(Poughkeepsie, NY) CH Energy Group, Inc. (NYSE:CHG) today reported first-quarter earnings of 98 cents per share, down 10 cents per share from the same period of the prior year, when earnings totaled $1.08 per share.
“Our quarterly earnings were primarily shaped by four distinct developments: First, our regulated utility Central Hudson Gas & Electric Corporation earned 32 cents more per share in the first quarter of 2012 than it did in 2011. Secondly, our fuel distribution subsidiary’s earnings were down by 11 cents per share due to the extremely mild winter in the Mid-Atlantic,” said Chairman of the Board, President and C.E.O. Steven V. Lant. “Third, we recorded 31 cents per share of expenses associated with the merger agreement that we announced in February with Canadian utility Fortis Inc. And fourth, on a per share basis, our earnings increased by 5 cents as a result of the lower number of outstanding shares in the first quarter of 2012 following our repurchase of shares last year.
“It was certainly a memorable quarter, one in which we announced a compelling transaction with Fortis while maintaining our focus on our core business. We look forward to continuing that same level of superior performance – and further improving customer service – as we work toward closing the merger transaction and becoming a member of the Fortis federation of utilities,” Lant said.
Lant said a regulatory filing has been made with the New York State Public Service Commission regarding the merger proposal; it proposes a utility rate freeze and customer benefits of approximately $20 million. He also noted that a proxy statement regarding the merger transaction is expected to be mailed in early May and that a Special Meeting of Shareholders is tentatively scheduled for June 19, 2012, to seek shareholder approval. No costs associated with the merger transaction will be borne by customers, Lant noted.
CH Energy Group released the following quarterly results by business unit:
Central Hudson Gas & Electric Corporation
First-quarter utility earnings were 32 cents per share higher as compared to the same period of 2011, 9 cents of which resulted from an increase in the utility’s investment base and associated delivery rate increase that took effect on July 1, 2011. “Central Hudson continues to invest in its system under the terms of its current three-year rate plan to replace aging infrastructure and improve system performance,” said Lant. “The lack of significant storm activity during the first quarter also contributed to improved quarterly results, especially when compared to the stormy first quarter of 2011. Expenses associated with trimming trees were also lower as compared to the accelerated program in effect a year earlier.”
Griffith Energy Services
Griffith Energy Services posted earnings of 17 cents per share during the first quarter, down 11 cents per share from the 28 cents per share reported for the first three months of 2011.
“Unusually warm weather impacted the quarterly results within our Mid-Atlantic fuel distribution subsidiary, though our core earnings were essentially unchanged due to higher margins and effective cost management that helped to offset lower sales volumes,” said Lant. He noted that the first quarter of 2011 had also benefitted from a reduction in an environmental reserve.
Other Businesses and Investments
Earnings were 31 cents per share lower, due primarily to costs associated with the proposed merger with Fortis. In addition, earnings during the first quarter of 2011 had included 4 cents per share of losses associated with renewable energy investments, most of which were divested later in the year. Financial statements are available by clicking here, by logging onto the news page at www.CHEnergyGroup.com or at http://www.centralhudson.com/pdf/CHEG_2012Q1financials.pdf.
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About CH Energy Group, Inc.: CH Energy Group, Inc. is predominantly a regulated transmission and distribution utility, headquartered in Poughkeepsie, NY. Central Hudson Gas & Electric Corporationserves 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 energy products and services to approximately 56,000 customers in the Mid Atlantic Region, as well as several renewable energy investments.
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: the possibility that various conditions precedent to the consummation of the Fortis transaction will not be satisfied or waived; the ability to obtain shareholder and regulatory approvals of the Fortis transaction on the timing and terms thereof; 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
Additional Information about the Fortis Transaction and Where to Find It
In connection with the proposed acquisition of CH Energy Group by Fortis, CH Energy Group will file a proxy statement with the SEC, a preliminary version of which was filed with the SEC on April 2, 2012, and intends to file other relevant materials with the SEC as well. Investors and security holders of CH Energy Group are urged to read the proxy statement and other relevant materials filed with the SEC when they become available because they will contain important information about the proposed acquisition and related matters. The final proxy statement will be mailed to CH Energy Group shareholders. Investors and stock shareholders may obtain a free copy of the proxy statement when it becomes available, and other documents filed by CH Energy Group, at the SEC's Web site, www.sec.gov. These documents (when they are available) can also be obtained by investors and stockholders free of charge from CH Energy Group at CH Energy Group’s website at www.chenergygroup.com, or by contacting CH Energy Group's Shareholder Relations Department at (845) 486-5204.
Participants in the Solicitation of Proxies
This communication is not a solicitation of a proxy from any security holder of CH Energy Group. However, CH Energy Group, Fortis and certain of their respective directors and executive officers, under SEC rules, may be deemed to be participants in the solicitation of proxies from shareholders of CH Energy Group in connection with the proposed acquisition. Information about CH Energy's directors and executive officers may be found in its 2011 Annual Report on Form 10-K filed with the SEC on February 16, 2012, and definitive proxy statement relating to its 2012 Annual Meeting of Stockholders filed with the SEC on March 21, 2012. Information about Fortis’ directors and executive officers may be found in its Management Information Circular available on its website at www.fortisinc.com. Additional information regarding the interests of such potential participants in the solicitation of proxies in connection with the merger will be included in CH Energy Group’s proxy statement, a preliminary version of which was filed with the SEC on April 2, 2012, and other relevant materials filed with the SEC when they become available.