CH Energy Group Reports 2010 and Fourth-Quarter Earnings
(Poughkeepsie, NY) CH Energy Group, Inc. (NYSE:CHG) today reported 2010 annual earnings of $2.44 per share, 32 cents per share lower than the prior year, when earnings totaled $2.76 per share. Two unusual events (a 2009 one-time gain resulting from the sale of assets of 34 cents, and 52 cents worth of impairment taken during 2010 related to non-core investments in renewable energy) had significant impacts on the annualized results. Normalized for those items, 2010 earnings per share would have totaled $2.96, versus $2.42 in 2009.
“While earnings per share were lower in 2010 than they were in 2009, that outcome masks significant progress in our core operations. Our 2010 consolidated results reflect two non-cash impairment charges -- without which, earnings per share would have been higher than those of 2009 by 20 cents per share,” said Chairman of the Board, President and C.E.O. Steven V. Lant. “Our primary businesses, Central Hudson Gas & Electric and Griffith Energy Services, each showed improved earnings from continuing operations on a weather-normalized basis during 2010. We believe this favorable trend is something on which we can build in 2011.”
In describing the highlights of 2010, Lant said, “Central Hudson had an excellent year – competently restoring electric service following the worst storm in its history,entering into a three-year rate settlement, and improving both service reliability and customer satisfaction. Griffith likewise performed well in 2010, increasing the profitability from its streamlined Mid-Atlantic market region on a weather-normalized basis.”
Lant noted that another important development in 2010 was a change in strategic direction: “We will focus on our core energy delivery businesses going forward in order to achieve more predictable earnings growth with lower volatility. We began by strategically streamlining Griffith in 2009, and we are in the process of divesting our renewable energy portfolio. We will then concentrate on improving Central Hudson and Griffith further still in order to maximize benefit for both customers and shareholders,” he said.
CH Energy Group released the following 2010 results by business unit:
Central Hudson Gas & Electric Corporation
Central Hudson earned $2.86 per share in 2010, up by 84 cents per share, year over year. The improvement was related primarily to increased delivery revenues resulting from mid-year delivery rate increases, which were partially offset by higher expenses associated with tree trimming, electric service restoration after storms and depreciation expense.
“For the fourth quarter of 2010, Central Hudson posted earnings of 60 cents per share, down from the 62 cents per share reported for the same period of 2009,” said Lant. “Though the final three months of 2010 benefitted from higher delivery rates that covered rising operating costs for items such as tree trimming and storm restoration expense, the fourth-quarter results of 2009 had included an 11-cent-per-share favorable impact of a regulatory deferral petition related to uncollectible customer accounts.”
Griffith Energy Services
Griffith earned 11 cents per share during 2010, down from 76 cents per share in 2009, when the strategic sale of Northeast operations had added 40 cents to annual results. The loss of income from those discontinued operations also reduced year-over-year results by an additional 23 cents per share. Weather further depressed earnings by 4 cents per share. Lower expenses and bad debts helped to improve results during 2010, as did a slight increase in margins. However, conservation and other items negatively impacted annual results, as well.
“For the fourth quarter of 2010, Griffith posted earnings of 10 cents per share, down from the 48 cents per share posted last year, when the 40-cent gain (excluding 6 cents of taxes at the holding company level) was recorded due to the asset sale and the earnings from the discontinued operations contributed 4 cents per share,” Lant said. “Improved margins and reduced operating expenses during the fourth quarter of 2010 bode well for the continued health and performance of the right-sized Griffith.”
Other Businesses and Investments
Holding company CH Energy Group, Inc., Central Hudson Enterprises Corporation (CHEC) partnerships, and other investments posted a loss of 53 cents per share in 2010, due in large part to the 44-cent-per-share impairment taken in relation to an investment in ethanol and an 8-cent per share impairment related to a biomass investment. For the quarter, these businesses lost 10 cents per share, down from a 6-cent-per-share loss in 2009.
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 74,000 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 57,000 customers in the Mid Atlantic Region, as well as several renewable energy investments.
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Conference Call: Mr. Lant will conduct a conference call with investors to review financial results at 10:00 a.m. (ET) today, February 11, 2011. Dial-in: 1-800-230-1059; 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 12:30 p.m. (ET) on Feb. 11, 2011, until 11:59 p.m. on Feb. 18, 2011, by dialing 1‑800-475-6701 and entering access code 189910. 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
Downloadable Financial Statements Available here
Forward-Looking Statements –
Statements included in this Annual Report on Form 10-K 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; plant capacity factors; energy supply and demand; potential future acquisitions; the ability of the Company to divest non-core assets at acceptable prices within expected time frames, 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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