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
September 30, 2009

OR

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 Registrants (1) have 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) have been subject to such filing requirements for the past 90 days.

Yes  x      No  o

 
 
 

Indicate by check mark CH Energy Group, Inc. 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).

Yes  o      No  o

Indicate by check mark Central Hudson Gas & Electric Corporation 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).

Yes  o      No  o

Indicate by check mark whether CH Energy Group, Inc. 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):

Large Accelerated Filer   o         Accelerated Filer   x

Non-Accelerated Filer   o  Smaller Reporting Company   o

Indicate by check mark whether Central Hudson Gas & Electric Corporation 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):

Large Accelerated Filer   o  Accelerated Filer   o

Non-Accelerated Filer   x  Smaller Reporting Company  o

Indicate by check mark whether CH Energy Group, Inc. is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes  o      No  x

Indicate by check mark whether Central Hudson Gas & Electric Corporation is a shell company (as defined in Rule 12b-2 of the Exchange Act):

Yes  o      No  x

As of the close of business on October 30, 2009, (i) CH Energy Group, Inc. had outstanding 15,804,806 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 SEPTEMBER 30, 2009

TABLE OF CONTENTS

 
PART I – FINANCIAL INFORMATION
PAGE
     
ITEM 1 – FINANCIAL STATEMENTS (UNAUDITED)
  
     
CH ENERGY GROUP, INC.
  
     
 
Consolidated Statement of Income –
  
 
6
 
7
     
 
Consolidated Statement of Comprehensive Income –
  
 
8
 
8
     
   
 
Nine Months Ended September 30, 2009 and 2008
9
     
   
 
December 31, 2008 and September 30, 2008
10
     
   
 
Nine Months Ended September 30, 2009 and 2008
12
     
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
  
     
 
Statement of Income –
  
 
13
 
14
     
 
Statement of Comprehensive Income –
  
 
15
 
15
     
   
 
Nine Months Ended September 30, 2009 and 2008
16
     
   
 
December 31, 2008 and September 30, 2008
17
     
   
 
Nine Months Ended September 30, 2009 and 2008
19
     
 
20

 
 
TABLE OF CONTENTS
  
     
   
PAGE
     
ITEM 2
67
     
ITEM 3
114
     
ITEM 4
114
     
 
PART II – OTHER INFORMATION
  
     
ITEM 1
115
     
ITEM 1A
115
     
ITEM 6
117
     
118
   
119
   
CERTIFICATIONS
123
_______________________________________________

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.


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
  
   
September 30,
  
   
2009
    
2008
  
Operating Revenues
  
 
    
 
  
Electric
   $ 138,685     $ 179,001  
Natural gas
     16,243       21,773  
Competitive business subsidiaries:
                
Petroleum products
     47,244       88,618  
Other
     11,473       11,395  
Total Operating Revenues
     213,645       300,787  
Operating Expenses
                
Operation:
                
Purchased electricity and fuel used in electric generation
     61,379       116,900  
Purchased natural gas
     5,798       13,405  
Purchased petroleum
     40,258       82,002  
Other expenses of operation - regulated activities
     50,311       39,247  
Other expenses of operation - competitive business subsidiaries
     19,118       20,508  
Depreciation and amortization
     10,277       9,713  
Taxes, other than income tax
     10,228       9,634  
Total Operating Expenses
     197,369       291,409  
Operating Income
     16,276       9,378  
Other Income and Deductions
                
(Loss) income from unconsolidated affiliates
     (75 )     123  
Interest on regulatory assets and investment income
     1,218       1,339  
Other - net
     (1,384 )     (41 )
Total Other Income
     (241 )     1,421  
Interest Charges
                
Interest on long-term debt
     5,355       4,926  
Interest on regulatory liabilities and other interest
     1,711       1,485  
Total Interest Charges
     7,066       6,411  
Income before income taxes, non-controlling interest and preferred dividends of subsidiary
     8,969       4,388  
Income Taxes
     3,327       1,193  
Net Income
     5,642       3,195  
Net income attributable to non-controlling interest:
                
Non-controlling interest in subsidiary
     48       68  
Dividends declared on Preferred Stock of subsidiary
     242       242  
Net income attributable to CH Energy Group
     5,352       2,885  
Dividends declared on Common Stock
     8,535       8,523  
Change in Retained Earnings
   $ (3,183 )   $ (5,638 )
                 
Common Stock:
                
Average shares outstanding
                
Basic
     15,776       15,771  
Diluted
     15,854       15,819  
                 
Amounts attributable to CH Energy Group common shareholders
                
Earnings per share
                
Basic
   $ 0.34     $ 0.18  
Diluted
   $ 0.34     $ 0.18  
                 
Dividends Declared Per Share
   $ 0.54     $ 0.54  


The Notes to Financial Statements are an integral part hereof.

 
CH ENERGY GROUP CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
  
(In Thousands, except per share amounts)
      
   
Nine Months Ended
  
   
September 30,
  
   
2009
    
2008
  
Operating Revenues
  
 
    
 
  
Electric
   $ 404,035     $ 468,659  
Natural gas
     137,422       142,267  
Competitive business subsidiaries:
                
Petroleum products
     218,273       379,653  
Other
     32,618       33,653  
Total Operating Revenues
     792,348       1,024,232  
Operating Expenses
                
Operation:
                
Purchased electricity and fuel used in electric generation
     205,014       291,675  
Purchased natural gas
     89,924       98,008  
Purchased petroleum
     167,198       334,982  
Other expenses of operation - regulated activities
     141,022       123,414  
Other expenses of operation - competitive business subsidiaries
     63,748       65,716  
Depreciation and amortization
     30,561       28,722  
Taxes, other than income tax
     29,966       28,425  
Total Operating Expenses
     727,433       970,942  
Operating Income
     64,915       53,290  
Other Income and Deductions
                
Income from unconsolidated affiliates
     2       459  
Interest on regulatory assets and investment income
     4,684       4,404  
Reserve for note receivable
     (1,299 )     -  
Other - net
     (3,744 )     (159 )
Total Other Income
     (357 )     4,704  
Interest Charges
                
Interest on long-term debt
     15,229       15,064  
Interest on regulatory liabilities and other interest
     4,575       4,116  
Total Interest Charges
     19,804       19,180  
Income before income taxes, non-controlling interest and preferred dividends of subsidiary
     44,754       38,814  
Income Taxes
     17,152       14,102  
Net Income
     27,602       24,712  
Net (loss) income attributable to non-controlling interest:
                
Non-controlling interest in subsidiary
     (141 )     129  
Dividends declared on Preferred Stock of subsidiary
     727       727  
Net income attributable to CH Energy Group
     27,016       23,856  
Dividends declared on Common Stock
     25,585       25,564  
Change in Retained Earnings
   $ 1,431     $ (1,708 )
Common Stock:
                
Average shares outstanding
                
Basic
     15,774       15,767  
Diluted
     15,851       15,815  
Amounts attributable to CH Energy Group common shareholders
                
Earnings per share
                
Basic
   $ 1.71     $ 1.51  
Diluted
   $ 1.70     $ 1.51  
Dividends Declared Per Share
   $ 1.62     $ 1.62  


The Notes to Financial Statements are an integral part hereof.

 
CH ENERGY GROUP CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
  
(In Thousands)
      
   
Three Months Ended
  
   
September 30,
  
   
2009
    
2008
  
Net Income
   $ 5,642     $ 3,195  
                 
Other Comprehensive Income:
                
                 
Fair value of cash flow hedges:
                
Unrealized losses - net of tax of $6 and $125
     (9 )     (188 )
                 
Reclassification for gains realized in net income -net of tax of $0 and $0
     -       -  
                 
Net unrealized losses on investments held by equity method investees - net of tax of $7 and $61
     (10 )     (91 )
Other comprehensive loss
     (19 )     (279 )
Comprehensive Income
     5,623       2,916  
Comprehensive income attributable to non-controlling interest
     290       310  
Comprehensive income attributable to CH Energy Group
   $ 5,333     $ 2,606  

   
Nine Months Ended
  
   
September 30,
  
   
2009
    
2008
  
Net Income
   $ 27,602     $ 24,712  
                 
Other Comprehensive Income:
                
                 
Fair value of cash flow hedges:
                
Unrealized gains - net of tax of $(33) and ($867)
     49       1,300  
                 
Reclassification for losses realized in net income -net of tax of $0 and $1,343
     -       (2,014 )
                 
Net unrealized losses on investments held by equity method investees – net of tax of $8 and $214
     (11 )     (321 )
Other comprehensive income (loss)
     38       (1,035 )
Comprehensive Income
     27,640       23,677  
Comprehensive income attributable to non-controlling interest
     586       856  
Comprehensive income attributable to CH Energy Group
   $ 27,054     $ 22,821  


The Notes to Financial Statements are an integral part hereof.

 
CH ENERGY GROUP CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
  
(In Thousands)
      
   
Nine Months Ended
  
   
September 30,
  
   
2009
    
2008
  
Operating Activities:
  
 
    
 
  
Net income
   $ 27,602     $ 24,712  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation
     26,647       25,009  
Amortization
     3,914       3,713  
Deferred income taxes - net
     2,180       6,674  
Provision for uncollectibles
     11,530       7,736  
Distributed equity in earnings of unconsolidated affiliates
     941       844  
Pension expense
     13,296       9,493  
Other post-employment benefits ("OPEB") expense
     6,669       7,551  
Regulatory liability - rate moderation
     (3,789 )     (5,901 )
Revenue decoupling mechanism
     (5,529 )     -  
Regulatory asset amortization
     3,378       3,322  
Gain on sale of property and plant
     (10 )     (98 )
Changes in operating assets and liabilities - net of business acquisitions:
                
Accounts receivable, unbilled revenues and other receivables
     38,870       15,682  
Fuel, materials and supplies
     5,352       (14,066 )
Special deposits and prepayments
     603       4,231  
Accounts payable
     (16,431 )     11,352  
Accrued income taxes and interest
     8,968       (2,264 )
Customer advances
     2,159       2,577  
Pension plan contribution
     (15,000 )     (12,895 )
OPEB contribution
     (1,300 )     (4,200 )
Regulatory asset - manufactured gas plant ("MGP") site remediations
     (1,595 )     (1,051 )
Regulatory asset - PSC tax surcharge and general assessment
     (15,566 )     -  
Deferred natural gas and electric costs
     17,993       (4,832 )
Customer benefit fund
     (33 )     (369 )
Other - net
     10,155       1,464  
Net cash provided by operating activities
     121,004       78,684  
Investing Activities:
                
Proceeds from sale of short-term investments
     -       3,545  
Proceeds from sale of property and plant
     194       181  
Additions to utility and other property and plant
     (93,946 )     (62,573 )
Acquisitions made by competitive business subsidiaries
     -       (9,262 )
Other - net
     (3,694 )     958  
Net cash used in investing activities
     (97,446 )     (67,151 )
Financing Activities:
                
Redemption of long-term debt
     (20,000 )     -  
Proceeds from issuance of long-term debt
     74,000       -  
(Repayments) borrowings of short-term debt - net
     (18,500 )     9,000  
Dividends paid on Preferred Stock of subsidiary
     (727 )     (727 )
Dividends paid on Common Stock
     (25,573 )     (25,559 )
Other - net
     (366 )     5,765  
Net cash provided by (used in) financing activities
     8,834       (11,521 )
Net Change in Cash and Cash Equivalents
     32,392       12  
Cash and Cash Equivalents at Beginning of Period
     19,825       11,313  
Cash and Cash Equivalents at End of Period
   $ 52,217     $ 11,325  
Supplemental Disclosure of Cash Flow Information:
                
Interest paid
   $ 15,410     $ 18,475  
Federal and state taxes paid
   $ 24,785     $ 9,986  
Additions to plant included in liabilities
   $ 2,685     $ 16,349  


The Notes to Financial Statements are an integral part hereof.

 
CH ENERGY GROUP CONSOLIDATED BALANCE SHEET (UNAUDITED)
  
(In Thousands)
                  
   
September 30,
    
December 31,
    
September 30,
  
   
2009
    
2008
    
2008
  
ASSETS
  
 
    
 
    
 
  
Utility Plant
  
 
    
 
    
 
  
Electric
   $ 899,355     $ 862,465     $ 842,006  
Natural gas
     276,639       263,874       259,377  
Common
     138,925       135,732       118,148  
      1,314,919       1,262,071       1,219,531  
Less: Accumulated depreciation
     373,693       369,925       368,065  
      941,226       892,146       851,466  
Construction work in progress
     62,957       53,778       80,302  
Net Utility Plant
     1,004,183       945,924       931,768  
Non-Utility Property & Plant
                        
Griffith non-utility property & plant
     43,592       42,691       42,023  
Other non-utility property & plant
     23,176       15,345       15,294  
      66,768       58,036       57,317  
Less:  Accumulated depreciation - Griffith
     25,646       23,398       22,710  
Less:  Accumulated depreciation - other
     2,984       2,212       2,000  
Net Non-Utility Property & Plant
     38,138       32,426       32,607  
Current Assets
                        
Cash and cash equivalents
     52,217       19,825       11,325  
Accounts receivable from customers - net of allowance for doubtful accounts; $10.0 million, $8.8 million and $6.5 million, respectively
     85,145       131,727       119,338  
Accrued unbilled utility revenues
     9,308       12,657       8,087  
Other receivables
     8,203       7,914       6,854  
Fuel, materials and supplies
     31,233       36,585       47,794  
Regulatory assets
     64,057       60,502       52,179  
Fair value of derivative instruments
     263       -       28  
Special deposits and prepayments
     20,815       21,344       23,904  
Accumulated deferred income tax
     7,486       7,498       7,077  
Total Current Assets
     278,727       298,052       276,586  
Deferred Charges and Other Assets
                        
Regulatory assets - pension plan
     174,723       197,934       40,641  
Regulatory assets - OPEB
     6,429       4,257       -  
Regulatory assets - other
     106,215       109,743       117,075  
Goodwill
     67,455       67,455       67,564  
Other intangible assets - net
     33,006       36,129       37,037  
Unamortized debt expense
     5,093       5,009       4,067  
Investments in unconsolidated affiliates
     8,417       9,711       9,882  
Other investments
     10,296       7,815       9,464  
Other
     16,809       15,728       16,146  
Total Deferred Charges and Other Assets
     428,443       453,781       301,876  
Total Assets
   $ 1,749,491     $ 1,730,183     $ 1,542,837  


The Notes to Financial Statements are an integral part hereof.

 
CH ENERGY GROUP CONSOLIDATED BALANCE SHEET (CONT'D) (UNAUDITED)
  
(In Thousands)
      
   
September 30,
    
December 31,
    
September 30,
  
 
  
2009
    
2008
    
2008
  
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) 15,790,431 shares, 15,783,083 shares, and 15,783,083 shares outstanding, respectively
   $ 1,686     $ 1,686     $ 1,686  
Paid-in capital
     350,905       350,873       350,828  
Retained earnings
     218,065       216,634       213,931  
Treasury stock - 1,071,656 shares, 1,079,004 shares, and 1,079,004 shares, respectively
     (45,026 )     (45,386 )     (45,386 )
Accumulated other comprehensive income
     93       55       138  
Capital stock expense
     (328 )     (328 )     (328 )
Total CH Energy Group Common Shareholders' Equity
     525,395       523,534       520,869  
Non-controlling interest in subsidiary
     1,520       1,448       1,474  
Total Equity
     526,915       524,982       522,343  
Preferred Stock of subsidiary
     21,027       21,027       21,027  
Long-term debt
     463,897       413,894       383,893  
Total Capitalization
     1,011,839       959,903       927,263  
Current Liabilities
                        
Current maturities of long-term debt
     24,000       20,000       20,000  
Notes payable
     17,000       35,500       51,500  
Accounts payable
     34,025       52,824       54,596  
Accrued interest
     6,238       5,899       4,288  
Dividends payable
     8,777       8,765       8,765  
Accrued vacation and payroll
     6,910       6,628       6,485  
Customer advances
     32,601       30,442       25,622  
Customer deposits
     8,582       8,445       8,413  
Regulatory liabilities
     24,064       4,275       3,922  
Fair value of derivative instruments
     12,887       15,759       14,080  
Accrued environmental remediation costs
     12,986       5,757       7,876  
Accrued income taxes
     9,070       441       409  
Deferred revenues
     7,476       8,827       7,424  
Other
     14,344       27,974       31,651  
Total Current Liabilities
     218,960       231,536       245,031  
Deferred Credits and Other Liabilities
                        
Regulatory liabilities - OPEB
     -       -       15,505  
Regulatory liabilities - other
     101,176       130,893       123,828  
Operating reserves
     4,931       5,155       4,802  
Accrued environmental remediation costs
     14,518       21,796       21,860  
Accrued OPEB costs
     54,381       52,645       30,019  
Accrued pension costs
     157,030       161,674       474  
Other
     14,525       12,478       13,795  
Total Deferred Credits and Other Liabilities
     346,561       384,641       210,283  
Accumulated Deferred Income Tax
     172,131       154,103       160,260  
Commitments and Contingencies
                        
Total Capitalization and Liabilities
   $ 1,749,491     $ 1,730,183     $ 1,542,837  


The Notes to Financial Statements are an integral part hereof.

 
CH ENERGY GROUP CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
(In Thousands, except share and per share amounts)

   
CH Energy Group Common Shareholders
              
   
Common Stock
$0.10 par value; 30,000,000 shares authorized
  
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 January 1, 2008
     16,862,087   $ 1,686     (1,100,087 ) $ (46,252 ) $ 351,230   $ (328 ) $ 215,639   $ 1,173     $ 1,345     $ 524,493  
Comprehensive income:
                                                                  
Net income
                                         23,856             129       23,985  
Change in fair value:
                                                                  
Derivative instruments
                                               1,300               1,300  
Investments
                                               (2,014 )             (2,014 )
Reclassification adjustments for losses recognized in net income
                                               (321 )             (321 )
Dividends declared on common stock ($2.16 per share)
                                         (25,564 )                   (25,564 )
Treasury shares activity - net
                 21,083     866     (402 )                               464  
Balance at September 30, 2008
     16,862,087   $ 1,686     (1,079,004 ) $ (45,386 ) $ 350,828   $ (328 ) $ 213,931   $ 138     $ 1,474     $ 522,343  
                                                                   
Balance at January 1, 2009
     16,862,087   $ 1,686     (1,079,004 ) $ (45,386 ) $ 350,873   $ (328 ) $ 216,634   $ 55     $ 1,448     $ 524,982  
Comprehensive income:
                                                                  
Net income
                                         27,016             (141 )     26,875  
Capital Contributions
                                                       213       213  
Change in fair value:
                                                                  
Derivative instruments
                                               49               49  
Investments
                                               (11 )             (11 )
Reclassification adjustments for losses recognized in net income
                                                               -  
Dividends declared on common stock ($2.16 per share)
                                         (25,585 )                   (25,585 )
Treasury shares activity - net
                 7,348     360     32                                 392  
Balance at September 30, 2009
     16,862,087   $ 1,686     (1,071,656 ) $ (45,026 ) $ 350,905   $ (328 ) $ 218,065   $ 93     $ 1,520     $ 526,915  


The Notes to Financial Statements are an integral part hereof.

 
CENTRAL HUDSON STATEMENT OF INCOME (UNAUDITED)
  
(In Thousands)
      
   
Three Months Ended
  
   
September 30,
  
   
2009
    
2008
  
Operating Revenues
  
 
    
 
  
Electric
   $ 138,685     $ 179,001  
Natural gas
     16,243       21,773  
Total Operating Revenues
     154,928       200,774  
                 
Operating Expenses
                
Operation:
                
Purchased electricity and fuel used in electric generation
     60,017       115,413  
Purchased natural gas
     5,798       13,405  
Other expenses of operation
     50,311       39,247  
Depreciation and amortization
     8,015       7,566  
Taxes, other than income tax
     9,867       9,452  
Total Operating Expenses
     134,008       185,083  
                 
Operating Income
     20,920       15,691  
                 
Other Income and Deductions
                
Interest on regulatory assets and other interest income
     1,202       962  
Other - net
     (710 )     120  
Total Other Income
     492       1,082  
                 
Interest Charges
                
Interest on other long-term debt
     4,515       4,926  
Interest on regulatory liabilities and other interest
     1,693       1,374  
Total Interest Charges
     6,208       6,300  
                 
Income Before Income Taxes
     15,204       10,473  
                 
Income Taxes
     6,333       4,346  
                 
Net Income
     8,871       6,127  
                 
Dividends Declared on Cumulative Preferred Stock
     242       242  
                 
Income Available for Common Stock
   $ 8,629     $ 5,885  


The Notes to Financial Statements are an integral part hereof.

 
CENTRAL HUDSON STATEMENT OF INCOME (UNAUDITED)
  
(In Thousands)
      
   
Nine Months Ended
  
   
September 30,
  
   
2009
    
2008
  
Operating Revenues
  
 
    
 
  
Electric
   $ 404,035     $ 468,659  
Natural gas
     137,422       142,267  
Total Operating Revenues
     541,457       610,926  
                 
Operating Expenses
                
Operation:
                
Purchased electricity and fuel used in electric generation
     201,782       287,156  
Purchased natural gas
     89,924       98,008  
Other expenses of operation
     141,022       123,414  
Depreciation and amortization
     24,013       22,380  
Taxes, other than income tax
     29,197       27,886  
Total Operating Expenses
     485,938       558,844  
                 
Operating Income
     55,519       52,082  
                 
Other Income and Deductions
                
Interest on regulatory assets and other interest income
     3,813       3,290  
Other - net
     (2,271 )     558  
Total Other Income
     1,542       3,848  
                 
Interest Charges
                
Interest on other long-term debt
     13,863       15,064  
Interest on regulatory liabilities and other interest
     4,454       3,589  
Total Interest Charges
     18,317       18,653  
                 
Income Before Income Taxes
     38,744       37,277  
                 
Income Taxes
     16,062       15,212  
                 
Net Income
     22,682       22,065  
                 
Dividends Declared on Cumulative Preferred Stock
     727       727  
                 
Income Available for Common Stock
   $ 21,955     $ 21,338  


The Notes to Financial Statements are an integral part hereof.

 
CENTRAL HUDSON STATEMENT OF COMPREHENSIVE INCOME (UNAUDITED)
  
(In Thousands)
    
 
Three Months Ended
  
 
September 30,
  
    2009     2008  
Net Income
   $ 8,871     $ 6,127  
Other Comprehensive Income
     -       -  
                 
Comprehensive Income
   $ 8,871     $ 6,127  
 
 
   
 
September 30,
  
    2009     2008  
Net Income
   $ 22,682     $ 22,065  
Other Comprehensive Income
     -       -  
                 
Comprehensive Income
   $ 22,682     $ 22,065  

 
The Notes to Financial Statements are an integral part hereof.

 
CENTRAL HUDSON STATEMENT OF CASH FLOWS (UNAUDITED)
  
(In Thousands)
      
   
Nine Months Ended
  
   
September 30,
  
   
2009
    
2008
  
Operating Activities:
  
 
    
 
  
Net Income
   $ 22,682     $ 22,065  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation
     23,217       21,746  
Amortization
     796       634  
Deferred income taxes - net
     (376 )     4,090  
Provision for uncollectibles
     7,966       5,326  
Pension expense
     13,296       9,493  
OPEB expense
     6,669       7,551  
Regulatory liability - rate moderation
     (3,789 )     (5,901 )
Revenue decoupling mechanism
     (5,529 )     -  
Regulatory asset amortization
     3,378       3,322  
Loss on sale of property and plant
     25       -  
Changes in operating assets and liabilities - net:
                
Accounts receivable, unbilled revenues and other receivables
     20,578       7,751  
Fuel, materials and supplies
     4,554       (15,729 )
Special deposits and prepayments
     2,332       5,093  
Accounts payable
     (13,102 )     15,857  
Accrued income taxes and interest
     8,392       899  
Customer advances
     1,437       (5,194 )
Pension plan contribution
     (15,000 )     (12,895 )
OPEB contribution
     (1,300 )     (4,200 )
Regulatory asset - MGP site remediations
     (1,595 )     (1,051 )
Regulatory asset - PSC tax surcharge and general assessment
     (15,566 )     -  
Deferred natural gas and electric costs
     17,993       (4,832 )
Customer benefit fund
     (33 )     (369 )
Other - net
     12,209       3,360  
Net cash provided by operating activities
     89,234       57,016  
Investing Activities:
                
Additions to utility plant
     (85,843 )     (58,268 )
Other - net
     (3,937 )     (1,180 )
Net cash used in investing activities
     (89,780 )     (59,448 )
Financing Activities:
                
Redemption of long-term debt
     (20,000 )     -  
Proceeds from issuance of long-term debt
     24,000       -  
Repayments of short-term debt - net
     (8,500 )     (6,000 )
Additional paid-in capital
     25,000       -  
Dividends paid on cumulative Preferred Stock
     (727 )     (727 )
Other - net
     (369 )     5,765  
Net cash provided by (used in) provided by financing activities
     19,404       (962 )
Net Change in Cash and Cash Equivalents
     18,858       (3,394 )
Cash and Cash Equivalents - Beginning of Period
     2,455       3,592  
Cash and Cash Equivalents - End of Period
   $ 21,313     $ 198  
Supplemental Disclosure of Cash Flow Information:
                
Interest paid
   $ 15,282     $ 17,950  
Federal and state taxes paid
   $ 25,103     $ 8,642  
Additions to plant included in liabilities
   $ 1,723     $ 16,349  


The Notes to Financial Statements are an integral part hereof.

 
CENTRAL HUDSON BALANCE SHEET (UNAUDITED)
  
(In Thousands)
                  
   
September 30,
    
December 31,
    
September 30,
  
 
  
2009
    
2008
    
2008
  
ASSETS
  
 
    
 
    
 
  
Utility Plant
  
 
    
 
    
 
  
Electric
   $ 899,355     $ 862,465     $ 842,006  
Natural gas
     276,639       263,874       259,377  
Common
     138,925       135,732       118,148  
      1,314,919       1,262,071       1,219,531  
                         
Less: Accumulated depreciation
     373,693       369,925       368,065  
      941,226       892,146       851,466  
                         
Construction work in progress
     62,957       53,778