Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
Diluted EPS
--------------------
Three Months Ended
June 30,
--------------------
Subsidiary 2008 2007
--------- ---------
Cleco Power LLC $ 0.54 $ 0.31
Cleco Midstream Resources LLC (excluding 2007 gain
from settlement of CES claims) (0.05) (0.15)
Corporate and Other(1) -- 0.09
--------- ---------
Earnings excluding the 2007 gain from settlement
of CES claims $ 0.49 $ 0.25
Earnings from settlement of CES claims -- 0.80
--------- ---------
Earnings applicable to common stock $ 0.49 $ 1.05
--------- ---------
(1) Includes dividends on preferred stock
Results for Second-Quarter 2008:
Major Reconciling Items for Second-Quarter EPS 2008 vs. 2007:
$ 1.05 2007 Second-Quarter Diluted EPS
(0.80) Absence of the 2007 gain from settlement of CES claims
------
$ 0.25
0.06 Higher Cleco Power non-fuel revenue
(0.02) Lower storm surcharge collections
0.04 Gains on energy hedging, net
(0.01) Higher Cleco Power expenses
0.16 Higher Cleco Power AFUDC
0.10 Lower Cleco Midstream losses (excluding gain from
settlement of CES claims)
(0.09) Lower corporate results
------
$ 0.49 2008 Second-Quarter Diluted EPS
Cleco Power's 2008 second-quarter earnings -- up $0.23 per share in the
quarter-to-quarter comparison
-- Retail and wholesale sales contributed $0.05 per share compared with
last year's results. Residential and commercial kilowatt-hour sales
provided roughly $0.03 per share, while market-based wholesale
customers added $0.02 per share. Residential customers were impacted
from 14 percent higher cooling degree-days in the quarter-to-quarter
comparison. Cooling degree-days were 17 percent above normal.
For the three months ended
(Million kWh) June 30,
--------------------------
2008 2007 Change
-------- -------- ------
Electric Sales
Residential 804 777 3 %
Commercial 599 594 1 %
Industrial 729 758 (4)%
Other retail 33 34 (3)%
-------- --------
Total retail 2,165 2,163 --
Sales for resale 103 117 (12)%
Unbilled 203 182 12 %
-------- --------
Total retail and wholesale customer sales 2,471 2,462 --
-- Transmission and miscellaneous revenue increased $0.01 per share
quarter over quarter.
-- Storm surcharge collections were down $0.02 per share due to the
issuance of storm recovery bonds in March 2008. The Louisiana Public
Service Commission (LPSC) issued a financing order in September 2007
authorizing Cleco Power to securitize its unrecovered storm restoration
costs resulting in a savings to customers. Prior to this, the LPSC
authorized Cleco Power to recover restoration costs through an interim
storm recovery plan.
-- Mark-to-market and realized gains on energy hedging positions tied to
a fixed-price wholesale contract as compared to the same period of 2007
contributed $0.04 per share, primarily due to increases in natural gas
prices.
-- Other expenses were $0.01 per share lower compared to the same period
last year, primarily due to the outage at Dolet Hills that occurred in
second quarter of 2007, and lower professional fees, partially offset by a
reclassification of recoverable fuel expense to nonrecoverable fuel
expense.
-- Interest expense, net increased $0.02 per share compared to last
year's results. Of that, $0.02 per share was due to higher interest on
solid waste disposal bonds and senior notes, and $0.02 per share related to
the senior secured storm recovery bonds. These were partially offset by
$0.02 per share of lower interest expense related to the storm damage
surcredit.
-- Capacity charges were up $0.02 per share, offset by $0.02 per share of
lower other taxes quarter over quarter.
-- AFUDC, primarily associated with the Rodemacher Unit 3 project,
contributed $0.16 per share more to results compared to second quarter of
2007. The equity portion of AFUDC associated with the Rodemacher Unit 3
project was up $0.13 per share, while the debt portion of AFUDC contributed
$0.03 per share more than in the second quarter of 2007.
Cleco Midstream Resources' 2008 second-quarter results, excluding the gain
from the settlement of CES claims -- up $0.10 per share in the
quarter-to-quarter comparison
Evangeline was up $0.04 per share for the second quarter of 2008 compared
to the same period a year ago, primarily due to the absence of replacement
power purchased for the 2007 outage. Excluding the 2007 gain from the
settlement of CES claims, Acadia had lower losses of $0.05 per share
compared to the same period last year with $0.04 per share due to lower
interest paid to the holding company and $0.01 per share from the absence
of the 2007 parts write-offs. Lower administrative costs contributed $0.01
per share compared to the same period last year.
Other
Corporate earnings decreased $0.09 per share in the quarter-to-quarter
comparison, primarily due to $0.08 per share of lower affiliate interest
received from Acadia, $0.01 per share of higher taxes, and $0.02 per share
reduction in the cash surrender values of corporate life insurance
policies. These decreases were partially offset by $0.02 per share of
lower interest expense related to the May 2008 repayment of $100 million of
corporate debt.
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries
Diluted EPS
--------------------
Six Months Ended
June 30,
--------------------
Subsidiary 2008 2007
--------- ---------
Cleco Power LLC $ 1.00 $ 0.52
Cleco Midstream Resources LLC (excluding 2007 gain
from settlement of CES claims) (0.12) (0.23)
Corporate and Other(1) (0.02) 0.10
--------- ---------
Earnings excluding the 2007 gain from settlement
of CES claims $ 0.86 $ 0.39
Earnings from settlement of CES claims -- 0.81
--------- ---------
Earnings applicable to common stock $ 0.86 $ 1.20
--------- ---------
(1) Includes dividends on preferred stock
Results for Six Months ended June 30, 2008:
Major Reconciling Items for Six Months ended June 30, EPS 2008 vs. 2007:
$ 1.20 Six Months ended June 30, 2007 Diluted EPS
(0.81) Absence of the 2007 gain from settlement of CES claims
------
$ 0.39
0.07 Higher Cleco Power non-fuel revenue
(0.01) Lower storm surcharge collections
0.04 Gains on energy hedging, net
0.05 Lower Cleco Power expenses
0.33 Higher Cleco Power AFUDC
0.11 Lower Cleco Midstream losses (excluding gain from
settlement of CES claims)
(0.12) Lower corporate results
------
$ 0.86 Six Months ended June 30, 2008 Diluted EPS
Cleco Power's Six Months ended June 30, 2008 earnings -- up $0.48 per share
year over year
-- Retail and wholesale sales added $0.05 per share compared to last
year's results. Residential and commercial kilowatt-hour sales
provided roughly $0.03 per share, while market-based wholesale
customers added $0.02 per share. Residential customers were impacted
from 12 percent higher cooling degree-days in the year-to-year
comparison. Cooling degree-days were 20 percent above normal for the
first half of 2008.
For the six months ended
(Million kWh) June 30,
--------------------------
2008 2007 Change
-------- -------- ------
Electric Sales
Residential 1,644 1,619 2 %
Commercial 1,153 1,137 1 %
Industrial 1,416 1,468 (4)%
Other retail 65 67 (3)%
-------- --------
Total retail 4,278 4,291 --
Sales for resale 173 219 (21)%
Unbilled 147 112 31 %
-------- --------
Total retail and wholesale customer sales 4,598 4,622 (1)%
-- Transmission and miscellaneous revenue increased $0.02 per share year
over year.
-- Storm surcharge collections were down $0.01 per share due to the
issuance of storm recovery bonds in March 2008. The LPSC issued a financing
order in September 2007 authorizing Cleco Power to securitize its
unrecovered storm restoration costs. Prior to this, the LPSC authorized
Cleco Power to recover restoration costs through an interim storm recovery
plan.
-- Mark-to-market and realized gains on energy hedging positions tied to
a fixed-price wholesale contract as compared to the same period of 2007
contributed $0.04 per share, primarily due to increases in natural gas
prices.
-- Amortization decreased $0.02 per share primarily due to lower
amortization of storm damages.
-- Interest expense, net increased $0.04 per share year over year. The
increase resulted from $0.03 per share of higher interest on solid waste
disposal bonds and senior notes, and $0.03 per share on the storm recovery
bonds, while interest income was $0.01 per share lower compared to last
year for the same period. These increases were partially offset by $0.03
per share of lower interest expense related to the storm damage surcredit.
-- Other expenses were $0.07 per share lower compared to the same period
last year. Lower employee compensation and benefits and professional fees
contributed $0.07 per share. Other taxes were $0.03 per share lower and
the absence of the Dolet Hills outage improved results by $0.01 per share.
Offsetting these amounts were $0.04 per share primarily from higher
expenses related to capacity contracts, increases in transmission and
distribution expenses, and a reclassification from recoverable fuel expense
to nonrecoverable fuel expense.
-- AFUDC, primarily associated with the Rodemacher Unit 3 project,
contributed $0.33 per share more compared to the first half of 2007. The
equity portion of AFUDC associated with the Rodemacher Unit 3 project was
up $0.27 per share, while the debt portion of AFUDC contributed $0.06 per
share.
Cleco Midstream Resources' Six Months ended June 30, 2008 results,
excluding the gain from the settlement of CES claims -- up $0.11 per share
year over year
Excluding the 2007 gain from the settlement of CES claims of $0.81 per
share, Acadia had lower losses of $0.07 per share, largely due to lower
interest paid to the holding company. Evangeline was up $0.03 primarily due
to the absence of replacement power purchased for the 2007 outage partially
offset by higher turbine maintenance expenses. Lower administrative
expenses added $0.01 per share in the year to year comparison.
Other
Corporate earnings decreased $0.12 per share in the year-to-year
comparison. Of that, $0.14 was due to lower affiliate interest income
received from Acadia, partially offset by $0.02 per share of lower interest
expense due to the payoff of $100 million of senior corporate notes in May
2008. Decreases in cash surrender values of corporate life insurance
policies of $0.03 per share were offset by $0.02 per share from the absence
of the 2007 Federal Energy Regulatory Commission penalty and $0.01 per
share related to the conversion of preferred stock to common shares.
Earnings Guidance
"We are maintaining our 2008 earnings target at a range of $1.60 to $1.70
per share," Madison said. "Those targets assume 2008 capital expenditures
of about $265 million on the Rodemacher project (including AFUDC), normal
weather for the remainder of the year, and the continuation of our current
rate plan. Cleco Midstream earnings targets assume continued performance by
Evangeline's tolling counterparty and are based on assumptions about
Acadia's plant operations and market conditions," said Madison.
Strategic Update
"We continue to meet and exceed our operational targets with respect to
each of our major initiatives," said Madison.
"Our Rodemacher Unit 3 project is on schedule to meet its original
commercial operations date of October 2009, and could possibly be on as
early as June 30, 2009 as evidenced by the amendment of the EPC contract
with Shaw. Construction continues to proceed exceptionally well, but there
is still much to accomplish with regard to the start-up and commissioning
of the unit.
"Equally important, in July 2008 we filed our first full rate case in over
20 years. Our filing enables us to maintain the parallel paths between the
Rodemacher 3 project and the rate case," Madison said.
"Also, in the regulatory arena, the long-term RFP process is on track to
select winning bids this month although results will not likely be public
until late 2008 or early 2009," Madison noted.
"Finally, we continue to move forward in collaboration with our neighboring
utilities, as well as the Southwest Power Pool, and the Louisiana Public
Service Commission to develop a comprehensive transmission solution for the
southern part of our service territory," Madison concluded.
Cleco management will discuss the company's second-quarter 2008 results
during a conference call scheduled for 11 a.m. EDT (10 a.m. CDT) Wednesday,
Aug. 6, 2008. 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 Second-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 273,000
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, 2008 2007
--------- ---------
Operating revenue
Electric operations $ 259,581 $ 251,909
Other operations 12,758 7,971
Affiliate revenue 2,448 1,621
--------- ---------
Operating revenue 274,787 261,501
Operating expenses
Fuel used for electric generation 22,887 51,312
Power purchased for utility customers 151,949 115,592
Other operations 22,862 24,722
Maintenance 14,589 14,939
Depreciation 19,336 19,990
Taxes other than income taxes 9,455 9,867
--------- ---------
Total operating expenses 241,078 236,422
--------- ---------
Operating income 33,709 25,079
Interest income 1,258 2,589
Allowance for other funds used during construction 14,993 7,032
Equity (loss) income from investees (2,365) 71,282
Other income 91 582
Other expense (1,377) (416)
Interest charges
Interest charges, including amortization of debt
expenses, premium and discount, net of
capitalized interest 14,947 14,377
Allowance for borrowed funds used during
construction (5,026) (2,388)
--------- ---------
Total interest charges 9,921 11,989
--------- ---------
Income before income taxes 36,388 94,159
Federal and state income tax expense 6,999 30,968
--------- ---------
Net income 29,389 63,191
Preferred dividends requirements, net of tax 12 12
--------- ---------
Net income applicable to common stock $ 29,377 $ 63,179
========= =========
Average shares of common stock outstanding
Basic 59,998,227 59,489,725
Diluted 60,168,947 59,798,877
Basic earnings per share
From continuing operations $ 0.49 $ 1.06
Net income applicable to common stock $ 0.49 $ 1.06
Diluted earnings per share
From continuing operations $ 0.49 $ 1.05
Net income applicable to common stock $ 0.49 $ 1.05
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, 2008 2007
--------- ---------
Operating revenue
Electric operations $ 469,462 $ 464,929
Other operations 22,821 17,240
Affiliate revenue 5,054 3,082
--------- ---------
Operating revenue 497,337 485,251
Operating expenses
Fuel used for electric generation 68,423 106,808
Power purchased for utility customers 241,743 199,739
Other operations 45,138 51,038
Maintenance 24,702 25,181
Depreciation 38,686 40,088
Taxes other than income taxes 18,286 19,667
Gain on sale of assets (99) --
--------- ---------
Total operating expenses 436,879 442,521
--------- ---------
Operating income 60,458 42,730
Interest income 2,875 5,157
Allowance for other funds used during construction 28,677 12,163
Equity (loss) income from investees (6,939) 69,883
Other income 157 872
Other expense (2,046) (1,882)
Interest charges
Interest charges, including amortization of debt
expenses, premium and discount, net of
capitalized interest 29,265 28,034
Allowance for borrowed funds used during
construction (9,603) (4,059)
--------- ---------
Total interest charges 19,662 23,975
--------- ---------
Income before income taxes 63,520 104,948
Federal and state income tax expense 12,060 33,111
--------- ---------
Net income 51,460 71,837
Preferred dividends requirements, net of tax 23 435
--------- ---------
Net income applicable to common stock $ 51,437 $ 71,402
========= =========
Average shares of common stock outstanding
Basic 59,948,801 58,585,451
Diluted 60,068,682 59,586,444
Basic earnings per share
From continuing operations $ 0.86 $ 1.21
Net income applicable to common stock $ 0.86 $ 1.21
Diluted earnings per share
From continuing operations $ 0.86 $ 1.20
Net income applicable to common stock $ 0.86 $ 1.20
Cash dividends paid per share of common stock $ 0.450 $ 0.450
CLECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
(UNAUDITED)
At June 30, At December
2008 31, 2007
----------- -----------
Assets
Current Assets
Cash and cash equivalents $ 150,769 $ 129,013
Accounts receivable, net 129,488 87,983
Other current assets 235,242 188,520
----------- -----------
Total Current Assets 515,499 405,516
Property, plant and equipment, net 1,877,564 1,725,880
Equity investment in investees 242,508 258,101
Prepayments, deferred charges and other 500,003 317,126
----------- -----------
Total Assets $ 3,135,574 $ 2,706,623
----------- -----------
Liabilities
Current Liabilities
Long-term debt due within one year $ 58,350 $ 100,000
Accounts payable 143,542 129,946
Other current liabilities 230,753 127,521
----------- -----------
Total Current Liabilities 432,645 357,467
Deferred credits and other liabilities 667,540 568,684
Long-term debt, net 998,090 769,103
----------- -----------
Total Liabilities 2,098,275 1,695,254
----------- -----------
Shareholders' Equity
Preferred stock 1,029 1,029
Common shareholders' equity 1,044,713 1,018,731
Accumulated other comprehensive loss (8,443) (8,391)
----------- -----------
Total Shareholders' Equity 1,037,299 1,011,369
----------- -----------
Total Liabilities and Shareholders' Equity $ 3,135,574 $ 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 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 continuation of the existing rate plan, 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 and Quarterly Reports on Form 10-Q. Actual results may differ
materially from those indicated in such forward-looking statements.
Contact Information: Investor Contacts: Cleco Corporation: Ryan Gunter (318) 484-7724 Rodney J. Hamilton (318) 484-7593 Analyst Inquiries: Dresner Corporate Services: Kristine Walczak (312) 726-3600 Media Contact: Cleco Corporation: Fran Phoenix (318) 484-7467