Cleco Corp. (NYSE: CNL) reported today 2008 net income applicable
to common stock of $102.1 million, down $49.2 million from the
$151.3 million recorded in 2007. Included in 2007 net income was a
$72.2 million net gain from the Acadia partnership settlement with
Calpine Corp. (Calpine) and the Calpine bankruptcy claim.
On an earnings per share basis, Cleco recorded earnings of $1.70
per diluted share in 2008, down $0.84 per share from the $2.54 per
share recorded in 2007. Included in 2007 earnings was $1.22 per
share from the Acadia partnership settlement and the Calpine
bankruptcy claim.
For the fourth quarter of 2008, net income applicable to common
stock was $13.5 million, or $0.22 per diluted share, up $0.02 per
share from the $0.20 per share in 2007.
"Although Cleco faced many challenges in 2008, I am pleased to
say that we did not waiver from our strategy and produced a solid
year," said Michael Madison, president and CEO of Cleco Corp. "In
2008, we issued securitized storm recovery bonds to pay for our
unrecovered restoration costs from hurricanes Katrina and Rita and
to establish a $50 million restricted storm reserve fund. Having
the storm reserve in place helped us to reach a consensus with the
Louisiana Public Service Commission (LPSC) on the treatment of 2008
storm costs from hurricanes Gustav and Ike. We also completed the
financing of Rodemacher Unit 3 in 2008. In 2009, we should see the
benefits of our past efforts as we prepare for commercial operation
of Rodemacher Unit 3, which also is the time we should begin to
realize the results of our new base rate plan."
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
Diluted EPS
----------------------------
Three Months Ended Dec. 31,
----------------------------
Subsidiary 2008 2007
------------- -------------
Cleco Power LLC $ 0.38 $ 0.33
Cleco Midstream Resources LLC (0.12) (0.09)
Corporate and Other(1) (0.04) (0.04)
------------- -------------
Earnings applicable to common stock $ 0.22 $ 0.20
(1)Includes dividends on preferred stock
Results for Fourth Quarter 2008:
Major Reconciling Items for Fourth-Quarter EPS 2008 vs.
2007:
$ 0.20 2007 Fourth-Quarter Diluted EPS
(0.02) Losses on energy hedging, net
(0.04) Higher Cleco Power expenses, net
0.11 Higher Cleco Power AFUDC (allowance for funds used during
construction)
(0.03) Lower Cleco Midstream results
------
$ 0.22 2008 Fourth-Quarter Diluted EPS
Cleco Power's 2008 fourth-quarter earnings -- up $0.05 per share
in the quarter-to-quarter comparison
-- Overall, nonfuel revenue was the same in the quarter-to-quarter
comparison with 2007. Fourth quarter 2008 kilowatt-hour sales
were the same as a year ago for the same period.
For the three months ended
(Million kWh) Dec. 31,
---------------------------
2008 2007 Change
--------- -------- -------
Electric Sales
Residential 757 806 (6.08)%
Commercial 576 609 (5.42)%
Industrial 721 754 (4.38)%
Other retail 33 33 -
--------- --------
Total retail 2,087 2,202 (5.22)%
Sales for resale 114 89 28.09 %
Unbilled 4 (86) 104.65 %
--------- --------
Total retail and wholesale customer sales 2,205 2,205 -
-- Mark-to-market and realized losses on energy hedging positions tied to a
fixed-price wholesale contract were $0.02 per share higher as compared
to the same period of 2007.
-- Interest expense increased $0.14 per share compared to last year's
results. Of that, $0.07 per share was primarily related to the 2008
absence of a favorable 2007 settlement with the Internal Revenue Service
(IRS) and $0.08 per share was due to the issuances of senior notes,
senior secured storm recovery bonds, Gulf Opportunity Zone bonds, and
solid-waste disposal bonds. Partially offsetting these amounts was $0.01
per share related to the storm damage surcredit.
-- Interest income decreased $0.01 per share resulting primarily from a
lower balance of deferred lignite mining costs.
-- Adjustments/true-ups related to income taxes increased earnings by
$0.06 per share.
-- Other expenses were $0.05 per share lower compared to the same period
last year primarily due to lower property taxes and lower generation
station maintenance work performed in 2008.
-- AFUDC, primarily associated with the Rodemacher Unit 3 project,
contributed an additional $0.11 per share as compared to the fourth
quarter of 2007. The equity portion of AFUDC associated with the
Rodemacher Unit 3 project was up $0.12 per share. Partially offsetting
this was $0.01 related to the debt portion of AFUDC due to adjustments
made in 2007.
Cleco Midstream Resources' results for fourth quarter 2008 --
down $0.03 per share in the quarter-to-quarter comparison
Evangeline was down $0.05 per share for the fourth quarter of
2008 compared to the same period a year ago, primarily due to
higher maintenance expenses largely related to a combustion turbine
major inspection outage during 2008. Acadia had lower losses of
$0.02 per share compared to the same period last year due to the
absence of the effect from renegotiation of the turbine maintenance
agreement in 2007.
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
Diluted EPS
----------------------------
Twelve Months Ended Dec. 31,
----------------------------
Subsidiary 2008 2007
------------- -------------
Cleco Power LLC $ 1.89 $ 1.42
Cleco Midstream Resources LLC (excluding 2007
gains from the Calpine bankruptcy claim,
net, and Acadia settlement, net of
impairment on investment) (0.17) (0.22)
Corporate and Other(1) (0.02) 0.12
------------- -------------
Earnings excluding Acadia net gain $ 1.70 $ 1.32
Gain from Calpine bankrupcty claim, net - 0.81
Gain from Acadia settlement, net of
impairment on investment - 0.41
------------- -------------
Earnings applicable to common stock $ 1.70 $ 2.54
(1)Includes dividends on preferred stock
Results for Twelve Months ended Dec. 31, 2008:
Major Reconciling Items for Twelve Months ended Dec. 31, EPS
2008 vs. 2007:
$ 2.54 Twelve Months ended Dec. 31, 2007 Diluted EPS
(0.81) Absence of 2007 gain from Calpine bankruptcy claim (equity
income)
(0.62) Absence of 2007 gain from Acadia settlement preferred
distribution (equity income)
(0.26) Absence of 2007 gain from Acadia settlement guaranteed payment
(other income)
0.47 Absence of 2007 impairment of investment in Acadia (equity
------ income)
$ 1.32
0.06 Higher Cleco Power non-fuel revenue
(0.02) Losses on energy hedging, net
(0.03) Lower storm surcharge collections
(0.12) Higher Cleco Power expenses, net
(0.02) EPS dilution - conversion of ESOP (Employee Stock Ownership
Plan) shares
0.60 Higher Cleco Power AFUDC
0.05 Lower Cleco Midstream losses (excluding gains from the Calpine
bankruptcy claim, net, and Acadia settlement, net of
impairment of investment)
(0.14) Lower corporate results
------
$ 1.70 Twelve Months ended Dec. 31, 2008 Diluted EPS
Cleco Power's twelve months ended Dec. 31, 2008 earnings -- up
$0.47 per share year over year
-- Revenue from wholesale customers added $0.03 per share compared to last
year's results while other retail sales were down $0.01 per share
compared to last year's results. Lower retail sales resulted primarily
from a decrease in cooling-degree days and hurricane-related outages.
Cooling-degree days for the period were slightly lower than 2007 levels
by 2.5 percent while heating-degree days were slightly above 2007 levels
by 1.8 percent.
For the twelve months ended
(Million kWh) Dec. 31,
---------------------------
2008 2007 Change
--------- -------- -------
Electric Sales
Residential 3,545 3,596 (1.42)%
Commercial 2,450 2,478 (1.13)%
Industrial 2,898 3,008 (3.66)%
Other retail 134 135 (0.74)%
--------- --------
Total retail 9,027 9,217 (2.06)%
Sales for resale 441 473 (6.77)%
Unbilled 16 (19) 184.21 %
--------- --------
Total retail and wholesale customer sales 9,484 9,671 (1.93)%
-- Transmission and miscellaneous revenue increased $0.04 per share year
over year.
-- Mark-to-market and realized net losses on energy hedging positions tied
to a fixed-price wholesale contract were $0.02 per share higher as
compared to 2007.
-- Storm surcharge collections were down $0.03 per share due to the
issuance of storm recovery bonds in March 2008.
-- Interest expense increased $0.25 per share year over year. The increase
resulted from $0.14 per share due to solid-waste disposal bonds and
senior notes issued in 2008, $0.08 per share on the storm recovery
bonds, $0.07 per share related primarily to the carrying cost of the
tax benefits of hurricanes Katrina and Rita storm damage costs and
$0.07 per share primarily related to the 2008 absence of a favorable
2007 settlement with the IRS. These increases were partially offset by
$0.06 per share related to the storm damage surcredit, $0.02 per share
of lower interest related to the repayment of medium-term notes in 2007
and $0.03 per share related to interest on retainage from Shaw and lower
interest rates on Cleco Power's credit facility.
-- Interest income decreased $0.02 per share resulting primarily from a
lower balance of deferred lignite mining costs.
-- Other expenses were $0.15 per share lower compared to last year. Lower
employee benefit costs contributed $0.04 per share and lower
distribution and generating maintenance work contributed $0.04 per
share. Other taxes and depreciation expense collectively were $0.09
per share lower. Partially offsetting this amount was $0.01 per share
of higher expenses related to capacity contracts and $0.01 per share
of other miscellaneous expenses.
-- The 2007 conversion of shares of ESOP preferred stock to shares of
common stock resulted in a $0.02 per share dilution.
-- AFUDC, primarily associated with the Rodemacher Unit 3 project,
contributed an additional $0.60 per share as compared to 2007. The
equity portion of AFUDC associated with the Rodemacher Unit 3 project
was up $0.53 per share, while the debt portion of AFUDC contributed
$0.07 per share.
Cleco Midstream Resources' results for twelve months ended Dec.
31, 2008, excluding the 2007 gains from the Calpine bankruptcy
claim, net and Acadia settlement, net of impairment on investment
-- up $0.05 per share year over year
Excluding the 2007 gains from the Calpine bankruptcy claim and
the Acadia settlement, net of impairment of investment of $1.22 per
share, Acadia had lower losses of $0.10 per share largely due to
$0.12 per share of lower interest paid to the holding company and
$0.01 related to other miscellaneous items. These increases were
partially offset by $0.03 per share related to the break-up fee
paid to Acadia Power Holdings, LLC in 2007 related to the sale of
Calpine's interest in Acadia. Evangeline was down $0.07 per share
primarily due to higher maintenance expenses largely related to a
combustion turbine major inspection outage during 2008, higher
maintenance expenses under Evangeline's long-term maintenance
contract, and higher other unplanned maintenance expenses as
compared to 2007. Lower administrative and other miscellaneous
expenses added $0.02 per share in the year-to-year comparison.
Other
Corporate earnings decreased $0.14 per share in the year-to-year
comparison. Of that, $0.12 per share was due to lower affiliate
interest income received from Acadia, $0.05 per share was related
to decreases in cash surrender values of corporate life insurance
policies, and $0.04 per share was related to lower interest income
from temporary investments. Partially offsetting these decreases
were $0.03 per share of lower interest expense primarily related to
the repayment of $100 million of senior notes in May 2008 at
maturity, $0.03 of lower taxes and other miscellaneous expenses,
and $0.01 per share due to the absence of preferred dividends
previously paid on shares of ESOP preferred stock converted to
shares of common stock.
Strategic Update
"As we look toward the future, we are excited about the
challenges and opportunities ahead. Cleco Power received both LPSC
and Federal Energy Regulatory Commission (FERC) approval for its
2008 request for proposal for short-term capacity. Last quarter, we
announced that Cleco Power selected the proposal submitted by
Acadia Power Partners (APP), a joint venture between Cleco
Midstream and Cajun Gas Energy, L.L.C. The contract is for 235
megawatts and is scheduled to take effect on March 1, 2009, and
continue until Oct. 1, 2009," said Madison.
"Cleco Power has chosen the acquisition of 50 percent of the
Acadia Power Station owned by APP, or one of its two 580-megawatt
units, as the lowest bid in its 2007 long-term request for proposal
for capacity beginning in 2010. Cleco Power will own and operate
one unit and operate the other 580-megawatt unit on behalf of APP.
Prior to closing the transaction, valued at approximately $300
million, Cleco Power must complete its due diligence, finalize and
execute definitive agreements, and receive approvals from the LPSC
and the FERC. We plan to complete the transaction by the end of
2009 in a process that remains under the supervision of an
independent monitor appointed by the LPSC.
"Recently, Cleco Power, along with two of its neighboring
utilities, received approval from the LPSC and the Southwest Power
Pool on an agreement to upgrade our interconnected transmission
system in our southern region. The upgrades will increase capacity,
reduce transmission constraints, and improve the electric service
provided by Cleco Power and the other two utilities in the Acadiana
Load Pocket area, which is south of Highway 190 between the
Atchafalaya Basin and Jennings. Construction of the project is
expected to cost $200 million. Of that amount, Cleco's portion will
be approximately $150 million. Construction is expected to begin in
late 2009 with the final phase completed in late 2012," said
Madison.
"With the court's reinstatement of the Clean Air Interstate
Rule, the possible passing of climate change legislation, and the
likely institution of a renewable portfolio standard, we are
closely monitoring our environmental regulatory situation. While
time will bring clarity, we are moving now to better position Cleco
Power to face these potential environmental requirements. We have
determined that our new Rodemacher Unit 3 can use biomass to
generate electricity, and we have installed new pollution control
systems at our existing solid-fuel units. We will continue to
explore opportunities that make sense for Cleco's shareholders and
customers."
2009 Earnings Guidance
"Cleco Power's current LPSC rate case is a historic one and its
results will significantly shape the company's financial future,"
said Madison. "As a result, we will wait to give guidance until the
LPSC staff files its testimony on the utility's proposed rate plan.
We anticipate that filing will take place in April and we expect to
provide 2009 guidance shortly thereafter."
Cleco management will discuss the company's annual and
fourth-quarter 2008 results during a conference call scheduled for
11 a.m. EST (10 a.m. CST) Friday, Feb. 27, 2009. The call will be
broadcast live on the Internet. A replay will be available for 12
months. Investors may access the webcast through the company's Web
site at www.cleco.com by selecting "For Investors" and then "Cleco
Corporation Fourth-Quarter 2008 Earnings Conference Call."
Cleco Corp. is a regional energy company headquartered in
Pineville, La. It operates a regulated electric utility company
that serves 276,000 customers across Louisiana. Cleco also operates
a wholesale energy business with approximately 1,350 megawatts of
name plate generating capacity. For more information about Cleco,
visit www.cleco.com.
Financial tables follow:
CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(UNAUDITED)
For the three months ended Dec. 31, 2008 2007
---------- ----------
Operating revenue
Electric operations $ 229,573 $ 222,401
Other operations 6,942 8,807
Affiliate revenue 2,670 2,466
---------- ----------
Operating revenue 239,185 233,674
Operating expenses
Fuel used for electric generation 73,566 69,283
Power purchased for utility customers 79,016 76,859
Other operations 29,068 27,989
Maintenance 11,632 14,112
Depreciation 19,906 20,077
Taxes other than income taxes 7,151 11,689
(Gain) loss on sales of assets (11) 15
---------- ----------
Total operating expenses 220,328 220,024
---------- ----------
Operating income 18,857 13,650
Interest income 872 3,724
Allowance for other funds used during construction 18,490 11,240
Equity (loss) income from investees (8,265) (4,460)
Other income 168 890
Other expense (3,648) (1,869)
Interest charges
Interest charges, including amortization of debt
expenses, premium and discount, net of
capitalized interest 22,158 9,325
Allowance for borrowed funds used during
construction (5,117) (5,643)
---------- ----------
Total interest charges 17,041 3,682
---------- ----------
Income before income taxes 9,433 19,493
Federal and state income tax (benefit) expense (4,116) 7,585
---------- ----------
Net income 13,549 11,908
Preferred dividends requirements, net of tax 12 12
---------- ----------
Net income applicable to common stock $ 13,537 $ 11,896
========== ==========
----------------------
Average shares of common stock outstanding
Basic 60,039,943 59,638,675
Diluted 60,320,230 59,973,467
Basic earnings per share
From continuing operations $ 0.22 $ 0.20
Net income applicable to common stock $ 0.22 $ 0.20
Diluted earnings per share
From continuing operations $ 0.22 $ 0.20
Net income applicable to common stock $ 0.22 $ 0.20
Cash dividends paid per share of common stock $ 0.225 $ 0.225
CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
For the 12 months ended Dec. 31, 2008 2007
----------- -----------
Operating revenue
Electric operations $ 1,032,970 $ 988,193
Other operations 36,768 35,285
Affiliate revenue 10,460 7,138
----------- -----------
Operating revenue 1,080,198 1,030,616
Operating expenses
Fuel used for electric generation 235,706 273,954
Power purchased for utility customers 471,261 385,247
Other operations 99,028 102,479
Maintenance 47,089 49,498
Depreciation 77,876 79,904
Taxes other than income taxes 34,471 41,975
(Gain) loss on sale of assets (110) 15
----------- -----------
Total operating expenses 965,321 933,072
----------- -----------
Operating income 114,877 97,544
Interest income 5,417 11,754
Allowance for other funds used during
construction 64,953 32,955
Equity (loss) income from investees (5,542) 93,148
Other income 1,263 29,531
Other expense (7,970) (4,405)
Interest charges
Interest charges, including amortization of
debt expenses, premium and discount, net of
capitalized interest 72,042 51,111
Allowance for borrowed funds used during
construction (19,642) (13,145)
----------- -----------
Total interest charges 52,400 37,966
----------- -----------
Income before income taxes 120,598 222,561
Federal and state income tax expense 18,457 70,772
----------- -----------
Net income 102,141 151,789
Preferred dividends requirements, net of tax 46 458
----------- -----------
Net income applicable to common stock $ 102,095 $ 151,331
=========== ===========
------------------------
Average shares of common stock outstanding
Basic 59,990,229 58,976,052
Diluted 60,214,640 59,717,528
Basic earnings per share
From continuing operations $ 1.70 $ 2.55
Net income applicable to common stock $ 1.70 $ 2.55
Diluted earnings per share
From continuing operations $ 1.70 $ 2.54
Net income applicable to common stock $ 1.70 $ 2.54
Cash dividends paid per share of common stock $ 0.900 $ 0.900
CLECO CORPORATION
CONSOLIDATED BALANCE SHEETS
(Thousands)
At At
Dec. 31, Dec. 31,
2008 2007
----------- -----------
Assets
Current Assets
Cash and cash equivalents $ 97,483 $ 129,013
Accounts receivable, net 78,314 87,983
Other current assets 290,582 188,520
----------- -----------
Total Current Assets 466,379 405,516
Property, plant and equipment, net 2,045,286 1,725,880
Equity investment in investees 249,144 258,101
Prepayments, deferred charges and other 580,395 317,126
----------- -----------
Total Assets $ 3,341,204 $ 2,706,623
----------- -----------
Liabilities
Current Liabilities
Long-term debt due within one year $ 63,546 $ 100,000
Accounts payable 138,300 129,946
Other current liabilities 158,987 127,521
----------- -----------
Total Current Liabilities 360,833 357,467
Deferred credits and other liabilities 812,687 568,684
Long-term debt, net 1,106,819 769,103
----------- -----------
Total Liabilities 2,280,339 1,695,254
----------- -----------
Shareholders' Equity
Preferred stock 1,029 1,029
Common shareholders' equity 1,069,669 1,018,731
Accumulated other comprehensive loss (9,833) (8,391)
----------- -----------
Total Shareholders' Equity 1,060,865 1,011,369
----------- -----------
Total Liabilities and Shareholders' Equity $ 3,341,204 $ 2,706,623
=========== ===========
Please note: In addition to historical financial information,
this news release contains forward-looking statements about future
results and circumstances, including, without limitation,
statements regarding the Rodemacher Unit 3 project, and the results
of Cleco Power's 2007 long-term RFP. There are many risks and
uncertainties with respect to such forward-looking statements,
including the weather and other natural phenomena, state and
federal legislative and regulatory initiatives, the timing and
extent of changes in commodity prices and interest rates, the
operating performance of Cleco Power's and Cleco Midstream's
facilities, the financial condition of the company's tolling
agreement counterparty, the performance of the tolling agreement by
such counterparty, construction and operational startup of
Rodemacher Unit 3, the continuation of the existing rate plan, the
outcome of Cleco Power's pending rate case, the results of Cleco
Power's 2007 long-term RFP, the implementation of the south
Louisiana joint transmission project, the impact of the global
financial crisis, and other risks and uncertainties more fully
described in the company's latest Annual Report on Form 10-K.
Actual results may differ materially from those indicated in such
forward-looking statements.
Investor Contacts: Cleco Corporation: Ryan Gunter (318) 484-7724
Rodney J. Hamilton (318) 484-7593 Media Contact: Cleco Corporation:
Robbyn Cooper (318) 484-7136 Cleco Corporation 2030 Donahue Ferry
Road PO Box 5000 Pineville, LA 71361-5000 Tel 318.484.7400
www.cleco.com
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