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CH Energy Group Inc. (CHG) filed Quarterly Report for the period ended 2011-09-28.
Ch Energy Group Inc. has a market cap of $866.6 million; its shares were traded at around $56.16 with a P/E ratio of 23.9 and P/S ratio of 0.9. The dividend yield of Ch Energy Group Inc. stocks is 4%. Ch Energy Group Inc. had an annual average earning growth of 14.2% over the past 10 years.
This is the annual revenues and earnings per share of CHG over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CHG.
Highlight of Business Operations:
NOTE 1 – Summary of Significant Accounting Policies Basis of Presentation This Quarterly Report on Form 10-Q is a combined report of CH Energy Group, Inc. (“CH Energy Group”) and its regulated electric and natural gas subsidiary, Central Hudson Gas & Electric Corporation (“Central Hudson”). The Notes to the Consolidated Financial Statements apply to both CH Energy Group and Central Hudson. CH Energy Group s Consolidated Financial Statements include the accounts of CH Energy Group and its wholly owned subsidiaries, which include Central Hudson and CH Energy Group s non-utility subsidiary, Central Hudson Enterprises Corporation (“CHEC”). Operating results of CHEC in 2011 include its wholly owned subsidiaries, Griffith Energy Services, Inc. (“Griffith”) and CH-Greentree, LLC (“CH-Greentree”). Discontinued operations on CH Energy Group s Consolidated Statements of Income include the operating results of CHEC s subsidiaries which were sold in 2011, including Lyonsdale Biomass, LLC (“Lyonsdale”) sold on May 1, 2011, Shirley Wind, LLC (“Shirley Wind”), sold on August 11, 2011 and CH-Auburn, LLC (“CH-Auburn”) sold on September 16, 2011. The non-controlling interest shown on CH Energy Group s Consolidated Financial Statements represents the minority owner s proportionate share of the income and equity of Shirley Delaware for 2011 and 2010 prior to the sale of this subsidiary and Lyonsdale for 2010 prior to the purchase of the minority owner s interest on October 1, 2010. Inter-company balances and transactions have been eliminated in consolidation. See Note 5 – “Acquisitions, Divestitures and Investments” for further information. The Financial Statements were prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which for regulated public utilities, includes specific accounting guidance for regulated operations. For additional information regarding regulatory accounting, see Note 2 - “Regulatory Matters.” Unaudited Financial Statements The accompanying Consolidated Financial Statements of CH Energy Group and Financial Statements of Central Hudson are unaudited but, in the opinion of Management, reflect adjustments (which include normal recurring adjustments) necessary for a fair statement of the results for the interim periods presented. These unaudited quarterly Financial Statements do not contain all footnote disclosures concerning accounting policies and other matters which would be included in annual Financial Statements and, accordingly, should be read in conjunction with the audited Financial Statements (including the Notes thereto) included in the combined CH Energy Group/Central Hudson Annual Report on Form 10-K for the year ended December 31, 2010 (the “Corporations 10-K Annual Report”). - 12 - CH Energy Group s and Central Hudson s balance sheet as of September 30, 2010 is not required to be included in this Quarterly Report on Form 10-Q; however, this balance sheet is included for supplemental analysis purposes. Reclassification Certain amounts in the 2010 Financial Statements have been reclassified to conform to the 2011 presentation. For more information regarding reclassification of discontinued operations, see Note 5 – “Acquisition, Divestitures and Investments.” Consolidation of Variable Interest Entities CH Energy Group and its subsidiaries do not have any interests in special purpose entities and do not have material affiliations with any variable interest entities which were not consolidated. Revenue Recognition CH Energy Group s deferred revenue balances as of September 30, 2011, December 31, 2010 and September 30, 2010 were $3.7 million, $4.7 million and $3.7 million, respectively. The deferred revenue balance will be recognized in CH Energy Group s operating revenues over the 12-month term of the respective customer contract. As required by the PSC, Central Hudson records gross receipts tax revenues and expenses on a gross income statement presentation basis (i.e., included in both revenue and expenses). Sales and use taxes for both Central Hudson and Griffith are accounted for on a net basis (excluded from revenue). - 13 - Fuel, Materials & SuppliesGriffith's earnings decreased in the three months ended September 30, 2011 compared to the same period in 2010 due to reduced weather normalized volumes and other expenses partially offset by increased margins. For the nine months ended September 30, 2011 compared to the same period in 2010, Griffith s earnings increased due to increased margins, colder weather and the related hedge. Additionally, a reduction to the environmental reserve related to the 2009 divestiture favorably impacted the nine month year-over-year earnings. These improvements were partially offset by lower weather normalized volumes, which Management believes is a response by customers to delivered heating oil prices which were 43% higher in 2011 compared to a similar period in 2010. - 62 -
For the three months ended September 30, 2011, operating expenses increased $13.4 million, or 32%, from $42.4 million in 2010 to $55.8 million in 2011 due to an increase in the cost of petroleum products of $13.3 million, or 44%, driven by higher wholesale market prices and partially offset by a decline in sales volume.
CH Energy Group's book value per share of its Common Stock decreased from $34.03 at December 31, 2010, to $33.31 at September 30, 2011. Common equity comprised 47.7% of total capital (including short-term debt) at September 30, 2011, a decrease from 50.6% at December 31, 2010. The changes in book value per share of common stock and common equity ratio reflect the net impact of retained earnings and share repurchases during the nine months ended September 30, 2011. Book value per share at September 30, 2010 was $33.98 and the common equity ratio was 50.6%.
Central Hudson s net cash provided by operations was $97.1 million and $51.5 million for the nine months ended September 30, 2011 and 2010, respectively. Cash provided by sales exceeded the period s expenses and working capital needs in the first nine months of 2011 and 2010, including the storm restoration costs paid for incremental electric service restoration efforts for both years, which have been deferred for future recovery from customers. As of September 30, 2011 there is approximately $9.4 million related to storm restoration efforts included in liabilities resulting from the impact of Tropical Storm Irene on Central Hudson s service territory. Central Hudson utilized cash from operations in excess of working capital needs to fund additional contributions to its pension and OPEB plans, which totaled $33.7 million and $36.1 million during the first nine months of 2011 and 2010, respectively. Costs spent for MGP remediation efforts in excess of amounts collected in rates of approximately $10.8 million also impacted the cash from operations in 2010. In 2011, amounts collected in rates were greater than remediation efforts as a result of the completion of remediation efforts at Newburgh. Remediation efforts at the Catskill site are expected to begin in 2012. In addition, net cash provided by operating activities at CH Energy Group was negatively impacted during the nine months ended September 30, 2011 and 2010 primarily due to an increase in Griffith s working capital and the prepayment penalty incurred by CH Energy Group Holding Company for the early retirement of debt with a portion of the proceeds from the Shirley Wind sale.
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