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, 2012

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

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


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


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

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, 2012 (i) CH Energy Group, Inc. had outstanding 14,916,204 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, 2012

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, 2012 and 2011	1

	Consolidated Statement of Comprehensive Income –
	Three Months Ended March 31, 2012 and 2011	2

	Consolidated Statement of Cash Flows –
	Three Months Ended March 31, 2012 and 2011	3

	Consolidated Balance Sheet –
	March 31, 2012, December 31, 2011 and March 31, 2011	4

	Consolidated Statement of Equity –
	Three Months Ended March 31, 2012 and 2011	6

Central Hudson Gas & Electric Corporation
	Statement of Income –
	Three Months Ended March 31, 2012 and 2011	7

	Statement of Comprehensive Income –
	Three Months Ended March 31, 2012 and 2011	7

	Statement of Cash Flows –
	Three Months Ended March 31, 2012 and 2011	8

	Balance Sheet –
	March 31, 2012, December 31, 2011 and March 31, 2012	9

	Statement of Equity –
	Three Months Ended March 31, 2012 and 2011	11

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

TABLE OF CONTENTS

		PAGE

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	53

ITEM 3	Quantitative and Qualitative Disclosure About Market Risk	81

ITEM 4	Controls and Procedures	81

PART II – OTHER INFORMATION

ITEM 1	Legal Proceedings	82

ITEM 1A	Risk Factors	82

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	84

ITEM 4	Mine Safety Disclosures	84

ITEM 6	Exhibits	84

SIGNATURES		85

EXHIBIT INDEX		86

_______________________________________________

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 I – 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,
	2012			2011
Operating Revenues
Electric	$	129,272		$	154,570
Natural gas		55,850			75,482
Competitive business subsidiaries:
Petroleum products		84,632			92,632
Other		4,318			4,288
Total Operating Revenues		274,072			326,972
Operating Expenses
Operation:
Purchased electricity and fuel used in electric generation		45,059			70,268
Purchased natural gas		24,614			41,798
Purchased petroleum		70,305			75,766
Other expenses of operation - regulated activities		59,886			69,233
Other expenses of operation - competitive business subsidiaries		12,422			12,519
Merger related costs		5,219			-
Depreciation and amortization		10,624			10,085
Taxes, other than income tax		13,642			13,301
Total Operating Expenses		241,771			292,970
Operating Income		32,301			34,002
Other Income and Deductions
Income from unconsolidated affiliates		52			464
Interest on regulatory assets and other interest income		2,160			1,866
Regulatory adjustments for interest costs		319			383
Business development costs		(58	)		(235	)
Other - net		(378	)		(569	)
Total Other Income (Deductions)		2,095			1,909
Interest Charges
Interest on long-term debt		6,218			6,740
Interest on regulatory liabilities and other interest		1,584			1,482
Total Interest Charges		7,802			8,222

Income before income taxes, non-controlling interest and preferred dividends of subsidiary		26,594			27,689
Income Taxes		11,771			10,615
Net Income from Continuing Operations		14,823			17,074

Discontinued Operations
Income from discontinued operations before tax		-			150
Income tax expense from discontinued operations		-			35
Net Income from Discontinued Operations		-			115

Net Income		14,823			17,189

Net Income attributable to non-controlling interest:
Dividends declared on Preferred Stock of subsidiary		242			242
Net Income Attributable to CH Energy Group		14,581			16,947

Dividends declared on Common Stock		8,279			8,427
Change in Retained Earnings	$	6,302		$	8,520

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,
	2012		2011
Common Stock:
Average shares outstanding - Basic		14,882		15,645
Average shares outstanding - Diluted		15,143		15,838

Income from continuing operations attributable to CH Energy Group common shareholders:
Earnings per share - Basic	$	0.98	$	1.07
Earnings per share - Diluted	$	0.96	$	1.06

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

Amounts attributable to CH Energy Group common shareholders:
Earnings per share - Basic	$	0.98	$	1.08
Earnings per share - Diluted	$	0.96	$	1.07
Dividends Declared per Share	$	0.555	$	0.540

CH ENERGY GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2012			2011
Net Income	$	14,823		$	17,189

Other Comprehensive Loss:
Net unrealized loss on investments held by equity method investees - net of tax benefit of $38 and $27		(58	)		(41	)

Other comprehensive loss		(58	)		(41	)

Comprehensive Income		14,765			17,148

Comprehensive income attributable to non-controlling interest		242			242

Comprehensive income attributable to CH Energy Group	$	14,523		$	16,906

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,
	2012			2011
Operating Activities:
Net income	$	14,823		$	17,189
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		9,499			9,885
Amortization		1,125			1,037
Deferred income taxes - net		11,598			9,177
Bad debt expense		2,500			2,458
Undistributed equity in earnings of unconsolidated affiliates		(52	)		(464	)
Pension expense		7,233			8,289
Other post-employment benefits ("OPEB") expense		1,996			1,999
Regulatory liability - rate moderation		(1,033	)		(3,451	)
Revenue decoupling mechanism recorded		(950	)		5,280
Regulatory asset amortization		1,722			1,743
Gain on sale of assets		(79	)		-
Changes in operating assets and liabilities - net of business acquisitions:
Accounts receivable, unbilled revenues and other receivables		(7,932	)		(27,400	)
Fuel, materials and supplies		5,425			6,781
Special deposits and prepayments		(4,407	)		(1,894	)
Income and other taxes		17			(2,242	)
Accounts payable		(2,144	)		(9,611	)
Accrued interest		997			1,234
Customer advances		(5,212	)		(9,264	)
Pension plan contribution		(28,165	)		(8,157	)
Revenue decoupling mechanism collected		(1,310	)		1,742
Regulatory asset - storm deferral		(3,042	)		-
Regulatory asset - manufactured gas plant ("MGP") site remediation		951			559
Regulatory asset - Temporary State Assessment		(3,332	)		(2,272	)
Deferred natural gas and electric costs		7,883			25,334
Other - net		4,500			1,821
Net cash provided by operating activities		12,611			29,773
Investing Activities:
Proceeds from sale of assets		96			41
Additions to utility and other property and plant		(25,887	)		(19,228	)
Acquisitions made by competitive business subsidiaries		-			(1,961	)
Other - net		(637	)		(477	)
Net cash used in investing activities		(26,428	)		(21,625	)
Financing Activities:
Redemption of long-term debt		(36,000	)		-
Proceeds from issuance of long-term debt		48,000			-
Borrowings of short-term debt - net		64,500			16,500
Dividends paid on Common Stock		(8,269	)		(8,523	)
Dividends paid on Preferred Stock of subsidiary		(242	)		(242	)
Shares repurchased		(2,993	)		(8,533	)
Other - net		(593	)		(228	)
Net cash provided by (used in) financing activities		64,403			(1,026	)
Cash Included in Net Current Assets Held for Sale		-			(603	)
Net Change in Cash and Cash Equivalents		50,586			6,519
Cash and Cash Equivalents at Beginning of Period		15,281			29,420
Cash and Cash Equivalents at End of Period	$	65,867		$	35,939

Supplemental Disclosure of Cash Flow Information:
Interest paid	$	5,351		$	5,932
Federal and state income taxes paid	$	16		$	162
Additions to plant included in liabilities	$	4,126		$	2,981

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

CH ENERGY GROUP CONSOLIDATED BALANCE SHEET (UNAUDITED)

(In Thousands)

	March 31,		December 31,		March 31,
	2012		2011		2011
ASSETS
Utility Plant
Electric	$	1,017,986	$	1,008,394	$	972,543
Natural gas		301,609		305,664		295,914
Common		151,086		147,286		143,398
Gross Utility Plant		1,470,681		1,461,344		1,411,855

Less: Accumulated depreciation		390,307		388,784		378,038
Net		1,080,374		1,072,560		1,033,817

Construction work in progress		66,518		58,847		50,588
Net Utility Plant		1,146,892		1,131,407		1,084,405

Non-Utility Property & Plant
Griffith non-utility property & plant		31,456		31,669		30,032
Other non-utility property & plant		524		524		55,927
Gross Non-Utility Property & Plant		31,980		32,193		85,959

Less: Accumulated depreciation - Griffith		22,220		22,006		20,679
Less: Accumulated depreciation - other		-		-		1,755
Net Non-Utility Property & Plant		9,760		10,187		63,525

Current Assets
Cash and cash equivalents		65,867		15,281		35,939
Accounts receivable from customers - net of allowance for doubtful accounts of $7.0 million, $7.0 million and $6.8 million respectively		96,574		90,937		126,427
Accrued unbilled utility revenues		14,283		15,299		14,778
Other receivables		9,096		9,512		6,775
Fuel, materials and supplies		19,689		25,114		17,925
Regulatory assets		49,683		49,526		36,809
Income tax receivable		-		432		2,504
Fair value of derivative instruments		9		349		108
Special deposits and prepayments		25,777		21,795		24,565
Assets held for sale		-		-		8,653
Accumulated deferred income tax		8,456		5,895		17,492
Total Current Assets		289,434		234,140		291,975

Deferred Charges and Other Assets
Regulatory assets - pension plan		151,737		159,020		134,199
Regulatory assets - other		119,559		114,980		86,069
Fair value of derivative instruments		-		931		-
Goodwill		37,752		37,512		36,455
Other intangible assets - net		12,564		13,173		13,691
Unamortized debt expense		5,035		4,535		4,831
Investments in unconsolidated affiliates		2,559		2,777		7,077
Other investments		15,212		14,461		13,506
Other		5,884		6,989		5,444
Total Deferred Charges and Other Assets		350,302		354,378		301,272
Total Assets	$	1,796,388	$	1,730,112	$	1,741,177

The Notes to Financial Statements are an integral part hereof.

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Table of Contents

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

(In Thousands, except share amounts)

	March 31,			December 31,			March 31,
	2012			2011			2011
CAPITALIZATION AND LIABILITIES
Capitalization
CH Energy Group Common Shareholders' Equity
Common Stock (30,000,000 shares authorized: $0.10 par value; 16,862,087 shares issued) 14,914,853 shares, 14,894,964 shares and 15,620,765 shares outstanding, respectively	$	1,686		$	1,686		$	1,686
Paid-in capital		348,306			351,053			350,290
Retained earnings		248,693			242,391			238,862
Treasury stock - 1,947,234 shares, 1,967,123 shares and 1,241,322 shares, respectively		(91,978	)		(92,908	)		(53,702	)
Accumulated other comprehensive income		296			354			418
Capital stock expense		(328	)		(328	)		(328	)
Total CH Energy Group Common Shareholders' Equity		506,675			502,248			537,226
Non-controlling interest in subsidiary		-			-			172
Total Equity		506,675			502,248			537,398
Preferred Stock of subsidiary		21,027			21,027			21,027
Long-term debt		494,002			446,003			466,960
Total Capitalization		1,021,704			969,278			1,025,385
Current Liabilities
Current maturities of long-term debt		1,006			37,006			36,941
Notes payable		71,000			6,500			16,500
Accounts payable		36,183			43,904			44,960
Accrued interest		7,330			6,333			7,632
Dividends payable		8,521			8,511			8,678
Accrued vacation and payroll		7,291			6,702			6,868
Customer advances		17,315			22,527			10,045
Customer deposits		7,235			6,647			7,590
Regulatory liabilities		8,959			11,161			17,379
Fair value of derivative instruments		22,118			19,791			9,626
Accrued environmental remediation costs		7,064			6,652			2,162
Accrued income and other taxes		817			-			-
Deferred revenues		3,853			4,801			3,857
Liabilities held for sale		-			-			321
Other		16,200			17,905			13,527
Total Current Liabilities		214,892			198,440			186,086
Deferred Credits and Other Liabilities
Regulatory liabilities - OPEB		8,974			6,988			8,930
Regulatory liabilities - other		112,122			108,887			113,621
Operating reserves		3,181			3,383			2,898
Fair value of derivative instruments		1,688			-			10,090
Accrued environmental remediation costs		10,559			11,036			3,201
Accrued OPEB costs		53,757			53,055			46,227
Accrued pension costs		95,896			121,911			96,524
Tax reserve		3,174			3,172			11,952
Other		20,520			18,802			17,966
Total Deferred Credits and Other Liabilities		309,871			327,234			311,409
Accumulated Deferred Income Tax		249,921			235,160			218,297
Commitments and Contingencies
Total Capitalization and Liabilities	$	1,796,388		$	1,730,112		$	1,741,177

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

Balance at December 31, 2011		16,862,087	$	1,686		(1,967,123	)	$	(92,908	)	$	351,053		$	(328	)	$	242,391		$	354		$	-	$	502,248
Comprehensive income:
Net income																		14,823								14,823
Dividends declared on Preferred Stock of subsidiary																		(242	)							(242	)
Change in fair value:
Investments																					(58	)				(58	)
Dividends declared on common stock																		(8,279	)							(8,279	)
Treasury shares activity - net						19,889			930			(2,747	)													(1,817	)
Balance at March 31, 2012		16,862,087	$	1,686		(1,947,234	)	$	(91,978	)	$	348,306		$	(328	)	$	248,693		$	296		$	-	$	506,675

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,
	2012			2011
Operating Revenues
Electric	$	129,272		$	154,570
Natural gas		55,850			75,482
Total Operating Revenues		185,122			230,052

Operating Expenses
Operation:
Purchased electricity and fuel used in electric generation		45,059			70,268
Purchased natural gas		24,614			41,798
Other expenses of operation		59,886			69,254
Depreciation and amortization		9,468			8,921
Taxes, other than income tax		13,491			13,235
Total Operating Expenses		152,518			203,476

Operating Income		32,604			26,576

Other Income and Deductions
Interest on regulatory assets and other interest income		2,146			1,866
Regulatory adjustments for interest costs		319			383
Other - net		(328	)		(563	)
Total Other Income		2,137			1,686

Interest Charges
Interest on long-term debt		5,728			5,904
Interest on regulatory liabilities and other interest		1,527			1,470
Total Interest Charges		7,255			7,374

Income Before Income Taxes		27,486			20,888

Income Taxes		10,753			8,249

Net Income		16,733			12,639

Dividends Declared on Cumulative Preferred Stock		242			242

Income Available for Common Stock	$	16,491		$	12,397

CENTRAL HUDSON STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)

(In Thousands)

	Three Months Ended March 31,
	2012		2011
Net Income	$	16,733	$	12,639
Other Comprehensive Income		-		-
Comprehensive Income	$	16,733	$	12,639

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,
	2012			2011
Operating Activities:
Net income	$	16,733		$	12,639
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		8,977			8,481
Amortization		491			440
Deferred income taxes - net		12,071			7,951
Bad debt expense		2,125			2,076
Pension expense		7,233			8,289
OPEB expense		1,996			1,999
Regulatory liability - rate moderation		(1,033	)		(3,451	)
Revenue decoupling mechanism recorded		(950	)		5,280
Regulatory asset amortization		1,722			1,743
Changes in operating assets and liabilities - net:
Accounts receivable, unbilled revenues and other receivables		(7,437	)		(12,231	)
Fuel, materials and supplies		4,648			5,117
Special deposits and prepayments		(3,203	)		(3,055	)
Income and other taxes		(942	)		(1,954	)
Accounts payable		(2,855	)		(4,425	)
Accrued interest		504			399
Customer advances		(3,374	)		(7,726	)
Pension plan contribution		(28,165	)		(8,157	)
Revenue decoupling mechanism collected		(1,310	)		1,742
Regulatory asset - storm deferral		(3,042	)		-
Regulatory asset - MGP site remediation		951			559
Regulatory asset - Temporary State Assessment		(3,332	)		(2,272	)
Deferred natural gas and electric costs		7,883			25,334
Other - net		1,478			4,174
Net cash provided by operating activities		11,169			42,952

Investing Activities:
Additions to utility plant		(25,783	)		(16,117	)
Other - net		(777	)		(453	)
Net cash used in investing activities		(26,560	)		(16,570	)

Financing Activities:
Redemption of long-term debt		(36,000	)		-
Proceeds from issuance of long-term debt		48,000			-
Borrowings of short-term debt - net		57,500			-
Dividends paid to parent - CH Energy Group		-			(11,000	)
Dividends paid on cumulative Preferred Stock		(242	)		(242	)
Other - net		(602	)		(228	)
Net cash provided by (used in) financing activities		68,656			(11,470	)

Net Change in Cash and Cash Equivalents		53,265			14,912
Cash and Cash Equivalents - Beginning of Period		2,521			9,622
Cash and Cash Equivalents - End of Period	$	55,786		$	24,534

Supplemental Disclosure of Cash Flow Information:
Interest paid	$	5,312		$	5,912
Federal and state income taxes paid	$	-		$	-
Additions to plant included in liabilities	$	4,126		$	2,165

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,
	2012		2011		2011
ASSETS
Utility Plant
Electric	$	1,017,986	$	1,008,394	$	972,543
Natural gas		301,609		305,664		295,914
Common		151,086		147,286		143,398
Gross Utility Plant		1,470,681		1,461,344		1,411,855

Less: Accumulated depreciation		390,307		388,784		378,038
Net		1,080,374		1,072,560		1,033,817

Construction work in progress		66,518		58,847		50,588
Net Utility Plant		1,146,892		1,131,407		1,084,405

Non-Utility Property and Plant		524		524		681
Less: Accumulated depreciation		-		-		35
Net Non-Utility Property and Plant		524		524		646

Current Assets
Cash and cash equivalents		55,786		2,521		24,534
Accounts receivable from customers - net of allowance for doubtful accounts of $5.4 million, $5.2 million and $5.3 million, respectively		65,922		61,610		86,292
Accrued unbilled utility revenues		14,283		15,299		14,778
Other receivables		6,086		5,301		2,832
Fuel, materials and supplies - at average cost		16,389		21,037		14,910
Regulatory assets		49,683		49,526		36,809
Fair value of derivative instruments		-		320		68
Special deposits and prepayments		21,311		18,258		20,268
Accumulated deferred income tax		2,019		-		11,133
Total Current Assets		231,479		173,872		211,624

Deferred Charges and Other Assets
Regulatory assets - pension plan		151,737		159,020		134,199
Regulatory assets - other		119,559		114,980		86,069
Fair value of derivative instruments		-		931		-
Unamortized debt expense		5,035		4,535		4,831
Other investments		14,745		14,047		13,110
Other		2,218		3,065		2,449
Total Deferred Charges and Other Assets		293,294		296,578		240,658

Total Assets	$	1,672,189	$	1,602,381	$	1,537,333

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, except share amounts)

	March 31,			December 31,			March 31,
	2012			2011			2011
CAPITALIZATION AND LIABILITIES
Capitalization
Common Stock (30,000,000 shares authorized: $5 par value; 16,862,087 shares issued and outstanding)	$	84,311		$	84,311		$	84,311
Paid-in capital		199,980			199,980			199,980
Retained earnings		182,456			165,965			166,295
Capital stock expense		(4,961	)		(4,961	)		(4,961	)
Total Equity		461,786			445,295			445,625

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

Long-term debt		465,950			417,950			417,901
Total Capitalization		948,763			884,272			884,553

Current Liabilities
Current maturities of long-term debt		-			36,000			36,000
Notes payable		59,000			1,500			-
Accounts payable		27,299			35,731			36,833
Accrued interest		6,686			6,183			6,366
Dividends payable - Preferred Stock		242			242			242
Accrued vacation and payroll		5,671			5,556			5,351
Customer advances		11,231			14,604			6,028
Customer deposits		7,170			6,582			7,514
Regulatory liabilities		8,959			11,161			17,379
Fair value of derivative instruments		22,118			19,791			9,626
Accrued environmental remediation costs		6,562			6,117			1,042
Accrued income and other taxes		1,564			1,274			699
Accumulated deferred income tax		-			156			-
Other		10,764			14,855			8,543
Total Current Liabilities		167,266			159,752			135,623

Deferred Credits and Other Liabilities
Regulatory liabilities - OPEB		8,974			6,988			8,930
Regulatory liabilities - other		112,122			108,887			113,621
Operating reserves		2,148			2,120			2,102
Fair value of derivative instruments		1,688			-			10,090
Accrued environmental remediation costs		9,407			9,726			1,693
Accrued OPEB costs		53,757			53,055			46,227
Accrued pension costs		95,896			121,911			96,524
Tax reserve		3,174			3,172			11,952
Other		19,564			17,955			17,080
Total Deferred Credits and Other Liabilities		306,730			323,814			308,219

Accumulated Deferred Income Tax		249,430			234,543			208,938

Commitments and Contingencies

Total Capitalization and Liabilities	$	1,672,189		$	1,602,381		$	1,537,333

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
	Shares Issued		Amount		Shares Repurchased		Amount		Paid-In Capital		Capital Stock Expense			Retained Earnings		Accumulated Other Comprehensive Income / (Loss)		Total Equity
Balance at December 31, 2010		16,862,087	$	84,311		-	$	-	$	199,980	$	(4,961	)	$	164,898	$	-	$	444,228
Net income															12,639				12,639
Dividends declared: