CH Energy Group Issues Second-Quarter Earnings Results

POUGHKEEPSIE, N.Y.--(BUSINESS WIRE)--CH Energy Group, Inc. (NYSE:CHG) earned 43 cents per share for the second quarter of 2010, as compared to the 9-cent loss that was posted during the same period of 2009. Earnings for the first six months of 2010 totaled $1.72 per share, as compared to the $1.37 per share earned during the first half of 2009.

“Our earnings strongly recovered from the significantly depressed levels of 2009, continuing a trend that began with the delivery rate increase that took effect at Central Hudson in July 2009”

“Our earnings strongly recovered from the significantly depressed levels of 2009, continuing a trend that began with the delivery rate increase that took effect at Central Hudson in July 2009," said Chairman of the Board, President and C.E.O. Steven V. Lant. “These new rates were better aligned with our costs of providing service to customers, and they allowed Central Hudson to earn a more appropriate return.”

Central Hudson, which represents approximately 90 percent of CH Energy Group’s total assets, is a regulated transmission and distribution utility serving approximately 300,000 electric and 75,000 natural gas customers in eight counties of New York State’s Mid-Hudson River Valley.

CH Energy Group released the following earnings results by business unit:

Central Hudson Gas & Electric Corporation

Central Hudson earned 62 cents per share during the second quarter of 2010, up from 6 cents per share posted during the same period of 2009. For the first six months of 2010, the utility earned $1.66 per share, as compared to 84 cents per share posted during the first half of 2009, with the majority of the improvement credited to second-quarter results.

“While more appropriate delivery rates and revenue stabilization were the primary factors that improved earnings, we also continued to be very austere in our expense management, which contributed significantly to these strong results,” Lant said.

He noted that other items, including higher expenses associated with restoring electric service after storms, depreciation and taxes and the impact of unfavorable weather combined to partially offset the positive influences. Lant also said that the second-quarter results include deferred expenses associated with the extraordinary level of uncollectible accounts over the course of the rate year that ended June 30, 2010.

Griffith Energy Services

Griffith Energy Services posted a loss of 10 cents per share during the second quarter of 2010, improved results from the 14-cent loss that occurred during 2009’s second quarter. “Owing to the seasonal nature of Griffith’s fuel oil business, we fully anticipated a loss during the period and we were encouraged to see progress as compared to a year ago,” Lant said. Half of the improvement was due to the 2009 partial divestiture. Additionally, better margins and lowered expenses help to offset a reduction in heating oil volumes and the impact that warmer weather had on sales.

For the first six months of 2010, Griffith posted earnings of 16 cents per share, down from the 50 cents per share earned during the first half of 2009. “Most of the difference is related to the divestiture of about 40 percent of Griffith that occurred in late 2009 as part of our strategic decision to reduce cash flow and earnings volatility,” Lant explained.

Other Businesses and Investments

The other businesses and investments of CH Energy Group posted a loss of 9 cents per share during the second quarter, as compared to a loss of 1 cent per share during the same period of 2009. This part of the business posted a loss of 10 cents per share during the first half of the year, as compared to earning 3 cents per share during the same period of 2009. The earnings from the Lyonsdale Biomass Plant in upstate New York were 4 cents per share lower for the quarter, due largely to the cost of a turbine overhaul that is expected to improve operating efficiency, as well as the expiration of a federal tax credit program at the end of 2009. Earnings were also reduced at the Cornhusker Energy Lexington Plant in Lexington, Neb.

Lant also said that CH Energy Group is reviewing its strategy with respect to the allocation of capital to renewable energy projects and has suspended making new investments in such projects pending completion of this review.

About CH Energy Group, Inc.: CH Energy Group, Inc. is a family of companies seizing new opportunities in the energy marketplace through two primary subsidiaries. Central Hudson Gas & Electric Corporation is a regulated transmission and distribution utility serving approximately 300,000 electric and about 75,000 natural gas customers in eight counties of New York State’s Mid-Hudson River Valley, and delivering natural gas and electricity in a 2,600-square-mile service territory that extends north from the suburbs of metropolitan New York City to the Capital District at Albany. Central Hudson Enterprises Corporation (“CHEC”), a non-regulated subsidiary, is the umbrella for a family of energy-related companies and investments focused primarily on fuel distribution and renewable energy. Griffith Energy Service’s fuel distribution business supplies energy products and services to approximately 58,000 customers in five states and Washington, D.C. CHEC also has interests in several renewable energy projects in New York and other states.

Conference Call: Mr. Lant will conduct a conference call with investors to review financial results at 2:00 p.m. (ET) today, July 30, 2010. Dial-in: 1-888-276-0005; Conference Name “CH Energy Group.” Supplemental materials will be posted to the Company’s Web site at www.CHEnergyGroup.com to assist participants in following the Conference Call presentation. A digitized replay of the call will be available from 4:30 p.m. (ET) on July 30, 2010, until 11:59 p.m. (ET) on August 6, 2010, by dialing 1-800-475-6701 and entering access code 164409. In addition, the call will be webcast live in listen-only mode and available for replay for approximately 30 days within the Investor Relations section of the Company’s Web site at www.CHEnergyGroup.com.

Forward-Looking Statements –

Statements included in this News Release and any documents incorporated by reference which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbor provided by Section 21E of the Exchange Act. Forward-looking statements may be identified by words including “anticipates,” “intends,” “estimates,” “believes,” “projects,” “expects,” “plans,” “assumes,” “seeks,” and similar expressions. Forward-looking statements including, without limitation, those relating to CH Energy Group and its subsidiaries' future business prospects, revenues, proceeds, working capital, liquidity, income, and margins, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements, due to several important factors, including those identified from time-to-time in the forward-looking statements. Those factors include, but are not limited to: weather; fuel prices; corn and ethanol prices; plant capacity factors; energy supply and demand; interest rates; potential future acquisitions; developments in the legislative, regulatory, and competitive environment; market risks; electric and natural gas industry restructuring and cost recovery; the ability to obtain adequate and timely rate relief; changes in fuel supply or costs including future market prices for energy, capacity, and ancillary services; the success of strategies to satisfy electricity, natural gas, fuel oil, and propane requirements; the outcome of pending litigation and certain environmental matters, particularly the status of inactive hazardous waste disposal sites and waste site remediation requirements; and certain presently unknown or unforeseen factors, including, but not limited to, acts of terrorism. CH Energy Group and its subsidiaries undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Given these uncertainties, undue reliance should not be placed on the forward-looking statements.

CH ENERGY GROUP, INC.
CONSOLIDATED BALANCE SHEET
	June 30,	December 31,
	2010 ¹	2009 ²
ASSETS	(Thousands of Dollars)
UTILITY PLANT
Utility plant	$1,362,265	$1,329,700
Less: Accumulated depreciation	387,556	375,434
	974,709	954,266
Construction work in progress	54,176	58,120
Net Utility Plant	1,028,885	1,012,386
OTHER PROPERTY AND PLANT - NET	44,372	43,653
CURRENT ASSETS
Cash and cash equivalents	43,732	73,436
Accounts receivable - net	83,192	94,526
Fuel, materials and supplies	22,406	24,841
Fair value of derivative instruments	1,138	741
Regulatory assets	68,881	59,993
Special deposits and prepayments	30,905	23,153
Accumulated deferred income tax	1,269	300
Other	16,751	20,771
	268,274	297,761
DEFERRED CHARGES AND OTHER ASSETS	344,172	344,083
TOTAL	$1,685,703	$1,697,883
CAPITALIZATION and LIABILITIES
CAPITALIZATION
Common Equity ³	$544,376	$533,502
Non-controlling interest	1,000	1,385
Preferred Stock of subsidiary	21,027	21,027
Long-term debt	463,899	463,897
	1,030,302	1,019,811
CURRENT LIABILITIES
Current maturities of long-term debt	24,000	24,000
Notes payable	3,000	0
Accounts payable	40,732	43,197
Accrued interest	6,169	6,067
Dividends payable	8,787	8,777
Customer advances and deposits	23,463	31,029
Regulatory liabilities	19,592	29,974
Fair value of derivative instruments	24,729	13,837
Other	32,860	46,130
	183,332	203,011
DEFERRED CREDITS AND OTHER LIABILITIES	285,459	316,978
ACCUMULATED DEFERRED INCOME TAX	186,610	158,083
TOTAL	$1,685,703	$1,697,883
¹ Unaudited
² Subject to explanations contained in the Annual Report on Form 10-K of
the Company to the SEC for the Year ended December 31, 2009.
³ Shares outstanding at June 30, 2010 = 15,823,371.
Shares outstanding at December 31, 2009 = 15,804,562.

CH ENERGY GROUP, INC
CONSOLIDATED STATEMENT OF INCOME
	(Unaudited)						(Unaudited)
	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2010			2009			2010			2009
	(Thousands of Dollars)
Operating Revenues
Electric	$	125,096		$	108,597		$	271,058		$	265,350
Natural gas		32,461			31,056			101,548			121,179
Competitive business subsidiaries:
Petroleum Products		37,178			33,057			117,338			101,575
Other		7,042			5,909			14,475			12,612
Total Operating Revenues		201,777			178,619			504,419			500,716
Operating Expenses
Operation:
Purchased electricity and fuel used in electric generation		53,445			51,884			121,596			143,635
Purchased natural gas		14,754			19,301			52,402			84,126
Purchased petroleum		32,313			26,960			95,084			74,849
Other expenses of operation - regulated activities		50,191			44,390			107,894			90,711
Other expenses of operation - comp bus subs		13,270			13,148			27,574			28,087
Depreciation and amortization		9,957			9,319			19,881			18,686
Taxes, other than income tax		10,627			9,553			21,480			19,658
Total Operating Expenses		184,557			174,555			445,911			459,752
Operating Income		17,220			4,064			58,508			40,964
Other Income and Deductions
(Loss) income from unconsolidated affiliates		(532	)		(153	)		(298	)		77
Interest on regulatory assets and investment income		1,513			2,350			2,640			3,466
Write-off of note receivable		0			0			0			(1,299	)
Regulatory adjustments for interest cost		(107	)		(659	)		(248	)		(1,188	)
Business development costs		(499	)		(529	)		(802	)		(1,010	)
Other - net		150			(464	)		(36	)		(163	)
Total Other Income (Deductions)		525			545			1,256			(117	)
Interest Charges
Interest on long term debt		5,649			5,094			11,257			9,874
Interest on regulatory liabilities and other interest		1,584			968			3,288			2,069
Allowance for borrowed funds used during construction		(97	)		(29	)		(138	)		(55	)
Total Interest Charges		7,136			6,033			14,407			11,888
Income (loss) before income taxes, non-controlling interest
and preferred dividends of subsidiary		10,609			(1,424	)		45,357			28,959
Income taxes		4,021			(436	)		18,054			10,993
Net Income (loss) from Continuing Operations		6,588			(988	)		27,303			17,966
Discontinued Operations
(Loss) income from discontinued operations before tax		0			(656	)		0			6,825
Income tax (benefit) expense from discontinued operations		0			(272	)		0			2,832
Net Income (loss) from Discontinued Operations		0			(384	)		0			3,993
Net Income (loss)		6,588			(1,372	)		27,303			21,959
Net (loss) Income attributable to noncontrolling interest:
Non-controlling interest in subsidiary		(419	)		(157	)		(385	)		(190	)
Dividends declared on Preferred Stock of subsidiary		242			242			485			485
Net income (loss) attributable to CH Energy Group		6,765			(1,457	)		27,203			21,664
Dividends declared on Common Stock		8,545			8,526			17,084			17,050
Change in Retained Earnings		($1,780	)		($9,983	)	$	10,119		$	4,614
Average number of common stock shares outstanding
Basic		15,782			15,774			15,780			15,773
Diluted		15,920			15,826			15,918			15,825
Income (loss) from continuing operations attributable to CH Energy Group common shareholders
Earnings per share -Basic:	$	0.43			($0.07	)	$	1.72		$	1.12
Earnings per share -Diluted:	$	0.42			($0.07	)	$	1.71		$	1.12
Income (loss) from discontinued operations attributable to CH Energy Group common shareholders
Earnings per share -Basic:	$	0.00			($0.02	)	$	0.00		$	0.25
Earnings per share -Diluted:	$	0.00			($0.02	)	$	0.00		$	0.25
Amounts attributable to CH Energy Group common shareholders
Earnings per share -Basic:	$	0.43			($0.09	)	$	1.72		$	1.37
Earnings per share -Diluted:	$	0.42			($0.09	)	$	1.71		$	1.37
Dividends Declared Per Share	$	0.54		$	0.54		$	1.08		$	1.08

CH ENERGY GROUP, INC.

EARNINGS PER SHARE BY SEGMENT

The chart below presents the change in earnings of CH Energy Group’s business units in terms of earnings for each share of CH Energy Group’s Common Stock. Management believes this presentation is useful because these business units are each wholly owned by CH Energy Group.

Consolidated CH Energy Group	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010 ¹			2009 ¹			2010 ¹			2009 ¹
Central Hudson - Electric	$	0.48		$	0.10		$	1.06		$	0.50
Central Hudson - Natural Gas	$	0.14		$	(0.04	)	$	0.60		$	0.34
Griffith	$	(0.10	)	$	(0.14	)	$	0.16		$	0.50
Other Businesses and Investments	$	(0.09	)	$	(0.01	)	$	(0.10	)	$	0.03
Earnings per Share (basic)	$	0.43		$	(0.09	)	$	1.72		$	1.37
Earnings per Share (diluted)	$	0.42		$	(0.09	)	$	1.71		$	1.37
¹ Unaudited

The information above is considered a non-GAAP financial measure. This information is not an alternative to earnings per share determined on a consolidated basis, which is the most directly comparable GAAP measure. A reconciliation of each business unit's earnings per share to CH Energy Group's earnings per share, determined on a consolidated basis, is included in the table above.