SOURCE: Cleco Corp.

Cleco Corp.

February 25, 2010 18:16 ET

Cleco Corp. Reports Full-Year 2009 Earnings

Earnings and Dividend Guidance Provided

PINEVILLE, LA--(Marketwire - February 25, 2010) - Cleco Corp. (NYSE: CNL)

   Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures

                                                      Diluted EPS
                                            ------------------------------
                                             Three months   Twelve months
                                            ended Dec. 31,  ended Dec. 31,
                                            --------------  --------------
Subsidiary                                   2009    2008    2009    2008
                                            ------  ------  ------  ------
Cleco Power LLC                             $ 0.35  $ 0.33  $ 1.84  $ 1.89
Cleco Midstream Resources LLC(1)             (0.21)  (0.12)  (0.29)  (0.17)
Corporate and Other(1),(2)                    0.01   (0.04)   0.18    0.03
                                            ------  ------  ------  ------
  Operational earnings per share (Non-GAAP)   0.15    0.17    1.73    1.75
Adjustments(3)                                0.06    0.05    0.03   (0.05)
                                            ------  ------  ------  ------
  Earnings per share applicable to common
   stock                                    $ 0.21  $ 0.22  $ 1.76  $ 1.70

GAAP refers to United States generally accepted accounting principles

(1) Includes affilate interest charges/interest income on affiliate debt
related to Cleco's investment in Acadia ($0.01 per share and $0.02 per
share for the quarters ended December 31, 2009 and 2008, respectively;
$0.05 per share and $0.07 per share for the twelve months ended December
31, 2009 and 2008, respectively)
(2) Includes dividends on preferred stock
(3) Refer to "Operational Earnings Adjustments" on page 5 of this news
release

"Cleco delivered solid earnings in 2009 in the face of a tough economic environment," said Mike Madison, president and chief executive officer of Cleco Corporation. "2009 was a defining year for Cleco with several key initiatives coming together. The foundation of our growth strategy is now firmly in place.

"Rodemacher Unit 3, the largest generation project in our history, achieved full commercial operation earlier this month. This unit is expected to provide stable, low cost power to our customers for decades to come. We also have received approval from our regulators to transfer half of the Acadia plant to Cleco Power. The addition of these two facilities to the Cleco Power generation fleet creates the efficient diversified portfolio we hoped to achieve," Madison said.

Recent Developments:

--  Rodemacher Unit 3 achieved full commercial operation on Feb. 12, 2010,
    and our new rates that the Louisiana Public Service Commission (LPSC)
    approved in October 2009 are now in effect.
--  On Feb. 22, 2010, the Cleco Evangeline LLC (Evangeline) tolling
    agreement was terminated for consideration of $188.6 million.
--  Evangeline executed a new tolling agreement with the same counterparty
    for the period Mar. 1, 2010, through Dec. 31, 2011.
--  The LPSC and the Federal Energy Regulatory Commission (FERC) approved
    the transfer of 50 percent of the Acadia Power Station to Cleco Power.
    This transaction closed on Feb. 23, 2010.
--  Entergy Louisiana's acquisition of the remaining 50 percent of the
    Acadia Power Station is progressing as expected.

Dividend Guidance:

The Board of Directors of Cleco Corporation has approved a dividend policy that will increase its quarterly dividend rate from $0.225 per common share to $0.25 per common share beginning with the dividend payable May 15, 2010. The 11 percent increase in the dividend, subject to the board's official declaration of the dividend in April, will result in an annual dividend rate of $1.00 per common share.

"With the completion of the Rodemacher Unit 3 construction and the associated increase in Cleco's earnings power, we are now in a position to increase the common dividend," Madison said. "This dividend increase is a step toward achieving our longer term goal of a dividend payout level in the range of 50 percent to 60 percent of sustainable earnings. This action on the dividend underscores management's and the board's confidence in the outlook for our business and our focus on our shareholders' total return."

The declaration of dividend payments is at the board's sole discretion and future dividend increases are subject to numerous factors that ordinarily affect dividend policy, including the result of Cleco's operations and its financial position as well as general economic and business conditions.

Earnings Guidance:

Cleco is targeting consolidated 2010 earnings in the range of $2.05 - $2.15 per share. The 2010 consolidated earnings estimate includes normal weather and excludes one-time results of the Evangeline transaction and the Acadia transactions.

Financial Highlights:

Fourth Quarter 2009

--  Cleco reports fourth quarter earnings applicable to common stock of
    $12.8 million, or $0.21 per diluted share, compared to $13.5 million,
    or $0.22 per diluted share, for the fourth quarter of 2008.

Year-to-date 2009

--  Cleco reports earnings applicable to common stock for 2009 of $106.3
    million, or $1.76 per diluted share, compared to $102.1 million, or
    $1.70 per diluted share for 2008.

Quarter-Over-Quarter Operational EPS Reconciliation:

$  0.17    2008 Fourth-Quarter Diluted Operational EPS

   0.02    Non-fuel revenue
   0.02    Energy hedging, net
   0.01    Income taxes
  (0.09)   Other expenses, net
   0.06    AFUDC (allowance for funds used during construction)
-------
   0.02    Cleco Power results

  (0.09)   Cleco Midstream results

   0.05    Corporate results
-------

   0.15    2009 Fourth-Quarter Diluted Operational EPS

   0.06    Adjustments(1)
-------

$  0.21    Reported GAAP earnings per share

(1) Refer to "Operational Earnings Adjustments" on page 5 of this news
    release

Cleco Power

--  Non-fuel revenue increased $0.02 per share compared to the fourth
    quarter of 2008 primarily due to higher residential usage and new
    service to a wholesale customer that began in April 2009.  Partially
    offsetting these increases were lower sales to industrial customers
    which was largely the result of decreased production at one of Cleco
    Power's largest industrial customers and the start of a large
    industrial customer cogenerating a portion of its electricity
    requirements.  Lower miscellaneous revenue also contributed to the
    decrease.

--  Net realized and mark-to-market gains on energy hedging positions tied
    to a fixed-price wholesale contract increased earnings by $0.02 per
    share compared to the fourth quarter of 2008.

--  Income taxes increased earnings by $0.01 per share compared to the
    fourth quarter of 2008 as a result of an increase in state flow-through
    tax benefits.

--  Other expenses, net were $0.09 per share higher compared to the fourth
    quarter of 2008 primarily due to higher generating station maintenance
    work performed during 2009 and higher interest related to uncertain tax
    positions.

--  AFUDC, primarily associated with the Rodemacher Unit 3 project,
    contributed an additional $0.06 per share compared to the fourth
    quarter of 2008.  The equity portion of AFUDC associated with the
    Rodemacher Unit 3 project was up $0.04 per share, while the debt
    portion of AFUDC contributed $0.02 per share more than the fourth
    quarter of 2008.


Cleco Midstream Resources

--  Evangeline was down $0.08 per share compared to the fourth quarter of
    2008 primarily due to higher interest charges related to uncertain tax
    positions, partially offset by lower maintenance expenses resulting
    from the facility's fourth quarter 2008 planned outage.

--  Acadia was down $0.02 per share compared to the fourth quarter of 2008
    primarily due to higher removal and retirement costs and higher turbine
    and general maintenance expenses, partially offset by lower
    depreciation expense resulting from certain Acadia assets meeting the
    criteria of assets held for sale.

--  Lower other operating expenses increased Midstream's results by $0.01
    per share compared to the fourth quarter of 2008.

Corporate and Other

--  Interest expense decreased $0.07 per share compared to the fourth
    quarter of 2008 primarily due to lower interest related to uncertain
    tax positions.

--  Higher other miscellaneous expenses, net decreased earnings by $0.02
    per share.

Year-Over-Year Operational EPS Reconciliation:

$  1.75     Twelve Months ended Dec. 31, 2008 Diluted Operational EPS

  (0.01)    Non-fuel revenue
  (0.20)    Interest expense, net
   0.06     Income taxes
  (0.11)    Other expenses, net
   0.21     AFUDC
-------
  (0.05)    Cleco Power results

  (0.12)    Cleco Midstream results

   0.15     Corporate results
-------

   1.73     Twelve Months ended Dec. 31, 2009 Diluted Operational EPS

   0.03     Adjustments(1)

$  1.76     Reported GAAP earnings per share

(1) Refer to "Operational Earnings Adjustments" on page 5 of this news
    release

Cleco Power

--  Non-fuel revenue decreased $0.01 per share in the year-to-year
    comparison. Miscellaneous revenue decreased $0.04 per share primarily
    from lower transmission, customer fee and pole attachment revenue.
    Partially offsetting this decrease was a $0.03 per share increase in
    retail and wholesale customer sales mainly from a new wholesale
    customer that began taking service in April 2009 and an increase in the
    number of customers served. Partially offsetting these increases were
    lower industrial sales from one of Cleco Power's large industrial
    customers and a large industrial customer starting to cogenerate a
    portion of its electricity requirements.

--  Interest expense, net increased $0.20 per share year over year
    primarily due to the issuances of senior notes, Gulf Opportunity Zone
    bonds, senior secured storm recovery bonds, and solid-waste disposal
    bonds. Also reducing earnings was lower average investment balances
    and lower investment earnings, lower recovery of interest costs
    relating to lower deferred lignite mining costs, and higher interest
    related to uncertain tax positions.

--  Income taxes increased earnings by $0.06 per share year over year
    largely as a result of an increase in state flow-through tax benefits.

--  Other expenses, net increased $0.11 per share year over year primarily
    due to higher generating station maintenance work, higher general
    liability expense, higher employee benefit costs and administrative
    expenses, and higher other net miscellaneous expenses.

--  AFUDC, primarily associated with the Rodemacher Unit 3 project,
    contributed an additional $0.21 per share compared to 2008. 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 $0.07 per
    share more than in 2008.

Cleco Midstream Resources

--  Evangeline was down $0.07 per share compared to the same period last
    year primarily due to higher interest related to uncertain tax
    positions, partially offset by lower maintenance expenses and the
    absence in 2009 of replacement power purchases resulting from
    Evangeline's 2008 unplanned outage.

--  Acadia was down $0.06 per share compared to the same period of 2008
    primarily due to higher expenses from outages at the facility during
    2009 and higher legal fees associated with the sale transactions.
    These decreases were partially offset by net revenue from Acadia's
    short-term tolling agreement with Cleco Power and lower depreciation
    expense resulting from certain Acadia assets meeting the criteria of
    assets held for sale.

--  Lower other operating expenses increased Midstream's results by $0.01
    per share year over year.

Corporate and Other

--  Lower interest charges resulting from uncertain tax positions, the
    repayment of $100 million of senior notes in May 2008, and the
    favorable settlement of a franchise tax lawsuit increased results by
    $0.15 per share compared to last year.

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 EPS to Reported GAAP EPS

                                             Three months   Twelve months
                                            ended Dec. 31,  ended Dec. 31,
                                            --------------  --------------
                                             2009    2008    2009    2008
                                            ------- ------  ------- ------
Operational earnings per share              $  0.15 $ 0.17  $  1.73 $ 1.75
  Tax levelization                             0.05   0.07        -      -
  Company/trust-owned life insurance policy
   adjustments                                 0.01  (0.02)    0.03  (0.05)
                                            ------- ------  ------- ------
Reported GAAP earnings per share            $  0.21 $ 0.22  $  1.76 $ 1.70

Reconciling adjustments from operational earnings per share to GAAP earnings per share are as follows:

Tax Levelization

Generally accepted accounting principles require companies to apply an effective tax rate to interim periods that is consistent with a company's estimated annual effective tax rate. As a result, quarterly, Cleco projects the effective tax rate for the year and then raises or lowers the tax expense recorded in that quarter to reflect the projected annual tax rate. During the fourth quarter of 2009, Cleco recorded a $0.05 per share benefit from the levelization of its annual tax rate after taking into consideration the effect of a late Rodemacher Unit 3 commercial operation date. This $0.05 per share adjustment during the fourth quarter brings Cleco's projected annual tax rate at the end of the third quarter in line with its actual annual tax rate at the end of the year. In 2008, the levelization adjustment was an increase of $0.07 per share for the fourth quarter related to various changes from the third quarter 2008 projected annual tax rate. This incremental adjustment is not related to the fourth quarter operational results because it reflects the effect of the change in tax rates on operational earnings for the entire year.

COLI/TOLI Adjustments

Cleco has both Company-Owned Life Insurance and Trust-Owned Life Insurance (COLI/TOLI) 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 fourth quarter of 2009 and decreased earnings by $0.02 per share for the fourth quarter of 2008. The adjustments increased earnings by $0.03 per share for 2009 and decreased earnings by $0.05 per share for 2008. 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.

Cleco management will discuss the company's annual and fourth-quarter 2009 results during a conference call scheduled for 11 a.m. Eastern time (10 a.m. Central time) Friday, Feb. 26, 2010. 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 "For Investors" and then "Cleco Corporation Fourth-Quarter 2009 Earnings Conference Call."

Cleco Corp. is a regional energy company headquartered in Pineville, La. It operates a regulated electric utility company that serves approximately 277,000 customers across Louisiana. Cleco also operates a wholesale energy business with 1,065 megawatts of nameplate generating capacity, which includes Entergy Louisiana's pending acquisition of Acadia Power Station Unit 2. For more information about Cleco, visit www.cleco.com.

Financial tables follow:

                                For the three months ended Dec. 31,
                         ------------------------------------------------
(Unaudited)                  (million kWh)             (thousands)
                         -------------------   --------------------------
                         2009   2008  Change     2009      2008    Change
                         -----  ----- ------   --------  -------- -------
Electric Sales
  Residential              823    757    8.7 % $ 35,186  $ 32,765     7.4 %
  Commercial               602    576    4.5 %   23,582    22,968     2.7 %
  Industrial               599    721  (16.9)%   12,911    13,980    (7.6)%
  Other retail              34     33    3.0 %    1,426     1,383     3.1 %
  Storm surcharge            -      -      -      4,987     5,464    (8.7)%
                         -----  ----- ------   --------  --------
    Total retail         2,058  2,087   (1.4)%   78,092    76,560     2.0 %
  Sales for resale         128    114   12.3 %    7,337     4,256    72.4 %
  Unbilled                 (38)     4      *     (1,275)      371  (443.7)%
                         -----  ----- ------   --------  --------
Total retail and
 wholesale customer
 sales                   2,148  2,205  (2.60)% $ 84,154  $ 81,187     3.7 %


*Not meaningful


                                For the twelve months ended Dec. 31,
                          -----------------------------------------------
(Unaudited)                  (million kWh)             (thousands)
                          ------------------   --------------------------
                          2009  2008  Change     2009      2008    Change
                          ----- ----- ------   --------- --------- ------
Electric Sales
  Residential             3,637 3,545    2.6 % $ 157,672 $ 154,001    2.4 %
  Commercial              2,484 2,450    1.4 %    95,453    94,226    1.3 %
  Industrial              2,232 2,898  (23.0)%    50,957    55,560   (8.3)%
  Other retail              136   134    1.5 %     5,715     5,589    2.3 %
  Storm surcharge             -     -      -      19,661    21,105   (6.8)%
                          ----- -----          --------- ---------
    Total retail          8,489 9,027   (6.0)%   329,458   330,481   (0.3)%
  Sales for resale          560   441   27.0 %    23,371    19,685   18.7 %
  Unbilled                   60    16  275.0 %     2,262     1,954   15.8 %
                          ----- -----          --------- ---------
Total retail and
 wholesale customer
 sales                    9,109 9,484  (4.00)% $ 355,091 $ 352,120    0.8 %





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


For the three months ended Dec. 31,                    2009        2008
                                                    ----------  ----------
Operating revenue
    Electric operations                             $  181,178  $  229,573
    Other operations                                     7,971       6,942
    Affiliate revenue                                    2,947       2,670
                                                    ----------  ----------
        Total operating revenue                        192,096     239,185
Operating expenses
    Fuel used for electric generation                   48,243      73,566
    Power purchased for utility customers               52,697      79,016
    Other operations                                    31,497      29,068
    Maintenance                                         15,523      11,632
    Depreciation                                        19,971      19,906
    Taxes other than income taxes                        7,135       7,151
    Gain on sale of assets                                   -         (11)
                                                    ----------  ----------
        Total operating expenses                       175,066     220,328
                                                    ----------  ----------
Operating income                                        17,030      18,857
Interest income                                            461         872
Allowance for other funds used during construction      20,928      18,490
Equity loss from investees                             (18,134)     (8,265)
Other income                                               827         168
Other expense                                             (626)     (3,648)
Interest charges
    Interest charges, including amortization of
     debt expenses, premium and discount, net of
     capitalized interest                               18,401      22,158
    Allowance for borrowed funds used during
     construction                                       (7,016)     (5,117)
                                                    ----------  ----------
        Total interest charges                          11,385      17,041
                                                    ----------  ----------
Income before income taxes                               9,101       9,433
Federal and state income tax benefit                    (3,678)     (4,116)
                                                    ----------  ----------
Net income                                              12,779      13,549
Preferred dividends requirements, net of tax                12          12
                                                    ----------  ----------
Net income applicable to common stock               $   12,767  $   13,537
                                                    ==========  ==========


Average shares of common stock outstanding
    Basic                                           60,254,541  60,039,943
    Diluted                                         60,622,385  60,320,230
Basic earnings per share
    Net income applicable to common stock           $     0.21  $     0.22
Diluted earnings per share
    Net income applicable to common stock           $     0.21  $     0.22

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






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

For the twelve months ended Dec. 31,                  2009         2008
                                                  -----------  -----------
Operating revenue
    Electric operations                           $   808,646  $ 1,032,970
    Other operations                                   33,651       36,768
    Affiliate revenue                                  11,461       10,460
                                                  -----------  -----------
        Total operating revenue                       853,758    1,080,198
Operating expenses
    Fuel used for electric generation                 261,456      235,706
    Power purchased for utility customers             216,906      471,261
    Other operations                                  109,060       99,028
    Maintenance                                        51,300       47,089
    Depreciation                                       78,204       77,876
    Taxes other than income taxes                      29,947       34,471
    Loss (gain) on sales of assets                         76         (110)
                                                  -----------  -----------
        Total operating expenses                      746,949      965,321
                                                  -----------  -----------
Operating income                                      106,809      114,877
Interest income                                         1,512        5,417
Allowance for other funds used during
 construction                                          73,269       64,953
Equity loss from investees                            (17,423)      (5,542)
Other income                                            5,581        1,263
Other expense                                          (2,807)      (7,970)
Interest charges
    Interest charges, including amortization of
     debt expenses, premium and discount, net of
     capitalized interest                              77,228       72,042
    Allowance for borrowed funds used during
     construction                                     (26,173)     (19,642)
                                                  -----------  -----------
Total interest charges                                 51,055       52,400
                                                  -----------  -----------
Income before income taxes                            115,886      120,598
Federal and state income tax expense                    9,579       18,457
                                                  -----------  -----------
Net income                                            106,307      102,141
Preferred dividends requirements, net of tax               46           46
                                                  -----------  -----------
Net income applicable to common stock             $   106,261  $   102,095
                                                  ===========  ===========

Average shares of common stock outstanding
    Basic                                          60,187,894   59,990,229
    Diluted                                        60,498,205   60,214,640
Basic earnings per share
    Net income applicable to common stock         $      1.77  $      1.70
Diluted earnings per share
    Net income applicable to common stock         $      1.76  $      1.70
Cash dividends paid per share of common stock     $     0.900  $     0.900






                                  CLECO CORPORATION
                             CONSOLIDATED BALANCE SHEETS
                                     (Thousands)

                                                  At Dec. 31,  At Dec. 31,
                                                      2009         2008
                                                  -----------  -----------
Assets
Current Assets
   Cash and cash equivalents                      $   145,193  $    97,483
   Accounts receivable, net                            70,557       78,314
   Other current assets                               278,175      290,582
                                                  -----------  -----------
      Total Current Assets                            493,925      466,379
Property, plant and equipment, net                  2,247,030    2,045,286
Equity investment in investees                        251,617      249,144
Prepayments, deferred charges and other               702,275      580,395
                                                  -----------  -----------
   Total Assets                                   $ 3,694,847  $ 3,341,204
                                                  -----------  -----------
Liabilities
Current Liabilities
   Long-term debt due within one year             $    11,478  $    63,546
   Accounts payable                                   114,541      138,300
   Other current liabilities                          115,785      158,987
                                                  -----------  -----------
      Total Current Liabilities                       241,804      360,833
Deferred credits and other liabilities              1,016,672      812,687
Long-term debt, net                                 1,320,299    1,106,819
                                                  -----------  -----------
   Total Liabilities                                2,578,775    2,280,339
                                                  -----------  -----------
Shareholders' Equity
   Preferred stock                                      1,029        1,029
   Common shareholders' equity                      1,126,334    1,069,669
   Accumulated other comprehensive loss               (11,291)      (9,833)
                                                  -----------  -----------
Total Shareholders' Equity                          1,116,072    1,060,865
                                                  -----------  -----------
   Total Liabilities and Shareholders' Equity     $ 3,694,847  $ 3,341,204
                                                  ===========  ===========

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 completion of the Acadia/Entergy Louisiana transaction. 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 costs of Rodemacher Unit 3, the completion of the Acadiana Load Pocket project, the completion of the Acadia/Entergy Louisiana transaction, the impact of the global economic downturn, 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.

Contact Information

  • Investor Contacts:
    R. Russell Davis
    (318) 484-7501
    Rodney J. Hamilton
    (318) 484-7593

    Media Contact:
    Fran Phoenix
    (318) 484-7467