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 EPSCleco 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