Edgar Filing: CENTRAL HUDSON GAS & ELECTRIC CORP

form10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2011

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________

Commission File Number	Registrant, State of Incorporation Address and Telephone Number	IRS Employer Identification No.


0-30512	CH Energy Group, Inc. (Incorporated in New York) 284 South Avenue Poughkeepsie, New York 12601-4839 (845) 452-2000	14-1804460


1-3268	Central Hudson Gas & Electric Corporation (Incorporated in New York) 284 South Avenue Poughkeepsie, New York 12601-4839 (845) 452-2000	14-0555980

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

CH Energy Group, Inc.	Yes þ		No o
Central Hudson Gas & Electric Corporation	Yes þ		No o

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

CH Energy Group, Inc.	Yes þ		No o
Central Hudson Gas & Electric Corporation	Yes þ		No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

CH Energy Group, Inc.		Central Hudson Gas & Electric Corporation
Large Accelerated Filer þ		Large Accelerated Filer o
Accelerated Filer o		Accelerated Filer o
Non-Accelerated Filer o		Non-Accelerated Filer þ
Smaller Reporting Company o		Smaller Reporting Company o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

CH Energy Group, Inc.	Yes o		No þ
Central Hudson Gas & Electric Corporation	Yes o		No þ

As of the close of business on April 30, 2011 (i) CH Energy Group, Inc. had outstanding 15,542,371 shares of Common Stock ($0.10 per share par value) and (ii) all of the outstanding 16,862,087 shares of Common Stock ($5 per share par value) of Central Hudson Gas & Electric Corporation were held by CH Energy Group, Inc.

CENTRAL HUDSON GAS & ELECTRIC CORPORATION MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (H)(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT PURSUANT TO GENERAL INSTRUCTIONS (H)(2)(a), (b) AND (c).

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2011

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM 1 – Financial Statements (Unaudited)

CH Energy Group, Inc.		PAGE
	Consolidated Statement of Income –
	Three Months Ended March 31, 2011 and 2010	1

	Consolidated Statement of Comprehensive Income –
	Three Months Ended March 31, 2011 and 2010	2

	Consolidated Statement of Cash Flows –
	Three Months Ended March 31, 2011 and 2010	3

	Consolidated Balance Sheet –
	March 31, 2011, December 31, 2010 and March 31, 2010	4

	Consolidated Statement of Equity –
	Three Months Ended March 31, 2011 and 2010	6

Central Hudson Gas & Electric Corporation
	Statement of Income –
	Three Months Ended March 31, 2011 and 2010	7

	Statement of Comprehensive Income –
	Three Months Ended March 31, 2011 and 2010	7

	Statement of Cash Flows –
	Three Months Ended March 31, 2011 and 2010	8

	Balance Sheet –
	March 31, 2011, December 31, 2010 and March 31, 2010	9

	Statement of Equity –
	Three Months Ended March 31, 2011 and 2010	11

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

	TABLE OF CONTENTS
		PAGE

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51

ITEM 3	Quantitative and Qualitative Disclosure About Market Risk	74

ITEM 4	Controls and Procedures	74

PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	74

ITEM 1A	Risk Factors	74

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	75

ITEM 6	Exhibits	75

SIGNATURES		76

EXHIBIT INDEX		77

_______________________________________________

FILING FORMAT

This Quarterly Report on Form 10-Q is a combined quarterly report being filed by two different registrants: CH Energy Group, Inc. (“CH Energy Group”) and Central Hudson Gas & Electric Corporation (“Central Hudson”), a wholly owned subsidiary of CH Energy Group. Except where the content clearly indicates otherwise, any reference in this report to CH Energy Group includes all subsidiaries of CH Energy Group, including Central Hudson. Central Hudson makes no representation as to the information contained in this report in relation to CH Energy Group and its subsidiaries other than Central Hudson.

Table of Contents

PART 1 – FINANCIAL INFORMATION

ITEM 1 – Financial Statements (Unaudited)

CH ENERGY GROUP CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)

(In Thousands, except per share amounts)

	Three Months Ended March 31,
	2011			2010
Operating Revenues
Electric	$	154,570		$	145,962
Natural gas		75,482			69,087
Competitive business subsidiaries:
Petroleum products		92,632			80,160
Other		5,960			4,764
Total Operating Revenues		328,644			299,973
Operating Expenses
Operation:
Purchased electricity and fuel used in electric generation		70,268			66,875
Purchased natural gas		41,798			37,648
Purchased petroleum		75,766			62,771
Other expenses of operation - regulated activities		69,254			57,703
Other expenses of operation - competitive business subsidiaries		12,891			13,314
Depreciation and amortization		10,716			9,690
Taxes, other than income tax		13,280			10,804
Total Operating Expenses		293,973			258,805
Operating Income		34,671			41,168
Other Income and Deductions
Income from unconsolidated affiliates		464			234
Interest on regulatory assets and other interest income		1,879			1,127
Regulatory adjustments for interest costs		383			(142	)
Business development costs		(948	)		(303	)
Other - net		(576)			(150	)
Total Other Income (Deductions)		1,202			766
Interest Charges
Interest on long-term debt		6,532			5,609
Interest on regulatory liabilities and other interest		1,690			1,699
Total Interest Charges		8,222			7,308

Income before income taxes, non-controlling interest and preferred dividends of subsidiary		27,651			34,626
Income Taxes		10,644			14,062
Net Income from Continuing Operations		17,007			20,564

Discontinued Operations
Income from discontinued operations before tax		187			122
Income tax expense (benefit) from discontinued operations		5			(29	)
Net income from Discontinued Operations		182			151

Net Income		17,189			20,715

Net income attributable to non-controlling interest:
Non-controlling interest in subsidiary		-			35
Dividends declared on Preferred Stock of subsidiary		242			242
Net income attributable to CH Energy Group		16,947			20,438

Dividends declared on Common Stock		8,427			8,539
Change in Retained Earnings	$	8,520		$	11,899

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CH ENERGY GROUP CONSOLIDATED STATEMENT OF INCOME (CONT'D) (UNAUDITED)

(In Thousands, except per share amounts)

	Three Months Ended March 31,
	2011		2010
Common Stock:
Average shares outstanding - Basic		15,645		15,778
Average shares outstanding - Diluted		15,838		15,936

Income from continuing operations attributable to CH Energy Group common shareholders
Earnings per share - Basic	$	1.07	$	1.29
Earnings per share - Diluted	$	1.06	$	1.27

Income from discontinued operations attributable to CH Energy Group common shareholders
Earnings per share - Basic	$	0.01	$	0.01
Earnings per share - Diluted	$	0.01	$	0.01

Amounts attributable to CH Energy Group common shareholders
Earnings per share - Basic	$	1.08	$	1.30
Earnings per share - Diluted	$	1.07	$	1.28
Dividends Declared Per Share	$	0.54	$	0.54

CH ENERGY GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2011			2010
Net Income	$	17,189		$	20,715

Other Comprehensive Income:
Fair value of cash flow hedges:
Unrealized gains - net of tax of $0 and ($4)		-			5
Reclassification for gains realized in net income - net of tax of $0 and $24		-			(36	)
Net unrealized gains/(loss) on investments held by equity method investees - net of tax of $27 and ($71)		(41	)		107

Other comprehensive (loss) income		(41	)		76

Comprehensive Income		17,148			20,791

Comprehensive income attributable to non-controlling interest		242			277

Comprehensive income attributable to CH Energy Group	$	16,906		$	20,514

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CH ENERGY GROUP CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2011			2010
Operating Activities:
Net income	$	17,189		$	20,715
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		9,885			8,993
Amortization		1,037			931
Deferred income taxes - net		9,177			18,627
Bad debt expense		2,458			2,626
Distributed (undistributed) equity in earnings of unconsolidated affiliates		(464	)		(197	)
Pension expense		8,289			8,955
Other post-employment benefits ("OPEB") expense		1,999			2,083
Regulatory liability - rate moderation		(3,451	)		(5,473	)
Revenue decoupling mechanism recorded		5,280			(913	)
Regulatory asset amortization		1,743			1,863
Gain on sale of assets		-			15

Changes in operating assets and liabilities - net of business acquisitions:
Accounts receivable, unbilled revenues and other receivables		(27,400	)		(17,301	)
Fuel, materials and supplies		6,781			4,096
Special deposits and prepayments		(1,894	)		(2,439	)
Income and other taxes		(2,242	)		(7,732	)
Accounts payable		(9,611	)		(6,111	)
Accrued interest		1,234			431
Customer advances		(9,264	)		(9,592	)
Pension plan contribution		(8,157	)		(30,138	)
OPEB contribution		-			(525	)
Revenue decoupling mechanism collected		1,742			1,369
Regulatory asset - storm deferral		-			(2,894	)
Regulatory asset - manufactured gas plant ("MGP") site remediation		559			(3,576	)
Regulatory asset - Temporary State Assessment		(2,272	)		(3,960	)
Deferred natural gas and electric costs		25,334			7,993
Other - net		1,821			(1,854	)
Net cash provided by (used in) operating activities		29,773			(14,008	)

Investing Activities:
Proceeds from sale of assets		41			33
Additions to utility and other property and plant		(19,228	)		(12,560	)
Acquisitions made by competitive business subsidiaries		(1,961	)		-
Other - net		(477	)		(614	)
Net cash used in investing activities		(21,625	)		(13,141	)

Financing Activities:
Borrowings (repayments) of short-term debt - net		16,500			30,000
Dividends paid on Common Stock		(8,523	)		(8,534	)
Dividends paid on Preferred Stock of subsidiary		(242	)		(242	)
Shares repurchased		(8,533	)		-
Other - net		(228	)		(21	)
Net cash (used in) provided by financing activities		(1,026	)		21,203

Cash Included in Net Current Assets Held for Sale		(603	)		-

Net Change in Cash and Cash Equivalents		6,519			(5,946	)
Cash and Cash Equivalents at Beginning of Period		29,420			73,436
Cash and Cash Equivalents at End of Period	$	35,939		$	67,490

Supplemental Disclosure of Cash Flow Information:
Interest paid	$	5,932		$	5,463
Federal and state taxes paid	$	7,989		$	14,374
Additions to plant included in liabilities	$	2,981		$	1,557
Regulatory asset - storm deferral costs in liabilities	$	-		$	16,360

The Notes to Financial Statements are an integral part hereof.

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CH ENERGY GROUP CONSOLIDATED BALANCE SHEET (UNAUDITED)

(In Thousands)

	March 31,		December 31,		March 31,
	2011		2010		2010
ASSETS
Utility Plant
Electric	$	972,543	$	963,261	$	915,540
Natural gas		295,914		292,358		282,828
Common		143,398		142,255		140,704
Gross Utility Plant		1,411,855		1,397,874		1,339,072

Less: Accumulated depreciation		378,038		395,776		381,112
Net		1,033,817		1,002,098		957,960

Construction work in progress		50,588		52,607		58,227
Net Utility Plant		1,084,405		1,054,705		1,016,187

Non-Utility Property & Plant
Griffith non-utility property & plant		30,032		29,881		28,173
Other non-utility property & plant		55,927		64,059		36,512
Gross Non-Utility Property & Plant		85,959		93,940		64,685

Less: Accumulated depreciation - Griffith		20,679		20,519		19,076
Less: Accumulated depreciation - other		1,755		5,108		3,735
Net Non-Utility Property & Plant		63,525		68,313		41,874

Current Assets
Cash and cash equivalents		35,939		29,420		67,490
Accounts receivable from customers - net of allowance for doubtful accounts of $6.8 million, $6.7 million and $7.7 million, respectively		126,427		99,402		109,760
Accrued unbilled utility revenues		14,778		16,233		13,163
Other receivables		6,775		8,006		7,049
Fuel, materials and supplies		17,925		25,447		20,745
Regulatory assets		41,763		96,491		77,403
Income tax receivable		2,504		2,802		9,595
Fair value of derivative instruments		108		146		64
Special deposits and prepayments		24,565		22,869		23,754
Assets held for sale		8,653		-		-
Accumulated deferred income tax		17,492		-		2,158
Total Current Assets		296,929		300,816		331,181

Deferred Charges and Other Assets
Regulatory assets - pension plan		134,199		142,647		159,509
Regulatory assets - other		81,115		83,678		119,700
Goodwill		36,455		35,940		35,651
Other intangible assets - net		13,691		12,867		14,246
Unamortized debt expense		4,831		4,774		5,017
Investments in unconsolidated affiliates		7,077		6,681		9,057
Other investments		13,506		12,883		10,901
Other		5,444		5,971		17,169
Total Deferred Charges and Other Assets		296,318		305,441		371,250
Total Assets	$	1,741,177	$	1,729,275	$	1,760,492

The Notes to Financial Statements are an integral part hereof.

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CH ENERGY GROUP CONSOLIDATED BALANCE SHEET (CONT'D) (UNAUDITED)

(In Thousands)

	March 31,			December 31,			March 31,
	2011			2010			2010
CAPITALIZATION AND LIABILITIES
Capitalization
CH Energy Group Common Shareholders' Equity
Common Stock (30,000,000 shares authorized: $0.10 par value; 16,862,087 shares issued) 15,620,765 shares, 15,799,262 shares and 15,813,388 shares outstanding, respectively	$	1,686		$	1,686		$	1,686
Paid-in capital		350,290			350,360			350,178
Retained earnings		238,862			230,342			237,898
Treasury stock - 1,241,322 shares, 1,062,825 shares and 1,048,699 shares, respectively		(53,702	)		(44,887	)		(44,064	)
Accumulated other comprehensive income		418			459			260
Capital stock expense		(328	)		(328	)		(328	)
Total CH Energy Group Common Shareholders' Equity		537,226			537,632			545,630
Non-controlling interest in subsidiary		172			172			1,420
Total Equity		537,398			537,804			547,050
Preferred Stock of subsidiary		21,027			21,027			21,027
Long-term debt		466,960			502,959			463,898
Total Capitalization		1,025,385			1,061,790			1,031,975
Current Liabilities
Current maturities of long-term debt		36,941			941			24,000
Notes payable		16,500			-			30,000
Accounts payable		44,960			57,059			52,755
Accrued interest		7,632			6,398			6,498
Dividends payable		8,678			8,774			8,782
Accrued vacation and payroll		6,868			6,663			7,315
Customer advances		10,045			19,309			12,858
Customer deposits		7,590			7,727			8,526
Regulatory liabilities		17,379			18,596			19,969
Fair value of derivative instruments		9,626			13,183			36,789
Accrued environmental remediation costs		2,162			2,233			12,606
Deferred revenues		3,857			4,650			3,895
Liabilities held for sale		321			-			-
Accumulated deferred income tax		-			6,052			-
Other		13,527			18,961			13,807
Total Current Liabilities		186,086			170,546			237,800
Deferred Credits and Other Liabilities
Regulatory liabilities - OPEB		8,930			6,976			3,205
Regulatory liabilities - other		113,621			99,793			107,897
Operating reserves		2,898			3,187			4,397
Fair value of derivative instruments		10,090			11,698			-
Accrued environmental remediation costs		3,201			4,312			6,898
Accrued OPEB costs		46,227			45,367			46,778
Accrued pension costs		96,524			102,555			124,845
Tax reserve		11,952			11,486			-
Other		17,966			16,967			14,326
Total Deferred Credits and Other Liabilities		311,409			302,341			308,346
Accumulated Deferred Income Tax		218,297			194,598			182,371
Commitments and Contingencies
Total Capitalization and Liabilities	$	1,741,177		$	1,729,275		$	1,760,492

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CH ENERGY GROUP CONSOLIDATED STATEMENT OF EQUITY (UNAUDITED)

(In Thousands, except share amounts)

	CH Energy Group Common Shareholders
	Common Stock				Treasury Stock
	Shares Issued		Amount		Shares Repurchased			Amount			Paid-In Capital			Capital Stock Expense			Retained Earnings			Accumulated Other Comprehensive Income / (Loss)			Non-controlling Interest		Total Equity
Balance at December 31, 2009		16,862,087	$	1,686		(1,057,525	)	$	(44,406	)	$	350,367		$	(328	)	$	225,999		$	184		$	1,385	$	534,887
Comprehensive income:
Net income																		20,680						35		20,715
Dividends declared on Preferred Stock of subsidiary																		(242	)							(242	)
Change in fair value:
Derivative instruments																					5					5
Investments																					107					107
Reclassification adjustments for gains recognized in net income																					(36	)				(36	)
Dividends declared on common stock																		(8,539	)							(8,539	)
Treasury shares activity - net						8,826			342			(189	)													153
Balance at March 31, 2010		16,862,087	$	1,686		(1,048,699	)	$	(44,064	)	$	350,178		$	(328	)	$	237,898		$	260		$	1,420	$	547,050

Balance at December 31, 2010		16,862,087	$	1,686		(1,062,825	)	$	(44,887	)	$	350,360		$	(328	)	$	230,342		$	459		$	172	$	537,804
Comprehensive income:
Net income																		17,189								17,189
Dividends declared on Preferred Stock of subsidiary																		(242	)							(242	)
Change in fair value:
Investments																					(41	)				(41	)
Dividends declared on common stock																		(8,427	)							(8,427	)
Treasury shares activity - net						(178,497	)		(8,815	)		(70	)													(8,885	)
Balance at March 31, 2011		16,862,087	$	1,686		(1,241,322	)	$	(53,702	)	$	350,290		$	(328	)	$	238,862		$	418		$	172	$	537,398

The Notes to Financial Statements are an integral part hereof.

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CENTRAL HUDSON STATEMENT OF INCOME (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2011			2010
Operating Revenues
Electric	$	154,570		$	145,962
Natural gas		75,482			69,087
Total Operating Revenues		230,052			215,049

Operating Expenses
Operation:
Purchased electricity and fuel used in electric generation		70,268			66,874
Purchased natural gas		41,798			37,648
Other expenses of operation		69,254			57,703
Depreciation and amortization		8,921			8,414
Taxes, other than income tax		13,235			10,651
Total Operating Expenses		203,476			181,290

Operating Income		26,576			33,759

Other Income and Deductions
Interest on regulatory assets and other interest income		1,866			1,125
Regulatory adjustments for interest costs		383			(142	)
Other - net		(563	)		(181	)
Total Other Income		1,686			802

Interest Charges
Interest on long-term debt		5,904			4,773
Interest on regulatory liabilities and other interest		1,470			1,663
Total Interest Charges		7,374			6,436

Income Before Income Taxes		20,888			28,125

Income Taxes		8,249			11,480

Net Income		12,639			16,645

Dividends Declared on Cumulative Preferred Stock		242			242

Income Available for Common Stock	$	12,397		$	16,403

CENTRAL HUDSON STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2011		2010
Net Income	$	12,639	$	16,645
Other Comprehensive Income		-		-
Comprehensive Income	$	12,639	$	16,645

The Notes to Financial Statements are an integral part hereof.

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CENTRAL HUDSON STATEMENT OF CASH FLOWS (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2011			2010
Operating Activities:
Net income	$	12,639		$	16,645
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		8,481			8,050
Amortization		440			364
Deferred income taxes - net		7,951			17,532
Bad debt expense		2,076			2,389
Pension expense		8,289			8,955
OPEB expense		1,999			2,083
Regulatory liability - rate moderation		(3,451	)		(5,473	)
Revenue decoupling mechanism recorded		5,280			(913	)
Regulatory asset amortization		1,743			1,863
Changes in operating assets and liabilities - net:
Accounts receivable, unbilled revenues and other receivables		(12,231	)		(10,418	)
Fuel, materials and supplies		5,117			3,977
Special deposits and prepayments		(3,055	)		(1,468	)
Income and other taxes		(1,954	)		(6,188	)
Accounts payable		(4,425	)		(3,012	)
Accrued interest		399			(405	)
Customer advances		(7,726	)		(6,454	)
Pension plan contribution		(8,157	)		(30,138	)
OPEB contribution		-			(525	)
Revenue decoupling mechanism collected		1,742			1,369
Regulatory asset - storm deferral		-			(2,894	)
Regulatory asset - MGP site remediation		559			(3,576	)
Regulatory asset - Temporary State Assessment		(2,272	)		(3,960	)
Deferred natural gas and electric costs		25,334			7,993
Other - net		4,174			2,693
Net cash provided by (used in) operating activities		42,952			(1,511	)

Investing Activities:
Additions to utility plant		(16,117	)		(12,760	)
Other - net		(453	)		(627	)
Net cash used in investing activities		(16,570	)		(13,387	)

Financing Activities:
Borrowings (repayments) of short-term debt - net		-			30,000
Dividends paid to parent - CH Energy Group		(11,000	)		-
Dividends paid on cumulative Preferred Stock		(242	)		(242	)
Other - net		(228	)		(21	)
Net cash (used in) provided by financing activities		(11,470	)		29,737

Net Change in Cash and Cash Equivalents		14,912			14,839
Cash and Cash Equivalents - Beginning of Period		9,622			4,784
Cash and Cash Equivalents - End of Period	$	24,534		$	19,623

Supplemental Disclosure of Cash Flow Information:
Interest paid	$	5,912		$	5,432
Federal and state taxes paid	$	7,827		$	8,910
Additions to plant included in liabilities	$	2,165		$	1,529
Regulatory asset - storm deferral costs in liabilities	$	-		$	16,360

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CENTRAL HUDSON BALANCE SHEET (UNAUDITED)

(In Thousands)

	March 31,		December 31,		March 31,
	2011		2010		2010
ASSETS
Utility Plant
Electric	$	972,543	$	963,261	$	915,540
Natural gas		295,914		292,358		282,828
Common		143,398		142,255		140,704
Gross Utility Plant		1,411,855		1,397,874		1,339,072

Less: Accumulated depreciation		378,038		395,776		381,112
Net		1,033,817		1,002,098		957,960

Construction work in progress		50,588		52,607		58,227
Net Utility Plant		1,084,405		1,054,705		1,016,187

Non-Utility Property and Plant		681		681		681
Less: Accumulated depreciation		35		35		33
Net Non-Utility Property and Plant		646		646		648

Current Assets
Cash and cash equivalents		24,534		9,622		19,623
Accounts receivable from customers - net of allowance for doubtful accounts of $5.3 million, $5.3 million and $5.9 million, respectively		86,292		67,185		77,113
Accrued unbilled utility revenues		14,778		16,233		13,163
Other receivables		2,832		10,328		3,265
Fuel, materials and supplies - at average cost		14,910		20,027		17,328
Regulatory assets		41,763		96,491		77,403
Income tax receivable		-		-		16,894
Fair value of derivative instruments		68		34		-
Special deposits and prepayments		20,268		17,184		19,797
Accumulated deferred income tax		11,133		-		-
Total Current Assets		216,578		237,104		244,586

Deferred Charges and Other Assets
Regulatory assets - pension plan		134,199		142,647		159,509
Regulatory assets - other		81,115		83,678		119,700
Unamortized debt expense		4,831		4,774		5,017
Other investments		13,110		12,511		10,622
Other		2,449		3,009		4,064
Total Deferred Charges and Other Assets		235,704		246,619		298,912

Total Assets	$	1,537,333	$	1,539,074	$	1,560,333

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CENTRAL HUDSON BALANCE SHEET (CONT'D) (UNAUDITED)

(In Thousands)

	March 31,			December 31,			March 31,
	2011			2010			2010
CAPITALIZATION AND LIABILITIES
Capitalization
Common Stock, 30,000,000 shares authorized; 16,862,087 shares issued and outstanding, $5 par value	$	84,311		$	84,311		$	84,311
Paid-in capital		199,980			199,980			199,980
Retained earnings		166,295			164,898			167,153
Capital stock expense		(4,961	)		(4,961	)		(4,961	)
Total Equity		445,625			444,228			446,483

Cumulative Preferred Stock not subject to mandatory redemption		21,027			21,027			21,027

Long-term debt		417,901			453,900			413,898
Total Capitalization		884,553			919,155			881,408

Current Liabilities
Current maturities of long-term debt		36,000			-			24,000
Notes payable		-			-			30,000
Accounts payable		36,833			43,452			45,314
Accrued interest		6,366			5,967			5,232
Dividends payable - Preferred Stock		242			242			242
Accrued vacation and payroll		5,351			5,484			5,751
Customer advances		6,028			13,753			8,548
Customer deposits		7,514			7,654			8,451
Regulatory liabilities		17,379			18,596			19,969
Fair value of derivative instruments		9,626			13,183			36,739
Accrued environmental remediation costs		1,042			1,396			12,334
Accrued income taxes		699			113			-
Accumulated deferred income tax		-			9,439			156
Other		8,543			13,275			8,977
Total Current Liabilities		135,623			132,554			205,713

Deferred Credits and Other Liabilities
Regulatory liabilities - OPEB		8,930			6,976			3,205
Regulatory liabilities - other		113,621			99,793			107,897
Operating reserves		2,102			2,068			3,164
Fair value of derivative instruments		10,090			11,698			-
Accrued environmental remediation costs		1,693			1,849			3,652
Accrued OPEB costs		46,227			45,367			46,778
Accrued pension costs		96,524			102,555			124,845
Tax reserve		11,952			11,486			-
Other		17,080			16,109			13,566
Total Deferred Credits and Other Liabilities		308,219			297,901			303,107

Accumulated Deferred Income Tax		208,938			189,464			170,105

Commitments and Contingencies

Total Capitalization and Liabilities	$	1,537,333		$	1,539,074		$	1,560,333

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CENTRAL HUDSON STATEMENT OF EQUITY (UNAUDITED)

(In Thousands, except share amounts)

Central Hudson Common Shareholders

Common Stock

Treasury Stock