Issues Guidance for 2008
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 EPS
Cleco 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 EPS
Cleco 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