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FORM 10-Q
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.................March 31, 1996
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...................................1-3268
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
(Exact name of registrant as specified in its charter)
NEW YORK 14-0555980
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
284 SOUTH AVENUE, POUGHKEEPSIE NEW YORK 12601-4879
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including
area code (914) 452-2000
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 $5.00 per share; 17,554,987 shares
outstanding as of April 30, 1996.
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CENTRAL HUDSON GAS & ELECTRIC CORPORATION
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1996
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1 - Consolidated Financial Statements
Consolidated Statement of Income -
Three Months Ended March 31, 1996 and 1995 1-2
Consolidated Balance Sheet - March 31, 1996
and December 31, 1995 3-4
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1996 and 1995 5-6
Notes to Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-12
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings 13
Item 4 - Submission of Matters to a Vote of
Security Holders 13-14
Item 5 - Other Information 14-15
Item 6 - Exhibits and Reports on Form 8-K 15
Signatures 16
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PART I - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
CONSOLIDATED STATEMENT OF INCOME
For the 3 Months Ended
March 31,
1996 1995
(Thousands of Dollars)
Operating Revenues
Electric.............................. $ 109,306 $ 102,053
Gas................................... 38,055 38,748
Total - own territory................ 147,361 140,801
Electric sales to other utilities..... 4,617 3,885
Gas sales to other utilities.......... 1,868 -
Total Operating Revenues..... 153,846 144,686
Operating Expenses
Operation:
Fuel used in electric generation..... 22,641 16,280
Purchased electricity................ 9,712 12,614
Purchased natural gas................ 21,329 22,292
Other expenses of operation.......... 25,123 24,384
Maintenance........................... 7,137 6,168
Depreciation and amortization......... 10,707 10,487
Taxes, other than income tax.......... 17,780 17,475
Federal income tax.................... 12,325 10,782
Total Operating Expenses..... 126,754 120,482
Operating Income....................... 27,092 24,204
Other Income and Deductions
Allowance for equity funds
used during construction............. 153 264
Federal income tax.................... 276 371
Other - net........................... 1,623 1,579
Total Other Income
and Deductions.............. 2,052 2,214
Income Before Interest Charges......... 29,144 26,418
Interest Charges
Interest on mortgage bonds............ 4,216 4,216
Interest on other long-term debt...... 2,082 2,177
Interest on short-term debt........... 11 6
Other interest........................ 507 420
Allowance for borrowed funds
used during construction............. (124) (238)
Amortization of expense on debt....... 252 282
Total Interest Charges....... 6,944 6,863
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CENTRAL HUDSON GAS & ELECTRIC CORPORATION
CONSOLIDATED STATEMENT OF INCOME
For the 3 Months Ended
March 31,
1996 1995
(Thousands of Dollars)
Net Income............................ 22,200 19,555
Premium on Preferred Stock Redemption. 378 -
Dividends Declared on Cumulative
Preferred Stock...................... 808 1,282
Income Available for Common Stock..... 21,014 18,273
Dividends Declared on
Common Stock......................... 9,215 8,997
Balance Retained in the Business...... $ 11,799 $ 9,276
Common Stock:
Average Shares Outstanding (000s).... 17,532 17,280
Earnings Per Share................... $1.20 $1.06
Dividends Declared................... $.525 $ .52
See Notes to Consolidated Financial Statements.
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CENTRAL HUDSON GAS & ELECTRIC CORPORATION
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1996 1995
(Thousands of Dollars)
ASSETS
Utility Plant
Electric....................... $1,150,238 $1,149,233
Gas............................ 141,510 140,341
Common......................... 85,045 83,220
Nuclear fuel................... 33,004 32,541
1,409,797 1,405,335
Less: Accumulated depreciation. 500,253 490,576
Nuclear fuel amortization 27,394 26,435
882,150 888,324
Construction work in progress.. 52,657 48,770
Net Utility Plant............ 934,807 937,094
Other Property and
Investments.................... 14,504 11,332
Current Assets
Cash and cash equivalents...... 16,820 15,478
Accounts receivable from
customers-net of allowance for
doubtful accounts............. 57,760 44,536
Accrued unbilled utility
revenues...................... 14,173 15,806
Other receivables.............. 2,208 4,674
Fuel, materials and supplies,
at average cost............... 27,046 27,590
Special deposits and
prepayments................... 19,837 12,659
Total Current Assets......... 137,844 120,743
Deferred Charges
Regulatory Assets.............. 152,254 159,907
Unamortized debt expense....... 5,968 6,080
Other.......................... 15,267 14,936
Total Deferred Charges....... 173,489 180,923
Total Assets.................... $1,260,644 $1,250,092
See Notes to Consolidated Financial Statements.
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CENTRAL HUDSON GAS & ELECTRIC CORPORATION
CONSOLIDATED BALANCE SHEET
March 31, December 31,
1996 1995
(Thousands of Dollars)
LIABILITIES
Capitalization
Common Stock Equity
Common stock, 30,000,000
authorized; shares out-
standing ($5 par value):
1996 - 17,552,299
1995 - 17,496,051............ $ 87,761 $ 87,480
Paid-in capital............... 284,400 282,942
Retained earnings............. 102,274 90,475
Capital stock expense......... (6,407) (6,658)
Total Common Stock Equity... 468,028 454,239
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
Long-term Debt................ 359,927 389,245
Total Capitalization....... 883,985 899,514
Current Liabilities
Current Redemption of
preferred stock.............. - 13,000
Current maturities
of long-term debt............ 31,208 1,577
Accounts payable.............. 22,704 24,433
Accrued taxes and interest.... 23,664 7,824
Dividends payable............. 10,022 10,244
Accrued vacation.............. 4,251 4,157
Customer deposits............. 4,003 4,021
Other......................... 4,780 6,166
Total Current Liabilities... 100,632 71,422
Deferred Credits and Other
Liabilities
Regulatory Liabilities........ 72,537 74,132
Operating reserves............ 6,260 6,024
Other......................... 9,262 9,659
Total Deferred Credits and
Other Liabilities.......... 88,059 89,815
Accumulated Deferred Income Tax 187,968 189,341
Total Capitalization and
Liabilities................... $1,260,644 $1,250,092
See Notes to Consolidated Financial Statements.
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CENTRAL HUDSON GAS & ELECTRIC CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 3 Months Ended
March 31,
1996 1995
(Thousands of Dollars)
Operating Activities
Net Income.......................... $ 22,200 $ 19,555
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, amortization and
nuclear fuel amortization........ 11,995 11,510
Deferred income taxes, net........ 2,022 934
Allowance for equity funds used
during construction.............. (153) (264)
Nine Mile 2 Plant deferred
finance charges, net............. (1,214) (1,214)
Provision for uncollectibles...... 1,052 875
Accrued pension costs............. (1,897) (2,657)
Deferred gas costs................ 3,020 6,166
Deferred gas refunds.............. (1,608) (613)
Other - net....................... 1,036 2,776
Changes in current assets and
liabilities, net:
Accounts receivable and unbilled
utility revenues................. (10,177) 1,324
Fuel, materials and supplies...... 544 4,061
Special deposits and prepayments.. (7,178) (7,435)
Accounts payable.................. (1,729) (11,668)
Accrued taxes and interest........ 15,840 15,765
Other current liabilities......... (1,311) (113)
Net cash provided by operating
activities......................... 32,442 39,002
Investing Activities
Additions to plant.................. (9,726) (9,703)
Allowance for equity funds used
during construction................ 153 264
Net additions to plant.............. (9,573) (9,439)
Nine Mile 2 Plant decommissioning
trust fund......................... (205) (498)
Other - net......................... 34 (639)
Net cash used in investing
activities......................... (9,744) (10,576)
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CENTRAL HUDSON GAS & ELECTRIC CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 3 Months Ended
March 31,
1996 1995
(Thousands of Dollars)
Financing Activities
Proceeds from issuance of:
Long-term debt................... 529 1,000
Common stock..................... 1,739 1,741
Repayments of short-term debt...... - (3,000)
Retirement and redemption of
long-term debt.................... (234) (146)
Retirement and redemption of
cumulative preferred stock........ (13,000) -
Dividends paid on cumulative
preferred and common stock........ (10,244) (10,247)
Issuance and redemption costs...... (16) (2)
Redemption premium on cumulative
preferred stock................... (130) -
Net cash used in financing
activities........................ (21,356) (10,654)
Net Change in Cash and Cash
Equivalents.......................... 1,342 17,772
Cash and Cash Equivalents -
Beginning Year....................... 15,478 5,792
Cash and Cash Equivalents -
End of Period........................ $ 16,820 $ 23,564
Supplemental Disclosure of
Cash Flow Information
Interest paid (net of amounts
capitalized)...................... $ 1,193 $ 1,061
Federal income tax paid............ 200 600
See Notes to Consolidated Financial Statements.
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CENTRAL HUDSON GAS & ELECTRIC CORPORATION
Notes to Consolidated Financial Statements
1. General
The accompanying consolidated financial statements of Central
Hudson Gas & Electric Corporation (herein the Registrant or the
Company) 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 condensed unaudited quarterly
consolidated financial statements do not contain the detail or
footnote disclosure 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 Company's Annual Report, on Form
10-K, for the year ended December 31, 1995. Due to the seasonal
nature of the Company's operations, financial results for
interim periods are not necessarily indicative of trends for a
twelve-month period. Certain 1995 amounts have been
reclassified to conform to the 1996 presentation.
2. Commitments and Contingencies
The Company faces a number of contingencies which arise during
the normal course of business and which have been discussed in
Note 8 (entitled "Commitments and Contingencies") to the
Consolidated Financial Statements included in the Company's 10-K
Report. The Financial Accounting Standards Board (FASB) has
issued an exposure draft entitled "Accounting for Certain
Liabilities related to Closure and Removal of Long-Lived
Assets," which includes nuclear plant decommissioning. If the
accounting standard proposed in such exposure draft were
adopted, it may result in higher annual provisions for
decommissioning to be recognized earlier in the operating life
of nuclear units and an accelerated recognition of the
decommissioning obligation. The FASB will be deliberating this
issue and the resulting final pronouncement could be different
from that proposed in the exposure draft. Registrant can make
no prediction at this time 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 of Registrant. Except as what is disclosed
above and in Part II of this Quarterly Report, on Form 10-Q, for
the quarterly period ended March 31, 1996, and in any Current
Report, on Form 8-K, filed in 1996, there have been no material
changes in the subject matters discussed in said Note 8.
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
For the three months ended March 31, 1996, cash expenditures,
related to the construction program of the Company, amounted to
$9.5 million. The amount shown on the Consolidated Statement of
Cash Flows for "Net additions to plant" of $9.6 million includes
the debt portion of $124,000 of the Allowance for Funds Used
During Construction ("AFDC", as such term is described in Note
1, entitled "Summary of Significant Accounting Policies," to the
Consolidated Financial Statements included in the Company's 10-K
Report). The cash requirements for such expenditures were
funded from internal sources and proceeds of $1.7 million from
the issuance of 56,248 shares of common stock under the
Company's Automatic Dividend Reinvestment and Stock Purchase
Plan and the Company's Customer Stock Purchase Plan.
The Company optionally redeemed all of its outstanding shares of
7.72% Cumulative Preferred Stock on January 1, 1996 at a
redemption price of $101.00 per share. The $13.1 million
redemption price paid and associated costs were funded through
internal sources.
On May 1, 1996, the Company optionally redeemed $30 million of
the Company's First Mortgage Bonds, 8 3/4% Series due 2001 at a
redemption price of 102.07% of the principal amount. The $30.6
million total cash requirements were financed from short-term
borrowings and the liquidation of temporary cash investments.
The growth of retained earnings in the first three months of 1996
contributed to the increase in the book value of common stock
from $25.96 at December 31, 1995 to $26.67 at March 31, 1996.
The combined effect of the sales of common stock under the
Company's Automatic Dividend Reinvestment and Stock Purchase
Plan and the Company's Customer Stock Purchase Plan, the
redemption of the Company's 7.72% Cumulative Preferred Stock,
and the growth of retained earnings in the first three months of
1996 contributed to the increase in the common equity ratio from
49.7% at December 31, 1995 to 51.1% at March 31, 1996.
The Company has $51.5 million of committed short-term credit
facilities available. It also has uncommitted short-term credit
facilities with four banks, one for $50 million, another for $30
million, and two for $25 million each. Authorization from the
Public Service Commission of the State of New York (PSC),
however, limits the short-term borrowing amount the Company may
have outstanding, at any time, to $52 million in the aggregate.
At March 31, 1996, the Company had no short-term debt
outstanding. Investments in short-term securities were $12.1
million at the end of March 1996.
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EARNINGS PER SHARE
Earnings per share of common stock were $1.20 for the first
quarter of 1996, as compared to $1.06 for the first quarter of
1995, an increase of 13%.
The increase in earnings per share for the quarter ended
March 31, 1996, as compared to the same period in 1995, resulted
primarily from increased electric and gas net operating revenues
attributable largely to increased sales occurring because of
colder winter weather experienced in the first quarter of 1996
when compared to the same period in 1995. This favorable
variance was partially offset by increased operation and
maintenance costs in 1996 resulting primarily from increased
storm restoration costs and increased employee payroll and
fringe benefit costs largely because of an increase in overtime
paid to storm repair crews. Earnings per share in the first
quarter of 1996, when compared to the comparable period in 1995,
were also unfavorably affected by an increase in the number of
shares of common stock outstanding, increased depreciation
costs, decreased AFDC on capital expenditures, and decreased
earnings from subsidiary companies.
RESULTS OF OPERATIONS
The following table reports the variation in the results of
operations for the three months ended March 31, 1996 compared to
the same period for 1995:
3 MONTHS ENDED MARCH 31,
INCREASE
1996 1995 (DECREASE)
(Thousands of Dollars)
Operating Revenues $153,846 $144,686 $ 9,160
Operating Expenses 126,754 120,482 6,272
Operating Income 27,092 24,204 2,888
Other Income & Deductions 2,052 2,214 (162)
Income before Interest Charges 29,144 26,418 2,726
Interest Charges 6,944 6,863 81
Net Income 22,200 19,555 2,645
Premium on Preferred Stock
Redemption 378 - 378
Dividends Declared on Cumulative
Preferred Stock 808 1,282 (474)
Income Available for Common Stock $ 21,014 $ 18,273 $ 2,741
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OPERATING REVENUES
Operating revenues increased $9.2 million (6%) for the first
quarter of 1996 as compared to the first quarter of 1995.
Details of these revenue changes by electric and gas departments
are as follows:
INCREASE (DECREASE) FROM PRIOR PERIOD
FIRST QUARTER
ELECTRIC GAS
(Thousands of Dollars)
Customer Sales $ 6,755 $ 1,456*
Sales to Other
Utilities 732 1,868
Fuel and Gas Cost
Adjustment 604 (2,701)
Deferred Revenues (25) 858
Miscellaneous (81) (306)**
$ 7,985 $ 1,175
*Both firm and interruptible revenues.
**Includes revenues from transportation of customer-owned gas.
Revenues collected from or credited to customers under the
electric fuel and gas cost adjustment clauses do not affect
earnings since they are offset in fuel costs, with the exception
of revenues collected pursuant to incentive mechanisms.
During the month of March 1996, the Company began selling natural
gas to third parties who in turn resell the natural gas to their
customers. These sales totaled $1.9 million for the first
quarter of 1996. Of the profits realized from these gas sales
for resale, 85% are returned to firm gas customers through the
Gas Adjustment Clause and 15% are retained by the Company.
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SALES
Total kilowatt-hour sales of electricity within the Company's
service territory increased 7%, while firm sales of natural gas
increased 21%, for the first quarter of 1996 as compared to the
first quarter of 1995. Changes in sales from last year by major
customer classifications are set forth below:
INCREASE (DECREASE) FROM PRIOR PERIOD
FIRST QUARTER
ELECTRIC GAS
Residential 12% 22%
Commercial 7 21
Industrial (1) 30
Interruptible N/A (84)
Transportation of
Customer-owned Gas N/A 7
Billing degree days were 25% higher for the quarter ended
March 31, 1996 than for the same period last year.
Sales of electricity to residential customers in the first
quarter of 1996 increased 12% from the comparable prior year
period due to the combined effect of an 11% increase in usage
per customer and a 1% increase in the number of customers.
Commercial sales in the first quarter of 1996 increased 7% as
compared to last year due to the combined effect of a 5%
increase in usage per customer and a 2% increase in the number
of customers. Electric sales to industrial customers decreased
1% due primarily to a decline in usage by a large cement
company.
Sales of gas to residential customers for the first quarter of
1996 increased 22% due to the combined effect of a 20% increase
in usage per customer and a 2% increase in the number of
customers. Sales of gas to commercial customers for the first
quarter of 1996 increased 21% due to the combined effect of an
18% increase in usage per customer and a 3% increase in the
number of customers. Firm gas sales to industrial customers
increased 30% for the first quarter of 1996, due primarily to
an increase in usage by a large industrial customer.
Interruptible gas sales decreased 84% in the first quarter of
1996 due primarily to the decrease in natural gas sold to the
other cotenant owners in the 1,200 MW Roseton Steam Electric
Generating Plant (Roseton Plant) for use as a boiler fuel at
that plant.
Transportation gas volumes increased 7% for the first quarter
of 1996 attributable primarily to increased gas transportation
service provided to IBM.
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OPERATING EXPENSES
The following table reports the variation in the operating
expenses for the three months ended March 31, 1996 compared to
the same period for the prior year:
INCREASE (DECREASE) FROM PRIOR PERIOD
FIRST QUARTER
AMOUNT PERCENT
(Dollars in Thousands)
Fuel and Purchased
Electricity $ 3,459 12%
Purchased Natural Gas (963) (4)
Other Expenses of Operation 300 1
Maintenance 1,329 25
Nine Mile 2 Plant Operation
and Maintenance 79 2
Depreciation and Amortiza-
tion 220 2
Taxes, Other than
Federal Income Tax 305 2
Federal Income Tax 1,543 14
Total $ 6,272 5%
The cost of fuel and purchased electricity increased $3.5 million
(12%) for the first quarter of 1996 due primarily to the net
effect of a 21% increase in electric generation and a 29%
decrease in purchased electricity. Overall, total system
output was up 4%.
Purchased natural gas costs decreased $963,000 (4%) for the first
quarter of 1996 due principally to lower interruptible gas
sales including gas used as boiler fuel.
Maintenance expenses increased $1.3 million (25%) for the first
quarter of 1996 due largely to increased storm costs in 1996.
Federal income taxes increased $1.5 million (14%) for the first
quarter of 1996 resulting primarily from increased pre-tax
operating income.
COMMON STOCK DIVIDENDS
Reference is made to the subcaption "Common Stock Dividends and
Price Ranges" on Page 29 of Exhibit 13 to the 10-K Report, and
which is incorporated by reference in Part II, Item 5 of said
Report, for a discussion of the Company's dividend policies.
On March 22, 1996, the Board of Directors of the Company
declared a quarterly dividend of $.525 per share, payable May
1, 1996 to shareholders of record as of April 10, 1996.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Asbestos Litigation. For a discussion of suits against
Registrant involving asbestos, see the caption "Legal Proceedings
- - Asbestos Litigation" in Item 3, Part I of Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995
("10-K Report").
Since 1987, Registrant has been involved as a defendant in
the "mass tort" asbestos litigation in the United States District
Court for the Southern District of New York and the New York
State Supreme Court, County of New York. This litigation
involves thousands of plaintiffs who seek large amounts of
compensatory and punitive damages from numerous defendants for
deaths and injuries allegedly caused by exposure to asbestos. As
of April 22, 1996, Registrant has been a defendant in
approximately 830 such individual lawsuits. Many of these
lawsuits have been disposed of without any payment by Registrant,
or for immaterial amounts. While the amounts specified in all
the remaining lawsuits total several billions of dollars, it is
Registrant's opinion, based on its experience in such litigation
and on information and relevant circumstances known to it at this
time, that these lawsuits will not have a material adverse effect
on Registrant's financial position. However, if Registrant were
ultimately held liable under these lawsuits and insurance
coverage were not available, the cost thereof could have a
material adverse effect (a reasonable estimate of which cannot be
made at this time) on the financial condition of Registrant if
Registrant could not recover all or a substantial portion thereof
in rates. Registrant's insurance does not extend to punitive
damages.
Item 4. Submission of Matters to a Vote of Security Holders.
Annual Meeting of Shareholders. Registrant's Annual Meeting
of Shareholders was held on April 2, 1996. The following matters
were voted upon at such meeting:
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(a) Election of Directors. All of the nominees proposed
as directors by the Board of Directors were elected, and no other
nominees were proposed. The number of shares voted for each such
director, and the number of shares withheld for each such
director, (out of a total number of shares voted of 15,058,472)
are as follows:
Name of Director Shares For Shares Withheld
L. Wallace Cross 14,887,815 170,657
Jack Effron 14,649,929 408,543
Frances D. Fergusson 14,873,910 184,562
Heinz K. Fridrich 14,885,528 172,944
Edward F.X. Gallagher 14,893,001 165,471
Paul J. Ganci 14,652,957 405,515
Charles LaForge 14,892,601 165,871
John E. Mack III 14,652,485 405,987
Edward P. Swyer 14,893,390 165,082
(b) Independent Accountants. The appointment by the
Board of Directors of Price Waterhouse LLP as Registrant's
Independent Accountants for the year 1996 was ratified by a vote
of the shareholders as follows:
Shares For Shares Against Shares Abstaining Broker Non-Votes
14,855,738 64,709 138,025 N/A
Item 5. Other Information.
Competition. Reference is made to the caption "Business -
Other Matters - Competition" in Item 1 of Part I of Registrant's
10-K Report for a discussion with respect to competition as it
generally affects Registrant, with respect to electric and
natural gas service, Registrant's response to such competition,
and the PSC Competitive Opportunities Proceeding currently
underway.
On March 28, 1996, the Public Service Commission of the
State of New York ("PSC") issued an Opinion and Order adopting
policies to address the restructuring of the natural gas market
in New York State, designed to open up local natural gas markets
to competition and thereby allow residential, small business and
commercial/industrial users the ability to purchase their gas
supplies from sources other than the local utility. Among other
provisions of the restructuring plan, smaller customers, such as
residential and small business customers, may join together, or
"aggregate", to purchase their gas supplies from third parties.
Pursuant to such PSC policies, Registrant filed tariffs complying
with the PSC's directives on April 26, 1996 and such tariffs
became effective on a temporary basis on May 1, 1996.
Registrant's filing is subject to the PSC's review for approval
on a permanent basis.
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On April 24, 1996, the Federal Energy Regulatory
Commission released Order No. 888, Order No. 889, and a Notice of
Proposed Rulemaking ("NOPR"). The two Orders are to become
effective 60 days after their publication in the Federal
Register, and will have the effect of (i) requiring electric
utilities (including Registrant) to open their transmission lines
to competitors, while allowing recovery of certain "stranded
costs," and (ii) requiring electric utilities (including
Registrant) to establish electronic systems to share information
about available transmission capacity, subject to certain
standards of conduct. The NOPR proposes a new system for
electric utilities (including Registrant) to use in reserving
capacity on their own and others' transmission lines. Registrant
is currently studying said Orders and NOPR, and cannot predict at
this time their ultimate effects on the operation of Registrant's
electric business. However, Registrant notes that the Orders
will require the functional (as opposed to actual) unbundling of
Registrant's wholesale generation and transmission services.
Item 6. Exhibits and Reports on 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
(3) Articles of Incorporation and
Bylaws:
(ii) 1 -- Bylaws in effect on the date of
this Report.
(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. Registrant did not file any
Current Reports on Form 8-K during the quarter for which this
Quarterly Report on Form 10-Q is filed.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunder duly authorized.
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
(Registrant)
By:
Donna S. Doyle
Controller
Authorized Officer and Chief
Accounting Officer
Dated: May 13, 1996
- 16 -
/PAGE
<PAGE>
<TABLE> EXHIBIT 12
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
<CAPTION>
1996
3 Months 12 Months
Ended Ended Year Ended December 31,
March 31 March 31 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
A. Net Income $22,200 $ 55,367 $ 52,722 $ 50,929 $ 50,390 $ 47,688 $ 42,941
B. Federal Income Tax 12,049 30,326 28,687 26,806 27,158 24,363 21,361
C. Earnings before Income Taxes 34,249 85,693 81,409 77,735 77,548 72,051 64,302
D. Total Fixed Charges <F1> 7,403 30,210 30,433 32,679 33,820 34,888 37,737
E. Total Earnings $41,652 $115,903 $111,842 $110,414 $111,368 $106,939 $102,039
Preferred Dividend Requirements:
F. Allowance for Preferred Stock
Dividends Under IRC Sec 247 $ 808 $ 4,429 $ 4,903 $ 5,127 $ 5,562 $ 5,544 $ 5,659
G. Less Allowable Dividend Deduction 32 428 528 528 528 544 544
H. Net Subject to Gross-up 776 4,001 4,375 4,599 5,034 5,000 5,115
I. Ratio of Earnings before Income
Taxes to Net Income (C/A) 1.543 1.548 1.544 1.526 1.539 1.511 1.497
J. Pref. Dividend (Pre-tax) (HxI) 1,197 6,194 6,755 7,018 7,747 7,555 7,657
K. Plus Allowable Dividend Deduction 32 428 528 528 528 544 544
L. Preferred Dividend Factor 1,229 6,622 7,283 7,546 8,275 8,099 8,201
M. Fixed Charges (D) 7,403 30,210 30,433 32,679 33,820 34,888 37,737
N. Total Fixed Charges
and Preferred Dividends $ 8,632 $ 36,832 $ 37,716 $ 40,225 $ 42,095 $ 42,987 $ 45,938
O. Ratio of Earnings to Fixed
Charges (E/D) 5.63 3.84 3.68 3.38 3.29 3.07 2.70
P. Ratio of Earnings to Fixed Charges
and Preferred Dividends (E/N) 4.83 3.15 2.97 2.74 2.65 2.49 2.22
<FN>
<F1>
Includes a portion of rent expense deemed to be representive of the interest factor.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> OPUR1
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED
STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> $934,807
<OTHER-PROPERTY-AND-INVEST> $14,504
<TOTAL-CURRENT-ASSETS> $137,844
<TOTAL-DEFERRED-CHARGES> $173,489
<OTHER-ASSETS> $0
<TOTAL-ASSETS> $1,260,644
<COMMON> $87,761
<CAPITAL-SURPLUS-PAID-IN> $277,993
<RETAINED-EARNINGS> $102,274
<TOTAL-COMMON-STOCKHOLDERS-EQ> $468,028
$35,000
$21,030
<LONG-TERM-DEBT-NET> $359,927
<SHORT-TERM-NOTES> $0
<LONG-TERM-NOTES-PAYABLE> $0
<COMMERCIAL-PAPER-OBLIGATIONS> $0
<LONG-TERM-DEBT-CURRENT-PORT> $31,208
$0
<CAPITAL-LEASE-OBLIGATIONS> $0
<LEASES-CURRENT> $0
<OTHER-ITEMS-CAPITAL-AND-LIAB> $345,451
<TOT-CAPITALIZATION-AND-LIAB> $1,260,644
<GROSS-OPERATING-REVENUE> $153,846
<INCOME-TAX-EXPENSE> $12,325
<OTHER-OPERATING-EXPENSES> $114,429
<TOTAL-OPERATING-EXPENSES> $126,754
<OPERATING-INCOME-LOSS> $27,092
<OTHER-INCOME-NET> $2,052
<INCOME-BEFORE-INTEREST-EXPEN> $29,144
<TOTAL-INTEREST-EXPENSE> $6,944
<NET-INCOME> $22,200
$808
<EARNINGS-AVAILABLE-FOR-COMM> $21,014
<COMMON-STOCK-DIVIDENDS> $9,215
<TOTAL-INTEREST-ON-BONDS> $0
<CASH-FLOW-OPERATIONS> $32,442
<EPS-PRIMARY> $1.20
<EPS-DILUTED> $0
</TABLE>
<PAGE>
EXHIBIT 3 (ii)
B Y - L A W S
OF
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
<PAGE>
TABLE OF CONTENTS
BY-LAWS OF
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
Page
ARTICLE I. MEETING OF SHAREHOLDERS 1
Section 1. Place of Meeting 1
Section 2. Annual Meeting 1
Section 3. Special Meeting 1
Section 4. Notice of Meetings 1
Section 5. Quorum 2
Section 6. Inspectors 2
Section 7. Adjournment of Meetings 2
Section 8. Voting 2
Section 9. Record Date 3
ARTICLE II. BOARD OF DIRECTORS 3
Section 1. Number and Qualifications 3
Section 2. Election of Directors 3
Section 3. Term of Office 3
Section 4. Resignation and Removal 4
Section 5. Newly Created Directorships and
Vacancies 4
Section 6. Election of Directors by Holders
of Preferred Stock 4
Section 7. Regular Meetings 6
Section 8. Special Meetings 6
Section 9. Notice and Place of Meetings 6
Section 10. Business Transacted at
Meetings 6
Section 11. Quorum and Manner of Acting 6
Section 12. Compensation 7
Section 13. Indemnification of Officers and
Directors 7
Section 14. Committees of the Board 7
ARTICLE III. EXECUTIVE COMMITTEE 8
Section 1. How Constituted and Powers 8
Section 2. Removal and Resignation 8
Section 3. Filling of Vacancies 8
Section 4. Quorum 8
Section 5. Record of Proceedings, etc. 8
Section 6. Organization, Meetings, etc. 9
Section 7. Compensation of Members 9
<PAGE>
Page
ARTICLE IV. OFFICERS 9
Section 1. Election 9
Section 2. Removal 9
Section 3. Resignation of Officers 9
Section 4. Filling of Vacancies 10
Section 5. Compensation 10
Section 6. Chairman of the Board of Directors
and Chief Executive Officer 10
Section 7. Vice Chairman of the Board of
Directors 10
Section 8. President and Chief Operating
Officer 10
Section 9. The Vice Presidents 10
Section 10. The Treasurer 11
Section 11. Controller 11
Section 12. The Secretary 12
Section 13. Other Officers 12
ARTICLE V. CONTRACTS, LOANS, BANK
ACCOUNTS, ETC. 12
Section 1. Contracts, etc., How Executed 12
Section 2. Loans 13
Section 3. Checks, Drafts, etc. 13
Section 4. Deposits 13
Section 5. General and Special
Bank Accounts 14
ARTICLE VI. CAPITAL STOCK 14
Section 1. Issue of Certificates
of Stock 14
Section 2. Transfer of Stock 14
Section 3. Lost, Destroyed and Mutilated
Certificates 14
ARTICLE VII. DIVIDENDS, SURPLUS, ETC. 15
Section 1. General Discretion of
Directors 15
ARTICLE VIII. MISCELLANEOUS PROVISIONS 15
Section 1. Fiscal Year 15
Section 2. Waiver of Notice 15
Section 3. Notices 16
Section 4. Examination of Books 16
Section 5. Gender 16
ARTICLE IX. AMENDMENTS 16
Section 1. Amendment by Directors 16
Section 2. Amendment by Shareholders 16
<PAGE>
B Y - L A W S
OF
CENTRAL HUDSON GAS & ELECTRIC CORPORATION
___________________
ARTICLE I.
MEETINGS OF SHAREHOLDERS
SECTION 1. Place of Meeting. All meetings of the
shareholders shall be held at the principal office of the
Corporation in the City of Poughkeepsie, County of Dutchess,
State of New York, or at such other place or places in the State
of New York as may from time to time be fixed by the Board of
Directors.
SECTION 2. Annual Meeting. The Annual Meeting of the
shareholders, for the election of directors and the transaction
of such other business as may be brought before the meeting,
shall be held each year on the first Tuesday in April (or if said
day be a legal holiday, then on the next succeeding business
day), at such time of day as the directors may determine.
SECTION 3. Special Meetings. Special meetings of the
shareholders may be called by the Board of Directors or by the
Chairman of the Board of Directors or by the President, or by
shareholders together holding at least one third of the capital
stock of the Corporation entitled to vote or act with respect
thereto upon the business to be brought before such meeting.
SECTION 4. Notice of Meetings. Notice of any annual or
special meeting of the shareholders shall be in writing and shall
be signed by the Chairman of the Board of Directors or the
President or the Secretary or an Assistant Secretary. Such
notice shall state the purpose or purposes for which the meeting
is called and shall state the place, date and hour of the meeting
and, unless it is the annual meeting, indicate that it is being
issued by or at the direction of the person or persons calling
the meeting. A copy of the notice of any meeting shall be given,
personally or by first-class mail, not fewer than ten nor more
than fifty days before the date of the meeting, provided,
however, that a copy of such notice may be given by third-class
mail not fewer than twenty-four nor more than fifty days before
the date of the meeting, to each shareholder entitled to vote at
such meeting. If mailed, such notice is given when deposited in
the United States mail, with postage thereon prepaid, directed to
the shareholder at his address as it appears on the record of
shareholders, or, if he shall have filed with the Secretary of
the Corporation a written request that notices to him be mailed
to some other address, then directed to him at such other
address. An affidavit of the Secretary of the Corporation or
other person giving the notice or of a transfer agent of the
Corporation that the notice required by this section has been
given shall be supplied at the meeting to which it relates.
SECTION 5. Quorum. Except as otherwise provided by
statute, the holders of a majority of the shares entitled to vote
thereat shall constitute a quorum at a meeting of shareholders
for the transaction of any business, provided that when a
specified item of business is required to be voted on by a class
or series, voting as a class, the holders of a majority of the
shares of such class or series shall constitute a quorum for the
transaction of such specified item of business.
SECTION 6. Inspectors. The person presiding at a
shareholders' meeting may, and on the request of any shareholder
entitled to vote thereat shall, appoint one or more inspectors.
Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of
inspector at such meeting with strict impartiality and according
to the best of his ability. The inspectors shall determine the
number of shares outstanding and the voting power of each, the
shares represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes, ballots
or consents, hear and determine questions arising in connection
with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all shareholders.
The inspectors shall make a report in writing of any matter
determined by them and execute a certificate of any fact found by
them.
SECTION 7. Adjournment of Meetings. Any meeting of
shareholders may be adjourned by a majority vote of the
shareholders present or represented by proxy despite the absence
of a quorum. When a meeting of shareholders is adjourned to
another time or place, it shall not be necessary to give any
notice of the adjourned meeting if the time and place to which
the meeting is adjourned are announced at the meeting at which
the adjournment is taken, and at the adjourned meeting at which a
quorum shall be present, any business may be transacted, and any
corporate action may be taken, which might have been transacted
or taken if the meeting had been held as originally called.
SECTION 8. Voting. Every shareholder of record shall be
entitled at every meeting of the shareholders to one vote for
every share of stock standing in his name on the record of
shareholders of the Corporation unless otherwise provided in the
Certificate of Incorporation and amendments thereto and except as
provided in Section 9 of this Article I. Every shareholder
entitled to vote at a meeting of shareholders may authorize
- 2 -
<PAGE>
another person or persons to act for him by proxy. No proxy
shall be valid after the expiration of eleven months from the
date thereof unless otherwise provided in the proxy. A list of
shareholders as of the record date certified by the officer
responsible for its preparation or by a transfer agent shall be
available at every meeting of shareholders and shall be produced
upon the request of any shareholder, and all persons who appear
from such list to be shareholders entitled to vote thereat may
vote at such meeting.
SECTION 9. Record Date. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to
or dissent from any proposal without a meeting, or for the
purpose of determining shareholders entitled to receive payment
of any dividend or the allotment of any rights, or for the
purpose of any other action, the Board of Directors may fix, in
advance, a date as the record date for any such determination of
shareholders. Such date shall not be more than fifty nor less
than ten days before the day of such meeting, nor more than fifty
days prior to any other action.
ARTICLE II.
BOARD OF DIRECTORS
SECTION 1. Number and Qualifications. The number of
directors constituting the entire Board shall be nine. The
number of directors may be increased, or decreased to not less
than three nor more than 25, by amendment of the by-laws adopted
by vote of a majority of the entire Board of Directors.
Each director shall be at least 18 years of age. No person
who has reached age 70 shall stand for election as a director.
SECTION 2. Election of Directors. Except as otherwise
required by law or by the Certificate of Incorporation as
amended, and except as hereinafter otherwise provided by Sections
5 and 6 of this Article II, directors shall be elected by a
plurality of the votes cast at the annual meeting of shareholders
by the holders of shares entitled to vote at the election and
shall hold office until the next annual meeting of shareholders.
SECTION 3. Term of Office. Each director shall, except as
hereinafter provided in Section 4 and in Section 6 of this
Article II, hold office until the expiration of the term for
which he is elected and until his successor has been elected and
qualified.
- 3 -
<PAGE>
SECTION 4. Resignation and Removal. Any director may
resign at any time. Such resignation shall be made in writing
and shall take effect at the time specified therein, or if no
time be specified, at the time of its receipt by the Chairman of
the Board of Directors or the Secretary. The acceptance of a
resignation shall not be necessary to make it effective unless so
specified therein. Any director may at any time, with or without
cause, be removed by vote of the shareholders at a special
meeting called for that purpose. When, however, pursuant to the
provisions of the Certificate of Incorporation as amended, the
holders of the shares of any class or series, voting as a class,
have the right to elect one or more directors, such director or
directors so elected may be removed only by the applicable vote
of the holders of the shares of that class or series, voting as a
class.
SECTION 5. Newly Created Directorships and Vacancies.
Newly created directorships resulting from an increase in the
number of directors and vacancies occurring in the Board for any
reason, except the removal of directors without cause, and except
as provided for in Section 6 of this Article II, may be filled by
vote of a majority of the directors then in office, although less
than a quorum exists. A vacancy occurring in the Board by reason
of the removal of a director without cause, may be filled only by
vote of the shareholders, subject to the provisions of said
Section 6. A director elected to fill a vacancy shall be elected
to hold office for the unexpired term of his predecessor, and
until his successor is elected and qualified.
SECTION 6. Election of Directors by Holders of Preferred
Stock. Anything in the by-laws to the contrary notwithstanding:
In case dividends on any series of the serial preferred stock of
the Corporation at the rate or rates prescribed for such series
shall not have been paid in full for periods aggregating one year
or more, than, and until full cumulative dividends thereon shall
have been paid, the holders of each such series shall have the
right, together with holders of all other serial preferred stock
in respect to which the same right shall be conferred, to elect a
majority of the members of the Board of Directors of the
corporation. Whenever the holders of any series of serial
preferred stock shall become so entitled, either separately or
together with the holders of other serial preferred stock as
aforesaid, to elect a majority of the members of the Board of
Directors, and upon the written request of the holders of record
of at least five percent of the total number of shares of serial
preferred stock then outstanding and entitled to such right of
election, addressed to the Secretary of the Corporation, a
special meeting of the holders of serial preferred stock entitled
to such right of election and the holders of Common Stock shall
- 4 -
<PAGE>
be called for the purpose of electing directors. At such meeting
the holders of serial preferred stock and the holders of Common
Stock shall vote separately, and the holders of serial preferred
stock present in person or by proxy at such meeting shall be
entitled to elect, by a plurality of votes cast by them, a
majority of the members of a new Board of Directors of the
corporation, and the holders of Common Stock present in person or
by proxy shall be entitled to elect, by a plurality of votes cast
by them, the remainder of the new Board of Directors. The
persons so elected as directors shall thereupon constitute the
Board of Directors of the Corporation, and the terms of office of
the previous directors of the Corporation shall thereupon
terminate. The term "a majority of the members of Board of
Directors" as herein used shall mean one more than one half of
the total number of directors provided for by the by-laws,
regardless of the number then in office, and in case one half of
such number shall not be a whole number, such one half shall be
the next smaller whole number. In the event of any vacancy in
the Board of Directors among the directors elected by the holders
of serial preferred stock, such vacancy may be filled by the
other directors elected by them, and if not so filled may be
filled by the holders of serial preferred stock entitled to the
right of election as aforesaid at a special meeting of the
holders of said stock called for that purpose, and such a meeting
shall be called upon the written request of at least five percent
of the total number of shares of serial preferred stock then
outstanding and entitled to such right of election. If and when,
however, full cumulative dividends upon any series of the serial
preferred stock shall at any subsequent time be paid, then and
thereupon such power of the holders of such series of serial
preferred stock to vote in the election of a majority of the
members of the Board of Directors shall cease; subject, however,
to being again revived at any subsequent time if there shall
again be default in payment of dividends upon such series of
serial preferred stock for periods aggregating one year or more
as aforesaid. Whenever such power of the holders of all series
of serial preferred stock to vote shall cease, the proper officer
of the Corporation may and upon the written request of the
holders of record of five percent of the total number of shares
of Common Stock then outstanding shall call a special meeting of
the holders of Common Stock for the purpose of electing
directors. At any meeting so called, the holders of a majority
of the Common Stock then outstanding, present in person or by
proxy, shall be entitled to elect, by a plurality of votes, a new
Board of Directors of the Corporation. The persons so elected as
directors shall thereupon constitute the Board of Directors of
the Corporation, and the terms of office of the previous
directors of the Corporation shall thereupon terminate.
- 5 -
<PAGE>
SECTION 7. Regular Meetings. The directors shall hold a
regular annual meeting for the election of officers as soon as
practicable after the adjournment of the Annual Meeting of the
shareholders, and, in addition, regular meetings of the directors
shall be held at such times as the Board of Directors may by
resolution determine. No notice of the Annual Meeting shall be
required if held immediately after the Annual Meeting of the
shareholders and if a quorum is present.
SECTION 8. Special Meetings. Special meetings of the
directors may be called by the Chairman of the Board of Directors
or by the President or by any two directors at any time and must
be called by the Secretary on the written request of any two
directors.
SECTION 9. Notice and Place of Meetings. Regular meetings
shall be held at such place or places either within or without
the State of New York as the Board of Directors may from time to
time determine. Special meetings shall be held at such place or
places either within or without the State of New York as may be
specified in the respective notices of the meetings. Except as
provided in Section 7 of this Article II, notice of any regular
or special meeting of the directors shall be mailed to each
director addressed to him at his residence or usual place of
business at least two days before the day on which the meeting is
to be held, or shall be sent to him at such place by telegraph,
or be delivered personally or by telephone, not later than the
day before the day on which the meeting is to be held.
SECTION 10. Business Transacted at Meetings. Any business
may be transacted and any corporate action taken at any regular
or special meeting of the directors whether stated in the notice
of the meeting or not.
SECTION 11. Quorum and Manner of Acting. Any five of the
directors in office at the time of any meeting of the Board shall
constitute a quorum and, except as by law otherwise provided, the
act of a majority of the directors present at any such meeting,
at which a quorum is present, shall be the act of the Board of
Directors. In the event it is necessary to obtain a quorum, and
only in such event, at the discretion of the presiding Board
member, any one or more members of the Board may be present and
participate in a meeting of the Board by means of a conference
telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the
same time. Participation by such means shall constitute presence
in person at such meeting. In the absence of a quorum, the
directors present may adjourn the meeting from time to time until
a quorum be had. Notice of any adjourned meeting need not be
given other than by announcement at the meeting. The directors
- 6 -
<PAGE>
shall act only as a Board and the individual directors shall have
no power as such.
SECTION 12. Compensation. The compensation of the
directors, other than employees of the Corporation, for services
as directors and as members of committees of the Board shall be
as fixed by the Board from time to time. Such directors shall
also be reimbursed for expenses incurred in attending meetings of
the Board and/or committees thereof.
SECTION 13. Indemnification of Officers and Directors. Any
person made, or threatened to be made a party to any action or
proceedings, whether civil or criminal, by reason of the fact
that he, his testator or intestate, is or was a director or
officer of the Board of Directors, or officer or employee of the
Corporation or serves or served any other corporation in any
capacity at the request of the Corporation, shall be indemnified
by the Corporation, and the Corporation may advance his related
expenses, to the full extent authorized or permitted by law. The
Corporation may enter into indemnification agreements with such
directors and officers, as the Chairman of the Board and/or
President shall authorize, to the full extent authorized or
permitted by law.
SECTION 14. Committees of the Board. The Board, by
resolution adopted by a majority of the entire Board, may
designate from among its members, in addition to the Executive
Committee provided for in Article III of these By-Laws,
committees of the Board, each consisting of three or more
directors, and each of which shall have the powers and duties
prescribed in the resolution designating such committees.
Anything in these By-Laws or in the resolution designating such
committees to the contrary notwithstanding, in the event it is
necessary to obtain a quorum, and only in such event, at the
discretion of the presiding committee member, any one or more
members of any committee of the Board of Directors may
participate in any meeting of such committee by means of a
conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at
the same time. Participation by such means shall constitute
presence in person at such meeting.
- 7 -
<PAGE>
ARTICLE III.
EXECUTIVE COMMITTEE
SECTION 1. How Constituted and Powers. The Board of
Directors, by resolution adopted by a majority of the entire
Board, may designate two or more of the directors, together with
the Chairman of the Board of Directors, and the President, to
constitute an Executive Committee, to serve at the pleasure of
the Board, which Committee shall during the intervals between
meetings of the Board of Directors, unless limited by the
resolution appointing such Committee, have authority to exercise
all or any of the powers of the Board of Directors in the
management of the affairs of the Corporation, insofar as such
powers may lawfully be delegated. The Board may designate one or
more directors as alternate members of such Committee, who may
replace any absent member or members at any meeting of such
Committee.
SECTION 2. Removal and Resignation. Any member of the
Executive Committee, except a member ex officio, may be removed
at any time with or without cause, by resolution adopted by a
majority of the entire Board. Any member of the Executive
Committee may resign at any time. Such resignation shall be in
writing and shall take effect at the time specified therein, or,
if no time be specified, at the time of its receipt by the
Chairman of the Board of Directors or the President or Secretary.
The acceptance of a resignation shall not be necessary to make it
effective unless so specified therein. Any person ceasing to be
a director shall ipso facto cease to be a member of the Executive
Committee.
SECTION 3. Filling of Vacancies. Any vacancy among the
members of the Executive Committee occurring from any cause
whatsoever may be filled from among the directors by a majority
of the entire Board of Directors.
SECTION 4. Quorum. A majority of the members of the
Executive Committee shall constitute a quorum. The act of a
majority of the members of the Executive Committee present at any
meeting at which a quorum is present shall be the act of the
Executive Committee. The members of the Executive Committee
shall act only as a committee and the individual members thereof
shall have no powers as such.
SECTION 5. Record of Proceedings, etc. The Executive
Committee shall keep a record of its acts and proceedings and
shall report the same to the Board of Directors when and as
required.
- 8 -
<PAGE>
SECTION 6. Organization, Meetings, etc. The Executive
Committee shall make such rules as it may deem expedient for the
regulation and carrying on of its meetings and proceedings.
SECTION 7. Compensation of Members. The members of the
Executive Committee shall be entitled to such compensation as may
be allowed them by resolution of the Board of Directors.
ARTICLE IV.
OFFICERS
SECTION 1. Election. The Board of Directors, at its
regular annual meeting, shall elect or appoint from their number
a Chairman of the Board of Directors and the Chairmen of
Committees of the Board and may elect or appoint a vice chairman
of the Board of Directors and vice chairmen of Committees of the
Board, which officers shall be officers of the Board; and it
shall elect or appoint a President, one or more Vice Presidents,
a Secretary, a Treasurer, and a Controller which officers shall
be officers of the Corporation. Each of said officers, subject
to the provisions of Sections 2 and 3 of this Article, shall hold
office, if elected, until the meeting of the Board following the
next Annual Meeting of shareholders and until his successor has
been elected and qualified, or, if appointed, for the term
specified in the resolution appointing him and until his
successor has been elected or appointed. Any two or more offices
may be held by the same person, except the offices of President
and Secretary. Should any of the officers of the Board or the
President cease to be a director, he shall ipso facto cease to be
such officer.
SECTION 2. Removal. Any officer may be removed summarily
with or without cause at any time by resolution of the Board of
Directors, or, except in the case of any officer elected by the
Board of Directors, by any committee or officer upon whom such
power of removal may be conferred by the Board of Directors,
without prejudice, however, to any rights which any such person
may have by contract.
SECTION 3. Resignation of Officers. Any officer may resign
at any time by giving written notice of such resignation to the
Board of Directors, its Chairman, the President or Secretary of
the Corporation. Such resignation shall take effect at the time
specified therein, or, if no time be specified, at the time of
its receipt by the Board of Directors or one of the above-named
officers of the Corporation. The acceptance of a resignation
shall not be necessary to make it effective unless so specified
therein.
- 9 -
<PAGE>
SECTION 4. Filling of Vacancies. A vacancy in any office,
from whatever cause arising, shall be filled for the unexpired
portion of the term in the manner provided in these by-laws for
the regular election or appointment of such officer.
SECTION 5. Compensation. The compensation of the officers
shall be fixed by the Board of Directors or by any committee or
superior officer upon whom power in that regard may be conferred
by the Board of Directors.
SECTION 6. Chairman of the Board of Directors and Chief
Executive Officer. The Chairman of the Board of Directors shall,
when present, preside at all meetings of the shareholders and the
Board of Directors. He shall be Chairman of the Executive
Committee. He shall be responsible for direction of the policy
of the Board of Directors and shall have the power and perform
the duties necessary to implement such responsibility. He shall
be the Chief Executive Officer of the Corporation and shall have
the power and perform the duties usually appertaining to the
chief executive of a corporation.
SECTION 7. Vice Chairman of the Board of Directors. In the
absence of the Chairman of the Board of Directors, the Vice
Chairman shall, when present, preside at all meetings of the
shareholders and the Board of Directors. He shall have such
powers and perform such duties as the Chairman of the Board of
Directors shall delegate to him.
SECTION 8. President and Chief Operating Officer. The
President shall, subject to the authority of the Chairman of the
Board of Directors, have the power and perform the duties usually
appertaining to the president of a corporation, and such power
and duties as the Chairman of the Board of Directors shall assign
to him. He shall be a member of the Board of Directors and of
the Executive Committee. He shall be the Chief Operating Officer
of the Corporation and shall have the power and perform the
duties usually appertaining to the chief operating officer of a
corporation.
SECTION 9. The Vice Presidents. The Vice Presidents shall
have such duties as may from time to time be assigned to them by
the Board of Directors or the President, or by the Chairman of
the Board in the President's absence. When performing the duties
of the President, they shall have all the powers of, and be
subject to all the restrictions upon, the President.
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SECTION 10. The Treasurer. The Treasurer shall:
(a) Except as otherwise ordered by the Board, have charge
and custody of, and be responsible for all funds, securities,
receipts and disbursements of the Corporation and shall deposit,
or cause to be deposited, all money and other valuable effects in
its name in such banks, trust companies or other depositaries as
shall be selected in accordance with these by-laws;
(b) Receive and give receipts for payments made to the
Corporation and take and preserve proper receipts for all monies
disbursed by it;
(c) In general, perform such duties as are incident to the
office of Treasurer, or as may be from time to time assigned to
him by the Board of Directors, the Chairman of the Board or the
President, or as may be prescribed by law or by these by-laws.
The Treasurer shall give to the Corporation a bond if, and
in such sum as, required by the Board of Directors, conditioned
for the faithful performance of the duties of his office and the
restoration to the Corporation at the expiration of his term of
office, or in case of his death, resignation or removal from
office, of all books, papers, vouchers, money or other property
of whatever kind, in his possession belonging to the Corporation.
SECTION 11. Controller. The Controller shall:
(a) Keep at the office of the Corporation correct books of
account of all its business and transactions, subject to the
supervision and control of the President and Treasurer;
(b) Exhibit at all reasonable times his books of accounts
and records to any of the directors upon application during
business hours at the office of the Corporation where such books
and records are kept;
(c) Render a full statement of the financial condition of
the Corporation whenever requested so to do by the Board of
Directors, the Chairman of the Board or the President; and
(d) In general, perform such duties as may be from time to
time assigned to him by the Board of Directors, the Chairman of
the Board or the President.
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SECTION 12. The Secretary. The Secretary shall:
(a) Keep the minutes of the meetings of the shareholders,
Board of Directors and Executive Committee in books provided for
the purpose;
(b) See that all notices are duly given in accordance with
the provisions of these by-laws or as required by law;
(c) Be custodian of the seal of the Corporation and see that
it or a facsimile thereof is affixed to all stock certificates
prior to their issue, and that it is affixed to all documents the
execution of which under the seal of the Corporation is duly
authorized or which require that the seal be affixed thereto;
(d) Have charge of the stock certificate books of the
Corporation and keep, or cause to be kept, at the office of the
Corporation or at the office of its transfer agent or registrar,
a record of shareholders of the Corporation, containing the names
and addresses of all shareholders, the number and class of shares
held by each and the dates when they respectively became the
owners of record thereof; and
(e) In general, perform such duties as are incident to the
office of Secretary, or as may be from time to time assigned to
him by the Board of Directors, the Chairman of the Board or the
President, or as are prescribed by law or by these by-laws.
SECTION 13. Other Officers. Other officers, including one
or more additional Vice Presidents, may from time to time be
appointed by the Board of Directors or by any officer or
committee upon whom a power of appointment may be conferred by
the Board of Directors, which other officers shall have such
powers and perform such duties as may be assigned to them by the
Board of Directors, the Chairman of the Board or the President
and shall hold office for such terms as may be designated by the
Board of Directors or the officer or committee appointing them.
ARTICLE V.
CONTRACTS, LOANS, BANK ACCOUNTS, ETC.
SECTION 1. Contracts, etc., How Executed. The Board of
Directors, except as in these by-laws otherwise provided, may
authorize any officer or officers, agent or agents, to enter into
any contract or execute and deliver any instrument in the name of
and on behalf of the Corporation, and such authority may be
general or confined to specific instances, and, unless so
authorized by the Board of Directors, no officer or agent or
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employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its
credits or to render it liable pecuniarily for any purpose or to
any amount.
SECTION 2. Loans. No loans shall be contracted on behalf
of the Corporation and no negotiable paper shall be issued in its
name, unless authorized by the vote of the Board of Directors.
When so authorized, any officer or agent of the Corporation may
effect loans and advances for the Corporation from any bank,
trust company or other institution, or from any firm, corporation
or individual and for such loans and advances may make, execute
and deliver promissory notes, bonds or other evidences of
indebtedness of the corporation. When so authorized any officer
or agent of the Corporation, as security for the payment of any
and all loans, advances, indebtedness and liabilities of the
Corporation, may pledge, hypothecate or transfer any and all
stocks, securities and other personal property at any time held
by the Corporation, and to that end endorse, assign and deliver
the same. Such authority may be general or confined to specific
instances. The Board of Directors may authorize any mortgage or
pledge of, or the creation of a security interest in, all or any
part of the corporate property, or any interest therein, wherever
situated.
SECTION 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidence of
indebtedness issued in the name of the Corporation shall be
signed by the Treasurer or such other officer
or officers, agent or agents of the Corporation and in such
manner as shall from time to time be determined by resolution of
the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation shall be
deposited from time to time to its credit in such banks, trust
companies or other depositaries as the Board of Directors may
select, or as may be selected by an officer or officers, agent or
agents of the Corporation to whom such power, from time to time,
may be delegated by the Board of Directors and, for the purpose
of such deposit, checks, drafts and other orders for the payment
of money which are payable to the order of the Corporation may be
endorsed, assigned and delivered by the President or a Vice
President, or the Treasurer or the Secretary, or by any officer,
agent or employee of the Corporation to whom any of said
officers, or the Board of Directors, by resolution, shall have
delegated such power.
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SECTION 5. General and Special Bank Accounts. The Board of
Directors may from time to time authorize the opening and keeping
of general and special bank accounts with such banks, trust
companies or other depositaries as the Board may select and may
make such special rules and regulations with respect thereto, as
it may deem expedient.
ARTICLE VI.
CAPITAL STOCK
SECTION 1. Issue of Certificates of Stock. Certificates
for shares of the capital stock of the Corporation shall be in
such form as shall be approved by the Board of Directors. They
shall be numbered, as nearly as may be, in the order of their
issue and shall be signed by the Chairman of the Board of
Directors or by the President or a Vice President, and by the
Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and sealed with the seal of the Corporation
or a facsimile thereof. The signatures of the officers upon a
certificate may be facsimiles if the certificate is countersigned
by a transfer agent or registered by a registrar other than the
Corporation itself or its employee.
SECTION 2. Transfer of Stock. Shares of the capital stock
of the Corporation shall be transferable by the holder thereof in
person or by duly authorized attorney upon surrender of the
certificate or certificates for such shares properly endorsed.
Every certificate of stock exchanged or returned to the
Corporation shall be appropriately cancelled. A person in whose
name shares of stock stand on the books of the Corporation shall
be deemed the owner thereof as regards the Corporation. The
Board of Directors may make such other and further rules and
regulations as they may deem necessary or proper concerning the
issue, transfer and registration of stock certificates.
SECTION 3. Lost, Destroyed and Mutilated Certificates. The
holder of any stock of the Corporation shall immediately notify
the corporation of any loss, destruction or mutilation of the
certificates therefor. The Corporation may issue a new
certificate of stock in the place of any certificate theretofore
issued by it alleged to have been lost or destroyed, and the
Board of Directors may, in its discretion, require the owner of
the lost or destroyed certificate or his legal representatives to
give the Corporation a bond in such sum and with such surety or
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sureties, as they may require to indemnify the Corporation, and
any registrar or transfer agent of its stock, against any claim
that may be made against it by reason of the issue of such new
certificate and against all other liability in the premises.
ARTICLE VII.
DIVIDENDS, SURPLUS, ETC.
SECTION 1. General Discretion of Directors. The Board of
Directors shall have the power from time to time to fix and
determine and to vary the amount of working capital of the
Corporation, to determine whether any and, if any, what dividends
shall be declared and paid to the shareholders, to fix the date
or dates for the payment of dividends, and to fix a time, not
exceeding 50 days preceding the date fixed for the payment of any
dividend, as a date for the determination of shareholders
entitled to receive payment of such dividend. When any dividend
is paid or any other distribution is made, in whole or in part,
from sources other than earned surplus, it shall be accompanied
by a written notice (1) disclosing the amounts by which such
dividend or distribution affects stated capital, surplus and
earned surplus, or (2) if such amounts are not determinable at
the time of such notice, disclosing the approximate effect of
such dividend or distribution as aforesaid and stating that such
amounts are not yet determinable.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
SECTION 1. Fiscal Year. The fiscal year of the Corporation
shall be the calendar year.
SECTION 2. Waiver of Notice. Notice of meeting need not be
given to any shareholder who submits a signed waiver of notice,
in person or by proxy, whether before or after the meeting. The
attendance of any shareholder at a meeting, in person or by
proxy, without protesting prior to the conclusion of the meeting
the lack of notice of such meeting, shall constitute a waiver of
notice by him. Notice of a meeting need not be given to any
director who submits a signed waiver of notice whether before or
after the meeting, or who attends the meeting without protesting,
prior thereto or at its commencement, the lack of notice to him.
Whenever the Corporation or the Board of Directors or any
committee thereof is authorized to take any action after notice
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to any person or persons or after the lapse of a prescribed
period of time, such action may be taken without notice and
without the lapse of such period of time, if at any time before
or after such action is completed the person or persons entitled
to such notice or entitled to participate in the action to be
taken or, in the case of a shareholder, by his attorney-in-fact,
submit a signed waiver of notice of such requirements.
SECTION 3. Notices. Whenever by the by-laws any written
notice is required to be given to any shareholder, director or
officer, the same may be given, unless otherwise required by law
and except as hereinbefore otherwise expressly provided, by
delivering it personally to him or by mailing or telegraphing it
to him at his last known post office address. Where a notice is
mailed or telegraphed, it shall be deemed to have been given at
the time it is mailed or telegraphed.
SECTION 4. Examination of Books. The Board of Directors
shall, subject to the laws of the State of New York have power to
determine from time to time, whether, to what extent, and under
what conditions and regulations the accounts and books of the
Corporation or any of them shall be open to the inspection of the
shareholders, and no shareholder shall have any right to inspect
any account book or document of the Corporation except as
conferred by the laws of the State of New York unless and until
authorized so to do by resolution of the Board of Directors or
shareholders of the Corporation.
SECTION 5. Gender. Words used in these by-laws importing
the male gender shall be construed to include the female gender,
wherever appropriate.
ARTICLE IX.
AMENDMENTS
SECTION 1. Amendment by Directors. The Board of Directors
shall have the power without the assent or vote of the
shareholders to adopt by-laws, and except as hereinafter provided
in Section 2 of this Article, and subject to such limitations as
may be imposed by law, to rescind, alter, amend or repeal by a
vote of a majority of the whole Board any of the by-laws, whether
adopted by the Board or by the shareholders.
SECTION 2. Amendment by Shareholders. The shareholders
shall have power to rescind, alter, amend or repeal any by-laws
and to adopt by-laws which, if so expressed, may not be
rescinded, altered, amended or repealed by the Board of
Directors.
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I, Ellen Ahearn, Secretary of Central Hudson Gas & Electric
Corporation, do hereby certify that the foregoing is a full, true
and correct copy of the by-laws of said Corporation as in effect
at the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand as Secretary
of said Corporation and hereunto affixed its corporate seal this
2nd day of April 1996.
Ellen Ahearn
Secretary
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