Cleco Corp. (NYSE: CNL) reported today 2009 second-quarter net
income applicable to common stock of $27.0 million, down $2.4
million from the $29.4 million recorded in the second quarter of
2008 and reaffirms its 2009 earnings guidance.
On an earnings per share basis, Cleco recorded earnings of $0.45
per diluted share, down $0.04 per share from the $0.49 per share
recorded in the second quarter of 2008. Results for the quarter
were driven by $0.03 per share of higher losses at Midstream
primarily from unplanned outage expenses at Acadia and $0.04 per
share of lower results at Cleco Power. Partially offsetting these
decreases was a $0.03 per share contribution from Corporate.
For the six months ended June 30, 2009, net income applicable to
common stock was $33.7 million, or $0.56 per diluted share, down
$0.30 per share from the $0.86 per share for the same period in
2008. Results for the six month period were driven by $0.25 per
share of lower results at Cleco Power primarily from increased
interest charges, net losses relating to economic hedge
transactions and operating and maintenance expenses, and $0.10 per
share higher losses at Midstream primarily from outage expenses.
Partially offsetting these decreases was a $0.05 per share
contribution from Corporate.
"We're very close to accomplishing three of our top goals for
the year," said Mike Madison, president and chief executive officer
of Cleco Corp. "Rodemacher Unit 3 is on schedule to begin
commercial operation in the fourth quarter of 2009, we've reached a
settlement agreement with all parties on our rate case, and we have
executed definitive agreements for the transfer of half of Acadia
to Cleco Power."
These projects are discussed in more detail in the company's
strategic update.
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
Diluted EPS
------------------
three months ended
June 30
------------------
Subsidiary 2009 2008
-------- --------
Cleco Power LLC $ 0.50 $ 0.54
Cleco Midstream Resources LLC (0.08) (0.05)
Corporate and Other(1) 0.03 -
-------- --------
Earnings applicable to common stock $ 0.45 $ 0.49
(1) Includes dividends on preferred stock
Results for Second-Quarter 2009:
Major Reconciling Items for Second-Quarter EPS 2009 vs. 2008:
$ 0.49 2008 Second-Quarter Diluted EPS
0.01 Non-fuel revenue
(0.03) Energy hedging, net
(0.04) Interest expense
(0.02) Income tax adjustments
(0.01) Other expenses, net
0.05 AFUDC (allowance for funds used during construction)
----
(0.04) Cleco Power results
(0.03) Cleco Midstream results
0.03 Corporate results
----
$ 0.45 2009 Second-Quarter Diluted EPS
Cleco Power's 2009 second-quarter earnings -- down $0.04 per share in the
quarter-to-quarter comparison
-- Non-fuel revenue increased $0.01 per share compared to the second
quarter of 2008 primarily due to higher unbilled sales as a result of
above normal temperatures in the latter part of the quarter, partially
offset by lower billed sales to industrial customers. Lower sales to
industrial customers were largely the result of decreased production at
one of Cleco Power's largest industrial customers and the start of a
large industrial customer cogenerating its electricity requirements.
Cooling degree days for the quarter were comparable to 2008 second-
quarter levels and were 17 percent above normal, again reflecting the
above normal temperatures in the latter part of the quarter.
For the three months ended
(Million kWh) June 30
--------------------------
2009 2008 Change
-------- -------- --------
Electric Sales
Residential 791 804 (1.6)%
Commercial 596 599 (0.5)%
Industrial 469 729 (35.7)%
Other retail 34 33 3.0%
-------- --------
Total retail 1,890 2,165 (12.7)%
Sales for resale 144 103 39.8%
Unbilled 325 203 60
-------- --------
Total retail and wholesale customer sales 2,359 2,471 (4.5)%
-- Realized losses and lower mark-to-market gains on energy hedging
positions tied to a fixed-price wholesale contract reduced earnings by
$0.03 per share compared to the second quarter of 2008.
-- Interest expense increased $0.04 per share compared to the second
quarter of 2008. Of that, $0.05 per share was primarily related to the
issuances of senior notes, Gulf Opportunity Zone bonds and solid-waste
disposal bonds. These increases were partially offset by $0.01 per
share of lower interest expense relating to medium-term notes and lower
interest rates and borrowings under Cleco Power's credit facility.
-- Adjustments to record tax expense at the expected annual effective tax
rate decreased earnings by $0.02 per share.
-- Other expenses were $0.01 per share higher compared to the same period
last year primarily due to higher employee benefit costs, training
expenses and administrative expenses, partially offset by lower other
non-recoverable fuel expenses.
-- AFUDC, primarily associated with the Rodemacher Unit 3 project,
contributed an additional $0.05 per share as compared to the second
quarter of 2008. The equity portion of AFUDC associated with the
Rodemacher Unit 3 project was up $0.04 per share, while the debt portion
of AFUDC contributed $0.01 per share more than in the second quarter of
2008.
Cleco Midstream Resources' results for second quarter 2009 --
down $0.03 per share in the quarter-to-quarter comparison
Acadia was down $0.04 per share compared to the second quarter
of 2008 primarily due to higher expenses from an unplanned outage
at the facility during 2009. Also contributing to the loss at
Acadia were higher interest charges primarily from additional
estimated interest costs related to an IRS audit and higher legal
fees. These decreases were partially offset by higher net revenue
from Acadia's short-term tolling agreement with Cleco Power.
Evangeline was up $0.01 per share for the second quarter of 2009
compared to the second quarter of 2008 primarily due to lower gas
expenses and lower interest charges.
Other
Corporate earnings increased $0.03 per share in the
quarter-to-quarter comparison primarily due to increases in the
cash surrender values of corporate life insurance policies.
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
Diluted EPS
------------------
six months ended
June 30
------------------
Subsidiary 2009 2008
-------- --------
Cleco Power LLC $ 0.75 $ 1.00
Cleco Midstream Resources LLC (0.22) (0.12)
Corporate and Other(1) 0.03 (0.02)
-------- --------
Earnings applicable to common stock $ 0.56 $ 0.86
(1) Includes dividends on preferred stock
Results for six months ended June 30, 2009:
Major Reconciling Items for six months ended June 30, EPS 2009 vs. 2008:
$ 0.86 Six Months ended June 30, 2008
(0.04) Non-fuel revenue
(0.07) Energy hedging, net
(0.14) Interest expense
(0.09) Income tax adjustments
(0.04) Other expenses, net
0.13 AFUDC (allowance for funds used during construction)
----
(0.25) Cleco Power results
(0.10) Cleco Midstream results
0.05 Corporate results
----
$ 0.56 Six Months ended June 30, 2009 Diluted EPS
Cleco Power's six months ended June 30, 2009 earnings -- down $0.25 per
share year over year
-- Retail and wholesale sales decreased $0.04 per share compared to last
year's results primarily from milder winter weather and lower industial
electric sales. Lower sales to industrial customers were largely the
result of decreased production at one of Cleco Power's largest
industrial customers and the start of a large industrial customer
cogenerating its electricity requirements. Heating degree days for the
first half of 2009 were 9 percent below 2008 levels while cooling degree
days were 2 percent above 2008 levels.
For the six months ended
(Million kWh) June 30
--------------------------
2009 2008 Change
-------- -------- --------
Electric Sales
Residential 1,607 1,644 (2.3)%
Commercial 1,139 1,153 (1.2)%
Industrial 1,056 1,416 (25.4)%
Other retail 66 65 1.5 %
-------- --------
Total retail 3,868 4,278 (9.6)%
Sales for resale 233 173 34.7%
Unbilled 192 147 30
-------- --------
Total retail and wholesale customer sales 4,293 4,598 (6.6)%
-- Mark-to-market and realized losses on energy hedging positions tied to a
fixed-price wholesale contract increased $0.07 per share year over year.
-- Interest expense increased $0.14 per share compared to the first half of
2008 primarily due to the issuances of senior notes, senior secured
storm recovery bonds, Gulf Opportunity Zone bonds and solid-waste
disposal bonds.
-- Adjustments to record tax expense at the expected annual effective tax
rate decreased earnings by $0.09 per share.
-- Other expenses were $0.04 per share higher compared to the same period
last year primarily due to higher general liability expense, higher
employee benefit costs, training expenses and administrative expenses.
-- AFUDC, primarily associated with the Rodemacher Unit 3 project,
contributed an additional $0.13 per share as compared to the first half
of 2008. The equity portion of AFUDC associated with the Rodemacher
Unit 3 project was up $0.10 per share, while the debt portion of AFUDC
contributed $0.03 per share more than in the first half of 2008.
Cleco Midstream Resources' six months ended June 30, 2009
results -- down $0.10 per share year over year
Evangeline was down $0.05 per share for the first half of 2009
compared to the first half of 2008 primarily due to higher
maintenance expenses largely related to a planned steam turbine
major inspection outage during 2009. Acadia was down $0.04 per
share for the first half of 2009 compared to the first half of 2008
primarily due to higher expenses from an unplanned outage at the
facility during 2009. These decreases were partially offset by
higher net revenue from Acadia's short-term tolling agreement with
Cleco Power. Additional estimated interest costs related to an IRS
audit reduced Midstream's results by $0.01 per share.
Other
Corporate earnings increased $0.05 per share in the year-to-year
comparison primarily due to increases in the cash surrender values
of corporate life insurance policies, lower interest charges
resulting from the repayment of $100 million of senior notes in May
2008 and lower other net expenses.
Earnings Guidance
"We are reaffirming our 2009 earnings target in the range of
$1.62 to $1.72 per share," Madison said. "Those targets assume
normal weather for the remainder of the year 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 Sept. 30,
2009, through the end of 2009. Midstream's earnings estimate
assumes continued performance by Evangeline's tolling counterparty
and is based on assumptions about Acadia's plant operations and
meeting the obligations under third-party forward sales
agreements."
Strategic update:
Cleco Power
"Construction of Rodemacher Unit 3 is more than 90 percent
complete, and as reported last quarter, the prerequisites for
actual startup are ongoing," Madison said.
"On July 27, 2009, we notified the Administrative Law Judge that
Cleco Power, along with the Louisiana Public Service Commission
staff, and the intervenors in the case had made significant
progress toward a full resolution of all issues in the case,"
Madison said. "We are pleased that our proposed rate plan has a
target return on equity of 10.7 percent with sharing occurring
after 11.3 percent. This settlement brings us one step closer to
delivering on our growth strategy and will now be presented to the
commission for approval. We hope to implement our new rate plan
when Rodemacher Unit 3 begins commercial operation in the fourth
quarter of 2009."
"Cleco Power's acquisition of 50 percent of the Acadia plant is
progressing. We've finished our due diligence and signed the
agreements to transfer the asset," Madison said. "The next step is
to file for regulatory approvals. The acquisition is expected to be
complete during the first quarter of 2010. Beginning January 2010,
the agreements provide that Acadia will continue to operate the
plant and serve Cleco Power under a tolling agreement covering 50
percent of the plant until the transaction is closed."
Midstream
"In addition to working on the Acadia-Cleco Power transaction,
our Midstream subsidiary continues to work on selling the remaining
capacity at Acadia either through a power purchase agreement,
tolling agreement or asset sale in order to attain the maximum
value from the asset," Madison said.
Cleco management will discuss the company's second-quarter 2009
results during a conference call scheduled for 11 a.m. Eastern time
(10 a.m. Central time) Thursday, Aug. 6, 2009. The call will be
webcast 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 Second-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 June 30 2009 2008
---------- ----------
Operating revenue
Electric operations $ 195,651 $ 259,581
Other operations 8,712 12,758
Affiliate revenue 2,863 2,448
---------- ----------
Operating revenue 207,226 274,787
Operating expenses
Fuel used for electric generation 50,326 22,887
Power purchased for utility customers 56,547 151,949
Other operations 25,941 22,862
Maintenance 14,766 14,589
Depreciation 19,479 19,336
Taxes other than income taxes 8,300 9,455
---------- ----------
Total operating expenses 175,359 241,078
---------- ----------
Operating income 31,867 33,709
Interest income 271 1,258
Allowance for other funds used during construction 17,538 14,993
Equity loss from investees (3,125) (2,365)
Other income 1,633 91
Other expense (480) (1,377)
Interest charges
Interest charges, including amortization of debt
expenses, premium and discount, net of
capitalized interest 20,150 14,947
Allowance for borrowed funds used during
construction (6,421) (5,026)
---------- ----------
Total interest charges 13,729 9,921
---------- ----------
Income before income taxes 33,975 36,388
Federal and state income tax expense 6,949 6,999
---------- ----------
Net income 27,026 29,389
Preferred dividends requirements, net of tax 12 12
---------- ----------
Net income applicable to common stock $ 27,014 $ 29,377
========== ==========
Average shares of common stock outstanding
Basic 60,175,528 59,998,227
Diluted 60,451,665 60,168,947
Basic earnings per share
From continuing operations $ 0.45 $ 0.49
Net income applicable to common stock $ 0.45 $ 0.49
Diluted earnings per share
From continuing operations $ 0.45 $ 0.49
Net income applicable to common stock $ 0.45 $ 0.49
Cash dividends paid per share of common stock $ 0.225 $ 0.225
CLECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(UNAUDITED)
For the six months ended June 30 2009 2008
---------- ----------
Operating revenue
Electric operations $ 398,517 $ 469,462
Other operations 15,820 22,821
Affiliate revenue 5,825 5,054
---------- ----------
Operating revenue 420,162 497,337
Operating expenses
Fuel used for electric generation 138,629 68,423
Power purchased for utility customers 102,265 241,743
Other operations 50,892 45,138
Maintenance 25,325 24,702
Depreciation 38,613 38,686
Taxes other than income taxes 15,333 18,286
Gain on sales of assets - (99)
---------- ----------
Total operating expenses 371,057 436,879
---------- ----------
Operating income 49,105 60,458
Interest income 682 2,875
Allowance for other funds used during construction 34,529 28,677
Equity loss from investees (14,876) (6,939)
Other income 2,674 157
Other expense (1,332) (2,046)
Interest charges
Interest charges, including amortization of debt
expenses, premium and discount, net of
capitalized interest 41,466 29,265
Allowance for borrowed funds used during
construction (12,634) (9,603)
---------- ----------
Total interest charges 28,832 19,662
---------- ----------
Income before income taxes 41,950 63,520
Federal and state income tax expense 8,275 12,060
---------- ----------
Net income 33,675 51,460
Preferred dividends requirements, net of tax 23 23
---------- ----------
Net income applicable to common stock $ 33,652 $ 51,437
========== ==========
Average shares of common stock outstanding
Basic 60,132,358 59,948,801
Diluted 60,279,903 60,068,682
Basic earnings per share
From continuing operations $ 0.56 $ 0.86
Net income applicable to common stock $ 0.56 $ 0.86
Diluted earnings per share
From continuing operations $ 0.56 $ 0.86
Net income applicable to common stock $ 0.56 $ 0.86
Cash dividends paid per share of common stock $ 0.450 $ 0.450
CLECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
(UNAUDITED)
At June 30, At Dec. 31,
2009 2008
----------- -----------
Assets
Current Assets
Cash and cash equivalents $ 41,996 $ 97,483
Accounts receivable, net 86,998 78,314
Other current assets 270,800 290,582
----------- -----------
Total Current Assets 399,794 466,379
Property, plant and equipment, net 2,161,603 2,045,286
Equity investment in investees 248,485 249,144
Prepayments, deferred charges and other 607,889 580,395
----------- -----------
Total Assets $ 3,417,771 $ 3,341,204
----------- -----------
Liabilities
Current Liabilities
Long-term debt due within one year $ 11,087 $ 63,546
Accounts payable 86,043 138,300
Other current liabilities 152,591 158,987
----------- -----------
Total Current Liabilities 249,721 360,833
Deferred credits and other liabilities 859,742 812,687
Long-term debt, net 1,238,757 1,106,819
----------- -----------
Total Liabilities 2,348,220 2,280,339
----------- -----------
Shareholders Equity
Preferred stock 1,029 1,029
Common shareholders equity 1,078,352 1,069,669
Accumulated other comprehensive loss (9,830) (9,833)
----------- -----------
Total Shareholders Equity 1,069,551 1,060,865
----------- -----------
Total Liabilities and Shareholders Equity $ 3,417,771 $ 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 Reports 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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