .23 $ .38 $ 2.20 $ 2.28
Write-off of Merger Costs (a) - (.25) - (.25)
Write-downs of Real Estate
Investments (b) (.10) (.01) (.10) (.31)
Write-off of Energy Service
Investment (c) (.04) - (.04) -
------ ----- ----- -----
Total $ .09 $ .12 $ 2.06 $1.72
====== ===== ===== =====
</TABLE>
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Notes to Financial Statements:
(a) During the fourth quarter of 1997, BGE took an after-tax charge of $37.5
million ($.25 per share) representing the costs associated with the terminated
merger of BGE and Potomac Electric Power Company.
(b) During the fourth quarter of 1997, the Company reflected an after-tax
write-down of $2.1 million ($.01 per share) for Church Street Station, an
entertainment complex located in Orlando, Florida. During the first quarter of
1997, BGE took an initial $12.0 million ($.08 per share) write-down of this same
property. During the second quarter of 1997, BGE took a $31.9 million after-tax
($.22 per share) write-down for Piney Orchard, a residential development located
in Anne Arundel County, Maryland. During the fourth quarter of 1998, BGE took an
additional after-tax write-down for Church Street Station of $15.4 million ($.10
per share).
(c) During the fourth quarter of 1998, BGE took a $5.5 million after-tax
write-off ($.04 per share) of an energy service investment. This write-off
consists of BGE's investment in a company that manufactures and markets power
switches designed to improve the reliability of electric service for large
industrial and commercial customers, and certain assets owned by one of BGE's
operating subsidiaries.
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