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 Other(1) (0.04) 0.11 --------- --------- Earnings applicable to common stock $ 0.20 $ 0.19 ========= ========= (1) Includes 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 Other(1) 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 ========= ========= (1) Includes 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 EPSCleco 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.
For the three months (Million kWh) 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.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 EPSCleco 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.
For the 12 months ended Dec. 31 ------------------------------- (Million kWh) 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. -- A $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 (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. 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.
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 ========= ========= 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 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 ========= ========= 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 CLECO CORPORATION CONSOLIDATED BALANCE SHEETS (Thousands) At Dec. 31, At Dec. 31, 2007 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.
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