Business & Finance
Thu, August 13, 2009Wed, August 12, 2009Tue, August 11, 2009Mon, August 10, 2009Sun, August 9, 2009Sat, August 8, 2009Fri, August 7, 2009Thu, August 6, 2009Wed, August 5, 2009Tue, August 4, 2009Mon, August 3, 2009Sun, August 2, 2009Fri, July 31, 2009Thu, July 30, 2009Wed, July 29, 2009Cleco Corp.: Cleco Corp. Posts 2009 Second-Quarter Earnings of $27.0 Million
Published in Business and Finance on Wednesday, August 5th 2009 at 14:18 GMT, Last Modified on 2009-08-05 14:18:31 by Market Wire
PINEVILLE, LA--(Marketwire - August 5, 2009) - Cleco Corp. (
On an earnings per share basis, Cleco recorded earnings of $0.45 per diluted share, down $0.04 per share from the $0.49 per share recorded in the second quarter of 2008. Results for the quarter were driven by $0.03 per share of higher losses at Midstream primarily from unplanned outage expenses at Acadia and $0.04 per share of lower results at Cleco Power. Partially offsetting these decreases was a $0.03 per share contribution from Corporate.
For the six months ended June 30, 2009, net income applicable to common stock was $33.7 million, or $0.56 per diluted share, down $0.30 per share from the $0.86 per share for the same period in 2008. Results for the six month period were driven by $0.25 per share of lower results at Cleco Power primarily from increased interest charges, net losses relating to economic hedge transactions and operating and maintenance expenses, and $0.10 per share higher losses at Midstream primarily from outage expenses. Partially offsetting these decreases was a $0.05 per share contribution from Corporate.
"We're very close to accomplishing three of our top goals for the year," said Mike Madison, president and chief executive officer of Cleco Corp. "Rodemacher Unit 3 is on schedule to begin commercial operation in the fourth quarter of 2009, we've reached a settlement agreement with all parties on our rate case, and we have executed definitive agreements for the transfer of half of Acadia to Cleco Power."
These projects are discussed in more detail in the company's strategic update.
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries Diluted EPS ------------------ three months ended June 30 ------------------ Subsidiary 2009 2008 -------- -------- Cleco Power LLC $ 0.50 $ 0.54 Cleco Midstream Resources LLC (0.08) (0.05) Corporate and Other(1) 0.03 - -------- -------- Earnings applicable to common stock $ 0.45 $ 0.49 (1) Includes dividends on preferred stock Results for Second-Quarter 2009: Major Reconciling Items for Second-Quarter EPS 2009 vs. 2008: $ 0.49 2008 Second-Quarter Diluted EPS 0.01 Non-fuel revenue (0.03) Energy hedging, net (0.04) Interest expense (0.02) Income tax adjustments (0.01) Other expenses, net 0.05 AFUDC (allowance for funds used during construction) ---- (0.04) Cleco Power results (0.03) Cleco Midstream results 0.03 Corporate results ---- $ 0.45 2009 Second-Quarter Diluted EPS Cleco Power's 2009 second-quarter earnings -- down $0.04 per share in the quarter-to-quarter comparison -- Non-fuel revenue increased $0.01 per share compared to the second quarter of 2008 primarily due to higher unbilled sales as a result of above normal temperatures in the latter part of the quarter, partially offset by lower billed sales to industrial customers. Lower sales to industrial customers were largely the result of decreased production at one of Cleco Power's largest industrial customers and the start of a large industrial customer cogenerating its electricity requirements. Cooling degree days for the quarter were comparable to 2008 second- quarter levels and were 17 percent above normal, again reflecting the above normal temperatures in the latter part of the quarter. For the three months ended (Million kWh) June 30 -------------------------- 2009 2008 Change -------- -------- -------- Electric Sales Residential 791 804 (1.6)% Commercial 596 599 (0.5)% Industrial 469 729 (35.7)% Other retail 34 33 3.0% -------- -------- Total retail 1,890 2,165 (12.7)% Sales for resale 144 103 39.8% Unbilled 325 203 60 -------- -------- Total retail and wholesale customer sales 2,359 2,471 (4.5)% -- Realized losses and lower mark-to-market gains on energy hedging positions tied to a fixed-price wholesale contract reduced earnings by $0.03 per share compared to the second quarter of 2008. -- Interest expense increased $0.04 per share compared to the second quarter of 2008. Of that, $0.05 per share was primarily related to the issuances of senior notes, Gulf Opportunity Zone bonds and solid-waste disposal bonds. These increases were partially offset by $0.01 per share of lower interest expense relating to medium-term notes and lower interest rates and borrowings under Cleco Power's credit facility. -- Adjustments to record tax expense at the expected annual effective tax rate decreased earnings by $0.02 per share. -- Other expenses were $0.01 per share higher compared to the same period last year primarily due to higher employee benefit costs, training expenses and administrative expenses, partially offset by lower other non-recoverable fuel expenses. -- AFUDC, primarily associated with the Rodemacher Unit 3 project, contributed an additional $0.05 per share as compared to the second 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 $0.01 per share more than in the second quarter of 2008.
Cleco Midstream Resources' results for second quarter 2009 -- down $0.03 per share in the quarter-to-quarter comparison
Acadia was down $0.04 per share compared to the second quarter of 2008 primarily due to higher expenses from an unplanned outage at the facility during 2009. Also contributing to the loss at Acadia were higher interest charges primarily from additional estimated interest costs related to an IRS audit and higher legal fees. These decreases were partially offset by higher net revenue from Acadia's short-term tolling agreement with Cleco Power. Evangeline was up $0.01 per share for the second quarter of 2009 compared to the second quarter of 2008 primarily due to lower gas expenses and lower interest charges.
Other
Corporate earnings increased $0.03 per share in the quarter-to-quarter comparison primarily due to increases in the cash surrender values of corporate life insurance policies.
Consolidated Diluted Earnings Per Share Allocated to Subsidiaries Diluted EPS ------------------ six months ended June 30 ------------------ Subsidiary 2009 2008 -------- -------- Cleco Power LLC $ 0.75 $ 1.00 Cleco Midstream Resources LLC (0.22) (0.12) Corporate and Other(1) 0.03 (0.02) -------- -------- Earnings applicable to common stock $ 0.56 $ 0.86 (1) Includes dividends on preferred stock Results for six months ended June 30, 2009: Major Reconciling Items for six months ended June 30, EPS 2009 vs. 2008: $ 0.86 Six Months ended June 30, 2008 (0.04) Non-fuel revenue (0.07) Energy hedging, net (0.14) Interest expense (0.09) Income tax adjustments (0.04) Other expenses, net 0.13 AFUDC (allowance for funds used during construction) ---- (0.25) Cleco Power results (0.10) Cleco Midstream results 0.05 Corporate results ---- $ 0.56 Six Months ended June 30, 2009 Diluted EPS Cleco Power's six months ended June 30, 2009 earnings -- down $0.25 per share year over year -- Retail and wholesale sales decreased $0.04 per share compared to last year's results primarily from milder winter weather and lower industial electric sales. Lower sales to industrial customers were largely the result of decreased production at one of Cleco Power's largest industrial customers and the start of a large industrial customer cogenerating its electricity requirements. Heating degree days for the first half of 2009 were 9 percent below 2008 levels while cooling degree days were 2 percent above 2008 levels. For the six months ended (Million kWh) June 30 -------------------------- 2009 2008 Change -------- -------- -------- Electric Sales Residential 1,607 1,644 (2.3)% Commercial 1,139 1,153 (1.2)% Industrial 1,056 1,416 (25.4)% Other retail 66 65 1.5 % -------- -------- Total retail 3,868 4,278 (9.6)% Sales for resale 233 173 34.7% Unbilled 192 147 30 -------- -------- Total retail and wholesale customer sales 4,293 4,598 (6.6)% -- Mark-to-market and realized losses on energy hedging positions tied to a fixed-price wholesale contract increased $0.07 per share year over year. -- Interest expense increased $0.14 per share compared to the first half of 2008 primarily due to the issuances of senior notes, senior secured storm recovery bonds, Gulf Opportunity Zone bonds and solid-waste disposal bonds. -- Adjustments to record tax expense at the expected annual effective tax rate decreased earnings by $0.09 per share. -- Other expenses were $0.04 per share higher compared to the same period last year primarily due to higher general liability expense, higher employee benefit costs, training expenses and administrative expenses. -- AFUDC, primarily associated with the Rodemacher Unit 3 project, contributed an additional $0.13 per share as compared to the first half of 2008. The equity portion of AFUDC associated with the Rodemacher Unit 3 project was up $0.10 per share, while the debt portion of AFUDC contributed $0.03 per share more than in the first half of 2008.
Cleco Midstream Resources' six months ended June 30, 2009 results -- down $0.10 per share year over year
Evangeline was down $0.05 per share for the first half of 2009 compared to the first half of 2008 primarily due to higher maintenance expenses largely related to a planned steam turbine major inspection outage during 2009. Acadia was down $0.04 per share for the first half of 2009 compared to the first half of 2008 primarily due to higher expenses from an unplanned outage at the facility during 2009. These decreases were partially offset by higher net revenue from Acadia's short-term tolling agreement with Cleco Power. Additional estimated interest costs related to an IRS audit reduced Midstream's results by $0.01 per share.
Other
Corporate earnings increased $0.05 per share in the year-to-year comparison primarily due to increases in the cash surrender values of corporate life insurance policies, lower interest charges resulting from the repayment of $100 million of senior notes in May 2008 and lower other net expenses.
Earnings Guidance
"We are reaffirming our 2009 earnings target in the range of $1.62 to $1.72 per share," Madison said. "Those targets assume normal weather for the remainder of the year and the continuation of our current rate plan through the in-service date of Rodemacher Unit 3. Additionally, the Cleco Power earnings target range accommodates in-service dates for Rodemacher Unit 3 from Sept. 30, 2009, through the end of 2009. Midstream's earnings estimate assumes continued performance by Evangeline's tolling counterparty and is based on assumptions about Acadia's plant operations and meeting the obligations under third-party forward sales agreements."
Strategic update:
Cleco Power
"Construction of Rodemacher Unit 3 is more than 90 percent complete, and as reported last quarter, the prerequisites for actual startup are ongoing," Madison said.
"On July 27, 2009, we notified the Administrative Law Judge that Cleco Power, along with the Louisiana Public Service Commission staff, and the intervenors in the case had made significant progress toward a full resolution of all issues in the case," Madison said. "We are pleased that our proposed rate plan has a target return on equity of 10.7 percent with sharing occurring after 11.3 percent. This settlement brings us one step closer to delivering on our growth strategy and will now be presented to the commission for approval. We hope to implement our new rate plan when Rodemacher Unit 3 begins commercial operation in the fourth quarter of 2009."
"Cleco Power's acquisition of 50 percent of the Acadia plant is progressing. We've finished our due diligence and signed the agreements to transfer the asset," Madison said. "The next step is to file for regulatory approvals. The acquisition is expected to be complete during the first quarter of 2010. Beginning January 2010, the agreements provide that Acadia will continue to operate the plant and serve Cleco Power under a tolling agreement covering 50 percent of the plant until the transaction is closed."
Midstream
"In addition to working on the Acadia-Cleco Power transaction, our Midstream subsidiary continues to work on selling the remaining capacity at Acadia either through a power purchase agreement, tolling agreement or asset sale in order to attain the maximum value from the asset," Madison said.
Cleco management will discuss the company's second-quarter 2009 results during a conference call scheduled for 11 a.m. Eastern time (10 a.m. Central time) Thursday, Aug. 6, 2009. 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 Second-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 276,000 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 ].
Financial tables follow:
CLECO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Thousands, except share and per share amounts) (UNAUDITED) For the three months ended June 30 2009 2008 ---------- ---------- Operating revenue Electric operations $ 195,651 $ 259,581 Other operations 8,712 12,758 Affiliate revenue 2,863 2,448 ---------- ---------- Operating revenue 207,226 274,787 Operating expenses Fuel used for electric generation 50,326 22,887 Power purchased for utility customers 56,547 151,949 Other operations 25,941 22,862 Maintenance 14,766 14,589 Depreciation 19,479 19,336 Taxes other than income taxes 8,300 9,455 ---------- ---------- Total operating expenses 175,359 241,078 ---------- ---------- Operating income 31,867 33,709 Interest income 271 1,258 Allowance for other funds used during construction 17,538 14,993 Equity loss from investees (3,125) (2,365) Other income 1,633 91 Other expense (480) (1,377) Interest charges Interest charges, including amortization of debt expenses, premium and discount, net of capitalized interest 20,150 14,947 Allowance for borrowed funds used during construction (6,421) (5,026) ---------- ---------- Total interest charges 13,729 9,921 ---------- ---------- Income before income taxes 33,975 36,388 Federal and state income tax expense 6,949 6,999 ---------- ---------- Net income 27,026 29,389 Preferred dividends requirements, net of tax 12 12 ---------- ---------- Net income applicable to common stock $ 27,014 $ 29,377 ========== ========== Average shares of common stock outstanding Basic 60,175,528 59,998,227 Diluted 60,451,665 60,168,947 Basic earnings per share From continuing operations $ 0.45 $ 0.49 Net income applicable to common stock $ 0.45 $ 0.49 Diluted earnings per share From continuing operations $ 0.45 $ 0.49 Net income applicable to common stock $ 0.45 $ 0.49 Cash dividends paid per share of common stock $ 0.225 $ 0.225 CLECO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Thousands, except share and per share amounts) (UNAUDITED) For the six months ended June 30 2009 2008 ---------- ---------- Operating revenue Electric operations $ 398,517 $ 469,462 Other operations 15,820 22,821 Affiliate revenue 5,825 5,054 ---------- ---------- Operating revenue 420,162 497,337 Operating expenses Fuel used for electric generation 138,629 68,423 Power purchased for utility customers 102,265 241,743 Other operations 50,892 45,138 Maintenance 25,325 24,702 Depreciation 38,613 38,686 Taxes other than income taxes 15,333 18,286 Gain on sales of assets - (99) ---------- ---------- Total operating expenses 371,057 436,879 ---------- ---------- Operating income 49,105 60,458 Interest income 682 2,875 Allowance for other funds used during construction 34,529 28,677 Equity loss from investees (14,876) (6,939) Other income 2,674 157 Other expense (1,332) (2,046) Interest charges Interest charges, including amortization of debt expenses, premium and discount, net of capitalized interest 41,466 29,265 Allowance for borrowed funds used during construction (12,634) (9,603) ---------- ---------- Total interest charges 28,832 19,662 ---------- ---------- Income before income taxes 41,950 63,520 Federal and state income tax expense 8,275 12,060 ---------- ---------- Net income 33,675 51,460 Preferred dividends requirements, net of tax 23 23 ---------- ---------- Net income applicable to common stock $ 33,652 $ 51,437 ========== ========== Average shares of common stock outstanding Basic 60,132,358 59,948,801 Diluted 60,279,903 60,068,682 Basic earnings per share From continuing operations $ 0.56 $ 0.86 Net income applicable to common stock $ 0.56 $ 0.86 Diluted earnings per share From continuing operations $ 0.56 $ 0.86 Net income applicable to common stock $ 0.56 $ 0.86 Cash dividends paid per share of common stock $ 0.450 $ 0.450 CLECO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Thousands) (UNAUDITED) At June 30, At Dec. 31, 2009 2008 ----------- ----------- Assets Current Assets Cash and cash equivalents $ 41,996 $ 97,483 Accounts receivable, net 86,998 78,314 Other current assets 270,800 290,582 ----------- ----------- Total Current Assets 399,794 466,379 Property, plant and equipment, net 2,161,603 2,045,286 Equity investment in investees 248,485 249,144 Prepayments, deferred charges and other 607,889 580,395 ----------- ----------- Total Assets $ 3,417,771 $ 3,341,204 ----------- ----------- Liabilities Current Liabilities Long-term debt due within one year $ 11,087 $ 63,546 Accounts payable 86,043 138,300 Other current liabilities 152,591 158,987 ----------- ----------- Total Current Liabilities 249,721 360,833 Deferred credits and other liabilities 859,742 812,687 Long-term debt, net 1,238,757 1,106,819 ----------- ----------- Total Liabilities 2,348,220 2,280,339 ----------- ----------- Shareholders’ Equity Preferred stock 1,029 1,029 Common shareholders’ equity 1,078,352 1,069,669 Accumulated other comprehensive loss (9,830) (9,833) ----------- ----------- Total Shareholders’ Equity 1,069,551 1,060,865 ----------- ----------- Total Liabilities and Shareholders’ Equity $ 3,417,771 $ 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, Cleco Power's pending rate case and Cleco Power's 2007 long-term request for proposal (RFP). 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 pending rate case, the results of Cleco Power's 2007 long-term RFP, the implementation of the Acadiana Load Pocket project, the impact of the global financial crisis, and other risks and uncertainties more fully described in the company's latest Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Actual results may differ materially from those indicated in such forward-looking statements.
