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BALTIMORE, April 30 /PRNewswire-FirstCall/ -- Constellation Energy (NYSE: CEG) today reported adjusted earnings of $0.95 per share for the first quarter of 2008, 8 percent lower than the $1.03 adjusted earnings per share earned in the same period last year. Adjusted earnings exclude the impact of special items, discontinued operations, certain economic, non-qualifying hedges and synfuel earnings. On a Generally Accepted Accounting Principles (GAAP) basis, the company earned $0.81 per share in the first quarter of 2008, compared to $1.07 per share in the same period last year.
Constellation Energy reaffirmed earnings guidance for 2008 at $5.25 to $5.75 per share, and for 2009, the company expects to grow earnings 15 to 20 percent over projected 2008 earnings.
"We are pleased with our first quarter results, which were in line with our expectations and reflect solid operating performance," said Mayo A. Shattuck III, chairman, president and chief executive officer of Constellation Energy. "We achieved several operational successes during the first quarter of 2008, including strong results from our generation fleet, driven by the roll- off of below-market hedges. Our Nuclear Group delivered particularly strong operating results, as we successfully completed planned outages and limited nuclear fleet forced outages to less than 3 days.
"During the first quarter, we continued to transact opportunistically. We purchased the Hillabee Energy Center for approximately $155 million, which should be completed in 2010 at about 45 percent of the cost to build a new plant. This acquisition complements our roughly 3,100 megawatts of peak load in the Southeast, a growing area of our business. The addition of this generation asset continues to expand our growth strategy beyond competitive markets into regulated markets, while capitalizing on our expertise and extensive background in building and operating generating facilities. Consistent with our 'Invest-Develop-Harvest' strategy in upstream gas, we executed the sale of a non-operating interest in producing wells to Constellation Energy Partners, recognizing a gain of approximately $14 million.
"Lastly, during the first quarter, we announced a comprehensive settlement with political and regulatory leaders in Maryland," said Shattuck. "We believe the agreement provides far-reaching benefits for our customers, our investors and Maryland. All parties gain meaningfully in this carefully crafted settlement, and the overarching value is a return to regulatory stability and normalcy. There is commitment to putting the past behind us and focusing on discussions around the many energy-related challenges and opportunities that lie in Maryland's future. We fully recognize that the expression of many different views and concerns about Maryland's future energy policy will continue and is likely to spark rather intensive debates. However, we are confident that we can go about these discussions in a constructive manner now that the past has been laid to rest."
The following table summarizes adjusted earnings per share and earnings per share reported in accordance with GAAP for the company's business segments and provides a reconciliation to total company reported earnings.
Three Months Ended March 31,
2008 2007
Reported Reported
GAAP Adjusted GAAP Adjusted
EARNINGS PER COMMON SHARE EPS* EPS EPS* EPS
Baltimore Gas and Electric $0.41 $0.37 (1) $0.36 $0.36
Merchant Energy 0.40 0.58 (2) 0.67 0.62 (3)
Other Nonregulated - - 0.05 0.05
Diluted Earnings Per Share from
Continuing Operations 0.81 0.95 1.08 1.03
Loss from Discontinued Operations
Assuming Dilution - - (0.01) -
Diluted Earnings Per Share $0.81 $0.95 $1.07 $1.03
* Unaudited.
GAAP EPS was adjusted by the following amounts to calculate Adjusted EPS
(1) Subtraction of effective tax rate impact related to Maryland
settlement agreement of $0.04 per share.
(2) Addition of mark-to-market losses on certain non-qualifying hedges
of $0.19 per share. Subtraction of earnings from our synthetic
fuel processing facilities of $0.01 per share.
(3) Subtraction of earnings from our synthetic fuel processing
facilities of $0.10 per share. Addition of mark-to-market losses on
certain non-qualifying hedges of $0.05 per share.
Constellation Energy Group and Subsidiaries
Consolidated Statements of Income (Unaudited)
Three Months Ended
March 31,
2008 2007
(In Millions, Except Per Share Amounts)
Revenues
Nonregulated revenues $3,726.9 $4,193.8
Regulated electric revenues 709.3 514.8
Regulated gas revenues 391.0 402.5
Total revenues 4,827.2 5,111.1
Expenses
Fuel and purchased energy expenses 3,743.1 4,016.7
Operating expenses 590.1 568.7
Depreciation, depletion, and amortization 148.3 132.4
Accretion of asset retirement obligations 16.6 17.7
Taxes other than income taxes 74.8 73.2
Total expenses 4,572.9 4,808.7
Income from Operations 254.3 302.4
Other Income 42.3 42.4
Fixed Charges
Interest expense 78.8 80.3
Interest capitalized and allowance for
borrowed funds used during construction (7.1) (3.8)
BGE preference stock dividends 3.3 3.3
Total fixed charges 75.0 79.8
Income from Continuing Operations Before
Income Taxes 221.6 265.0
Income Tax Expense 75.9 67.7
Income from Continuing Operations 145.7 197.3
Loss from discontinued operations, net of
income taxes of $0.8 - (1.6)
Net Income $145.7 $195.7
Earnings Applicable to Common Stock $145.7 $195.7
Average Shares of Common Stock Outstanding -
Basic 178.2 180.6
Average Shares of Common Stock Outstanding -
Diluted 180.2 182.8
Earnings Per Common Share from Continuing
Operations - Basic $0.82 $1.09
Loss from discontinued operations - Basic - (0.01)
Earnings Per Common Share - Basic $0.82 $1.08
Earnings Per Common Share from Continuing
Operations - Diluted $0.81 $1.08
Loss from discontinued operations - Diluted - (0.01)
Earnings Per Common Share - Diluted $0.81 $1.07
Certain prior-period amounts have been reclassified to conform with the
current period's presentation.
Constellation Energy Group and Subsidiaries
Consolidated Balance Sheets (Unaudited)
March 31, December 31,
2008 2007
ASSETS (In Millions)
Current Assets
Cash and cash equivalents $662.6 $1,095.9
Accounts receivable (net of allowance
for uncollectibles of $139.3 and $44.9,
respectively) 4,560.5 4,289.5
Fuel stocks 609.2 591.3
Materials and supplies 208.9 207.5
Derivative assets 1,843.0 760.6
Unamortized energy contract assets 86.5 32.0
Deferred income taxes - 300.7
Other 445.7 408.1
Total current assets 8,416.4 7,685.6
Investments And Other Noncurrent Assets
Nuclear decommissioning trust funds 1,274.4 1,330.8
Other investments 541.1 542.2
Regulatory assets (net) 548.6 576.2
Goodwill 261.3 261.3
Derivative assets 1,472.4 1,030.2
Unamortized energy contract assets 194.7 178.3
Other 366.6 370.6
Total investments and other noncurrent
assets 4,659.1 4,289.6
Property, Plant And Equipment
Nonregulated property, plant and equipment 8,454.9 8,087.0
Regulated property, plant and equipment 6,150.8 6,051.2
Nuclear fuel (net of amortization) 347.2 374.3
Accumulated depreciation (4,843.7) (4,745.4)
Net property, plant and equipment 10,109.2 9,767.1
Total Assets $23,184.7 $21,742.3
LIABILITIES AND EQUITY
Current Liabilities
Short-term borrowings $- $14.0
Current portion of long-term debt 232.8 380.6
Accounts payable and accrued liabilities 2,931.8 2,630.1
Customer deposits and collateral 202.2 146.6
Derivative liabilities 1,847.4 1,134.3
Unamortized energy contract liabilities 389.7 392.2
Deferred income taxes 95.3 -
Accrued expenses and other 742.0 956.0
Total current liabilities 6,441.2 5,653.8
Deferred Credits And Other Noncurrent
Liabilities
Deferred income taxes 1,415.7 1,588.5
Asset retirement obligations 934.5 917.6
Derivative liabilities 1,480.3 1,118.9
Unamortized energy contract liabilities 1,132.2 1,218.6
Defined benefit obligations 762.3 828.6
Deferred investment tax credits 48.8 50.5
Other 167.1 155.9
Total deferred credits and other noncurrent
liabilities 5,940.9 5,878.6
Long-Term Debt
Long-term debt of nonregulated businesses 2,853.9 2,830.8
Long-term debt of BGE 1,189.5 1,334.2
Rate stabilization securitization bonds
of BGE 623.2 623.2
6.20% deferrable interest subordinated
debentures due October 15, 2043 to BGE
wholly owned BGE Capital Trust II relating
to trust preferred securities 257.7 257.7
Unamortized discount and premium (4.8) (4.8)
Current portion of long-term debt (232.8) (380.6)
Total long-term debt 4,686.7 4,660.5
Minority Interests 19.9 19.2
BGE Preference Stock Not Subject To
Mandatory Redemption 190.0 190.0
Common Shareholders' Equity
Common stock 2,544.5 2,513.3
Retained earnings 3,958.3 3,919.5
Accumulated other comprehensive loss (596.8) (1,092.6)
Total common shareholders' equity 5,906.0 5,340.2
Total Liabilities And Equity $23,184.7 $21,742.3
Certain prior-period amounts have been reclassified to conform with the
current period's presentation.
Constellation Energy Group and Subsidiaries
Merchant Operating Statistics (Unaudited)
Three Months Ended March 31,
Oil & Hydro &
Nuclear Coal Gas Renewables Other Total
Generation by Fuel Type (%)
2008 59.4 35.6 - 3.5 1.5 100.0
2007 56.9 38.0 0.9 2.8 1.4 100.0
Thousands of MWH
2008 7,804 4,686 (2) 456 192 13,136
2007 7,116 4,757 110 352 179 12,514
Utility Operating Statistics (Unaudited)
Three Months Ended
March 31,
2008 2007
ELECTRIC
Revenues (In Millions)
Residential $504.7 $298.9
Commercial
Excluding Delivery Service Only 120.0 134.9
Delivery Service Only 52.1 49.9
Industrial
Excluding Delivery Service Only 6.2 6.8
Delivery Service Only 6.5 6.6
System Sales 689.5 497.1
Other 19.9 17.7
Total $709.4 $514.8
Distribution Volumes (In Thousands) - MWH
Residential 3,698 3,806
Commercial
Excluding Delivery Service Only 900 1,054
Delivery Service Only 2,775 2,792
Industrial
Excluding Delivery Service Only 51 65
Delivery Service Only 755 749
Total 8,179 8,466
GAS
Revenues (In Millions)
Residential
Excluding Delivery Service Only $240.7 $260.1
Delivery Service Only 7.3 7.5
Commercial
Excluding Delivery Service Only 69.1 73.2
Delivery Service Only 15.0 15.4
Industrial
Excluding Delivery Service Only 3.8 4.0
Delivery Service Only 4.1 4.0
System Sales 340.0 364.2
Off-System Sales 53.3 40.6
Other 3.1 2.5
Total $396.4 $407.3
Distribution Volumes (In Thousands) - DTH
Residential
Excluding Delivery Service Only 17,948 19,645
Delivery Service Only 1,951 2,190
Commercial
Excluding Delivery Service Only 5,768 6,110
Delivery Service Only 10,510 10,649
Industrial
Excluding Delivery Service Only 334 343
Delivery Service Only 5,159 4,164
System Sales 41,670 43,101
Off-System Sales 5,244 4,518
Total 46,914 47,619
Utility operating statistics do not reflect the elimination of
intercompany transactions.
Heating Degree Days (Calendar-Month Basis)
Heating Degree Days - Actual 2,329 2,428
- Normal 2,472 2,448
Constellation Energy Group and Subsidiaries
Supplemental Financial Statistics (Unaudited)
Three Months Ended
March 31,
2008 2007
Effective Tax Rate 33.7% 25.3%
Equity Investment In Nonregulated Businesses --
End of Period $4,186.4 $3,681.4
Equity Investment In Regulated Business --
End of Period $1,719.6 $1,691.9
Common Stock Data
Three Months Ended
March 31,
2008 2007
Common Stock Dividends - Per Share
-- Declared $0.4775 $0.4350
-- Paid $0.4350 $0.3775
Market Value Per Share
-- High $107.97 $88.20
-- Low $81.94 $68.78
-- Close $88.27 $86.95
Shares Outstanding -- End of Period (In Millions) 178.4 180.2
Book Value per Share -- End of Period $33.11 $29.82