EX-99.1 2 exhibit991.htm EXHIBIT 99.1 EARNINGS RELEASE exhibit991.htm
 
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Cleco Corporation
2030 Donahue Ferry Road
PO Box 5000
Pineville, LA 71361-5000
Tel 318.484.7400
www.cleco.com
NEWS RELEASE
Investor Contacts:
    
Cleco Corporation:
Analyst Inquiries:
Media Contact:
Ryan Gunter
Dresner Companies:
Cleco Corporation:
(318) 484-7724
Kristine Walczak
Fran Phoenix
Rodney J. Hamilton
(312) 780-7205
(318) 484-7467
(318) 484-7593
    

For Immediate Release


Cleco Corp. Reports Full-Year 2007 Earnings
Issues Guidance for 2008



PINEVILLE, La., Feb. 27, 2008 – Cleco Corp. (NYSE: CNL) today reported 2007 net income applicable to common stock of $151.3 million.  Our 2007 net income includes a $72.2 million net gain from the Acadia partnership settlement with Calpine ($48.1 million) and the Calpine bankruptcy claim ($24.1 million).

Net income, excluding the $72.2 million from the Acadia transactions, was up $6.2 million compared to 2006; however, earnings for 2007 were diluted by the August 2006 sale of 6.9 million shares of common stock.  Cleco Power’s retail sales grew by two percent.

On an earnings per share (EPS) basis, Cleco recorded earnings of $2.54 per diluted share in 2007.  Excluding the $1.22 per diluted share from the Acadia partnership settlement and Calpine bankruptcy claim, Cleco recorded earnings of $1.32 per diluted share, down $0.04 per share from the $1.36 per diluted share recorded in 2006.

For the fourth quarter of 2007, Cleco recorded net income of $11.9 million, up $1.1 million compared to the fourth quarter of 2006. Earnings for the fourth quarter of 2007 were $0.20 per diluted share, up $0.01 compared to $0.19 per diluted share recorded in the fourth quarter of 2006.

“We had a good fourth quarter and year.  The Acadia partnership transactions positively increased our 2007 earnings; however, we had strong earnings without the Acadia-related income,” Cleco President and CEO Michael Madison said.  “In 2008, our focus will be on keeping our major solid-fuel generation project, Rodemacher 3, within budget to begin commercial operations no later than the fourth quarter of 2009.  We also will be focused on filing our base rate case with the Louisiana Public Service Commission (LPSC), and securing the additional capacity needed to meet our utility customers’ long-term power needs.”


      
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    Cleco Corporation
    Page 2 of 2    
 
 
 
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
 
Diluted EPS
 
Three Months Ended Dec. 31
Subsidiary
  2007
     2006
Cleco Power
   $
0.33
         $
0.22
    
Cleco Midstream Resources
     (0.09 )         (0.14 )  
Corporate and Other1
     (0.04 )        
0.11
    
Earnings applicable to common stock
   $
0.20
         $
0.19
    
     
 
1Includes dividends on preferred stock
 
  
   
 
Diluted EPS
 
Twelve Months Ended Dec. 31
Subsidiary
2007
    2006
Cleco Power
   $
1.42
         $
1.21
    
Cleco Midstream Resources (excluding Acadia partnership 
      settlement and Calpine bankruptcy claim)
     (0.22 )         (0.07 )  
Corporate and Other1
    
0.12
          
0.22
    
Earnings excluding Acadia partnership settlement and
     Calpine bankruptcy claim
   $
1.32
         $
1.36
    
Earnings from 2007 Acadia partnership settlement and Calpine 
      bankruptcy claim
    
1.22
          
                 --
    
Earnings applicable to common stock
   $
2.54
         $
1.36
    
                       
    
 
 
1Includes dividends on preferred stock
 






Results for Fourth-Quarter 2007:

Major Reconciling Items for Fourth-Quarter EPS 2007 vs. 2006:

$
            0.19
  
2006 Fourth-Quarter Diluted EPS
       
 
            0.15
  
Higher Cleco Power AFUDC
 
           (0.04)
  
Higher Cleco Power expenses
 
            0.05
  
Lower losses at Cleco Midstream
 
           (0.09)
  
Lower proceeds from corporate-owned life insurance
 
           (0.06)
  
Lower other corporate results
       
$
           0.20
  
2007 Fourth-Quarter Diluted EPS
       


      
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Cleco Corporation
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Cleco Power

Cleco Power’s 2007 fourth-quarter earnings were $0.11 per share higher than in the fourth quarter of 2006.
 
Overall, nonfuel revenue was even in the quarter-to-quarter comparison with 2006.
 
·  
Fourth-quarter 2007 kilowatt-hour sales were approximately the same as a year ago for the same period.
 

(Million kWh)
For the three months ended Dec. 31
 
2007
2006
Change
Electric Sales
      
Residential
                      806 
                  792 
                    1.8 %
Commercial
                      609 
                  580 
                    5.0 %
Industrial
                      754 
                  762 
                   (1.0)%
Other retail
                        33 
                    32 
                     3.1 %
Total retail
                   2,202 
               2,166 
                     1.7 %
Sales for resale
                        89 
                    89 
                       --
Unbilled
                       (86)
                   (46)
                  (87.0)%
Total retail and wholesale customer sales
                   2,205 
               2,209 
                    (0.2)%


Cleco Power expenses were up $0.04 per share, but offset by $0.15 per share of AFUDC in the quarter-to- quarter comparison.
 
·  
Distribution expenses related primarily to tree trimming were up $0.01 per share, planned power plant outages increased maintenance costs by $0.01 per share, and transmission expenses increased by $0.01 per share.
 
·  
Damage claims and other miscellaneous items increased expenses by $0.03 per share.
 
·  
Capacity payments were $0.01 per share higher primarily due to the March 2006 termination of a power purchase agreement with Calpine Energy Services.
 
·  
Interest expense, net, decreased $0.03 per share primarily due to a reversal of accrued interest expense for uncertain tax positions, partially offset by higher interest associated with higher debt balances.
 
·  
The equity portion of AFUDC (allowance for funds used during construction) associated with the Rodemacher 3 project was up $0.12 per share, while the debt portion of AFUDC contributed $0.03 per share more than in fourth quarter 2006.
 
 
 
 
      
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Cleco Corporation
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Cleco Midstream
 
Cleco Midstream had $0.05 per share of lower losses in the fourth quarter of 2007 compared to the fourth quarter of 2006.

Acadia’s earnings were up $0.02 per share mainly due to lower interest paid to the holding company, partially offset by higher turbine maintenance.  Evangeline’s earnings improved $0.03 per share primarily due to the absence of a 2006 depreciation adjustment.


Other

Corporate earnings decreased $0.15 per share in the quarter-to-quarter comparison.  The decrease was due to lower proceeds from corporate-owned life insurance policies in the amount of $0.09 per share, $0.02 per share of lower interest income, $0.02 per share of higher income taxes, $0.02 per share of higher franchise taxes, and $0.01 per share of other miscellaneous expenses, partially offset by $0.01 per share due to the absence of penalties accrued in 2006 related to the Federal Energy Regulatory Commission investigation.



Results for 12 Months ended Dec. 31, 2007:
 

Major Reconciling Items for 12 Months ended Dec. 31 EPS 2007 vs. 2006:

$
     1.36
  
12 Months ended Dec. 31, 2006, Diluted EPS
       
 
      0.53
  
Higher Cleco Power AFUDC
 
      0.12
  
Higher Cleco Power nonfuel revenue
 
     (0.06)
  
Absence of 2006 storm cost transfer to regulatory asset
 
     (0.04)
  
Amortization of deferred storm costs
 
     (0.06)
  
Cleco Power Dolet Hills planned power plant outage expenses
 
     (0.06)
  
Higher Cleco Power interest expense, net
 
     (0.12)
  
Higher other Cleco Power nonfuel expenses
 
     (0.10)
  
Effect of increased number of outstanding shares
 
     (0.15)
  
Lower Cleco Midstream contribution (excluding Acadia settlement and claim)
 
     (0.08)
  
Lower proceeds from corporate-owned life insurance
 
     (0.02)
  
Lower other corporate results
$
     1.32
  
2007 EPS without Acadia partnership settlement and Calpine bankruptcy claim
 
     1.22
  
Acadia partnership settlement and Calpine bankruptcy claim
$
     2.54
  
12 Months ended Dec. 31, 2007, Diluted EPS


      
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Cleco Corporation
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Cleco Power

For 2007, Cleco Power’s earnings were $1.42 per diluted share, up $0.21 per share from 2006 results.

Overall, nonfuel revenue increased $0.12 per share compared to 2006 results.

Kilowatt-hour sales were $0.04 per share higher. Cooling degree-days were up 2 percent in 2007 compared to 2006 and 13 percent above normal. Heating degree-days were up 10 percent in 2007 compared to 2006 levels, but 14 percent below normal.
 
 
(Million kWh)
For the 12 months ended Dec. 31
 
2007
2006
Change
Electric Sales
      
     Residential
                   3,596 
             3,552
                  1.2 %
     Commercial
                   2,478 
             2,109
                17.5 %
     Industrial
                   3,008 
             2,963
                  1.5 %
     Other retail*
                      135 
                412
               (67.2)%
          Total retail
                   9,217 
             9,036
                  2.0 %
     Sales for resale
                      473 
                480
                 (1.5)%
     Unbilled
                       (19)
                    7
             (371.4)%
Total retail and wholesale customer sales
                  9,671 
            9,523
                  1.5 %
*Effective August 2006, certain other retail customers were reclassified to commercial customers.

 
·  
The collection of a storm cost recovery surcharge, which began in May 2006, increased revenue $0.08 per share.
 
·  
Mark-to-market gains in 2007 on energy hedging positions tied to a fixed-price wholesale contract compared to mark-to-market losses in 2006 resulted in a $0.06 per share increase in earnings.
 
·  
The absence of the 2006 reversal of previously accrued customer refunds resulted in a $0.05 per share decrease in results.
 
·  
Lower transmission services revenue, partially offset by higher distribution joint-use and other miscellaneous revenue, netted a $0.01 per share decrease in results compared to 2006 results.
 

Cleco Power expenses were up $0.34 per share, but offset by $0.53 per share of AFUDC in the year over year comparison.
 
·  
Higher capacity payments of $0.03 per share primarily related to the March termination of the 2006 power purchase agreement with Calpine.
 
·  
An $0.06 per share increase was due to the transfer of storm costs from expense to a regulatory asset in 2006.
 
·  
Production maintenance expenses were $0.06 per share higher primarily due to a major planned maintenance outage at the Dolet Hills Power Station.  Transmission costs increased $0.02 per share primarily related to a new service agreement, and distribution expenses, primarily related to right-of-way clearing, increased $0.03 per share.  Increased customer and other miscellaneous expenses, partially offset by the transfer of the unamortized regulatory asset balance for prior storm costs
 
      
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Cleco Corporation
Page 6 of 12
 
 
  
(Hurricane Lili and Tropical Storm Isidore) from maintenance expense to the reserve for storm restoration costs, were a net $0.03 per share higher compared to 2006 results.
 
·  
Amortization of deferred storm costs increased expenses by $0.04 per share, and depreciation expense from routine property, plant, and equipment additions increased expenses by $0.01 per share.
 
·  
Interest expense, net, was up $0.06 per share primarily due to higher short-term debt levels and lower income from temporary investments.
 
·  
Higher AFUDC, primarily related to Rodemacher 3 construction, provided an increase in earnings of $0.53 per share.  The equity portion of AFUDC totaled $0.42 of the increase.
 
Finally, Cleco Power’s 2007 earnings were reduced by approximately $0.10 per share due to the sale of 6.9 million shares of common stock in August 2006.
 

Cleco Midstream
 
Cleco Midstream’s earnings were up $1.07 per share compared to the 2006 results.
 
Excluding the $1.22 per share gain from the Calpine bankruptcy claim and the Acadia partnership settlement, net of impairment of investment, Cleco Midstream’s earnings were down $0.15 per share in 2007 compared to 2006.
 
Contributing to the decline were $0.18 per share of lower results from Acadia due to the absence of the $0.15 per share benefit from the drawdown on a letter of credit in 2006 and $0.03 per share primarily due to lower merchant revenue, higher maintenance expenses, and the absence of proceeds from two insurance claim settlements.
 
Evangeline’s results were up $0.03 per share from 2006 primarily due to the absence of a maintenance depreciation adjustment and 2006 tax true-ups from prior years partially offset by higher interest on tax positions and a net increase in replacement power during a spring outage.
 
During the second quarter of 2007, Cleco Midstream recorded net income of $48.1 million, or $0.81 per share, from the approval and sale of unsecured bankruptcy claims against Calpine. Upon the August 2007 closing of Cajun Gas Energy’s (Cajun) purchase of Calpine’s 50 percent ownership in the Acadia project, Cleco Midstream recorded $0.88 per share related to the value of the preferred and guaranteed distribution structures within the Acadia partnership. Subsequently, Cleco Midstream reduced the carrying value of its 50 percent ownership in the Acadia project to the amount paid by Cajun for the other 50 percent interest, resulting in a $0.47 per share impairment. The resulting net gain from the settlement of Acadia claims and partnership value totaled $1.22 per share.
 

      
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Cleco Corporation
Page 7 of  12
 
 
Other
 
Corporate earnings decreased $0.10 per share in the year-to-year comparison.  Factors contributing to the decrease include $0.08 per share of lower proceeds from corporate-owned life insurance policies, higher corporate franchise tax, lower 2006 insurance proceeds, and the absence of a 2006 tax settlement, partially offset by higher interest income, net, and the conversion of shares of ESOP preferred stock to shares of common stock.
 

Strategic Update

“We have spent approximately $630 million, including $30 million of AFUDC, on the Rodemacher 3 project since construction began in May 2006, and we are pleased to report that this billion-dollar generating unit is taking shape.  We are scheduled to begin commercial operations no later than the fourth quarter of 2009,” Madison said.

“Another important project we’re working on is our general base rate case.  Cleco Power plans to file its rate case with the LPSC by the end of the second quarter this year,” Madison said.

Madison stated, “We also are currently evaluating bids received from Cleco Power’s long-term Request for Proposal.  Cleco Power requested proposals to supply its customers with up to 600 megawatts of intermediate and/or peaking capacity based on our integrated resources planning process, which showed we’ll need more capacity even after Rodemacher 3 comes on line.  Cleco Power plans to develop a short list of bidders in mid-April and make the final selections in August 2008.”


2008 Earnings Guidance:

“We are targeting consolidated 2008 earnings in the range of $1.60 to $1.70 per share,” Madison said.  “Our 2008 earnings estimate includes Cleco Power results of $1.60 to $1.70 per share, a Midstream loss of $0.10 per share, and corporate results of $0.10 per share.
 
“Cleco Power’s earnings estimate assumes normal weather, 2008 capital expenditures of about $265 million, including AFUDC on the Rodemacher project, and the continuation of our current rate plan.  The 2008 target includes approximately $1.05 per share of AFUDC equity income, an approximate $0.50 per share increase from 2007,” 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 annual and fourth-quarter 2007 results during a conference call scheduled for 11 a.m. EST (10 a.m. CST) Thursday, Feb. 28, 2008.  The call will be broadcast live on the Internet.  Replays 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 2007 Earnings Conference Call.”
 
Cleco Corp. is a regional energy company headquartered in Pineville, La.  It operates a regulated electric utility company that serves 273,000 customers across Louisiana.  Cleco also operates a wholesale energy business with approximately 1,350 megawatts of nameplate capacity.  For more information about Cleco, visit www.cleco.com.
 
Financial tables follow:

      
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CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(UNAUDITED)
  
For the three months ended Dec. 31,
  
2007
    
2006
  
             
Operating revenue
            
     Electric operations
   $
222,401
     $
222,628
  
     Other operations
    
8,807
      
8,065
  
     Affiliate revenue
    
2,466
      
1,199
  
          Gross operating revenue
    
233,674
      
231,892
  
               Electric customer credits
    
--
      
310
  
          Operating revenue, net
    
233,674
      
232,202
  
Operating expenses
                
     Fuel used for electric generation
    
69,283
      
78,470
  
     Power purchased for utility customers
    
76,859
      
68,285
  
     Other operations
    
27,989
      
22,600
  
     Maintenance
    
14,112
      
11,078
  
     Depreciation
    
20,077
      
19,865
  
     Taxes other than income taxes
    
11,689
      
9,515
  
     Gain on sales of assets
    
15
      
--
  
          Total operating expenses
    
220,024
      
209,813
  
Operating income
    
13,650
      
22,389
  
Interest income
    
3,724
      
3,235
  
Allowance for other funds used during construction
    
11,240
      
3,548
  
Equity income from investees
     (4,460 )     (6,351 )
Other income
    
890
      
6,483
  
Other expense
     (1,869 )     (2,910 )
Interest charges
                
     Interest charges, including amortization of debt expenses,
          premium and discount, net of capitalized interest
    
9,325
      
13,443
  
     Allowance for borrowed funds used during construction
     (5,643 )     (1,311 )
          Total interest charges
    
3,682
      
12,132
  
                 
Income from continuing operations before income taxes
    
19,493
      
14,262
  
Federal and state income tax expense
    
7,585
      
3,126
  
                 
Income from continuing operations
    
11,908
      
11,136
  
Discontinued operations
                
     Income from discontinued operations, net of tax
    
--
      
75
  
Net income
    
11,908
      
11,211
  
Preferred dividends requirements, net
    
12
      
425
  
                 
Net income applicable to common stock
   $
11,896
     $
10,786
  




      
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Page 9 of  12
CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Thousands, except share and per share amounts)
(UNAUDITED)
  
For the three months ended Dec. 31,
  
2007
    
2006
  
             
Average shares of common stock outstanding
            
     Basic
    
59,638,675
      
57,202,384
  
     Diluted
    
59,973,467
      
59,460,959
  
                 
Basic earnings per share
                
     From continuing operations
   $
0.20
     $
0.19
  
     Net income applicable to common stock
   $
0.20
     $
0.19
  
                 
Diluted earnings per share
                
     From continuing operations
   $
0.20
     $
0.19
  
     Net income applicable to common stock
   $
0.20
     $
0.19
  
                 
Cash dividends paid per share of common stock
   $
0.225
     $
0.225
  


      
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Cleco Corporation
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CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
  
For the 12 months ended Dec. 31,
  
         2007
    
           2006
  
Operating revenue
            
     Electric operations
   $
988,193
     $
959,393
  
     Other operations
    
35,285
      
30,233
  
     Affiliate revenue
    
7,138
      
6,356
  
          Gross operating revenue
    
1,030,616
      
995,982
  
               Electric customer credits
            
4,693
  
          Operating revenue, net
    
1,030,616
      
1,000,675
  
Operating expenses
                
     Fuel used for electric generation
    
273,954
      
265,450
  
     Power purchased for utility customers
    
385,247
      
374,712
  
     Other operations
    
102,479
      
90,661
  
     Maintenance
    
49,498
      
40,082
  
     Depreciation
    
79,904
      
74,975
  
     Taxes other than income taxes
    
41,975
      
39,888
  
     Loss (gain) on sales of assets
    
15
       (69 )
          Total operating expenses
    
933,072
      
885,699
  
Operating income
    
97,544
      
114,976
  
Interest income
    
11,754
      
10,452
  
Allowance for other funds used during construction
    
32,955
      
7,779
  
Equity income from investees
    
93,148
      
24,452
  
Other income
    
29,531
      
7,412
  
Other expense
     (4,405 )     (4,081 )
Interest charges
                
     Interest charges, including amortization of debt expenses,
          premium and discount, net of capitalized interest
    
51,111
      
47,116
  
     Allowance for borrowed funds used during construction
     (13,145 )     (2,845 )
          Total interest charges
    
37,966
      
44,271
  
Income from continuing operations before income taxes
    
222,561
      
116,719
  
Federal and state income tax expense
    
70,772
      
42,049
  
Income from continuing operations
    
151,789
      
74,670
  
Discontinued operations
                
     Loss from discontinued operations, net of tax
    
--
       (79 )
Net income
    
151,789
      
74,591
  
Preferred dividends requirements, net
    
458
      
1,735
  
Net income applicable to common stock
   $
151,331
     $
72,856
  


      
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Page 11 of 12
 
CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Thousands, except share and per share amounts)
  
For the 12 months ended Dec. 31,
  
2007
    
2006
  
             
Average shares of common stock outstanding
            
     Basic
    
58,976,052
      
52,751,021
  
     Diluted
    
59,717,528
      
55,028,211
  
                 
Basic earnings per share
                
     From continuing operations
   $
2.55
     $
1.36
  
     Net income applicable to common stock
   $
2.55
     $
1.36
  
                 
Diluted earnings per share
                
     From continuing operations
   $
2.54
     $
1.36
  
     Net income applicable to common stock
   $
2.54
     $
1.36
  
                 
Cash dividends paid per share of common stock
   $
0.900
     $
0.900
  


      
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Cleco Corporation
Page 12 of 12
CLECO CORPORATION
CONSOLIDATED BALANCE SHEETS
(Thousands)
  
   
At
Dec. 31,
2007
    
At
Dec. 31,
2006
  
Assets
            
Current Assets
            
     Cash and cash equivalents
   $
129,013
     $
192,471
  
     Accounts receivable, net
    
87,983
      
79,048
  
     Other current assets
    
191,681
      
265,789
  
          Total Current Assets
    
408,677
      
537,308
  
Property, plant and equipment, net
    
1,725,880
      
1,304,887
  
Equity investment in investees
    
258,101
      
307,136
  
Prepayments, deferred charges and other
    
318,077
      
311,773
  
     Total Assets
   $
2,710,735
     $
2,461,104
  
                 
Liabilities
                
Current Liabilities
                
     Long-term debt due within one year
   $
100,000
     $
50,000
  
     Accounts payable
    
129,946
      
151,653
  
     Other current liabilities
    
131,633
      
186,858
  
          Total Current Liabilities
    
361,579
      
388,511
  
Deferred credits and other liabilities
    
568,684
      
557,031
  
Long-term debt, net
    
769,103
      
619,341
  
     Total Liabilities
    
1,699,366
      
1,564,883
  
Shareholders’ Equity
                
     Preferred stock
    
1,029
      
20,092
  
     Common shareholders’ equity
    
1,018,731
      
885,439
  
     Accumulated other comprehensive loss
     (8,391 )     (9,310 )
Total Shareholders’ Equity
    
1,011,369
      
896,221
  
     Total Liabilities and Shareholders’ Equity
   $
2,710,735
     $
2,461,104
  


Please note:  In addition to historical financial information, this news release contains forward-looking statements about future results and circumstances, including, without limitation, regarding the Rodemacher Unit 3 project and earnings guidance.  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 outcome of Cleco Power’s rate case, the results of Cleco Power’s long-term RFP, 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.
 
 
 
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