CH Energy Group Annual Earnings Rise 10 Percent.Business Editors POUGHKEEPSIE Poughkeepsie (pəkĭp`sē), city (1990 pop. 28,844), seat of Dutchess co., SE N.Y., on the Hudson River; settled 1687 by the Dutch, inc. as a city 1854. , N.Y.--(BUSINESS WIRE)--Jan. 30, 2004 CH Energy Group, Inc. today posted its 2003 annual earnings at $2.78 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 10 percent higher than the Company's 2002 earnings of $2.53 and slightly above the high end of the range of the Corporation's projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. of $2.55 to $2.75 a share. "Clearly, 2003 was a good year for our shareholders and our customers. While favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. weather patterns played a large role in the earnings gain, Central Hudson Hudson, towns, United States Hudson. 1 Industrial town (1990 pop. 17,233), Middlesex co., E central Mass., on the Assabet River, in an apple-growing region; settled c.1699, inc. 1866. Gas & Electric also benefited from a robust regional economy and Central Hudson Enterprises Corporation (CHEC CHEC Children's Health Environmental Coalition CHEC Christian Home Educators of Colorado CHEC Commonwealth Human Ecology Council (UK) CHEC Coffs Harbour Education Campus ) posted substantial gains from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the as a result of sustainable improvements in operating efficiencies achieved in the fuel oil delivery companies," said Chairman of the Board Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. J. Ganci. "Equally important, customer satisfaction increased for the fourth consecutive year at Central Hudson, attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to our investments to improve service reliability and the fact that our electric delivery rates remain the lowest in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of state." Contributing to the earnings gain were the expected increased benefits flowing from the third year of Central Hudson's This article is about the defunct chain of department stores. For the former parent company formed by the 1969 merger with Dayton's, see Target Corporation. Hudson's, or The J.L. electric regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. settlement. That regulatory settlement also included rate reductions and refunds for customers. Earnings were also favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of common stock and other items. Those positive developments were more than enough to offset increased operating and maintenance expenses due to higher sales and storm restoration, higher depreciation, and the absence of significant one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. gains from a CHEC subsidiary divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). and non-recurring items. Fourth Quarter Results Earnings in the fourth quarter of 2003 were 73 cents, as compared to 66 cents per share in the same quarter of 2002. Significant contributors included increased electric residential sales and reduced operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. at Central Hudson, as well as improved sales and operating efficiencies at the oil distribution companies. Earnings were also favorably impacted by the sale of CHEC's retail natural gas business. Earnings were dampened by increased depreciation and the absence of non-recurring items. 2004 Earnings Projections The Company projects its 2004 earnings at between $2.60 and $2.85 per share, noting that $2.30 to $2.45 is estimated to result from the operations of Central Hudson; 20 cents to 25 cents from CHEC's fuel distribution business units; and 10 cents to 15 cents from partnership income and interest income on the funds being held in money market funds that are ready for immediate deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. if a suitable investment opportunity is identified. "Our business development team will continue to actively seek investment opportunities that meet our risk and profitability parameters," said Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. V. Lant, President and Chief Executive Officer. He noted that the annual earnings projection does not include any earnings accretion The act of adding portions of soil to the soil already in possession of the owner by gradual deposition through the operation of natural causes. The growth of the value of a particular item given to a person as a specific bequest under the provisions of a will between the from such investments, and that earnings could be higher in 2004 if such acquisitions do occur. About CH Energy Group With more than 440,000 customers, CH Energy Group, Inc. is a family of companies seizing new opportunities in the energy marketplace through two primary subsidiaries: Central Hudson Gas & Electric is a regulated reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. transmission and distribution utility serving approximately 355,000 customers in eight counties of New York State's Mid-Hudson River Valley, and delivering natural gas and electricity in a 2,600-square-mile service territory that extends from the suburbs of metropolitan New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. north to the Capital District at Albany Albany, town, Australia Albany (ăl`bənē), town (1996 pop. 14,590), Western Australia, SW Australia. It is a port on Princess Royal Harbour of King George Sound. The town has woolen mills and fish canneries. . Central Hudson Enterprises Corporation (CHEC) includes business units delivering energy and related services to nearly 85,000 customers in eight states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). . Its regional footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. stretches from Connecticut Connecticut, state, United States Connecticut (kənĕt`ĭkət), southernmost of the New England states of the NE United States. It is bordered by Massachusetts (N), Rhode Island (E), Long Island Sound (S), and New York (W). to the Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C. area. Conference Call: Messrs. Ganci and Lant will conduct a conference call with analysts and investors to review financial results at 4:00 p.m. (ET) today (January January: see month. 30, 2004). Dial-in: 1-800-450-0785; Conference Name: "CH Energy Group." A digitized replay of the call will be available from 11:00 p.m. (ET) on January 30, 2004, until 11:59 p.m. (ET) on February February: see month. 26 2004, by dialing 1-800-475-6701 and entering access code #717190. In addition, consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge are available on the Company's website at www.CHEnergyGroup.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Statements included in this news release, including its Appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. and the documents incorporated by reference which are not historical in nature, are intended to be, and are hereby identified as, "forward-looking statements" for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provided by Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . Forward-looking statements may be identified by words including "anticipates," "believes," "projects," "intends," "estimates," "expects," "plans," "assumes," "seeks," and similar expressions. Forward-looking statements including, without limitation, those relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Registrants' future business prospects, revenues, proceeds, working capital, liquidity, income and margins, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to several important factors including those identified from time to time in the forward-looking statements. Those factors include, but are not limited to: weather; energy supply and demand; fuel prices; interest rates; potential future acquisitions; developments in the legislative, regulatory and competitive environment; market risks; electric and gas industry restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and cost recovery; the ability to obtain adequate and timely rate relief; changes in fuel supply or costs; the success of strategies to satisfy electricity requirements now that Central Hudson's major electric generation assets have been sold; future market prices for energy, capacity, and ancillary Subordinate; aiding. A legal proceeding that is not the primary dispute but which aids the judgment rendered in or the outcome of the main action. A descriptive term that denotes a legal claim, the existence of which is dependent upon or reasonably linked to a main claim. services; the outcome of pending litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and certain environmental matters, particularly the status of inactive in·ac·tive adj. 1. Not active or tending to be active. 2. a. Not functioning or operating; out of use: inactive machinery. b. hazardous waste Hazardous waste Any solid, liquid, or gaseous waste materials that, if improperly managed or disposed of, may pose substantial hazards to human health and the environment. Every industrial country in the world has had problems with managing hazardous wastes. disposal sites and waste site remediation requirements; and certain presently unknown or unforeseen factors, including, but not limited to, acts of terrorism terrorism, the threat or use of violence, often against the civilian population, to achieve political or social ends, to intimidate opponents, or to publicize grievances. . Registrants undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Given these uncertainties, undue reliance should not be placed on the forward-looking statements.
CH Energy Group, Inc. announces the following operating results for
the periods indicated:
3 Months Ended December 31 2003 2002
-------------- --------------
Operating Revenues $188,517,000 $175,863,000
Net Income $11,461,000 $10,629,000
Earnings Per Share (Basic and Diluted) $.73 $.66
Average Shares Outstanding 15,762,000 16,154,000
12 Months Ended December 31 2003 2002
-------------- --------------
Operating Revenues $806,684,000 $695,841,000
Net Income $43,985,000 $41,281,000
Earnings Per Share (Basic) $2.78 $2.53
Earnings Per Share (Diluted) $2.77 $2.51
Average Shares Outstanding 15,831,000 16,302,000
APPENDIX
--------
Highlights Relative to the Prior Year
----------------------------------------------------------------------
2003 More
(Less)
Year Ended December 31: 2003 2002 than 2002
-------------- ------------- --------------
Operating Revenues $806,684,000 $695,841,000 $110,843,000
Income Available for
Common Stock:
From Continuing
Operations $ 43,985,000 $ 34,410,000 $ 9,575,000
From Non-recurring
Items - 2,043,000 (2,043,000)
From Discontinued
Operations - Net - 4,828,000 (4,828,000)
-------------- ------------- --------------
Total $ 43,985,000 $ 41,281,000 $ 2,704,000
Earnings Per Share (Basic)
From:
Continuing Operations $2.78 $2.12 $ .66
Non-recurring Items - .12 (.12)
Discontinued
Operations - Net - .29 (.29)
Earnings Per Share of
Common Stock $2.78 $2.53 $ .25
Average Shares
Outstanding (Basic) 15,831,000 16,302,000
----------------------------------------------------------------------
Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: basic earnings per share of CH Energy Group, Inc. increased $.25 per share in 2003 due to the following: CH Energy Group Inc., Holding Company (CHEG): - $.19 -- Down $.19 due largely to a reduction in interest and investment income and the absence of favorable state income tax adjustments recorded in 2002. The reduction in interest and investment income results from the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of CHEG's Alternate alternate /al·ter·nate/ (awl´ter-nit) 1. following in turns. 2. pertaining to every other one in a series. 3. occurring in place of another; acting as a substitute. Investment Program by July July: see month. 2003 and the reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. of approximately $90 million in lower yield, but lower risk, money market instruments Money market instruments See: Cash investments . Central Hudson Gas & Electric Corp. (CHG&E): + $.51 -- Up $.54 due to an increase in electric net operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. (net of the cost of fuel, purchased electricity and revenue taxes). An increase in sales, a reduction in shared earnings, and the recording of revenues deferred in a prior year were the primary contributors to the increase in net revenues. Sales increased due to colder weather and a modest increase in the average number of residential and commercial customers. Weather impacted electric net revenues from sales by approximately $.07 per share, net of the effect of weather hedging hedging, in commerce, method by which traders use two counterbalancing investment strategies so as to minimize any losses caused by price fluctuations. It is generally used by traders on the commodities market. contracts. Heating billing degree-days reflect a 17% increase over last year and an increase of 6% above the normal level. Shared earnings decreased due largely to an increase in CHG&E's investment base, or rate base, upon which it earns its rate of return and a reduction in ratemaking rate·mak·ing n. The practice of establishing rates of payment, as for public transportation or utilities. rate operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the terms of the current settlement agreement with the New York State Public Service Commission ("PSC (Public Service Commission) Same as PUC. "), $3.1 million of electric delivery revenues deferred during the 12 months ended June June: see month. 30, 2002 are being recorded to income over the 12 months ended June 30, 2004. -- Up $.19 due to an increase in the amortization of shareholder benefits relating to the sale of CHG&E's interests in its principal generating facilities. -- Up $.17 due to an increase in gas net operating revenues (net of the cost of gas and revenue taxes) due largely to an increase in natural gas sales to residential and commercial customers, primarily space heating Space heating is the heating of a space, usually enclosed, such as a house or room. A space heater keeps the air and surroundings at a comfortable temperature for people or animals, or even plants in a greenhouse. customers. The increase resulted from the colder weather and an increase in the average number of customers with weather impacting gas net revenues from sales by approximately $.12 per share, net of the effect of weather hedging contracts. The increase in gas net revenues also reflects the recording of previously deferred gas delivery revenues; however, these revenues were offset by the deferral deferral - Waiting for quiet on the Ethernet. of shared earnings for gas operations and an unfavorable change related to gas losses. -- Up $.13 due primarily to the effect of the recording of regulatory carrying charges Payments made to satisfy expenses incurred as a result of ownership of property, such as land taxes and mortgage payments. Disbursements paid to creditors, in addition to interest, for extending credit. Consumer Protection laws require full disclosure of all carrying charges. and a reduction of interest charges and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. dividends. The favorable impact on earnings from carrying charges resulted largely from changes in balances related to the Customer Benefit Fund, pension costs, and New York State income taxes. The reduction in interest charges and preferred stock dividends reflects the redemption The liberation of an estate in real property from a mortgage. Redemption is the process by which land that has been mortgaged or pledged is bought back or reclaimed. It is accomplished through a payment of the debt owed or a fulfillment of the other conditions. of higher cost long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and preferred stock issues in 2002 and 2003. The increase was partially offset by a reduction in interest income due to a decrease in temporary cash investments and the early settlement of an amount due CHG&E from the sale of its interest in the Nine Mile 2 nuclear generating plant. -- Up $.07 due to the favorable impact of CHEG's Common Stock Repurchase Program. Central Hudson Gas & Electric Corp. (CHG&E): + $.51 (cont'd cont'd abbr (= continued) → sigue cont'd abbr (= continued) → suite cont'd abbr (= continued) → ) -- Down $.34 due to an increase in operating expenses. The rise in costs reflects increases in storm restoration and other electric distribution operations and maintenance costs, uncollectible accounts Uncollectible account An account which cannot be collected by a company because the customer is not able to pay or is unwilling to pay. , property and other insurance costs, and employee compensation and welfare costs. -- Down $.12 due to an increase in depreciation on utility plant assets. -- Down $.12 due to a non-recurring item. Income was recorded in 2002 for the receipt and subsequent sale of stock related to the demutualization Demutualization The process of changing corporate structure from a mutual fund company to some other form, such as a limited liability or corporation. Notes: This means mutual/life insurance companies convert from policyholder companies to stock companies. of certain insurance companies through which CHG&E provided employee benefits. -- Down $.01 due to the net effect of various other items including an increase in taxes other than income taxes, notably property taxes, and a reduction in income taxes. Central Hudson Enterprises Corp. (CHEC): - $.07 -- Up $.47 due to an increase in net revenues (net of fuel and other related expenses) from its fuel oil distribution subsidiaries, due to increased sales resulting from the colder weather in 2003 and the impact of additional acquisitions of fuel oil distribution companies in the fourth quarter of 2002 and January 2003. Heating degree-days were 12% higher in 2003 and the colder weather favorably impacted earnings by $.07 per share. -- Up $.08 due to a reduction in operating expenses for CHEC's energy efficiency operations, including one-time charges recorded in 2002 related to the restructuring of certain energy efficiency contracts. -- Up $.01 due to the favorable impact of CHEG's Common Stock Repurchase Program. -- Up $.01 due to a gain realized on the sale of CHEC's natural gas business unit in October October: see month. 2003. -- Down $.35 due to increased operating expenses at the fuel oil distribution subsidiaries primarily due to the impact of the acquisitions noted above and the colder weather. -- Down $.29 per share due to the recording, in 2002, of the net effect of the gain from the sale of CH Resources, Inc. 2003 Results of Operations CH Energy Group, Inc., Holding Company Other Income and Deductions, for CHEG decreased $2.2 million due primarily to the liquidation of its Alternate Investment Program portfolio of securities by July 2003 and the reinvestment of approximately $90 million into lower yield, but lower risk, money market instruments. The reduction is also attributable to favorable New York State income tax adjustments recorded in 2002. Central Hudson Gas & Electric Corp. Utility sales of electricity to full service customers within CHG&E's service territory, plus delivery of electricity supplied by others, increased 3% in 2003 as compared to 2002. Sales to residential customers increased 6%, sales to commercial customers increased 1% and sales to industrial customers increased 3%. The across-the-board increase in delivery sales was due largely to colder weather and a modest increase in the average number of residential and commercial customers. Billing heating degree-days were 17% higher than last year and 6% higher than normal. Utility sales of natural gas to firm CHG&E customers, plus transportation of gas supplied by others, increased 19% in 2003 as compared to the prior year. Residential and commercial sales, primarily space heating sales, both increased by 21% due to the colder weather experienced in 2003 and modest growth in the average number of customers. Industrial sales, representing approximately 5% of total firm sales in 2003 and 6% in 2002, decreased slightly by 1%. Interruptible sales decreased 37% due to a reduction in the sale of natural gas for electric generation and to the curtailment Curtailment The act of contracting or reducing operations of a company in the hope of bringing it financial or operational stability. This management technique is often used when a company has grown too fast and is unable to effectively manage its operations. of interruptible service to meet increased demand from firm customers. Utility electric and gas operating revenues increased $47.4 million (8.9%) from $533.3 million in 2002 to $580.7 in 2003. Electric revenues increased $29.4 million (6.9%) and gas revenues increased $18.0 million (17.1%). Approximately 50% of the electric revenue increase is amounts collected for the recovery of electric supply costs due primarily to higher wholesale prices for purchased electricity. The balance of the increase reflects the increase in sales discussed above; lower amounts recorded for the deferral of revenues related to shared earnings; the recording of Customer Benefit Funds to offset the cost of various programs authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by CHG&E's current settlement agreement with the PSC; and the recording of delivery revenues deferred during the rate year ended June 2002. The increase in gas revenues largely reflects an increase in revenues collected for the recovery of gas supply costs due to higher wholesale prices for natural gas. Revenues from the increase in gas sales and the recording of delivery revenues previously deferred also contributed to the increase. The increase in gas revenues was partially offset by a reduction in sales for resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. revenues retained to offset related expenses. Total utility operating expenses increased $45.3 million (9.2%) from $491.5 million in 2002 to $536.8 million in 2003. Purchased electricity and purchased natural gas increased by a total of $30.7 million due primarily to increases in the wholesale cost of these energy requirements. The balance of operating expenses, including income taxes, increased $14.6 million, reflecting a significant increase in costs related to CHG&E's Reliability and Economic Development programs that are funded by the Customer Benefit Fund. The rise in operating expenses also reflects increases in storm restoration and other electric distribution and maintenance costs, uncollectible accounts, property and other insurance costs, property taxes, and employee compensation and welfare costs. Interest Charges and Preferred Stock Dividends decreased $3.5 million due primarily to a decrease in regulatory carrying charges accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. on a declining Customer Benefit Fund balance and the redemption of higher cost long-term debt and preferred stock issues in 2002 and 2003. Other Income and Deductions increased $1.5 million mainly reflecting increases in the amortization of shareholder benefits relating to the sale of CHG&E's interest in its principal generating facilities and the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of regulatory carrying charges on accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. balances related to pension credits in customer rates. The increases were partially offset by a reduction in interest income resulting primarily from a decrease in temporary cash investments and the early settlement of a balance due CHG&E from the sale of its interest in the Nine Mile 2 nuclear generating plant. Also offsetting the increase was the effect of non-recurring income recorded in 2002 that related to the sale of the stock of certain insurance companies through which CHG&E provided employee benefits. Central Hudson Enterprises Corp. Revenues for CHEC, net of the effect of weather hedging contracts, increased $64.4 million from $161.6 million in 2002 to $226.0 million in 2003. The increase in revenues primarily reflects the impact ($64.0 million) of increased revenues from the sale of petroleum products by the fuel oil distribution companies. Sales of petroleum products in 2003, as compared to 2002, increased by 27 million gallons or 21%. Revenues also increased due to higher retail prices as a result of higher wholesale market prices in 2003. The increased sales are due to colder weather in the early part of 2003 and also, acquisitions made in the fourth quarter of 2002 and in January 2003. Heating degree-days were 12% higher than last year. Operating expenses for CHEC increased $59.5 million from $161.4 million in 2002 to $220.9 million in 2003. Operating expenses are primarily the cost of petroleum and natural gas at CHEC's fuel oil distribution subsidiaries, which increased $53.9 million due primarily to an increase in sales by the distribution companies as a result of the colder weather, and the impact of the acquisitions noted above. The cost of petroleum and natural gas costs also increased due to higher wholesale prices. Other operating expenses increased $5.6 million mainly reflecting higher distribution costs distribution costs distribute npl → Vertriebskosten pl and higher income taxes related to the increase in sales noted above. CH Energy Group, Inc. Fourth Quarter 2003 Relative to the Prior Year Earnings per share (basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ) for the quarter ended December December: see month. 31, 2003 increased $.07 per share as compared to the same quarter in 2002. The results for the quarter reflect an increase in electric and gas utility net revenues due primarily to the recording of revenues previously deferred in accordance with the terms of CHG&E's current settlement agreement and an increase in net revenues mainly from electric residential sales which resulted from a modest growth in the average number of customers. Earnings were also enhanced by a reduction in CHG&E's operating expenses, primarily employee compensation and workers compensation costs; an increase in the amortization of shareholder benefits from the sale of CHG&E's principal generating facilities; increased net revenues from CHEC's fuel oil distribution subsidiaries primarily reflecting the impact of the acquisitions in the fourth quarter of 2002 and in January of 2003; the gain realized on the sale of CHEC's natural gas business unit in October 2003; and the favorable effect of CHEG's Common Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program. Partially offsetting the increase in earnings is the impact this quarter of several favorable transactions recorded in the fourth quarter of 2002 and increased depreciation on utility plant assets. The transactions, which enhanced earnings in 2002, were state income tax adjustments and an adjustment to the gain from the sale of CH Resources, Inc. Energy Group remains in a strong financial position. At December 31, 2003, the Company had $125.8 million in cash and cash equivalents. In addition, its current obligations included $15.0 million of current maturities of long-term debt and $16.0 million of short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. outstanding. Cash outlays Outlays Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons. during the year included a tax-deductible Tax-deductible The effect of creating a tax deduction, such as charitable contributions and mortgage interest. contribution of $10.0 million to CHG&E's pension fund on September September: see month. 30, 2003 to reduce the shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. between the Accumulated Benefit Obligation Accumulated Benefit Obligation (ABO) An approximate measure of the liability of a pension plan in the event of a termination at the date the calculation is performed. Related: Projected benefit obligation. (ABO ABO See: Accumulated Benefit Obligation ) for its pension plan and the market value of related pension assets at that date. The remaining shortfall (2% of ABO) resulted in the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of the balance of Prefunded Pension Costs to Regulatory Assets. Please note that this report plus the consolidated financial statements are available on the Company's website at www.chenergygroup.com.
CH ENERGY GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (Audited)
3 Months Ended 12 Months Ended
December 31, December 31,
-------------------- ---------------------
2003 2002 2003 2002
---------- --------- ---------- ----------
(Thousands of (Thousands of
Dollars) Dollars)
OPERATING REVENUES
Electric $103,999 $96,185 $457,395 $427,978
Natural Gas 27,005 26,573 123,306 105,343
Competitive Business
Subsidiaries 57,513 53,105 225,983 162,520
---------- --------- ---------- ----------
Total Operating Revenues 188,517 175,863 806,684 695,841
---------- --------- ---------- ----------
OPERATING EXPENSES
Operations - Purchased
Electricity and Fuel Used
in Electric Generation,
Purchased Nat. Gas and
Purchased Petroleum 110,481 101,337 501,516 418,365
Other Exp. of Operation -
Regulated Activities 26,594 26,882 107,105 92,245
Other Exp. of Operation -
Competitive Business
Subsidiaries 14,476 14,330 56,195 51,712
Depreciation and
Amortization 8,668 8,154 33,611 31,230
Operating Taxes 8,829 9,389 31,956 38,606
Federal and State Income
Tax 7,071 5,239 27,279 20,746
---------- --------- ---------- ----------
Total Operating Expenses 176,119 165,331 757,662 652,904
---------- --------- ---------- ----------
OPERATING INCOME 12,398 10,532 49,022 42,937
---------- --------- ---------- ----------
OTHER INCOME AND DEDUCTIONS
Allowance for Equity Funds
Used During Construction 79 246 436 591
Federal and State Income
Tax - Credit (926) 1,729 (3,156) (1,548)
Interest and Investment
Income 2,815 1,938 12,225 13,780
Other - Net 2,518 1,427 8,810 7,469
---------- --------- ---------- ----------
Total Other Income and
Deductions 4,486 5,340 18,315 20,292
---------- --------- ---------- ----------
INCOME BEFORE INTEREST
CHARGES 16,884 15,872 67,337 63,229
---------- --------- ---------- ----------
INTEREST AND OTHER CHARGES
Interest on Debt 2,849 2,992 11,269 11,955
Other 2,314 3,055 10,987 12,908
Allowance for Borrowed
Funds Used During
Construction 18 (65) (291) (248)
Preferred Stock Dividends
of Central Hudson * 242 451 1,387 2,161
---------- --------- ---------- ----------
Total Interest and Other
Charges 5,423 6,433 23,352 26,776
---------- --------- ---------- ----------
Net Income from Continuing
Operations 11,461 9,439 43,985 36,453
Net Loss from Discontinued
Operations, Net of Income
Tax Benefit of ($62) and
$1,377 - (61) - (2,237)
Gain on Disposal of
Discontinued Operations,
Net of Income Tax of $1,511
and ($5,239) - 1,251 - 7,065
---------- --------- ---------- ----------
NET INCOME 11,461 10,629 43,985 41,281
DIVIDENDS DECLARED ON COMMON
STOCK 8,511 8,662 34,093 35,095
---------- --------- ---------- ----------
AMOUNT RETAINED IN THE
BUSINESS $2,950 $1,967 $9,892 $6,186
========== ========= ========== ==========
Average Shares of Common
Stock Outstanding (000s) 15,762 16,154 15,831 16,302
========== ========= ========== ==========
Earnings Per Share - (Basic) $0.73 $0.66 $2.78 $2.53
========== ========= ========== ==========
Earnings Per Share -
(Diluted) $0.73 $0.66 $2.77 $2.51
========== ========= ========== ==========
* Prior periods have been revised to include preferred dividends in
continuing operations. Such revision has no impact on previously
reported net income.
CH ENERGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
December December
31, 31,
2003(1) 2002(2)
-----------------------
ASSETS (Thousands of Dollars)
UTILITY PLANT
Utility Plant $959,945 $895,608
Less Accumulated Depreciation 309,208 297,549
----------- -----------
650,737 598,059
Construction Work in Progress 56,764 76,398
----------- -----------
Net Utility Plant 707,501 674,457
----------- -----------
OTHER PROPERTY AND PLANT 21,589 18,337
----------- -----------
CURRENT ASSETS
Cash and Cash Equivalents 125,834 83,523
Investments - 89,441
Accounts Receivable from Customers 61,223 60,978
Materials & Supplies 19,847 16,033
Fair Value of Derivative Instruments 869 2,747
Bond Defeasance Escrow - 16,275
Special Deposits and Prepayments 23,315 28,466
Other 19,834 9,892
----------- -----------
250,922 307,355
----------- -----------
DEFERRED CHARGES AND OTHER ASSETS 320,480 282,758
----------- -----------
TOTAL $1,300,492 $1,282,907
=========== ===========
CAPITALIZATION and LIABILITIES
CAPITALIZATION
Common Equity (3) $485,424 $486,915
Cumulative Preferred Stock:
Not subject to mandatory redemption 21,030 21,030
Subject to mandatory redemption - 12,500
Long-term Debt 278,880 269,877
----------- -----------
785,334 790,322
----------- -----------
CURRENT LIABILITIES
Current Maturities of Long-term Debt 15,000 15,000
Notes Payable 16,000 -
Accounts Payable 40,602 45,649
Accrued Interest 4,274 4,273
Dividends Payable 8,754 9,113
Other 35,390 38,070
----------- -----------
120,020 112,105
----------- -----------
DEFERRED CREDITS AND OTHER LIABILITIES 299,090 324,710
----------- -----------
ACCUMULATED DEFERRED INCOME TAX (NET) 96,048 55,770
----------- -----------
TOTAL $1,300,492 $1,282,907
=========== ===========
(1) Audited.
(2) Subject to explanations contained in the Annual Report of the
Company for 2002.
(3) Shares outstanding at December 31, 2003 = 15,762,000.
Shares outstanding at December 31, 2002 = 16,064,600.
Selected Financial Information
------------------------------
3 Months Ended December 31,
-----------------------------------
%
2003 2002 Variation
----------- ----------- -----------
CENTRAL HUDSON GAS & ELECTRIC CORP.
-----------------------------------
Sales of Electricity (Mwh): *
Residential 457,045 450,952 1
Commercial 469,582 468,312 -
Industrial 356,397 362,880 (2)
Unbilled and Other 15,529 17,882 (13)
----------- ----------- -----------
Total Own Territory 1,298,553 1,300,026 -
=========== =========== ===========
Sales of Gas (Mcf.): *
Residential 1,006,642 1,029,554 (2)
Commercial 1,532,195 1,415,902 8
Industrial 143,547 171,599 (16)
Unbilled and Other 272,069 290,154 (6)
----------- ----------- -----------
Total Firm Sales 2,954,453 2,907,209 2
Interruptible Sales 985,067 1,254,370 (21)
----------- ----------- -----------
Total Own Territory 3,939,520 4,161,579 (5)
=========== =========== ===========
* Includes volumes related to
Electric or Gas Energy Delivery
Services.
Cooling Degree Days:
Billing Cycle 98 112 (13)
Actual in Period - 10 (100)
Heating Degree Days:
Billing Cycle 1,082 1,180 (8)
Actual in Period 2,116 2,306 (8)
Electric Output For Own Territory
(Mwh.):
Generated 59,357 35,947 65
Purchased 1,347,036 1,325,298 2
----------- ----------- -----------
Total 1,406,393 1,361,245 3
=========== =========== ===========
Gas Send-out Firm Customers (Mcf.) 3,177,090 3,397,647 (6)
=========== =========== ===========
CH ENERGY GROUP, INC.
---------------------
Earnings Per Share - (Basic) $0.73 $0.66 11
Dividends Declared Per Share $0.54 $0.54 -
12 Months Ended December 31,
-----------------------------------
%
2003 2002 Variation
----------- ----------- -----------
CENTRAL HUDSON GAS & ELECTRIC CORP.
-----------------------------------
Sales of Electricity (Mwh): *
Residential 1,979,676 1,871,588 6
Commercial 1,930,674 1,905,196 1
Industrial 1,432,946 1,386,711 3
Unbilled and Other 36,408 49,355 (26)
----------- ----------- -----------
Total Own Territory 5,379,704 5,212,850 3
=========== =========== ===========
Sales of Gas (Mcf.): *
Residential 5,481,658 4,532,261 21
Commercial 6,268,863 5,186,602 21
Industrial 623,075 626,921 (1)
Unbilled and Other 5,520 93,741 (94)
----------- ----------- -----------
Total Firm Sales 12,379,116 10,439,525 19
Interruptible Sales 3,451,906 5,461,965 (37)
----------- ----------- -----------
Total Own Territory 15,831,022 15,901,490 -
=========== =========== ===========
* Includes volumes related to
Electric or Gas Energy Delivery
Services.
Cooling Degree Days:
Billing Cycle 642 757 (15)
Actual in Period 642 755 (15)
Heating Degree Days:
Billing Cycle 6,552 5,580 17
Actual in Period 6,455 5,799 11
Electric Output For Own Territory
(Mwh.):
Generated 188,686 104,385 81
Purchased 5,409,937 5,333,976 1
----------- ----------- -----------
Total 5,598,623 5,438,361 3
=========== =========== ===========
Gas Send-out Firm Customers
(Mcf.) 10,262,029 9,425,912 9
=========== =========== ===========
CH ENERGY GROUP, INC.
--------------------
Earnings Per Share - (Basic) $2.78 $2.53 10
Dividends Declared Per Share $2.16 $2.16 -
Dec. 31, Dec. 31, %
2003 2002 Variation
----------- ----------- -----------
Book Value Per Share $30.80 $30.31 2
Retained Earnings (000s) $179,395 $169,503 6
Common Equity Ratio (%) 59.5% 60.5% (2)
CH Energy Group, Inc.
---------------------
Selected Financial Indices
--------------------------
Calendar Year 2003 vs Calendar Year 2002
----------------------------------------
Calendar Calendar
Year Year
2003 2002
----------- -----------
Earnings Per Share - (Basic) $2.78 $2.53
Earned Return on Common Equity (Per Books) 8.99% 8.22%
Pretax Coverage of Total
Interest Charges, excluding AFDC 3.78x 3.10x
Dividends Declared $2.16 $2.16
Pay-out Ratio 77.7% 85.4%
Percent of Cash Construction Expenditures
Financed from Internal Funds(1) 100.0% 93.3%
Common Equity Ratio 59.5% 60.5%
Retained Earnings ($000) $179,395 $169,503
Book Value Per Share (End of Period) $30.80 $30.31
(1) Internal funds used in this measurement exclude pension
contributions of $10,000,000 made in 2003, and $32,000,000 made in
2002.
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