Cleco Corp. (NYSE: CNL) today announced results for the first
quarter of 2011.
- 2011 First Quarter Operational Earnings of
$28.6 Million or $0.47 Per Diluted Share(1)
- 2011 Operational Earnings Guidance of $2.25 -
$2.35 Per Diluted Share Reaffirmed
"We had a positive first quarter, and the year is off to a good
start," said Mike Madison, president and CEO of Cleco Corp. "Our
first-quarter results reflect the impact of a full quarter with our
new retail rates and the return of more normal weather compared to
the unusually cold winter we had this time last year."
"Last week we closed the sale of Acadia Unit 2 to Entergy
Louisiana, LLC ("Entergy") for approximately $300 million. As we
own 50 percent of Acadia through Cleco Midstream, we received
approximately $150 million of the sale proceeds," said Madison.
"These proceeds were used to pay off our $150 million bank-term
loan at the holding company."
"Our balance sheet is in great shape," Madison continued. "We
extracted maximum value from Acadia and could not be more pleased
with the full outcome of our investment in Acadia."
"The completion of the sale transaction with Entergy in addition
to the major projects we completed in 2010 have led to two
consecutive annual increases in our common stock dividend," said
Madison. "These dividend increases support our goal to deliver an
average total shareholder return of 8 percent to 10 percent per
year through 2014."
(1) See "Consolidated Earnings - Reconciliation of GAAP to
Non-GAAP Measures" for a reconciliation of operational diluted
earnings per share (Non-GAAP) to diluted earnings per share
applicable to common stock (GAAP)
Dividend:
On April 29, 2011, the board of directors of Cleco Corp.
declared a dividend of $0.28 per share of common stock payable on
May 16, 2011. The 12 percent increase will result in an annual
dividend rate of $1.12 per share of Cleco common stock.
Earnings Guidance:
Cleco is reaffirming its 2011 consolidated operational earnings
in the range of $2.25 - $2.35 per diluted share. The 2011
consolidated operational earnings estimate assumes normal weather
for the last three quarters of the year and excludes adjustments
related to company- and trust-owned life insurance (COLI/TOLI)
policies and the expected gain in the range of $0.53 - $0.59 per
diluted share relating to the Acadia Unit 2 transaction. Please
refer to "Operational Earnings Adjustments" in this news release
for a description of these adjustments and for the impact of
COLI/TOLI on the company's earnings per diluted share in the first
quarters of 2011 and 2010.
Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
Diluted Earnings Per Share
----------------------------
Three months ended March 31
----------------------------
Subsidiary 2011 2010
------------- -------------
Cleco Power LLC $ 0.49 $ 0.53
Cleco Midstream Resources LLC (excluding
gains from the Evangeline and Acadia
Unit 1 transactions) (0.01) (0.03)
Corporate and Other(1) (0.01) 0.05
------------- -------------
Operational diluted earnings per share
(Non-GAAP) 0.47 0.55
Adjustments(2) 0.01 1.93
------------- -------------
Diluted earnings per share applicable to
common stock $ 0.48 $ 2.48
GAAP refers to United States generally accepted accounting principles.
(1) Includes dividends on preferred stock
(2) Refer to "Operational Earnings Adjustments" in this news release
Financial Highlights:
First Quarter 2011
- Cleco reports first-quarter earnings applicable to common stock
of $29.0 million or $0.48 per diluted share compared to $150.0
million or $2.48 per diluted share for the first quarter of
2010.
Quarter-Over-Quarter Operational Earnings Per
Share Reconciliation:
$ 0.55 2010 first-quarter diluted operational earnings per share
0.21 Non-fuel revenue
0.01 Energy hedging, net
(0.12) Other expenses, net
(0.16) AFUDC (allowance for funds used during construction)
0.02 Income taxes
-------
$ (0.04) Cleco Power results
0.02 Cleco Midstream results
(0.06) Corporate results
-------
$ 0.47 2011 first-quarter diluted operational earnings per share
0.01 Adjustments(1)
-------
$ 0.48 Reported GAAP diluted earnings per share
(1) Refer to "Operational Earnings Adjustments" in this news release
Cleco Power
- Non-fuel revenue increased earnings by $0.21
per share compared to the first quarter of 2010. The impact of
the retail base rate increases that became effective in February
2010, which included Madison Unit 3 and Acadia Unit 1, contributed
approximately $0.39 per share, while higher mineral lease payments
and other miscellaneous revenue contributed $0.02 per share.
Partially offsetting these increases was $0.20 per share of lower
electric sales, generally resulting from milder winter
weather.
- Absence of unfavorable results from energy
hedging positions that were tied to a fixed-price wholesale
contract during 2010 increased earnings by $0.01 per share in the
first quarter of 2011.
- Other expenses, net, were $0.12 per share
higher compared to the first quarter of 2010 primarily due to
$0.06 per share of higher operating and maintenance expenses and
$0.05 per share of higher depreciation expense both primarily
resulting from Madison Unit 3 being placed in service and the
acquisition of Acadia Unit 1 both in the first quarter of 2010.
Interest charges increased $0.04 per share primarily due to the
November 2010 issuance of $250.0 million senior notes. These
increases were partially offset by $0.03 per share of lower
capacity payments made during the first quarter of 2011 primarily
due to the commencement of commercial operations at Madison Unit 3
and the acquisition of Acadia Unit 1.
- AFUDC, primarily associated with the first
quarter 2010 completion of Madison Unit 3, reduced earnings by
$0.16 per share compared to the first quarter of 2010. The
equity portion of AFUDC primarily associated with the Madison Unit
3 project decreased earnings $0.13 per share, while the debt
portion of AFUDC decreased earnings $0.03 per share compared to the
first quarter of 2010.
- Lower income taxes increased earnings by $0.02
per share compared to the first quarter of 2010 as a result of
the absence in 2011 of $0.03 per share of tax expense resulting
from healthcare legislation changes affecting Medicare Part D and a
$0.04 per share lower adjustment to record taxes at the annual
projected effective tax rate in 2011. This was partially offset by
the absence in 2011 of the $0.05 per share reduction in tax expense
that occurred as a result of the implementation of new retail base
rates.
Cleco Midstream Resources
- Evangeline's results decreased earnings by
$0.02 per share compared to the first quarter of 2010
primarily due to lower tolling revenue due to the Evangeline
restructuring and pricing of a new tolling agreement. This decrease
was partially offset by lower interest charges.
- Acadia's results increased earnings by $0.04
per share compared to the first quarter of 2010 primarily due
to lower maintenance expenses and higher revenue.
For a discussion of other transactions affecting the results of
Cleco Midstream, please refer to "Operational Earnings Adjustments
- Gains from Evangeline and Acadia Unit 1 Transactions" below.
Corporate and Other
- Higher interest charges decreased earnings by
$0.01 per share compared to the first quarter of 2010
primarily due to a bank term loan executed in February 2010.
- Higher income taxes decreased earnings by
$0.05 per share compared to the first quarter of 2010 as a
result of $0.07 per share to record tax expense at the consolidated
projected annual effective tax rate. This increase was partially
offset by $0.02 per share for miscellaneous tax items.
Operational Earnings Adjustments:
Cleco's management uses operational earnings per share to
evaluate the operations of Cleco and to establish goals for
management and employees. Management believes this presentation is
appropriate and enables investors to more accurately compare
Cleco's operational financial performance over the periods
presented. Operational earnings as presented here may not be
comparable to similarly titled measures used by other companies.
The following table provides a reconciliation of operational
earnings per share to reported GAAP earnings per share.
Reconciliation of Operational Earnings Per Share to
Reported GAAP Diluted Earnings Per Share
Diluted Earnings Per Share
------------------------------
Three months ended March 31
------------------------------
2011 2010
-------------- --------------
Operational earnings per share $ 0.47 $ 0.55
Company- and trust-owned life insurance
policy adjustments 0.01 0.01
Gain from Evangeline transaction - 1.51
Gain from Acadia Unit 1 transaction - 0.41
-------------- --------------
Reported GAAP diluted earnings per share
applicable to common stock $ 0.48 $ 2.48
Reconciling adjustments from operational earnings per share to
GAAP diluted earnings per share are as follows:
COLI/TOLI Adjustments
Cleco has both Company-Owned Life Insurance and Trust-Owned Life
Insurance policies covering certain members of management. These
policies are payable to Cleco upon death of the insured. COLI/TOLI
assets are acquired at fair value and adjusted for changes in
market value and any payments/redemptions of cash surrender values.
The resulting adjustments for these items increased earnings by
$0.01 per share for the first quarters of 2011 and 2010. Cleco is
unable to predict changes in the market values and amounts of cash
surrender values of these policies and management does not consider
these adjustments to be a component of operational earnings.
Gains from Evangeline and Acadia Unit 1
Transactions
On Feb. 22, 2010, the then existing Evangeline tolling agreement
was terminated and a new tolling agreement was executed with the
same counterparty resulting in the recognition of a gain of $1.51
per share for 2010. On Feb. 23, 2010, Cleco Power's acquisition of
Acadia Unit 1 and half of Acadia Power Station's common facilities
was completed resulting in the recognition of a gain of $0.41 per
share for 2010. Because these are one-time gains, management does
not consider these adjustments to be components of operational
earnings.
Cleco management will discuss the company's first-quarter 2011
results during a conference call scheduled for 11 a.m. Eastern time
(10 a.m. Central time) Thursday, May 5, 2011. 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 "Investor Relations" and then
"Cleco Corp. 2011 First-Quarter Earnings Webcast."
Cleco Corp. is a regional energy company headquartered in
Pineville, La. It operates a regulated electric utility company,
Cleco Power LLC, which serves about 279,000 retail customers across
Louisiana. Cleco also operates a wholesale energy business, Cleco
Midstream Resources LLC. For more information about Cleco, visit
www.cleco.com.
For the three months ended March 31
-------------------------------------------------------
(Unaudited) (million kWh) (thousands)
-------------------------- --------------------------
2011 2010 Change 2011 2010 Change
-------- -------- ------ -------- -------- ------
Electric Sales
Residential 960 1,040 (7.7)% $ 67,190 $ 46,498 44.5 %
Commercial 594 591 0.5 % 44,092 29,563 49.1 %
Industrial 554 544 1.8 % 20,650 14,160 45.8 %
Other retail 33 35 (5.7)% 2,466 1,757 40.4 %
Surcharge - - - 1,717 4,195 (59.1)%
Other - - - (1,711) (975) (75.5)%
-------- -------- -------- --------
Total retail 2,141 2,210 (3.1)% 134,404 95,198 41.2 %
Sales for resale 446 476 (6.3)% 11,939 8,783 35.9 %
Unbilled (165) (124) (33.1)% (12,269) 10,967 (211.9)%
-------- -------- -------- --------
Total retail
and wholesale
customer sales 2,422 2,562 (5.5)% $134,074 $114,948 16.6 %
CLECO CORP.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(Unaudited)
For the three months ended March 31 2011 2010
---------- ----------
Operating revenue
Electric operations $ 238,468 $ 252,798
Tolling operations 2,781 7,464
Other operations 12,728 10,876
Affiliate revenue 147 1,149
---------- ----------
Gross operating revenue 254,124 272,287
Electric customer credits (434) -
---------- ----------
Operating revenue, net 253,690 272,287
Operating expenses
Fuel used for electric generation 96,968 94,582
Power purchased for utility customers 8,449 48,219
Other operations 27,662 26,654
Maintenance 16,809 13,837
Depreciation 29,098 24,253
Taxes other than income taxes 9,460 8,802
Loss on sales of assets 10 39
---------- ----------
Total operating expenses 188,456 216,386
---------- ----------
Operating income 65,234 55,901
Interest income 115 162
Allowance for other funds used during construction 1,978 9,805
Equity income from investees 611 37,847
Gain on toll settlement - 148,402
Other income 1,205 1,079
Other expense (1,318) (925)
Interest charges
Interest charges, including amortization of
debt expenses, premium, and discount,
net of capitalized interest 27,328 26,007
Allowance for borrowed funds used during
construction (714) (3,572)
---------- ----------
Total interest charges 26,614 22,435
---------- ----------
Income before income taxes 41,211 229,836
Federal and state income tax expense 12,195 79,866
---------- ----------
Net income 29,016 149,970
Preferred dividends requirements, net of tax 12 12
---------- ----------
Net income applicable to common stock $ 29,004 $ 149,958
========== ==========
Average number of basic common shares outstanding 60,576,004 60,326,020
Average number of diluted common shares
outstanding 60,904,867 60,581,060
Basic earnings per share
Net income applicable to common stock $ 0.48 $ 2.49
Diluted earnings per share
Net income applicable to common stock $ 0.48 $ 2.48
Cash dividends paid per share of common stock $ 0.25 $ 0.225
CLECO CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
(Unaudited)
At March 31, At Dec. 31,
2011 2010
----------- -----------
Assets
Current Assets
Cash and cash equivalents $ 137,191 $ 191,128
Accounts receivable, net 85,738 92,197
Other current assets 271,506 325,525
----------- -----------
Total Current Assets 494,435 608,850
Property, plant and equipment, net 2,800,500 2,784,225
Equity investment in investees 87,343 86,732
Prepayments, deferred charges and other 675,633 681,603
----------- -----------
Total Assets $ 4,057,911 $ 4,161,410
----------- -----------
Liabilities
Current Liabilities
Short-term debt $ 150,000 $ 150,000
Long-term debt due within one year 12,683 12,269
Accounts payable 90,676 125,923
Other current liabilities 240,702 189,489
----------- -----------
Total Current Liabilities 494,061 477,681
Deferred credits 852,321 965,813
Long-term debt, net 1,377,684 1,399,709
----------- -----------
Total Liabilities 2,724,066 2,843,203
----------- -----------
Shareholders' Equity
Preferred stock 1,029 1,029
Common shareholders' equity 1,344,171 1,328,816
Accumulated other comprehensive loss (11,355) (11,638)
----------- -----------
Total Shareholders' Equity 1,333,845 1,318,207
----------- -----------
Total Liabilities and Shareholders' Equity $ 4,057,911 $ 4,161,410
=========== ===========
Please note: In addition to historical financial information,
this news release contains forward-looking statements about future
results and circumstances. 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, the
completion of the Acadiana Load Pocket project, the impact of the
global economic environment, 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.
Analyst Contact: Cleco Corp. Russell Davis (318) 484-7501
Russell.Davis@cleco.com Investor Contact: Cleco Corp. Rodney
Hamilton (318) 484-7593 Rodney.Hamilton@cleco.com Media Contact:
Cleco Corp. Fran Phoenix (318) 484-7467
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