-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A66oPwZugj/eD6zRXUT0crYr8hy0oW47ZYprKvjUQwPczsgTRq0Uldkemn6OJ2uO ytJyDdllRZWE4XKSbAcgtQ== 0000018647-99-000025.txt : 19990507 0000018647-99-000025.hdr.sgml : 19990507 ACCESSION NUMBER: 0000018647-99-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL HUDSON GAS & ELECTRIC CORP CENTRAL INDEX KEY: 0000018647 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 140555980 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-03268 FILM NUMBER: 99612131 BUSINESS ADDRESS: STREET 1: 284 SOUTH AVE CITY: POUGHKEEPSIE STATE: NY ZIP: 12601 BUSINESS PHONE: 9144522000 MAIL ADDRESS: STREET 1: 284 SOUTH AVENUE CITY: POUGHKEEPSIE STATE: NY ZIP: 12601 10-Q 1 QUARTERLY FINANCIAL REPORT FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended.....................March 31, 1999 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 oranization) 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; 16,862,087 shares outstanding as of March 31, 1999. CENTRAL HUDSON GAS & ELECTRIC CORPORATION FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999 INDEX PART I - FINANCIAL INFORMATION PAGE Item 1 - Consolidated Financial Statements Consolidated Statement of Income - Three Months Ended March 31, 1999 and 1998 1 Consolidated Balance Sheet - March 31, 1999 and December 31, 1998 2 Consolidated Statement of Cash Flows - Three Months Ended March 31, 1999 and 1998 4 Notes to Consolidated Financial Statements 5 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION Item 1 - Legal Proceedings 14 Item 4 - Submission of Matters to a Vote of Security Holders 16 Item 6 - Exhibits and Reports on Form 8-K 18 Signatures PART I - FINANCIAL INFORMATION ITEM I - CONSOLIDATED FINANCIAL STATEMENTS CENTRAL HUDSON GAS & ELECTRIC CORPORATION CONSOLIDATED STATEMENT OF INCOME For the 3 Months Ended March 31, 1999 1998 ---- ---- (Thousands of Dollars) Operating Revenues Electric................................................ $100,743 $101,312 Gas..................................................... 38,955 35,490 -------- -------- Total - own territory................................. 139,698 136,802 Electric Sales to other utilities....................... 6,651 6,854 Gas Sales to other utilities............................ 122 226 -------- -------- 146,471 143,882 -------- -------- Operating Expenses Operation: Fuel used in electric generation...................... 21,988 20,233 Purchased electricity................................. 7,794 11,364 Purchased natural gas................................. 21,985 19,147 Other expenses of operation........................... 23,338 24,297 Maintenance............................................. 6,636 5,543 Depreciation and amortization........................... 11,701 11,248 Taxes, other than income tax............................ 16,714 17,208 Federal income tax...................................... 11,285 10,839 -------- -------- 121,441 119,879 -------- -------- Operating Income.......................................... 25,030 24,003 -------- -------- Other Income and Deductions Equity Earnings-Subcos.................................. (922) (45) Allowance for equity funds used during construction..... 62 106 Federal income tax...................................... 122 280 Other - net............................................. 1,895 1,450 -------- -------- 1,157 1,791 -------- -------- Income before Interest Charges............................ 26,187 25,794 -------- -------- Interest Charges Interest on mortgage bonds.............................. 3,440 3,559 Interest on other long-term debt........................ 2,377 2,082 Interest on short-term debt............................. 103 Other interest.......................................... 994 889 Allowance for borrowed funds used during construction... (67) (129) Amortization of (premium) and expense on debt - net..... 236 226 -------- -------- 7,083 6,627 -------- -------- Net Income................................................ 19,104 19,167 Dividends Declared on Cumulative Preferred Stock.......... 807 807 -------- -------- Income Available for Common Stock......................... 18,297 18,360 Dividends Declared on Common Stock........................ 9,106 9,161 -------- -------- Balance Retained in the Business.......................... $ 9,191 $ 9,199 ======== ======== Common Stock: Average Shares Outstanding (000s)....................... 16,862 17,232 Earnings Per Share on Average Shares Outstanding........ $1.09 $1.06 Dividends Declared...................................... $0.540 $0.535 See Notes to Consolidated Financial Statements. - 1 - CENTRAL HUDSON GAS & ELECTRIC CORPORATION CONSOLIDATED BALANCE SHEET March 31, December 31, 1999 1998 (Unaudited) (Audited) ----------- ------------ ASSETS (Thousands of Dollars) Electric................................... $1,224,776 $1,222,743 Gas........................................ 158,894 158,165 Common..................................... 95,188 94,271 Nuclear fuel............................... 42,320 42,317 ---------- ---------- 1,521,178 1,517,496 Less: Accumulated depreciation............ 608,644 597,383 Nuclear fuel amortization........... 36,205 35,381 ---------- ---------- 876,329 884,732 Construction work in progress.............. 47,107 43,512 ---------- ---------- Net Utility Plant....................... 923,436 928,244 ---------- ---------- Other Property and Plant..................... 19,362 19,059 ---------- ---------- Investments and Other Assets Prefunded Pension Costs................. 41,673 40,218 Other................................... 18,859 18,209 ---------- ---------- Total Investments and Other Assets...... 60,532 58,427 ---------- ---------- Current Assets Cash and cash equivalents.................. 13,202 10,499 Accounts receivable from customers-net of allowance for doubtful accounts........... 54,368 45,564 Accrued unbilled utility revenues.......... 14,918 15,233 Other receivables.......................... 2,897 4,555 Fuel, materials and supplies, at average cost...................................... 23,440 23,587 Special deposits and prepayments........... 21,854 34,823 ---------- ---------- Total Current Assets.................... 130,679 134,261 ---------- ---------- Deferred Charges Regulatory assets ......................... 139,452 149,261 Unamortized debt expense................... 5,401 5,062 Other...................................... 24,848 21,724 ---------- ---------- Total Deferred Charges.................. 169,701 176,047 ---------- ---------- TOTAL ASSETS...................... $1,303,710 $1,316,038 ========== ========== See Notes to Consolidated Financial Statements. - 2 -
CENTRAL HUDSON GAS & ELECTRIC CORPORATION CONSOLIDATED BALANCE SHEET March 31, December 31, 1999 1998 (Unaudited) (Audited) ----------- ------------ LIABILITIES AND CAPITALIZATION (Thousands of Dollars) Capitalization Common Stock Equity: Common stock, 30,000,000 shares authorized; shares issued ($5 par value): 1999 - 17,554,987 1998 - 17,554,987.................................. $ 87,775 $ 87,775 Paid-in capital...................................... 284,465 284,465 Retained earnings.................................... 142,478 133,287 Reacquired Capital Stock............................. (27,143) (27,143) Capital stock expense................................ (6,185) (6,204) ---------- ---------- Total Common Stock Equity........................ 481,390 472,180 ---------- ---------- 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....................................... 377,132 356,918 ---------- ---------- Total Capitalization............................. 914,552 885,128 ---------- ---------- Current Liabilities Current maturities of long-term debt................. 3,308 39,507 Notes payable........................................ - 18,000 Accounts payable..................................... 22,324 23,591 Accrued taxes and interest........................... 23,724 6,334 Dividends payable.................................... 9,913 9,913 Accrued vacation..................................... 4,344 4,400 Customer deposits.................................... 4,288 4,248 Other................................................ 6,357 7,932 ---------- ---------- Total Current Liabilities........................ 74,258 113,925 ---------- ---------- Deferred Credits and Other Liabilities Regulatory liabilities............................... 81,528 81,065 Operating reserves................................... 6,333 5,995 Other................................................ 27,670 27,251 ---------- ---------- Total Deferred Credits and Other Liabilities..... 115,531 114,311 ---------- ---------- Accumulated Deferred Income Tax ........................ 199,369 202,674 ---------- ---------- TOTAL CAPITALIZATION AND LIABILITIES....... $1,303,710 $1,316,038 ========== ==========
See Notes to Consolidated Financial Statements. - 3 -
CENTRAL HUDSON GAS & ELECTRIC CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) For the 3 Months Ended March 31, 1999 1998 ---- ---- OPERATING ACTIVITIES: (Thousands of Dollars) Net Income.................................................................... $ 19,104 $ 19,167 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization & nuclear fuel amortization.................. 12,856 12,148 Deferred income taxes, net.............................................. (1,111) (2,081) Allowance for equity funds used during construction..................... (62) (106) Nine Mile 2 Plant deferred finance charges, net......................... (1,214) (1,214) Provision for uncollectibles............................................ 450 825 Accrued pension costs................................................... (3,119) (3,181) Deferred gas costs...................................................... 6,160 4,620 Deferred gas refunds.................................................... (48) (1,010) Other, net.............................................................. 2,636 (465) Changes in current assets and liabilities, net: Accounts receivable and unbilled revenues............................... (7,281) (448) Fuel, materials and supplies............................................ 147 2,094 Special deposits and prepayments........................................ 12,969 (4,859) Accounts payable........................................................ (1,267) (6,663) Accrued taxes and interest.............................................. 17,390 18,779 Other current liabilities............................................... (1,591) (1,544) -------- -------- NET CASH PROVIDED BY OPERATING ACTIVITIES................................... 56,019 36,062 -------- -------- INVESTING ACTIVITIES: Additions to plant...................................................... (8,234) (8,751) Allowance for equity funds used during construction..................... 62 106 -------- ------- Net additions to plant............................................. (8,172) (8,645) Nine Mile 2 Plant decommissioning trust fund............................ (217) (217) Other, net.............................................................. (563) (103) -------- -------- NET CASH USED IN INVESTING ACTIVITIES................................... (8,952) (8,965) -------- -------- FINANCING ACTIVITIES: Proceeds from issuance of long-term debt................................ 22,114 - Net borrowings (repayments) of short-term debt.......................... (18,000) - Retirement and redemption of long-term debt............................. (38,106) (364) Dividends paid on cumulative preferred and common stock................. (9,913) (10,047) Issuance and redemption costs........................................... (459) - Reacquired capital stock................................................ - (5,681) -------- -------- NET CASH USED IN FINANCING ACTIVITIES................................... (44,364) (16,092) -------- -------- NET CHANGE IN CASH AND CASH EQUIVALENTS......................................... 2,703 11,005 CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR................................... 10,499 9,054 -------- -------- CASH AND CASH EQUIVALENTS - END OF PERIOD....................................... $ 13,202 $ 20,059 ======== ======== Supplemental Disclosure of Cash Flow Information Interest paid (net of amounts capitalized).............................. $ 2,116 $ 1,212 Federal income tax paid................................................. - -
See Notes to Consolidated Financial Statements - 4 - CENTRAL HUDSON GAS & ELECTRIC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - GENERAL The accompanying consolidated financial statements of Central Hudson Gas & Electric Corporation (herein 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 disclosures concerning accounting policies and other matters which would be included in annual consolidated financial statements and, accordingly, should be read in conjunction with the audited Consolidated Financial Statements (including the notes thereto) included in the Company's Annual Report, on Form 10-K, for the year ended December 31, 1998 (Company's 10-K Report). 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. NOTE 2 - REGULATORY MATTERS Reference is made to Note 2 - Regulatory Matters to the Consolidated Financial Statements of the Company's 10-K Report under the caption "Impact of Amended Settlement Agreement on Accounting Policies." At March 31, 1999, net regulatory assets (liabilities) associated with the fossil-fueled generating assets totaled ($429,000). The reduction from that reported at December 31, 1998 was due primarily to the receipt of an asbestos litigation settlement. The Company did not charge against income any of these net regulatory assets because recovery of such assets is considered probable under the Amended Settlement Agreement. HOLDING COMPANY RESTRUCTURING As reported in the Company's 10-K Report, the Company has received approval from its shareholders and regulators to form a holding company. It is expected that the holding company restructuring will occur by October 1999. The timing will be coordinated with the transfer of up to $100 million in equity (as authorized by the Public Service Commission of the State of New York, hereinafter the "PSC") from the Company to unregulated operations. As of March 31, 1999, $25.5 million has been transferred. - 5 - NOTE 3 - SEGMENTS AND RELATED INFORMATION SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," was adopted by the Company during the fourth quarter of 1998 (see Note 10 to the Consolidated Financial Statements included in the Company's 10-K Report). The Company's reportable operating segments are its electric and gas operations. The Company's "Other Segment" consists primarily of Central Hudson Enterprises Corporation and CH Resources, Inc., both of which are non-regulated energy businesses and which are currently accounted for under the equity method of accounting. All of the segments currently operate in the northeast region of the United States. Certain additional information regarding these segments is set forth in the following table. General corporate expenses, property common to both segments and depreciation of such common property have been allocated to the segments in accordance with practice established for regulatory purposes. - 6 -
Central Hudson Gas & Electric Segment Disclosure - FAS 131 Quarter Ended March 31, 1999 Electric Gas Other Total -------- --- ----- ----- Revenues from external customers $ 107,374 $ 38,845 $ - $ 146,219 Intersegment revenues 20 232 - 252 Total revenues 107,394 39,077 - 146,471 Depreciation and amortization 10,537 1,164 11,701 Interest expense 6,149 1,001 7,150 Interest income 422 62 484 Income tax (credit) expense 8,143 3,020 11,163 Earnings per share 0.81 0.33 (0.05) 1.09 Segment assets 1,065,578 185,935 52,197 1,303,710 Construction Expenditures 6,943 1,291 8,234 1998 Electric Gas Other Total -------- --- ----- ----- Revenues from external customers $ 108,135 $ 35,377 $ - $ 143,512 Intersegment revenues 31 339 - 370 Total revenues 108,166 35,716 - 143,882 Depreciation and amortization 10,129 1,119 11,248 Interest expense 5,878 878 6,756 Interest income 247 24 271 Income tax (credit) expense 7,613 2,946 10,559 Earnings per share 0.74 0.32 - 1.06 Segment assets 1,056,093 173,932 21,358 1,251,383 Construction Expenditures 8,226 526 8,752
- 7 - NOTE 4 - NEW ACCOUNTING STANDARDS - DERIVATIVE AND HEDGING ACCOUNTING Reference is made to the caption "New Accounting Standards and Other FASB Projects" of Note 1 - Summary of Significant Accounting Policies, to the Consolidated Financial Statements of the Company's 10-K Report. During the first quarter of 1999, the Company purchased natural gas futures contracts to hedge a portion of the price risk associated with its gas supply portfolio. These financial instruments did not have a material impact on the Company's financial position or results of operation. In addition, the PSC, in a Memorandum and Resolution recently issued and effective April 13, 1999, authorized the inclusion of risk management costs as a legitimate component of the Gas Adjustment Clause. The Memorandum and Resolution defines risk management costs as "costs associated with transactions that are intended to reduce price volatility or reduce overall costs to customers. These costs include transaction costs, and gains and losses associated with transactions made in commodities exchanges and with other risk management entities." NOTE 5 - 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 9 - Commitments and Contingencies to the Consolidated Financial Statements included in the Company's 10-K Report. Except for what is disclosed in Part II of this Quarterly Report, on Form 10-Q, for the quarterly period ended March 31, 1999, and all documents previously filed with the Securities and Exchange Commission in 1999, there have been no material changes in the subject matters discussed in said Note 9. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CAPITAL RESOURCES AND LIQUIDITY For the three months ended March 31, 1999, cash expenditures related to the construction program of the Company amounted to $8.2 million. Construction expenditures during the quarter ended March 31, 1999, were primarily for normal extensions and improvements of the Company's electric and natural gas systems. The cash requirements for such expenditures were funded from internal sources. - 8 - The growth of retained earnings in the first three months of 1999 contributed to the increase in the book value of common stock from $28.00 at December 31, 1998 to $28.55 at March 31, 1999 and the increase in the common equity ratio from 51.0% at December 31, 1998 to 52.4% at March 31, 1999. The increase in the common equity ratio was also impacted by the absence of short-term debt at March 31, 1999. The Company has $52 million of committed short-term credit facilities available. In order to diversify its sources of short-term financing, the Company has also entered into short-term credit facilities with several commercial banks. At March 31, 1999, the Company had no short-term debt outstanding. Authorization from the PSC limits the short-term borrowing amount the Company may have outstanding, at any time, to $52 million in the aggregate. Investments in short-term securities were $13.2 million at the end of March 1999. The Company, on March 1, 1999, redeemed its 8.375% $16.7 million pollution control bonds issued by the New York State Energy Research Development Authority (NYSERDA) due December 1, 2028. The bonds were refinanced with lower cost NYSERDA pollution control bonds supported by the Company's Promissory Note of $16.7 million at a fixed rate of 4.20% for their initial term of five years and thereafter, are subject to repricing. (See caption "First Mortgage Bonds" included in Note 7 to the Consolidated Financial Statements of the Company's 10-K Report.) EARNINGS PER SHARE Earnings per share of common stock were $1.09 for the first quarter of 1999, as compared to $1.06 for the first quarter of 1998, an increase of 3%. The increase in earnings per share for the quarter ended March 31, 1999, as compared to the same period in 1998, resulted primarily from an increase in electric and gas net operating revenues (which includes fuel costs and purchased electricity). The increase in electric net revenues resulted largely from an increase in services to all customer classes, combined with a reduction in purchased electricity costs for own territory sales. Gas net operating revenues increased due to increased residential and commercial sales. The total increase in net operating revenues is also reflective of a 5% increase in billing degree days. Also contributing to this increase was the favorable impact of the Company's common stock repurchase program and the non-recurring effect of a favorable settlement related to asbestos litigation. These increases were partially offset by increased costs incurred for the expansion and startup operations of one of the Company's unregulated affiliates; the net increase in operation and maintenance costs primarily resulting from increased costs related to tree trimming operations; the - 9 - increased depreciation on the Company's plant and equipment; and the net effect of various other items, including increased interest expense and a decrease in Allowance for Funds Used During Construction on capital expenditures. RESULTS OF OPERATIONS The following table reports the variation in the results of operations for the three months ended March 31, 1999 compared to the same period in 1998: 3 MONTHS ENDED MARCH 31, INCREASE 1999 1998 (DECREASE) ---- ---- ---------- (Thousands of Dollars) Operating Revenues............... $146,471 $143,882 $ 2,589 Operating Expenses............... 121,441 119,879 1,562 ------- ------- ------- Operating Income................. 25,030 24,003 1,027 Other Income..................... 1,157 1,791 (634) ------- ------- ------- Income before Interest Charges......................... 26,187 25,794 393 Interest Charges................. 7,083 6,627 456 ------- ------- ------- Net Income....................... 19,104 19,167 (63) Dividends Declared on Cumulative Preferred Stock................. 807 807 - ------- ------- ------- Income Available for Common Stock........................... $ 18,297 $ 18,360 $ (63) ======= ======= ======= OPERATING REVENUES Operating revenues increased $2.6 million (2%) for the first quarter of 1999 as compared to the first quarter of 1998. 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........... $ (139) $1,950* Sales to Other Utilities............... (203) (104) Fuel and Gas Cost Adjustment.............. (247) 1,970 Deferred Revenues........ (1,424)** (525) Miscellaneous............ (374) (132) Energy Delivery Service................. 1,615 202 ------ ----- $ (772) $3,361 ====== ===== *Both firm and interruptible revenues. - 10 - **Includes the deferral and restoration of revenues related to the Company's Retail Access Program under its Amended and Restated Settlement Agreement as described under the caption "Competitive Opportunities Proceeding Settlement Agreement" of Note 2 to the Notes to Consolidated Financial Statements in Item 8 of the Company's 10-K Report. SALES The Company's sales vary seasonally in response to weather conditions. Generally electric sales peak in the summer and gas sales peak in the winter. Sales of electricity to full service customers within the Company's service territory were essentially flat and firm sales of natural gas increased 9% in the first quarter of 1999 as compared to the first quarter of 1998. Changes in sales from last year by major customer classifications are set forth below. Also indicated are the changes related to electric and gas energy delivery service: INCREASE (DECREASE) FROM PRIOR PERIOD FIRST QUARTER ELECTRIC GAS Residential................ 4 % 6 % Commercial................. (4) 9 Industrial................. (2) (3) Interruptible.............. N/A 15 Energy Delivery Service................... * 16 *Delivery service for electric retail access customers was first recorded in the quarter ended March 31, 1998. The volume of electricity delivered was 4.5% of total own territory sales for the quarter ended March 31, 1999 as compared to .1% last year. Billing heating degree days were 5% higher for the three months ended March 31, 1999 when compared to the same period in 1998. Sales of electricity to residential customers in the first quarter of 1999 increased 4% from the comparable prior year period resulting from a 3% increase in usage per customer and a 1% increase in the number of customers. Commercial sales in the first quarter of 1999 decreased 4% as compared to last year due to the net effect of a 6% decrease in usage per customer and a 2% increase in the number of customers. Electric sales to industrial customers decreased 2%. The reduction in commercial and industrial sales was also impacted by the migration of these customers to retail access service. Total sales to full service - 11 - and retail access commercial customers increased 4% compared to the first quarter of 1998 while total industrial sales increased 3%. Sales of gas to residential customers for the first quarter of 1999 increased 6% due to a 5% increase in usage per customer and a 1% increase in the number of customers. Sales of gas to commercial customers for the first quarter of 1999 increased 9% due to a 6% increase in usage per customer and a 3% increase in the number of customers. Industrial gas sales decreased 3% for the comparative quarters due primarily to a decrease in the gas used for boiler ignition by one of the Company's generating plants. Interruptible gas sales increased 15% in the first quarter of 1999 due largely to an increase in boiler gas usage for electric generation. OPERATING EXPENSES The following table reports the variation in the operating expenses for the three months ended March 31, 1999 compared to the same period in the prior year: INCREASE (DECREASE) FROM PRIOR PERIOD FIRST QUARTER AMOUNT PERCENT (Thousands of Dollars) Operating Expenses Fuel and Purchased Electricity.............. $(1,815) (6)% Purchased Natural Gas....................... 2,838 15 Other Expenses of Operation................. (959) (4) Maintenance................ 1,093 20 Depreciation and Amortization.............. 453 4 Taxes, Other than Income Tax....................... (494) (3) Federal Income tax......... 446 4 ------ -- Total............ $ 1,562 1% ====== The cost of fuel and purchased electricity decreased $1.8 million (6%) for the first quarter ended March 31, 1999 resulting from a 1% decrease in total system output combined with a lower average price of fuel used in electric generation. - 12 - Purchased natural gas costs increased $2.8 million (15%) for the first quarter of 1999 resulting from an increase in sales, primarily to residential and commercial customers (and an increase in the restoration of deferred gas costs related to the Company's gas cost adjustment.) Maintenance expenses increased $1.1 million (20%) primarily due to increased costs related to tree trimming operations. COMMON STOCK DIVIDENDS Reference is made to the caption "Common Stock Dividends and Price Ranges" of Part II, Item 7 of the Company's 10-K Report, for a discussion of the Company's dividend payments. On March 26, 1999, the Board of Directors of the Company declared a quarterly dividend of $.54 per share, payable May 1, 1999 to shareholders of record as of April 9, 1999. OTHER MATTERS FORWARD-LOOKING STATEMENTS This quarterly report on Form 10-Q and the documents incorporated by reference contain statements which, to the extent they are not recitations of historical fact, constitute "forward- looking statements" within the meaning of the Securities Litigation Reform Act of 1995 (Reform Act). The statements will contain words such as "believes," "expects," "intends," "plans," and other similar words. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict. A number of important factors affecting the Company's business and financial results could cause actual results to differ materially from those stated in the forward-looking statements. Those factors include weather, energy supply and demand, developments in the legislative, regulatory and competitive environment, electric and gas industry restructuring and cost recovery and certain environmental matters as well as such other factors as set forth in the Company's 10-K Report and all documents subsequently filed with the Securities and Exchange Commission. The Company undertakes 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 these forward-looking statements. - 13 - THE YEAR 2000 ISSUE Reference is made to the caption "The Year 2000 Issue" of Item 7 of the Company's 10-K Report for a discussion related to the Year 2000 issue with the following updates noted: The Year 2000 problem project is still currently on schedule with implementation projected to be completed by June 30, 1999. This is also the date that the Company's remediation is scheduled for completion under the NERC Guidelines. Regarding total project costs, of a total estimate of $3.0 million, approximately $1.7 million has been expended through March 1999, including $927,762 of internal labor charges. The Company does not expect final costs to exceed this estimate; however, no assurances can be given. PART II - OTHER INFORMATION Item 1. Legal Proceedings (a) ASBESTOS LITIGATION. For a discussion of lawsuits against the Company involving asbestos, see Note 9 - Commitments and Contingencies, under the caption "Asbestos Litigation," in Part II, Item 8 of the Company's 10-K Report. Since 1987, the Company has been involved as a defendant in the "mass tort" asbestos litigation in the United States District Courts for the Southern and Eastern Districts 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 death and injuries allegedly caused by exposure to asbestos. As of April 30, 1999, the Company has been a defendant in approximately 1,623 such individual lawsuits. Many of these lawsuits have been disposed of without any payment by the Company, or for immaterial amounts. While the amounts demanded in all the remaining lawsuits total several billions of dollars, it is the Company'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 the Company's financial position. However, if the Company 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 the Company if the Company could not recover all or a substantial portion thereof in rates. The Company's insurance does not extend to punitive damages. - 14 - The Company is insured under successive comprehensive general liability policies issued by a number of insurers, has put such insurers on notice of the asbestos lawsuits and has demanded indemnification and reimbursement for its defense costs. In December 1994, the Company commenced a lawsuit against eight such insurers in the New York State Supreme Court, Dutchess County. By order dated October 2, 1998, the Court granted a motion by Central Hudson against one insurer, Travelers Casualty and Surety Company (f/k/a The Aetna Casualty and Surety Company) (Travelers), seeking a declaration that Travelers owed Central Hudson the cost of defense in the underlying asbestos litigation. Travelers has since paid Central Hudson $3,181,029.94, consisting of the undisputed portion of Central Hudson's past defense costs together with prejudgment interest. Travelers has made this payment subject to the October 2, 1998 order of the Court and without prejudice to its rights to appeal or to seek contribution from the other insurers and from Central Hudson. (b) CITY OF NEWBURGH LITIGATION. For a discussion of the lawsuit by the City of Newburgh, New York (City) against the Company involving allegations that the Company had violated certain laws, including environmental laws, see Note 9 Commitments and Contingencies, under the caption "Former Manufactured Gas Plant Facilities," in Part II, Item 8 of the Company's 10-K Report. Subsequent to the December 18, 1998 jury award referred to under said caption, the Company and the City entered into a Settlement Agreement, dated March 4, 1999, which received court approval on the same date. Under the Settlement Agreement (i) said lawsuit was disposed of and the City's claims were dismissed with prejudice, (ii) the City waived its right to have the $16 million awarded by the jury for the cost of environmental remediation on the City's property (as described under said caption) paid to or for the benefit of the City and the Company agreed to remediate the City's property at the Company's costs pursuant to the New York State Department of Environmental Conservation's (NYSDEC) October 1995 Order on Consent (described under said caption), (iii) the Company paid the City $2 million and will pay the City $500,000 in the future on the occurrence of certain events (iv) if the total cost of such remediation is less than $16 million, the Company will pay the City an additional amount on a formula basis up to $500,000 depending on the extent to which the cost of remediation is less than $16 million, and (v) the Company agreed to indemnify and hold harmless the City against claims or lawsuits by any third party against the City alleging injury, damages or violation of law caused by or arising from the alleged contamination in said lawsuit having migrated from the Company's to the City's property. - 15 - The Company can make no prediction as to the full financial effect this matter will have on it, including the extent, if any, of insurance reimbursement and including implementation of environmental clean-up under said Order on Consent. (c) ORDER ON CONSENT. Reference is made to the negotiations of the Company with the NYSDEC of the terms and conditions of a consent order relating to alleged opacity variances of its Danskammer Plant and Roseton Plant (owned as tenants-in-common by the Company, Consolidated Edison Company of New York, Inc. and Niagara Mohawk Power Corporation) as described in Part I, Item 1, under the caption "Business - Environmental Quality - Air" of the Company's 10-K Report. The Company and the NYSDEC entered into an Order on Consent, effective April 26, 1999 (DEC Index No. D3-900-97-08), pursuant to which the Company, in settlement of a claim by the NYSDEC that emissions from said Plants exceeded applicable opacity emissions standards, agreed to a civil penalty of $1.5 million for both plants, of which $500,000 is to be paid to the NYSDEC within 30 days of the effective date of such Order, and the remaining $1.0 million of such penalty is suspended if the Company causes certain environmental projects in Dutchess and Orange Counties, New York to be implemented, as set forth in said Order. Said Order also provides for (i) a new level of stipulated penalty provisions for future opacity exceedences and (ii) an Opacity Reduction Program, all with respect to said Plants. (d) ENVIRONMENTAL LITIGATION. By letter dated April 13, 1999, the Company was advised that Riverkeeper, Inc., Robert H. Boyle and John J. Cronin had commenced a citizen suit, in the United States District Court for the Southern District of New York (99 Civ. 2536), against the Company under ss.11 of the Endangered Species Act, 16 U.S.C. ss.1540, seeking injunctive relief from the Company's alleged unpermitted takings of the endangered shortnose sturgeon through the Company's Roseton and Danskammer Plants on the Hudson River. The Company does not believe it has violated such Act and intends to vigorously defend this action. The Company can make no prediction as to the outcome of this litigation. Item 4. Submission of Matters to a Vote of Security Holders. Annual Meeting of Shareholders. The Company's Annual Meeting of Shareholders was held on April 27, 1999. The following matters were voted upon at such meeting: - 16 - (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 14,735,845 are as follows: Name of Director Shares For Shares Withheld - ---------------- ---------- --------------- Jack Effron 14,591,953 143,892 Frances D. Fergusson 14,579,525 156,320 Heinz K. Fridrich 14,583,804 152,041 Edward F. X. Gallagher 14,594,664 141,181 Paul J. Ganci 14,600,024 135,821 Charles LaForge 14,587,933 147,912 John E. Mack III 14,595,089 140,756 Edward P. Swyer 14,597,330 138,515 (b) INDEPENDENT ACCOUNTANTS. The appointment by the Board of Directors of PricewaterhouseCoopers LLP as the Company's Independent Accountants for the year 1999 was ratified by a vote of the shareholders as follows: Shares For Shares Against Shares Abstaining - ---------- -------------- ----------------- 14,570,623 55,036 110,186 (c) APPOINTMENT OF OFFICERS. Immediately following the Company's Annual Meeting of Shareholders, the Company's Board of Directors appointed Mr. Paul J. Ganci as Chairman of the Board and Chief Executive Officer. Previously, Mr. Ganci was President and Chief Executive Officer. The Board of Directors appointed Mr. Carl E. Meyer as President and Chief Operating Officer of the Company; previously Mr. Meyer was Executive Vice President Operations. The Board of Directors also appointed Mr. Allan R. Page as Executive Vice President of Administration and Transition; previously Mr. Page was Executive Vice President Energy Resources and Development. The Board also directed that Mr. Page be appointed President and Chief Operating Officer of the Company's subsidiaries, Central Hudson Enterprises Corporation, CH Resources, Inc. and Greene Point Development Corporation. Mr. Ganci is Chairman of the Board and Chief Executive Officer of those subsidiaries. - 17 - Item 6. Exhibits and Reports of Form 8-K (a) The following exhibits are furnished in accordance with the provisions of Item 601 of Regulation S-K: Exhibit No. Regulation S-K Item 601 Designation Exhibit Description ----------- ------------------- (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. During the period covered by this Report on Form 10-Q, the Company filed the following Current Report on Form 8-K: (i) A Report dated January 15, 1999 which described the creation and establishment, on January 8, 1999, of a series of debt securities in connection with the Company's medium-term note program. - 18 - SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Company 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 6, 1999 - 19 - EX-3.(II) 2 BY LAWS EXHIBIT 3 B Y - L A W S OF CENTRAL HUDSON GAS & ELECTRIC CORPORATION E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 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 3 Section 9. Record Date 3 ARTICLE II. BOARD OF DIRECTORS 4 Section 1. Number and Qualifications 4 Section 2. Election of Directors 4 Section 3. Term of Office 4 Section 4. Resignation and Removal 4 Section 5. Newly Created Directorships and Vacancies 5 Section 6. Election of Directors by Holders of Preferred Stock 5 Section 7. Regular Meetings 6 Section 8. Special Meetings 6 Section 9. Notice and Place of Meetings 6 Section 10. Business Transacted at Meetings 7 Section 11. Quorum and Manner of Acting 7 Section 12. Compensation 7 Section 13. Indemnification of Officers and Directors 7 Section 14. Committees of the Board 8 ARTICLE III. EXECUTIVE COMMITTEE 9 Section 1. How Constituted and Powers 9 Section 2. Removal and Resignation 9 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -2- PAGE ---- Section 3. Filling of Vacancies 9 Section 4. Quorum 9 Section 5. Record of Proceedings, etc. 10 Section 6. Organization, Meetings, etc. 10 Section 7. Compensation of Members 10 ARTICLE IV. OFFICERS 11 Section 1. Election 11 Section 2. Removal 11 Section 3. Resignation of Officers 11 Section 4. Filling of Vacancies 11 Section 5. Compensation 12 Section 6. Chairman of the Board of Directors and Chief Executive Officer 12 Executive Officer Section 7. Vice Chairman of the Board of Directors 12 Section 8. President and Chief Operating Officer 12 Section 9. The Vice Presidents 12 Section 10. The Treasurer 13 Section 11. Controller 13 Section 12. The Secretary 14 Section 13. Other Officers 14 ARTICLE V. CONTRACTS, LOANS, BANK ACCOUNTS, ETC. 15 Section 1. Contracts, etc., How Executed 15 Section 2. Loans 15 Section 3. Checks, Drafts, etc. 15 Section 4. Deposits 16 Section 5. General and Special Bank Accounts 16 ARTICLE VI. CAPITAL STOCK 17 Section 1. Issue of Certificates of Stock 17 Section 2. Transfer of Stock 17 Section 3. Lost, Destroyed and Mutilated Certificates 17 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -3- PAGE ---- ARTICLE VII. DIVIDENDS, SURPLUS, ETC. 18 Section 1. General Discretion of Directors 18 ARTICLE VIII. MISCELLANEOUS PROVISIONS 19 Section 1. Fiscal Year 19 Section 2. Waiver of Notice 19 Section 3. Notices 19 Section 4. Examination of Books 19 Section 5. Gender 20 ARTICLE IX. AMENDMENTS 21 Section 1. Amendment by Directors 21 Section 2. Amendment by Shareholders 21 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 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 brought before the meeting, shall be held each year on the last 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 sixty days before the date of the meeting, provided, however, that a copy of such notice may be given by third-class mail E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -2- not fewer than twenty-four nor more than sixty 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -3- 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 amend ments thereto and except as provided in Section 9 of this Article I. Every shareholder entitled to vote at a meeting of shareholders may authorize 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 sixty nor less than ten days before the day of such meeting, nor more than sixty days prior to any other action. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -4- 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. 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -5- 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 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 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -6- 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. 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -7- 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 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 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -8- 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -9- 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 three or more of the directors, together with the Chairman of the Board of Directors, 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -10- 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. 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -11- 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. 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -12- 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 and Chief Executive Officer 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. 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 and Chief Operating Officer shall, subject to the authority of the Chairman of the Board of Directors and Chief Executive Officer, have the power and perform the duties usually appertaining to the President and Chief Operating Officer of a corporation, and such power and duties as the Chairman of the Board of Directors and Chief Executive Officer shall assign to him. 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. 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 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -13- 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. 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 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -14- 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -15- 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 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -16- 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. 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -17- 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 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -18- 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -19- 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 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -20- SECTION 5. GENDER. Words used in these by-laws importing the male gender shall be construed to include the female gender, wherever appropriate. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -21- 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. E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 -22- I, Steven V. Lant, Corporate 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 Corporate Secretary of said Corporation and hereunto affixed its corporate seal this 5th day of May, 1999. [SGD] STEVEN V. LANT ----------------------------- Corporate Secretary Amended: April 27, 1999 E:\CORPSEC\ALLEN\10Q\CHGE.599 5/5/99 EX-12 3 COMPUTATION OF RATIOS
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 1999 Year Ended December 31, --------------------- -------------------------------------------------- 1998 1997(1) 1996(1) 1995 3 Months 12 Months ---- ---- ---- ---- Ended Ended March 31, March 31, --------- --------- Earnings: A. Net Income $ 19,104 $ 52,481 $ 52,544 $ 55,086 $ 56,082 $ 52,722 B. Federal Income Tax 11,163 29,232 28,627 26,237 31,068 28,687 -------- -------- -------- -------- -------- -------- C. Earnings before Income Taxes $ 30,267 $ 81,713 $ 81,171 $ 81,323 $ 87,150 $ 81,409 ======== ======== ======== ======== ======== ======== D. Fixed Charges Interest on Mortgage Bonds 3,440 14,106 14,225 14,237 15,112 16,862 Interest on Other Long-Term Debt 2,377 9,185 8,890 8,860 8,505 9,063 Other Interest 1,097 3,848 3,639 2,647 2,626 1,917 Interest Portion of Rents 256 1,008 1,004 1,020 1,094 1,522 Amortization of Premium & Expense on Debt 236 933 924 906 940 1,069 -------- -------- -------- -------- -------- -------- 7,406 29,080 28,682 27,670 28,277 30,433 -------- -------- -------- -------- -------- -------- E. Total Earnings $ 37,673 $110,793 $109,853 $108,993 $115,427 $111,842 ======== ======== ======== ======== ======== ======== Preferred Dividend Requirements: F. Allowance for Preferred Stock Dividends Under IRC Sec 247 $ 807 $ 3,230 $ 3,230 $ 3,230 $ 3,230 $ 4,903 G. Less Allowable Dividend Deduction 32 127 127 127 127 528 -------- -------- -------- -------- -------- -------- H. Net Subject to Gross-up 775 3,103 3,103 3,103 3,103 4,375 I. Ratio of Earnings before Income Taxes to Net Income (C/A) 1.584 1.557 1.545 1.476 1.554 1.544 -------- -------- -------- -------- -------- -------- J. Pref. Dividend (Pre-tax) (HxI) 1,228 4,831 4,794 4,580 4,822 6,755 K. Plus Allowable Dividend Deduction 32 127 127 127 127 528 -------- -------- -------- -------- -------- -------- L. Preferred Dividend Factor 1,260 4,958 4,921 4,707 4,949 7,283 M. Fixed Charges (D) 7,406 29,080 28,682 27,670 28,277 30,433 -------- -------- -------- -------- -------- -------- N. Total Fixed Charges and Preferred Dividends $ 8,666 $ 34,038 $ 33,603 $ 32,377 $ 33,226 $ 37,716 ======== ======== ======== ======== ======== ======== O. Ratio of Earnings to Fixed Charges (E/D) 5.09 3.81 3.83 3.94 4.08 3.68 ======== ======== ======== ======== ======== ======== P. Ratio of Earnings to Fixed Charges and Preferred Dividends (E/N) 4.35 3.25 3.27 3.37 3.47 2.97 ======== ======== ======== ======== ======== ======== (1)Restated to properly reflect the exclusion of AFUDC from fixed charges.
EX-27 4 FDS --
OPUR1 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FOR THE CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE OF SUCH FINANCIAL STATEMENTS 1,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 PER-BOOK $923,436 $79,894 $130,679 $169,701 $0 $1,303,710 $87,775 $251,137 $142,478 $481,390 $35,000 $21,030 $377,132 $0 $0 $0 $3,308 $0 $0 $0 $385,850 $1,303,710 $146,471 $11,285 $110,156 $121,441 $25,030 $1,157 $26,187 $7,083 $19,104 $807 $18,297 $9,106 $0 $56,019 $1.09 $0
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