Cleco Corp. Posts 2007 First-Quarter Net Income of $8.2 Million


PINEVILLE, LA -- (MARKET WIRE) -- May 2, 2007 -- Cleco Corp. (NYSE: CNL) today reported 2007 first-quarter net income applicable to common stock of $8.2 million, down $3.5 million from the $11.7 million recorded in the first quarter of 2006.

On an earnings per share (EPS) basis, Cleco recorded earnings of $0.14 per diluted share, down $0.09 per share from the $0.23 per share recorded in first quarter 2006.

Net income for the first quarter of 2006 benefited from two items relating to the reversal of storm expenses and customer refund accruals, thus first-quarter 2007 results were lower by comparison. In addition, first-quarter 2007 earnings per share were diluted $0.03 per share by the August issuance of 6.9 million shares of common stock, the $157.5 million net proceeds of which are being used to fund a portion of Rodemacher Unit 3 construction costs.

"Construction at our Rodemacher 3 project continues to go well. On the Midstream side of the business, we are pleased to have reached a settlement agreement with Calpine that should capture the value we built through the Acadia tolling agreements," Cleco President and CEO Michael Madison said.

    Consolidated Diluted Earnings Per Share Allocated to Subsidiaries

                                                        Diluted EPS
                                                --------------------------
                                                Three Months Ended Mar. 31
                                                --------------------------
Subsidiary                                          2007          2006
                                                ------------  ------------
Cleco Power LLC                                 $       0.21  $       0.28
Cleco Midstream Resources LLC                          (0.08)        (0.07)
Corporate and Other(1)                                  0.01          0.02
                                                ------------  ------------
    Earnings applicable to common stock         $       0.14  $       0.23
                                                ------------  ------------
(1)Includes dividends on preferred stock


Results for First-Quarter 2007:

Major Reconciling Items for First-Quarter EPS 2007 vs. 2006:
------------------------------------------------------------
       $0.23               2006 First-Quarter Diluted EPS

        0.06               Higher Cleco Power nonfuel revenue
        0.04               Gains on energy hedging, net
       (0.14)              Higher Cleco Power nonfuel expenses
       (0.03)              Effect of increased number of outstanding shares
       (0.01)              Lower Cleco Midstream contribution
       (0.01)              Lower corporate results
       -----
       $0.14               2007 First-Quarter Diluted EPS
Cleco Power LLC

Cleco Power's 2007 first-quarter earnings were $0.07 per share lower than in the first quarter of 2006.

Overall, nonfuel revenue increased $0.06 per share in the quarter-to-quarter comparison with 2006.

--  The collection of a storm cost recovery surcharge contributed $0.08
    per share to first-quarter 2007 results. Collection of the surcharge began
    in May 2006 after the Louisiana Public Service Commission (LPSC) approved
    an interim storm cost recovery plan.
    
--  Higher kilowatt-hour sales resulted in a $0.05 per share increase.
    First-quarter 2007 kilowatt-hour sales were up 7 percent from the same
    period a year ago largely due to cooler weather affecting residential and
    commercial customers as compared to first quarter 2006. Heating degree-days
    for the quarter were 26 percent above 2006 first-quarter levels despite
    being 11 percent below normal.
    
(Million kWh)                         For the three months ended Mar. 31
                                     ------------------------------------
                                            2007         2006      Change
                                     -----------  -----------  ----------
Electric Sales
  Residential                                842          750          12%
  Commercial                                 543          407          33%
  Industrial                                 710          692           3%
  Other retail                                33          131         (75)%
                                     -----------  -----------  ----------
    Total retail                           2,128        1,980           7%
  Sales for resale                           102          117         (13)%
  Unbilled                                   (70)         (82)         15%
                                     -----------  -----------  ----------
Total retail and wholesale customer
 sales                                     2,160        2,015           7%
--  Earnings in the first quarter of 2006 benefited from the reversal of
    rate refund accruals for years 2002 to 2006 following the completion of the
    LPSC review of associated reports, so by comparison, first-quarter 2007
    results were lower by $0.06 per share. Transmission revenue decreased $0.01
    per share.
    
Results of energy hedging, net were up $0.04 per share compared to the first quarter of 2006.

--  The $0.04 per share increase was the result of 2007 mark-to-market
    gains on energy hedging positions tied to a fixed-price wholesale contract
    as compared to mark-to-market losses in the same period of 2006.
    
Nonfuel expenses were up $0.14 per share compared to the same quarter of 2006.
--  In the first quarter of 2006, previously expensed storm costs were
    transferred to a regulatory asset following the issuance of the LPSC
    interim storm recovery plan, so by comparison first-quarter 2007 expenses
    were higher by $0.10 per share.
    
--  Benefits and salaries expenses were $0.04 per share higher, while a
    $0.03 per share expense increase was due to higher transmission expense,
    production maintenance expense, and professional fees.
    
--  Storm amortization costs increased expenses by $0.05 per share due to
    the May 2006 LPSC interim storm cost recovery plan approval. Depreciation
    of routine property, plant and equipment additions increased expenses by
    $0.01 per share.
    
--  Interest expense, net, increased $0.03 per share primarily due to
    interest expense on tax exempt solid waste disposal bonds issued in
    November 2006, lower interest income from temporary investments, and
    accrual of interest on tax positions, partially offset by lower interest
    expense due to the retirement of medium-term notes.
    
--  Capacity payments were $0.01 per share lower compared to the same
    period a year ago primarily as a result of lower-cost short-term power
    purchase agreements.
    
--  AFUDC (allowance for funds used during construction), primarily
    associated with the Rodemacher project, contributed $0.08 per share more to
    results.
    
--  Income taxes were down $0.03 per share primarily related to the flow-
    through of AFUDC equity income.
    
Other:
--  The issuance of 6.9 million shares of common stock in August 2006
    resulted in a $0.03 per share dilution.
    
Cleco Midstream Resources LLC

Cleco Midstream's earnings were down $0.01 per share in the first quarter of 2007 compared to the first quarter of 2006 primarily due to a $0.02 per share lower contribution from Acadia, partially offset by a $0.01 per share increase from operations at Evangeline. The lower results at Acadia were largely due to the absence of the first-quarter 2006 drawdown of $2.8 million against a $15.0 million letter of credit issued by Calpine. Evangeline's results improved primarily due to lower turbine maintenance expenses.

Other

Corporate earnings decreased $0.01 per share in the quarter-to-quarter comparison primarily due to higher taxes and an increase in corporate reserves.

Strategic Update

"I am pleased to once again announce that construction of our Rodemacher 3 plant remains on schedule with about $310 million in capital expenditures since inception," Madison said.

"Continuing our focus on the future, we have recently completed the analysis of our short-term RFP, or Requests for Proposals, for up to 350 MW, and we have begun negotiations with the top bidding counterparties. We also expect to issue a draft of a long-term RFP for up to approximately 650 MW in the second quarter of this year, with our target of selecting winning bids by the third quarter of 2008," Madison said.

Storm Cost Recovery

Madison continued, "Our work with LPSC staff consultants in preparing a financing order enabling securitization continues to go well. We anticipate securitization of storm costs and the $50 million storm reserve during the latter part of the third quarter 2007."

Acadia Settlement:

On April 23, a settlement agreement with Calpine over the Acadia project and associated tolling agreements was filed in bankruptcy court. Under the settlement agreement, Cleco will receive an unsecured claim of $85 million dollars against Calpine in settlement of all claims relating to Calpine Energy Services, L.P.'s default under the Acadia tolling agreements.

"In addition," Madison said, "the value of Cleco's right to priority distributions from the project also has been set at $85 million. Cleco has offered to pay $60 million plus assumed liabilities for Calpine's interest in the Acadia project, and Cleco has agreed, in connection with the bankruptcy court auction of Calpine's interest in the Acadia project, to amend the partnership agreement to eliminate Cleco's priority distribution rights in exchange for the payment of $85 million. Together, Cleco's priority distribution rights and Calpine's interest in the Acadia project are valued at $145 million. Our offer now becomes the 'Stalking Horse' bid in an auction process which is scheduled to begin this month for Calpine's interest in Acadia."

If Cleco's bid wins, Cleco will pay Calpine $60 million for Calpine's interest in Acadia. In the event that Cleco is outbid, the winning bidder will be required to pay Cleco $85 million, which represents the net present value of priority distributions from the project. In either case, Cleco will receive an $85 million claim for the settlement of the damage claims related to Calpine's default under the tolling agreements and assume the operations and management of the plant.

All documents, including the purchase/sale agreement, claim settlements, and operations and management agreements, are subject to approval by the bankrupcy court. A bankruptcy court hearing on the motions to approve the bidding procedures relating to the auction and claim settlement agreement is scheduled for May 9.

Cleco management will discuss the company's first-quarter 2007 results during a conference call scheduled for 11 a.m. EDT (10 a.m. CDT) Thursday, May 3, 2007. The call will be broadcast live on the Internet, and 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 First-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 268,000 customers across Louisiana. Cleco also operates a wholesale energy business with approximately 1,350 megawatts of generating capacity. For more information about Cleco, visit www.cleco.com.

                              CLECO CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
               (Thousands, except share and per share amounts)
                                   (UNAUDITED)

For the three months ended March 31,                2007          2006
                                                ------------  ------------
Operating revenue
     Electric operations                        $    213,020  $    210,989
     Other operations                                  9,269         6,596
     Affiliate revenue                                 1,461         1,451
                                                ------------  ------------
          Gross operating revenue                    223,750       219,036
               Electric customer credits                  --         4,382
                                                ------------  ------------
          Operating revenue, net                     223,750       223,418
Operating expenses
     Fuel used for electric generation                55,496        48,363
     Power purchased for utility customers            84,147        99,832
     Other operations                                 26,315        18,088
     Maintenance                                      10,241         5,933
     Depreciation                                     20,098        15,645
     Taxes other than income taxes                     9,799         9,584
                                                ------------  ------------
          Total operating expenses                   206,096       197,445
                                                ------------  ------------
Operating income                                      17,654        25,973
Interest income                                        2,567         2,492
Allowance for other funds used during
 construction                                          5,131           669
Equity (loss) income from investees                   (1,399)          373
Other income                                              89           108
Other expense                                         (1,266)         (328)
Interest charges
     Interest charges, including amortization
      of debt expenses, premium and discount,
      net of capitalized interest                     13,657        11,176
     Allowance for borrowed funds used during
      construction                                    (1,670)         (227)
                                                ------------  ------------
          Total interest charges                      11,987        10,949
                                                ------------  ------------

Income from continuing operations before income
 taxes                                                10,789        18,338
Federal and state income tax expense                   2,143         6,113
                                                ------------  ------------

Income from continuing operations                      8,646        12,225
Discontinued operations
     Loss from discontinued operations, net of
      tax                                                 --           (87)
                                                ------------  ------------
Net income                                             8,646        12,138
Preferred dividends requirements, net of tax             423           459
                                                ------------  ------------

Net income applicable to common stock           $      8,223  $     11,679
                                                ============  ============


Average shares of common stock outstanding
     Basic                                         57,854,737    49,851,812
     Diluted                                       58,198,391    52,120,948

Basic earnings per share
     From continuing operations                 $        0.14 $        0.23
     Net income applicable to common stock      $        0.14 $        0.23

Diluted earnings per share
     From continuing operations                 $        0.14 $        0.23
     Net income applicable to common stock      $        0.14 $        0.23

Cash dividends paid per share of common stock   $       0.225 $       0.225




                               CLECO CORPORATION
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Thousands)
                                   (UNAUDITED)
                                                     At            At
                                                 March 31,      Dec. 31,
                                                    2007          2006
                                                ------------  ------------
Assets
Current Assets
     Cash and cash equivalents                  $     98,608  $    192,471
     Accounts receivable, net                         82,403        79,048
     Other current assets                            207,319       265,789
                                                ------------  ------------
          Total Current Assets                       388,330       537,308
Property, plant and equipment, net                 1,388,071     1,304,887
Equity investment in investees                       315,033       307,136
Prepayments, deferred charges and other              314,755       311,773
                                                ------------  ------------
     Total Assets                               $  2,406,189  $  2,461,104
                                                ------------  ------------

Liabilities
Current Liabilities
     Long-term debt due within one year         $     40,000  $     50,000
     Accounts payable                                149,062       151,653
     Other current liabilities                       133,445       183,047
                                                ------------  ------------
          Total Current Liabilities                  322,507       384,700
Deferred credits and other liabilities               570,572       560,842
Long-term debt, net                                  619,270       619,341
                                                ------------  ------------
     Total Liabilities                             1,512,349     1,564,883
                                                ------------  ------------
Shareholders' Equity
     Preferred stock                                   1,029        20,092
     Common shareholders' equity                     902,151       885,439
     Other comprehensive income                       (9,340)       (9,310)
                                                ------------  ------------
Total Shareholders' Equity                           893,840       896,221
                                                ------------  ------------
     Total Liabilities and Shareholders' Equity $  2,406,189  $  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 the settlement of claims relating to Calpine's bankruptcy. 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 counterparties, the performance of the tolling agreements by such counterparties, the resolution of claims arising from the Calpine bankruptcy, construction and operational startup of the new unit at Rodemacher Power Station, 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.

Contact Information: Investor Contacts: Cleco Corporation: Ryan Gunter (318) 484-7724 Rodney J. Hamilton (318) 484-7593 Analyst Inquiries: Dresner Companies: Kristine Walczak (312) 780-7205 Media Contact: Cleco Corporation: Michael Burns (318) 484-7663