CH Energy Group Reports Higher Second-Quarter Earnings.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. -- Earnings per share for the second quarter of 2005 for CH Energy Group, Inc. (NYSE NYSE See: New York Stock Exchange :CHG CHG Change CHG Charge CHG Changed CHG Chlorhexidine Gluconate (aka chloraprep) CHG Centre Hospitalier Général (French: general hospital) CHG Come Holy Ghost (Catholicism) ) were 38 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. , versus the 35 cents per share earned during the second quarter of 2004, an 8-percent increase. The primary drivers of the increase were a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. , 9-cent tax benefit; higher returns on temporary investments; a reduction in expenses; and a modest improvement in operating performance from the Company's oil distribution subsidiaries. The quarter's earnings were negatively impacted by the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of 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. items that had previously contributed 12 cents. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , the Company reports earnings of $1.67, a decrease of 14 cents as compared to the first half of 2004. "We're we're Contraction of we are. we're we are pleased with our second-quarter results, especially since our year-to-date earnings reflect the expiration of several significant regulatory items, including the incentive associated with the sale of our generating plants that had increased earnings during prior periods but expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. in December December: see month. 2004," 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, Chairman of the Board, President and Chief Executive Officer. "In fact, our quarterly results were actually somewhat dampened by the impact of a 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. contract designed to lessen less·en v. less·ened, less·en·ing, less·ens v.tr. 1. To make less; reduce. 2. Archaic To make little of; belittle. v.intr. To become less; decrease. the effect that variable weather can have upon our revenues. Though it had a 5-cent negative impact in the second quarter of this year, we expect that higher revenues related to warm June June: see month. weather will offset this impact in the third quarter." Lant said that the Company believes it will still achieve its full-year earnings projections. Results in both 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. and parent CH Energy Group are projected to be strong enough to maintain 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: earnings within the target range, even though the Company is adjusting its guidance for the fuel-oil segment to 10-15 cents per share from 20-25 cents per share. 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. Electric and Gas Business Central Hudson Gas & Electric Corporation's contribution to second quarter earnings was 34 cents per share, a decrease of 9 cents from the 43 cents posted during the same period of 2004. The decline resulted from the expiration of a 9-cent incentive associated with the sale of the utility's generating plants and 3 cents of previously deferred revenues. Electric and natural gas revenues increased by $13.3 million (10.7 percent) between the second quarters of 2004 and 2005, due largely to an increase in the amount Central Hudson collected to recover the cost of energy purchased on behalf of its customers. Lant indicated that the utility is considering the possibility of filing in the weeks ahead with the 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 Public Service Commission for an increase in its delivery rates. "It has been 13 years since our rates were last increased. During that period, the Consumer Price Index has risen nearly 40 percent and the costs we pay for virtually everything have increased dramatically. "In addition, several significant changes have impacted our regulated business, including increased customer demand for system reliability, pension plan obligations, employee benefit costs, property taxes, and mandated safety and environmental programs. For these and many other reasons, Central Hudson is considering the possibility of requesting a rate increase." Unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. Fuel Distribution Businesses The fuel oil distribution businesses of 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 ) had a loss - which is typical for the second quarter - of 10 cents per share for the period, 1 cent better than the 11-cents-per-share loss posted in the second quarter of 2004. The improvement in earnings resulted largely from an increase in service profitability and a reduction in 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. . Unregulated - Other Businesses Holding Company CH Energy Group, Inc. and CHEC partnership investments contributed 14 cents per share to earnings during the second quarter, which was 11 cents above the same period of 2004. A 9-cent favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. New York State income tax benefit and increased earnings on temporary investments were partially offset by a decrease in earnings from CHEC partnership investments during the quarter. 2005 Earnings Projections Lant reiterated the Company's earlier 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. that 2005 consolidated annual earnings would total between $2.55 and $2.75 per share, composed of the following segments: Central Hudson, unchanged at $2.15 - $2.25; fuel oil distribution businesses, 10-15 cents, reduced from 20-25 cents due to lower residential sales volumes during the heating season attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to customer conservation and attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: , as well as lower commercial sales volumes due to fuel switching in reaction to higher prices in the oil industry; and unregulated, other businesses (including Holding Company CH Energy Group, Inc.), 30-35 cents, increased from 20-25 cents due to a 9-cent New York State income tax benefit for which notice was received in June 2005. 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 Corporation is a regulated transmission and distribution utility serving approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 358,000 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 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, as well as an interest in a Lexington Lexington. 1 City (1990 pop. 225,366), seat of Fayette co., N central Ky., in the heart of the bluegrass region; inc. 1832, made coextensive with Fayette co. 1974. , Neb., ethanol ethanol (ĕth`ənōl') or ethyl alcohol, CH3CH2OH, a colorless liquid with characteristic odor and taste; commonly called grain alcohol or simply alcohol. plant. Conference Call: Mr. Lant will conduct a conference call with analysts and investors to review financial results at 4:00 p.m. (ET) today, July July: see month. 20, 2005. Dial-in: 1-800-553-5260; Conference Name: "CH Energy Group." A digitized replay of the call will be available from 9:15 p.m. (ET) on July 20, 2005, until 11:59 p.m. (ET) on July 27, 2005, by dialing 1-800-475-6701 and entering access code # 788004. 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 Web site 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 CH Energy Group, Inc. and its subsidiaries' 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 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. 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. . CH Energy Group, Inc. and its subsidiaries 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 June 30 2005 2004
Operating Revenues $188,613,000 $165,354,000
Net Income $5,959,000 $5,496,000
Earnings Per Share - Basic $.38 $.35
Earnings Per Share - Diluted $.37 $.34
Average Shares Outstanding - Basic 15,762,000 15,762,000
Average Shares Outstanding - Diluted 15,769,000 15,771,000
12 Months Ended June 30 2005 2004
Operating Revenues $837,865,000 $786,702,000
Net Income $40,237,000 $44,651,000
Earnings Per Share - Basic $2.55 $2.83
Earnings Per Share - Diluted $2.55 $2.83
Average Shares Outstanding - Basic 15,762,000 15,763,000
Average Shares Outstanding - Diluted 15,770,000 15,771,000
----------------------------------------------------------------------
APPENDIX
Highlights Relative to Prior Year
2005 More
(Less)
3 Months Ended June 30: 2005(1) 2004(1) than 2004
Operating Revenues $ 188,613,000 $ 165,354,000 $23,259,000
Income Available for Common
Stock $ 5,959,000 $ 5,496,000 $ 463,000
Earnings Per Share of
Common Stock $ .38 $ .35 $ .03
Average Shares Outstanding
(Basic)(1) Unaudited 15,762,000 15,762,000
Consolidated basic earnings per share of CH Energy Group Inc. (CHEG), increased $.03 per share due to the following: Unregulated - Other : + $.11 --Up $.11 due largely to the recording of favorable New York State income tax benefits of $.09 related to the completion of the Energy Group tax audit. The increase also reflects an increase in investment income from short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments held by CH Energy Group, Inc. (CHEG), the holding company, partially offset by a decrease in income from CHEC's partnership and other investment interests. The increase in investment income reflects higher returns due to higher interest rates. Unregulated - Fuel Oil Distribution: + $.01 --Up $.01 due to an increase in net revenues (net of fuel and other related expenses) from Central Hudson Enterprises Corp.'s (CHEC) fuel oil distribution subsidiaries. The increase is due to an increase in service profitability and a reduction in operating expenses. Regulated Electric and Natural Gas - Central Hudson Gas & Electric Corp. (CHG&E): - $.09 --Down $.09 due to the completion of the amortization of Central Hudson's share of the gain from the 2001 sale of its interests in its major generating assets. This gain was recorded as deferred income beginning July 1, 2001, and its amortization to other income was completed in December 2004. --Down $.04 due to a decrease in electric net operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. , net of the cost of purchased electricity, fuel and revenue taxes. The reduction in electric net revenues is due to the recording of an estimated amount payable for June, the first month of a summer weather-hedging contract that runs through August. The estimate was based on the significant increase in actual cooling degree-days resulting from the hotter weather. The ($.05) per share impact of the weather-hedging contract was partially offset by an increase in revenues from electric delivery sales, primarily to residential customers. However, the impact of electricity actually delivered to customers in the month of June is not fully reflected due to the timing of certain customer billing cycles Billing cycle The time elapsed between billing periods for goods sold or services rendered. . Total own territory delivery sales increased 1% with the increase attributable to increased usage by existing residential and industrial customers and also customer growth for residential sales. The earnings impact of weather on electric net revenues, based on billed sales, was $.01 per share. --Down $.04 due to an increase in property taxes and depreciation and amortization of utility plant assets. --Down $.03 due to the absence of the amortization of previously deferred electric revenues that ended June 30, 2004, pursuant to the current regulatory agreement. --Down $.03 from an increase in storm restoration costs. --Up $.05 due to a reduction in operating expenses reflecting a reduction in expense related to 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. , workers compensation and injuries and damages. --Up $.04 from electric and gas regulatory mechanisms. The increase was due to lower shared earnings for electric and gas operations. Both electric and gas shared earnings decreased largely due to lower 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. and a change in the sharing arrangements effective July 1, 2004. --Up $.02 due to an increase in natural gas net operating revenues from delivery sales, net of the cost of natural gas and revenue taxes. Delivery sales to firm gas customers increased 3% overall while weather normalized sales were relatively flat. Sales to residential and commercial customers, largely 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. sales, each increased 4% due to increased usage and customer growth. Sales to existing industrial customers decreased 9%. Gas billing heating degree-days, which were at a normal level for the second quarter of 2005, were 14% higher than the prior year. The earnings impact of weather on gas net revenues was $.02 per share. --Up $.03 due to the net effect of various other items including a reduction in income taxes and a reduction in 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. due to customers. These reductions were partially offset by an increase in interest charges resulting from the issuance of 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. in November November: see month. of 2004. The reduction in carrying charges primarily reflects the substantial use of the principal balance of the Customer Benefit Fund by December 31, 2004, for customer refunds and other 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: programs. Second Quarter Results of Operations Regulated Electric and Natural Gas - Central Hudson Gas & Electric Corp. Utility deliveries of electricity within CHG&E's service territory increased 1% in the second quarter of 2005 as compared to the same quarter in 2004. Sales to residential and industrial customers each increased 2%, while sales to commercial customers remained relatively flat. Sales to residential customers increased due to customer growth and increased usage. Customer growth also served to offset a reduction in usage by commercial customers. Billing cooling degree-days decreased 27% over the prior year but were 10% higher than normal. Utility deliveries of natural gas to firm CHG&E customers increased 3% in 2005 as compared to last year. Sales to residential and commercial customers each increased 4% due to increased usage and customer growth. Industrial sales, which were 4% and 5% of total firm sales in the quarters ended June 2005 and 2004, respectively, decreased 9%, while interruptible sales increased 2%. Billing heating degree-days, although at normal levels for 2005, were 14% higher than last year. Utility electric and gas operating revenues increased $13.3 million (10.7%) from $123.5 million in 2004 to $136.8 million in 2005. Electric revenues increased $8.2 million (8.4%) and gas revenues increased by $5.1 million (19.4%) largely due to an increase in amounts collected through CHG&E's cost adjustment mechanisms to recover its cost of purchased electricity and natural gas. Electric and gas revenues also reflect increases due to an increase in delivery sales. The increase in electric revenues was partially offset by a reduction in revenues related to weather hedging contracts. Total utility operating expenses, including income taxes, increased $13.0 million (11.2%) from $116.0 million in 2004 to $129.0 million in 2005. The increase in operating expenses results from an increase in purchased electricity and natural gas expense, which increased $9.0 million and $4.7 million, respectively. Both reflect an increase in wholesale costs; an increase in volumes purchased due to an increase in sales to full service customers; and a change in amounts recorded related to the recovery of these costs through CHG&E's cost adjustment mechanisms for purchased electricity and natural gas costs. Other operating expenses, including income taxes, decreased $.7 million due to a decrease in income taxes of $1.8 million, which resulted largely from a reduction in taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. . Partially offsetting the decrease in income taxes was an increase in depreciation and amortization of utility plant and taxes other than income taxes. Other Income decreased $2.9 million (65.9%) due to the completion of the amortization in December 2004 of Central Hudson's share of the gain from the 2001 sale of its interests in its major generating assets and a reduction in carrying charges due from customers related to pension costs. In its June 2004 Rate Order adopting the terms of CHG&E's Joint Proposal for Rate Plan Modification A change or alteration in existing materials. Modification generally has the same meaning in the law as it does in common parlance. The term has special significance in the law of contracts and the law of sales. , the PSC (Public Service Commission) Same as PUC. authorized the use of the Customer Benefit Fund to offset pension under-collection balances, which reduced the balance upon which carrying charges for pension costs are determined. This reduction in carrying charges was offset by a reduction in carrying charges related to the Customer Benefit Fund as discussed below. Interest Charges decreased $1.2 million (24.7%) due primarily to a reduction of regulatory carrying charges resulting from the substantial use, by December 31, 2004, of the principal balance of the Customer Benefit Fund for customer refunds and other authorized programs. 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 CHG&E's current settlement agreement, carrying charges were 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 the unused balance for the future benefit of customers. This reduction in carrying charges was partially offset by an increase in interest charges on long-term debt due to the issuance of medium-term notes Medium-term note (MTN) A corporate debt instrument that is continuously offered to investors over a period of time by an agent of the issuer. Investors can select from maturity bands of: 9 months to 1 year, more than 1 year to 18 months, more than 18 months to 2 years, etc. in November of 2004. Unregulated - Fuel Oil Distribution Revenues for CHEC's fuel oil distribution operations increased $ 10.0 million (24.2%) from $ 41.6 million for the quarter ended June 30, 2004 to $51.6 million for the quarter ended June 30, 2005. The increase in revenues primarily reflects an increase in the average selling price The average sales price of goods or commodities. Especially used in the retail sector and technology distribution. of petroleum in 2005 in comparison to 2004 due to an increase in wholesale costs. The increase is partially offset by a reduction in residential petroleum volumes due to customer attrition Customer attrition, also known as customer churn, customer turnover, or customer defection, is a business term used to describe loss of clients or customers. and price-induced customer conservation, and fuel switching by commercial customers. Operating expenses, including income taxes, increased $9.8 million (23.1%) from $42.7 million in 2004 to $52.5 million in 2005 due to an increase in purchased petroleum expense. The cost of petroleum increased $9.9 million due primarily to an increase in the wholesale cost of petroleum in 2005 as compared to 2004. This increase was partially offset by a reduction in other expenses of operation due to a decrease in distribution costs distribution costs distribute npl → Vertriebskosten pl related to lower volumes sold. Unregulated -Other Other Income and income taxes, for CHEG, the holding company, and CHEC's investment in partnerships and interests other than fuel distribution operations increased $1.6 million. The increase is primarily due to the recording of favorable New York State income tax benefits related to the completion of a tax audit. The increase also reflects an increase in investment income from short-term investments held by CHEG due to higher interest rates, which was partially offset by a decrease in income from CHEC's partnership and other investment interests. CH Energy Group, Inc. 12 Months Ended June 30, 2005 Relative to the Prior Year Consolidated basic earnings per share for the 12 months ended June 30, 2005, were $2.55 as compared to earnings of $2.83 for the 12 months ended June 30, 2004. The change in earnings of $.28 per share reflects the following: --The completion of the amortization of CHG&E's share of the gain from the 2001 sale of its interests in its major generating assets. --A reduction in earnings related to CHG&E's electric and gas utility regulatory mechanisms due primarily to the absence of the amortization of electric and gas delivery revenues that ended June 30, 2004. --An increase in property taxes and depreciation and amortization of utility plant assets. --An increase in CHG&E interest charges due to the issuance of long-term debt in September September: see month. 2003 and February February: see month. and November of 2004. --A decrease in earnings from CHEC's fuel oil distribution subsidiaries due primarily to reduced volumes related to customer attrition, price-induced customer conservation, fuel switching and also milder weather. The decrease in earnings was partially offset by an increase in CHEG's investment income due to higher interest rates; the recording of favorable New York State income tax benefits related to the completion of a tax audit; a reduction in utility regulatory carrying charges due to customers related to the substantial use of the Customer Benefit Fund; an increase in natural gas net revenues due to an increase in sales; and a reduction in utility income taxes due to lower taxable income. CH Energy Group, Inc. (consolidated) remains in a strong financial position. At June 30, 2005 CHEG had $114 million in cash and cash equivalents and its current obligations included $13 million of short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. outstanding. 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) (Unaudited)
3 Months Ended 12 Months Ended
June 30, June 30,
-------------------- ---------------------
2005 2004 2005 2004
---------- --------- ----------- ---------
(Thousands of Dollars)(Thousands of Dollars)
Operating Revenues
Electric $105,663 $97,441 $446,185 $444,892
Natural Gas 31,142 26,091 135,007 122,903
Competitive Business
Subsidiaries 51,808 41,822 256,673 218,907
---------- --------- ----------- ---------
Total Operating Revenues $188,613 $165,354 $837,865 $786,702
---------- --------- ----------- ---------
Operating Expenses
Operations - Purchased
Electricity and Fuel Used
in Electric Generation,
Purchased Natural Gas,
and Purchased Petroleum 124,925 101,339 545,415 483,306
Other Expenses of Operation
- Regulated Activities 24,129 24,507 99,847 103,617
Other Expenses of Operation
- Comp. Bus. Subsidiaries 12,184 12,453 52,913 55,041
Depreciation and
Amortization 9,102 8,613 35,615 34,229
Taxes, Other Than Income Tax 8,820 7,702 32,882 32,050
---------- --------- ----------- ---------
Total Operating Expenses 179,160 154,614 766,672 708,243
---------- --------- ----------- ---------
Operating Income $9,453 $10,740 $71,193 $78,459
---------- --------- ----------- ---------
Other Income
Allowance for Equity Funds
Used During Construction 24 74 45 356
Interest and Investment
Income 2,225 2,913 8,647 10,601
Other - Net (274) 1,473 3,057 9,170
---------- --------- ----------- ---------
Total Other Income 1,975 4,460 11,749 20,127
---------- --------- ----------- ---------
Interest Charges
Interest on Debt 3,520 2,909 12,514 11,255
Other Interest 325 2,139 3,709 9,912
Allowance for Borrowed
Funds Used During
Construction (119) (49) (280) (189)
---------- --------- ----------- ---------
Total Interest Charges 3,726 4,999 15,943 20,978
---------- --------- ----------- ---------
Income Before Income Taxes
and Preferred Dividends of
Subsidiary $7,702 $10,201 $66,999 $77,608
Income Taxes 1,501 4,463 25,792 31,987
---------- --------- ----------- ---------
Income Before Preferred
Dividends of Subsidiary $6,201 $5,738 $41,207 $45,621
Cumulative Preferred Stock
Dividends of Subsidiary 242 242 970 970
---------- --------- ----------- ---------
Net Income $5,959 $5,496 $40,237 $44,651
Dividends Declared on Common
Stock 8,511 8,511 34,046 34,046
---------- --------- ----------- ---------
Amount Retained in the
Business ($2,552) ($3,015) $6,191 $10,605
========== ========= =========== =========
Avg. Shares of Common Stock
Outstanding - (Basic)(000s) 15,762 15,762 15,762 15,763
Avg. Shares of Common Stock
Outstanding - (Diluted)
(000s) 15,769 15,771 15,770 15,771
Earnings Per Share - (Basic) $0.38 $0.35 $2.55 $2.83
Earnings Per Share -
(Diluted) $0.37 $0.34 $2.55 $2.83
Dividends Declared Per Share $0.54 $0.54 $2.16 $2.16
CH ENERGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
June 30, December 31,
2005 (1) 2004 (2)
-------------- ---------------
ASSETS (Thousands of Dollars)
UTILITY PLANT
Utility Plant $1,034,525 $1,021,912
Less Accumulated Depreciation 325,583 315,691
-------------- ---------------
708,942 706,221
Construction Work in Progress 51,704 38,846
-------------- ---------------
Net Utility Plant 760,646 745,067
-------------- ---------------
OTHER PROPERTY AND PLANT & EQUIPMENT 22,207 23,139
-------------- ---------------
CURRENT ASSETS
Cash and Cash Equivalents 113,969 119,117
Accounts Receivable from Customers 69,801 65,239
Materials & Supplies 19,518 21,459
Fair Value of Derivative Instruments 1,034 -
Regulatory Assets 15,351 17,454
Special Deposits and Prepayments 14,619 20,767
Accumulated Deferred Income Tax 13,025 9,454
Other 10,148 13,678
-------------- ---------------
257,465 267,168
-------------- ---------------
DEFERRED CHARGES AND OTHER ASSETS 274,554 252,433
-------------- ---------------
TOTAL $1,314,872 $1,287,807
============== ===============
CAPITALIZATION and LIABILITIES
CAPITALIZATION
Common Equity (3) $502,991 $493,465
Cumulative Preferred Stock:
Not subject to mandatory redemption 21,027 21,030
Long-term Debt 319,884 319,883
-------------- ---------------
843,902 834,378
-------------- ---------------
CURRENT LIABILITIES
Notes Payable 13,000 12,000
Accounts Payable 36,168 43,418
Accrued Interest 5,096 4,629
Dividends Payable 8,754 8,754
Accrued Taxes Payable 3,512 -
Regulatory Liabilities 3,041 -
Fair Value of Derivative Instruments - 906
Other 29,020 31,795
-------------- ---------------
98,591 101,502
-------------- ---------------
DEFERRED CREDITS AND OTHER LIABILITIES 244,205 231,152
-------------- ---------------
ACCUMULATED DEFERRED INCOME TAX (NET) 128,174 120,775
-------------- ---------------
TOTAL $1,314,872 $1,287,807
============== ===============
(1) Unaudited.
(2) Subject to explanations contained in the Annual Report of the
Company for 2004.
(3) Shares outstanding at June 30, 2005 = 15,762,000.
Shares outstanding at December 31, 2004 = 15,762,000.
Selected Financial Information
3 Months Ended June 30,
------------------------------
2005 2004 % Variation
--------- --------- ----------
CENTRAL HUDSON GAS & ELECTRIC CORP.
----------------------------------------
Sales of Electricity (Mwh): *
Residential 438,318 431,177 2
Commercial 470,359 470,869 -
Industrial 384,064 375,146 2
Other 7,624 7,718 (1)
--------- --------- ----------
Total Own Territory 1,300,365 1,284,910 1
========= ========= ==========
Sales of Gas (Mcf.): *
Residential 1,002,286 967,870 4
Commercial 1,188,721 1,138,029 4
Industrial 96,312 105,970 (9)
Other 2,777 3,762 (26)
--------- --------- ----------
Total Firm Sales 2,290,096 2,215,631 3
Interruptible Sales 770,864 754,242 2
--------- --------- ----------
Total Own Territory 3,060,960 2,969,873 3
========= ========= ==========
* Includes volumes related to Electric
or Gas Energy Delivery Services.
Electric Cooling Degree Days:
Billing Cycle 64 88 (27)
Normal Billing Cycle 58 58 -
Actual in Period 240 199 21
Electric Heating Degree Days:
Billing Cycle 1,609 1,352 19
Normal Billing Cycle 1,596 1,596 -
Actual in Period 701 590 19
Gas Heating Degree Days:
Billing Cycle 1,755 1,537 14
Normal Billing Cycle 1,758 1,758 -
Actual in Period 682 587 16
Electric Output For Own Territory
(Mwh.):
Generated 19,477 41,400 (53)
Purchased 1,425,426 1,299,934 10
--------- --------- ----------
Total 1,444,903 1,341,334 8
========= ========= ==========
Gas Send-out Firm Customers (Mcf.) 1,140,733 1,152,599 (1)
========= ========= ==========
CH ENERGY GROUP, INC.
----------------------------------------
Earnings Per Share - (Basic) $0.38 $0.35 9
Dividends Declared Per Share $0.54 $0.54 -
12 Months Ended June 30,
--------------------------------
2005 2004 % Variation
---------- ---------- ----------
CENTRAL HUDSON GAS & ELECTRIC CORP.
--------------------------------------
Sales of Electricity (Mwh): *
Residential 2,028,864 2,008,806 1
Commercial 1,981,849 1,957,838 1
Industrial 1,491,895 1,460,005 2
Other 37,140 37,279 -
---------- ---------- ----------
Total Own Territory 5,539,748 5,463,928 1
========== ========== ==========
Sales of Gas (Mcf.): *
Residential 5,290,778 5,301,330 -
Commercial 6,383,582 6,258,495 2
Industrial 562,576 575,956 (2)
Other 25,346 24,339 4
---------- ---------- ----------
Total Firm Sales 12,262,282 12,160,120 1
Interruptible Sales 3,671,862 3,483,689 5
---------- ---------- ----------
Total Own Territory 15,934,144 15,643,809 2
========== ========== ==========
* Includes volumes related to Electric
or Gas Energy Delivery Services.
Electric Cooling Degree Days:
Billing Cycle 649 705 (8)
Normal Billing Cycle 664 664 -
Actual in Period 838 741 13
Electric Heating Degree Days:
Billing Cycle 6,121 6,052 1
Normal Billing Cycle 6,320 6,320 -
Actual in Period 6,130 7,013 (13)
Gas Heating Degree Days:
Billing Cycle 6,057 6,047 -
Normal Billing Cycle 6,210 6,210 -
Actual in Period 6,090 5,980 2
Electric Output For Own Territory
(Mwh.):
Generated 149,805 182,019 (18)
Purchased 5,636,623 5,569,900 1
---------- ---------- ----------
Total 5,786,428 5,751,919 1
========== ========== ==========
Gas Send-out Firm Customers (Mcf.) 9,832,622 9,954,645 (1)
========== ========== ==========
CH ENERGY GROUP, INC.
--------------------------------------
Earnings Per Share - (Basic) $2.55 $2.83 (10)
Dividends Declared Per Share $2.16 $2.16 -
June 30, Dec. 31, % Variation
2005 2004
---------- ---------- ----------
Book Value Per Share $31.91 $31.31 2
Retained Earnings (000s) $197,047 $187,772 5
Common Equity Ratio (%) 58.7% 58.3% 1
C H ENERGY GROUP, INC
Selected Financial Indices
12 Months Ended June 30, 2005 vs. Calendar Year 2004
12 Months Calendar
Ended Year
June 30, 2005 2004
-------------- ------------
Earnings Per Share - (Basic) $2.55 $2.69
Earned Return on Common Equity (Per Books) 8.03% 8.52%
Pretax Coverage of Total Interest Charges, 4.43 x 4.34 x
excluding AFDC
Dividends Declared $2.16 $2.16
Pay-out Ratio 84.7% 80.3%
Percent of Cash Construction Expenditures
Financed from Internal Funds 100.0% 100.0%
Common Equity Ratio 58.7% 58.3%
Retained Earnings ($000) $197,047 $187,772
Book Value Per Share (End of Period) $31.91 $31.31
CH Energy Group Segment Information - 12 Months Ended June 30, 2005
Regulated Unregulated
------------------- ------------------------
($000s Except Natural Fuel Oil
Earnings Per Share) Electric Gas Distribution Other
---------------------- --------- --------- ------------ -----------
Revenues from
external customers $446,185 $135,007 $255,720 $953
Intersegment revenues 12 268 - -
--------- --------- ------------ -----------
Total Revenues $446,197 $135,275 $255,720 $953
Earnings before income
taxes $44,239 $15,599 $2,807 $3,385
Net Income $25,846 $8,910 $1,687 $3,794
Earnings per share
(basic) $1.64 $0.56 $0.11 $0.24 (1)
Segment Assets @
6/30/05 $787,767 $267,565 $136,065 $124,705
($000s Except
Earnings Per Share) Elim(s). Total
----------------------------- --------------- -----------
Revenues from
external customers - $837,865
Intersegment revenues ($280) -
--------------- -----------
Total Revenues ($280) $837,865
Earnings before income taxes - $66,030
Net Income - $40,237
Earnings per share (basic) - $2.55
Segment Assets @ 6/30/05 ($1,230) $1,314,872
(1)The amount of Unregulated EPS attributable to CHEC's other
business activities was $0.02 per share, with the balance of $0.22
per share resulting primarily from investment and business
development activities and the recording of New York State income
tax benefits related to the completion of the Energy Group tax
audit.
CH Energy Group Segment Information - 12 Months Ended June 30, 2004
Regulated Unregulated
------------------- ------------------------
($000s Except Natural Fuel Oil
Earnings Per Share) Electric Gas Distribution Other
-------------------------------- --------- ------------ -----------
Revenues from
external customers $444,892 $122,903 $217,756 $1,151
Intersegment revenues 9 305 - -
--------- --------- ------------ -----------
Total Revenues $444,901 $123,208 $217,756 $1,151
Earnings before income
taxes $50,035 $17,753 $5,182 $3,668
Net Income $29,562 $9,443 $3,146 $2,500
Earnings per share
(basic) $1.88 $0.59 $0.20 $0.16 (1)
Segment Assets @
6/30/04 $768,766 $227,562 $133,135 $131,087
($000s Except
Earnings Per Share) Elim(s). Total
----------------------------- --------------- -----------
Revenues from
external customers - $786,702
Intersegment revenues ($314) -
--------------- -----------
Total Revenues ($314) $786,702
Earnings before income taxes - $76,638
Net Income - $44,651
Earnings per share (basic) - $2.83
Segment Assets @ 6/30/04 ($1,256) $1,259,294
(1)The amount of Unregulated EPS attributable to CHEC's other
business activities was $0.04 per share, with the balance of $.12
per share resulting primarily from investment and business
development activities.
CH Energy Group Segment Information - Quarter Ended June 30, 2005
Regulated Unregulated
------------------- ------------------------
($000s Except Natural Fuel Oil
Earnings Per Share) Electric Gas Distribution Other
----------------------- --------- --------- ------------ -----------
Revenues from
external customers $105,663 $31,142 $51,598 $210
Intersegment revenues 3 34 - -
--------- --------- ------------ -----------
Total Revenues $105,666 $31,176 $51,598 $210
Earnings before income
taxes $6,931 $1,950 ($2,486) $1,065
Net Income $4,279 $1,016 ($1,492) $2,156
Earnings per share (basic) $0.27 $0.06 ($0.09) $0.14(1)
Segment Assets @ 6/30/05 $787,767 $267,565 $136,065 $124,705
($000s Except
Earnings Per Share) Elim(s). Total
-------------------------------------------- ------------ ----------
Revenues from
external customers - $188,613
Intersegment revenues ($37) -
------------ ----------
Total Revenues ($37) $188,613
Earnings before income taxes - $7,460
Net Income - $5,959
Earnings per share (basic) - $0.38
Segment Assets @ 6/30/05 ($1,230) $1,314,872
(1)The amount of Unregulated EPS attributable to CHEC's other
business activities was $0.01 per share, with the balance of $0.13
per share resulting primarily from the recording of New York State
income tax benefits related to the completion of the Energy Group
tax audit and investment and business development activities.
CH Energy Group Segment Information - Quarter Ended June 30, 2004
Regulated Unregulated
------------------- ------------------------
($000s Except Natural Fuel Oil
Earnings Per Share) Electric Gas Distribution Other
----------------------- --------- --------- ------------ -----------
Revenues from
external customers $97,441 $26,091 $41,555 $267
Intersegment revenues 3 42 - -
--------- --------- ------------ -----------
Total Revenues $97,444 $26,133 $41,555 $267
Earnings before income
taxes $9,948 $2,179 ($2,754) $586
Net Income $5,721 $999 ($1,653) $429
Earnings per share (basic) $0.36 $0.06 ($0.10) $0.03(1)
Segment Assets @ 6/30/04 $768,766 $227,562 $133,135 $131,087
($000s Except
Earnings Per Share) Elim(s). Total
-------------------------------------------- ------------ ----------
Revenues from
external customers - $165,354
Intersegment revenues ($45) -
------------ ----------
Total Revenues ($45) $165,354
Earnings before income taxes - $9,959
Net Income - $5,496
Earnings per share (basic) - $0.35
Segment Assets @ 6/30/04 ($1,256) $1,259,294
(1)The amount of Unregulated EPS attributable to CHEC's other business
activities was $0.02 per share, with the balance of $0.01 per
share resulting primarily from investment and business development
activities.
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