Cleco Corp. (NYSE: CNL) reported today 2009 first-quarter net
income applicable to common stock of $6.6 million, down $15.5
million from the $22.1 million recorded in the first quarter of
2008.
On an earnings per share basis, Cleco recorded earnings of $0.11
per diluted share, down $0.26 per share from the $0.37 per share
recorded in the first quarter of 2008. The decrease was primarily
due to milder weather, increased interest expense at Cleco Power
and higher planned outage expenses at Cleco Midstream.
"We continue to make progress on our key initiatives," said
Michael Madison, president and chief executive officer of Cleco
Corp. "First and foremost is Rodemacher Unit 3, our $1 billion
solid-fuel generating unit. We are approaching final project
milestones, including the first boiler test fire and steam blows on
the unit's pipes. This new source of generation will benefit Cleco
now and in the future."
Cleco's other key initiatives, including more details on
Rodemacher Unit 3, are discussed in the company's strategic
update.
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
Diluted EPS
------------------------------
three months ended March 31,
------------------------------
Subsidiary 2009 2008
-------------- --------------
Cleco Power LLC $ 0.25 $ 0.46
Cleco Midstream Resources LLC (0.14) (0.08)
Corporate and Other(1) - (0.01)
-------------- --------------
Earnings applicable to common stock $ 0.11 $ 0.37
(1) Includes dividends on preferred stock
Results for First-Quarter 2009:
Major Reconciling Items for First-Quarter EPS 2009 vs. 2008:
$ 0.37 2008 First-Quarter Diluted EPS
(0.07) Lower Cleco Power non-fuel revenue
(0.03) Losses on energy hedging, net
(0.09) Higher Cleco Power interest expense
(0.07) Higher Cleco Power income taxes
(0.02) Higher Cleco Power other expenses, net
0.07 Higher Cleco Power AFUDC (allowance for funds used during
construction)
(0.06) Lower Cleco Midstream results
0.01 Higher corporate results
--------
$ 0.11 2009 First-Quarter Diluted EPS
Cleco Power?s 2009 first-quarter earnings - down $0.21 per share in the
quarter-to-quarter comparison
-- Retail and wholesale sales decreased $0.07 per share compared to the
first quarter of 2008. Heating degree days for the quarter were 10
percent below 2008 first-quarter levels and were 25 percent below
normal.
For the three months ended
(Million kWh) March 31,
----------------------------
2009 2008 Change
-------- -------- -------
Electric Sales
Residential 816 840 (2.9)%
Commercial 542 554 (2.2)%
Industrial 587 686 (14.4)%
Other retail 33 32 3.1 %
-------- --------
Total retail 1,978 2,112 (6.3)%
Sales for resale 89 71 25.4 %
Unbilled (132) (57) (131.6)%
-------- --------
Total retail and wholesale customer sales 1,935 2,126 (9.0)%
-- Mark-to-market and realized losses on energy hedging positions tied to
a fixed-price wholesale contract were $0.03 per share higher compared to
the first quarter of 2008.
-- Interest expense increased $0.09 per share compared to the first
quarter of 2008. Of that, $0.08 per share was primarily related to the
issuances of senior notes, senior secured storm recovery bonds, Gulf
Opportunity Zone bonds, and solid-waste disposal bonds; $0.02 per share was
related to the absence of a favorable settlement with the Internal Revenue
Service (IRS); and $0.02 per share was primarily related to the carrying
cost of the tax benefits of storm damage costs. These increases were
partially offset by $0.03 per share related primarily to lower interest
rates and lower borrowings on Cleco Power's credit facility.
-- Adjustments related to income taxes decreased earnings by $0.07 per
share due to the effect of FASB Interpretation No. 18 "Accounting For
Income Taxes in Interim Periods."
-- Other expenses were $0.02 per share higher compared to the same period
last year primarily due to higher general liability expense and higher
employee benefit costs and administrative expenses.
-- AFUDC, primarily associated with the Rodemacher Unit 3 project,
contributed an additional $0.07 per share as compared to the first quarter
of 2008. The equity portion of AFUDC associated with the Rodemacher Unit 3
project was up $0.05 per share, while the debt portion of AFUDC contributed
$0.02 per share more than in the first quarter of 2008.
Cleco Midstream Resources' results for first quarter 2009 --
down $0.06 per share in the quarter-to-quarter comparison
Evangeline was down $0.05 per share for the first quarter of
2009 compared to the first quarter of 2008 primarily due to higher
maintenance expenses largely related to a planned steam turbine
major inspection outage during 2009. Acadia was down $0.01 per
share compared to the first quarter of 2008 primarily due to higher
removal and retirement costs, and higher turbine and general
maintenance expenses.
Other
Corporate earnings increased $0.01 per share in the
quarter-to-quarter comparison primarily due to lower interest
charges resulting from the repayment of $100 million of senior
notes in May 2008 and lower taxes and other miscellaneous
expenses.
Strategic update:
Cleco Power
"We remain on course to complete our Rodemacher Unit 3 project
later this year. Once complete, we will have delivered on the first
major component of our strategy, which is to expand our utility
through regulated investments," Madison said.
"Delivering on our growth strategy also includes achieving a
fair and balanced outcome on our rate case, which we filed in July
2008. We are pleased to have reached a settlement with the
Louisiana Public Service Commission (LPSC) Staff and are now in
discussions with intervenors in hopes of reaching a global
settlement. The settlement will then be presented to the LPSC for
their consideration," Madison said.
"As discussed in our last earnings release, Acadia Power
Partners submitted the lowest bid in Cleco Power's 2007 request for
capacity to meet our additional load requirements after Rodemacher
Unit 3. Under the agreement, Cleco Power will acquire 50 percent of
the Acadia plant. Our board of directors recently approved the
transaction, and we expect to execute the transaction documents
later this month. We will then commence the approval process with
the LPSC and the Federal Energy Regulatory Commission. Our goal is
to complete the deal by the end of this year. Like the bid
selection process, the acquisition is being overseen by an
independent monitor appointed by the LPSC," Madison said.
"Work on our transmission reliability initiative, the Acadiana
Load Pocket project, is ongoing. Construction of the new
transmission facilities is expected to begin later this year.
Through this project, we will invest approximately $150 million in
our transmission system and strengthen our service reliability. The
project is scheduled to be complete in late 2012," Madison
said.
Midstream
"Our Midstream business also remains on track. Midstream is
focused on completing the sale of one of Acadia's two power blocks
to Cleco Power and marketing the output of the other block either
through a power purchase agreement, tolling agreement or asset
sale," Madison said.
2009 Earnings Guidance
"We are targeting consolidated 2009 earnings in the range of
$1.62 to $1.72 per share," Madison said. "Our 2009 earnings
estimate includes Cleco Power results of $1.67 to $1.77 per share,
a Midstream loss of $0.15 per share, and corporate results of $0.10
per share.
"Cleco Power's earnings estimate assumes normal weather, 2009
capital expenditures of approximately $136 million, including AFUDC
on the Rodemacher project, and the continuation of our current rate
plan through the in-service date of Rodemacher Unit 3.
Additionally, the Cleco Power earnings target range accommodates
in-service dates for Rodemacher Unit 3 from September 30 through
the end of 2009," Madison said. "Midstream's earnings estimate
assumes continued performance by Evangeline's tolling counterparty
and is based on assumptions about Acadia's plant operations and
market conditions."
Cleco management will discuss the company's first-quarter 2009
results during a conference call scheduled for 11 a.m. Eastern time
(10 a.m. Central time) Thursday, May 7, 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 First-Quarter 2009 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
nameplate generating capacity. For more information about Cleco,
visit www.cleco.com.
Financial tables follow:
CLECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(UNAUDITED)
For the three months ended March 31, 2009 2008
--------- ---------
Operating revenue
Electric operations $ 202,865 $ 209,881
Other operations 7,109 10,064
Affiliate revenue 2,962 2,606
--------- ---------
Operating revenue 212,936 222,551
Operating expenses
Fuel used for electric generation 88,303 45,536
Power purchased for utility customers 45,718 89,794
Other operations 24,951 22,275
Maintenance 10,559 10,113
Depreciation 19,134 19,547
Taxes other than income taxes 7,033 8,831
Gain on sales of assets - (99)
--------- ---------
Total operating expenses 195,698 195,997
--------- ---------
Operating income 17,238 26,554
Interest income 411 1,617
Allowance for other funds used during construction 16,991 13,683
Equity loss from investees (11,751) (4,574)
Other income 1,285 66
Other expense (1,095) (669)
Interest charges
Interest charges, including amortization of debt
expenses, premium and discount, net of
capitalized interest 21,316 14,121
Allowance for borrowed funds used during
construction (6,213) (4,577)
--------- ---------
Total interest charges 15,103 9,544
--------- ---------
Income before income taxes 7,976 27,133
Federal and state income tax expense 1,326 5,061
--------- ---------
Net income 6,650 22,072
Preferred dividends requirements, net of tax 12 12
--------- ---------
Net income applicable to common stock $ 6,638 $ 22,060
========= =========
Average shares of common stock outstanding
Basic 60,097,929 59,907,896
Diluted 60,366,170 60,083,024
Basic earnings per share
From continuing operations $ 0.11 $ 0.37
Net income applicable to common stock $ 0.11 $ 0.37
Diluted earnings per share
From continuing operations $ 0.11 $ 0.37
Net income applicable to common stock $ 0.11 $ 0.37
Cash dividends paid per share of common stock $ 0.225 $ 0.225
CLECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
At March 31, At Dec. 31,
2009 2008
----------- -----------
Assets
Current Assets
Cash and cash equivalents $ 85,956 $ 97,483
Accounts receivable, net 59,438 78,314
Other current assets 259,606 290,582
----------- -----------
Total Current Assets 405,000 466,379
Property, plant and equipment, net 2,114,728 2,045,286
Equity investment in investees 244,619 249,144
Prepayments, deferred charges and other 599,580 580,395
----------- -----------
Total Assets $ 3,363,927 $ 3,341,204
----------- -----------
Liabilities
Current Liabilities
Long-term debt due within one year $ 61,087 $ 63,546
Accounts payable 65,827 138,300
Other current liabilities 157,226 158,987
----------- -----------
Total Current Liabilities 284,140 360,833
Deferred credits and other liabilities 838,306 812,687
Long-term debt, net 1,186,220 1,106,819
----------- -----------
Total Liabilities 2,308,666 2,280,339
----------- -----------
Shareholders? Equity
Preferred stock 1,029 1,029
Common shareholders? equity 1,064,064 1,069,669
Accumulated other comprehensive loss (9,832) (9,833)
----------- -----------
Total Shareholders? Equity 1,055,261 1,060,865
----------- -----------
Total Liabilities and Shareholders? Equity $ 3,363,927 $ 3,341,204
=========== ===========
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, Cleco Power's
pending rate case, and Cleco Power's 2007 long-term request for
proposal (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 Acadiana Load Pocket 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 and
Quarterly Report on Form 10-Q. Actual results may differ materially
from those indicated in such forward-looking statements.
Investor Contacts: R. Russell Davis (318) 484-7501 Rodney J.
Hamilton (318) 484-7593 Media Contact: Fran Phoenix (318) 484-7467
Cleco Corporation 2030 Donahue Ferry Road PO Box 5000 Pineville, LA
71361-5000 Tel 318.484.7400 www.cleco.com
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