EXHIBIT 99.1
| Cleco Corporation |
NEWS RELEASE
|
Investor Contacts: |
|
|
Cleco Corporation: | Analyst Inquiries: | Media Contact: |
Kathleen F. Nolen | Dresner Companies | Cleco Corporation |
(318) 484-7687 | Kristine Walczak | Michael Burns |
Rodney J. Hamilton | (312) 726-3600 | (318) 484-7663 |
(318) 484-7593 |
For Immediate Release
Cleco Corp. Posts First Quarter 2004 Earnings of $0.27 per Share
PINEVILLE, La., May 5, 2004 - Cleco Corp. (NYSE, PCX: CNL) today reported first quarter 2004 earnings of $0.27 per diluted share, down from the $0.36 per share recorded in first quarter 2003.
The decrease in earnings primarily reflected higher expenses at Cleco Power. The earnings contribution from Cleco Midstream for the first quarter of 2004 was slightly below that recorded in the first quarter of 2003. Results at Cleco Evangeline LLC improved, but they were partially offset by losses at Perryville Energy Partners LLC.
Diluted EPS | ||
Three Months Ended March 31, | ||
|
| |
Subsidiary | 2004 | 2003 |
Cleco Power LLC | $0.25 | $0.33 |
Cleco Midstream Resources LLC | 0.05 | 0.06 |
Corporate and Other | (0.03) | (0.03) |
Earnings applicable to common stock | $0.27 | $0.36 |
"Our first-quarter results are within our anticipated range despite cost pressures from several areas," President and CEO David Eppler said. "Cleco Power revenue was strong, and both Acadia and Evangeline performed well. Just as important as the quarter's financial results was the extension by the Louisiana Public Service Commission (LPSC) of our rate stabilization plan for an additional 12 months. The plan now runs through September 2005.
"The extension provides us the time to thoroughly analyze offers we anticipate receiving through a request for proposals (RFP) for power supplies we plan to issue in June. We'll then compare those bids against several self-build projects we are considering. Our intent is to put together a balanced generation portfolio that provides our customers with reliable, low-cost power," Eppler said.
More
News Release
Page 2
Major Reconciling Items for First-Quarter EPS 2004 vs. 2003:
$0.36 |
| 2003 First-Quarter Diluted EPS | |
0.01 | Higher Cleco Power nonfuel revenue, net of customer refund accrual | ||
(0.05) | Higher Cleco Power nonfuel expenses | ||
(0.01) | Higher Cleco Power depreciation | ||
(0.01) | Higher Cleco Power interest expense | ||
(0.02) | Higher Cleco Power effective tax rate | ||
(0.01) | Lower contribution from Midstream generating projects | ||
|
|
| |
| $0.27 |
| 2004 First-Quarter Diluted EPS |
Cleco Power LLC
Cleco Power posted 2004 first-quarter earnings of $0.25 per share, $0.08 per share lower than the $0.33 per share recorded in the same period of 2003.
Cleco Power's overall nonfuel revenue increased by about $0.01 per share in the quarter-to-quarter comparison to 2003. Revenues benefited from customer growth, warmer-than-normal March 2004 weather, new energy management services that began in May 2003, and a renegotiated contract for additional ancillary services with a municipal customer. Offsetting those increases were lower revenues due to the mid-2003 renegotiation of rates for a large industrial customer and milder-than-normal January and February weather.
(Million kWh) | For the three months ended March 31, | ||
2004 | 2003 | Change | |
Electric Sales | |||
Residential | 822 | 805 | 2.1% |
Commerical | 406 | 394 | 3.0% |
Industrial | 660 | 658 | 0.3% |
Other retail | 134 | 134 | 0.0% |
Unbilled | (82) | (81) | 1.2% |
Total retail | 1,940 | 1,910 | 1.6% |
Sales for resale | 187 | 163 | 14.7% |
Total retail and wholesale customer sales | 2,127 | 2,073 | 2.6% |
Nonfuel expenses for Cleco Power were about $0.05 per share higher in the first quarter of 2004 than in the first quarter of 2003, mostly due to higher employee benefit costs, and professional services and insurance costs. Depreciation was $0.01 per share higher primarily due to property additions. Additionally, interest expense was $0.01 per share higher largely due to the issuance of senior notes in April 2003, partially offset by effects of the redemption of medium-term notes and the repayment of short-term bank lines.
Lastly, Cleco Power's first quarter 2004 earnings were about $0.02 per share lower due to a higher effective tax rate than in the first quarter of 2003. State tax expense increased in 2004 as a result of a net operating loss carryforward that was utilized during 2003.
News Release
Page 3
Cleco Midstream Resources LLC
Cleco Midstream earned $0.05 per share for the first quarter of 2004, $0.01 per share less than the $0.06 per share posted in the first quarter of 2003.
The Acadia project recorded earnings of $0.06 per share for the first quarter of 2004, up from $0.04 per share earned during the first quarter of 2003, primarily because the plant ran more and incurred lower operating and maintenance costs in the 2004 period.
Evangeline earned $0.02 per share for the first quarter of 2004. The plant recorded a loss of $0.07 per share during the first quarter of 2003 when the project experienced higher maintenance and depreciation costs due to a reassessment of the useful life of the facility's combustion turbine parts.
In accordance with requirements under Financial Accounting Standards Board (FASB) Interpretation No. 46R (FIN 46R --Consolidation of Variable Interest Entities), Cleco Evangeline LLC was deconsolidated from Cleco Corp.'s consolidated financial statements as of March 31, 2004. The deconsolidation was required under FIN 46R because under the long-term tolling agreement, the company expects to be reimbursed for more than 50 percent of Evangeline's variable expenses. Since the subsidiary was deconsolidated on March 31, revenues and expenses for the first quarter of 2004 were detailed on Cleco Corp.'s consolidated income statement. For future periods, the subsidiary's net results will be accounted for as equity income from investees. The subsidiary's assets and liabilities were not included on the March 31, 2004, Cleco Corp. balance sheet, but instead the corporation's investment in the project was accounted for as an equity investment in investees.
Prior to its Jan. 28, 2004, bankruptcy filing, Perryville posted a $0.03 per share loss, which is included in Cleco Corp.'s first quarter 2004 income statement. For the first quarter of 2003, Perryville had earnings of $0.09 per share. Following the bankruptcy filing, Perryville Energy Partners LLC and its holding company, Perryville Energy Holdings LLC (collectively, Perryville), were deconsolidated from Cleco Corp. As a result, no income or loss following the bankruptcy filing was recognized on Cleco's consolidated financial statements. For the months of February and March 2004, Perryville posted a $0.9 million loss, which was not included in the Cleco Corp. income statement for the quarter.
As a result of the deconsolidation of both the Perryville and Evangeline subsidiaries, all project-related debt (nonrecourse to the corporation) has been removed from Cleco Corp.'s balance sheet.
Other
Corporate and other expenses in the first quarter of 2004 were comparable to expenses during the first quarter of 2003.
Perryville Project on Schedule
The Perryville bankruptcy process continues on schedule. On April 23, the U.S. Bankruptcy Court for the Western District of Louisiana approved Perryville's asset sales agreement with Entergy. The parties still must obtain state and federal regulatory approvals of the transaction before the sale can be completed, and the company cannot be certain when or if those approvals will be obtained. In addition, other customary closing conditions must be satisfied or waived before the sale can be completed. In the meantime, the unit continues to perform well and is providing power to Entergy under an interim power purchase agreement.
News Release
Page 4
Cleco Power RFP Issued
In April, Cleco Power announced its intent to seek proposals for up to 1,000 megawatts of capacity to replace existing contracts and accommodate load growth, as well as 800 megawatts of capacity to replace older natural gas-fired units. Cleco made an informational filing with the LPSC on April 15 and expects to formally issue the RFP in late June.
Eppler said, "We are looking at all options to create the lowest cost, most reliable long-term power supply possible for our customers. We'll be analyzing fuel conversion opportunities at our existing gas plants, new asset construction, generating asset purchases, power contracts, as well as transmission investments. We hope to have recommendations in front of the LPSC for approval and certification in early 2005."
In March the LPSC extended Cleco's rate stabilization plan through September 2005 in order to allow Cleco Power the time needed to compile a broad, long-term integrated resource plan. The rate plan, which allows a maximum effective return on equity of 12.625 percent, was due to expire in September 2004.
Credit Facilities Renewed
On April 30, Cleco Corp. and Cleco Power finalized credit facilities totaling $275 million, replacing $185 million in expiring credit lines. "The $150 million Cleco Corp. facility is a three-year credit line, which effectively prefinances the $100 million corporate senior notes expiring in May 2005," Eppler said. "The expanded $125 million Cleco Power 364-day credit facility adds liquidity, which will be necessary should we proceed with any of the proposed investments under the integrated resource plan."
Annual Meeting
The company's annual meeting of shareholders was held in Alexandria, La., on April 23. At the meeting, shareholders elected four directors for three-year terms: Sherian G. Cadoria, retired brigadier general of the U.S. Army and president of Cadoria Speaker and Consultancy Service; Richard B. Crowell , member of the law firm of Crowell & Owens; Eppler; and W. Larry Westbrook, retired chief financial officer of Southern Company.
2004 Earnings Guidance Unchanged
Results for the first quarter of 2004 were in line with expectations previously provided by the company. Cleco is maintaining its 2004 earnings target of $1.25 to $1.35 per share. That target assumes no net income effect from the Perryville project. The target also assumes normal weather for utility power sales and continued performance of the tolling contracts at Acadia and Evangeline.
Cleco management will discuss the company's 2004 first-quarter results during a conference call scheduled for 11 a.m. EDT (10 a.m. CDT) Thursday, May 6, 2004. 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 "1st Quarter 2004 Earnings Conference Call."
News Release
Page 5
Cleco's businesses referred to in this news release are:
| Cleco Power LLC |
| Cleco Midstream Resources LLC Perryville Energy Partners, LLC; Perryville Energy Holdings, LLC |
| Other (Cleco Corporation; Cleco Support Group LLC, Cleco Innovations LLC; CLE Resources, Inc.) |
Cleco Corp. is an energy services company headquartered in Pineville, La. It operates a regulated electric utility that serves 264,000 customers across Louisiana. Cleco also operates a wholesale energy business that has approximately 2,100 megawatts of generating capacity, including the Perryville plant, a 718-megawatt plant. Perryville's sale to Entergy Louisiana Inc. is pending. For more information about Cleco, visit www.cleco.com.
Financial tables follow:
News Release
Page 6
CLECO CORPORATION | |||
For the three months ended March 31 | 2004 | 2003 | |
|
| ||
Operating revenue |
| ||
Electric operations | $ 149,379 | $ 138,866 | |
Tolling operations | 10,255 | 23,776 | |
Energy trading, net | (53) | (194) | |
Energy operations | 17,098 | 18,654 | |
Other operations | 6,910 | 7,258 | |
Affiliate revenue | 842 | - | |
Gross operating revenue | 184,431 | 188,360 | |
Electric customer credits | (721) | (911) | |
Total operating revenue | 183,710 | 187,449 | |
Operating expenses |
| ||
Fuel used for electric generation | 30,143 | 32,702 | |
Power purchased for utility customers | 55,109 | 42,596 | |
Purchases for energy operations | 15,950 | 17,768 | |
Operations and maintenance | 28,832 | 25,599 | |
Depreciation | 16,363 | 23,851 | |
Taxes other than income taxes | 10,104 | 9,783 | |
Total operating expenses | 156,501 | 152,299 | |
Operating income | 27,209 | 35,150 | |
Interest income | 375 | 677 | |
Allowance for other funds used during construction | 842 | 910 | |
Equity income from investees | 8,638 | 7,796 | |
Other income | 96 | 434 | |
Other expense | (478) | (1,398) | |
Income before interest charges | 36,682 | 43,569 | |
Interest charges |
| ||
Interest charges, including amortization of debt expenses, | 17,933 | 17,723 | |
Allowance for borrowed funds used during construction | (282) | (206) | |
Total interest charges | 17,651 | 17,517 | |
| |||
Net income before income taxes and preferred dividends | 19,031 | 26,052 | |
Federal and state income taxes | 5,653 | 8,239 | |
| |||
Net income before preferred dividends | 13,378 | 17,813 | |
Preferred dividends requirements, net | 499 | 477 | |
| |||
Net income applicable to common stock | $ 12,879 | $ 17,336 | |
News Release
Page 7
CLECO CORPORATION | ||||
For the three months ended March 31 | 2004 | 2003 | ||
| ||||
Average shares of common stock outstanding |
| |||
Basic | 46,916,535 | 47,068,584 | ||
Diluted | 49,266,592 | 49,485,666 | ||
| ||||
Basic earnings per share |
| |||
Net income applicable to common stock | $ | 0.27 | $ 0.37 | |
|
| |||
Diluted earnings per share |
|
| ||
Net income applicable to common stock | $ | 0.27 | $ 0.36 | |
|
| |||
Cash dividends paid per share of common stock | $ | 0.225 | $ 0.225 | |
News Release
Page 8
CLECO CORPORATION | |||
At March 31, | At March 31, | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ 80,108 | $ 91,929 | |
Account receivable, net | 48,094 | 59,407 | |
Other current assets | 83,170 | 94,847 | |
Total current assets | 211,372 | 246,183 | |
Property, plant and equipment, net | 1,052,702 | 1,569,393 | |
Equity investment in investee | 312,777 | 272,088 | |
Prepayments, deferred charges and other | 164,430 | 203,067 | |
Total assets | $1,741,281 | $2,290,731 | |
Liabilities | |||
Current liabilities | |||
Short-term debt | $ 116,076 | $ 337,617 | |
Accounts payable | 60,020 | 73,830 | |
Other current liabilities | 49,170 | 35,227 | |
Total current liabilities | 225,266 | 446,674 | |
Deferred credits and other liabilities | 463,420 | 388,762 | |
Long-term debt, net | 550,590 | 866,197 | |
Total liabilities | 1,239,276 | 1,701,633 | |
Shareholders' equity | |||
Preferred stock | 19,510 | 18,181 | |
Common stock | 486,214 | 573,778 | |
Other comprehensive income | (3,719) | (2,861) | |
Total shareholders' equity | 502,005 | 589,098 | |
Total liabilities and shareholder's equity | $1,741,281 | $2,290,731 | |
###
Please note: In addition to historical financial information, this news release contains forward-looking statements about future results and circumstances with respect to which there are many risks and uncertainties, 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 Midstream's facilities, the financial condition of the company's tolling agreement counterparties, the performance of the tolling agreements by such counterparties, the completion of the pending sale of the Perryville Plant, the resolution of damage claims against Mirant Corp. and certain of its subsidiaries, and the 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.
More