Attached files
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| 8-K - CH ENERGY GROUP 8-K 10-27-2011 - CH ENERGY GROUP INC | form8k.htm |
Exhibit 99
NEWS RELEASE
February 16, 2012
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For Release:
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Immediately
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Contact:
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Investors:
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Stacey A. Renner, (845) 486-5730
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News Media:
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Denise D. VanBuren, (845) 471-8323
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CH Energy Group’s Earnings Strong After Eventful Year
(Poughkeepsie, NY) CH Energy Group, Inc. (NYSE:CHG), holding company parent of Central Hudson Gas & Electric Corporation, today reported 2011 earnings of $2.97 per share, up 53 cents per share from the $2.44 earned in 2010 when earnings had been impacted by a significant charge related to the impairment of non-utility assets.
“2011 was as an eventful year, during which our company was able to rise to critical operating challenges while also positioning itself for the future. Not only did Central Hudson respond exceptionally well to the stormiest conditions it ever faced, but CH Energy Group completed its transition in strategic direction by divesting four renewable energy projects,” said Chairman of the Board, President and C.E.O. Steven V. Lant. “We ended 2011 as a company with stronger earnings, a higher dividend and a lower risk profile. Our strategic decision to refocus on our core energy delivery businesses has proven out.”
Lant noted that earnings per share for 2011 would have been 31 cents per share higher but for the estimated cumulative impact of several weather events, including Tropical Storm Irene and an unusual October snowstorm. Results were bolstered in 2011 by 10 cents per share worth of incentives earned by Central Hudson for its strong performance in delivering energy efficiency programs to customers and by proactive cost management throughout the year. Additionally, proceeds from divestitures funded a substantial share repurchase that elevated earnings per share by 9 cents, with an additional 11 cents per share anticipated to occur in 2012, he said.
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“When annual results are adjusted to eliminate the impacts of significant events that caused earnings to vary from expected levels during the last two years, 2011’s earnings are $3.15 per share -- 37 cents higher than the similarly normalized results of 2010,” he explained.
CH Energy Group released the following results by business unit:
Central Hudson Gas & Electric Corporation
Central Hudson posted 2011 earnings of $2.88 per share, as compared to $2.86 per share during 2010; when adjusted for the type of significant items discussed above, earnings were 26 cents per share higher. The single largest driver was 42 cents per share of additional revenue that resulted from mid-year delivery rate increases; this revenue was needed to pay for higher expenses, including property taxes and depreciation, which increased over the prior year by 12 and 11 cents per share, respectively.
“It’s important to recognize that our current regulatory agreement allows us to continue to invest in our utility infrastructure to benefit our customers while producing sustainable earnings growth as our investment base expands,” Lant said. “Central Hudson now represents 93 percent of our total assets. It has a solid foundation and a promising future.”
Griffith Energy Services
Griffith Energy Services posted earnings of 10 cents per share during 2011, as compared to 11 cents per share during 2010. Lant said the fuel oil subsidiary experienced improved margins last year but noted that those higher margins were not enough to offset contractions in volume due to customer conservation brought on by the unusual combination of the continued weak economy and higher wholesale oil prices.
“We anticipate that we will see improved results going forward as a result of acquisitions that closed in the fourth quarter of 2011,” Lant said.
Other Businesses and Investments
CH Energy Group’s other businesses and investments reduced earnings by 1 cent per share during 2011, a 52-cent improvement as compared 2010, when a loss of 53 cents per share was posted.
“Once we made the decision to exit renewable energy, we moved quickly and decisively to divest assets that had the highest potential value. The divestiture process is now essentially complete,” Lant said. “The remaining renewable energy investments are not expected to have a material impact on the financial condition of CH Energy Group in the future.”
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About CH Energy Group, Inc.: CH Energy Group, Inc. is predominantly an energy delivery company headquartered in Poughkeepsie, NY. Regulated transmission and distribution subsidiary Central Hudson Gas & Electric Corporation serves approximately 300,000 electric and about 75,000 natural gas customers in eight counties of New York State’s Mid-Hudson River Valley, delivering natural gas and electricity in a 2,600-square-mile service territory that extends north from the suburbs of metropolitan New York City to the Capital District at Albany. CH Energy Group also operates Central Hudson Enterprises Corporation (CHEC), a non-regulated subsidiary composed primarily of Griffith Energy Services, which supplies petroleum products and related services to approximately 56,000 customers in the Mid Atlantic Region.
CH Energy Group's mission is to provide electricity, natural gas, petroleum and related services to an expanding customer base in a safe, reliable, courteous and affordable manner; to produce growing financial returns for shareholders; to foster a culture that encourages employees to reach their full potential; and to be a good corporate citizen.
# # #
Conference Call: Mr. Lant will conduct a conference call with investors to review financial results at 2:00 p.m. (ET) today, Feb. 16, 2012. Dial-in: 1-800-230-1093; Conference Name “CH Energy Group.” Supplemental materials will be posted to the Company’s Web site at www.CHEnergyGroup.com to assist participants in following the Conference Call presentation. A digitized replay of the call will be available from 4:30 p.m. eastern time on Feb. 16, 2012, until 11:59 p.m. on Mar. 16, 2012, by dialing 1-800-475-6701 and entering access code number 234877. In addition, the call will be webcast live in listen-only mode and available for replay for approximately 30 days within the Investor Relations section of the Company’s Web site at www.CHEnergyGroup.com.
Forward-Looking Statements –
Statements included in this news release and any 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 provided by Section 21E of the Exchange Act. Forward-looking statements may be identified by words including “anticipates,” “intends,” “estimates,” “believes,” “projects,” “expects,” “plans,” “assumes,” “seeks,” and similar expressions. Forward-looking statements including, without limitation, those relating to CH Energy Group’s and Central Hudson’s future business prospects, revenues, proceeds, working capital, investment valuations, 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: deviations from normal seasonal weather and storm activity; fuel prices; energy supply and demand; potential future acquisitions; legislative, regulatory, and competitive developments; interest rates; access to capital; market risks; electric and natural gas industry restructuring and cost recovery; the ability to obtain adequate and timely rate relief; changes in fuel supply or costs including future market prices for energy, capacity, and ancillary services; the success of strategies to satisfy electricity, natural gas, fuel oil, and propane requirements; the outcome of pending litigation and certain environmental matters, particularly the status of inactive hazardous waste disposal sites and waste site remediation requirements; and certain presently unknown or unforeseen factors, including, but not limited to, acts of terrorism. CH Energy Group and Central Hudson 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.
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CH ENERGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
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December 31,
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December 31,
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|||||||
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2011(1)
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2010(2)
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ASSETS
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(Thousands of Dollars)
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UTILITY PLANT
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Utility Plant
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$ | 1,461,344 | $ | 1,397,874 | ||||
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Less: Accumulated depreciation
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388,784 | 395,776 | ||||||
| 1,072,560 | 1,002,098 | |||||||
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Construction work in progress
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58,847 | 52,607 | ||||||
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Net Utility Plant
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1,131,407 | 1,054,705 | ||||||
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OTHER PROPERTY AND PLANT - NET
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10,187 | 68,313 | ||||||
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CURRENT ASSETS
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Cash and cash equivalents
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15,281 | 29,420 | ||||||
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Accounts receivable from customers - net
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90,937 | 99,402 | ||||||
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Fuel, materials and supplies
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25,114 | 25,447 | ||||||
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Fair value of derivative instruments
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349 | 146 | ||||||
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Regulatory assets
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49,526 | 89,905 | ||||||
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Special deposits and prepayments
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22,227 | 25,671 | ||||||
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Accumulated deferred income tax
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5,895 | - | ||||||
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Other
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24,811 | 24,239 | ||||||
| 234,140 | 294,230 | |||||||
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DEFERRED CHARGES AND OTHER ASSETS
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354,378 | 312,027 | ||||||
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TOTAL
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$ | 1,730,112 | $ | 1,729,275 | ||||
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CAPITALIZATION and LIABILITIES
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CAPITALIZATION
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Common Shareholders' Equity(3)
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$ | 502,248 | $ | 537,632 | ||||
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Non-controlling interest
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- | 172 | ||||||
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Cumulative Preferred Stock
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Not subject to mandatory redemption
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21,027 | 21,027 | ||||||
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Long-term debt
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446,003 | 502,959 | ||||||
| 969,278 | 1,061,790 | |||||||
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CURRENT LIABILITIES
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Current maturities of long-term debt
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37,006 | 941 | ||||||
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Notes payable
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6,500 | - | ||||||
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Accounts payable
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43,904 | 57,059 | ||||||
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Accrued interest
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6,333 | 6,398 | ||||||
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Dividends payable
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8,511 | 8,774 | ||||||
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Customer advances and deposits
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29,174 | 27,036 | ||||||
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Regulatory liabilities
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11,161 | 18,596 | ||||||
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Fair value of derivative instruments
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19,791 | 13,183 | ||||||
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Accumulated deferred income tax
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- | 9,634 | ||||||
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Other
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36,060 | 32,507 | ||||||
| 198,440 | 174,128 | |||||||
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DEFERRED CREDITS AND OTHER LIABILITIES
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327,234 | 300,918 | ||||||
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ACCUMULATED DEFERRED INCOME TAX
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235,160 | 192,439 | ||||||
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TOTAL
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$ | 1,730,112 | $ | 1,729,275 | ||||
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(1)
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Subject to explanations contained in the Annual Report on Form 10-K of the Company to the SEC for the Year ended December 31, 2011.
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(2)
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Subject to explanations contained in the Annual Report on Form 10-K of the Company to the SEC for the Year ended December 31, 2010.
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(3)
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Shares outstanding at December 31, 2011 = 14,894,964. Shares outstanding at December 31, 2010 = 15,799,262.
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CH ENERGY GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
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Year Ended December 31,
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2011
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2010
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2009
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(In Thousands, except per share amounts)
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Operating Revenues
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Electric
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$ | 538,548 | $ | 563,139 | $ | 536,170 | ||||||
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Natural Gas
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161,974 | 156,795 | 174,137 | |||||||||
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Competitive business subsidiaries:
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Petroleum products
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266,066 | 220,518 | 193,288 | |||||||||
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Other
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18,932 | 19,656 | 17,962 | |||||||||
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Total Operating Revenues
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985,520 | 960,108 | 921,557 | |||||||||
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Operating Expenses
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Operation:
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Purchased electricity and fuel used in electric generation
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206,160 | 246,116 | 261,003 | |||||||||
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Purchased natural gas
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76,778 | 75,189 | 107,221 | |||||||||
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Purchased petroleum
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228,156 | 182,753 | 151,411 | |||||||||
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Other expenses of operation - regulated activities
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238,557 | 224,955 | 194,383 | |||||||||
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Other expenses of operation - competitive business subsidiaries
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47,474 | 45,429 | 49,771 | |||||||||
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Impairment on long-lived assets
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- | 2,116 | - | |||||||||
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Depreciation and amortization
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40,055 | 38,275 | 36,582 | |||||||||
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Taxes, other than income tax
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48,751 | 45,972 | 39,601 | |||||||||
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Total Operating Expenses
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885,931 | 860,805 | 839,972 | |||||||||
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Operating Income
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99,589 | 99,303 | 81,585 | |||||||||
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Other Income and Deductions
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Income (loss) from unconsolidated affiliates
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735 | (318 | ) | 228 | ||||||||
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Interest on regulatory assets and other interest income
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5,777 | 5,475 | 5,789 | |||||||||
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Impairment of investments
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(3,582 | ) | (11,408 | ) | (1,299 | ) | ||||||
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Regulatory adjustments for interest costs
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1,351 | (1,105 | ) | (1,366 | ) | |||||||
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Business development costs
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(1,222 | ) | (1,809 | ) | (2,012 | ) | ||||||
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Other - net
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(493 | ) | (1,509 | ) | (1,263 | ) | ||||||
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Total Other Income (Deductions)
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2,566 | (10,674 | ) | 77 | ||||||||
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Interest Charges
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Interest on long-term debt
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26,520 | 22,973 | 20,999 | |||||||||
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Penalty for early retirement of debt
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2,982 | - | - | |||||||||
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Interest on regulatory liabilities and other interest
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5,656 | 6,112 | 4,797 | |||||||||
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Total Interest Charges
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35,158 | 29,085 | 25,796 | |||||||||
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Income before income taxes, non-controlling interest and preferred dividends of subsidiary
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66,997 | 59,544 | 55,866 | |||||||||
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Income taxes
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23,813 | 19,214 | 22,269 | |||||||||
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Net Income from Continuing Operations
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43,184 | 40,330 | 33,597 | |||||||||
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Discontinued Operations
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Income (loss) from discontinued operations before tax
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1,660 | (2,333 | ) | 5,026 | ||||||||
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Gain (loss) from sale of discontinued operations
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(457 | ) | - | 10,767 | ||||||||
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Income tax (benefit) expense from discontinued operations
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(1,923 | ) | (1,205 | ) | 5,112 | |||||||
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Net Income (loss) from Discontinued Operations
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3,126 | (1,128 | ) | 10,681 | ||||||||
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Net Income
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46,310 | 39,202 | 44,278 | |||||||||
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Net Income (loss) attributable to non-controlling interest:
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Non-controlling interest in subsidiary
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- | (272 | ) | (176 | ) | |||||||
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Dividends declared on Preferred Stock of subsidiary
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970 | 970 | 970 | |||||||||
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Net Income Attributable to CH Energy Group
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45,340 | 38,504 | 43,484 | |||||||||
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Dividends declared on Common Stock
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33,291 | 34,161 | 34,119 | |||||||||
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Change in Retained Earnings
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$ | 12,049 | $ | 4,343 | $ | 9,365 | ||||||
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Average number of common stock shares outstanding
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Basic
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15,278 | 15,785 | 15,775 | |||||||||
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Diluted
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15,481 | 15,952 | 15,881 | |||||||||
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Income from continuing operations attributable to CH Energy Group common shareholders
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Earnings per share - Basic
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$ | 2.77 | $ | 2.51 | $ | 2.08 | ||||||
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Earnings per share - Diluted
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$ | 2.73 | $ | 2.48 | $ | 2.07 | ||||||
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Income (loss) from discontinued operations attributable to CH Energy Group common shareholders
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Earnings per share - Basic
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$ | 0.20 | $ | (0.07 | ) | $ | 0.68 | |||||
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Earnings per share - Diluted
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$ | 0.20 | $ | (0.07 | ) | $ | 0.67 | |||||
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Amounts attributable to CH Energy Group common shareholders:
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Earnings per share - Basic
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$ | 2.97 | $ | 2.44 | $ | 2.76 | ||||||
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Earnings per share - Diluted
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$ | 2.93 | $ | 2.41 | $ | 2.74 | ||||||
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Dividends Declared Per Share
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$ | 2.19 | $ | 2.16 | $ | 2.16 | ||||||
CH ENERGY GROUP, INC.
EARNINGS PER SHARE BY SEGMENT
The table below presents the change in earnings of CH Energy Group’s business units in terms of earnings for each share of CH Energy Group’s Common Stock. Management believes this presentation is useful because it shows the relative contribution of the various business units to CH Energy Group's earnings. Additionally, Management believes that the disclosure of Significant Events within each business unit provides investors with the context around CH Energy Group's results that is important in enabling them to ascertain the likelihood that past performance is indicative of future performance.
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Consolidated CH Energy Group
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Year Ended
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Three Months Ended
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December 31,
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December 31,
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2011
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2010
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2011
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2010
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Central Hudson - Electric
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$ | 2.22 | $ | 2.10 | $ | 0.68 | $ | 0.40 | ||||||||
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Central Hudson - Natural Gas
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0.66 | 0.76 | 0.20 | 0.20 | ||||||||||||
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Griffith
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0.10 | 0.11 | 0.07 | 0.10 | ||||||||||||
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Other Businesses and Investments
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(0.01 | ) | (0.53 | ) | - | (0.10 | ) | |||||||||
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Consolidated Earnings per Share (basic), as reported
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$ | 2.97 | $ | 2.44 | $ | 0.95 | $ | 0.60 | ||||||||
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Significant Events:
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Central Hudson
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$ | (0.12 | ) | $ | 0.12 | $ | - | $ | - | |||||||
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Griffith
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- | (0.02 | ) | (0.03 | ) | - | ||||||||||
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Other Businesses and Investments
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(0.06 | ) | (0.44 | ) | (0.03 | ) | (0.05 | ) | ||||||||
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Total Significant Events
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$ | (0.18 | ) | $ | (0.34 | ) | $ | (0.06 | ) | $ | (0.05 | ) | ||||
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CH Energy Group Consolidated Adjusted Earnings Per Share (non-GAAP)
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Central Hudson
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$ | 3.00 | $ | 2.74 | $ | 0.88 | $ | 0.60 | ||||||||
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Griffith
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0.10 | 0.13 | 0.10 | 0.10 | ||||||||||||
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Other Businesses and Investments
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0.05 | (0.09 | ) | 0.03 | (0.05 | ) | ||||||||||
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Total CH Energy Group Consolidated Adjusted Earnings Per Share (non-GAAP)
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$ | 3.15 | $ | 2.78 | $ | 1.01 | $ | 0.65 | ||||||||
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Consolidated Earnings per Share (diluted), as reported
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$ | 2.93 | $ | 2.41 | $ | 0.94 | $ | 0.60 | ||||||||
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The information above is considered a non-GAAP financial measure. This information is not an alternative to earnings per share determined on a consolidated basis, which is the most directly comparable GAAP measure. A reconciliation of each business unit's earnings per share to CH Energy Group's earnings per share, determined on a consolidated basis, is included in the table above.
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