SOURCE: Cleco Corp.

May 06, 2008 17:44 ET

Cleco Corp. Posts 2008 First-Quarter Net Income of $22.1 Million

PINEVILLE, LA--(Marketwire - May 6, 2008) - Cleco Corp. (NYSE: CNL) reported today 2008 first-quarter net income applicable to common stock of $22.1 million, up $13.9 million from the $8.2 million recorded in the first quarter of 2007.

On an earnings per share (EPS) basis, Cleco recorded earnings of $0.37 per diluted share, up $0.23 per share from the $0.14 per share recorded in the first quarter of 2007.

Results were driven mainly by $0.18 per share of higher AFUDC (allowance for funds used during construction) from Cleco Power associated with the Rodemacher Unit 3 project.

"Construction of our Rodemacher Unit 3 project remains on budget and on schedule to begin commercial operations in October 2009. As of March 31, 2008, we have spent roughly $714 million of the billion-dollar budget," Cleco President and CEO Michael Madison said.

"Rodemacher Unit 3 is a 600-MW solid-fuel unit designed with circulating fluidized-bed (CFB) technology. Petroleum coke, or petcoke, a byproduct of the oil refinery business, will be the primary fuel source; however, the unit will be capable of utilizing a variety of other solid fuels such as renewables because of the technology we selected. This is why Rodemacher Unit 3 is the cornerstone of our strategy to create a diversified fuel portfolio," said Madison.

    Consolidated Diluted Earnings Per Share Allocated to Subsidiaries

                                                          Diluted EPS
                                                      --------------------
                                                       Three Months Ended
                                                            March 31
                                                      --------------------
Subsidiary                                              2008       2007
                                                      ---------  ---------
Cleco Power LLC                                       $    0.46  $    0.21
Cleco Midstream Resources LLC                             (0.08)     (0.08)
Corporate and Other(1)                                    (0.01)      0.01
                                                      ---------  ---------
  Earnings applicable to common stock                 $    0.37  $    0.14

(1) Includes dividends on preferred stock


Results for First-Quarter 2008:

Major Reconciling Items for First-Quarter EPS 2008 vs. 2007:


      $0.14                2007 First-Quarter Diluted EPS

       0.01                Gains on energy hedging, net
       0.06                Lower Cleco Power expenses
       0.18                Higher Cleco Power AFUDC
      (0.02)               Lower corporate results
      -----

      $0.37                2008 First-Quarter Diluted EPS


Cleco Power's 2008 first-quarter earnings - up $0.25 per share
year over year

    -- Kilowatt-hour sales were essentially even with last year's results.
       First quarter 2008 kilowatt-hour sales were down 2 percent from the
       same period a year ago largely due to lower usage from industrial
       customers.  Heating degree-days for the quarter were 6 percent below
       2007 first quarter levels and were 17 percent below normal.


                                                   For the three months
(Million kWh)                                         ended March 31
                                                 ------------------------
                                                   2008     2007   Change
                                                 -------  -------  ------
Electric Sales
  Residential                                        840      842      --
  Commercial                                         554      543       2 %
  Industrial                                         686      710      (3)%
  Other retail                                        32       33      (3)%
                                                 -------  -------  ------
    Total retail                                   2,112    2,128      (1)%
  Sales for resale                                    71      102     (30)%
  Unbilled                                           (57)     (70)     19 %
                                                 -------  -------  ------
Total retail and wholesale customer sales          2,126    2,160      (2)%


    -- 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 to a $0.01 per share increase primarily due to
       increases in natural gas prices.

    -- Operating and maintenance expenses were $0.06 per share lower
       compared to the same period last year, primarily due to lower
       compensation and benefit expense as well as lower generation
       maintenance expense and lower professional fees.

    -- AFUDC primarily associated with the Rodemacher Unit 3 project,
       contributed $0.18 per share more to results. The equity portion of
       AFUDC associated with the Rodemacher Unit 3 project was up $0.14 per
       share, while the debt portion of AFUDC contributed $0.04 per share
       more than in the first quarter of 2007.

Cleco Midstream Resources' 2008 first-quarter earnings - unchanged quarter over quarter

Evangeline was down $0.03 per share for the first quarter of 2008 mainly due to the February planned outage. This was offset by a decrease in losses at Acadia largely due to lower interest paid to the holding company during the first quarter of 2008.

Other

Corporate earnings decreased $0.02 per share in the quarter-to-quarter comparison primarily due to lower affiliate interest received from Acadia.

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 normal weather, 2008 capital expenditures of about $265 million on the Rodemacher project (including AFUDC), 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."

Strategic Update

"We continue to achieve impressive results," said Madison.

"After nearly two years of persistent work, we have completed the first ever utility securitization in the State of Louisiana. The financing resulted in the issuance of approximately $180 million initial principal amount of storm recovery bonds to recover the remainder of Cleco Power's unrecovered 2005 storm costs from hurricanes Katrina and Rita, with approximately $50 million being used to fund a storm reserve for future storms," Madison said.

"Additionally, we continue to advance through the long-term RFP process and are on schedule to select winning bids in August of 2008. Also, on the regulatory front, we are working diligently to prepare to file our rate case by the end of the second quarter of 2008 with rates anticipated to coincide with commercial operation of Rodemacher Unit 3," said Madison. "This will be our first full rate case in more than 20 years."

"Finally, we continue to move forward in collaboration with our neighboring utilites, 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 first-quarter 2008 results during a conference call scheduled for 11 a.m. Eastern time (10 a.m. Central time) Wednesday, May 7, 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 First-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.

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

For the three months ended March 31,                    2008       2007
                                                      ---------  ---------

Operating revenue
     Electric operations                              $ 209,881  $ 213,020
     Other operations                                    10,064      9,269
     Affiliate revenue                                    2,606      1,461
                                                      ---------  ---------
          Operating revenue                             222,551    223,750
Operating expenses
     Fuel used for electric generation                   45,536     55,496
     Power purchased for utility customers               89,794     84,147
     Other operations                                    22,275     26,315
     Maintenance                                         10,113     10,241
     Depreciation                                        19,547     20,098
     Taxes other than income taxes                        8,831      9,799
     Gain on sales of assets                                (99)        --
                                                      ---------  ---------
          Total operating expenses                      195,997    206,096
                                                      ---------  ---------
Operating income                                         26,554     17,654
Interest income                                           1,617      2,567
Allowance for other funds used during construction       13,683      5,131
Equity loss from investees                               (4,574)    (1,399)
Other income                                                 66         89
Other expense                                              (669)    (1,266)
Interest charges
     Interest charges, including amortization of debt
      expenses, premium and discount, net of capitalized
      interest                                           14,121     13,657
     Allowance for borrowed funds used during
      construction                                       (4,577)    (1,670)
                                                      ---------  ---------
          Total interest charges                          9,544     11,987
                                                      ---------  ---------

Income before income taxes                               27,133     10,789
Federal and state income tax expense                      5,061      2,143
                                                      ---------  ---------

Net income                                               22,072      8,646
Preferred dividends requirements, net of tax                 12        423
                                                      ---------  ---------

Net income applicable to common stock                 $  22,060  $   8,223
                                                      =========  =========




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

For the three months ended March 31,                     2008       2007
                                                      ---------- ----------

Average shares of common stock outstanding
     Basic                                            59,907,896 57,854,737
     Diluted                                          60,083,024 58,198,391

Basic earnings per share
     From continuing operations                       $     0.37 $     0.14
     Net income applicable to common stock            $     0.37 $     0.14

Diluted earnings per share
     From continuing operations                       $     0.37 $     0.14
     Net income applicable to common stock            $     0.37 $     0.14

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,
                                                     2008        2007
                                                  -----------  -----------
Assets
Current Assets
     Cash and cash equivalents                    $   108,934  $   129,013
     Accounts receivable, net                          91,781       87,983
     Other current assets                             194,020      188,520
                                                  -----------  -----------
          Total Current Assets                        394,735      405,516
Property, plant and equipment, net                  1,815,284    1,725,880
Equity investment in investees                        253,056      258,101
Prepayments, deferred charges and other               469,763      317,126
                                                  -----------  -----------
     Total Assets                                 $ 2,932,838  $ 2,706,623
                                                  -----------  -----------

Liabilities
Current Liabilities
     Long-term debt due within one year           $   108,350  $   100,000
     Accounts payable                                 115,423      129,946
     Other current liabilities                        174,325      127,521
                                                  -----------  -----------
          Total Current Liabilities                   398,098      357,467
Deferred credits and other liabilities                653,179      568,684
Long-term debt, net                                   861,025      769,103
                                                  -----------  -----------
     Total Liabilities                              1,912,302    1,695,254
                                                  -----------  -----------
Shareholders' Equity
     Preferred stock                                    1,029        1,029
     Common shareholders' equity                    1,027,916    1,018,731
     Accumulated other comprehensive loss              (8,409)      (8,391)
                                                  -----------  -----------
Total Shareholders' Equity                          1,020,536    1,011,369
                                                  -----------  -----------
     Total Liabilities and Shareholders' Equity   $ 2,932,838  $ 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 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:
    Fran Phoenix
    (318) 484-7467