FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(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, 2000
OR
[ ] 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 .................................. 0-30512
CH ENERGY GROUP, INC.
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(Exact name of registrant as specified in its charter)
NEW YORK 14-1804460
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
284 SOUTH AVENUE, POUGHKEEPSIE NEW YORK 12601-4879
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (845) 452-2000
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Indicate by check mark whether the Registrant (1) has 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
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [ X ] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
Common stock, par value $.10 per share; and the number of shares
outstanding of Registrant's common stock, as of September 30, 2000, was
16,616,687.
<PAGE>
CH ENERGY GROUP, INC.
FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2000
INDEX
PART I - FINANCIAL INFORMATION PAGE
------------------------------ ----
Item 1 - Consolidated Financial Statements 1
Consolidated Statement of Income -
three Months Ended September 30, 2000
and 1999 1
Consolidated Statement of Income -
Nine Months Ended September 30, 2000
and 1999 2
Consolidated Balance Sheet - September 30,
2000 and December 31, 1999 3
Consolidated Statement of Cash Flows -
Nine Months Ended September 30, 2000
and 1999 5
Notes to Consolidated Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13
Item 3 - Quantitative and Qualitative Disclosure
about Market Risk 20
PART II - OTHER INFORMATION
---------------------------
Item 1 - Legal Proceedings 21
Item 5 - Other Information 21
Item 6 - Exhibits and Reports on Form 8-K 22
Signatures 23
Exhibit Index
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM I - CONSOLIDATED FINANCIAL STATEMENTS
CH ENERGY GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
For the 3 Months Ended
September 30,
2000 1999
--------- ---------
(Thousands of Dollars)
Operating Revenues
Electric ........................................... $140,626 $121,865
Gas ................................................ 13,740 12,458
Other .............................................. 13,531 12,150
--------- ---------
Total Operating Revenues ....................... 167,897 146,473
--------- ---------
Operating Expenses
Operation:
Fuel used in electric generation
and purchased electricity ...................... 63,431 47,106
Purchased natural gas ............................ 9,121 8,780
Purchased petroleum .............................. (301) 523
Other expenses of operation ...................... 32,221 28,470
Maintenance ........................................ 6,625 6,325
Depreciation and amortization ...................... 12,612 12,059
Taxes, other than income tax ....................... 14,849 16,486
Federal income tax ................................. 8,604 7,641
--------- ---------
147,162 127,390
--------- ---------
Operating Income ..................................... 20,735 19,083
--------- ---------
Other Income and (Deductions)
Allowance for equity funds used
during construction .............................. -- 41
Federal income tax ................................. (149) (268)
Other - net ........................................ 3,010 3,229
--------- ---------
2,861 3,002
--------- ---------
Income before Interest Charges ....................... 23,596 22,085
--------- ---------
Interest Charges
Interest on mortgage bonds ......................... 2,570 3,205
Interest on other long-term debt ................... 3,591 3,392
Other interest ..................................... 2,334 1,661
Allowance for borrowed funds used
during construction .............................. (202) (44)
--------- ---------
8,293 8,214
Preferred Stock Dividends of Central Hudson .......... 807 807
Net Income ........................................... 14,496 13,064
Dividends Declared on Common Stock ................... 8,963 9,106
--------- ---------
Balance Retained in the Business ..................... $5,533 $3,958
========= =========
Common Stock:
Average Shares Outstanding (000s) .................. 16,696 16,862
Earnings Per Share (Basic and Diluted) ............. $0.87 $0.77
Dividends Declared ................................. $0.540 $0.540
See Notes to Consolidated Financial Statements.
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CH ENERGY GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
For the 9 Months Ended
September 30,
2000 1999
--------- ---------
(Thousands of Dollars)
Operating Revenues
Electric ........................................... $382,949 $327,776
Gas ................................................ 76,534 70,053
Other .............................................. 47,288 31,988
--------- ---------
Total Operating Revenues ....................... 506,771 429,817
--------- ---------
Operating Expenses
Operation:
Fuel used in electric generation and
purchased electricity ......................... 169,990 113,942
Purchased natural gas ............................ 46,151 44,010
Purchased petroleum .............................. 5,907 2,827
Other expenses of operation ...................... 97,170 81,655
Maintenance ........................................ 23,058 21,375
Depreciation and amortization ...................... 37,609 36,041
Taxes, other than income tax ....................... 46,003 48,541
Federal income tax ................................. 22,106 23,946
--------- ---------
447,994 372,337
--------- ---------
Operating Income ..................................... 58,777 57,480
--------- ---------
Other Income and (Deductions)
Allowance for equity funds used
during construction .............................. -- 152
Federal income tax ................................. (323) (201)
Other - net ........................................ 8,616 7,603
--------- ---------
8,293 7,554
--------- ---------
Income before Interest Charges ....................... 67,070 65,034
--------- ---------
Interest Charges
Interest on mortgage bonds ......................... 8,772 9,852
Interest on other long-term debt ................... 9,268 8,310
Other interest ..................................... 6,698 4,627
Allowance for borrowed funds used
during construction .............................. (527) (167)
--------- ---------
24,211 22,622
Preferred Stock Dividends of Central Hudson .......... 2,422 2,422
Net Income ........................................... 40,437 39,990
Dividends Declared on Common Stock ................... 27,109 27,317
--------- ---------
Balance Retained in the Business ..................... $13,328 $12,673
========= =========
Common Stock:
Average Shares Outstanding (000s) ................ 16,793 16,862
Earnings Per Share (Basic and Diluted) ........... $2.41 $2.37
Dividends Declared ............................... $1.62 $1.62
See Notes to Consolidated Financial Statements.
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CH ENERGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
September 30, December 31,
2000 1999
ASSETS (Unaudited) (Audited)
---------- ----------
(Thousands of Dollars)
Utility Plant
Electric ........................................ $1,259,678 $1,250,456
Gas ............................................. 169,345 164,767
Common .......................................... 98,659 100,659
Nuclear fuel .................................... 46,663 42,847
---------- ----------
1,574,345 1,558,729
Less: Accumulated depreciation ................. 661,987 638,910
Nuclear fuel amortization ................ 40,071 38,354
---------- ----------
872,287 881,465
Construction work in progress ................... 52,464 39,951
---------- ----------
Net Utility Plant ........................ 924,751 921,416
---------- ----------
Other Property and Plant .......................... 33,782 31,544
---------- ----------
Investments and Other Assets
Prefunded Pension Costs ......................... 59,052 46,038
Other ........................................... 23,722 21,226
---------- ----------
Total Investments and Other Assets .......... 82,774 67,264
---------- ----------
Current Assets
Cash and cash equivalents ....................... 15,301 20,385
Accounts receivable from customers-net
of allowance for doubtful accounts ............ 58,219 57,600
Accrued unbilled utility revenues ............... 10,168 16,327
Other receivables ............................... 2,475 4,092
Fuel, materials and supplies, at average cost ... 30,118 31,485
Special deposits and prepayments ................ 24,574 17,533
---------- ----------
Total Current Assets ........................ 140,855 147,422
---------- ----------
Deferred Charges
Regulatory assets ............................... 142,794 137,487
Unamortized debt expense ........................ 4,939 5,016
Other ........................................... 30,612 25,750
---------- ----------
Total Deferred Charges ...................... 178,345 168,253
---------- ----------
Total Assets ................................ $1,360,507 $1,335,899
========== ==========
See Notes to Consolidated Financial Statements.
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CH ENERGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
September 30, December 31,
2000 1999
CAPITALIZATION AND LIABILITIES (Unaudited) (Audited)
---------- ----------
(Thousands of Dollars)
Capitalization
Common Stock Equity:
Common stock, 30,000,000 shares authorized;
shares issued ($.10 par value):
2000 - 16,862,087
1999 - 16,862,087 ........................... $1,686 $1,686
Paid-in capital ................................... 351,230 351,230
Retained earnings ................................. 146,124 132,796
Reacquired capital stock at cost
(245,400 shares at September 30, 2000) ......... (8,470) --
Capital stock expense ............................. (1,251) (1,306)
---------- ----------
Total Common Stock Equity ...................... 489,319 484,406
---------- ----------
Cumulative Preferred Stock
Not subject to mandatory redemption ............. 21,030 21,030
Subject to mandatory redemption ................. 35,000 35,000
---------- ----------
Total Cumulative Preferred Stock ............... 56,030 56,030
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Long-term Debt .................................... 320,362 335,451
---------- ----------
Total Capitalization ........................... 865,711 875,887
---------- ----------
Current Liabilities
Current maturities of long-term debt .............. 62,610 35,100
Notes payable ..................................... 55,000 50,000
Accounts payable .................................. 32,515 36,746
Accrued taxes and interest ........................ 7,654 4,406
Dividends payable ................................. 9,771 9,913
Accrued vacation .................................. 4,472 4,344
Customer deposits ................................. 4,478 4,471
Other ............................................. 2,812 2,977
---------- ----------
Total Current Liabilities ...................... 179,312 147,957
---------- ----------
Deferred Credits and Other Liabilities
Regulatory liabilities ............................ 99,388 87,039
Operating reserves ................................ 3,173 6,294
Other ............................................. 18,696 19,101
---------- ----------
Total Deferred Credits and Other Liabilities ... 121,257 112,434
---------- ----------
Accumulated Deferred Income Tax ..................... 194,227 199,621
---------- ----------
TOTAL CAPITALIZATION AND LIABILITIES ........... $1,360,507 $1,335,899
========== ==========
See Notes to Consolidated Financial Statements.
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CH ENERGY GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
For the 9 Months Ended
September 30,
2000 1999
-------- ---------
OPERATING ACTIVITIES: (Thousands of Dollars)
Net Income ............................................ $40,437 $39,990
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, amortization & nuclear
fuel amortization ............................ 40,390 38,165
Deferred income taxes, net ..................... 4,457 5,902
Allowance for equity funds used
during construction .......................... -- (152)
Nine Mile 2 Plant deferred finance
charges, net ................................. (3,572) (3,642)
Provision for uncollectibles ................... 1,725 1,950
Net accrued/deferred pension costs ............ (10,302) (8,471)
Deferred gas costs ............................. (1,338) 3,285
Deferred gas refunds ........................... (96) (95)
Other, net ..................................... (5,598) 715
Changes in current assets and liabilities, net:
Accounts receivable and unbilled revenues ...... 5,432 (7,086)
Fuel, materials and supplies ................... 1,367 (2,771)
Special deposits and prepayments ............... (7,041) (96,906)
Accounts payable ............................... (4,231) 9,374
Accrued taxes and interest ..................... 4,606 (18)
Other current liabilities ...................... (1,361) 4,654
-------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES ........................................ 64,875 (15,106)
-------- ---------
INVESTING ACTIVITIES:
Additions to plant .................................. (41,198) (31,163)
Allowance for equity funds used
during construction ............................... -- 152
-------- ---------
Net additions to plant ............................ (41,198) (31,011)
Investment activities of competitive affiliate ...... (8,925) (7,290)
Nine Mile 2 Plant decommissioning trust fund ........ (651) (651)
Other, net .......................................... (551) (666)
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES ............... (51,325) (39,618)
-------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt ............ 47,500 177,300
Net borrowings (repayments) of short-term debt ...... 5,000 (13,700)
Retirement and redemption of long-term debt ......... (35,100) (81,877)
Dividends paid on common stock ...................... (27,251) (27,317)
Reacquired capital stock ............................ (8,470) --
Issuance and Redemption Costs ....................... (313) (3,004)
-------- ---------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES .............................. (18,634) 51,402
-------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS ................. (5,084) (3,322)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR ........... 20,385 10,499
-------- ---------
CASH AND CASH EQUIVALENTS - END OF PERIOD ............... $15,301 $7,177
======== =========
Supplemental Disclosure of Cash Flow Information
Interest paid (net of amounts capitalized) .......... $16,907 $14,490
Federal income tax paid ............................. $18,800 $22,825
See Notes to Consolidated Financial Statements
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<PAGE>
CH ENERGY GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
The accompanying Consolidated Financial Statements of CH Energy Group, Inc.
(herein the Corporation) 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. In addition,
the results of operations for the prior year have been restated to reflect fully
consolidated results following the formation of the holding company referred to
in Note 2 below. These condensed unaudited quarterly Consolidated Financial
Statements do not contain the detail or footnote disclosures concerning
accounting policies and other matters which would be included in annual
Consolidated Financial Statements and, accordingly, should be read in
conjunction with the audited Consolidated Financial Statements (including the
Notes thereto) included in the Corporation's Annual Report, on Form 10-K, for
the year ended December 31, 1999 (Corporation's 10-K Report).
Due to the seasonal nature of the Corporation's operations, financial
results for interim periods are not necessarily indicative of trends for a
twelve-month period.
NOTE 2 - REGULATORY MATTERS
Reference is made to the caption "Competitive Opportunities Proceeding" of
Note 2 - Regulatory Matters, to the Consolidated Financial Statements of the
Corporation's 10-K Report and to the Amended and Restated Settlement Agreement,
dated January 2, 1998, (Settlement Agreement) as described in said Note 2.
At September 30, 2000, net regulatory assets of the Corporation's
wholly-owned affiliate, Central Hudson Gas & Electric Corporation (Central
Hudson), associated with the fossil-fueled generating assets were not material.
REGULATORY FILING
The Settlement Agreement, as approved by the New York State Public Service
Commission (PSC) in June, 1998, required Central Hudson to divest itself of its
fossil-fueled generating plants and to establish rates for electric service
based on the cost of delivering electricity to its customers. On August 1, 2000,
as reported in Note 2 to the Notes to Consolidated Financial Statements
contained in the Corporation's 10-Q report for the quarterly period ended June
30, 2000, Central Hudson filed a Competitive Transition Filing (Filing) with the
PSC to unbundle its rates for electric service to provide for delivery of
electricity separately from electricity supply, effective July 1, 2001, and to
reflect the contemplated sale of its interests in
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<PAGE>
its fossil-fueled generating plants, the Roseton Electric Generating Station
(Roseton Plant) and the Danskammer Point Steam Electric Generating Station
(Danskammer Plant).
On October 6, 2000, Central Hudson made a supplemental filing with the PSC
to reflect the then known results of the proposed sale of its fossil-fueled
generating plants to Dynegy Power Corp. (Dynegy), which sale is subject to
approval by the PSC. Central Hudson's Filing, as supplemented, requests that the
portion of its current rates for electric service attributable to the costs of
delivering electric service be increased by approximately $7.7 million, or 4.2%.
Along with establishing rates for delivery service, the Filing includes
proposals to recover the full cost of electric energy purchases made by Central
Hudson to supply such energy to its full service customers and to use the net
cash proceeds and gains from the sale of its fossil-fueled generating plants to
reduce outstanding debt; recover its investment in the Nine Mile Point Unit No.
2 generating station (Nine Mile 2 Plant); accelerate the rebuilding of portions
of its electric delivery network to provide customers with greater levels of
reliability than achieved to date; offset various regulatory assets; enhance
earnings by increasing the PSC's allowed return on equity, specifically removing
the current "hard cap" on such allowed return and by providing incentives to
improve reliability and customer service; and to establish a fund for use in
providing benefits to its customers as may be directed by the PSC. The Filing
also addresses the unbundling of gas prices into delivery and natural gas supply
components. The Filing requests that Central Hudson's rates for natural gas
delivery to its customers be increased by approximately $2.6 million, or 6.7%,
and that the full commodity cost of purchased gas for delivery to customers be
recovered through a charge separate from its delivery service rates. New
electric and gas delivery prices would go into effect on July 1, 2001 at the
expiration of the Settlement Agreement.
HOLDING COMPANY RESTRUCTURING
As reported under the caption "Competitive Opportunities Proceeding
Settlement Agreement" in Note 2 to the Consolidated Financial Statements
included in the Corporation's 10-K Report, Central Hudson received approval from
its shareholders and regulators to form a holding company, which restructuring
occurred on December 15, 1999. As reported in the Corporation's Current Report,
on Form 8-K, dated March 9, 2000, by Order issued and effective March 7, 2000,
the PSC amended the Settlement Agreement with respect to an extension of the
time by which Central Hudson can transfer up to $100 million, through the
Corporation to one or more of its competitive business affiliates. Transfers can
be made until the earlier of (i) receipt of the proceeds by Central Hudson from
the auction of the Danskammer and Roseton Plants or (ii) June 30, 2001, the
expiration date of the Settlement Agreement. As of September 30,
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<PAGE>
2000, $28 million of the $100 million authorized by the PSC under the Settlement
Agreement has been transferred to one or more subsidiaries of Central Hudson
Energy Services, Inc. (Services); Services being a wholly-owned subsidiary of
the Corporation.
NEW YORK STATE INDEPENDENT SYSTEM OPERATOR (NY ISO)
As reported under the caption "Independent System Operator" in Note 2 to
the Consolidated Financial Statements included in the Corporation's 10-K Report,
the newly established NY ISO, successor to the New York Power Pool, began
operations in November 1999. The combination of a tight market for generating
capacity in New York State and increasing fuel costs has caused prices for
electricity on the wholesale market to increase. Continued ownership of the
Danskammer and Roseton Plants helped Central Hudson to moderate price increases
to its customers this past summer and may continue to do so for the balance of
the year. When the proposed sale of these fossil-fueled generating plants to
Dynegy (see aforementioned caption Regulatory Filing) is consummated, Central
Hudson customers will benefit from a Transition Power Agreement with Dynegy that
will enable Central Hudson to purchase varying amounts of electricity from these
plants for three to four years and, thereby continue to have the capability to
moderate price increases for full-service electric energy supply.
NOTE 3 - SEGMENTS AND RELATED INFORMATION
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," was adopted by Central Hudson during the fourth quarter of 1998
(see Note 10 to the Consolidated Financial Statements included in the
Corporation's 10-K Report).
The Corporation's primary reportable operating segments are the regulated
electric and gas operations of Central Hudson and unregulated operations which
consist of the subsidiaries of Services. All of the segments currently operate
in the northeast region of the United States.
Certain additional information regarding these segments is set forth in the
following table. In the determination of earnings per share by segment, general
corporate expenses, property common to both segments and depreciation of such
common property have been allocated to the segments in accordance with practices
established for regulatory purposes.
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<PAGE>
CH Energy Group, Inc. Segment Disclosure - FAS 131
<TABLE>
<CAPTION>
QUARTER ENDED SEPTEMBER 30, 2000 NINE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------------------- ------------------------------------------------
REGULATED UNREG. TOTAL REGULATED UNREG. TOTAL
---------------------- ------- -------- --------------------- ------- --------
ELECTRIC GAS ELECTRIC GAS
-------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues from
external customers $140,612 $13,294 $13,531 $167,437 $382,884 $75,160 $47,288 $505,332
Intersegment
Revenues 14 446 -- 460 65 1,374 -- 1,439
-------- -------- ------- -------- -------- ------- ------- --------
Total Revenues $140,626 $13,740 $13,531 $167,897 $382,949 $76,534 $47,288 $506,771
Earnings Per Share $0.85 $(0.07) $0.09 $0.87 $1.99 $0.38 $0.04 $2.41
<CAPTION>
QUARTER ENDED SEPTEMBER 30, 1999 NINE MONTHS ENDED SEPTEMBER 30, 1999
-------------------------------------------------- ------------------------------------------------
REGULATED UNREG. TOTAL REGULATED UNREG. TOTAL
---------------------- ------- -------- --------------------- ------- --------
ELECTRIC GAS ELECTRIC GAS
-------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues from
external customers $121,842 $12,142 $12,150 $146,134 $327,715 $69,287 $31,988 $428,990
Intersegment
Revenues 23 316 -- 339 61 766 -- 827
-------- -------- ------- -------- -------- ------- ------- --------
Total Revenues $121,865 $12,458 $12,150 $146,473 $327,776 $70,053 $31,988 $429,817
Earnings Per Share $0.83 $(0.11) $0.05 $0.77 $2.04 $0.32 $0.01 $2.37
</TABLE>
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NOTE 4 - NEW ACCOUNTING STANDARDS
DERIVATIVE AND HEDGING ACCOUNTING: Reference is made to the caption "New
Accounting Standards and Other FASB Projects" of Note 1 - Summary of Significant
Accounting Policies, to the Consolidated Financial Statements of the
Corporation's 10-K Report. In June 2000, the Financial Accounting Standards
Board (FASB) issued Statement No. 138 which amends FASB Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities." (FASB 133)
Amendment provisions potentially affecting the Corporation relate to the normal
purchases and sales exception from FASB 133 applicability and interest rate risk
as it relates to the hedging of same. The normal purchases and sales exception
may now be applied to contracts that implicitly or explicitly permit net
settlement and contracts that have a market mechanism to facilitate net
settlement. Contracts which qualify for the normal purchases and normal sales
exception from FASB 133 are those that provide for the purchase or sale of
something other than a financial or derivative instrument (e.g., fuel, electric
and gas purchases) that will be delivered in quantities expected to be used or
sold by the reporting entity over a reasonable period in the normal course of
business.
The implementation of FASB 133 for the Corporation is required by January
1,2001 with the option of earlier implementation. Efforts, by the Corporation,
are underway to establish procedures to satisfy the extensive accounting,
disclosure and documentation requirements specified by the provisions of FASB
133 and it is expected that the necessary actions to implement this Statement
will be taken by December 31, 2000, for implementation effective January 1,
2001. The Corporation, on the basis of a preliminary review of its contracts, is
of the opinion that the majority of its contracts will qualify for the normal
purchases and sales exception. The Corporation believes that the implementation
of FASB 133, as amended by FASB 137 which amended the effective date to fiscal
years beginning after June 15, 1999 and FASB 138, will not have a material
impact on its financial position or results of operations. This belief is based
on the Corporation's conservative risk management policy currently in effect
regarding the use of derivative instruments and hedging activities; the present
as well as the expected future use of derivatives; and the fact that with
respect to Central Hudson operations, all gains and losses arising from the use
of derivatives, along with the related fuel or purchased electricity costs, flow
through Central Hudson's electric and gas fuel adjustment clauses, further
minimizing the Corporation's exposure to off-balance sheet risk.
PLANT DECOMMISSIONING: Reference is made to the caption "New Accounting
Standards and Other FASB Projects" of Note 1 - Summary of Significant Accounting
Policies, to the Consolidated Financial Statements of the Corporation's 10-K
Report. On February 17, 2000, the FASB issued an exposure draft proposing to
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<PAGE>
amend the initial FASB exposure draft entitled "Accounting for Certain
Liabilities Related to Closure and Removal of Long-Lived Assets." The February
17, 2000 exposure draft, "Accounting for Obligations Associated with the
Retirement of Long-Lived Assets," is proposed to be effective for financial
statements for fiscal years beginning after June 15, 2001. In the fourth quarter
of 2000, FASB will redeliberate issues raised in the comment letters received to
date and a Final Statement is now expected to be issued in the second quarter of
2001. The Corporation can make no prediction at this time as to the ultimate
form of this proposed accounting standard, assuming it is adopted, nor can it
make any prediction as to its ultimate effect(s) on the financial condition,
results of operations and cash flows of the Corporation.
Reference is made to the caption "New Accounting Standards and Other FASB
Projects" of Note 1 - Summary of Significant Accounting Policies, to the
Consolidated Financial Statements of the Corporation's 10-K Report. On June 30,
2000, FASB issued a proposed statement entitled "Accounting for the Impairment
or Disposal of Long-Lived Assets and for Obligations Associated with Disposal
Activities" that would supersede Statement 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." The proposed
statement would establish accounting standards for the impairment of long-lived
assets to be held and used and for the long-lived assets to be disposed of,
including segments of a business previously covered by Accounting Principles
Board (APB) Opinion No. 30, "Reporting the Results of Operations - Reporting the
Effects of Disposal of a Segment of Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions." Comments were due back to FASB
by October 13, 2000, which proposes the statement be effective for financial
statements for fiscal years beginning after December 15, 2001. The Corporation
can make no prediction as to the ultimate form of such proposed accounting
standard, assuming it is adopted, nor can it make any prediction as to its
ultimate effect(s) on the financial condition, results of operations and cash
flows of the Corporation.
NOTE 5 - STOCK-BASED COMPENSATION
The Corporation's shareholders approved, at their annual meeting on April
25, 2000, a Long-Term Performance-Based Incentive Plan (Plan) for executive
officers and other key employees, effective January 1, 2000. The Plan provides
for the granting of stock options, stock appreciation rights, restricted stock
awards, performance shares and performance units. No participant may be granted
total awards in excess of 150,000 shares over the life of the Plan. The
aggregate number of shares available for the grant of awards is 500,000, subject
to adjustment in the event of a change in the Corporation's capitalization.
Shares awarded may be authorized but unissued shares, treasury shares, open
market shares or any combination thereof.
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<PAGE>
A total of 30,300 stock options were granted by the Committee on
Compensation and Succession/Retirement of the Corporation's Board of Directors,
effective as of January 1, 2000, exercisable over a period of 10 years with 40%
vesting after two years and 20% each year thereafter for the following three
years. The exercise price is $31.94 per share and was established by such
Committee based on the average market price (as traded on the New York Stock
Exchange) on January 5, 2000. Such Committee also granted a total of 6,380
performance shares, effective as of January 1, 2000 on the basis of achieving
superior total shareholder return as measured against an industry index.
The Corporation, as permitted by Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation," has elected to
account for stock-based employee compensation under the provisions of APB
Opinion 25, "Accounting for Stock Issued to Employees," and related
interpretations. No compensation costs related to the Plan have been recorded to
date because amounts were determined to be immaterial to the Corporation's
financial position, results of operations or liquidity. The determination of
immateriality is based on the difference between the exercise price of $31.94
and the market value of $32.00 at the grant date of April 25, 2000, the date of
shareholder approval. For accounting and disclosure purposes, the Corporation's
grant date is considered to be the date of shareholder approval, as defined in
FASB Interpretation No. 44, Accounting for Certain Transactions Involving Stock
Compensation: An Interpretation of APB Opinion No. 25.
NOTE 6 - NEW YORK STATE TAX CHANGES
On May 15, 2000, changes to the New York State Tax Law were signed into
law, effective January 1, 2000. These changes repealed the .75 percent tax on
gross earnings and the excess dividends tax under Section 186 of the New York
State Tax Law and replaced both with an income-based tax under Article 9-A of
such Law. The tax under Section 186-a of such Law, on the furnishing of utility
services, was also restructured and reduced. Preliminary estimates indicate that
these changes will increase state tax expense to the Corporation by $1.4 million
in the year 2000 and $.7 million in 2001, with a reduction of $.7 million in
2002, and a cumulative reduction in 2003. The net effect of all these tax
changes will be deferred for future rate treatment.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
The Corporation faces a number of contingencies which arise during the
normal course of business and which have been discussed in Note 9 - Commitments
and Contingencies, to the Consolidated Financial Statements included in the
Corporation's 10-K Report. Except for what is disclosed in Part II of this
Quarterly Report, on Form 10-Q, for the quarterly period ended
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<PAGE>
September 30, 2000, and all documents previously filed with the Securities and
Exchange Commission (SEC) in 2000, there have been no material changes in the
subject matters discussed in said Note 9.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
The Corporation's book value of its common stock increased from $28.80 at
December 31, 1999, to $29.45 at September 30, 2000. The growth of retained
earnings, partially offset by the repurchase of the Corporation's common stock
during this time period, was the primary reason for the increase in book value.
However, the common equity ratio decreased slightly, from 50.4% to 49.8%, due to
an increase in the Corporation's debt component of its total capitalization,
including short-term obligations, and also, the common stock repurchases.
For the nine months ended September 30, 2000, the Corporation, under its
stock repurchase program initiated in March 2000, has purchased 245,400 shares
of its common stock for $8.5 million.
On June 13, 2000, Central Hudson issued $40 million of unsecured Medium
Term Notes, bearing a coupon of 7.32% and maturing on June 13, 2001. The
proceeds from the sale of these Notes was used to finance maturing First
Mortgage Bonds of Central Hudson and for general corporate purposes.
As part of the holding company restructuring referred to in Note 2 of the
Consolidated Financial Statements contained herein, the Corporation, in December
1998, established a revolving credit agreement with three commercial banks for
borrowing up to $50 million through December 4, 2001. Such revolving credit
facility was increased in size to $170 million, effective July 10, 2000.
Central Hudson has $50 million of committed short-term credit available
through a revolving credit agreement with several commercial banks. Central
Hudson also has several uncommitted credit facilities available. Authorization
from the PSC limits the short-term borrowing amount Central Hudson may have
outstanding, at any time, to $52 million in the aggregate.
Services presently has a $12.5 million revolving credit agreement with
several commercial banks.
At September 30, 2000, the Corporation had $55.0 million of short-term debt
outstanding. The balance of cash and cash equivalents was $15.3 million at the
end of September 2000.
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<PAGE>
EARNINGS PER SHARE
Earnings per share of common stock were $.87 for the third quarter of 2000,
as compared to $.77 for the third quarter of 1999, an increase of 13%. Earnings
per share of common stock were $2.41 for the first nine months ended September
30, 2000, as compared to $2.37 for the first nine months ended September 30,
1999, an increase of 2%.
The increase in earnings for the quarter resulted primarily from an
increase in Central Hudson electric and gas net operating revenues; an increase
in earnings from operations of Services, the Corporation's unregulated
affiliate; and a reduction in taxes other than income taxes largely due to the
receipt of property tax refunds related to a reassessment settlement. Partially
offsetting the increase in earnings per share was the net effect of various
items including increased depreciation on plant and equipment, an increase in
transmission and distribution maintenance costs, an increase in the net cost of
capital, and a reduction in federal income taxes related to increased tax
depreciation. The increase in earnings from Services is due largely to increased
profit margins for wholesale electric generation sales, partially offset by a
reduction in retail electric sales due to higher wholesale prices.
Gas net revenues of Central Hudson (net of the cost of gas and revenue
taxes) increased due primarily to an increase in own territory firm sales. An
increase in the number of heating degree days due to cooler weather resulted in
increased firm gas sales to residential and commercial heating customers. The
increase in electric net revenues is due to the net effect of an increase in the
profits retained from sales of electricity to other utilities and marketers, a
reduction in revenues deferred in accordance with the excess earnings provision
in the Settlement Agreement, a reduction in nonrecoverable fuel costs related to
Central Hudson's Partial Pass-thru fuel cost incentive, and a decrease in
Central Hudson's sales to own territory customers, primarily residential and
commercial customers. The reduction in electric sales was attributable to a
cooler summer as evidenced by a 44% reduction in cooling degree days for the
current quarter as compared to last year. Electric net revenues are net of the
cost of fuel, purchased electricity and revenue taxes.
The principal reasons for the improvement in earnings for the nine months
ended September, 2000 were an increase in Central Hudson's electric net
operating revenues primarily from profits retained from sales to other utilities
and marketers; an increase in utility gas net operating revenues due largely to
sales growth; increased earnings from Services; and a reduction in federal
income taxes due to increased tax depreciation benefits. These increases were
largely offset by an increase in Central Hudson operating and maintenance (O&M)
costs and increased depreciation on utility plant and equipment. O&M costs
increased
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<PAGE>
due largely to costs incurred for normal storm restoration efforts and an
increase in workers' compensation insurance and employee benefit costs due to
substantial dividends received last year.
The Corporation's common stock repurchase program did not materially affect
its financial results for the periods discussed above.
RESULTS OF OPERATIONS
The following table reports the variation in the results of operations for
the three months and nine months ended September 30, 2000, compared to the same
period in 1999:
3 MONTHS ENDED SEPTEMBER 30,
------------------------------------
INCREASE
2000 1999 (DECREASE)
-------- -------- --------
(Thousands of Dollars)
Operating Revenues ................... $167,897 $146,473 $ 21,424
Operating Expenses ................... 147,162 127,390 19,772
-------- -------- --------
Operating Income ..................... 20,735 19,083 1,652
Other Income ......................... 2,861 3,002 (141)
-------- -------- --------
Income before Interest
Charges ............................ 23,596 22,085 1,511
Interest Charges ................... 8,293 8,214 79
-------- -------- --------
Preferred Stock Dividends of
Central Hudson ..................... 807 807 --
-------- -------- --------
Net Income ........................... $ 14,496 $ 13,064 $ 1,432
Dividends Declared on Common Stock ... 8,963 9,106 (143)
-------- -------- --------
Amount Retained in Business .......... $ 5,533 $ 3,958 $ 1,575
======== ======== ========
9 MONTHS ENDED SEPTEMBER 30,
------------------------------------
INCREASE
2000 1999 (DECREASE)
-------- -------- --------
(Thousands of Dollars)
Operating Revenues ................... $506,771 $429,817 $ 76,954
Operating Expenses ................... 447,994 372,337 75,657
-------- -------- --------
Operating Income ..................... 58,777 57,480 1,297
Other Income ......................... 8,293 7,554 739
-------- -------- --------
Income before Interest
Charges ............................. 67,070 65,034 2,036
Interest Charges .................... 24,211 22,622 1,589
-------- -------- --------
Preferred Stock Dividends of
Central Hudson ...................... 2,422 2,422 --
-------- -------- --------
Net Income ........................... $ 40,437 $ 39,990 $ 447
Dividends Declared on Common
Stock ............................... 27,109 27,317 (208)
-------- -------- --------
Amount Retained in Business .......... $ 13,328 $ 12,673 $ 655
======== ======== ========
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<PAGE>
As reported under the caption "Regulatory Matters" in Note 2 to the
Consolidated Financial Statements of this report, Central Hudson filed a
Competitive Transition Filing with the PSC on August 1, 2000 to succeed the
Settlement Agreement, and a supplemental filing on October 6, 2000 to reflect
the results of the auction of the Danskammer and Roseton Plants to Dynegy, as
described in Item 5 to the Corporation's Form 8-K Current Report, dated August
8, 2000. As a result of the sale of these generating plants (expected to close
in December 2000 or early 2001), the related electric operating revenues,
operating expenses and asset and liability balances will be eliminated from
Central Hudson's financial results. In addition, as reflected in the Filing
supplement, Central Hudson proposes to use a portion of the proceeds from the
sale of these plants to write down its investment in the Nine Mile 2 Plant,
which would result in a further reduction of operating revenues, operating
expenses and asset and liability balances related to this plant.
The Corporation is unable to estimate the net impact of the foregoing on
its financial results because it cannot predict (i) the action the PSC will take
on the Filing, as supplemented, (ii) the action the PSC will take on Central
Hudson's petition for approval of the sale of its fossil-fueled generating
plants to Dynegy, and (iii) the return on investment the Corporation may realize
by the redeployment of the proceeds of such sale into new investments.
OPERATING REVENUES
Operating revenues increased $21.4 million (15%) for the third quarter of
2000 as compared to the third quarter of 1999 and increased $77.0 million (18%)
for the nine months ended September 30, 2000. Details of these revenue changes
by electric, gas and other departments are as follows:
INCREASE (DECREASE) FROM PRIOR PERIOD
----------------------------------------
THIRD QUARTER
----------------------------------------
ELECTRIC GAS OTHER
-------- ------- ------
(Thousands of Dollars)
Customer Sales* ................. $ (3,162) $(1,386)** $ --
Sales to Other Utilities ........ 5,163 1,726 --
Fuel and Gas Cost
Adjustment ..................... 11,834 1,143 --
Deferred Revenues ............... 5,046*** 217 --
Miscellaneous ................... (120) (418) 1,381****
-------- ------- ------
$ 18,761 $ 1,282 $1,381
======== ======= ======
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<PAGE>
INCREASE (DECREASE) FROM PRIOR PERIOD
----------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 2000
----------------------------------------
ELECTRIC GAS OTHER
-------- ------- -------
(Thousands of Dollars)
Customer Sales* ................. $ 2,660 $ 2,699** $ --
Sales to Other Utilities ........ 18,775 3,675 --
Fuel and Gas Cost
Adjustment ..................... 24,610 200 --
Deferred Revenues ............... 9,668*** 153 --
Miscellaneous ................... (540) (246) 15,300****
-------- ------- -------
$ 55,173 $ 6,481 $15,300
======== ======= =======
*Includes electricity and gas supplied by others.
**Both firm and interruptible revenues.
***Includes the deferral and restoration of revenues related to Central
Hudson's Retail Access Program and earnings in excess of the rate of return
cap under the Settlement Agreement.
****Operating revenues from Services which was not fully operational in the
first and second quarters of 1999 and was engaged in expansion and startup
activities.
SALES
Central Hudson's sales vary seasonally in response to weather conditions.
Generally, electric sales peak in the summer and gas sales peak in the winter.
Total kilowatthour sales of electricity within Central Hudson's service
territory decreased 5% and firm sales of natural gas increased 13% in the third
quarter of 2000 as compared to the third quarter of 1999. For the first nine
months ended September 30, 2000, electric sales increased 1% and gas sales to
firm customers increased 6% compared to the same period last year. Changes in
sales from last year by major customer classifications, including energy
supplied by others, are set forth below.
INCREASE (DECREASE) FROM PRIOR PERIOD
-------------------------------------
THIRD QUARTER
-------------------------------------
ELECTRIC GAS
-------- ---------
Residential ............................. (9)% 15 %
Commercial .............................. (3) 12
Industrial .............................. (1) (1)
Interruptible ........................... N/A (50)
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<PAGE>
INCREASE (DECREASE) FROM PRIOR PERIOD
-------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------
ELECTRIC GAS
-------- ---------
Residential ............................. (1)% 5 %
Commercial .............................. 2 6
Industrial .............................. 2 2
Interruptible ........................... N/A (29)
Billing heating degree days were 56% higher for the quarter ended September
30, 2000 and 1% higher for the nine months ended September 30, 2000 when
compared to the same period in 1999, but during the first nine months of 2000
were 5% below normal. Cooling degree days were 44% lower for the quarter and 35%
lower for the nine months ended September 30, 2000 when compared to the same
periods in 1999, and were 23% below normal for the quarter and 13% below normal
for the nine months ended September 30, 2000.
Interruptible gas sales for the third quarter and the first nine months of
2000, as compared to the same periods in 1999, decreased by 50% and 29%,
respectively, due largely to a reduction in gas sales for electric generation.
OPERATING EXPENSES
The following table reports the variation in the operating expenses for the
three and nine months ended September 30, 2000, compared to the same periods in
the prior year:
INCREASE (DECREASE) FROM PRIOR PERIOD
-------------------------------------
THIRD QUARTER
-------------------------------------
AMOUNT PERCENT
-------- -------
(Thousands of Dollars)
Operating Expenses
Fuel and Purchased Electricity ......... $16,325 35 %
Purchased Natural Gas ................... 341 4
Purchased Petroleum ..................... (824) (158)
Other Expenses of Operation ............. 3,751 13
Maintenance ............................. 300 5
Depreciation and Amortization ........... 553 5
Taxes, Other than Income Tax ............ (1,637) (10)
Federal Income tax ...................... 963 13
------- ----
Total ............................... $19,772 16 %
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<PAGE>
INCREASE (DECREASE) FROM PRIOR PERIOD
-------------------------------------
NINE MONTHS ENDED SEPTEMBER 30, 2000
-------------------------------------
AMOUNT PERCENT
-------- -------
(Thousands of Dollars)
Operating Expenses
Fuel and Purchased Electricity ......... $ 56,048 49 %
Purchased Natural Gas ................... 2,141 5
Purchased Petroleum ..................... 3,080 109
Other Expenses of Operation ............. 15,515 19
Maintenance ............................. 1,683 8
Depreciation and Amortization ........... 1,568 4
Taxes, Other than Income Tax ............ (2,538) (5)
Federal Income tax ...................... (1,840) (8)
-------- ----
Total .......................... $ 75,657 20 %
Total operating expenses for the third quarter and the first nine months of
2000 increased $19.8 million and $75.7 million, respectively, from the
comparable periods in 1999, including an increase in expenses for Services of
$0.6 million and $14.1 million, respectively. The balance of the increases in
operating expenses for the two periods relate to Central Hudson operations. For
the 3 months ended September 30, 2000 Central Hudson operating expenses
increased $19.7 million. This was due largely to an increase in the cost of fuel
and purchased electricity resulting from an increase in electricity sales to
other utilities and marketers and also, increased fuel prices. For the nine
months ended September 30, 2000 Central Hudson expenses increased $62 million,
again largely the result of an increase in the cost of fuel and purchased
electricity due to increased fuel prices and sales of electricity to other
utilities and marketers. Central Hudson results for the nine month period also
include increases in the cost of purchased natural gas due to increased sales
and fuel prices and an increase in other expenses, primarily due to Central
Hudson storm restoration costs for severe storms occurring from mid-May to early
June. Both report periods reflect a reduction in taxes other than income taxes
arising from property tax refunds received as a result of a reassessment
settlement.
COMMON STOCK DIVIDENDS
Reference is made to the caption "Common Stock Dividends and Price Ranges"
of Part II, Item 7 of the Corporation's 10-K Report, for a discussion of the
Corporation's dividend payments. On September 22, 2000, the Board of Directors
of the Corporation declared a quarterly dividend of $.54 per share, payable
November 1, 2000, to shareholders of record as of October 10, 2000.
- 19 -
<PAGE>
OTHER MATTERS
On November 1, 2000, Services closed on the acquisition of Griffith
Consumers Co., a heating oil provider with 43,000 retail customers based
primarily in the greater Baltimore-Washington, D.C. area. The acquisition will
provide Services with a platform from which to market a full range of energy
supply alternatives - including electricity, natural gas, propane, and fuel oil
- and related energy services in Washington, D.C., Maryland, Delaware, Virginia
and West Virginia. The cost of acquisition was less than 10% of the
Corporation's total assets.
FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q and the documents incorporated by
reference contain statements which, to the extent they are not recitations of
historical fact, constitute "forward-looking statements" within the meaning of
the Securities Litigation Reform Act of 1995 (Reform Act). The statements
contain words such as "believes," "expects," "intends," "plans," and other
similar words or expressions. All such forward-looking statements are intended
to be subject to the safe harbor protection provided by the Reform Act. These
statements are not guarantees of future performance and involve certain risks,
uncertainties and assumptions which are difficult to predict. A number of
important factors affecting the Corporation's business and financial results
could cause actual results to differ materially from those stated in the
forward-looking statements. Those factors include weather, energy supply and
demand, developments in the legislative, regulatory and competitive environment,
electric and gas industry restructuring and cost recovery and certain
environmental matters as well as such other factors as set forth in the
Corporation's 10-K Report and all documents subsequently filed with the SEC. The
Corporation undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Reference is made to Part II, Item 7A of the Corporation's 10-K Report for
a discussion of market risk. The Corporation's balance sheet at September 30,
2000 reflects amounts for the change in the fair value of derivative financial
instruments which were used to hedge commodity transactions. The amounts
recorded are not material to the Corporation's financial position or results of
operations.
- 20 -
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
(a) ASBESTOS LITIGATION. For a discussion of lawsuits against Central
Hudson involving asbestos, see Note 9 - Commitments and Contingencies, under the
caption "Asbestos Litigation," in Part II, Item 8 of the Corporation's 10-K
Report.
As of September 30, 2000, 338 new cases involving asbestos have been
brought against Central Hudson of the type described under such caption and
subject to the insurance coverage described under such caption (which insurance
does not extend to punitive damages). As of that date, of the 2,310 cases
brought against Central Hudson, 761 remain pending. Of the 1,549 cases no longer
pending against Central Hudson, 1,412 have been dismissed or discontinued, and
Central Hudson has settled 137 cases. The Corporation is presently unable to
assess the validity of the remaining asbestos lawsuits; accordingly, it cannot
determine the ultimate liability relating to these cases. Based on information
known to the Corporation at this time, including Central Hudson's experience in
settling asbestos cases and in obtaining dismissals of asbestos cases, the
Corporation believes that the cost to be incurred in connection with the
remaining lawsuits will not have a material adverse effect on the Corporation's
financial position or results of operations.
Item 5. Other Information
(a) NINE MILE 2 PLANT. Reference is made to Note 3 - Nine Mile 2 Plant
under the caption "General" to the Consolidated Financial Statements included in
the Corporation's 10-K Report, and to Part II Item 5(b) of the Corporation's
Quarterly Report, on Form 10-Q, for the quarterly period ended March 31, 2000,
and to Part II Item 5(a) of the Corporation's Quarterly Report, on Form 10-Q,
for the quarterly period ended June 30, 2000, for a discussion of the possible
sale of the interests of some of the cotenant owners in the Nine Mile 2 Plant.
On September 28, 2000, Central Hudson, Niagara Mohawk Power Corporation and
Rochester Gas and Electric Corporation solicited bids for sale of their
interests in the Nine Mile 2 Plant. Thereafter, New York State Gas & Electric
Corporation announced their intention to include the sale of its interest in the
Nine Mile 2 Plant in such solicitation. The initial bids are to be returned in
November 2000. If a bidder were selected, the Corporation can make no prediction
when Central Hudson's interest in the Nine Mile 2 Plant would be sold.
(b) ENVIRONMENTAL REGULATION. Reference is made to the caption
"Environmental Quality Regulation - Central Hudson Toxic Substance and Hazardous
Wastes" in Item 1 of the Corporation's 10-K Report for a discussion of the
regulations to which Central Hudson is subject with respect to the disposal of
industrial,
- 21 -
<PAGE>
hazardous and toxic wastes and to Item 5(c) of Part II of the Corporation's
Quarterly Report on Form 10-Q, for the quarterly period ended June 30, 2000, for
a discussion of the June 2, 2000 letter to Central Hudson from the New York
Department of Environmental Conservation (DEC), Division of Environmental
Enforcement.
By that letter, Central Hudson was requested to provide information
regarding the Orange County Landfill (Site) located in the Township of Goshen,
New York. The Site is listed on the New York State's Inactive Hazardous Waste
Disposal site Registry and the DEC is obtaining information about disposal of
wastes at the Site.
The DEC, in its letter, states that its records indicate Central Hudson or
a predecessor entity, did dispose or may have disposed of wastes at the Site, or
that Central Hudson transported wastes to the Site for disposal.
Central Hudson responded to the request for information on June 30, 2000.
Documents submitted with that response indicate that at least three (3)
shipments of waste may have been disposed of by Central Hudson at the Site, one
of construction waste, one of office and commercial waste and one of asbestos
rubble.
Item 6. Exhibits and Reports of Form 8-K
(a) The following exhibits are furnished in accordance with the provisions
of Item 601 of Regulation S-K:
Exhibit No.
Regulation S-K
Item 601
Designation Exhibit Description
-------------- -------------------
(10) (i) 93 - - Asset Purchase and Sales Agreement, dated August 7, 2000,
among Central Hudson, Consolidated Edison Company of New
York, Inc., Niagara Mohawk Power Corporation and Dynegy
Power Corp. for the sale of the Roseton Electric Generating
Station and related assets.
(10) (i) 94 - - Asset Purchase and Sales Agreement, dated August 7, 2000,
by and between Central Hudson and Dynegy Power Corp. for the
sale of the Danskammer Point Steam Electric Generating
Station and related assets.
(10) (i) 95 - - Purchase Price Agreement, dated August 7, 2000, among
Central Hudson, Consolidated Edison Company of New York,
Inc., Niagara Mohawk Power Corporation and Dynegy Power
Corp. relating to the sale of the Roseton
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<PAGE>
Electric Generating Station and the Danskammer Point Steam
Electric Generating Station.
(10) (i) 96 - - Guarantee Agreement, dated August 7, 2000, among Central
Hudson, Consolidated Edison Company of New York, Inc.,
Niagara Mohawk Power Corporation and Dynegy Holdings, Inc.,
relating to the sale of the Roseton Electric Generating
Station and the Danskammer Point Steam Electric Generating
Station.
(12) - - Statement Showing Computation of the Ratio of Earnings to
Fixed Charges and the Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
(27) - - Financial Data Schedule, pursuant to Item 601(c) of
Regulation S-K.
(b) Reports on Form 8-K. During the period covered by this Report on Form 10-Q,
the Corporation filed the following Current Report on Form 8-K:
(i) A Report, dated August 8, 2000, containing a copy of the press release
announcing that Central Hudson, along with Consolidated Edison Company of New
York, Inc. and Niagara Mohawk Power Corporation, had agreed to sell the
Danskammer and Roseton Plants to Dynegy Power Corp.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Corporation has duly caused this report to be signed on its behalf by the
undersigned hereunder duly authorized.
CH ENERGY GROUP, INC.
(Registrant)
By: /s/ Donna S. Doyle
-----------------------------------
Donna S. Doyle
Vice President - Accounting
and Controller
Dated: November 8, 2000
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<PAGE>
EXHIBIT INDEX
Following is the list of Exhibits, as required by Item 601 of Regulation
S-K, filed as part of this Report on Form 10-Q:
Exhibit No.
Regulation S-K
Item 601
Designation Exhibit Description
-------------- -------------------
(10) (i) 93 - - Asset Purchase and Sales Agreement, dated August 7, 2000,
among Central Hudson, Consolidated Edison Company of New
York, Inc., Niagara Mohawk Power Corporation and Dynegy
Power Corp. for the sale of the Roseton Electric Generating
Station and related assets.
(10) (i) 94 - - Asset Purchase and Sales Agreement, dated August 7, 2000, by
and between Central Hudson and Dynegy Power Corp. for the
sale of the Danskammer Point Steam Electric Generating
Station and related assets.
(10) (i) 95 - - Purchase Price Agreement, dated August 7, 2000, among
Central Hudson, Consolidated Edison Company of New York,
Inc., Niagara Mohawk Power Corporation and Dynegy Power
Corp. relating to the sale of the Roseton Electric
Generating Station and the Danskammer Point Steam Electric
Generating Station.
(10) (i) 96 - - Guarantee Agreement, dated August 7, 2000, among Central
Hudson, Consolidated Edison Company of New York, Inc.,
Niagara Mohawk Power Corporation and Dynegy Holdings, Inc.,
relating to the sale of the Roseton Electric Generating
Station and the Danskammer Point Steam Electric Generating
Station.
(12) - - Statement Showing Computation of the Ratio of Earnings to
Fixed Charges and the Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends.
(27) - - Financial Data Schedule, pursuant to Item 601(c) of
Regulation S-K.
