x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2012
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
|
Commission
File Number
|
Registrant, State of Incorporation
Address and Telephone Number
|
IRS Employer
Identification No.
|
||||
0-30512
|
CH Energy Group, Inc.
(Incorporated in New York)
284 South Avenue
Poughkeepsie, New York 12601-4839
(845) 452-2000
|
14-1804460
|
||||
1-3268
|
Central Hudson Gas & Electric Corporation
(Incorporated in New York)
284 South Avenue
Poughkeepsie, New York 12601-4839
(845) 452-2000
|
14-0555980
|
CH Energy Group, Inc.
|
Yes þ
|
No o
|
|
Central Hudson Gas & Electric Corporation
|
Yes þ
|
No o
|
CH Energy Group, Inc.
|
Yes þ
|
No o
|
|
Central Hudson Gas & Electric Corporation
|
Yes þ
|
No o
|
CH Energy Group, Inc.
|
Central Hudson Gas & Electric Corporation
|
|
Large Accelerated Filer þ
|
Large Accelerated Filer o
|
|
Accelerated Filer o
|
Accelerated Filer o
|
|
Non-Accelerated Filer o
|
Non-Accelerated Filer þ
|
|
Smaller Reporting Company o
|
Smaller Reporting Company o
|
CH Energy Group, Inc.
|
Yes o
|
No þ
|
|
Central Hudson Gas & Electric Corporation
|
Yes o
|
No þ
|
CH Energy Group, Inc.
|
PAGE
|
|
Three Months Ended March 31, 2012 and 2011
|
1
|
|
Three Months Ended March 31, 2012 and 2011
|
2
|
|
Three Months Ended March 31, 2012 and 2011
|
3
|
|
March 31, 2012, December 31, 2011 and March 31, 2011
|
4
|
|
Three Months Ended March 31, 2012 and 2011
|
6
|
Central Hudson Gas & Electric Corporation
|
||
Three Months Ended March 31, 2012 and 2011
|
7
|
|
Three Months Ended March 31, 2012 and 2011
|
7
|
|
Three Months Ended March 31, 2012 and 2011
|
8
|
|
March 31, 2012, December 31, 2011 and March 31, 2012
|
9
|
|
Three Months Ended March 31, 2012 and 2011
|
11
|
PAGE
|
||
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
53
|
|
Quantitative and Qualitative Disclosure About Market Risk
|
81
|
|
Controls and Procedures
|
81
|
Legal Proceedings
|
82
|
|
Risk Factors
|
82
|
|
ITEM 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 84 |
ITEM 4 | Mine Safety Disclosures | 84 |
Exhibits
|
84
|
|
85
|
||
86
|
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Operating Revenues
|
|
|
||||||
Electric
|
$ | 129,272 | $ | 154,570 | ||||
Natural gas
|
55,850 | 75,482 | ||||||
Competitive business subsidiaries:
|
||||||||
Petroleum products
|
84,632 | 92,632 | ||||||
Other
|
4,318 | 4,288 | ||||||
Total Operating Revenues
|
274,072 | 326,972 | ||||||
Operating Expenses
|
||||||||
Operation:
|
||||||||
Purchased electricity and fuel used in electric generation
|
45,059 | 70,268 | ||||||
Purchased natural gas
|
24,614 | 41,798 | ||||||
Purchased petroleum
|
70,305 | 75,766 | ||||||
Other expenses of operation - regulated activities
|
59,886 | 69,233 | ||||||
Other expenses of operation - competitive business subsidiaries
|
12,422 | 12,519 | ||||||
Merger related costs
|
5,219 | - | ||||||
Depreciation and amortization
|
10,624 | 10,085 | ||||||
Taxes, other than income tax
|
13,642 | 13,301 | ||||||
Total Operating Expenses
|
241,771 | 292,970 | ||||||
Operating Income
|
32,301 | 34,002 | ||||||
Other Income and Deductions
|
||||||||
Income from unconsolidated affiliates
|
52 | 464 | ||||||
Interest on regulatory assets and other interest income
|
2,160 | 1,866 | ||||||
Regulatory adjustments for interest costs
|
319 | 383 | ||||||
Business development costs
|
(58 | ) | (235 | ) | ||||
Other - net
|
(378 | ) | (569 | ) | ||||
Total Other Income (Deductions)
|
2,095 | 1,909 | ||||||
Interest Charges
|
||||||||
Interest on long-term debt
|
6,218 | 6,740 | ||||||
Interest on regulatory liabilities and other interest
|
1,584 | 1,482 | ||||||
Total Interest Charges
|
7,802 | 8,222 | ||||||
|
||||||||
Income before income taxes, non-controlling interest and preferred dividends of subsidiary
|
26,594 | 27,689 | ||||||
Income Taxes
|
11,771 | 10,615 | ||||||
Net Income from Continuing Operations
|
14,823 | 17,074 | ||||||
|
||||||||
Discontinued Operations
|
||||||||
Income from discontinued operations before tax
|
- | 150 | ||||||
Income tax expense from discontinued operations
|
- | 35 | ||||||
Net Income from Discontinued Operations
|
- | 115 | ||||||
|
||||||||
Net Income
|
14,823 | 17,189 | ||||||
|
||||||||
Net Income attributable to non-controlling interest:
|
||||||||
Dividends declared on Preferred Stock of subsidiary
|
242 | 242 | ||||||
Net Income Attributable to CH Energy Group
|
14,581 | 16,947 | ||||||
|
||||||||
Dividends declared on Common Stock
|
8,279 | 8,427 | ||||||
Change in Retained Earnings
|
$ | 6,302 | $ | 8,520 |
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Common Stock:
|
|
|
||||||
Average shares outstanding - Basic
|
14,882 | 15,645 | ||||||
Average shares outstanding - Diluted
|
15,143 | 15,838 | ||||||
|
||||||||
Income from continuing operations attributable to CH Energy Group common shareholders:
|
||||||||
Earnings per share - Basic
|
$ | 0.98 | $ | 1.07 | ||||
Earnings per share - Diluted
|
$ | 0.96 | $ | 1.06 | ||||
|
||||||||
Income from discontinued operations attributable to CH Energy Group common shareholders:
|
||||||||
Earnings per share - Basic
|
$ | - | $ | 0.01 | ||||
Earnings per share - Diluted
|
$ | - | $ | 0.01 | ||||
|
||||||||
Amounts attributable to CH Energy Group common shareholders:
|
||||||||
Earnings per share - Basic
|
$ | 0.98 | $ | 1.08 | ||||
Earnings per share - Diluted
|
$ | 0.96 | $ | 1.07 | ||||
Dividends Declared per Share
|
$ | 0.555 | $ | 0.540 |
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Net Income
|
$ | 14,823 | $ | 17,189 | ||||
|
||||||||
Other Comprehensive Loss:
|
||||||||
Net unrealized loss on investments held by equity method investees - net of tax benefit of $38 and $27
|
(58 | ) | (41 | ) | ||||
|
||||||||
Other comprehensive loss
|
(58 | ) | (41 | ) | ||||
|
||||||||
Comprehensive Income
|
14,765 | 17,148 | ||||||
|
||||||||
Comprehensive income attributable to non-controlling interest
|
242 | 242 | ||||||
|
||||||||
Comprehensive income attributable to CH Energy Group
|
$ | 14,523 | $ | 16,906 |
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Operating Activities:
|
|
|
||||||
Net income
|
$ | 14,823 | $ | 17,189 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
9,499 | 9,885 | ||||||
Amortization
|
1,125 | 1,037 | ||||||
Deferred income taxes - net
|
11,598 | 9,177 | ||||||
Bad debt expense
|
2,500 | 2,458 | ||||||
Undistributed equity in earnings of unconsolidated affiliates
|
(52 | ) | (464 | ) | ||||
Pension expense
|
7,233 | 8,289 | ||||||
Other post-employment benefits ("OPEB") expense
|
1,996 | 1,999 | ||||||
Regulatory liability - rate moderation
|
(1,033 | ) | (3,451 | ) | ||||
Revenue decoupling mechanism recorded
|
(950 | ) | 5,280 | |||||
Regulatory asset amortization
|
1,722 | 1,743 | ||||||
Gain on sale of assets
|
(79 | ) | - | |||||
Changes in operating assets and liabilities - net of business acquisitions:
|
||||||||
Accounts receivable, unbilled revenues and other receivables
|
(7,932 | ) | (27,400 | ) | ||||
Fuel, materials and supplies
|
5,425 | 6,781 | ||||||
Special deposits and prepayments
|
(4,407 | ) | (1,894 | ) | ||||
Income and other taxes
|
17 | (2,242 | ) | |||||
Accounts payable
|
(2,144 | ) | (9,611 | ) | ||||
Accrued interest
|
997 | 1,234 | ||||||
Customer advances
|
(5,212 | ) | (9,264 | ) | ||||
Pension plan contribution
|
(28,165 | ) | (8,157 | ) | ||||
Revenue decoupling mechanism collected
|
(1,310 | ) | 1,742 | |||||
Regulatory asset - storm deferral
|
(3,042 | ) | - | |||||
Regulatory asset - manufactured gas plant ("MGP") site remediation
|
951 | 559 | ||||||
Regulatory asset - Temporary State Assessment
|
(3,332 | ) | (2,272 | ) | ||||
Deferred natural gas and electric costs
|
7,883 | 25,334 | ||||||
Other - net
|
4,500 | 1,821 | ||||||
Net cash provided by operating activities
|
12,611 | 29,773 | ||||||
Investing Activities:
|
||||||||
Proceeds from sale of assets
|
96 | 41 | ||||||
Additions to utility and other property and plant
|
(25,887 | ) | (19,228 | ) | ||||
Acquisitions made by competitive business subsidiaries
|
- | (1,961 | ) | |||||
Other - net
|
(637 | ) | (477 | ) | ||||
Net cash used in investing activities
|
(26,428 | ) | (21,625 | ) | ||||
Financing Activities:
|
||||||||
Redemption of long-term debt
|
(36,000 | ) | - | |||||
Proceeds from issuance of long-term debt
|
48,000 | - | ||||||
Borrowings of short-term debt - net
|
64,500 | 16,500 | ||||||
Dividends paid on Common Stock
|
(8,269 | ) | (8,523 | ) | ||||
Dividends paid on Preferred Stock of subsidiary
|
(242 | ) | (242 | ) | ||||
Shares repurchased
|
(2,993 | ) | (8,533 | ) | ||||
Other - net
|
(593 | ) | (228 | ) | ||||
Net cash provided by (used in) financing activities
|
64,403 | (1,026 | ) | |||||
Cash Included in Net Current Assets Held for Sale
|
- | (603 | ) | |||||
Net Change in Cash and Cash Equivalents
|
50,586 | 6,519 | ||||||
Cash and Cash Equivalents at Beginning of Period
|
15,281 | 29,420 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 65,867 | $ | 35,939 | ||||
|
||||||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Interest paid
|
$ | 5,351 | $ | 5,932 | ||||
Federal and state income taxes paid
|
$ | 16 | $ | 162 | ||||
Additions to plant included in liabilities
|
$ | 4,126 | $ | 2,981 |
|
March 31,
|
December 31,
|
March 31,
|
|||||||||
|
2012
|
2011
|
2011
|
|||||||||
ASSETS
|
|
|
|
|||||||||
Utility Plant
|
|
|
|
|||||||||
Electric
|
$ | 1,017,986 | $ | 1,008,394 | $ | 972,543 | ||||||
Natural gas
|
301,609 | 305,664 | 295,914 | |||||||||
Common
|
151,086 | 147,286 | 143,398 | |||||||||
Gross Utility Plant
|
1,470,681 | 1,461,344 | 1,411,855 | |||||||||
|
||||||||||||
Less: Accumulated depreciation
|
390,307 | 388,784 | 378,038 | |||||||||
Net
|
1,080,374 | 1,072,560 | 1,033,817 | |||||||||
|
||||||||||||
Construction work in progress
|
66,518 | 58,847 | 50,588 | |||||||||
Net Utility Plant
|
1,146,892 | 1,131,407 | 1,084,405 | |||||||||
|
||||||||||||
Non-Utility Property & Plant
|
||||||||||||
Griffith non-utility property & plant
|
31,456 | 31,669 | 30,032 | |||||||||
Other non-utility property & plant
|
524 | 524 | 55,927 | |||||||||
Gross Non-Utility Property & Plant
|
31,980 | 32,193 | 85,959 | |||||||||
|
||||||||||||
Less: Accumulated depreciation - Griffith
|
22,220 | 22,006 | 20,679 | |||||||||
Less: Accumulated depreciation - other
|
- | - | 1,755 | |||||||||
Net Non-Utility Property & Plant
|
9,760 | 10,187 | 63,525 | |||||||||
|
||||||||||||
Current Assets
|
||||||||||||
Cash and cash equivalents
|
65,867 | 15,281 | 35,939 | |||||||||
Accounts receivable from customers - net of allowance for doubtful accounts of $7.0 million, $7.0 million and $6.8 million respectively
|
96,574 | 90,937 | 126,427 | |||||||||
Accrued unbilled utility revenues
|
14,283 | 15,299 | 14,778 | |||||||||
Other receivables
|
9,096 | 9,512 | 6,775 | |||||||||
Fuel, materials and supplies
|
19,689 | 25,114 | 17,925 | |||||||||
Regulatory assets
|
49,683 | 49,526 | 36,809 | |||||||||
Income tax receivable
|
- | 432 | 2,504 | |||||||||
Fair value of derivative instruments
|
9 | 349 | 108 | |||||||||
Special deposits and prepayments
|
25,777 | 21,795 | 24,565 | |||||||||
Assets held for sale
|
- | - | 8,653 | |||||||||
Accumulated deferred income tax
|
8,456 | 5,895 | 17,492 | |||||||||
Total Current Assets
|
289,434 | 234,140 | 291,975 | |||||||||
|
||||||||||||
Deferred Charges and Other Assets
|
||||||||||||
Regulatory assets - pension plan
|
151,737 | 159,020 | 134,199 | |||||||||
Regulatory assets - other
|
119,559 | 114,980 | 86,069 | |||||||||
Fair value of derivative instruments
|
- | 931 | - | |||||||||
Goodwill
|
37,752 | 37,512 | 36,455 | |||||||||
Other intangible assets - net
|
12,564 | 13,173 | 13,691 | |||||||||
Unamortized debt expense
|
5,035 | 4,535 | 4,831 | |||||||||
Investments in unconsolidated affiliates
|
2,559 | 2,777 | 7,077 | |||||||||
Other investments
|
15,212 | 14,461 | 13,506 | |||||||||
Other
|
5,884 | 6,989 | 5,444 | |||||||||
Total Deferred Charges and Other Assets
|
350,302 | 354,378 | 301,272 | |||||||||
Total Assets
|
$ | 1,796,388 | $ | 1,730,112 | $ | 1,741,177 |
|
March 31,
|
December 31,
|
March 31,
|
|||||||||
|
2012
|
2011
|
2011
|
|||||||||
CAPITALIZATION AND LIABILITIES
|
|
|
|
|||||||||
Capitalization
|
|
|
|
|||||||||
CH Energy Group Common Shareholders' Equity
|
|
|
|
|||||||||
Common Stock (30,000,000 shares authorized: $0.10 par value; 16,862,087 shares issued) 14,914,853 shares, 14,894,964 shares and 15,620,765 shares outstanding, respectively
|
$ | 1,686 | $ | 1,686 | $ | 1,686 | ||||||
Paid-in capital
|
348,306 | 351,053 | 350,290 | |||||||||
Retained earnings
|
248,693 | 242,391 | 238,862 | |||||||||
Treasury stock - 1,947,234 shares, 1,967,123 shares and 1,241,322 shares, respectively
|
(91,978 | ) | (92,908 | ) | (53,702 | ) | ||||||
Accumulated other comprehensive income
|
296 | 354 | 418 | |||||||||
Capital stock expense
|
(328 | ) | (328 | ) | (328 | ) | ||||||
Total CH Energy Group Common Shareholders' Equity
|
506,675 | 502,248 | 537,226 | |||||||||
Non-controlling interest in subsidiary
|
- | - | 172 | |||||||||
Total Equity
|
506,675 | 502,248 | 537,398 | |||||||||
Preferred Stock of subsidiary
|
21,027 | 21,027 | 21,027 | |||||||||
Long-term debt
|
494,002 | 446,003 | 466,960 | |||||||||
Total Capitalization
|
1,021,704 | 969,278 | 1,025,385 | |||||||||
Current Liabilities
|
||||||||||||
Current maturities of long-term debt
|
1,006 | 37,006 | 36,941 | |||||||||
Notes payable
|
71,000 | 6,500 | 16,500 | |||||||||
Accounts payable
|
36,183 | 43,904 | 44,960 | |||||||||
Accrued interest
|
7,330 | 6,333 | 7,632 | |||||||||
Dividends payable
|
8,521 | 8,511 | 8,678 | |||||||||
Accrued vacation and payroll
|
7,291 | 6,702 | 6,868 | |||||||||
Customer advances
|
17,315 | 22,527 | 10,045 | |||||||||
Customer deposits
|
7,235 | 6,647 | 7,590 | |||||||||
Regulatory liabilities
|
8,959 | 11,161 | 17,379 | |||||||||
Fair value of derivative instruments
|
22,118 | 19,791 | 9,626 | |||||||||
Accrued environmental remediation costs
|
7,064 | 6,652 | 2,162 | |||||||||
Accrued income and other taxes
|
817 | - | - | |||||||||
Deferred revenues
|
3,853 | 4,801 | 3,857 | |||||||||
Liabilities held for sale
|
- | - | 321 | |||||||||
Other
|
16,200 | 17,905 | 13,527 | |||||||||
Total Current Liabilities
|
214,892 | 198,440 | 186,086 | |||||||||
Deferred Credits and Other Liabilities
|
||||||||||||
Regulatory liabilities - OPEB
|
8,974 | 6,988 | 8,930 | |||||||||
Regulatory liabilities - other
|
112,122 | 108,887 | 113,621 | |||||||||
Operating reserves
|
3,181 | 3,383 | 2,898 | |||||||||
Fair value of derivative instruments
|
1,688 | - | 10,090 | |||||||||
Accrued environmental remediation costs
|
10,559 | 11,036 | 3,201 | |||||||||
Accrued OPEB costs
|
53,757 | 53,055 | 46,227 | |||||||||
Accrued pension costs
|
95,896 | 121,911 | 96,524 | |||||||||
Tax reserve
|
3,174 | 3,172 | 11,952 | |||||||||
Other
|
20,520 | 18,802 | 17,966 | |||||||||
Total Deferred Credits and Other Liabilities
|
309,871 | 327,234 | 311,409 | |||||||||
Accumulated Deferred Income Tax
|
249,921 | 235,160 | 218,297 | |||||||||
Commitments and Contingencies
|
||||||||||||
Total Capitalization and Liabilities
|
$ | 1,796,388 | $ | 1,730,112 | $ | 1,741,177 |
|
CH Energy Group Common Shareholders
|
|
|
|||||||||||||||||||||||||||||||||||||
|
Common Stock
|
Treasury Stock
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Shares Issued
|
Amount
|
Shares Repurchased
|
Amount
|
Paid-In Capital
|
Capital Stock Expense
|
Retained Earnings
|
Accumulated Other Comprehensive Income / (Loss)
|
Non-controlling Interest
|
Total Equity
|
||||||||||||||||||||||||||||||
Balance at December 31, 2010
|
16,862,087 | $ | 1,686 | (1,062,825 | ) | $ | (44,887 | ) | $ | 350,360 | $ | (328 | ) | $ | 230,342 | $ | 459 | $ | 172 | $ | 537,804 | |||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||||||||||
Net income
|
17,189 | - | 17,189 | |||||||||||||||||||||||||||||||||||||
Dividends declared on Preferred Stock of subsidiary
|
(242 | ) | (242 | ) | ||||||||||||||||||||||||||||||||||||
Change in fair value:
|
||||||||||||||||||||||||||||||||||||||||
Investments
|
(41 | ) | (41 | ) | ||||||||||||||||||||||||||||||||||||
Dividends declared on common stock
|
(8,427 | ) | (8,427 | ) | ||||||||||||||||||||||||||||||||||||
Treasury shares activity - net
|
(178,497 | ) | (8,815 | ) | (70 | ) | (8,885 | ) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2011
|
16,862,087 | $ | 1,686 | (1,241,322 | ) | $ | (53,702 | ) | $ | 350,290 | $ | (328 | ) | $ | 238,862 | $ | 418 | $ | 172 | $ | 537,398 | |||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2011
|
16,862,087 | $ | 1,686 | (1,967,123 | ) | $ | (92,908 | ) | $ | 351,053 | $ | (328 | ) | $ | 242,391 | $ | 354 | $ | - | $ | 502,248 | |||||||||||||||||||
Comprehensive income:
|
||||||||||||||||||||||||||||||||||||||||
Net income
|
14,823 | 14,823 | ||||||||||||||||||||||||||||||||||||||
Dividends declared on Preferred Stock of subsidiary
|
(242 | ) | (242 | ) | ||||||||||||||||||||||||||||||||||||
Change in fair value:
|
||||||||||||||||||||||||||||||||||||||||
Investments
|
(58 | ) | (58 | ) | ||||||||||||||||||||||||||||||||||||
Dividends declared on common stock
|
(8,279 | ) | (8,279 | ) | ||||||||||||||||||||||||||||||||||||
Treasury shares activity - net
|
19,889 | 930 | (2,747 | ) | (1,817 | ) | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2012
|
16,862,087 | $ | 1,686 | (1,947,234 | ) | $ | (91,978 | ) | $ | 348,306 | $ | (328 | ) | $ | 248,693 | $ | 296 | $ | - | $ | 506,675 |
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Operating Revenues
|
|
|
||||||
Electric
|
$ | 129,272 | $ | 154,570 | ||||
Natural gas
|
55,850 | 75,482 | ||||||
Total Operating Revenues
|
185,122 | 230,052 | ||||||
|
||||||||
Operating Expenses
|
||||||||
Operation:
|
||||||||
Purchased electricity and fuel used in electric generation
|
45,059 | 70,268 | ||||||
Purchased natural gas
|
24,614 | 41,798 | ||||||
Other expenses of operation
|
59,886 | 69,254 | ||||||
Depreciation and amortization
|
9,468 | 8,921 | ||||||
Taxes, other than income tax
|
13,491 | 13,235 | ||||||
Total Operating Expenses
|
152,518 | 203,476 | ||||||
|
||||||||
Operating Income
|
32,604 | 26,576 | ||||||
|
||||||||
Other Income and Deductions
|
||||||||
Interest on regulatory assets and other interest income
|
2,146 | 1,866 | ||||||
Regulatory adjustments for interest costs
|
319 | 383 | ||||||
Other - net
|
(328 | ) | (563 | ) | ||||
Total Other Income
|
2,137 | 1,686 | ||||||
|
||||||||
Interest Charges
|
||||||||
Interest on long-term debt
|
5,728 | 5,904 | ||||||
Interest on regulatory liabilities and other interest
|
1,527 | 1,470 | ||||||
Total Interest Charges
|
7,255 | 7,374 | ||||||
|
||||||||
Income Before Income Taxes
|
27,486 | 20,888 | ||||||
|
||||||||
Income Taxes
|
10,753 | 8,249 | ||||||
|
||||||||
Net Income
|
16,733 | 12,639 | ||||||
|
||||||||
Dividends Declared on Cumulative Preferred Stock
|
242 | 242 | ||||||
|
||||||||
Income Available for Common Stock
|
$ | 16,491 | $ | 12,397 |
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Net Income
|
$ | 16,733 | $ | 12,639 | ||||
Other Comprehensive Income
|
- | - | ||||||
Comprehensive Income
|
$ | 16,733 | $ | 12,639 |
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Operating Activities:
|
|
|
||||||
Net income
|
$ | 16,733 | $ | 12,639 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
8,977 | 8,481 | ||||||
Amortization
|
491 | 440 | ||||||
Deferred income taxes - net
|
12,071 | 7,951 | ||||||
Bad debt expense
|
2,125 | 2,076 | ||||||
Pension expense
|
7,233 | 8,289 | ||||||
OPEB expense
|
1,996 | 1,999 | ||||||
Regulatory liability - rate moderation
|
(1,033 | ) | (3,451 | ) | ||||
Revenue decoupling mechanism recorded
|
(950 | ) | 5,280 | |||||
Regulatory asset amortization
|
1,722 | 1,743 | ||||||
Changes in operating assets and liabilities - net:
|
||||||||
Accounts receivable, unbilled revenues and other receivables
|
(7,437 | ) | (12,231 | ) | ||||
Fuel, materials and supplies
|
4,648 | 5,117 | ||||||
Special deposits and prepayments
|
(3,203 | ) | (3,055 | ) | ||||
Income and other taxes
|
(942 | ) | (1,954 | ) | ||||
Accounts payable
|
(2,855 | ) | (4,425 | ) | ||||
Accrued interest
|
504 | 399 | ||||||
Customer advances
|
(3,374 | ) | (7,726 | ) | ||||
Pension plan contribution
|
(28,165 | ) | (8,157 | ) | ||||
Revenue decoupling mechanism collected
|
(1,310 | ) | 1,742 | |||||
Regulatory asset - storm deferral
|
(3,042 | ) | - | |||||
Regulatory asset - MGP site remediation
|
951 | 559 | ||||||
Regulatory asset - Temporary State Assessment
|
(3,332 | ) | (2,272 | ) | ||||
Deferred natural gas and electric costs
|
7,883 | 25,334 | ||||||
Other - net
|
1,478 | 4,174 | ||||||
Net cash provided by operating activities
|
11,169 | 42,952 | ||||||
|
||||||||
Investing Activities:
|
||||||||
Additions to utility plant
|
(25,783 | ) | (16,117 | ) | ||||
Other - net
|
(777 | ) | (453 | ) | ||||
Net cash used in investing activities
|
(26,560 | ) | (16,570 | ) | ||||
|
||||||||
Financing Activities:
|
||||||||
Redemption of long-term debt
|
(36,000 | ) | - | |||||
Proceeds from issuance of long-term debt
|
48,000 | - | ||||||
Borrowings of short-term debt - net
|
57,500 | - | ||||||
Dividends paid to parent - CH Energy Group
|
- | (11,000 | ) | |||||
Dividends paid on cumulative Preferred Stock
|
(242 | ) | (242 | ) | ||||
Other - net
|
(602 | ) | (228 | ) | ||||
Net cash provided by (used in) financing activities
|
68,656 | (11,470 | ) | |||||
|
||||||||
Net Change in Cash and Cash Equivalents
|
53,265 | 14,912 | ||||||
Cash and Cash Equivalents - Beginning of Period
|
2,521 | 9,622 | ||||||
Cash and Cash Equivalents - End of Period
|
$ | 55,786 | $ | 24,534 | ||||
|
||||||||
Supplemental Disclosure of Cash Flow Information:
|
||||||||
Interest paid
|
$ | 5,312 | $ | 5,912 | ||||
Federal and state income taxes paid | $ | - | $ | - | ||||
Additions to plant included in liabilities
|
$ | 4,126 | $ | 2,165 |
|
March 31,
|
December 31,
|
March 31,
|
|||||||||
|
2012
|
2011
|
2011
|
|||||||||
ASSETS
|
|
|
|
|||||||||
Utility Plant
|
|
|
|
|||||||||
Electric
|
$ | 1,017,986 | $ | 1,008,394 | $ | 972,543 | ||||||
Natural gas
|
301,609 | 305,664 | 295,914 | |||||||||
Common
|
151,086 | 147,286 | 143,398 | |||||||||
Gross Utility Plant
|
1,470,681 | 1,461,344 | 1,411,855 | |||||||||
|
||||||||||||
Less: Accumulated depreciation
|
390,307 | 388,784 | 378,038 | |||||||||
Net
|
1,080,374 | 1,072,560 | 1,033,817 | |||||||||
|
||||||||||||
Construction work in progress
|
66,518 | 58,847 | 50,588 | |||||||||
Net Utility Plant
|
1,146,892 | 1,131,407 | 1,084,405 | |||||||||
|
||||||||||||
Non-Utility Property and Plant
|
524 | 524 | 681 | |||||||||
Less: Accumulated depreciation
|
- | - | 35 | |||||||||
Net Non-Utility Property and Plant
|
524 | 524 | 646 | |||||||||
|
||||||||||||
Current Assets
|
||||||||||||
Cash and cash equivalents
|
55,786 | 2,521 | 24,534 | |||||||||
Accounts receivable from customers - net of allowance for doubtful accounts of $5.4 million, $5.2 million and $5.3 million, respectively
|
65,922 | 61,610 | 86,292 | |||||||||
Accrued unbilled utility revenues
|
14,283 | 15,299 | 14,778 | |||||||||
Other receivables
|
6,086 | 5,301 | 2,832 | |||||||||
Fuel, materials and supplies - at average cost
|
16,389 | 21,037 | 14,910 | |||||||||
Regulatory assets
|
49,683 | 49,526 | 36,809 | |||||||||
Fair value of derivative instruments
|
- | 320 | 68 | |||||||||
Special deposits and prepayments
|
21,311 | 18,258 | 20,268 | |||||||||
Accumulated deferred income tax
|
2,019 | - | 11,133 | |||||||||
Total Current Assets
|
231,479 | 173,872 | 211,624 | |||||||||
|
||||||||||||
Deferred Charges and Other Assets
|
||||||||||||
Regulatory assets - pension plan
|
151,737 | 159,020 | 134,199 | |||||||||
Regulatory assets - other
|
119,559 | 114,980 | 86,069 | |||||||||
Fair value of derivative instruments
|
- | 931 | - | |||||||||
Unamortized debt expense
|
5,035 | 4,535 | 4,831 | |||||||||
Other investments
|
14,745 | 14,047 | 13,110 | |||||||||
Other
|
2,218 | 3,065 | 2,449 | |||||||||
Total Deferred Charges and Other Assets
|
293,294 | 296,578 | 240,658 | |||||||||
|
||||||||||||
Total Assets
|
$ | 1,672,189 | $ | 1,602,381 | $ | 1,537,333 |
|
March 31,
|
December 31,
|
March 31,
|
|||||||||
|
2012
|
2011
|
2011
|
|||||||||
CAPITALIZATION AND LIABILITIES
|
|
|
|
|||||||||
Capitalization
|
|
|
|
|||||||||
Common Stock (30,000,000 shares authorized: $5 par value; 16,862,087 shares issued and outstanding)
|
$ | 84,311 | $ | 84,311 | $ | 84,311 | ||||||
Paid-in capital
|
199,980 | 199,980 | 199,980 | |||||||||
Retained earnings
|
182,456 | 165,965 | 166,295 | |||||||||
Capital stock expense
|
(4,961 | ) | (4,961 | ) | (4,961 | ) | ||||||
Total Equity
|
461,786 | 445,295 | 445,625 | |||||||||
|
||||||||||||
Cumulative Preferred Stock not subject to mandatory redemption
|
21,027 | 21,027 | 21,027 | |||||||||
|
||||||||||||
Long-term debt
|
465,950 | 417,950 | 417,901 | |||||||||
Total Capitalization
|
948,763 | 884,272 | 884,553 | |||||||||
|
||||||||||||
Current Liabilities
|
||||||||||||
Current maturities of long-term debt
|
- | 36,000 | 36,000 | |||||||||
Notes payable
|
59,000 | 1,500 | - | |||||||||
Accounts payable
|
27,299 | 35,731 | 36,833 | |||||||||
Accrued interest
|
6,686 | 6,183 | 6,366 | |||||||||
Dividends payable - Preferred Stock
|
242 | 242 | 242 | |||||||||
Accrued vacation and payroll
|
5,671 | 5,556 | 5,351 | |||||||||
Customer advances
|
11,231 | 14,604 | 6,028 | |||||||||
Customer deposits
|
7,170 | 6,582 | 7,514 | |||||||||
Regulatory liabilities
|
8,959 | 11,161 | 17,379 | |||||||||
Fair value of derivative instruments
|
22,118 | 19,791 | 9,626 | |||||||||
Accrued environmental remediation costs
|
6,562 | 6,117 | 1,042 | |||||||||
Accrued income and other taxes
|
1,564 | 1,274 | 699 | |||||||||
Accumulated deferred income tax
|
- | 156 | - | |||||||||
Other
|
10,764 | 14,855 | 8,543 | |||||||||
Total Current Liabilities
|
167,266 | 159,752 | 135,623 | |||||||||
|
||||||||||||
Deferred Credits and Other Liabilities
|
||||||||||||
Regulatory liabilities - OPEB
|
8,974 | 6,988 | 8,930 | |||||||||
Regulatory liabilities - other
|
112,122 | 108,887 | 113,621 | |||||||||
Operating reserves
|
2,148 | 2,120 | 2,102 | |||||||||
Fair value of derivative instruments
|
1,688 | - | 10,090 | |||||||||
Accrued environmental remediation costs
|
9,407 | 9,726 | 1,693 | |||||||||
Accrued OPEB costs
|
53,757 | 53,055 | 46,227 | |||||||||
Accrued pension costs
|
95,896 | 121,911 | 96,524 | |||||||||
Tax reserve
|
3,174 | 3,172 | 11,952 | |||||||||
Other
|
19,564 | 17,955 | 17,080 | |||||||||
Total Deferred Credits and Other Liabilities
|
306,730 | 323,814 | 308,219 | |||||||||
|
||||||||||||
Accumulated Deferred Income Tax
|
249,430 | 234,543 | 208,938 | |||||||||
|
||||||||||||
Commitments and Contingencies
|
||||||||||||
|
||||||||||||
Total Capitalization and Liabilities
|
$ | 1,672,189 | $ | 1,602,381 | $ | 1,537,333 |
|
Central Hudson Common Shareholders
|
|
||||||||||||||||||||||||||||||||||
|
Common Stock
|
Treasury Stock
|
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Shares Issued
|
Amount
|
Shares Repurchased
|
Amount
|
Paid-In Capital
|
Capital Stock Expense
|
Retained Earnings
|
Accumulated Other Comprehensive Income / (Loss)
|
Total Equity
|
|||||||||||||||||||||||||||
Balance at December 31, 2010
|
16,862,087 | $ | 84,311 | - | $ | - | $ | 199,980 | $ | (4,961 | ) | $ | 164,898 | $ | - | $ | 444,228 | |||||||||||||||||||
Net income
|
12,639 | 12,639 | ||||||||||||||||||||||||||||||||||
Dividends declared:
|
||||||||||||||||||||||||||||||||||||
On cumulative Preferred Stock
|
(242 | ) | (242 | ) | ||||||||||||||||||||||||||||||||
On Common Stock to parent - CH Energy Group
|
(11,000 | ) | (11,000 | ) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2011
|
16,862,087 | $ | 84,311 | - | $ | - | $ | 199,980 | $ | (4,961 | ) | $ | 166,295 | $ | - | $ | 445,625 | |||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2011
|
16,862,087 | $ | 84,311 | - | $ | - | $ | 199,980 | $ | (4,961 | ) | $ | 165,965 | $ | - | $ | 445,295 | |||||||||||||||||||
Net income
|
16,733 | 16,733 | ||||||||||||||||||||||||||||||||||
Dividends declared:
|
||||||||||||||||||||||||||||||||||||
On cumulative Preferred Stock
|
(242 | ) | (242 | ) | ||||||||||||||||||||||||||||||||
Balance at March 31, 2012
|
16,862,087 | $ | 84,311 | - | $ | - | $ | 199,980 | $ | (4,961 | ) | $ | 182,456 | $ | - | $ | 461,786 |
|
CH Energy Group
|
Central Hudson
|
||||||||||||||||
|
March 31,
|
December 31,
|
March 31,
|
March 31,
|
December 31,
|
March 31,
|
||||||||||||
|
2012
|
2011
|
2011
|
2012
|
2011
|
2011
|
||||||||||||
Natural gas
|
$ | 7,322 | $ | 11,711 | $ | 5,467 | $ | 7,322 | $ | 11,711 | $ | 5,467 | ||||||
Petroleum products and propane
|
2,115 | 3,422 | 2,284 | - | 494 | 519 | ||||||||||||
Fuel used in electric generation
|
286 | 285 | 266 | 286 | 285 | 266 | ||||||||||||
Materials and supplies
|
9,966 | 9,696 | 9,908 | 8,781 | 8,547 | 8,658 | ||||||||||||
Total
|
$ | 19,689 | $ | 25,114 | $ | 17,925 | $ | 16,389 | $ | 21,037 | $ | 14,910 |
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Shares
|
260,259 | 193,449 |
|
March 31, 2012
|
|||||||
Transaction Description
|
Maximum Potential
Payments
|
Outstanding
Liabilities(1)
|
||||||
Heating oil, propane, other petroleum products, weather and commodity hedges (In Thousands)
|
$ | 28,550 | $ | 5,480 |
(1)
|
Balance included in CH Energy Group's Consolidated Balance Sheet.
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
||||
|
2012
|
|
2011
|
|
2011
|
||||
Regulatory Assets (Debits):
|
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
|
Deferred purchased electric and natural gas costs
|
|
$
|
2,892
|
|
$
|
10,775
|
|
$
|
4,985
|
Deferred unrealized losses on derivatives
|
|
|
22,118
|
|
|
19,791
|
|
|
9,558
|
PSC General and Temporary State Assessment and carrying charges
|
|
|
11,547
|
|
|
8,123
|
|
|
12,286
|
RDM and carrying charges
|
|
|
3,068
|
|
|
791
|
|
|
-
|
Residual natural gas deferred balances
|
|
|
4,554
|
|
|
4,554
|
|
|
4,554
|
Deferred debt expense on re-acquired debt
|
|
|
628
|
|
|
625
|
|
|
632
|
Deferred and accrued costs - MGP site remediation and carrying charges
|
|
|
4,586
|
|
|
4,577
|
|
|
4,504
|
Other
|
|
|
290
|
|
|
290
|
|
|
290
|
|
|
49,683
|
|
|
49,526
|
|
|
36,809
|
|
Long-term:
|
|
|
|
|
|
|
|
|
|
Deferred pension costs
|
|
|
151,737
|
|
|
159,020
|
|
|
134,199
|
Deferred unrealized losses on derivatives
|
|
|
1,688
|
|
|
-
|
|
|
10,090
|
Carrying charges - pension reserve
|
|
|
6,158
|
|
|
4,986
|
|
|
2,068
|
Deferred and accrued costs - MGP site remediation and carrying charges
|
|
|
13,459
|
|
|
14,260
|
|
|
4,894
|
Deferred debt expense on re-acquired debt
|
|
|
5,172
|
|
|
5,332
|
|
|
5,325
|
Deferred Medicare Subsidy taxes
|
|
|
7,450
|
|
|
7,307
|
|
|
6,885
|
Residual natural gas deferred balances and carrying charges
|
|
|
8,168
|
|
|
9,829
|
|
|
12,453
|
Income taxes recoverable through future rates
|
|
|
47,820
|
|
|
42,997
|
|
|
35,972
|
Energy efficiency incentives
|
|
|
2,719
|
|
|
2,719
|
|
|
-
|
Deferred storm costs and carrying charges
|
|
|
15,178
|
|
|
15,416
|
|
|
-
|
Other
|
|
|
11,747
|
|
|
12,134
|
|
|
8,382
|
|
|
271,296
|
|
|
274,000
|
|
|
220,268
|
|
Total Regulatory Assets
|
|
$
|
320,979
|
|
$
|
323,526
|
|
$
|
257,077
|
|
|
|
|
|
|
|
|
|
|
Regulatory Liabilities (Credits):
|
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
|
Excess electric depreciation reserve
|
|
$
|
74
|
|
$
|
1,107
|
|
$
|
4,931
|
RDM and carrying charges
|
|
|
-
|
|
|
-
|
|
|
3,198
|
Income taxes refundable through future rates
|
|
|
5,120
|
|
|
5,062
|
|
|
5,128
|
Deferred unbilled gas revenues
|
|
|
3,765
|
|
|
4,992
|
|
|
4,122
|
|
|
8,959
|
|
|
11,161
|
|
|
17,379
|
|
Long-term:
|
|
|
|
|
|
|
|
|
|
Customer benefit fund
|
|
|
2,566
|
|
|
2,623
|
|
|
3,403
|
Deferred cost of removal
|
|
|
53,335
|
|
|
52,565
|
|
|
52,517
|
Rate Base Impact of Tax Repair Project and carrying charges
|
|
|
8,083
|
|
|
9,413
|
|
|
9,632
|
Excess electric depreciation reserve and carrying charges
|
|
|
2,688
|
|
|
2,678
|
|
|
4,004
|
Deferred unrealized losses on derivatives
|
|
|
-
|
|
|
931
|
|
|
-
|
Income taxes refundable through future rates
|
|
|
33,769
|
|
|
29,648
|
|
|
26,099
|
Deferred OPEB costs
|
|
|
8,974
|
|
|
6,988
|
|
|
8,930
|
Carrying charges - OPEB reserve
|
|
|
6,482
|
|
|
5,405
|
|
|
2,476
|
Other
|
|
|
5,199
|
|
|
5,624
|
|
|
15,490
|
|
|
121,096
|
|
|
115,875
|
|
|
122,551
|
|
Total Regulatory Liabilities
|
|
$
|
130,055
|
|
$
|
127,036
|
|
$
|
139,930
|
|
|
|
|
|
|
|
|
|
|
Net Regulatory Assets
|
|
$
|
190,924
|
|
$
|
196,490
|
|
$
|
117,147
|
Description
|
2010 Rate Order
|
|
Electric delivery revenue increases
|
$11.8 million(1) 7/1/10
$9.3 million(1) 7/1/11
$9.1 million 7/1/12
|
|
Natural gas delivery revenue increases
|
$5.7 million 7/1/10
$2.4 million 7/1/11
$1.6 million 7/1/12
|
|
ROE
|
10.0%
|
|
Earnings sharing
|
Yes(2)
|
|
Capital structure – common equity
|
48%
|
|
Targets with true-up provisions - % of revenue requirement to defer for shortfalls
|
||
Net plant balances
|
100%
|
|
Transmission and distribution ROW maintenance
|
100%
|
|
RDMs – electric and natural gas(3)
|
Yes
|
|
New deferral accounting for full recovery
|
||
Fixed debt costs
|
Yes(4)
|
|
Transmission sag mitigation
|
Yes
|
|
New York State Temporary Assessment
|
Yes
|
|
Material regulatory actions(5)
|
Yes(5)
|
|
Property taxes – Deferral for 90% of excess/deficiency relative to revenue requirement
|
Yes(6)
|
(1)
|
Moderated by $12 million and $4 million bill credits, respectively.
|
(2)
|
ROE > 10.5%, 50% to customers, > 11.0%, 80% to customers, > 11.5%, 90% to customers.
|
(3)
|
Electric is based on revenue dollars; gas is based on usage per customer.
|
(4)
|
Deferral authorization in RY2 and RY3 only.
|
(5)
|
Legislative, governmental or regulatory actions with individual impacts greater than or equal to 2% of net income of the applicable department.
|
(6)
|
The Company’s pre-tax gain or loss limited to $0.7 million per rate year.
|
Impact
|
|
Category
|
|
Accounting
Reference
|
|
Title
|
|
Issued Date
|
|
Effective Date
|
|
1
|
|
Comprehensive Income (Topic 220)
|
|
ASU No. 2011-05
|
|
Presentation of Comprehensive Income
|
|
Jun-11
|
|
Jan-12
|
|
1
|
|
Comprehensive Income (Topic 220)
|
|
ASU No. 2011-12
|
|
Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income
|
|
Dec-11
|
|
Jan-12
|
|
1
|
|
Fair Value Measurements (Topic 820)
|
|
ASU No. 2011-04
|
|
Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in US GAAP and IFRS
|
|
May-11
|
|
Jan-12
|
|
2
|
|
Balance Sheet (Topic 210)
|
|
ASU No. 2011-11
|
|
Disclosures about Offsetting Assets and Liabilities
|
|
Dec-11
|
|
Jan-13
|
Impact Key:
|
|
|
(1)
|
No current impact on the financial condition, results of operations and cash flows of CH Energy Group and its subsidiaries when adopted on the effective date noted. Additional disclosures have been added or presentation of information modified where required.
|
|
(2)
|
No anticipated impact on the financial condition, results of operations and cash flows of CH Energy Group and its subsidiaries upon future adoption.
|
|
Three Months Ended
March 31,
|
|||||
|
2012
|
2011
|
||||
Balance at the beginning of the period
|
$ | 3,172 | $ | 11,486 | ||
Adjustment related to tax accounting method change
|
2 | 466 | ||||
Balance at the end of the period
|
$ | 3,174 | $ | 11,952 |
Jurisdiction
|
Tax Years Open for Audit
|
|
Federal(1)
|
2007 - 2011
|
|
New York State
|
2007 - 2011
|
|
|
Three Months Ended
March 31,
|
|
|||||
|
|
2012
|
|
|
2011
|
|
||
Net income attributable to CH Energy Group
|
|
$
|
14,581
|
|
|
$
|
16,947
|
|
Preferred Stock dividends of Central Hudson
|
|
|
242
|
|
|
|
242
|
|
State income tax
|
|
|
408
|
|
|
|
348
|
|
Deferred federal income tax
|
|
|
10,452
|
|
|
|
9,556
|
|
Deferred state income tax
|
|
|
911
|
|
|
|
746
|
|
Income before taxes
|
|
$
|
26,594
|
|
|
$
|
27,839
|
|
|
|
|
|
|
|
|
|
|
Computed federal tax at 35% statutory rate
|
|
$
|
9,308
|
|
|
$
|
9,744
|
|
State income tax net of federal tax benefit
|
|
|
1,359
|
|
|
|
988
|
|
Depreciation flow-through
|
|
|
797
|
|
|
|
788
|
|
Cost of Removal
|
|
|
(596)
|
|
|
|
(457)
|
|
Merger Transaction Costs
|
|
|
1,705
|
|
|
|
-
|
|
Production tax credits
|
|
|
-
|
|
|
|
(35)
|
|
Other
|
|
|
(802)
|
|
|
|
(378)
|
|
Total income tax
|
|
$
|
11,771
|
|
|
$
|
10,650
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate - federal
|
|
|
39.3
|
%
|
|
|
34.3
|
%
|
Effective tax rate - state
|
|
|
5.0
|
%
|
|
|
4.0
|
%
|
Effective tax rate - combined
|
|
|
44.3
|
%
|
|
|
38.3
|
%
|
|
|
Three Months Ended
March 31,
|
|
|||||
|
|
2012
|
|
|
2011
|
|
||
Net income
|
|
$
|
16,733
|
|
|
$
|
12,639
|
|
Deferred federal income tax
|
|
|
9,320
|
|
|
|
7,287
|
|
Deferred state income tax
|
|
|
1,433
|
|
|
|
962
|
|
Income before taxes
|
|
$
|
27,486
|
|
|
$
|
20,888
|
|
|
|
|
|
|
|
|
|
|
Computed federal tax at 35% statutory rate
|
|
$
|
9,620
|
|
|
$
|
7,311
|
|
State income tax net of federal tax benefit
|
|
|
1,433
|
|
|
|
962
|
|
Depreciation flow-through
|
|
|
797
|
|
|
|
788
|
|
Cost of Removal
|
|
|
(596)
|
|
|
|
(457)
|
|
Other
|
|
|
(501)
|
|
|
|
(355)
|
|
Total income tax
|
|
$
|
10,753
|
|
|
$
|
8,249
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate - federal
|
|
|
33.9
|
%
|
|
|
34.9
|
%
|
Effective tax rate - state
|
|
|
5.2
|
|
|
|
4.6
|
|
Effective tax rate - combined
|
|
|
39.1
|
%
|
|
|
39.5
|
%
|
# of
|
|
Total
|
|
Total
|
||||||||||||||
Acquired
|
Purchase
|
Intangible
|
|
Tangible
|
||||||||||||||
Quarter Ended
|
Companies
|
Price
|
Assets(1)
|
Goodwill
|
Assets
|
|||||||||||||
March 31, 2012
|
1 | $ | 275 | $ | 265 | $ | 240 | $ | 10 | |||||||||
Total
|
1 | $ | 275 | $ | 265 | $ | 240 | $ | 10 |
(1) Including goodwill.
|
-
|
On May 1, 2011, the sale of Lyonsdale, which owns a wood-burning electric generating facility in Lyons Falls, New York, was completed.
|
-
|
On August 11, 2011, the sale of Shirley Wind, which owns a wind project in Glenmore, Wisconsin, was completed.
|
-
|
On September 16, 2011, the sale of CH-Auburn, which owns an electric generating plant that utilizes methane gas generated by the City of Auburn, New York landfill, was completed.
|
-
|
On December 29, 2011, the sale of a molecular gate owned by CH-Greentree, which was used to remove nitrogen from landfill gas and was being leased to Greentree Landfill Gas Company, LLC, was completed.
|
CH-Auburn
|
Shirley Wind
|
Lyonsdale
|
CH-Greentree
|
|||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Current Assets
|
$ | 174 | $ | 623 | $ | 2,099 | $ | - | ||||||||
Other Assets
|
- | 461 | - | - | ||||||||||||
Property, Plant and Equipment:
|
||||||||||||||||
Property, plant and equipment
|
4,667 | 32,564 | 10,670 | 5,500 | ||||||||||||
Less: Accumulated depreciation
|
626 | 657 | 4,191 | 1,205 | ||||||||||||
Total property, plant and equipment, net
|
4,041 | 31,907 | 6,479 | 4,295 | ||||||||||||
Assets sold
|
$ | 4,215 | $ | 32,991 | $ | 8,578 | $ | 4,295 | ||||||||
Liabilities:
|
||||||||||||||||
Current Liabilities
|
$ | 85 | $ | 6 | $ | 322 | $ | - | ||||||||
Other Liabilities
|
1,736 | - | - | - | ||||||||||||
Liabilities sold
|
$ | 1,821 | $ | 6 | $ | 322 | $ | - | ||||||||
Net Assets Sold
|
$ | 2,394 | $ | 32,985 | $ | 8,256 | $ | 4,295 |
|
Three Months Ended
March 31,
|
|||||
|
2012
|
2011
|
||||
Revenues from discontinued operations
|
$ | - | $ | 3,445 | ||
Income from discontinued operations before tax
|
- | 150 | ||||
Income tax expense from discontinued operations
|
- | 35 |
CHEC Investment
|
Description
|
Intercompany Debt
|
Equity Investment
|
Total
|
||||||||||
Griffith Energy Services
|
100% controlling interest in a fuel distribution business
|
$ | 34,100 | $ | 38,169 | $ | 72,269 | |||||||
Cornhusker Holdings
|
12% equity interest plus subordinated debt investment in an operating corn-ethanol plant
|
- | - | - | ||||||||||
CH-Community Wind
|
50% equity interest in a joint venture that owns 18% interest in two operating wind projects
|
- | - | - | ||||||||||
Other
|
Partnerships and an energy sector venture capital fund
|
- | 2,559 | 2,559 | ||||||||||
|
|
$ | 34,100 | $ | 40,728 | $ | 74,828 |
|
March 31, 2012
|
December 31, 2011
|
March 31, 2011
|
|||||||||||||||
|
Gross Carrying Amount
|
Accumulated Amortization
|
Gross Carrying Amount
|
Accumulated Amortization
|
Gross Carrying Amount
|
Accumulated Amortization
|
||||||||||||
Customer relationships
|
$ | 36,526 | $ | 24,188 | $ | 36,517 | $ | 23,571 | $ | 35,341 | $ | 21,801 | ||||||
Covenants not to compete
|
377 | 151 | 361 | 134 | 256 | 105 | ||||||||||||
Total Amortizable Intangibles
|
$ | 36,903 | $ | 24,339 | $ | 36,878 | $ | 23,705 | $ | 35,597 | $ | 21,906 |
|
Three Months Ended
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Intangibles Amortization Expense (In Thousands)
|
$ | 634 | $ | 597 |
March 31, 2012
|
December 31, 2011
|
March 31, 2011
|
||||||||||
CH Energy Group Holding Company Short-term borrowings
|
$ | 32,000 | $ | 5,000 | $ | 16,500 | ||||||
Central Hudson Short-term borrowings
|
59,000 | 1,500 | - | |||||||||
Intercompany borrowing
|
(20,000 | ) | - | - | ||||||||
Total CH Energy Group
|
$ | 71,000 | $ | 6,500 | $ | 16,500 |
|
Pension Benefits
|
OPEB(1)
|
||||||||||||||
|
Three Months Ended
March 31,
|
Three Months Ended
March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Service cost
|
$ | 2,741 | $ | 2,448 | $ | 644 | $ | 673 | ||||||||
Interest cost
|
6,177 | 6,537 | 1,662 | 1,732 | ||||||||||||
Expected return on plan assets
|
(6,768 | ) | (6,860 | ) | (1,734 | ) | (1,711 | ) | ||||||||
Amortization of:
|
||||||||||||||||
Prior service cost (credit)
|
501 | 536 | (1,466 | ) | (1,466 | ) | ||||||||||
Transitional obligation
|
- | - | 641 | 641 | ||||||||||||
Recognized actuarial loss
|
5,788 | 6,523 | 2,326 | 2,688 | ||||||||||||
Net Periodic Benefit Cost
|
$ | 8,439 | $ | 9,184 | $ | 2,073 | $ | 2,557 |
(1)
|
The OPEB amounts for all periods presented reflect the effect of the Medicare Prescription Drug Improvement and Modernization Act of 2003.
|
|
March 31,
|
December 31,
|
March 31,
|
|||||||||
|
2012
|
2011
|
2011
|
|||||||||
Accrued pension costs
|
$ | 96,547 | $ | 122,562 | $ | 97,195 |
|
March 31,
|
December 31,
|
March 31,
|
|||||||||
|
2012
|
2011
|
2011
|
|||||||||
Prefunded pension costs prior to funding status adjustment
|
$ | 49,996 | $ | 30,270 | $ | 33,280 | ||||||
Additional liability required
|
(146,543 | ) | (152,832 | ) | (130,475 | ) | ||||||
Total accrued pension costs
|
$ | (96,547 | ) | $ | (122,562 | ) | $ | (97,195 | ) | |||
Total offset to additional liability - Regulatory assets - Pension Plan
|
$ | 146,543 | $ | 152,832 | $ | 130,475 |
|
Retirement Income Plan
|
OPEB
|
||||||||||||||
|
Three Months Ended
|
Three Months Ended
|
||||||||||||||
|
March 31,
|
March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Contributions
|
$ | 28,000 | $ | 8,000 | $ | - | $ | - |
Asset Class
|
March 31,
2012
|
Minimum
|
Target Average
|
Maximum
|
December 31,
2011
|
|||||||||||||||
Equity Securities
|
52.1 | % | 45 | % | 50 | % | 55 | % | 35.8 | % | ||||||||||
Debt Securities
|
46.7 | % | 45 | % | 50 | % | 55 | % | 54.4 | % | ||||||||||
Other(1)
|
1.2 | % | - | % | - | % | - | % | 9.8 | % |
(1)
|
Consists of temporary cash investments, as well as receivables for investments sold and interest, and payables for investments purchased, which have not settled as of that date.
|
|
|
|
|
|
|
|
Performance Shares
|
|
|
|
Grant Date
|
|
Performance
|
|
Outstanding at
|
||
Grant Date
|
|
Fair Value
|
|
Shares Granted
|
|
March 31, 2012
|
||
January 26, 2009
|
|
$
|
49.29
|
|
36,730
|
|
28,060
|
|
February 8, 2010
|
|
$
|
38.62
|
|
48,740
|
|
43,220
|
|
February 7, 2011
|
|
$
|
49.77
|
|
40,320
|
|
40,320
|
|
February 6, 2012
|
|
$
|
56.15
|
|
39,440
|
|
39,440
|
Grant Date
|
|
Type of Award
|
|
Shares or
Stock Units Granted
|
|
Grant Date
Fair Value
|
|
Vesting Terms
|
|
Unvested Shares Outstanding at
March 31, 2012
|
||||
January 26, 2009
|
|
Shares
|
|
2,930
|
|
$
|
49.29
|
|
End of 3 years
|
|
-
|
(1)
|
||
October 1, 2009
|
|
Shares
|
|
14,375
|
|
$
|
43.86
|
|
Ratably over 5 years
|
|
8,625
|
|||
November 20, 2009
|
|
Stock
Units
|
|
13,900
|
|
$
|
41.43
|
|
1/3 each year in
Years 5, 6 and 7
|
|
13,900
|
|||
February 8, 2010
|
|
Shares
|
|
3,060
|
|
$
|
38.62
|
|
End of 3 years
|
|
2,655
|
(2)
|
||
February 10, 2010
|
|
Shares
|
|
5,200
|
|
$
|
38.89
|
|
End of 3 years
|
|
5,200
|
|||
November 15, 2010
|
|
Shares
|
|
3,000
|
|
$
|
46.53
|
|
Ratably over 3 years
|
|
2,000
|
|||
February 7, 2011
|
|
Shares
|
|
1,500
|
|
$
|
49.77
|
|
1/3 each year in Years 3, 4 and 5
|
|
1,500
|
|||
February 7, 2011
|
|
Shares
|
|
2,230
|
|
$
|
49.77
|
|
End of 3 years
|
|
2,230
|
|||
February 6, 2012
|
|
Shares
|
|
2,170
|
|
$
|
56.15
|
|
End of 3 years
|
|
2,170
|
(1)
|
The vesting of 250 shares was accelerated upon a change in control for an individual resulting from the sale of certain assets of Griffith and the vesting of 360 shares was accelerated as approved by the Board of Directors. The remaining 2,320 shares vested on January 26, 2012.
|
||||||||||||
(2)
|
The vesting of 405 shares was accelerated as approved by the Board of Directors.
|
|
CH Energy Group
|
Central Hudson
|
||||||||||||||
|
Three Months Ended
March 31,
|
Three Months Ended
March 31,
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Performance shares
|
$ | 1,538 | $ | 690 | $ | 525 | $ | 570 | ||||||||
Restricted shares and stock units
|
$ | 114 | $ | 112 | $ | 65 | $ | 66 | ||||||||
Recognized tax benefit of restricted shares and stock units
|
$ | 46 | $ | 46 | $ | 26 | $ | 26 |
·
|
Air
|
·
|
Former Manufactured Gas Plant Facilities
|
·
|
Investigation – Begins with preliminary investigations and is completed upon filing and approval by DEC of a Remedial Investigation (“RI”) Report.
|
·
|
Remedial Alternative Analysis – Engineering analysis of alternatives for remediation based on the RI is compiled into a Remedial Alternative Analysis (“RAA”) Report.
|
·
|
Remedial Design - Upon approval of the RAA and final decision of remediation approach based on alternatives presented, a Remedial Design (“RD”) is developed and filed with the DEC for approval.
|
·
|
Remediation – Completion of the work plan as defined in the approved RD. Upon completion, final reports are filed with the DEC for approval and may include a Construction Completion Report (“CCR”), Final Engineering Report (“FER”), or other reports required by the DEC based on the work performed.
|
·
|
Post-Remediation Monitoring – Entails the operation, maintenance, and monitoring (“OM&M”) as directed by the DEC based on the approved final report of remediation. The activities are typically defined in a Site Management Plan (“SMP”), which is approved by the DEC. The extent of activities during this phase may increase or decrease based on the results of ongoing monitoring being performed and future potential usage of the property.
|
Ø
|
Site #1 – Beacon (NY) – Post-Remediation Monitoring Complete
|
-
|
SMP submitted to DEC and release letter for the site expected.
|
-
|
No further costs expected and no amounts accrued as of March 31, 2012 related to this site.
|
-
|
If the building at this site were to be removed, further investigation and testing would be required related to the soil under the building, which may require additional remediation. Management cannot currently estimate the costs that may be incurred related to this.
|
Ø
|
Site #2 – Newburgh (NY) – Post-Remediation In Progress
|
-
|
DEC to provide comments on CCR.
|
-
|
As of March 31, 2012, amounts accrued represent an estimate of costs for OM&M and execution of the draft SMP.
|
-
|
Central Hudson is retiring and removing propane air facilities located on Area A. Once removed, additional investigation and testing will be required, which may require additional remediation. Management cannot currently estimate the costs that may be incurred related to this additional investigation and testing.
|
Ø
|
Site #3 – Laurel Street (Poughkeepsie, NY) – Post-Remediation In Progress
|
-
|
CCR approved by the DEC in 2010.
|
-
|
As of March 31, 2012, amounts accrued represent an estimate of costs for OM&M.
|
Ø
|
Site #4 – Catskill (NY) – Remedial Design in Progress
|
-
|
RAA Report approved by the DEC in July 2011 and Remedial Design is in progress.
|
-
|
Once the Remedial Design is approved by DEC, remediation is anticipated to commence during the summer of 2012.
|
-
|
As of March 31, 2012, amounts accrued represent an estimate of costs to complete the RD, remediation, and OM&M.
|
Ø
|
Site #5 – North Water Street (Poughkeepsie, NY) – RAA in progress
|
-
|
RI report approved by the DEC.
|
-
|
Further investigation and analysis being performed in connection with the development of the RAA.
|
-
|
Upon approval of the RAA, the RD will be completed, followed by remediation.
|
-
|
As of March 31, 2012, DEC approved an Interim Remedial Measure ("IRM") associated with the southern portion of this site. This IRM is being performed in conjunction with a public benefit project to construct a pedestrian pathway and elevator as proposed by the Walkway Over The Hudson, a not for profit organization based in Poughkeepsie, NY.
|
-
|
As of March 31, 2012, amounts accrued represent an estimate for completion of the RAA and RD as well as the estimated cost of the IRM. Management cannot estimate the cost for the remaining physical remediation or any post-remediation until the RAA is complete.
|
Ø
|
Site #6 – Kingston (NY) – Investigation in Progress
|
-
|
Continuing RI at this site.
|
-
|
Upon completion of RI, RAA and RD will be developed, followed by remediation.
|
-
|
As of March 31, 2012, amounts accrued represent an estimate of costs to complete the RI, RAA and the RD. Management cannot estimate the cost for physical remediation or any post-remediation until the RAA is complete.
|
Ø
|
Site #7 – Bayeaux Street (Poughkeepsie, NY) – No action required
|
-
|
No further investigation or remedial action is currently required. However, per the DEC this site still remains on the list for potential future investigation.
|
Site #
|
|
Liability Recorded as of 12/31/11
|
|
Amounts Spent in 2012(1)
|
|
Liability Adjustment
|
|
Liability Recorded as of 3/31/12
|
|
Current Portion of Liability at 3/31/12
|
|
Long-Term Portion of Liability at 3/31/12
|
||||||||||||||
1, 2, 3, 4
|
|
$
|
14,590
|
|
$
|
88
|
|
$
|
(35)
|
|
$
|
14,467
|
|
$
|
5,359
|
|
$
|
9,108
|
||||||||
5, 6
|
|
|
1,253
|
|
|
121
|
|
|
370
|
|
|
1,502
|
|
|
1,203
|
|
|
299
|
||||||||
|
|
$
|
15,843
|
|
$
|
209
|
|
$
|
335
|
|
$
|
15,969
|
|
$
|
6,562
|
|
$
|
9,407
|
(1)
|
Amounts spent in 2012 as shown above do not include legal fees of approximately $7 thousand.
|
-
|
Current Rate Order includes recovery from customers of $13.6 million over the three year settlement period ending June 30, 2013.
|
-
|
As part of the 2010 Rate Order, Central Hudson maintained previously granted deferral authority and subsequent recovery for amounts spent over the rate allowance.
|
-
|
Total MGP Site Investigation and Remediation costs recovered through rates and other regulatory mechanisms from July 1, 2007 through March 31, 2012 was approximately $21.0 million, with $1.2 million recovered in the three months ended March 31, 2012.
|
-
|
The total spent in the three months ended March 31, 2012 related to site investigation and remediation was approximately $0.3 million.
|
-
|
The regulatory asset balance as of March 31, 2012 was $18.0 million, which represents the difference between amounts spent or currently accrued as a liability and the amounts recovered through rate allowance.
|
-
|
Upon completion of investigation at sites #5 and #6, when remediation and post-remediation costs will be able to be reasonably estimated and therefore will be recorded as a liability, this regulatory asset balance will likely increase significantly. Management projects that the investigation at these sites will likely be completed within the next two years.
|
·
|
Little Britain Road property owned by Central Hudson
|
·
|
Eltings Corners
|
·
|
Asbestos Litigation
|
|
Three Months Ended March 31, 2012
|
||||||||||||||||||
|
Segments
|
Other
|
|
|
|||||||||||||||
|
Central Hudson
|
|
Businesses
|
|
|
||||||||||||||
|
|
Natural
|
|
and
|
|
|
|||||||||||||
|
Electric
|
Gas
|
Griffith
|
Investments
|
Eliminations
|
Total
|
|||||||||||||
Revenues from external customers
|
$ | 129,272 | $ | 55,850 | $ | 88,950 | $ | - | $ | - | $ | 274,072 | |||||||
Intersegment revenues
|
3 | 90 | - | - | (93 | ) | - | ||||||||||||
Total revenues
|
129,275 | 55,940 | 88,950 | - | (93 | ) | 274,072 | ||||||||||||
Operating income (loss)
|
20,125 | 12,479 | 4,947 | (5,250 | ) | - | 32,301 | ||||||||||||
Interest and investment income
|
1,810 | 336 | - | 698 | (684 | ) (1) | 2,160 | ||||||||||||
Interest charges
|
5,716 | 1,539 | 696 | 535 | (684 | ) (1) | 7,802 | ||||||||||||
Income (loss) before income taxes
|
16,224 | 11,262 | 4,268 | (5,161 | ) | - | 26,594 | ||||||||||||
Net Income (Loss) Attributable to CH Energy Group
|
10,278 | 6,213 | 2,518 | (4,429 | ) | - | 14,581 | ||||||||||||
Segment assets at March 31
|
1,292,259 | 379,930 | 109,457 | 14,742 | - | 1,796,388 |
(1)
|
This represents the elimination of inter-company interest income (expense) generated from lending activities between CH Energy Group (the holding company), and its subsidiaries (CHEC and Griffith).
|
|
Three Months Ended March 31, 2011
|
|||||||||||||||||||
|
Segments
|
Other
|
|
|
||||||||||||||||
|
Central Hudson
|
|
Businesses
|
|
|
|||||||||||||||
|
|
Natural
|
|
and
|
|
|
||||||||||||||
|
Electric
|
Gas
|
Griffith
|
Investments
|
Eliminations
|
Total
|
||||||||||||||
Revenues from external customers
|
$ | 154,570 | $ | 75,482 | $ | 96,920 | $ | - | $ | - | $ | 326,972 | ||||||||
Intersegment revenues
|
4 | 166 | - | - | (170 | ) | - | |||||||||||||
Total revenues
|
154,574 | 75,648 | 96,920 | - | (170 | ) | 326,972 | |||||||||||||
Operating income (loss)
|
14,674 | 11,902 | 7,498 | (72 | ) | - | 34,002 | |||||||||||||
Interest and investment income
|
1,413 | 453 | - | 754 | (754 | ) (1) | 1,866 | |||||||||||||
Interest charges
|
5,857 | 1,517 | 753 | 849 | (754 | ) (1) | 8,222 | |||||||||||||
Income (loss) before income taxes
|
10,083 | 10,805 | 6,816 | (15 | ) | - | 27,689 | |||||||||||||
Net Income (Loss) Attributable to CH Energy Group
|
6,033 | 6,364 | 4,392 | (3) | 158 | (2) | - | 16,947 | ||||||||||||
Segment assets at March 31
|
1,182,116 | 355,217 | 115,816 | 90,581 | (2,553 | ) | 1,741,177 |
(1)
|
This represents the elimination of inter-company interest income (expense) generated from lending activities between CH Energy Group (the holding company), and its subsidiaries (CHEC and Griffith).
|
||||||||||||||||||
(2)
|
Includes net loss from discontinued operations of $256.
|
||||||||||||||||||
(3)
|
Includes net income from discontinued operations of $371.
|
Central Hudson
|
% of Requirement Hedged (1)
|
|
Electric Derivative Contracts:
|
||
April 2012 – December 2012
|
37.5%
|
|
2013
|
6.9%
|
|
2014
|
6.9%
|
|
Natural Gas Derivative Contracts:
|
||
November 2012 – March 2013
|
3.5%
|
As of March 31, 2012
|
||||||||||||
Triggering Event
|
# of Contracts in a Liability Position Containing the Triggering Feature
|
Gross Fair Value of Contract
|
Cost to Settle if Contingent Feature is Triggered
(net of collateral)
|
|||||||||
Central Hudson:
|
|
|
|
|||||||||
Credit Rating Downgrade (to below BBB-)
|
2 | $ | 212 | $ | 212 | |||||||
Adequate Assurance(1)
|
- | - | - | |||||||||
Total Central Hudson
|
2 | $ | 212 | $ | 212 | |||||||
Griffith:
|
||||||||||||
Change in Ownership (CHEG ownership of CHEC falls below 51%)
|
- | $ | - | $ | - | |||||||
Adequate Assurance(1)
|
- | - | - | |||||||||
Total Griffith
|
- | $ | - | $ | - | |||||||
Total CH Energy Group
|
2 | $ | 212 | $ | 212 |
(1)
|
If the counterparty has reasonable grounds to believe Central Hudson's or Griffith's creditworthiness or performance has become unsatisfactory, it can request collateral in an amount determined by the counterparty, not to exceed the amount required to settle the contract.
|
Asset or Liability Category
|
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
As of March 31, 2012
|
|
|
|
|
||||||||||||
Assets:
|
|
|
|
|
||||||||||||
Derivative Contracts:
|
|
|
|
|
||||||||||||
Griffith - heating oil
|
$ | 9 | $ | 9 | $ | - | $ | - | ||||||||
Total CH Energy Group Assets
|
$ | 9 | $ | 9 | $ | - | $ | - | ||||||||
Liabilities:
|
||||||||||||||||
Derivative Contracts:
|
||||||||||||||||
Central Hudson - electric
|
$ | (23,792 | ) | $ | - | $ | - | $ | (23,792 | ) | ||||||
Central Hudson - natural gas
|
(14 | ) | (14 | ) | - | - | ||||||||||
Total CH Energy Group and Central Hudson Liabilities
|
$ | (23,806 | ) | $ | (14 | ) | $ | - | $ | (23,792 | ) | |||||
As of December 31, 2011
|
||||||||||||||||
Assets:
|
||||||||||||||||
Derivative Contracts:
|
||||||||||||||||
Central Hudson - electric
|
$ | 931 | $ | - | $ | - | $ | 931 | ||||||||
Central Hudson - total return swap
|
320 | - | 320 | - | ||||||||||||
Total Central Hudson Assets
|
$ | 1,251 | $ | - | $ | 320 | $ | 931 | ||||||||
Griffith - heating oil
|
$ | 29 | $ | 29 | $ | - | $ | - | ||||||||
Total CH Energy Group Assets
|
$ | 1,280 | $ | 29 | $ | 320 | $ | 931 | ||||||||
Liabilities:
|
||||||||||||||||
Derivative Contracts:
|
||||||||||||||||
Central Hudson - electric
|
$ | (17,761 | ) | $ | - | $ | - | $ | (17,761 | ) | ||||||
Central Hudson - natural gas
|
(2,030 | ) | (2,030 | ) | - | - | ||||||||||
Total CH Energy Group and Central Hudson Liabilities
|
$ | (19,791 | ) | $ | (2,030 | ) | $ | - | $ | (17,761 | ) | |||||
As of March 31, 2011
|
||||||||||||||||
Assets:
|
||||||||||||||||
Derivative Contracts:
|
||||||||||||||||
Central Hudson - natural gas
|
$ | 68 | $ | 68 | $ | - | $ | - | ||||||||
Total Central Hudson Assets
|
$ | 68 | $ | 68 | $ | - | $ | - | ||||||||
Griffith - heating oil
|
$ | 39 | $ | - | $ | - | $ | - | ||||||||
Total CH Energy Group Assets
|
$ | 107 | $ | 68 | $ | - | $ | - | ||||||||
Liabilities:
|
||||||||||||||||
Derivative Contracts:
|
||||||||||||||||
Central Hudson - electric
|
$ | (19,716 | ) | $ | - | $ | - | $ | (19,716 | ) | ||||||
Total CH Energy Group and Central Hudson Liabilities
|
$ | (19,716 | ) | $ | - | $ | - | $ | (19,716 | ) |
|
Three Months Ended
|
|||||||
|
March 31,
|
|||||||
|
2012
|
2011
|
||||||
Balance at Beginning of Period
|
$ | (16,830 | ) | $ | (23,872 | ) | ||
Unrealized gains (losses)
|
(6,962 | ) | 4,156 | |||||
Realized losses
|
(7,654 | ) | (1,671 | ) | ||||
Purchases
|
- | - | ||||||
Issuances
|
- | - | ||||||
Sales and settlements
|
7,654 | 1,671 | ||||||
Transfers in and/or out of Level 3
|
- | - | ||||||
Balance at End of Period
|
$ | (23,792 | ) | $ | (19,716 | ) | ||
|
||||||||
The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to derivatives still held at end of period
|
$ | - | $ | - |
|
Amount of Gain (Loss) Recognized as Increase/(Decrease) in the Income Statement
|
||||||||
|
Three Months Ended March 31,
|
||||||||
|
2012
|
2011
|
Location of Gain (Loss)
|
||||||
Central Hudson:
|
|
|
|||||||
Electricity swap contracts
|
$ | (7,654 | ) | $ | (1,671 | ) |
Regulatory asset(1)
|
||
Natural gas swap contracts
|
(2,406 | ) | (1,385 | ) |
Regulatory asset(1)
|
||||
Total return swap contracts
|
617 | - |
Other-net
|
||||||
Total Central Hudson
|
$ | (9,443 | ) | $ | (3,056 | ) | |||
|
|||||||||
Griffith:
|
|||||||||
Heating oil call option contracts
|
$ | 30 | $ | 81 |
Purchased petroleum
|
||||
Griffith other derivative financial instrument
|
- | - |
Purchased petroleum
|
||||||
Total Griffith
|
$ | 30 | $ | 81 | |||||
|
|||||||||
Total CH Energy Group
|
$ | (9,413 | ) | $ | (2,975 | ) |
(1)
|
Realized gains and losses on Central Hudson’s derivative instruments are conveyed to or recovered from customers through PSC authorized deferral accounting mechanisms, with an offset in revenue and on the balance sheet, and no impact on results of operations.
|
Asset Category
|
Fair Value
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||||||
As of March 31, 2012:
|
||||||||||||||||
Other investments
|
$ | 2,438 | $ | 2,438 | $ | - | $ | - | ||||||||
As of December 31, 2011:
|
||||||||||||||||
Other investments
|
$ | 2,605 | $ | 2,605 | $ | - | $ | - | ||||||||
As of March 31, 2011:
|
||||||||||||||||
Other investments
|
$ | 4,018 | $ | 4,018 | $ | - | $ | - |
|
Fixed Rate
|
Variable Rate
|
Total Debt Outstanding
|
|||||||||||||||||||||
Expected Maturity Date
|
Amount
|
Estimated Effective Interest Rate
|
Amount
|
Estimated Effective Interest Rate
|
Amount
|
Estimated Effective Interest Rate
|
||||||||||||||||||
As of March 31, 2012:
|
|
|
|
|
|
|
||||||||||||||||||
2012
|
$ | 1,006 | 6.86 | % | $ | - | - | % |
|
|
||||||||||||||
2013
|
31,076 | 6.92 | - | - |
|
|
||||||||||||||||||
2014
|
21,650 | 5.45 | - | - |
|
|
||||||||||||||||||
2015
|
1,230 | 6.86 | - | - |
|
|
||||||||||||||||||
2016
|
9,315 | 3.39 | - | - |
|
|
||||||||||||||||||
Thereafter
|
397,031 | 5.17 | 33,700 | 0.37 |
|
|
||||||||||||||||||
Total
|
$ | 461,308 | 5.37 | % | $ | 33,700 | 0.37 | % | $ | 495,008 | 5.07 | % | ||||||||||||
|
||||||||||||||||||||||||
Fair Value
|
$ | 545,959 | $ | 33,700 | $ | 579,659 | ||||||||||||||||||
|
||||||||||||||||||||||||
As of December 31, 2011:
|
||||||||||||||||||||||||
2012
|
$ | 37,006 | 6.71 | % | $ | - | - | % | ||||||||||||||||
2013
|
31,076 | 6.92 | - | - | ||||||||||||||||||||
2014
|
21,650 | 5.45 | - | - | ||||||||||||||||||||
2015
|
1,230 | 6.86 | - | - | ||||||||||||||||||||
2016
|
9,315 | 3.39 | - | - | ||||||||||||||||||||
Thereafter
|
349,032 | 5.23 | 33,700 | 0.37 | ||||||||||||||||||||
Total
|
$ | 449,309 | 5.55 | % | $ | 33,700 | 0.37 | % | $ | 483,009 | 5.22 | % | ||||||||||||
|
||||||||||||||||||||||||
Fair Value
|
$ | 504,135 | $ | 33,700 | $ | 537,835 | ||||||||||||||||||
|
||||||||||||||||||||||||
As of March 31, 2011:
|
||||||||||||||||||||||||
2011
|
$ | 941 | 6.86 | % | $ | - | - | % | ||||||||||||||||
2012
|
37,007 | 6.71 | - | - | ||||||||||||||||||||
2013
|
31,076 | 6.92 | - | - | ||||||||||||||||||||
2014
|
41,650 | 6.02 | - | - | ||||||||||||||||||||
2015
|
1,230 | 6.86 | - | - | ||||||||||||||||||||
Thereafter
|
358,297 | 5.54 | 33,700 | 0.52 | ||||||||||||||||||||
Total
|
$ | 470,201 | 5.78 | % | $ | 33,700 | 0.52 | % | $ | 503,901 | 5.43 | % | ||||||||||||
|
||||||||||||||||||||||||
Fair Value
|
$ | 491,432 | $ | 33,700 | $ | 525,132 |
|
Fixed Rate
|
Variable Rate
|
Total Debt Outstanding
|
|||||||||||||||||||||
Expected Maturity Date
|
Amount
|
Estimated Effective Interest Rate
|
Amount
|
Estimated Effective Interest Rate
|
Amount
|
Estimated Effective Interest Rate
|
||||||||||||||||||
As of March 31, 2012:
|
|
|
|
|
|
|
||||||||||||||||||
2012
|
$ | - | - | % | $ | - | - | % |
|
|
||||||||||||||
2013
|
30,000 | 6.93 | - | - |
|
|
||||||||||||||||||
2014
|
14,000 | 4.81 | - | - |
|
|
||||||||||||||||||
2015
|
- | - | - | - |
|
|
||||||||||||||||||
2016
|
8,000 | 2.83 | - | - |
|
|
||||||||||||||||||
Thereafter
|
380,250 | 5.09 | 33,700 | 0.37 |
|
|
||||||||||||||||||
Total
|
$ | 432,250 | 5.27 | % | $ | 33,700 | 0.37 | % | $ | 465,950 | 4.96 | % | ||||||||||||
|
||||||||||||||||||||||||
Fair Value
|
$ | 507,978 | $ | 33,700 | $ | 541,678 | ||||||||||||||||||
|
||||||||||||||||||||||||
As of December 31, 2011:
|
||||||||||||||||||||||||
2012
|
$ | 36,000 | 6.71 | % | $ | - | - | % | ||||||||||||||||
2013
|
30,000 | 6.93 | - | - | ||||||||||||||||||||
2014
|
14,000 | 4.81 | - | - | ||||||||||||||||||||
2015
|
- | - | - | - | ||||||||||||||||||||
2016
|
8,000 | 2.83 | - | - | ||||||||||||||||||||
Thereafter
|
332,250 | 5.14 | 33,700 | 0.37 | ||||||||||||||||||||
Total
|
$ | 420,250 | 5.46 | % | $ | 33,700 | 0.37 | % | $ | 453,950 | 5.12 | % | ||||||||||||
|
||||||||||||||||||||||||
Fair Value
|
$ | 468,042 | $ | 33,700 | $ | 501,742 | ||||||||||||||||||
|
||||||||||||||||||||||||
As of March 31, 2011:
|
||||||||||||||||||||||||
2011
|
$ | - | - | % | $ | - | - | % | ||||||||||||||||
2012
|
36,000 | 6.71 | - | - | ||||||||||||||||||||
2013
|
30,000 | 6.93 | - | - | ||||||||||||||||||||
2014
|
14,000 | 4.81 | - | - | ||||||||||||||||||||
2015
|
- | - | - | - | ||||||||||||||||||||
Thereafter
|
340,201 | 5.47 | 33,700 | 0.52 | ||||||||||||||||||||
Total
|
$ | 420,201 | 5.66 | % | $ | 33,700 | 0.52 | % | $ | 453,901 | 5.28 | % | ||||||||||||
|
||||||||||||||||||||||||
Fair Value
|
$ | 434,771 | $ | 33,700 | $ | 468,471 |
Business Segments:
|
||||
(1)
|
Central Hudson’s regulated electric utility business;
|
|||
(2)
|
Central Hudson’s regulated natural gas utility business;
|
|||
(3)
|
Griffith’s fuel distribution business;
|
|||
Other Businesses and Investments:
|
||||
(4)
|
CHEC’s renewable energy investments and the holding company’s activities, which consist primarily of financing its subsidiaries.
|
·
|
Concentrate on energy distribution through Central Hudson in the Mid-Hudson Valley and through Griffith in the Mid-Atlantic region
|
·
|
Invest primarily in utility electric and natural gas transmission and distribution
|
·
|
Focus on risk management
|
-
|
Limit commodity exposure
|
-
|
Manage regulatory affairs effectively
|
-
|
Maintain a financial profile that supports a credit rating in the “A” category
|
·
|
Target stable and predictable earnings, with growth trend expectations of 5% or more per year off a 2009 base
|
·
|
Provide an annualized dividend that is approximately 65% to 70% of annual earnings
|
|
Three Months Ended
March 31,
|
|
||||||||||
|
2012
|
2011
|
Change
|
|||||||||
Central Hudson - Electric
|
$ | 0.70 | $ | 0.39 | $ | 0.31 | ||||||
Central Hudson - Natural Gas
|
0.41 | 0.40 | 0.01 | |||||||||
Griffith
|
0.17 | 0.28 | (0.11 | ) | ||||||||
Other Businesses and Investments
|
(0.30 | ) | 0.01 | (0.31 | ) | |||||||
Total CH Energy Group Consolidated Earnings, as reported
|
$ | 0.98 | $ | 1.08 | $ | (0.10 | ) | |||||
|
||||||||||||
Significant Events:
|
||||||||||||
Central Hudson
|
$ | (0.04 | ) | $ | (0.13 | ) | $ | 0.09 | ||||
Griffith
|
(0.06 | ) | 0.04 | (0.10 | ) | |||||||
Other Businesses and Investments
|
(0.31 | ) | (0.04 | ) | (0.27 | ) | ||||||
Total Significant Events
|
$ | (0.41 | ) | $ | (0.13 | ) | $ | (0.28 | ) | |||
|
||||||||||||
CH Energy Group Consolidated Adjusted
Earnings Per Share (non-GAAP):
|
||||||||||||
Central Hudson
|
$ | 1.15 | $ | 0.92 | $ | 0.23 | ||||||
Griffith
|
0.23 | 0.24 | (0.01 | ) | ||||||||
Other Businesses and Investments
|
0.01 | 0.05 | (0.04 | ) | ||||||||
Total CH Energy Group Consolidated Adjusted Earnings Per Share (non-GAAP)
|
$ | 1.39 | $ | 1.21 | $ | 0.18 |
Three Months Ended
March 31,
|
|
||||||||
2012
|
2011
|
Change
|
|||||||
Central Hudson - Electric
|
$ | 0.70 | $ | 0.39 | $ | 0.31 | |||
Central Hudson - Natural Gas
|
0.41 | 0.40 | 0.01 | ||||||
Total Central Hudson Earnings
|
$ | 1.11 | $ | 0.79 | $ | 0.32 | |||
Significant Events:
|
|||||||||
Higher weather related restoration costs(1)
|
$ | - | $ | (0.13 | ) | $ | 0.13 | ||
Storm deferral adjustment
|
(0.04 | ) | - | (0.04 | ) | ||||
Central Hudson Adjusted Earnings Per Share
|
$ | 1.15 | $ | 0.92 | $ | 0.23 | |||
Change
|
|||||||||
Delivery revenue
|
$ | 0.09 | |||||||
Higher property and other taxes
|
(0.03 | ) | |||||||
Higher depreciation
|
(0.04 | ) | |||||||
Lower trimming costs
|
0.09 | ||||||||
Lower Income and capital-based taxes
|
0.02 | ||||||||
Share accretion
|
0.05 | ||||||||
Other
|
0.05 | ||||||||
$ | 0.23 |
(1)
|
Amount represents incremental costs incurred for weather related service restoration, including costs for outside contractor assistance in restoration efforts and higher than average internal expenses (such as overtime and materials), which did not meet the PSC criteria for deferral and therefore have not been deferred for future recovery from customers.
|
Three Months Ended
March 31,
|
|
||||||||
2012
|
2011
|
Change
|
|||||||
Griffith - Fuel Distribution Earnings
|
$ | 0.17 | $ | 0.28 | $ | (0.11 | ) | ||
Significant Events:
|
|||||||||
Weather impact on sales
|
$ | (0.06 | ) | $ | 0.02 | $ | (0.08 | ) | |
Discontinued operations
|
- | 0.02 | (0.02 | ) | |||||
Griffith Adjusted Earnings Per Share
|
$ | 0.23 | $ | 0.24 | $ | (0.01 | ) | ||
Change
|
|||||||||
Weather-normalized sales (including conservation)
|
$ | (0.05 | ) | ||||||
Gross margin on petroleum sales
|
0.02 | ||||||||
Operating expenses
|
0.01 | ||||||||
Share accretion
|
0.01 | ||||||||
$ | (0.01 | ) |
|
Three Months Ended
March 31,
|
|
|||||||||
|
2012
|
2011
|
Change
|
||||||||
Other Businesses & Investments Earnings
|
$ | (0.30 | ) | $ | 0.01 | $ | (0.31 | ) | |||
|
|||||||||||
|
|||||||||||
Significant Events:
|
|||||||||||
Renewable Investments:
|
|||||||||||
Operations
|
$ | - | $ | (0.04 | ) | $ | 0.04 | ||||
Merger related costs
|
(0.31 | ) | - | (0.31 | ) | ||||||
Other Businesses and Investments Adjusted Earnings Per Share
|
$ | 0.01 | $ | 0.05 | $ | (0.04 | ) | ||||
|
|||||||||||
|
Change
|
||||||||||
Share accretion
|
$ | (0.01 | ) | ||||||||
Other
|
(0.03 | ) | |||||||||
|
$ | (0.04 | ) |
Three Months Ended
March 31, 2012
|
Three Months Ended
March 31, 2011
|
|||||||||||||||||||||||||||||||
Business Unit
|
Operating
Revenues
|
Net Income (Loss) Attributable to CH Energy Group
|
Operating
Revenues
|
Net Income Attributable to CH Energy Group
|
||||||||||||||||||||||||||||
Electric(1)
|
$ | 129,272 | 47 | % | $ | 10,278 | 70 | % | $ | 154,570 | 47 | % | $ | 6,033 | 36 | % | ||||||||||||||||
Gas(1)
|
55,850 | 21 | 6,213 | 43 | 75,482 | 23 | 6,364 | 37 | ||||||||||||||||||||||||
Total Central Hudson
|
185,122 | 68 | 16,491 | 113 | 230,052 | 70 | 12,397 | 73 | ||||||||||||||||||||||||
Griffith(1)(2)
|
88,950 | 32 | 2,518 | 17 | 96,920 | 30 | 4,392 | 26 | ||||||||||||||||||||||||
Other Businesses and Investments(3)
|
- | - | (4,429 | ) | (30 | ) | - | - | 158 | 1 | ||||||||||||||||||||||
Total CH Energy Group
|
$ | 274,072 | 100 | % | $ | 14,581 | 100 | % | $ | 326,972 | 100 | % | $ | 16,947 | 100 | % |
(1)
|
A portion of the revenues above represent amounts collected from customers for the recovery of purchased electric and natural gas costs at Central Hudson and the cost of purchased petroleum products at Griffith and therefore have no material impact on net income. A breakout of these components is as follows:
|
||||||||||||||||||||||||||||
|
Electric 1st Quarter 2012: 16% cost recovery revenues + 31% other revenues = 47%
|
||||||||||||||||||||||||||||
|
Electric 1st Quarter 2011: 21% cost recovery revenues + 26% other revenues = 47%
|
||||||||||||||||||||||||||||
|
Natural gas 1st Quarter 2012: 9% cost recovery revenues + 12% other revenues = 21%
|
||||||||||||||||||||||||||||
|
Natural gas 1st Quarter 2011: 13% cost recovery revenues + 10% other revenues = 23%
|
||||||||||||||||||||||||||||
|
Griffith 1st Quarter 2012: 25% commodity costs + 7% other revenues = 32%
|
||||||||||||||||||||||||||||
|
Griffith 1st Quarter 2011: 23% commodity costs + 7% other revenues = 30%
|
||||||||||||||||||||||||||||
(2)
|
Net income for Griffith for the three months ended March 31, 2011 includes income from discontinued operations of $371.
|
||||||||||||||||||||||||||||
(3)
|
Net income for Other Businesses and Investments for the three months ended March 31, 2011 includes a loss from discontinued operations of $(256).
|
|
Three Months Ended
March 31,
|
Increase/(Decrease) in
|
||||||||||||||
|
2012
|
2011
|
Amount
|
Percent
|
||||||||||||
Operating Revenues
|
$ | 185,122 | $ | 230,052 | $ | (44,930 | ) | (19.5 | ) | |||||||
|
||||||||||||||||
Operating Expenses:
|
||||||||||||||||
Purchased electricity, fuel and natural gas
|
69,673 | 112,066 | (42,393 | ) | (37.8 | ) | ||||||||||
Depreciation and amortization
|
9,468 | 8,921 | 547 | 6.1 | ||||||||||||
Other operating expenses
|
73,377 | 82,489 | (9,112 | ) | (11.0 | ) | ||||||||||
Total Operating Expenses
|
152,518 | 203,476 | (50,958 | ) | (25.0 | ) | ||||||||||
Operating Income
|
32,604 | 26,576 | 6,028 | 22.7 | ||||||||||||
Other Income, net
|
2,137 | 1,686 | 451 | 26.7 | ||||||||||||
Interest Charges
|
7,255 | 7,374 | (119 | ) | (1.6 | ) | ||||||||||
Income before income taxes
|
27,486 | 20,888 | 6,598 | 31.6 | ||||||||||||
Income Taxes
|
10,753 | 8,249 | 2,504 | 30.4 | ||||||||||||
Net income
|
$ | 16,733 | $ | 12,639 | $ | 4,094 | 32.4 |
|
Actual Deliveries
|
Weather Normalized Deliveries(1)
|
||||||||||||||||||||||||||||||
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
||||||||||||||||||||||||||
|
March 31,
|
Variation in
|
March 31,
|
Variation in
|
||||||||||||||||||||||||||||
|
2012
|
2011
|
Amount
|
Percent
|
2012
|
2011
|
Amount
|
Percent
|
||||||||||||||||||||||||
Residential
|
548 | 622 | (74 | ) | (12 | ) % | 586 | 610 | (24 | ) | (4 | ) % | ||||||||||||||||||||
Commercial
|
476 | 507 | (31 | ) | (6 | ) | 478 | 505 | (27 | ) | (5 | ) | ||||||||||||||||||||
Industrial and other
|
254 | 260 | (6 | ) | (2 | ) | 256 | 260 | (4 | ) | (2 | ) | ||||||||||||||||||||
Total Deliveries
|
1,278 | 1,389 | (111 | ) | (8 | ) % | 1,320 | 1,375 | (55 | ) | (4 | ) % |
(1)
|
Central Hudson uses an internal analysis based on historical weather data to remove the estimated impacts of weather on delivery volumes.
|
|
Actual Deliveries
|
Weather Normalized Deliveries(1)
|
||||||||||||||||||||||||||||||
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
||||||||||||||||||||||||||
|
March 31,
|
Variation in
|
March 31,
|
Variation in
|
||||||||||||||||||||||||||||
|
2012
|
2011
|
Amount
|
Percent
|
2012
|
2011
|
Amount
|
Percent
|
||||||||||||||||||||||||
Residential
|
2,094 | 2,780 | (686 | ) | (25 | ) % | 2,547 | 2,620 | (73 | ) | (3 | ) % | ||||||||||||||||||||
Commercial
|
2,257 | 2,905 | (648 | ) | (22 | ) | 2,681 | 2,777 | (96 | ) | (3 | ) | ||||||||||||||||||||
Industrial and other
|
148 | 214 | (66 | ) | (31 | ) | 177 | 204 | (27 | ) | (13 | ) | ||||||||||||||||||||
Total Deliveries
|
4,499 | 5,899 | (1,400 | ) | (24 | ) % | 5,405 | 5,601 | (196 | ) | (3 | ) % |
(1)
|
Central Hudson uses an internal analysis based on historical weather data to remove the estimated impacts of weather on delivery volumes.
|
Three Months Ended
|
|
|||||||||||
March 31,
|
Increase /
|
|||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
Revenues with Matching Expense Offsets:(1)
|
|
|
|
|||||||||
Energy cost adjustment
|
$ | 43,920 | $ | 69,271 | $ | (25,351 | ) | |||||
Sales to others for resale
|
1,139 | 997 | 142 | |||||||||
Other revenues with matching offsets
|
20,899 | 22,548 | (1,649 | ) | ||||||||
Subtotal
|
65,958 | 92,816 | (26,858 | ) | ||||||||
Revenues Impacting Earnings:
|
||||||||||||
Customer sales
|
58,131 | 60,699 | (2,568 | ) | ||||||||
RDM and other regulatory mechanisms
|
2,902 | (1,590 | ) | 4,492 | ||||||||
Pole attachments and other rents
|
1,110 | 932 | 178 | |||||||||
Finance charges
|
748 | 877 | (129 | ) | ||||||||
Other revenues
|
423 | 836 | (413 | ) | ||||||||
Subtotal
|
63,314 | 61,754 | 1,560 | |||||||||
Total Electric Revenues
|
$ | 129,272 | $ | 154,570 | $ | (25,298 | ) |
(1)
|
Revenues with matching offsets do not affect earnings since they offset related costs, the most significant being energy cost adjustment revenues, which provide for the recovery of purchased electricity costs. Other related costs include authorized business expenses recovered through rates and the cost of special programs authorized by the PSC and funded with certain available credits. Changes in revenues from electric sales to other utilities also do not affect earnings since any related profits or losses are returned or charged, respectively, to customers.
|
Three Months Ended
|
|
|||||||||||
March 31,
|
Increase /
|
|||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
Revenues with Matching Expense Offsets:(1)
|
|
|
|
|||||||||
Energy cost adjustment
|
$ | 16,599 | $ | 32,239 | $ | (15,640 | ) | |||||
Sales to others for resale
|
8,220 | 9,697 | (1,477 | ) | ||||||||
Other revenues with matching offsets
|
7,522 | 9,801 | (2,279 | ) | ||||||||
Subtotal
|
32,341 | 51,737 | (19,396 | ) | ||||||||
Revenues Impacting Earnings:
|
||||||||||||
Customer sales
|
20,311 | 24,807 | (4,496 | ) | ||||||||
RDM and other regulatory mechanisms
|
1,945 | (2,297 | ) | 4,242 | ||||||||
Interruptible profits
|
663 | 664 | (1 | ) | ||||||||
Finance charges
|
267 | 333 | (66 | ) | ||||||||
Other revenues
|
323 | 238 | 85 | |||||||||
Subtotal
|
23,509 | 23,745 | (236 | ) | ||||||||
Total Natural Gas Revenues
|
$ | 55,850 | $ | 75,482 | $ | (19,632 | ) |
(1)
|
Revenues with matching offsets do not affect earnings since they offset related costs, the most significant being energy cost adjustment revenues, which provide for the recovery of purchased natural gas costs. Other related costs include authorized business expenses recovered through rates and the cost of special programs authorized by the PSC and funded with certain available credits. For natural gas sales to other entities for resale, 85% of such profits are returned to customers.
|
Three Months Ended
|
|
|||||||||||
March 31,
|
Increase /
|
|||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
Expenses Currently Matched to Revenues:(1)
|
|
|
|
|||||||||
Purchased electricity
|
$ | 45,059 | $ | 70,268 | $ | (25,209 | ) | |||||
Purchased natural gas
|
24,819 | 41,936 | (17,117 | ) | ||||||||
Temporary State Assessment
|
5,760 | 6,545 | (785 | ) | ||||||||
Pension
|
7,067 | 8,119 | (1,052 | ) | ||||||||
OPEB
|
1,953 | 1,950 | 3 | |||||||||
NYS energy programs
|
6,511 | 8,597 | (2,086 | ) | ||||||||
MGP site remediations
|
1,232 | 1,216 | 16 | |||||||||
Other matched expenses
|
5,898 | 5,922 | (24 | ) | ||||||||
Subtotal
|
98,299 | 144,553 | (46,254 | ) | ||||||||
Other Expense Variations:
|
||||||||||||
Tree trimming
|
3,521 | 5,821 | (2,300 | ) | ||||||||
Property and school taxes(2)
|
10,130 | 9,371 | 759 | |||||||||
Weather related service restoration
|
1,439 | 4,970 | (3,531 | ) | ||||||||
Depreciation
|
9,468 | 8,921 | 547 | |||||||||
Uncollectible expense
|
2,125 | 2,076 | 49 | |||||||||
Purchased natural gas incentive arrangements
|
(205 | ) | (138 | ) | (67 | ) | ||||||
Other expenses
|
27,741 | 27,902 | (161 | ) | ||||||||
Subtotal
|
54,219 | 58,923 | (4,704 | ) | ||||||||
Total Operating Expenses
|
$ | 152,518 | $ | 203,476 | $ | (50,958 | ) |
(1)
|
Includes expenses that, in accordance with the 2010 Rate Order, are adjusted in the current period to equal the revenues earned for the applicable expenses.
|
||||||||||
(2)
|
In accordance with the 2010 Rate Order, Central Hudson is authorized to defer 90% of any difference between actual property tax expense and the amounts provided in rates for each Rate Year.
|
|
Three Months Ended March 31,
|
Increase/(Decrease) in
|
||||||||||||||
|
2012
|
2011
|
Amount
|
Percent
|
||||||||||||
Operating Revenues
|
$ | 274,072 | $ | 326,972 | $ | (52,900 | ) | (16.2 | ) % | |||||||
Operating Expenses:
|
||||||||||||||||
Purchased electricity, fuel, natural gas and petroleum
|
139,978 | 187,832 | (47,854 | ) | (25.5 | ) | ||||||||||
Depreciation and amortization
|
10,624 | 10,085 | 539 | 5.3 | ||||||||||||
Merger related costs
|
5,219 | - | 5,219 | 100.0 | ||||||||||||
Other operating expenses
|
85,950 | 95,053 | (9,103 | ) | (9.6 | ) | ||||||||||
Total Operating Expenses
|
241,771 | 292,970 | (51,199 | ) | (17.5 | ) | ||||||||||
Operating Income
|
32,301 | 34,002 | (1,701 | ) | (5.0 | ) | ||||||||||
Other Income (Deductions), net
|
2,095 | 1,909 | 186 | 9.7 | ||||||||||||
Interest Charges
|
7,802 | 8,222 | (420 | ) | (5.1 | ) | ||||||||||
Income before income taxes, non-controlling interest and preferred dividends of subsidiary
|
26,594 | 27,689 | (1,095 | ) | (4.0 | ) | ||||||||||
Income Taxes
|
11,771 | 10,615 | 1,156 | 10.9 | ||||||||||||
Net income from continuing operations
|
14,823 | 17,074 | (2,251 | ) | (13.2 | ) | ||||||||||
Net income from discontinued operations, net of tax
|
- | 115 | (115 | ) | (100.0 | ) | ||||||||||
Dividends declared on Preferred Stock of subsidiary
|
242 | 242 | - | - | ||||||||||||
Net income attributable to CH Energy Group
|
$ | 14,581 | $ | 16,947 | $ | (2,366 | ) | (14.0 | ) % |
Actual Deliveries
|
Weather Normalized Deliveries(1)
|
|||||||||||||||||||||||||||||||
Three Months Ended
March 31,
|
Increase /
(Decrease) in
|
Three Months Ended
March 31,
|
Increase /
(Decrease) in
|
|||||||||||||||||||||||||||||
2012
|
2011
|
Amount
|
Percent
|
2012
|
2011
|
Amount
|
Percent
|
|||||||||||||||||||||||||
Heating Oil:
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Base company volume(2)
|
11,005 | 15,871 | (4,866 | ) | (31 | ) | 14,227 | 15,784 | (1,557 | ) | (10 | ) | ||||||||||||||||||||
Acquisitions volume
|
373 | 138 | 235 | 170 | 483 | 128 | 355 | 277 | ||||||||||||||||||||||||
Total Heating Oil
|
11,378 | 16,009 | (4,631 | ) | (29 | ) | 14,710 | 15,912 | (1,202 | ) | (8 | ) | ||||||||||||||||||||
Motor Fuels:
|
||||||||||||||||||||||||||||||||
Base company volume(2)
|
9,841 | 10,055 | (214 | ) | (2 | ) | 9,841 | 10,055 | (214 | ) | (2 | ) | ||||||||||||||||||||
Acquisitions volume
|
595 | 467 | 128 | 27 | 595 | 467 | 128 | 27 | ||||||||||||||||||||||||
Total Motor Fuels
|
10,436 | 10,522 | (86 | ) | (1 | ) | 10,436 | 10,522 | (86 | ) | (1 | ) | ||||||||||||||||||||
Propane and Other:
|
||||||||||||||||||||||||||||||||
Base company volume(2)
|
336 | 514 | (178 | ) | (35 | ) | 428 | 511 | (83 | ) | (16 | ) | ||||||||||||||||||||
Total Propane and Other
|
336 | 514 | (178 | ) | (35 | ) | 428 | 511 | (83 | ) | (16 | ) | ||||||||||||||||||||
Total:
|
||||||||||||||||||||||||||||||||
Base company volume(2)
|
21,182 | 26,440 | (5,258 | ) | (20 | ) | 24,496 | 26,350 | (1,854 | ) | (7 | ) | ||||||||||||||||||||
Acquisitions volume
|
968 | 605 | 363 | 60 | 1,078 | 595 | 483 | 81 | ||||||||||||||||||||||||
Total
|
22,150 | 27,045 | (4,895 | ) | (18 | ) | 25,574 | 26,945 | (1,371 | ) | (5 | ) |
(1)
|
Griffith uses an internal analysis based on historical weather data to remove the estimated impacts of weather on delivery volumes.
|
|||||||||||||||||||||||
(2) | For the purpose of this chart, "Base company” excludes any impact from acquisitions made by Griffith in 2012 and 2011. |
|
Three Months Ended March 31,
|
|||||||||||||||
|
2012
|
2011
|
||||||||||||||
|
Actual
|
Weather
Normalized
|
Actual
|
Weather
Normalized
|
||||||||||||
Heating Oil:
|
|
|
|
|
||||||||||||
Base company
|
50 | % | 56 | % | 58 | % | 58 | % | ||||||||
Acquisitions
|
2 | % | 2 | % | 1 | % | 1 | % | ||||||||
Motor Fuels:
|
||||||||||||||||
Base company
|
44 | % | 38 | % | 37 | % | 37 | % | ||||||||
Acquisitions
|
3 | % | 2 | % | 2 | % | 2 | % | ||||||||
Propane and Other:
|
||||||||||||||||
Base company
|
1 | % | 2 | % | 2 | % | 2 | % | ||||||||
Total
|
100 | % | 100 | % | 100 | % | 100 | % |
|
Three Months Ended March 31,
|
|||||||||||||||
Product and Service Line
|
2012
|
2011
|
||||||||||||||
Heating oil - Base company
|
$ | 9,475 | 55 | % | $ | 13,001 | 66 | % | ||||||||
Heating oil - Acquisitions
|
275 | 2 | % | 68 | - | % | ||||||||||
Motor fuels - Base company
|
2,253 | 13 | % | 2,297 | 11 | % | ||||||||||
Motor fuels - Acquisitions
|
186 | 1 | % | 134 | 1 | % | ||||||||||
Propane and Other - Base company
|
491 | 3 | % | 716 | 4 | % | ||||||||||
Service and installations - Base company
|
2,949 | 17 | % | 2,951 | 15 | % | ||||||||||
Service and installations - Acquisitions
|
77 | - | % | 1 | - | % | ||||||||||
Other - Base company
|
1,647 | 9 | % | 646 | 3 | % | ||||||||||
Other - Acquisitions
|
- | - | % | 4 | - | % | ||||||||||
Total
|
$ | 17,353 | 100 | % | $ | 19,818 | 100 | % |
Three Months Ended
|
|
|||||||||||
March 31,
|
Increase /
|
|||||||||||
2012
|
2011
|
(Decrease)
|
||||||||||
Revenues:
|
|
|
|
|||||||||
Heating oil(1)
|
$ | 44,597 | $ | 57,267 | $ | (12,670 | ) | |||||
Heating oil - Acquisitions
|
1,467 | 460 | 1,007 | |||||||||
Motor Fuels(1)
|
33,822 | 31,071 | 2,751 | |||||||||
Motor Fuels - Acquisitions
|
2,079 | 1,510 | 569 | |||||||||
Other(1)
|
2,667 | 2,319 | 348 | |||||||||
Other - Acquisitions
|
- | 5 | (5 | ) | ||||||||
Service Revenues(1)
|
4,198 | 4,287 | (89 | ) | ||||||||
Service Revenues - Acquisitions
|
120 | 1 | 119 | |||||||||
Total
|
$ | 88,950 | $ | 96,920 | $ | (7,970 | ) |
(1)
|
These line items exclude the impact of acquisitions made by Griffith in 2012 and 2011 for the analysis which compares the three months ended March 31, 2012 to 2011.
|
|
CH Energy Group
|
Central Hudson
|
||||||||||||
|
Three Months Ended
March 31,
|
Three Months Ended
March 31,
|
||||||||||||
|
2012
|
2011
|
2012
|
2011
|
||||||||||
Net Cash Provided By/(Used In):
|
|
|
|
|||||||||||
Operating Activities
|
$ | 12,611 | $ | 29,773 | $ | 11,169 | $ | 42,952 | ||||||
Investing Activities
|
(26,428 | ) | (21,625 | ) | (26,560 | ) | (16,570 | ) | ||||||
Financing Activities
|
64,403 | (1,026 | ) | 68,656 | (11,470 | ) | ||||||||
Cash Included in Current Assets Held for Sale
|
- | (603 | ) | - | - | |||||||||
Net change for the period
|
50,586 | 6,519 | 53,265 | 14,912 | ||||||||||
Balance at beginning of period
|
15,281 | 29,420 | 2,521 | 9,622 | ||||||||||
Balance at end of period
|
$ | 65,867 | $ | 35,939 | $ | 55,786 | $ | 24,534 |
·
|
A final report to the PSC of NorthStar’s findings and recommendations was completed February 28, 2011. On March 25, 2011, Central Hudson filed its audit comment letter with the PSC.
|
·
|
On May 20, 2011, the Commission accepted NorthStar’s Audit Report and issued its Order directing Central Hudson to file an implementation plan based on the report’s twenty recommendations.
|
·
|
Central Hudson submitted its implementation plan to the Commission on July 1, 2011 and Update Reports as required by the Order on November 1, 2011 and March 1, 2012. With the March 2012 update, the Company has reported the completion of eight recommendations, with the remaining balance of twelve all on schedule with the originally filed plan.
|
·
|
The Administrative Law Judge (“ALJ”) established a case procedure and schedule, adopting a comment oriented proceeding that included issuance of a PSC Staff Policy Whitepaper in June and a Technical Conference in July.
|
·
|
PSC Staff Whitepaper reported that there does not appear to be any deficiency in utility cost control practices, with adequate controls in place. Staff also found that rate recovery for prudent and verifiable legally imposed clean up costs is a reasonable approach and warned that sharing or less than full recovery will have cost of capital impacts.
|
·
|
On November 3, 2011, the ALJ issued a Recommended Decision (“RD”) against any generic ratepayer/shareholder cost sharing policy, or any ratemaking cap on expenses based on cost estimates or denying recovery of any carrying charges on deferred balances. It also recommends adoption of additional annual reporting, new independent shareholder funded audits and development of best cost control practices for MGP remediation.
|
·
|
Briefs on Exceptions were filed on November 23, 2011 and Briefs Opposing Exceptions were filed on December 8, 2011.
|
·
|
On March 22, 2012, the PSC issued an Order establishing a new mechanism for awarding utility financial incentives for the period January 1, 2012 through December 31, 2015. Awards are based on the results of a two-step process with 90% of the total incentive based on an individual utility’s performance and the remaining 10% dependent on all utilities and NYSERDA meeting the 15 x 15 energy savings goal. Formulaic incentives will be awarded on a positive basis only using a sliding scale from 80% to 100% of achievement.
|
·
|
Advanced Metering Infrastructure
|
·
|
The American Recovery and Reinvestment Act of 2009
|
|
Total Number of Shares Purchased(1)
|
|
Average Price Paid per Share(2)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(3)
|
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs(3)
|
|
January 1-31, 2012
|
991
|
|
$
|
57.01
|
|
-
|
1,051,324
|
February 1-29, 2012
|
-
|
|
$
|
-
|
|
-
|
1,051,324
|
March 1-31, 2012
|
-
|
|
$
|
-
|
|
-
|
1,051,324
|
Total
|
991
|
|
$
|
57.01
|
|
-
|
(1)
|
Consists of shares surrendered to CH Energy Group in satisfaction of tax withholdings on the vesting of restricted shares.
|
||||||||||
(2)
|
Value at which reacquired shares of CH Energy Group's common stock credited on the date the stock was surrendered.
|
||||||||||
(3)
|
On July 31, 2007, the Board of Directors authorized the repurchase of up to 2,000,000 shares or approximately 13% of CH Energy Group's outstanding common stock on that date, from time to time, over the five year period ending July 31, 2012.
|
CH ENERGY GROUP, INC.
|
||
(Registrant)
|
||
By:
|
/s/ Kimberly J. Wright
|
|
Kimberly J. Wright
|
||
Vice President - Accounting and Controller
|
||
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
|
||
(Co-Registrant)
|
||
By:
|
/s/ Kimberly J. Wright
|
|
Kimberly J. Wright
|
||
Controller
|
Exhibit No.
(Regulation
S-K Item 601
Designation)
|
Exhibit Description
|
|
2.1
|
Agreement and Plan of Merger, dated as of February 21, 2012, by and among FortisUS, Inc., Cascade Acquisition Sub, Inc., Fortis Inc., and CH Energy Group. (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed with the SEC on February 21, 2012)
|
|
4.1
|
Second Supplemental Indenture dated March 23, 2012 to the Indenture dated as of April 1, 1992 between Central Hudson Gas & Electric Corporation and U.S. Bank Trust National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K filed by Central Hudson Gas & Electric Corporation on March 23, 2012)
|
|
Rule 13a-14(a)/15d-14(a) Certification by Mr. Lant.
|
||
Rule 13a-14(a)/15d-14(a) Certification by Mr. Capone.
|
||
Rule 13a-14(a)/15d-14(a) Certification by Mr. Lant.
|
||
Rule 13a-14(a)/15d-14(a) Certification by Mr. Capone.
|
||
Section 1350 Certification by Mr. Lant.
|
||
Section 1350 Certification by Mr. Capone.
|
||
Section 1350 Certification by Mr. Lant.
|
||
Section 1350 Certification by Mr. Capone.
|
||
101.INS
|
XBRL Instance Document.
|
|
101.SCH
|
XBRL Taxonomy Extension Schema.
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase.
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase.
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase.
|