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CH Energy Group's 2005 Earnings Climb 4.5 Percent Above Those of 2004

Posted on: Monday, 13 February 2006, 09:01 CST

Annual earnings for CH Energy Group, Inc. (NYSE:CHG) were $2.81 per share in 2005, versus the $2.69 per share posted during 2004, a rise of 12 cents, or 4.5 percent. Higher electric and natural gas delivery revenues, improved fuel distribution profitability, increased investment earnings and lower income taxes all contributed to higher earnings, more than offsetting the expiration of substantial regulatory incentives and increases in both operating expenses and depreciation.

"Last year was certainly a very dynamic one, with many factors in play that had the potential to seriously impact our earnings: Extreme weather, energy supply price escalation, higher interest rates, the conclusion of incentives associated with the sale of our former generating assets and rising expenses were among the many challenges that our organization successfully managed to achieve these strong year-end results," reported Steven V. Lant, Chairman of the Board, President and C.E.O.

Regulated Electric and Gas Business

Central Hudson Gas & Electric Corporation's contribution to annual earnings was $2.20, a 19-cent decline from that of the year 2004. However, last year's results included 38 cents worth of regulatory incentives associated with the 2001 sale of the utility's major generating plants as part of New York State's deregulation of the electric industry and 8 cents of revenue restoration related to a previous rate filing. Deliveries to electric and natural gas customers increased 4 percent and 2 percent, respectively, between 2004 and 2005; both segments saw an increase in the number of customers and electricity sales additionally benefited from hot summer weather. The overall impact of weather upon earnings in 2005 was 6 cents, as compared to 2004.

Fuel Distribution Businesses

The fuel distribution businesses of Central Hudson Enterprises Corporation (CHEC) improved their annual earnings contribution by 5 cents for the year, to 23 cents, as compared to 2004 results. The improvement can be attributed to an increase in margins and service profitability, as well as the addition of earnings from the operations of acquisitions made during the course of the year.

Other Businesses

Holding Company CH Energy Group, Inc. and CHEC partnership investments contributed 38 cents, an increase of 26 cents from 2004 levels. Lower income taxes, increased returns on short-term investments and improved earnings from CHEC's other holdings contributed to the strong performance.

4th Quarter 2005 Results

Consolidated basic earnings per share for the quarter ended December 31, 2005, were 74 cents, compared to the 60 cents posted during the final quarter of the previous year. The 23-percent increase is largely attributable to a significant improvement in earnings (9 cents) at the Company's fuel distribution subsidiaries (resulting from improved service profitability, 2005 acquisitions and increased gross margin per gallon); and 5 cents resulting from partnership investments and increased interest on short-term investments held by the holding Company, as compared to the fourth quarter of 2004. Utility operations were flat for the quarter, as increased net revenues and reduced operating expenses offset the expiration of a regulatory incentive associated with the sale of Central Hudson's generating assets.

2006 Earnings Projections

Due to the importance of Central Hudson's pending request to increase delivery rates for electricity and natural gas, it is not possible for CH Energy Group to provide earnings guidance for 2006. The proceeding is currently in settlement negotiations, with a final decision expected from the New York State Public Service Commission around mid-year.

About CH Energy Group

With nearly 440,000 customers, 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 358,000 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 from the suburbs of metropolitan New York City north to the Capital District at Albany. Central Hudson Enterprises Corporation includes business units delivering energy and related services to more than 80,000 customers in eight states and the District of Columbia. Its regional footprint stretches from Connecticut to the Washington, D.C. area, as well as interests in a Lexington, Neb., ethanol plant and two wind power projects in the Mid-Atlantic region.

Conference Call: Lant, Chief Financial Office Christopher M. Capone and Vice President of Accounting and Controller Donna S. Doyle will conduct a conference call with analysts and investors to review financial results at 1:00 p.m. (ET) today, Feb. 13, 2006. Dial-in: 1-800-230-1074; Conference Name: "CH Energy Group." A digitized replay of the call will be available from 6:15 p.m. (EST) today, until 11:59 p.m. (EST) on Feb. 20, 2006, by dialing 1-800-475-6701 and entering access code #817295. In addition, the call will be webcast live and available for approximately 30 days via the Finance & Governance section of the Company's Web site at www.CHEnergyGroup.com, where consolidated financial statements may also be found.

Forward-Looking Statements

Statements included in this news release, including its Appendix and the 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 Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words including "anticipates,""believes,""projects,""intends,""estimates,""expects,""plans,""assumes,""seeks," and similar expressions. Forward-looking statements including, without limitation, those relating to CH Energy Group, Inc. 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; energy supply and demand; fuel prices; interest rates; potential future acquisitions; developments in the legislative, regulatory and competitive environment; market risks; electric and gas industry restructuring and cost recovery; the ability to obtain adequate and timely rate relief; changes in fuel supply or costs; the success of strategies to satisfy electricity requirements now that Central Hudson's major electric generation assets have been sold; future market prices for energy, capacity, and ancillary services; 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, Inc. 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. announces the following operating results for the periods indicated: 3 Months Ended December 31 2005 2004 ---- ---- Operating Revenues $268,951,000 $201,293,000 Net Income $11,672,000 $9,487,000 Earnings Per Share - Basic $.74 $.60 Earnings Per Share - Diluted $.74 $.60 Average Shares Outstanding - Basic 15,762,000 15,762,000 Average Shares Outstanding - Diluted 15,767,000 15,768,000 12 Months Ended December 31 2005 2004 ---- ---- Operating Revenues $972,506,000 $791,512,000 Net Income $44,291,000 $42,423,000 Earnings Per Share - Basic $2.81 $2.69 Earnings Per Share - Diluted $2.81 $2.69 Average Shares Outstanding - Basic 15,762,000 15,762,000 Average Shares Outstanding - Diluted 15,767,000 15,771,000 APPENDIX -------- Highlights Relative to Prior Year --------------------------------- 2005 More 2005 2004 (Less) than 2004 Year Ended December 31: ---- ---- -------------- Operating Revenues $972,506,000 $791,512,000 $180,994,000 Income Available for Common Stock $ 44,291,000 $ 42,423,000 $ 1,868,000 Earnings Per Share of Common Stock (Basic) $ 2.81 $ 2.69 $ .12 Average Shares Outstanding (Basic) 15,762,000 15,762,000

-- Consolidated basic earnings per share of CH Energy Group

(Energy Group) increased $.12 per share in 2005 compared to

2004.

-- Earnings from continuing operations increased $.38 per share

in 2005 compared to 2004. Utility earnings from continuing

operations net of weather collar payments increased $.22 per

share. Interest income at the Holding Company level increased

$.11 per share due to higher interest rates. Earnings from our

fuel distribution businesses increased $.05 per share in 2005

compared to 2004.

-- These consolidated results were achieved despite a significant

reduction in utility earnings in 2005 due to fewer

non-recurring items as compared to 2004, mainly due to the

expiration in 2004 of substantial regulatory items. The final

$.38 per share of the shareholder incentive related to the

sale of regulated generating plants expired in 2004, and

restored earnings of $.08 per share (spread evenly over the

first and second quarter of 2004) ceased in 2004 as well.

-- In 2005, utility earnings were also impacted by a $.04 per

share charge due to reliability assessments imposed by the New

York Public Service Commission (PSC), $.06 per share from

favorable weather, and $.04 per share from a NYISO sales for

resale favorable adjustment related to a prior year. In

addition, there were favorable income tax adjustments of $.15

per share recorded by the holding company.

-- Additional detail is provided below by segment, with all

significant variations including recurring and non-recurring

items.

Regulated Electric and Natural Gas Businesses - Central Hudson

Gas & Electric Corp.: - $.19

-- Down $.38 due to the expiration in December 2004 of the

amortization of Central Hudson's share of the gain from the

2001 sale of its interests in its major generating assets.

-- Down $.09 due to an increase in depreciation and amortization

of utility plant assets as a result of an increased balance of

utility plant assets.

-- Down $.02 from electric and gas regulatory mechanisms. The

decrease reflects $.08 per share due to the absence in 2005 of

the amortization of previously deferred electric and natural

gas delivery revenues and $.04 per share from the recording of

PSC assessments for service interruptions consistent with a

PSC Order issued on September 30, 2005. These reductions in

revenues were partially offset by a reduction in shared

earnings from electric and natural gas operations and payments

received from the New York Independent System Operator (NYISO)

related to adjustments made to energy sales transactions that

had occurred in May 2000.

-- Up $.26 due to an increase in electric net operating revenues.

Total electric deliveries increased 4% reflecting an 8%

increase in deliveries to residential customers and a 4%

increase in deliveries to commercial customers, both

attributable to increased usage due to hotter summer weather

and modest customer growth. Total weather-normalized

deliveries increased 1.5%, including a 3% increase in

residential deliveries and a nearly 1% increase in commercial

deliveries. Weather increased earnings from electric delivery

billed sales by $.08 per share, after accounting for the

effect of weather-hedging contracts. Electric residential

cooling degree-days were 55% higher than last year and 58%

higher than normal.

-- Up $.03 due to an increase in natural gas net operating

revenues. Deliveries to firm natural gas customers increased

2% overall as compared to an increase in weather normalized

sales of 3%. Deliveries to residential and commercial

customers, largely space heating sales, increased 1% and 3%,

respectively, due to customer growth. Overall, natural gas

residential heating degree-days were 1% higher than 2004 but

were 4% lower during the heating season months of January

through March, and November and December. The decrease in

degree-days during these months resulted in an earnings impact

of weather on natural gas net revenues of ($.02) per share.

-- Up $.01 due to the net effect of various other items including

a reduction in regulatory carrying charges due to customers,

which was partially offset by an increase in interest charges

resulting from the issuance of long-term debt in November of

2004 and December of 2005 and an increase in the issuance of

short-term debt. The reduction in carrying charges reflects

the substantial use of the principal balance of the Customer

Benefit Fund by December 31, 2004, for customer refunds and

other authorized programs.

Unregulated - Fuel Distribution Businesses: + $.05

-- Up $.11 from CHEC's fuel distribution businesses. The increase

is primarily due to an increase in service profitability,

earnings from acquisitions made in 2005, and an increase in

average gross margin per gallon in all product categories. The

increase in service profitability contributed approximately

$.05 per share, earnings from acquisitions contributed

approximately $.04 per share, and increased average gross

margins contributed an additional $.02 per share.

-- Down $.06 due to an increase in operating expenses and

interest expense. The $.04 increase in operating expenses is

due to an increase in general and administrative expenses and

additional expenses associated with the acquisitions made in

2005. Interest expense on the inter-company debt increased by

$.02 per share.

Unregulated - Other Businesses: + $.26

-- Up $.15 due to lower income taxes for Energy Group, the

holding company, including a $.09 per share adjustment

relating to the completion of a tax audit for 2001 and

adjustments of $.04 and $.02 per share, respectively, relating

to 2004 and 2005 income tax provisions.

-- Up $.10 due to an increase in interest income largely from

short-term investments held by Energy Group due to higher

interest rates.

-- Up $.01 due primarily to an increase in income from Central

Hudson Enterprises Corp.'s (CHEC) other investment interests.

Regulated Electric and Natural Gas Businesses - Central Hudson Gas & Electric Corp.

Utility deliveries of electricity within Central Hudson's service territory increased 4% in 2005 as compared to 2004. Deliveries to residential and commercial customers increased 8% and 4%, respectively, resulting from increased usage due to a hotter summer and modest customer growth. Deliveries to industrial customers were flat. Electric residential cooling degree-days increased 55% over the prior year and were 58% higher than normal.

Utility deliveries of natural gas to firm Central Hudson customers increased 2% in 2005 as compared to 2004. Deliveries to residential and commercial customers increased 1% and 3%, respectively, due to customer growth. Industrial deliveries, which represent less than 5% of total firm deliveries in 2005 and 2004, decreased 6%, while deliveries to interruptible customers decreased 2%.

Utility electric and natural gas operating revenues increased $120.8 million (21.7%) from $555.8 million in 2004 to $676.6 million in 2005 due to the higher cost of purchased electricity and increased usage due to hotter than normal weather, and the higher cost of natural gas. Electric revenues increased $90.4 million (21.0%) and gas revenues increased $30.4 million (24.3%) both due largely to an increase in amounts collected through Central Hudson's cost adjustment mechanisms for the recovery of its cost of purchased electricity and natural gas. The revenue increase also reflects an increase in deliveries and an increase in sales for resale revenues. The increase in electric revenues was partially offset by a reduction in revenues from weather-hedging contracts; the absence in 2005 of the amortization of previously deferred electric delivery revenues; and PSC assessments related to service interruptions.

Total utility operating expenses, including income taxes, increased $113.8 million (22.1%) from $515.9 million in 2004 to $629.7 million in 2005. Purchased electricity costs increased $85.3 million due to an increase in wholesale prices for volumes purchased for full service customers, while natural gas costs increased $28.4 million due to an increase in wholesale prices and volumes purchased. Other operating expenses increased slightly. Increases in taxes other than income taxes, depreciation and amortization of utility plant assets, and other expenses of operation were largely offset by a reduction in income taxes. The increase in taxes other than income taxes reflects an increase in property taxes and regulatory adjustments related to New York State income taxes.

Other Income & Deductions decreased $10.8 million (65%) in 2005 due to the completion of the amortization in December 2004 of Central Hudson's share of the gain from the 2001 sale of its interests in its major generating assets and a reduction in carrying charges due from customers related to pension costs. In its June 2004 Rate Order adopting the terms of Central Hudson's Joint Proposal for Rate Plan Modification, the PSC authorized the use of the Customer Benefit Fund to offset pension under-collection balances, which reduced the balance upon which regulatory carrying charges for pension costs are determined. This reduction was partially offset by favorable regulatory adjustments for the change in interest rates on Central Hudson's variable rate long-term debt.

The variations related to Central Hudson's variable rate long-term debt and pension-related carrying charges are offset by changes in interest charges relating to these items.

Interest Charges decreased $.8 million in 2005 due to a reduction of regulatory carrying charges due to customers resulting from the substantial use, by December 31, 2004, of the principal balance of the Customer Benefit Fund for customer refunds and other authorized programs. In accordance with Central Hudson's settlement agreement, carrying charges were accrued on the unused balance deferred for the future benefit of customers. This reduction in carrying charges was partially offset by an increase in interest charges on long and short-term debt. Interest on long-term debt increased due to the issuance of medium-term notes in November of 2004 and December of 2005 and higher interest rates on Central Hudson's variable rate debt. Additional short-term debt was required throughout 2005 for working capital needs due to the escalation of fuel prices.

Unregulated - Fuel Distribution Businesses

Sales of petroleum products for CHEC's fuel distribution businesses decreased 9.2 million gallons (6.2%) to 138.5 million gallons in 2005 from 147.7 million gallons in 2004. This was primarily as a result of a decrease of 6.3 million gallons (8.6%) in sales of heating oil from 73.2 million gallons in 2004 to 66.9 million in 2005. The decrease in sales was mostly due to a reduction in commercial sales resulting from higher relative prices for heating oil as compared to those for natural gas and a decrease in residential sales due to customer attrition and conservation because of the increased price of heating oil. Motor fuel sales decreased 2.8 million gallons (3.9%) from 71.9 million gallons in 2004 to 69.1 million gallons in 2005 while sales of propane decreased slightly from 2.6 million gallons in 2004 to 2.5 million gallons in 2005. Motor fuel sales decreased principally from the loss of one large volume, low margin customer. The decrease in propane sales is largely attributable to customer conservation. The weather was colder in 2005 than in 2004 as evidenced by a 4% increase in heating degree-days as compared to 2004. As adjusted for billing lags, heating degree-days in 2005 increased 3%.

Revenues, net of the effect of weather hedging contracts, increased $60.4 million (25.7%) from $234.7 million in 2004 to $295.1 million in 2005 due to the significant increase in the price of petroleum products. Revenues from petroleum products increased $58.6 million (27.1%) from $216.1 million in 2004 to $274.7 million in 2005 due to an increase in the average selling price to cover the increased costs of petroleum products. Motor fuel revenues increased $31.7 million (32%) from $99.1 million in 2004 to $130.8 million in 2005. Heating oil revenues also increased $26.4 million (23.6%) from $112 million in 2004 to $138.4 million in 2005. Partially offsetting the overall increases in selling price was a reduction in sales volumes. Other revenues related to service and installations, energy services and propane sales increased $2.3 million.

Operating expenses for CHEC's fuel distribution businesses, including income taxes and interest charges, increased $59.7 million (25.7%) from $232.2 million in 2004 to $291.9 million in 2005. The cost of petroleum increased $57.3 million or 34% due to higher wholesale market prices. Other operating expenses increased $2.4 million in 2005 due to an increase in general and administrative expenses, interest charges, and income taxes.

Unregulated -Other Businesses Other income and income taxes, for Energy Group, the holding company, and CHEC's investment in partnerships and interests other than fuel distribution operations increased $4.2 million. The increase is primarily due to a reduction in income taxes, including adjustments relating to the completion of a tax audit for 2001 and adjustments for the 2005 and 2004 income tax provisions. The increase also reflects an increase in interest income from short-term investments held by Energy Group due to higher interest rates.

CH Energy Group, Inc.

Fourth Quarter 2005 Relative to the Prior Year

Consolidated basic earnings per share for the quarter ended December 31, 2005 were $.74 as compared to earnings of $.60 for the quarter ended December 31, 2004. The increase in earnings of $.14 per share reflects the following:

-- A $.09 per share increase from CHEC's unregulated fuel

distribution subsidiaries due to an increase in gross margin

resulting from an increase in service profitability,

acquisitions made in 2005, and an increase in average gross

margin per gallon as compared to the fourth quarter of 2004.

The increase in earnings was partially offset by an increase

in operating expenses, including additional expenses

associated with the acquisitions made in 2005.

-- A $.05 per share increase from Energy Group's other

unregulated businesses due to a gain recorded from an energy

venture capital investment fund held by CHEC and an increase

in interest income from short-term investments held by Energy

Group due to higher interest rates.

-- Earnings for Central Hudson, Energy Group's regulated

business, were flat. A $.09 per share loss in earnings

resulting from the expiration of the amortization of Central

Hudson's share of the gain from the sale of its major

generating assets in 2001 was offset primarily by increases in

electric and natural gas net revenues and a reduction in

operating expenses.

CH Energy Group, Inc. (consolidated) remains in a strong financial position. At December 31, 2005, CHEG had $91.5 million in cash and cash equivalents and its current obligations included $30 million of short-term debt outstanding.

Please note that this report plus the consolidated financial statements are available on the Company's website at www.chenergygroup.com.

CH ENERGY GROUP, INC. CONSOLIDATED STATEMENT OF INCOME (Unaudited) (Unaudited) 3 Months Ended 12 Months Ended December 31, December 31, ---------------------------------- 2005 2004 2005 2004 ------ ------ ------ ------ Operating Revenues Electric $128,128 $100,743 $ 520,994 $430,575 Natural Gas 46,914 29,010 155,602 125,230 Competitive Business Subsidiaries 93,909 71,540 295,910 235,707 -------- -------- --------- -------- Total Operating Revenues 268,951 201,293 972,506 791,512 -------- -------- --------- -------- Operating Expenses Operations - Purchased Electricity and Fuel Used in Electric Generation, Purchased Natural Gas, and Purchased Petroleum 189,297 127,897 669,335 498,287 Other Expenses of Operation - Regulated Activities 25,967 26,330 99,439 98,748 Other Expenses of Operation - Comp. Bus. Subsidiaries 15,652 14,179 55,003 53,666 Depreciation and Amortization 8,915 8,799 36,219 34,640 Taxes, Other Than Income Tax 8,141 8,502 33,485 31,038 -------- -------- --------- -------- Total Operating Expenses 247,972 185,707 893,481 716,379 -------- -------- --------- -------- Operating Income 20,979 15,586 79,025 75,133 -------- -------- --------- -------- Other Income & Deductions Interest and Investment Income 2,893 1,925 10,054 9,824 Other - Net 446 2,443 (954) 7,542 -------- -------- --------- -------- Total Other Income & Deductions 3,339 4,368 9,100 17,366 -------- -------- --------- -------- Interest Charges Interest on Debt 3,639 3,052 13,826 11,488 Other Interest 934 1,043 3,219 6,362 -------- -------- --------- -------- Total Interest Charges 4,573 4,095 17,045 17,850 -------- -------- --------- -------- Income Before Income Taxes and Preferred Dividends of Subsidiary 19,745 15,859 71,080 74,649 Income Taxes 7,831 6,130 25,819 31,256 -------- -------- --------- -------- Income Before Preferred Dividends of Subsidiary 11,914 9,729 45,261 43,393 Cumulative Preferred Stock Dividends of Subsidiary 242 242 970 970 -------- -------- --------- -------- Net Income 11,672 9,487 44,291 42,423 Dividends Declared on Common Stock 8,511 8,511 34,046 34,046 -------- -------- --------- -------- Amount Retained in the Business $ 3,161 $ 976 $ 10,245 $ 8,377 ======== ======== ========= ======== Ave. Shares of Common Stock Outstanding- (Basic) (000s) 15,762 15,762 15,762 15,762 Ave. Shares of Common Stock Outstanding- (Diluted) (000s) 15,767 15,768 15,767 15,771 Earnings Per Share - (Basic) $ 0.74 $ 0.60 $ 2.81 $ 2.69 Earnings Per Share - (Diluted) $ 0.74 $ 0.60 $ 2.81 $ 2.69 Dividends Declared Per Share $ 0.54 $ 0.54 $ 2.16 $ 2.16 CH ENERGY GROUP, INC. CONSOLIDATED BALANCE SHEET December 31, December 31, 2005 (1) 2004 (2) ----------------------- ASSETS (Thousands of Dollars) UTILITY PLANT Utility Plant $1,074,215 $1,021,912 Less Accumulated Depreciation 333,164 315,691 ----------- ----------- 741,051 706,221 Construction Work in Progress 38,460 38,846 ----------- ----------- Net Utility Plant 779,511 745,067 ----------- ----------- OTHER PROPERTY AND PLANT & EQUIPMENT 23,138 23,139 ----------- ----------- CURRENT ASSETS Cash and Cash Equivalents 91,510 119,117 Accounts Receivable from Customers 97,462 65,239 Materials & Supplies 28,350 21,459 Regulatory Assets 30,764 17,454 Special Deposits and Prepayments 24,350 20,767 Accumulated Deferred Income Tax 8,836 9,454 Other 15,660 13,678 ----------- ----------- 296,932 267,168 ----------- ----------- DEFERRED CHARGES AND OTHER ASSETS 279,925 252,433 ----------- ----------- TOTAL $1,379,506 $1,287,807 =========== =========== CAPITALIZATION and LIABILITIES CAPITALIZATION Common Equity(3) $503,833 $493,465 Cumulative Preferred Stock: Not subject to mandatory redemption 21,027 21,030 Long-term Debt 343,886 319,883 ----------- ----------- 868,746 834,378 ----------- ----------- CURRENT LIABILITIES Notes Payable 30,000 12,000 Accounts Payable 54,926 43,418 Accrued Interest 5,156 4,629 Dividends Payable 8,754 8,754 Regulatory Liabilities 373 - Fair Value of Derivative Instruments 335 906 Other 34,627 31,795 ----------- ----------- 134,171 101,502 ----------- ----------- DEFERRED CREDITS AND OTHER LIABILITIES 242,805 231,152 ----------- ----------- ACCUMULATED DEFERRED INCOME TAX (NET) 133,784 120,775 ----------- ----------- TOTAL $1,379,506 $1,287,807 =========== =========== (1) Unaudited. (2) Subject to explanations contained in the Annual Report of the Company for 2004. (3) Shares outstanding at December 31, 2005 = 15,762,000. Shares outstanding at December 31, 2004 = 15,762,000. Selected Financial Information -------------------------------- 3 Months Ended December 31, ------------------------------- 2005 2004 % Variation ---------- ---------- ---------- CENTRAL HUDSON GAS & ELECTRIC CORP. ------------------------------------- Sales of Electricity (Mwh): * Residential 499,979 473,061 6 Commercial 494,451 470,063 5 Industrial 360,122 365,205 (1) Other 11,172 11,029 1 ---------- ---------- --------- Total Own Territory 1,365,724 1,319,358 4 ========== ========== ========= Sales of Gas (Mcf.): * Residential 1,195,790 1,185,191 1 Commercial 1,554,561 1,532,244 1 Industrial 112,609 133,035 (15) Other 6,732 5,964 13 ---------- ---------- --------- Total Firm Sales 2,869,692 2,856,434 - Interruptible Sales 961,279 1,070,698 (10) ---------- ---------- --------- Total Own Territory 3,830,971 3,927,132 (2) ========== ========== ========= * Includes volumes related to Electric or Gas Energy Delivery Services. Electric Cooling Degree Days: Billing Cycle 203 91 123 Normal Billing Cycle 99 99 - Actual in Period 15 - - Electric Heating Degree Days: Billing Cycle 1,140 1,223 (7) Normal Billing Cycle 1,350 1,350 - Actual in Period 2,128 2,126 - Gas Heating Degree Days: Billing Cycle 972 1,049 (7) Normal Billing Cycle 1,144 1,144 - Actual in Period 2,133 2,123 - Electric Output For Own Territory (Mwh.): Generated 28,405 53,512 (47) Purchased 1,395,607 1,327,728 5 ---------- ---------- --------- Total 1,424,012 1,381,240 3 ========== ========== ========= Gas Send-out Firm Customers (Mcf.)3,052,140 3,171,467 (4) ========== ========== ========= CH ENERGY GROUP, INC. ------------------------------------ Earnings Per Share - (Basic) $0.74 $0.60 23 Dividends Declared Per Share $0.54 $0.54 - 12 Months Ended December 31, ---------------------------------- 2005 2004 % Variation ----------- --------- ---------- CENTRAL HUDSON GAS & ELECTRIC CORP. ----------------------------------- Sales of Electricity (Mwh): * Residential 2,164,677 2,007,918 8 Commercial 2,055,089 1,969,588 4 Industrial 1,481,815 1,477,368 - Other 37,311 37,279 - ----------- ----------- ---------- Total Own Territory 5,738,892 5,492,153 4 =========== =========== ========== Sales of Gas (Mcf.): * Residential 5,304,127 5,233,065 1 Commercial 6,405,962 6,237,197 3 Industrial 529,731 565,347 (6) Other 27,024 24,343 11 ----------- ----------- ---------- Total Firm Sales 12,266,844 12,059,952 2 Interruptible Sales 3,459,379 3,540,358 (2) ----------- ----------- ---------- Total Own Territory 15,726,223 15,600,310 1 =========== =========== ========== * Includes volumes related to Electric or Gas Energy Delivery Services. Electric Cooling Degree Days: Billing Cycle 1,044 673 55 Normal Billing Cycle 659 659 - Actual in Period 1,043 673 55 Electric Heating Degree Days: Billing Cycle 6,037 5,970 1 Normal Billing Cycle 6,320 6,320 - Actual in Period 6,106 5,994 2 Gas Heating Degree Days: Billing Cycle 5,997 5,954 1 Normal Billing Cycle 6,210 6,210 - Actual in Period 6,064 5,982 1 Electric Output For Own Territory (Mwh.): Generated 102,930 174,434 (41) Purchased 5,915,550 5,476,826 8 ----------- ----------- ---------- Total 6,018,480 5,651,260 6 =========== =========== ========== Gas Send-out Firm Customers (Mcf.) 9,695,608 9,934,450 (2) ========== =========== ========== CH ENERGY GROUP, INC. ---------------------------------- Earnings Per Share - (Basic) $2.81 $2.69 4 Dividends Declared Per Share $2.16 $2.16 - Dec. 31, Dec. 31, % Variation 2005 2004 ----------- ----------- ---------- Book Value Per Share $31.97 $31.31 2 Retained Earnings (000s) $198,017 $187,772 5 Common Equity Ratio (%) 56.0% 58.3% (4) CH ENERGY GROUP, INC Selected Financial Indices Calendar Year 2005 vs. Calendar Year 2004 Calendar Calendar Year Year 2005 2004 --------- --------- Earnings Per Share - (Basic) $2.81 $2.69 Earned Return on Common Equity (Per Books) 8.77% 8.52% Pretax Coverage of Fixed Charges 4.54 x 4.52 x Dividends Declared $2.16 $2.16 Pay-out Ratio 76.9% 80.3% Common Equity Ratio 56.0% 58.3% Retained Earnings ($000) $198,017 $187,772 Book Value Per Share (End of Period) $31.97 $31.31 CH Energy Group Segment Information - 12 Months Ended December 31, 2005 Regulated Unregulated --------- ----------- ($000s Except Natural Fuel Earnings Per Share) Electric Gas Distribution Other --------------------------------------------------------------------- Revenues from external customers $520,994 $155,602 $295,092 $ 818 Intersegment revenues 13 355 - - -------- ---------------------------------- Total Revenues $521,007 $155,957 $295,092 $ 818 Earnings before income taxes $ 43,439 $ 15,162 $ 6,069 $ 5,440 Net Income $ 25,751 $ 8,914 $ 3,663 $ 5,963 Earnings per share (basic) $ 1.63 $ 0.57 $ 0.23 $0.38 (1 Segment Assets at 12/31/05 $832,506 $288,826 $152,485 $105,689 ($000s Except Earnings Per Share) Elim(s). Total -------------------------------------------------------- ------------ Revenues from external customers - $ 972,506 Intersegment revenues ($368) - ---------- ------------ Total Revenues ($368) $ 972,506 Earnings before income taxes - $ 70,110 Net Income - $ 44,291 Earnings per share (basic) - $ 2.81 Segment Assets at 12/31/05 - $ 1,379,506 (1) The amount of Unregulated EPS attributable to CHEC's other business activities was $0.06 per share, with the balance of $.32 per share resulting primarily from investment activity. CH Energy Group Segment Information - 12 Months Ended December 31, 2004 Regulated Unregulated --------- ----------- ($000s Except Natural Fuel Earnings Per Share) Electric Gas Distribution Other -------------------------------------------------------------------- Revenues from external customers $430,575 $125,230 $234,704 $ 1,003 Intersegment revenues 11 259 - - -------- --------------------------------- Total Revenues $430,586 $125,489 $234,704 $ 1,003 Earnings before income taxes $ 50,547 $ 15,558 $ 4,885 $ 2,689 Net Income $ 29,158 $ 8,521 $ 2,933 $ 1,811 Earnings per share (basic) $ 1.85 $ 0.54 $ 0.18 $ 0.12(1) Segment Assets at 12/31/04 $768,645 $260,797 $140,912 $ 117,453 ($000s Except Earnings Per Share) Elim(s). Total -------------------------------------------------------------------- Revenues from external customers - $ 791,512 Intersegment revenues ($270) - ----------------------- Total Revenues ($270) $ 791,512 Earnings before income taxes - $ 73,679 Net Income - $ 42,423 Earnings per share (basic) - $ 2.69 Segment Assets at 12/31/04 - $1,287,807 (1) The amount of Unregulated EPS attributable to CHEC's other business activities was $0.04 per share, with the balance of $.08 per share resulting primarily from investment activity. CH Energy Group Segment Information - Quarter Ended December 31, 2005 Regulated Unregulated --------- ----------- ($000s Except Natural Fuel Earnings Per Share) Electric Gas Distribution Other ------------------ ---------- ---------- --------------- ---------- Revenues from external customers $ 128,128 $ 46,914 $ 93,730 $ 179 Intersegment revenues 4 140 - - ---------- -------- --------------- ---------- Total Revenues $ 128,132 $ 47,054 $ 93,730 $ 179 Earnings before income taxes $ 9,657 $ 2,931 $ 4,753 $ 2,162 Net Income $ 5,654 $ 1,751 $ 2,873 $ 1,394 Earnings per share (basic) $ 0.36 $ 0.11 $ 0.18 $ 0.09 (1) Segment Assets at 12/31/05 $ 832,506 $ 288,826 $ 152,485 $ 105,689 ($000s Except Earnings Per Share) Elim(s). Total ------------------------------------------- ---------- ------------- Revenues from external customers - $ 268,951 Intersegment revenues ($144) - ---------- ------------- Total Revenues ($144) $ 268,951 Earnings before income taxes - $ 19,503 Net Income - $ 11,672 Earnings per share (basic) - $ 0.74 Segment Assets at 12/31/05 - $ 1,379,506 (1) The amount of Unregulated EPS attributable to CHEC's other business activities was $0.04 per share, with the balance of $.05 per share resulting primarily from investment activity. CH Energy Group Segment Information - Quarter Ended December 31, 2004 Regulated Unregulated --------- ----------- ($000s Except Natural Fuel Earnings Per Share) Electric Gas Distribution Other -------------------------------------------------------------------- Revenues from external customers $100,743 $ 29,010 $ 71,283 $ 257 Intersegment revenues 1 86 - - ---------- ------------------------------- Total Revenues $100,744 $ 29,096 $ 71,283 $ 257 Earnings before income taxes $ 9,480 $ 2,915 $ 2,410 $ 812 Net Income $ 5,675 $ 1,714 $ 1,449 $ 649 Earnings per share (basic) $ 0.36 $ 0.11 $ 0.09 $0.04 (1) Segment Assets at 12/31/03 $768,645 $260,797 $140,912 $117,453 ($000s Except Earnings Per Share) Elim(s). Total ------------------------------------------------------ ------------- Revenues from external customers - $ 201,293 Intersegment revenues ($87) - ---------- ------------- Total Revenues ($87) $ 201,293 Earnings before income taxes - $ 15,617 Net Income - $ 9,487 Earnings per share (basic) - $ 0.60 Segment Assets at 12/31/03 - $ 1,287,807 (1) Earnings for Unregulated Other results primarily from investment activity.

Source: Business Wire

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