Baltimore Gas and Electric Co.'s Constellation Holdings subsidiary, which has lost money in the past two years on its real estate investments, plans to sell those assets as market conditions permit, shareholders were told at the annual meeting yesterday.
"The last few years have not been a happy time" for Constellation's real estate operations, BG&E Chairman George V. McGowan told shareholders. "We have good projects, and we don't intend to sell them until we can realize more reasonable values, but over the long term, we intend to reduce Constellation's real estate activities to concentrate on power generation."
Constellation has about $910 million in assets, of which $380 million,about 42 percent, is in real estate. Over the next five years, Constellation hopes to reduce its real estate holdings to about 20 percent of its portfolio, Constellation President Bruce M. Ambler said.
Because of the depressed real estate market, the market value of the real estate is well below the book value of $380 million. Just how far below book value, the company does not know, Mr. Ambler said.
Company officials said they expect the company to continue its involvement in real estate but that the company does not expect to begin any new development projects, said Arthur J. Slusark, a BG&E spokesman. That means BG&E is, in effect, withdrawing from real estate development and that Constellation is liquidating its real estate assets when possible.
The funds raised by the sale of real estate will be reinvested primarily in energy projects. " The opportunities there are better for us," Mr. McGowan said.
In other developments yesterday:
* The company announced earnings applicable to common stock of $48.7 million, or 37 cents a share, down from $50.3 million, or 40 cents a share, in the same quarter a year ago. The per-share figures reflect a 3-for-2 stock split effective April 23. Sales of electricity rose 6.2 percent, and sales of gas rose 9.3 percent,mainly because of cold weather.
* Shareholders rejected a proposal to cap executive pay at 20 times the average pay of BG&E's workers, which the company has said is about $41,000. That would mean a limit of about $820,000. Last year, Mr. McGowan made substantially less than that -- about $458,000 in salary and about $53,000 in other benefits.
* Yesterday's meeting was the last that Mr. McGowan expects to attend as the company's chief executive officer. He said at a news conference after the meeting that he intends to retire at the end of this year.
* A shareholder proposal to require the company to increase energy conservation and make greater use of renewable fuels was defeated.
Three months ended 3/31/92
.. .. ..Revenue.. .. .. .. Net*.. .. .. .. .. .. .. .. .. .. Share**
'92.. ..671,369,000.. .. ..48,680,000.. .. .. .. .. .. .. .. 0.37
'91.. . 594,664,000.. .. .50,285,000.. .. .. .. .. .. .. .. . 0.40
% change.. +12.9.. .. .. .. ..- 2.6.. .. .. .. .. .. .. .. .. ..+7.5
*Applicable to common stock
**Adjusted to reflect 3-for-2 stock split to shareholders of record as of April 23.