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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-15759
Cleco Corporation
(Exact name of Registrant as specified in its charter)
Louisiana 72-1445282
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 Donahue Ferry Road, Pineville, 71360-5226
Louisiana (Zip Code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (318) 484-7400
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -----------------------
Common Stock, $2.00 par value and associated New York Stock Exchange
Rights to purchase Preferred Stock Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
------------------- ---
Cumulative Preferred Stock, $100 Par
Value 4.50%
Convertible, Series of 1991
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports); and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_] .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
As of March 1, 2001, the aggregate value of the Registrant's voting stock
held by non-affiliates was $1,000,050,984. The Registrant's Cumulative
Preferred Stock is not listed on any national securities exchange, nor are
prices for the Cumulative Preferred Stock quoted on any national automated
quotation system; therefore, its market value is not readily determinable and
is not included in the foregoing amount.
As of March 1, 2001, there were 22,495,820 shares outstanding of the
Registrant's Common Stock, par value $2.00 per share.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Shareholders for the year
ended December 31, 2000 (2000 Annual Report to Shareholders), furnished to the
Securities and Exchange Commission pursuant to Rule 14a-3(c) under the
Securities Exchange Act of 1934, are filed as Exhibit 13 to this report and
incorporated by reference into Part I and Part II herein. Portions of the
Registrant's definitive Proxy Statement relating to the Annual Meeting of
Shareholders to be held on April 27, 2001, are incorporated by reference into
Part III herein.
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TABLE OF CONTENTS
Page
----
Disclosure Regarding Forward-Looking Statements......................... 1
PART I
Item 1. Business
General.................................................... 3
Operations................................................. 3
Regulatory Matters, Industry Development and Franchises.... 10
Item 2. Properties................................................. 16
Item 3. Legal Proceedings.......................................... 17
Item 4. Submission of Matters to a Vote of Security Holders........ 17
Executive Officers of the Company.......................... 18
PART II
Market for Registrant's Common Equity and Related
Item 5. Stockholder Matters........................................ 20
Item 6. Selected Financial Data.................................... 20
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 20
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 20
Item 8. Financial Statements and Supplementary Data................ 21
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure................................... 21
PART III
Item 10. Directors and Executive Officers of the Registrant......... 22
Item 11. Executive Compensation..................................... 22
Security Ownership of Certain Beneficial Owners and
Item 12. Management................................................. 22
Item 13. Certain Relationships and Related Transactions............. 22
PART IV
Exhibits, Financial Statement Schedules, and Reports on
Item 14. Form 8-K................................................... 23
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (this Report) includes "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact included in
this Report, including, without limitation, the statements under "Business--
Operations--Cleco Power--Fuel and Purchased Power, Power Purchases," "--
Natural Gas Supply," "Business--Operations--Cleco Power--Sales," "Regulatory
Matters, Industry Developments and Franchises--Industry Developments,"
"Business--Operations--Midstream," "Environmental Matters--Environmental
Quality--Air Quality," "Legal Proceedings," "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Results of
Operations--Earnings," "--Revenues and Sales--Cleco Power," "--Revenues and
Sales--Midstream," "--Fuel, Purchased Power and Purchases for Energy
Marketing--Cleco Power," "--Discontinued Operation," "--Financial Condition--
Cash Generation and Cash Requirements--Construction and Investment in
Subsidiaries Overview," "--Cleco Power Construction," "--Midstream
Construction and Investment in Subsidiaries," "--Industry
Developments/Customer Choice," "--Environmental Matters," and Notes D, O, Q, R
and S of the Notes to the Consolidated Financial Statements, contain forward-
looking statements. Included or incorporated by reference elsewhere in this
Report are forward-looking statements regarding available power, fuel supply,
sales growth, capital expenditures, Cleco Power's 1996 Louisiana Public
Service Commission (LPSC) settlement, the effect of certain recent Federal
Energy Regulatory Commission (FERC) regulations, development of electric
generating facilities, future legislative and regulatory changes affecting
electric utilities, future earnings, revenue recognition from the Evangeline
Tolling Agreement, the effects of the outcome of litigation and other legal
proceedings, efforts to transfer generation facilities from Cleco Power LLC
(Cleco Power) to Cleco Midstream Resources LLC (Midstream), the timing of the
sale of Utility Construction & Technology Solutions LLC (UtiliTech), capital
expenditures, sources of funds for capital expenditures, the timing of
completion of the Acadia Power Partners LLC (APP) project and the Perryville
Energy Partners LLC PEP project, the ultimate equity investment in APP and
PEP, future legislative and regulatory changes, the effect of certain recent
FERC regulations, environmental compliance costs, development of electric
generating facilities, future minimum operating lease rental payments and
other matters. Although Cleco Corporation (the Company) believes the
expectations reflected in such forward-looking statements are reasonable, such
forward-looking statements are based on numerous assumptions (some of which
may prove to be incorrect) and are subject to risks and uncertainties which
could cause the actual results to differ materially from the those indicated
in such forward-looking statements. Forward-looking statements have been and
will be made in written documents and oral presentations of the Company. Such
statements are based on management's beliefs as well as assumptions made by
and information currently available to management. When used in the Company's
documents or oral presentations, the words "anticipate," "estimate," "expect,"
"objective," "projection," "forecast," "goal" and similar expressions are
intended to identify forward-looking statements. In addition to any
assumptions and other factors referred to specifically in connection with such
forward-looking statements, factors that could cause the Company's actual
results to differ materially from those contemplated in any forward-looking
statements include, among others, the following:
Factors affecting utility operations such as unusual weather conditions;
catastrophic weather-related damage; unscheduled generation outages;
unusual maintenance or repairs; unanticipated changes to fuel costs, gas
supply costs, or availability constraints due to higher demand, shortages,
transportation problems or other developments; environmental incidents; or
electric transmission or gas pipeline system constraints;
Increased competition in the electric environment, including effects of
industry restructuring or deregulation, transmission system operation or
administration, retail wheeling or cogeneration;
Regulatory factors such as unanticipated changes in rate-setting
policies or procedures; recovery of investments made under traditional
regulation; and the frequency and timing of rate increases;
Financial or regulatory accounting principles or policies imposed by the
Financial Accounting Standards Board (FASB), the Securities and Exchange
Commission (SEC), the FERC, the LPSC or similar entities with regulatory or
accounting oversight;
Economic conditions, including inflation rates and monetary
fluctuations;
1
Changing market conditions and a variety of other factors associated
with physical energy and financial trading activities, including, but not
limited to, price, basis, credit, liquidity, volatility, capacity,
transmission, interest rate and warranty risks;
Availability or cost of capital resulting from changes in the Company,
interest rates, and securities ratings or market perceptions of the
electric utility industry and energy related industries;
Employee work force factors, including changes in key executives;
Legal and regulatory delays and other obstacles associated with mergers,
acquisitions, capital projects, reorganizations or investments in joint
ventures;
Cost and other effects of legal and administrative proceedings,
settlements, investigations, claims and other matters; and
Changes in federal, state or local legislature requirements, such as
changes in tax laws or rates, regulating policies, or environmental laws
and regulations.
The Company undertakes no obligation to update or revise any forward-
looking statements, whether as a result of changes in actual results, changes
in assumptions or other factors affecting such statements.
2
PART I
Item 1. BUSINESS
GENERAL
REORGANIZATION
Effective July 1, 1999, Cleco Utility Group Inc. (Utility Group)
reorganized into a holding company structure. This reorganization resulted in
the creation of a new holding company, Cleco Corporation (the Company), which
holds investments in several subsidiaries, including Cleco Power LLC
(successor to Utility Group), Cleco Midstream Resources LLC (Midstream) and
Utility Construction & Technology Solutions LLC (UtiliTech). The
reorganization had no impact on the Company's Consolidated Financial
Statements because the reorganization was accounted for similarly to a pooling
of interest.
Effective December 31, 2000, Utility Group merged into Cleco Power LLC
(Cleco Power), another wholly owned subsidiary of the Company. Immediately
prior to the merger, Cleco Power had only nominal assets or liabilities.
Pursuant to the merger, Cleco Power acquired all of the assets and assumed all
of the liabilities and obligations of Utility Group.
Cleco Power's predecessor was incorporated on January 2, 1935 under the
laws of the State of Louisiana. Cleco Power was organized on December 12, 2000
and contains the LPSC jurisdictional generation, transmission and distribution
electric utility operations serving the Company's traditional retail and
wholesale customers. Cleco Power serves approximately 249,000 customers in 63
communities and rural areas in a 14,000-square-mile region in the State of
Louisiana.
Midstream, organized on September 4, 1998 under the laws of the State of
Louisiana, operates competitive LPSC nonjurisdictional electric generation,
develops wholesale generation projects, provides personnel to operate power
plants and operates oil and natural gas production, energy marketing and
natural gas pipeline businesses. Midstream operates primarily in Louisiana and
Texas.
UtiliTech, organized on October 30, 1997 under the laws of the State of
Louisiana, provides utility engineering and line construction services to
municipal governments, rural electric cooperatives and investor-owned electric
companies. UtiliTech operates primarily in Louisiana, Arkansas, Texas and
Mississippi. On December 31, 2000, management decided to sell substantially
all of UtiliTech's assets and discontinue UtiliTech's operations after the
sale. The sale is expected to be finalized during the first quarter of 2001,
with all operations estimated to cease by March 31, 2001. Revenues and
expenses associated with UtiliTech are not shown in their respective line
items of the Company's Consolidated Statements of Income, but instead are
netted and shown as loss from operations from a discontinued operation.
The Company was incorporated on October 30, 1998 under the laws of the
State of Louisiana. At December 31, 2000, the Company employed 1,577 persons.
The Company's mailing address is P.O. Box 5000, Pineville, Louisiana 71361-
5000, and its telephone number is (318) 484-7400. The Company's home page on
the Internet's World Wide Web is located at http://www.cleco.com.
The Company, subject to certain limited exceptions, is exempt from
regulation as a public utility holding company pursuant to Section 3(a)(1) of
the Public Utility Holding Company Act of 1935 (1935 Act).
OPERATIONS
CLECO POWER
Certain Factors Affecting Cleco Power
As an electric utility, Cleco Power is affected, to varying degrees, by a
number of factors affecting the electric utility industry in general. These
factors include, among others, increasingly competitive business
3
conditions, the cost of compliance with environmental regulations and changes
in the federal and state regulation of the generation, transmission and sale
of electricity. For a discussion of various regulatory changes and competitive
forces affecting Cleco Power and other electric utilities, see "Regulatory
Matters, Industry Developments and Franchises--Industry Developments" below.
Power Generation
Cleco Power operates and either owns or has an ownership interest in three
steam electric generating stations, the Teche Power Station, the Rodemacher
Power Station (Rodemacher) and the Dolet Hills Power Station (Dolet Hills),
and a gas turbine, the Franklin Gas Turbine. Cleco Power is the sole owner of
Teche Power Station and Rodemacher Power Station Unit 1. Cleco Power owns a
50% interest in Dolet Hills Unit 1 and a 30% interest in Rodemacher Unit 2. At
December 31, 2000, Cleco Power's aggregate electric generating capacity was
1,366,900 kilowatts (kW). Cleco Power is the sole owner of the Franklin Gas
Turbine.
The following table sets forth certain information with respect to Cleco
Power's generating facilities.
Capacity
Year of At
Generating initial 12/31/2000 Type of fuel used
Generating Station Unit # operation (kW) for generation(1)
- ------------------ ---------- --------- ---------- -----------------
Franklin Gas Turbine....... 1973 7,000 gas
Teche Power Station........ 1 1953 23,000 gas
2 1956 48,000 gas
3 1971 367,000 gas/oil (standby)
Rodemacher Power Station... 1 1975 440,000 gas/oil
2 1982 156,900(2) coal/gas
Dolet Hills Power Station.. 1 1986 325,000(3) lignite
---------
Total Generating
Capability................ 1,366,900
=========
- --------
(1) When oil is used on a standby basis, capacity may be reduced.
(2) Represents Cleco Power's 30% interest in the capacity of Rodemacher Unit
2, a 523,000-kW generating unit.
(3) Represents Cleco Power's 50% interest in the capacity of Dolet Hills Unit
1, a 650,000-kW generating unit.
In February 1999, the LPSC approved the transfer of the existing Coughlin
Power Station assets out of the LPSC-regulated rate base of Cleco Power into
Cleco Evangeline LLC (Evangeline), an indirect wholly-owned subsidiary of the
Company. The actual transfer occurred in November 1999. In return for the
approval of the asset transfer, Cleco Power agreed to extend the terms of its
1996 rate settlement with the LPSC for an additional three years to 2004. See
"--Regulatory Matters Industry Developments and Franchises--Rates" for more
information about the LPSC settlement. The agreement also contains specific
provisions designed to hold Cleco Power's ratepayers harmless from negative
impacts that might result from the removal of the generating assets from our
rate base. In return, Cleco Power was authorized to transfer the generating
and transmission assets to Evangeline at their net book value of approximately
$9.8 million. This resulted in a reduction in Cleco Power's generating
capability of 334,000 kW.
The Company is exploring the possibility of transferring generation
facilities to Midstream. Management believes any potential transfer of LPSC
jurisdictional generation facilities to Midstream would be accompanied by
consumer safeguards for Cleco Power's retail customers. Management is unable
to predict whether it will be able to transfer any additional generation to
Midstream or what impact any such transfer would have on the Company's
financial condition or results of operations.
4
Fuel and Purchased Power
Changes in fuel and purchased power expenses reflect fluctuations in
generation fuel mix, fuel costs, availability of economic purchased power and
deferral of expenses for recovery from customers through fuel adjustment
clauses in subsequent months.
The following table sets forth, for the periods indicated, the percentages
of power generated from various fuels at Cleco Power's electric generating
plants, the cost of fuel used per kilowatt hour (kWh) attributable to each
such fuel and the weighted average fuel cost per kWh.
Lignite Coal Gas Fuel Oil Weighted
------------------ ------------------ ------------------ ------------------ average
Cost Cost Cost Cost cost per
per kWh Percent of per kWh Percent of per kWh Percent of per kWh Percent of kWh
Year (mills) generation (mills) generation (mills) generation (mills) generation (mills)
- ---- ------- ---------- ------- ---------- ------- ---------- ------- ---------- --------
2000.................... 15.56 37.0 15.07 16.8 46.78 45.7 43.18 0.5 29.88
1999.................... 15.74 28.4 14.90 17.2 27.45 54.3 -- -- 21.96
1998.................... 15.85 32.0 14.88 16.7 25.38 51.3 -- -- 20.57
1997.................... 14.85 36.7 17.06 19.1 29.85 44.2 -- -- 21.90
1996.................... 15.45 38.1 16.67 21.3 30.06 39.8 26.09 0.8 21.61
Power Purchases
If transmission capacity is available, Cleco Power purchases electric
energy from neighboring utilities and energy marketing companies when the
price of the energy purchased is less than Cleco Power's cost of generating
such energy from its own facilities or when it needs power to supplement its
own electric generation. Cleco Power has a long-term contract under which it
purchases energy from the Sabine River Authority which operates a
hydroelectric generating plant. In addition, Cleco Power entered into three
contracts for firm electric capacity and energy with Williams Energy Marketing
and Trading Company (Williams) and Dynegy Power Marketing, Inc. (Dynegy), for
605 MW of capacity in 2000, increasing to 760 MW of capacity in 2004. These
contracts were approved by the LPSC in March 2000 and expire in 2004.
In 2000 the amount of power purchased increased, compared to 1999, as a
result of the increased demand for electric energy and the reduction of Cleco
Power's generation capacity resulting from the transfer of Coughlin Power
Station from Cleco Power's regulated rate base in 1999 into Evangeline, which
repowered the plant. The following table sets forth the amounts of power
purchased by Cleco Power on the wholesale market for the years indicated.
% of Total
Million Energy
Period kWh Requirements
------ ------- ------------
2000................................................. 3,255 34
1999................................................. 2,359 27
1998................................................. 2,117 24
1997................................................. 1,924 24
1996................................................. 2,529 33
For information with respect to the Company's ability to currently pass
through changes in costs of fuel to its customers, see "Regulatory Matters,
Industry Developments and Franchises--Rates" below.
In future years, Cleco Power's generating facilities may not supply enough
electric power to meet its customers' growing demand (native load demand) and
Cleco Power may need to purchase additional generating capacity and/or
purchase power to satisfy these needs. Management expects to meet
substantially all of Cleco Power's native load demand through 2004 with Cleco
Power's own generation resources and the power purchase agreements discussed
above. Because of Cleco Power's location on the transmission grid, it relies
on one main supplier of electric transmission and is sometimes constrained as
to the amount of purchased power it can bring into its system. The three power
supply contracts with Williams and Dynegy discussed above are not expected to
be affected by such transmission constraints.
5
Natural Gas Supply
During 2000 Cleco Power purchased a total of 31,210 million British thermal
units (MMBtu) of natural gas for the generation of electricity. The annual and
average per-day quantities of gas purchased by Cleco Power from each supplier
are shown in the table below.
Average
Amount
2000 Purchased Percent
purchases per day of total
Natural gas supplier (MMBtu) (MMBtu) gas used
-------------------- --------- --------- --------
Amoco Natural Gas............................ 5,583 15.3 17.89
OneOk........................................ 3,825 10.5 12.26
Reliant Energy Services, Inc................. 3,571 9.8 11.44
LIG Chemical Company......................... 2,486 6.8 7.97
Exxon Corporation............................ 1,723 4.7 5.52
Others....................................... 14,022 38.4 44.92
------ ---- ------
Total...................................... 31,210 85.5 100.00
====== ==== ======
A wholly owned subsidiary of Midstream, CLE Intrastate Pipeline Company,
Inc. (CLE Intrastate), owns a series of natural gas interconnections with
Trunkline Gas Company, Columbia Gulf Transmission Co. and ANR Pipeline
Company. The pipeline interconnections have allowed Cleco Power to access
various additional natural gas supply markets, which helps to maintain the
competitiveness of Cleco Power's generating units.
Natural gas was available without interruption throughout 2000, although
the price of natural gas increased significantly during 2000 as compared to
1999 due to increased demand and decreased production. Cleco Power currently
meets, and expects to continue to meet, its natural gas requirements with
purchases on the spot market through daily, monthly and seasonal contracts
with various natural gas suppliers. However, future supplies to Cleco Power
remain vulnerable to disruptions due to weather events and transportation
disruptions. The potential for disruptions to Cleco Power has been decreased
by the addition of the CLE Intrastate interconnections. Nevertheless, large
boiler fuel users of natural gas, including electric utilities, generally have
low priority among gas users in the event pipeline suppliers are forced to
curtail deliveries due to inadequate supplies. As a result, supplies of
natural gas may become unavailable from time to time, or prices may increase
rapidly in response to temporary supply disruptions. Such events, though rare,
may require Cleco Power to shift its gas-fired generation to alternative fuel
sources, such as fuel oil, to the extent it has the capability to burn those
alternative fuels. Currently, Cleco Power anticipates that its alternative
fuel capability, combined with its solid-fuel generation resources, are
adequate to meet its fuel needs during any temporary interruption of natural
gas supplies.
Coal and Lignite Supply
Cleco Power uses coal fuel for generation at Rodemacher Unit 2. The
majority of the coal for Rodemacher Unit 2 is purchased from mines in Wyoming
under a long-term contract expiring in 2007 with Jacobs Ranch Coal Company.
The contract has been modified under price reopener procedures initiated in
early 1997. The pricing structure under the modified contract has been defined
through mid-2002. After purchasing a given annual quantity of base coal
(approximately 500,000 tons in 2000), Cleco Power has the right to purchase
coal from third parties in the spot market through competitive bidding.
Provisions for pricing and terms can again be renegotiated in early 2002 under
a contract reopener provision which expires on June 30, 2002. If negotiations
are not complete by the expiration date, the contract terminates unless the
parties have expressly agreed in writing to extend the negotiating period.
Management currently expects to complete negotiations before the expiration
date.
Cleco Power uses lignite fuel for generation at Dolet Hills Unit 1.
Substantially all of the lignite used to fuel Dolet Hills Unit 1 is obtained
under two long-term agreements. Cleco Power and Southwestern Electric Power
Company (SWEPCO), each a 50% owner of Dolet Hills Unit 1, have entered into
agreements pursuant to which each acquired an undivided 50% interest in the
other's leased and owned lignite reserves in northwestern
6
Louisiana. Cleco Power and SWEPCO have also entered into a long-term agreement
expiring in 2011 with the Dolet Hills Mining Venture (DHMV) for the mining and
delivery of such lignite reserves. These reserves are expected to provide a
substantial portion of the fuel requirements for the projected operating life
of Dolet Hills Unit 1. Cleco Power's minimum annual purchase requirement is
1,750,000 tons. The price of lignite delivered pursuant to the agreement is a
base price per ton, subject to escalation based on certain inflation indices,
plus specified "pass-through" costs. Additional spot lignite may be obtained
through competitive bidding. Cleco Power is currently engaged in litigation
involving its contract with DHMV. For information regarding the legal
proceedings, see "Legal Proceedings" in Item 3 of this Report.
Additionally, Cleco Power and SWEPCO have entered into a long-term
agreement expiring in 2011 with Red River Mining Co., a joint venture of the
North American Coal Corporation and Phillips Coal Company, which provides for
base contract purchases and spot purchases of lignite. Cleco Power's minimum
annual purchase requirement is 550,000 tons. The base lignite price under the
contract is a base price per MMBtu, subject to escalation, plus certain "pass-
through" costs, while the spot lignite price is determined through competitive
bidding.
The continuous supply of coal and lignite from the mining sources described
above may be subject to interruption due to adverse weather conditions or
other factors which may disrupt mining operations or transportation. At
December 31, 2000, Cleco Power's coal inventory at Rodemacher Unit 2 was
approximately 120,974 tons (about a 58-day supply), and Cleco Power's lignite
inventory at Dolet Hills Unit 1 was approximately 148,770 tons (about a 25-day
supply).
Oil Supply
Cleco Power stores fuel oil as an alternative fuel source. Rodemacher Power
Station has storage capacity for an approximate 75-day supply and other
generating stations have storage capacity totaling about a 20-day supply.
However, in accordance with Cleco Power's current fuel oil inventory
practices, at December 31, 2000 Cleco Power had between 5 to 10 days supply of
fuel oil stored at its generating stations. During 2000, approximately 2.2
million gallons of fuel oil were burned. Fuel oil was burned during 2000
because the cost of using fuel oil to generate electricity was lower than the
cost of using natural gas.
Sales
Cleco Power is a "public utility" engaged principally in the generation,
transmission, distribution and sale of electricity within Louisiana. For
further information regarding Cleco Power's generating stations and its
transmission and distribution facilities, see "--Power Generation" above and
"Properties--Cleco Power" in Item 2 of this Report.
Cleco Power's 2000 system peak demand occurred in August and was 1,839,000
KW. Sales and peak demand are affected and influenced by weather and are
generally highest during the summer air-conditioning and winter heating
seasons. In 2000, Cleco Power experienced warmer than normal summer weather
and the third coldest December on record in its service territory. For
information concerning the financial effects of seasonal demand on Cleco
Power's quarterly operating results, see Note T to the Consolidated Financial
Statements on page 60 of the 2000 Annual Report to Shareholders, which is
filed as Exhibit 13 to this Report and incorporated herein by reference.
Capacity reserve margin is the net capacity resources (either owned
capacity or purchased capacity) less native load demand divided by net
capacity resources. Cleco Power's capacity reserve margin is established by
the Southwest Power Pool (SPP) at 12%. A member of the SPP meets the capacity
reserve margin goal by submitting the forecasted native load demand and the
forecasted mix of net capacity resources to meet the forecasted native load
demand. In 2000, Cleco Power was deemed to have met the reserve requirements
established by the SPP. If capacity reserve requirements are not met, the SPP
can require higher capacity reserve requirements in subsequent years. Cleco
Power's actual capacity reserve margin for 2000 was 7.7%. Cleco Power expects
the peak demand on the system to grow at a compound annual rate of
approximately 2% to 3% over the
7
next five years. To meet the capacity reserve margin through 2004, Cleco Power
has purchased 605 MW of firm capacity and transmission service which began on
June 1, 2000, increasing to 760 MW in 2004. Cleco Power believes it can meet
its anticipated growth in customer demand by purchasing additional needed
capacity on the wholesale market. Future capacity needs may be met by
continuing to purchase power on the wholesale market.
Energy Marketing Operations
For information concerning energy marketing operations within Cleco Power,
see "Management's Discussion and Analysis of Financial Condition and Results
of Operations--Results of Operations--Revenues and Sales--Cleco Power" and "--
Fuel, Purchased Power and Purchases for Energy Marketing--Cleco Power," on
pages 18 through 21 of the 2000 Annual Report to Shareholders, which is filed
as Exhibit 13 to this Report and incorporated herein by reference.
MIDSTREAM
Midstream wholly owns six active limited liability companies which operate
mainly in Louisiana and Texas:
. Cleco Marketing & Trading LLC (CMT), which markets various energy
services and trades natural gas and power in several regional markets.
. Evangeline, which owns and operates a 775 MW non-LPSC jurisdictional
power plant.
. Cleco Generation Services LLC (GEN), which offers power station
operations, maintenance, and engineering services. Its main customers are
Cleco Power and Evangeline.
. Cleco Energy LLC (Energy), which itself and through its subsidiaries,
manages natural gas pipelines, natural gas production and natural gas
procurement primarily in Texas and Louisiana. During 2000, Midstream
increased its ownership interest in Energy from 98% to 100%.
. Acadia Power Holding LLC (APH), which owns 50% of Acadia Power Partners
(APP). APP is a joint venture with Calpine Corporation that is in the
process of constructing a 1,000 MW, combined cycle, natural gas, non-LPSC
jurisdictional power plant near Eunice, Louisiana. Commercial operations
are expected to begin mid-2002.
. Perryville Energy Holding LLC (PEH), which owns 50% of Perryville Energy
Partners (PEP). PEP is a joint venture with Mirant Corporation that is in
the process of constructing a 700 MW, combined cycle, natural gas, non-
LPSC jurisdictional power plant near Perryville, Louisiana. Commercial
operations of 150 MW in simple cycle are expected to begin mid-2001. Full
commercial operations in combined cycle is expected in mid-2002.
The following table sets forth certain information with respect to
Midstream's operating generating facilities.
Capacity Type of
Year At fuel
Generating of 12/31/00 used for
Generating Station Unit # repowering (kW) generation
- ------------------ ---------- ---------- -------- ----------
Evangeline Power Station.............. 6 2000 264,000 gas
7 2000 511,000 gas
-------
Total Generating Capability........... 775,000
=======
8
The following table sets forth certain information with respect to
Midstream's generating facilities currently under construction through joint
ventures.
Year of
Total planned Percentage Midstream portion projected Type of fuel
facility capacity Midstream of planned commercial used
Joint venture (kW) ownership capacity (kW) operation for generation
- ------------- ----------------- ---------- ----------------- ---------- --------------
Acadia Power Partners
LLC.................... 1,000,000 50% 500,000 2002 gas
Perryville Energy
Partners LLC........... 700,000 50% 350,000 2001(1) gas
--------- -------
Total Generating
Capability under
construction........... 1,700,000 850,000
- --------
(1) 150,000 kW is expected to begin commercial operations in mid-2001 in
simple cycle with the remaining capacity expected to begin commercial
operations in mid-2002 in combined cycle.
Midstream competes against regional and national companies which develop
non-LPSC jurisdictional power stations. CMT competes against regional energy
marketing companies. Energy competes against regional gas transportation and
gas marketing companies.
CMT's primary customers are energy producers, utilities, large commercial
and industrial firms, wholesale power and gas marketers, and municipalities
that buy or resell power to end-users. Revenues are primarily based upon the
demand for energy products compared with supply. Weather and customer mix
within the region primarily have a determination on the demand for energy
products. The number of power plants that are operational, the availability
and price of natural gas, and the available transmission capacity drive the
supply of energy products.
Evangeline has one customer, Williams, which is the counterparty to the
Evangeline Capacity Sale and Tolling Agreement (Evangeline Tolling Agreement).
Tolling revenues are primarily affected by the availability of the Evangeline
power plant and other operational characteristics of the plant.
Energy's revenues are primarily driven by the demand for natural gas, which
in turn is driven by the weather and the number of power stations, industrial
plants and commercial and residential customers, who use natural gas within
its region.
APP has a tolling agreement with Aquila Energy for 580 MW of capacity
starting on July 1, 2002 and continuing for 20 years. Under the tolling
agreement, Aquila Energy will supply the natural gas required to generate 580
MW and will own the electricity. APP expects to toll the remaining 420 MW
before commercial operations commence in mid-2002.
PEP expects to enter into a tolling agreement for the 150 MW of capacity
projected to be available in mid-2001. PEP also expects to toll the remaining
550 MW of capacity projected to be available in mid-2002.
At December 31, 2000, Midstream employed 138 people: three within
Evangeline, 20 within CMT, 45 within Energy, 51 within GEN and 19 at
Midstream.
For additional information concerning Midstream's operations, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Results of Operations--Revenues and Sales--Midstream," "Nonfuel
Operating Expenses and Income Taxes--All Segments, Excluding Discontinued
Operations," "--Financial Condition Cash Generation and Cash Requirements--
Midstream Construction and Investments in Subsidiaries," and the Notes to
Consolidated Financial Statements--Note L--Disclosures about Segments on pages
20, 21, 22, 25-26, and 53-54, respectively, of the 2000 Annual Report to
Shareholders, which is filed as Exhibit 13 to this Report and incorporated
herein by reference.
UTILITECH--DISCONTINUED OPERATION
UtiliTech provides utility engineering and line construction services to
municipal governments, rural electric cooperatives and investor-owned electric
companies. UtiliTech primarily operates in Louisiana, Texas, Arkansas and
Mississippi. The majority of UtiliTech's 2000 revenue came from the line
construction services.
9
On December 31, 2000, management decided to sell substantially all of
UtiliTech's assets and discontinue UtiliTech's operations after the sale. The
sale is expected to be finalized during the first quarter of 2001 with all
operations estimated to cease by March 31, 2001. Revenues and expenses
associated with UtiliTech are not shown in their respective line items of the
Company's Consolidated Statements of Income, but instead are netted and shown
as loss from operations from a discontinued operation.
In 2000, UtiliTech grew from 29 line construction crews to 45 line
construction crews and now employs a total of 259 persons. This growth
resulted in part from the purchase of an Alabama line construction business.
For information concerning UtiliTech's operations, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Results of Operations--Discontinued Operation," and the Notes to Consolidated
Financial Statements--Note L--Disclosures about Segments on pages 23, and 53-
54, respectively, of the 2000 Annual Report to Shareholders, which is filed as
Exhibit 13 to this Report and incorporated herein by reference.
REGULATORY MATTERS, INDUSTRY DEVELOPMENTS AND FRANCHISES
Rates
Retail electric operations of Cleco Power are subject to the jurisdiction
of the LPSC with respect to rates, standards of service, accounting and other
matters. Cleco Power is also subject to the jurisdiction of the FERC with
respect to certain aspects of its electric business, including rates for
wholesale service, interconnections with other utilities, and the transmission
of power. Periodically, Cleco Power has sought and received increases in base
rates from both the LPSC and the FERC to cover increases in operating costs
and costs associated with additions to generation, transmission and
distribution facilities.
Cleco Power's electric rates include fuel and purchased power cost
adjustment clauses which enable Cleco Power to adjust rates for monthly
fluctuations in the cost of fuel and short-term purchased power. Pretax income
from certain off-system sales to other utilities is passed on to customers
through a reduction in fuel cost adjustment billing factors. Fuel costs and
fuel adjustment billing factors are approved by the LPSC and the FERC. These
cost adjustments are based on costs from earlier periods which can result in
over- or under-recovery for the period in which the adjustment is made. Any
over- or under-recovery is corrected by an adjustment in later periods. As of
December 31, 2000, the net accumulated asset for under-recovery on sales
subject to the LPSC's jurisdiction was approximately $3.6 million.
The LPSC elected in 1993 to review the earnings of all electric, gas, water
and telecommunications utilities that it regulates to determine whether the
returns on equity of these companies were higher than returns that might be
awarded in the economic environment at that time. In 1996, the LPSC approved a
settlement of Cleco Power's earnings review, which lowered Cleco Power's
electricity rates. The terms of the settlement were to be effective for a
five-year period. In February 1999, the period was extended three years until
2004. For information regarding this settlement, see "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Financial
Condition--Retail Rates of Cleco Power" on pages 27-28 of the 2000 Annual
Report to Shareholders, which is filed as Exhibit 13 to this Report and
incorporated herein by reference.
The Company is exploring the possibility of transferring generation
facilities from Cleco Power to Midstream. Management believes any potential
transfer of LPSC jurisdictional generation facilities from Cleco Power to
Midstream would be accompanied by consumer safeguards for Cleco Power's retail
customers. Management is unable to predict whether it will be able to transfer
any additional generation from Cleco Power to Midstream or what impact any
such transfer would have on the Company's financial condition or results of
operations.
Franchises
Cleco Power operates under nonexclusive franchise rights granted by
governmental units, such as municipalities and parishes (counties), and
enforced by state regulation. These franchises are for fixed terms, which vary
from 10 years to 50 years. In the past, Cleco Power has been substantially
successful in the timely renewal of franchises as each reaches the end of its
term and expires.
10
A number of parishes have attempted in recent years to impose franchise
fees on retail revenues earned within the unincorporated areas Cleco Power
serves. If the parishes are ultimately successful, taxes other than income
taxes could increase substantially in future years.
For information on certain franchises affecting the Company, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Financial Condition--Franchises" on page 28 of the 2000 Annual
Report to Shareholders, which is filed as Exhibit 13 to this Report and
incorporated herein by reference.
Industry Developments
Technological improvements in recent years have somewhat lessened the
historical barriers to entry in the electric utility industry and have set in
motion statutory and regulatory changes aimed at increased competition in the
industry. Federal and state legislation and new regulatory initiatives
designed to restructure electricity markets will likely produce even greater
competition at both wholesale and retail levels in the future. The LPSC is
investigating whether retail choice is in the best interest of Louisiana
electric utility customers. In 2000 the LPSC staff developed a transition to
competition plan that was proposed to the LPSC. The staff's plan would allow
large industrial customers to have the opportunity to choose a power provider
starting in January 2003. The plan does not suggest a date for residential or
commercial customers. On January 19, 2001, the LPSC staff presented their
proposed competitive transition plan to the commissioners. All interested
parties were given 45 days to comment on different aspects of the plan. The
Company expects LPSC action on the plan in April 2001. Cleco Power and a
number of parties, including the other Louisiana electric utilities, certain
power marketing companies and various associations representing industry and
consumers, have been participating in electric industry restructuring
proceedings before the LPSC since 1997.
Several neighboring states have passed legislation providing for retail
choice by 2002. At the federal level, several bills, some with conflicting
provisions, have been introduced and were actively debated in the last few
years to promote a more competitive environment in the electric utility
industry although none have passed. Conversely, the troubled electric supply
situation experienced in California this past year has led many participants
in the industry to reexamine and question certain aspects of the restructuring
process. While a competitive environment continues to be espoused in many
markets, several states have modified or abandoned their restructuring efforts
or have asked for delays in implementing already passed rules or legislation.
Management expects the debate relating to customer choice and other related
issues to continue in legislative and regulatory bodies in 2001. At this time,
the Company cannot predict whether any legislation or regulation will be
enacted or adopted during 2001 and, if enacted, what form such legislation or
regulation would take.
Wholesale Electric Competition
The Energy Policy Act, enacted by Congress in 1992, significantly changed
U.S. energy policy, including regulations governing the electric utility
industry. The Energy Policy Act allows the FERC, on a case-by-case basis and
with certain restrictions, to order wholesale transmission access and to order
electric utilities to enlarge their transmission systems. The Act prohibits
FERC-ordered retail wheeling (i.e., opening up electric utility transmission
systems to allow customer choice of energy suppliers at the retail level),
including "sham" wholesale transactions. Further, under the Energy Policy Act,
a FERC transmission order requiring a transmitting utility to provide
wholesale transmission services must include provisions generally permitting
the utility to recover from the FERC applicant all of the costs incurred in
connection with the transmission services, including any enlargement of the
transmission system and any associated services.
In addition, the Energy Policy Act revised the 1935 Act to permit
utilities, including registered holding companies, and non-utilities to form
"exempt wholesale generators" without the principal restrictions of the 1935
Act. Under prior law, independent power producers were generally required to
adopt inefficient and complex ownership structures to avoid pervasive
regulation under the 1935 Act.
In 1996, the FERC issued Orders No. 888 and 889 requiring open access to
utilities' transmission systems. The open access provisions require FERC-
regulated electric utilities to offer third parties access to transmission
under terms and conditions comparable to the utilities' use of their own
systems. In addition, Order No. 888, as
11
amended, provides for the full recovery from a utility's departing customers
of wholesale stranded costs, to the extent such costs were prudently incurred
to serve wholesale customers and would go unrecovered if those customers used
open access transmission service and moved to another electricity supplier.
Order No. 888, as amended, also allows customers under existing wholesale
sales contracts to seek FERC approval to modify their contracts on a case-by-
case basis. Because of the "grandfather" provisions of Orders No. 888 and 889,
most of Cleco Power's existing transmission contracts are not affected. To
date, the orders have not had a material impact on Cleco Power's operations or
financial condition.
In 1999, the FERC issued Order No. 2000, which further defines the
operation of utilities' transmission systems. This order establishes a general
framework for all transmission-owning entities in the nation to voluntarily
place their transmission facilities under the control of an appropriate
Regional Transmission Organization (RTO). Although participation is voluntary,
the FERC has made it clear that any jurisdictional entity not participating in
an RTO will be subject to further regulatory directives. Current objectives
state that all electric utilities which own, operate or control interstate
transmission facilities should participate in an RTO that will be operational
no later than December 15, 2001. On October 16, 2000, Cleco Power submitted a
filing with the FERC stating it will join the SPP RTO, either as a member of
the SPP Independent System Operator (ISO) or as part of Entergy's transmission
company, by December 15, 2001. The decision will be made once the details of
the transmission companies are finalized. The transfer of control of Cleco
Power's transmission facilities to an RTO has the potential to materially
affect Cleco Power's results of operations and financial condition.
Wholesale energy markets, including the market for wholesale electric
power, have been competitive and are becoming even more so as the number of
participants in these markets increases as a result of enactment of the Energy
Policy Act and the regulatory activities of the FERC.
For a discussion of regulatory accounting relating to the Company's
electric utility operations, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Financial Condition--Regulatory
Matters" on pages 28-29 of the 2000 Annual Report to Shareholders, which is
filed as Exhibit 13 to this Report and incorporated herein by reference.
Retail Electric Competition
Currently, the LPSC does not provide exclusive service territories for
electric utilities under its jurisdiction. Instead, retail service is obtained
through the long-term, nonexclusive franchises described above under "--
Franchises". The LPSC uses a "300 foot rule" for determining the supplier for
new customers. The application of this rule has led to competition with
neighboring utilities for retail customers at the borders of Cleco Power's
service areas. Cleco Power also competes in its service area with suppliers of
alternative forms of energy, some of which may be less costly than electricity
for certain applications. Cleco Power could experience some competition for
electric sales to industrial customers in the form of cogeneration or from
independent power producers. However, Cleco Power believes that its rates, and
the quality and reliability of its service, place it in a favorable
competitive position in current retail markets, as it has ranked number one in
reliability among electric utility companies in Louisiana in 1998 and 1999
based upon annual filings with the LPSC. The rankings for 2000 have not been
released by the LPSC. For information on retail electric competition affecting
Cleco Power, see "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Financial Condition--Industry Developments/Customer
Choice" on pages 26-27 of the 2000 Annual Report to Shareholders, which is
filed as Exhibit 13 to this Report and incorporated herein by reference.
Legislative and Regulatory Changes and Matters
Various federal and state legislative and regulatory bodies are considering
a number of issues in addition to those discussed above that will shape the
future of the electric utility industry. Such issues include, among others:
. deregulation of retail electricity sales;
. the ability of electric utilities to recover stranded costs;
. the repeal or modification of the 1935 Act;
12
. the unbundling of vertically integrated electric utility companies into
separate business segments or companies (i.e., generation, transmission,
distribution and retail energy service);
. the role of electric utilities, independent power producers and
competitive bidding in the construction and operation of new generating
capacity; and
. the pricing of transmission service on an electric utility's transmission
system.
The Company is unable, at this time, to predict the outcome of such issues
or their effect on the Company's financial position, results of operations or
cash flows.
For information on certain regulatory matters and regulatory accounting
affecting the Company, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Financial Condition--Regulatory Matters"
on pages 28-29 of the 2000 Annual Report to Shareholders, which is filed as
Exhibit 13 to this Report and incorporated herein by reference.
ENVIRONMENTAL MATTERS
Environmental Quality
The Company is subject to numerous laws and regulations administered by
federal, state and local authorities to protect the environment. These
statutory and regulatory provisions impose various substantive requirements,
the violation of which may result in substantial fines and penalties.
Environmental requirements continue to increase as a result of new
legislation, administrative actions and judicial interpretations. Therefore,
the precise future effects of existing and potential requirements are
difficult to determine. During 2000, the Company's capital expenditures
related to environmental compliance were about $4.3 million, due largely to
the installation of air pollution abatement equipment at the Evangeline power
plant. Expenditures related to environmental compliance are estimated to total
approximately $0.7 million in 2001.
Air Quality
The State of Louisiana regulates emissions from each of the Company's
generating units through regulations issued by the Air Quality Division (AQD)
of the Louisiana Department of Environmental Quality (LDEQ). In addition, the
AQD implements certain programs initially established by the federal
Environmental Protection Agency (EPA). The AQD establishes standards of
performance or requires permits for certain generating units in Louisiana. All
of the Company's generating units are subject to these requirements.
The federal Clean Air Act Amendments of 1990 (the Act) established a
regulatory program to address the effects of acid rain and imposed
restrictions on sulfur dioxide (SO\\2\\) emissions from certain generating
units. The Act essentially requires that certain generation stations, such as
those owned by Cleco Power and Evangeline, must hold a regulatory "allowance"
for each ton of SO\\2\\ emitted beginning in the year 2000. The EPA is
required to allocate a set number of allowances to each affected unit based on
its historic emissions. As of December 31, 2000, it is expected that Cleco
Power has sufficient allowances for 2001. Evangeline will be required to
purchase allowances for 2001. The amount of allowances to be purchased in 2001
will be determined by the amount of generation at the plant.
The Act also requires the EPA to revise nitrogen oxides (NOx) emission
limits for existing coal-fired boilers. In November 1996, the EPA finalized
rules lowering the NOx emission rate for certain boilers, including Rodemacher
Unit 2 and Dolet Hills Unit 1, which are owned by Cleco Power. Under this
rule, Rodemacher Unit 2 and Dolet Hills Unit 1 would have had to meet this new
emission rate by January 1, 2000. The rule also allows an option to "early
elect," that is, achieve compliance with a less restrictive NOx limit
beginning January 1, 1997. Cleco Power exercised this option in December 1996.
Early election protects Cleco Power from any further reductions in the NOx
permitted emission rate until 2008. Rodemacher Unit 2 and Dolet Hills Unit 1
were in compliance with the NOx early election limits in 1998, 1999 and 2000
and are expected to continue to be in compliance in 2001 without undergoing
significant capital improvements. Significant future reductions in NOx
emission limits may require modification of burners or other capital
improvements at either or both of the units.
13
NO\\x\\ emissions from Evangeline's generating unit fall well within EPA
limits, as the unit uses a combination of natural gas as a fuel and modern
turbine technology that reduces NOx emissions to immaterial levels.
Air and water permits issued on or about July 13, 2000, by the LDEQ to APP
were judicially appealed by various citizens and environmental action groups
(APP-related petitioners) in early August 2000. APP is engaged in the
developmental stages of the construction, ownership and operation of a new
electric generating plant near Eunice, Louisiana. APP-related petitioners
filed their appeals to the air and water permits in the 19th Judicial District
Court in Baton Rouge, Louisiana. APP-related petitioners asked the court to
reverse the air and water permits issued by the LDEQ and allege that LDEQ's
decision to issue the permits was arbitrary, capricious and procedurally
inadequate. APP-related petitioners have also asked the court to stay APP's
power plant construction activities pending resolution of the litigation. APP
has denied APP-related petitioners' allegations and is vigorously defending
the validity of the permits issued to it by the LDEQ. The permits could be
upheld, reversed, or remanded in whole or in part. If the permits were to be
reversed in material part by the court, APP may be required to cease its
construction of the generating plant temporarily or permanently, depending on
the nature and details of the reversal. If the court were to remand the
permits, without reversing them, to the LDEQ for further proceedings, APP's
continuation of construction of the generating plant may be jeopardized,
depending upon the nature and details of the remand. Oral arguments on the
appeal of these permits were held on February 5, 2001. On February 23, 2001,
the Court issued its written response following the February 5, 2001 hearing.
In its written response, the Court ordered the matter remanded to the LDEQ but
did not vacate the permits or halt construction. The precise issues that LDEQ
must take up on remand will not be determined until the Court issues its
judgement on its February 23, 2001 ruling which has not yet occurred. The
parties are awaiting the court's ruling. Although the ultimate outcome of this
action cannot be predicted at this time, based on information currently
available to the Company, management does not believe the outcome of this
action will have a material adverse effect on the Company's financial
condition or results of operations.
An air permit issued by the LDEQ on August 25, 2000, to PEP, a joint
venture in which Midstream has a 50 percent interest with Mirant Corporation,
was judicially appealed by various citizens and community action groups (PEP-
related petitioners). PEP is engaged in the developmental stages of the
construction, ownership and operation of a new electric generating plant near
Perryville, Louisiana. PEP-related petitioners filed their appeal of the air
permit in the 19th Judicial District Court in Baton Rouge, Louisiana, alleging
that the issuance of the air permit violates the Louisiana Constitution, the
public trustee doctrine and state and federal environmental laws. PEP-related
petitioners have asked that the district court reverse the permit decision or
remand the permit decision to require the LDEQ address certain alleged
deficiencies in its issuance of the permit and have also requested that the
court stay the air permit. PEP denies PEP-related petitioners' allegations and
is vigorously defending the validity of the permit issued to it by the LDEQ.
The permit could be upheld, reversed or remanded, in whole or in part. In the
event of a reversal or remand by the court, PEP's construction of the
generating plant may be delayed, depending upon the nature and details of the
reversal or remand. A hearing date on PEP-related petitioners' challenge to
the permit has not yet been scheduled with the court. Although the ultimate
outcome of this action cannot be predicted at this time, based on information
currently available to the Company, management does not believe the outcome of
this action will have a material adverse effect on the Company's financial
condition or results of operations.
Water Quality
The Company has received from the EPA all National Pollutant Discharge
Elimination System (NPDES) permits required under the Clean Water Act for
discharges from its five generating stations. NPDES permits have fixed dates
of expiration, and the Company has applied for renewal of these permits within
the applicable time periods. The Office of Water Resources of the LDEQ
requires facilities which discharge wastewater into Louisiana waters to be
permitted under the Louisiana Pollution Discharge Elimination System (LPDES).
The Company has applied for and received LPDES permits for its five generating
stations.
The federal Clean Water Act, which was passed in 1972, contains provisions
requiring the EPA to evaluate all bodies of water within its jurisdiction to
determine if they meet water quality standards and to establish a program to
bring non-compliant bodies of water into compliance with the standards. Given
the enormous number of bodies of water required to be evaluated and the
complexity of standards set forth in the Clean Water Act, the
14
EPA has not completed the requirements. In the last few years, environmental
groups have sued the EPA over the failure to address their requirements of the
Clean Water Act. In October 1999, the EPA received a federal court order to
develop and implement Total Maximum Daily Loadings (TMDL's) for all impacted
streams in Louisiana. The TMDL's will restrict the amount of specific covered
pollutants which may be discharged under revised permits which will
incorporate the limitations of TMDL. The EPA has released TMDLs for copper,
oxygen demanding substances and nutrients none of which have had a material
impact on the Company. The Company is evaluating the potential impact of
current and future TMDL limitations to its facilities.
For the upcoming session of the Louisiana Legislature, a proposed bill,
Senate Bill 1, has been filed for consideration. The bill institutes a process
by which all new industrial and agricultural users of groundwater must apply
for and obtain permits to pump groundwater if their wells have a maximum
potential flow rate of one million gallons per day or more. If the bill
becomes law, it will be effective prior to the date APP's generating plant is
completed and operating. In its current form, the draft bill may require APP
to apply for and obtain a permit for the wells the plant will use. If APP were
required to apply for a permit under the bill it is possible that APP would
not be successful in obtaining the permit. Although it cannot be predicted
whether the bill will be adopted, or what final form the bill may take,
Management believes that if the bill becomes law it will not have a material
adverse effect on the Company's financial condition or results of operations.
Solid Waste Disposal
The Solid Waste Division (SWD) of the LDEQ has adopted regulations and a
permitting system for the management and disposal of solid waste generated by
power stations. The Company has received all required permits from the SWD for
the on-site disposal of solid waste generated at its generating stations.
Hazardous Waste Generation
The Company produces certain wastes at its five generating stations and at
other locations that are classified as hazardous. The Hazardous Waste Division
of the LDEQ regulates these wastes and has issued identification numbers to
the sites where such wastes are produced. The Company does not treat, store or
dispose of these wastes on-site; therefore, no permits are required. All
hazardous wastes produced by the Company are disposed of at federally
permitted hazardous waste disposal sites.
Toxics Release Inventory
The Toxics Release Inventory (TRI) is a part of the Emergency Planning and
Community Right to Know Act and is administered by the EPA. The TRI is an
annual reporting requirement for industrial facilities on about 650 substances
they release into air, water and land. The TRI ranks companies based on how
much of a particular substance they release on a state level and a parish
(county) level. The Company was exempt from the reporting requirements of the
TRI until the EPA added seven new industry groups, including electric utility
facilities to the TRI in May 1997. The Company submitted timely TRI reports on
its 1998 activities and the TRI rankings were made publicly available in 2000.
The rankings do not result in any federal or state penalties and did not cause
significant adverse public perceptions of the Company. Management is aware of
the potential adverse effects and is continuing to monitor the TRI process.
Management is currently taking steps to protect against possible negative
public perceptions of the Company as a result of the TRI such as increasing
the recycling of fly ash at Dolet Hills.
Electric and Magnetic Fields
The possibility that exposure to electric and magnetic fields (EMFs)
emanating from electric power lines, household appliances and other electric
devices may result in adverse health effects or damage to the environment has
been a subject of recent public attention. Cleco Power funds research on EMFs
through various organizations. The scientific research conducted to date
concerning the effects of EMFs has not led to any definitive results, but
research is continuing. Lawsuits alleging that the presence or use of electric
power transmission and distribution lines has an adverse effect on health
and/or property values have arisen in several states against electric
utilities and others.
Midstream does not own any electric power lines.
15
Customers
No customer accounted for 10% or more of the Company's consolidated
revenues in 2000, 1999 or 1998. Additional information regarding the Company's
sales and revenues is set forth in "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Results of Operations" on pages
18-20 of the 2000 Annual Report to Shareholders, which is filed as Exhibit 13
to this Report and incorporated herein by reference.
Construction and Financing
For information on the Company's construction program, financing and
related matters, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Financial Condition--Cash Generation and
Cash Requirements" on pages 24-26 of the 2000 Annual Report to Shareholders,
which is filed as Exhibit 13 to this Report and incorporated herein by
reference.
Item 2. PROPERTIES
CLECO POWER
All of Cleco Power's electric generating stations and all other electric
operating properties are located in the State of Louisiana. Cleco Power
considers all of its properties to be well maintained, in good operating
condition and suitable for their intended purposes.
Electric Generating Stations
As of December 31, 2000, Cleco Power either owned or had an ownership
interest in three steam electric generating stations and a gas turbine with a
combined electric generating capacity of 1,366,900 kW. For additional
information regarding Cleco Power's generating facilities, see "Operations--
Cleco Power--Power Generation" in Item 1 of this Report.
Electric Substations
As of December 31, 2000, Cleco Power owned 87 transmission substations and
313 distribution substations.
Electric Lines
As of December 31, 2000, Cleco Power's transmission system consisted of
approximately 67 circuit miles of 500 kilovolt (kV) lines; 462 circuit miles
of 230 kV lines; 661 circuit miles of 138 kV lines; and 17 circuit miles of 69
kV lines. Cleco Power's distribution system consisted of approximately 2,256
circuit miles of 34.5 kV lines and 12,414 circuit miles of other lines.
General Properties
Cleco Power owns various properties, which include a seven-story
headquarters office building, regional offices, a central warehouse, service
centers, telecommunications equipment and other facilities owned for general
purposes.
Title
Cleco Power's electric generating plants and certain other principal
properties are owned in fee. Electric transmission and distribution lines are
located either on private rights-of-way or along streets or highways by public
consent.
16
Substantially all of Cleco Power's property, plant and equipment is subject
to a lien securing obligations of Cleco Power under an Indenture of Mortgage,
which does not impair the use of such properties in the operation of its
business.
MIDSTREAM
Midstream considers all of its properties to be well maintained, in good
operating condition and suitable for their intended purposes.
Electric Generation
As of December 31, 2000, Midstream owned one steam electric generating
station (Evangeline) with an electric generating capacity of 775,000 kW. In
addition as of such date, Midstream had 850,000 kW of net generating capacity
under construction through APP and PEP.
Oil and Gas Related
As of December 31, 2000, Midstream had an ownership interest in 343 miles
of gas gathering and transmission pipeline in Texas and Louisiana as well as
oil and gas producing properties in Texas.
Title
Midstream's assets are owned in fee. Evangeline is subject to a lien
securing obligations under an Indenture of Mortgage, which does not impair the
use of such properties in the operation of its business. Various other
properties are also subject to mortgages associated with the debt used to
acquire such properties.
UTILITECH--DISCONTINUED OPERATION
UtiliTech owns various line construction equipment located mainly within
Louisiana, but such equipment is also utilized in Arkansas, Texas and
Mississippi. UtiliTech considers all of its properties to be well maintained,
in good operating condition and suitable for their intended purposes.
Title
UtiliTech's assets are owned in fee.
Item 3. LEGAL PROCEEDINGS
For information on legal proceedings affecting the Company, see Notes to
Consolidated Financial Statements--Note P--Proceedings before the LPSC,--Note
Q--Legal Proceeding: Fuel Supply--Lignite and--Note S--Commitments and
Contingencies on pages 56, 57 and 58-59, respectively, of the 2000 Annual
Report to Shareholders, which is filed as Exhibit 13 to this Report and
incorporated herein by reference.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders of the
Company during the fourth quarter of 2000.
17
EXECUTIVE OFFICERS OF THE COMPANY
The names of the executive officers of the Company, their positions held,
five-year employment history, ages and years of service as of December 31,
2000, are presented below. Executive officers are appointed annually to serve
for the ensuing year or until their successors have been appointed.
Name of Position and Five-Year
Executive Employment History
- --------- ----------------------
David M. Eppler................ President and Chief Executive Officer since
May 2000; President and Chief Operating
Officer from January 1999 to May 2000;
Executive Vice President and Chief Operating
Officer from July 1997 to January 1999;
Executive Vice President from January 1997 to
July 1997; Vice President--Power Supply and
Energy Transmission from July 1995 to January
1997. (Age 50; 19 years of service)
Thomas J. Howlin............... Senior Vice President of Finance and Chief
Financial Officer since July 25, 1997; Vice
President--Finance and Chief Financial
Officer from July 14, 1997 to July 25, 1997.
Vice President and Chief Financial Officer--
TransAmerican Natural Gas Corporation from
April 1995 to March 1997. (Age 52; 3 years of
service)
Catherine C. Powell............ Senior Vice President of Employee and
Corporate Services since July 1997; Vice
President--Employee and Corporate Services
from July 1995 to July 1997. (Age 45; 9 years
of service)
Darrell J. Dubroc.............. Sr. Vice President of Generation Services
since December 1999; Vice President--
Generation Services from July 1997 to
December 1999; General Manager--Wholesale
Merchant Operations from July 1996 to July
1997; Manager--Regulatory Affairs and
Business Development from March 1995 to July
1996. (Age 39; 15 years of service)
Jeffrey W. Hall................ Vice President of Retail Energy Services
since July 1997; General Manager--Customer
Revenue from July 1996 to July 1997;
Manager--Public Affairs from October 1995 to
July 1996. (Age 49; 19 years of service)
Mark H. Segura................. Sr. Vice President of Utility Operations
since April 1999; Vice President--
Distribution Services from July 1997 to April
1999; General Manager--Distribution Services
from July 1996 to July 1997; Manager--Stores
and Transformer Management from October 1993
to July 1996. (Age 42; 16 years of service)
R. Russell Davis............... Vice President and Controller since June
2000. Controller of Central and South West
Services, Inc. a subsidiary service company
of Central & South West Corp (CSW) and
Controller of CSW's four US electric utility
operating companies from 1994 to June 2000.
(Age 44; 1 year of service)
18
Name of Position and Five-Year
Executive Employment History
- --------- ----------------------
Judy P. Miller................. Assistant Controller since December 2000;
Acting Controller from February 2000 to June
2000; Manager--Internal Audit from May 1998
to February 2000; Assistant Corporate
Secretary from April 1995 to May 1998. (Age
43; 17 years of service)
Michael P. Prudhomme........... Secretary since July 2000; Secretary-
Treasurer from January 1994 to July 2000.
(Age 57; 31 years of service)
Larry R. Wells................. Vice President of Transmission Services since
April 1999; General Manager--Transmission
Services from July 1996 to April 1999;
General Manager--Transmission Engineering and
Construction from October 1993 to July 1996.
(Age 58; 34 years of service)
George W. Bausewine............ Vice President of Strategic and Regulatory
Affairs since July 2000; General Manager--
from 1997 to July 2000; Director--Strategic
Planning from 1993 to 1997. (Age 45; 14 years
of service)
Kathleen F. Nolen.............. Treasurer since December 2000; Assistant
Treasurer from April 1999 to December 2000;
Manager--Purchasing from October 1993 to
April 1999. (Age 40; 17 years of service)
Kenneth D. Nolley, Sr.......... Assistant Treasurer since December 2000;
Financial Manager of Cleco ConnexUs LLC from
March 2000 to December 2000; Counterparty
Credit Manager with Cleco Support Group LLC
from October 1998 to March 2000; Assistant
Vice-President & Commercial Lender with
Rapides Bank/Bank One from September 1995 to
October 1998. (Age 32; 2 years of service)
19
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock is listed for trading on the New York Stock
Exchange (NYSE) and the Pacific Stock Exchange. For information concerning the
high and low sales prices for the Company's common stock as reported on the
NYSE Composite Tape and dividends paid per share during each calendar quarter
of 2000 and 1999, see the Notes to Consolidated Financial Statements--Note T--
Miscellaneous Financial Information (Unaudited) on page 60 of the 2000 Annual
Report to Shareholders, which is filed as Exhibit 13 to this Report and
incorporated herein by reference.
Subject to the prior rights of the holders of the respective series of the
Company's preferred stock, such dividends as determined by the board of
directors of the Company may be declared and paid on the common stock from
time to time out of funds legally available therefor. The provisions of the
Company's charter applicable to preferred stock and certain provisions
contained in the debt instruments of the Company under certain circumstances
restrict the amount of retained earnings available for the payment of
dividends by the Company. The most restrictive covenant requires that common
shareholders' equity be not less than 30% of total capitalization, including
short-term debt. At December 31, 2000, approximately $85.1 million of retained
earnings were not restricted. On January 26, 2001, the Company's Board of
Directors declared a quarterly dividend of $0.425 per share, which dividend
was paid on February 15, 2001 to common shareholders of record on February 5,
2001.
As of March 1, 2001, there were 9,289 holders of record of the Company's
common stock, and the closing price of the Company's common stock as reported
on the NYSE Composite Tape was $45.05 per share.
Item 6. SELECTED FINANCIAL DATA
The information set forth in "Selected Financial Data (Unaudited)" on page
62 of the 2000 Annual Report to Shareholders is incorporated herein by
reference; such information is filed as Exhibit 13 to this Report. This
information should be read in conjunction with the Consolidated Financial
Statements and the related Notes thereto set forth on pages 33 through 60 of
the 2000 Annual Report to Shareholders, which is filed as Exhibit 13 to this
Report and incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information set forth in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 17 through 32 of the
2000 Annual Report to Shareholders is incorporated herein by reference; such
information is filed as Exhibit 13 to this Report.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For information concerning the quantitative and qualitative disclosures
about market risk, see "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Financial Condition-- Financial Risk
Management" on pages 29 through 31 of the 2000 Annual Report to Shareholders,
which is filed as Exhibit 13 to this Report and incorporated herein by
reference.
20
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information set forth on pages 33 through 60 of the 2000 Annual Report
to Shareholders is incorporated herein by reference; such information is filed
as Exhibit 13 to this Report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
21
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set forth, (i) under the caption "Proposal Number 1--
Election of Three Class I Directors" on pages 5 and 6 of, and (ii) under the
caption "Section 16(a) Beneficial Ownership Reporting Compliance" on page 10
of the Company's definitive Proxy Statement dated March 16, 2001 relating to
the Annual Meeting of Shareholders to be held on April 27, 2001, filed with
the SEC pursuant to Regulation 14A under the Securities Exchange Act of 1934
(2001 Proxy Statement), is incorporated herein by reference. See also
"Executive Officers of the Registrant" on pages 23 through 25 of this Report.
Item 11. EXECUTIVE COMPENSATION
The information set forth, (i) under the subcaptions "Organization of the
Board of Directors" and "Compensation of the Board of Directors" under the
caption "Proposal Number 1--Election of Three Class I Directors" on pages 6
and 7, respectively, of, and (ii) under the caption "Executive Compensation"
on pages 11 through 20 of the 2001 Proxy Statement (excluding the information
required by paragraphs (k) and (l) of Item 402 of Regulation S-K) is
incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set forth, (i) under the caption "Security Ownership of
Directors and Management" on pages 8 through 9 of, and (ii) under the caption
"Security Ownership of Certain Beneficial Owners" on pages 9 through 10 of the
2001 Proxy Statement is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth under the caption "Proposal Number 1--Election of
Three Class I Directors--Interests of the Board of Directors" on page 7 of the
2001 Proxy Statement is incorporated herein by reference.
22
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
2000 Annual
Form 10-K Report to
Annual Report Shareholders
------------- ------------
14(a)(1) Consolidated Statements of Income for
the years ended
December 31, 2000, 1999 and 1998....... 33
Consolidated Balance Sheets at December
31, 2000 and 1999...................... 34-35
Consolidated Statements of Cash Flows
for the years ended
December 31, 2000, 1999 and 1998....... 36
Consolidated Statements of Changes in
Common Shareholders' Equity for the
years ended December 31, 2000, 1999 and
1998................................... 37
Notes to Consolidated Financial
Statements............................. 38-60
Report of Independent Accountants....... 61
14(a)(2) Financial Statement Schedules
Report of Independent Accountants....... 28
Schedule I--Financial Statements of
Cleco Corporation
Condensed Statement of Income........... 29
Condensed Balance Sheet................. 30
Condensed Statement of Cash Flows....... 31
Condensed Statement of Changes in Common
Shareholders' Equity................... 32
Notes to the Condensed Financial
Statements............................. 33
Schedule II--Valuation and Qualifying
Accounts............................... 37
Financial Statement Schedules other than
those shown in the above index are
omitted because they are either not
required or are not applicable or the
required information is shown in the
Consolidated Financial Statements and
Notes thereto.
14(a)(3) List of Exhibits........................ 24
The Exhibits designated by an asterisk are filed herewith. The Exhibits not
so designated have been previously filed with the SEC and are incorporated
herein by reference. The Exhibits designated by two asterisks are management
contracts and compensatory plans and arrangements required to be filed as
Exhibits to this Report.
23
SEC File or Registration
Registration Statement Exhibit
Exhibits Number or Report Number
-------- ------------ ------------- --------
2(a) Plan of Reorganization and
Share Exchange Agreement 333-71643-01 S-4(6/30/99) C
3(a) Articles of Incorporation of
the Company, effective July
1, 1999 333-71643-01 S-4(6/30/99) A
3(b) Bylaws of the Company
(revised effective July 28,
2000) 333-55656 S-3(2/14/01) 4.10
3(d) Articles of Amendment to the
Amended and Restated
Articles of Incorporation
of the Company setting
forth the terms of the $25
Preferred Stock 1-15759 8-K(7/28/00) 1
4(a)(1) Indenture of Mortgage dated
as of July 1, 1950, between
the Company and First
National Bank of New
Orleans, as Trustee 1-5663 10-K(1997) 4(a)(1)
4(a)(2) First Supplemental Indenture
dated as of October 1,
1951, to Exhibit 4(a)(1) 1-5663 10-K(1997) 4(a)(2)
4(a)(3) Second Supplemental
Indenture dated as of June
1, 1952, to Exhibit 4(a)(1) 1-5563 10-K(1997) 4(a)(3)
4(a)(4) Third Supplemental Indenture
dated as of January 1,
1954, to Exhibit 4(a)(1) 1-5563 10-K(1997) 4(a)(4)
4(a)(5) Fourth Supplemental
Indenture dated as of
November 1, 1954, to
Exhibit 4(a)(1) 1-5563 10-K(1997) 4(a)(5)
4(a)(6) Tenth Supplemental Indenture
dated as of September 1,
1965, to Exhibit 4(a)(1) 1-5663 10-K(1986) 4(a)(11)
4(a)(7) Eleventh Supplemental
Indenture dated as of April
1, 1969, to Exhibit 4(a)(1) 1-5663 10-K(1998) 4(a)(8)
4(a)(8) Eighteenth Supplemental
Indenture dated as of
December 1, 1982, to
Exhibit 4(a)(1) 1-5663 10-K(1993) 4(a)(8)
4(a)(9) Nineteenth Supplemental
Indenture dated as of
January 1, 1983, to Exhibit
4(a)(1) 1-5663 10-K(1993) 4(a)(9)
4(a)(10) Twenty-Sixth Supplemental
Indenture dated as of March
15, 1990, to Exhibit
4(a)(1) 1-5663 8-K(3/90) 4(a)(27)
4(b) Indenture between the
Company and Bankers Trust
Company, as Trustee, dated
as of October 1, 1988 33-24896 S-3(10/11/88) 4(b)
4(b)(1) Agreement Appointing
Successor Trustee dated as
of April 1, 1996 by and
among Central Louisiana
Electric Company, Inc.,
Bankers Trust Company and
The Bank of New York 333-02895 S-3(4/26/96) 4(a)(2)
4(c) $100,000,000 Credit
Agreement dated as of June
15, 1995, among Cleco
Power, certain Banks
parties thereto, and The
Bank of New York, as Agent 1-5663 10-Q(6/95) 4
24
SEC File or Registration
Registration Statement Exhibit
Exhibits Number or Report Number
-------- ------------ ---------------- --------
4(d) $120,000,000 364-Day
Credit Agreement dated
August 25, 1999 among the
Company, the lenders
party thereto, the First
National Bank of Chicago,
as Syndicate Agent,
Westdeutsche Landesbank
Girozentrale, as
Documentation Agent,
Fleet National Bank, as
Managing Agent and the
Bank of New York, as
Administrative Agent 333-71643-01 10-Q(9/99) 4(a)
4(e) $80,000,000 Three year
Credit Agreement dated
August 25, 1999 among the
Company, the lenders
party thereto, the First
National Bank of Chicago,
as Syndicate Agent,
Westdeutsche Landesbank
Girozentrale, as
Documentation Agent,
Fleet National Bank, as
Managing Agent and the
Bank of New York, as
Administrative Agent 333-71643-01 10-Q(9/99) 4(b)
4(f) Agreement Under Regulation
S-K Item
601(b)(4)(iii)(A) 333-71643-01 10-Q(9/99) 4(c)
4(g) Trust Indenture dated as
of December 10, 1999
Between Cleco Evangeline
LLC and Bank One Trust
Company, N.A. as Trustee
Relating to $218,600,000,
8.82% Senior Secured
Bonds due 2019 1-15759 10-K(1999) 4(m)
4(h) Senior Indenture, dated as
of May 1, 2000, between
the Company and Bank One,
N.A., as trustee 333-33098 S-3/A(5/8/00) 4(a)
4(i) Supplemental Indenture No.
1, dated as of May 25,
2000, to Senior Indenture
providing for the
issuance of the Company's
8 3/4% Senior Notes due
2005 1-15759 8-K(5/24/00) 4-1
4(j) Form of 8 3/4% Senior
Notes due 2005 (included
in Exhibit 4(i) above) 1-15759 8-K(5/24/00) 4-1
4(k) Rights agreement between
the Company and EquiServe
Trust Company, as Right
Agent 1-15759 8-K(7/28/00) 1
**10(a) 1990 Long-Term Incentive 1-5663 1990 Proxy A
Compensation Plan Statement (4/90)
**10(c) Participation Agreement,
Annual Incentive
Compensation Plan
**10(d) Deferred Compensation Plan
for Directors 1-5663 10-K(1992) 10(n)
**10(e)(1) Supplemental Executive
Retirement Plan 1-5663 10-K(1992) 10(o)(1)
**10(e)(2) Form of Supplemental
Executive Retirement Plan
Participation Agreement
between the Company and
the following officers:
David M. Eppler,
Catherine C. Powell,
Darrell J. Dubroc and
Thomas J. Howlin 1-5663 10-K(1992) 10(o)(2)
25
SEC File or Registration
Registration Statement Exhibit
Exhibits Number or Report Number
-------- ------------ ------------- ---------
**10(f) Form of Executive Severance
Agreement between the
Company and the following
officers: David M. Eppler,
Catherine C. Powell,
Darrell J. Dubroc and
Thomas J. Howlin. 1-5663 10-K(1995) 10(f)
10(h)(1) Term Loan Agreement dated as
of April 2, 1991, among the
401(k) Savings and
Investment Plan ESOP Trust,
the Company, as Guarantor,
the Banks listed therein
and The Bank of New York,
as Agent 1-5663 10-Q(3/91) 4(b)
10(h)(2) Assignment and Assumption
Agreement, effective as of
May 6, 1991, between The
Bank of New York and the
Canadian Imperial Bank of
Commerce, relating to
Exhibit 10(h)(1) 1-5663 10-Q(3/91) 4(c)
10(h)(3) Assignment and Assumption
Agreement dated as of July
3, 1991, between The Bank
of New York and Rapides
Bank and Trust Company in
Alexandria, relating to
Exhibit 10(h)(1) 1-5663 10-K(1991) 10(y)(3)
10(h)(4) Assignment and Assumption
Agreement dated as of July
6, 1992, among The Bank of
New York, CIBC, Inc. and
Rapides Bank and Trust
Company in Alexandria, as
Assignors, the 401(k)
Savings and Investment Plan
ESOP Trust, as Borrower,
and the Company, as
Guarantor, relating to
Exhibit 10(h)(1) 1-5663 10-K(1992) 10(bb)(4)
10(i) Reimbursement Agreement (The
Industrial Development
Board of the Parish of
Rapides, Inc. (Louisiana)
Adjustable Tender Pollution
Control Revenue Refunding
Bonds, Series 1991) dated
as of October 15, 1997,
among the Company, various
financial institutions, and
Westdeutsche Landesbank
Gironzentiale, New York
Branch, as Agent 1-5663 10-K(1997) 10(i)
10(l) Selling Agency Agreement
between the Company and
Salomon Brothers Inc,
Merrill Lynch & Co., Smith
Barney Inc. and First
Chicago Capital Markets,
Inc. dated as of December
12, 1996 333-02895 S-3(12/10/96) 1
10(m) 401(k) Savings and
Investment Plan ESOP Trust
Agreement dated as of
August 1, 1997, between UMB
Bank, N.A. and the Company 1-5663 10-K(1997) 10(m)
10(m)(1) First Amendment to 401(k)
Savings and Investment Plan
ESOP Trust Agreement dated
as of October 1, 1997,
between UMB Bank, N.A. and
the Company 1-5663 10-K(1997) 10(m)(1)
10(n) Form of Notice and
Acceptance of Grant of
Nonqualified Stock Options,
with fixed option price. 333-71643-01 10-Q(9/99) 10(a)
26
SEC File or Registration
Registration Statement Exhibit
Exhibits Number or Report Number
-------- ------------ ---------------- -------
10(o) Form of Notice and Acceptance
of Grant of Nonqualified
Stock Options, with variable
option prices 333-71643-01 10-Q(9/99) 10(b)
10(p) Form of Notice and Acceptance
of Grant of Nonqualified
Stock Options, awarded to
Gregory L. Nesbitt 333-71643-01 10-Q(9/99) 10(c)
**10(q) 2000 Long-Term Incentive 2000 Proxy
Compensation Plan 333-71643-01 Statement (3/00) A
10(r) Form of Notice and Acceptance
of Directors' Grant of
Nonqualified Stock Options
under the Company's 2000
Long-Term Incentive
Compensation Plan 1-15759 10-Q(6/00) 10(a)
10(s) Form of Notice and Acceptance
of Grant of Restricted Stock
under the Company's 2000
Long-Term Incentive
Compensation Plan 1-15759 10-Q(6/00) 10(b)
10(t) Form of Notice and Acceptance
of Grant of Nonqualified
Stock Options, with fixed
option price under the
Company's 2000 Long-Term
Incentive Compensation Plan 1-15759 10-Q(6/00) 10(c)
10(u) Form of Notice and Acceptance
of Grant of Nonqualified
Stock Options, with variable
option price under the
Company's 2000 Long-Term
Incentive Compensation Plan 1-15759 10-Q(6/00) 10(d)
10(x) Cleco Corporation Employee
Stock Purchase Plan 333-44364 S-8(8/23/00) 4.3
10(y) Executive Employment
Agreements between the
Company and David M. Eppler,
Thomas J. Howlin, Catherine
C. Powell, Darrell J. Dubroc
and Mark H. Segura
*11 Computation of Net Income Per
Common Share
12 Computation of Earnings to
Fixed Charges and Earnings to
Combined Fixed Charges and
Preferred Stock Dividends 1-15759 8-K(3/6/01) 12
*13 Management's Discussion and
Analysis of Financial
Condition and Results of
Operations, Consolidated
Financial Statements and
Notes, Report of Independent
Accountants and Selected
Financial and Operating Data
(Unaudited)
*21 Subsidiaries of the Registrant
*23 Consent of Independent
Accountants
*24 Power of Attorney from each
Director of the Company whose
signature is affixed to this
Form 10-K for the year ended
December 31, 2000
14(b) Reports on Form 8-K
During the three-month period ended December 31, 2000, the Company filed no
Current Reports on Form 8-K.
27
Report of Independent Accountants on
Financial Statement Schedules
To the Shareholders and
Board of Directors of Cleco Corporation:
Our audits of the consolidated financial statements referred to in our
report dated January 30, 2001 appearing in the 2000 Annual Report to
Shareholders of Cleco Corporation (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K)
also included an audit of the financial statement schedules listed in Item
14(a)(2) of this Form 10-K. In our opinion, these financial statement
schedules present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
PricewaterhouseCoopers LLP
New Orleans, Louisiana
January 30, 2001
28
Schedule I
Cleco Corporation
(Parent Company Only)
Condensed Statement of Income
For the year
Ended December
31,
-----------------
2000 1999
-------- -------
(thousands)
Income from continuing operations
Equity in income of subsidiaries.......................... $ 69,932 $34,260
Subsidiary revenues....................................... 55,827 44,254
Other income.............................................. 3,640 153
-------- -------
Total income from continuing operations................. 129,399 78,667
Expenses and other Deductions
Administrative and General................................ (1,404) 273
Taxes other than income taxes............................. 136 --
Subsidiary costs.......................................... 55,804 43,308
Interest.................................................. 6,963 666
-------- -------
Expenses and other deductions............................. 61,499 44,247
-------- -------
Net income from continuing operations before income taxes
and preferred dividends.................................. 67,900 34,420
Income tax benefit........................................ (1,435) (512)
-------- -------
Net income from continuing operations..................... 69,335 34,932
Discontinued operations
Loss from operations, net of income tax................... (5,411) (946)
Loss on disposal of segment, net of income tax............ (1,450) --
-------- -------
Total discontinued operation............................ (6,861) (946)
-------- -------
Net income before extraordinary item........................ 62,474 33,986
Extraordinary item, net of income taxes..................... 2,508 --
-------- -------
Net income before preferred dividends....................... 64,982 33,986
Preferred dividend requirements, net........................ 1,870 963
-------- -------
Net income................................................ $ 63,112 $33,023
======== =======
The accompanying notes are an integral part of the condensed financial
statements.
29
Schedule I
Cleco Corporation
(Parent Company Only)
Condensed Balance Sheet
December 31,
------------------
2000 1999
-------- --------
(thousands)
ASSETS
Current assets
Cash and cash equivalents................................ $ 3,414 $ 9,314
Receivable from subsidiaries............................. 11,409 31,334
Interest receivable...................................... 91 74
Other current assets..................................... 1,834 --
-------- --------
Total current assets................................... 16,748 40,722
Construction work in process............................... 799
Restricted cash............................................ 15,809 15,000
Notes receivables from subsidiaries........................ 127,394 5,620
Investment in subsidiaries................................. 481,289 435,513
Other assets............................................... 13 --
Deferred charges........................................... 738 --
-------- --------
Total Assets........................................... $642,790 $496,855
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt.......................................... $ 54,220 $ --
Short-term bank loans.................................... -- 20,000
Long-term debt due in one year........................... 350
Accounts payable......................................... 609 652
Interest accrued......................................... 729 42
Payable to subsidiaries.................................. 5,832 24,313
Taxes accrued............................................ -- 91
Other current liabilities................................ 152 --
-------- --------
Total current liabilities.............................. 61,892 45,098
Deferred credits........................................... 823 248
Long-term debt, net........................................ 100,579 --
-------- --------
Total liabilities and deferred credits..................... 163,294 45,346
Shareholders' equity
Preferred stock
Not subject to mandatory redemption...................... 28,090 28,880
Deferred compensation related to preferred stock held by
ESOP.................................................... (12,994) (14,991)
-------- --------
Total preferred stock not subject to mandatory
redemption............................................ 15,096 13,889
Common stock, $2 par value, authorized 50,000,000 shares,
issued 22,531,870 shares issued at December 31, 2000 and
1999...................................................... 45,064 45,064
Premium on capital stock................................... 112,502 112,733
Retained earnings.......................................... 308,047 282,825
Treasury stock, at cost, 36,536 and 90,094 at December 31,
2000 and 1999 respectively................................ (1,213) (3,002)
-------- --------
Total common shareholders' equity...................... 464,400 437,620
-------- --------
Total shareholders' equity............................. 479,496 451,509
-------- --------
Total liabilities and shareholders' equity............. $642,790 $496,855
======== ========
The accompanying notes are an integral part of the condensed financial
statements.
30
Schedule I
Cleco Corporation
(Parent Company Only)
Statements of Cash Flows
For the year
ended December
31,
-----------------
2000 1999
-------- -------
(Thousands)
Operating Activities:
Net Income................. $ 64,982 $33,986
Noncash items included in
net income
Equity in earnings of
subsidiaries............. (69,932) (34,260)
Loss from discontinued
operations, net of tax... 5,411 --
Loss from disposal of
segment, net of tax...... 1,450 --
Extraordinary gain, net of
tax...................... (2,508) --
Changes in assets and
liabilities
Accounts receivable from
subsidiaries............. 19,925 (31,334)
Interest receivable....... (17) (74)
Accounts payable to
affiliates............... (18,481) 24,313
Accounts payable.......... (43) 652
Interest payable.......... 729 42
Taxes accrued............. -- 91
Other, net................ 867 (670)
Common Stock dividends from
subsidiaries.............. 59,410 39,829
-------- -------
Net cash provided by
operating activities... 61,793 32,575
Investing activities;
Additions to property,
plant and equipment....... (799) --
Investment in subsidiaries. (39,600) --
Notes receivable from
subsidiaries.............. (121,774) (5,620)
-------- -------
Net cash used in
investing activities... (162,173) (5,620)
Financing activities;
Repurchase of common stock. -- (3,002)
Transfer of cash into
restricted account........ (809) (15,000)
Issuance of long-term debt. 100,929 --
Increase in short term
debt, net................. 34,220 20,000
Dividends paid on common
and preferred stock....... (39,860) (19,639)
-------- -------
Net cash used in
financing activities... 94,480 (17,641)
-------- -------
Net increase in cash and
cash equivalents........... (5,900) 9,314
Cash and cash equivalents,
beginning of year.......... 9,314 --
-------- -------
Cash and cash equivalents,
end of year................ $ 3,414 $ 9,314
======== =======
Supplemental cash flow
disclosures
Interest paid, net of
amount capitalized........ $ 4,669 $ 251
======== =======
Income taxes paid, net of
amount reimbursed by
subsidiaries............... $ -- $ --
======== =======
The accompanying notes are an integral part of the condensed financial
statements.
31
Schedule I
Cleco Corporation
(Parent Company Only)
Statement of Changes in Common Shareholders' Equity
Premium
Common Stock on Treasury Stock
------------------- Capital Retained ---------------
Shares Amount Stock Earnings Shares Amount
---------- ------- -------- -------- ------- ------
(Thousands, except share and per share amounts)
Balance, January 1, 1997
Balance, December 31,
1997
Incorporation......... 1,000 -- -- -- -- --
---------- ------- -------- -------- ------- ------
Balance, December 31,
1998................... 1,000
Cancellation of
original shares...... (1,000)
Reorganization into a
holding company...... 22,531,870 $45,064 112,733 $271,036
Purchase of treasury
shares............... 90,094 $3,002
Adjustment for a step-
by-step acquisition
of a subsidiary...... (2,558)
Dividend requirements,
preferred stock, net. (963)
Cash dividend paid,
common stock, $0.83
per share............ (18,676)
Net income............ -- -- -- 33,986 -- --
---------- ------- -------- -------- ------- ------
Balance, December 31,
1999................... 22,531,870 45,064 112,733 282,825 90,094 3,002
---------- ------- -------- -------- ------- ------
Redemption of
preferred stock...... (471)
Issuance of treasury
stock................ 22 (39,949) (1,343)
Incentive shares
forfeited............ 2,371 71
Incentive shares
purchased............ 218
Payment in common
stock................ (15,980) (517)
Dividend requirements,
preferred stock, net. (1,870)
Cash dividends paid,
common stock $1.69 per
share.................. (37,890)
Net income............ -- -- -- 64,982 -- --
---------- ------- -------- -------- ------- ------
22,531,870 $45,064 $112,502 $308,047 36,536 $1,213
========== ======= ======== ======== ======= ======
The accompanying notes are an integral part of the condensed financial
statements.
32
CLECO CORPORATION
(PARENT COMPANY ONLY)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NOTE A--HOLDING COMPANY STRUCTURE
Cleco Holding Corporation was originally formed on October 29, 1999 with
1,000 shares of common stock, no par value. All of Cleco Holding Corporation
common stock was held by the parent company, Cleco Corporation (formerly
Central Louisiana Electric Company, Inc.). At the Annual Meeting of
Shareholders held on April 9, 1999, a resolution was passed to reorganize the
structure of Cleco Corporation and Cleco Holding Corporation. The effective
date of the resolution was July 1, 1999.
Cleco Corporation was renamed Cleco Utility Group Inc. (Utility Group) and
was reorganized into a holding company structure. This reorganization resulted
in the creation of a new holding company, Cleco Corporation (formerly Cleco
Holding Corporation, Parent Company Only, and together with its subsidiaries,
the Company), which holds investments in several subsidiaries. There was no
impact to Cleco Corporation's Consolidated Financial Statements because the
reorganization was accounted for similarly to a pooling of interest.
Effective December 31, 2000, Utility Group merged into Cleco Power LLC
(Cleco Power), a Louisiana limited liability company and wholly owned
subsidiary of the Company, which became the successor issuer to Utility Group.
Immediately prior to the merger, Cleco Power had only nominal assets or
liabilities. Pursuant to the merger, Cleco Power acquired all of the assets
and assumed all of the liabilities and obligations of Utility Group.
NOTE B--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Parent Company only is an exempt holding company under the Public
Utility Holding Company Act of 1935. Its major, first-tier subsidiaries
consist of Cleco Power, Cleco Midstream Resources LLC (Midstream) and Utility
Construction & Technology Solutions LLC (UtiliTech).
Cleco Power contains the Louisiana Public Service Commission (LPSC)
jurisdictional generation, transmission and distribution electric utility
operations serving the Company's traditional retail and wholesale customers.
Another subsidiary, Midstream, operates competitive LPSC non-jurisdictional
electric generation, oil and natural gas production, energy marketing and
natural gas pipeline businesses. A third subsidiary, UtiliTech, provides
utility engineering and line construction services to municipal governments,
rural electric cooperatives and investor-owned electric companies. In December
2000 management decided to dispose of substantially all of UtiliTech's assets
by sale in 2001.
Financial statements are presented for the years ended December 31, 2000
and 1999 because operations of Parent Company Only were immaterial before
1999. The operating results and investment in subsidiaries are included in the
Parent Company Only condensed statement of income from July 1, 1999, the
effective date of the organization described above.
The accompanying financial statements have been prepared to present the
unconsolidated financial position, results of operations and cash flows of
Parent Company Only. Investments in subsidiaries and other investees are
stated at cost plus equity in undistributed earnings from date of acquisition.
These Parent Company Only financial statements should be read in conjunction
with Cleco Corporation's consolidated financial statements.
NOTE C--DEBT
The Parent Company Only has two credit facilities totaling $200 million.
The first facility is a $120 million facility which provides for borrowings at
interest rates based on either competitive bid, prime rate, or the London
Interbank Offered Rate and will expire on June 14, 2001. The commitment fees
for this facility are based upon
33
CLECO CORPORATION
(PARENT COMPANY ONLY)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS--(Continued)
the Parent Company Only's lowest secured debt ratings and are currently
0.125%. The second facility is an $80 million, three-year facility that
provides for borrowings at interest rates established by competitive bid and
will expire on August 25, 2002. The commitment fees for this facility are
based upon the Parent Company Only's lowest secured debt ratings and are
currently 0.15%. Both facilities provide support for the issuance of
commercial paper. At December 31, 2000, and December 31, 1999, there was
approximately $54.2 million and zero, respectively, in commercial paper
outstanding under the facilities. Guarantees issued by the Parent Company Only
to third parties for certain types of transactions between those parties and
the Parent Company Only's subsidiaries, other than Cleco Power, will reduce
the amount of the facilities available to the Parent Company Only by an amount
equal to the stated or determinable amount of the primary obligation. In
addition, certain indebtedness incurred by the Parent Company Only outside of
the facilities will reduce the amount of the facilities available to the
Parent Company Only. The amount of guarantees provided by the Parent Company
Only and other indebtedness reducing the amount of the facilities available to
be utilized was $60.9 million at December 31, 2000, and $18.2 million at
December 31, 1999.
Total indebtedness as of December 31, 2000 and 1999 was as follows:
2000 1999
-------- -------
(thousands)
Commercial paper, net...................................... $ 54,220 $ --
Short-term bank loans...................................... -- 20,000
-------- -------
Total short-term debt.................................... $ 54,220 $20,000
======== =======
Senior notes, 8.75% due 2005............................... $100,000 $ --
Other long-term debt....................................... 929 --
-------- -------
Gross amount of long-term debt........................... 100,929 --
Less amount due in one year................................ 350 --
-------- -------
Total long-term debt, net................................ $100,579 $ --
======== =======
NOTE D--DIVIDENDS RECEIVED
Parent Company Only received $59.4 million and $39.8 million in cash
dividends from Cleco Power during the years 2000 and 1999, respectively.
NOTE E--RESTRICTED CASH
Restricted cash represents cash to be used for specific purposes. At
December 31, 2000, approximately $15.8 million in restricted cash represents
deposits into an escrow account for credit support as required by a provision
of the Evangeline Capacity Sale and Tolling Agreement (Evangeline Tolling
Agreement) between Evangeline and Williams Energy Marketing and Trading
Company (Williams). The credit support is to be maintained as security for the
performance of certain obligations by Evangeline in regard to the Evangeline
Tolling Agreement. Upon the fulfillment of certain conditions specified in the
agreement, the credit support can be reduced to $13 million.
NOTE F--PREFERRED STOCK
In connection with the establishment of the Parent Company's Employee Stock
Purchase Plan (ESOP), Utility Group, the predecessor of Cleco Power, sold
300,000 shares of 8.125% convertible preferred stock to the ESOP. As part of
the holding company reorganization, each share of Utility Group 8.125%
convertible preferred
34
CLECO CORPORATION
(PARENT COMPANY ONLY)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS--(Continued)
stock was exchanged for one share of Parent Company Only 8.125% convertible
preferred stock. Each share of Parent Company Only 8.125% preferred stock is
convertible into 4.8 shares of Parent Company Only common stock. The amount of
total capitalization reflected in the consolidated financial statements has
been reduced by an amount of deferred compensation expense related to the
shares of convertible preferred stock which have not yet been allocated to
ESOP participants. The amount shown in the consolidated financial statements
for preferred dividend requirements in 2000, 1999 and 1998 has been reduced by
$391,000, $435,000 and $521,000, respectively, to reflect the benefit of the
income tax deduction for dividend requirements on unallocated shares held by
the ESOP.
Upon involuntary liquidation, preferred shareholders are entitled to
receive par value for shares held before any distribution is made to common
shareholders. Upon voluntary liquidation, preferred shareholders are entitled
to receive the redemption price per share applicable at the time such
liquidation occurs, plus any accrued dividends.
Information about the components of preferred stock capitalization is as
follows:
Balance Balance Balance Balance
Jan. 1, Dec. 31, Dec. 31, Dec. 31,
1998 Change 1998 Change 1999 Change 2000
--------- ------- --------- -------- --------- ------ ---------
(Thousands, except share amounts)
CUMULATIVE PREFERRED
STOCK,
$100 par value
NOT SUBJECT TO
MANDATORY REDEMPTION
4.50%................. $ 1,029 $ 1,029 $ 1,029 $ 1,029
Convertible, Series of
1991,
Variable rate......... 29,073 $ (384) 28,689 $ (838) 27,851 $ (790) 27,061
--------- ------- --------- -------- --------- ------ ---------
$ 30,102 $ (384) $ 29,718 $ (838) $ 28,880 $ (790) $ 28,090
========= ======= ========= ======== ========= ====== =========
SUBJECT TO MANDATORY
REDEMPTION
4.50%, Series of 1955. $ 320 $ (40) $ 280 $ (280) -- -- --
4.65%, Series of 1964. 2,940 (140) 2,800 (2,800) -- -- --
4.75%, Series of 1965. 2,860 (260) 2,600 (2,600) -- -- --
--------- ------- --------- -------- --------- ------ ---------
$ 6,120 $ (440) $ 5,680 $ (5,680)
========= ======= ========= ======== ========= ====== =========
Deferred compensation
related to convertible
preferred stock held by
the ESOP............... $(18,766) $ 1,843 $(16,923) $ 1,932 $ (14,991) $1,997 $ 12,994
CUMULATIVE PREFERRED
STOCK, $100 par value
Number of shares
Authorized........... 1,410,000 (4,000) 1,406,000 (54,000) 1,352,000 1,352,000
Issued and
outstanding.......... 362,218 (8,240) 353,978 (65,174) 288,804 (7,904) 280,900
========= ======= ========= ======== ========= ====== =========
CUMULATIVE PREFERRED
STOCK, $25 par value
Number of shares
authorized (None
outstanding)........... 3,000,000 3,000,000 3,000,000 3,000,000
========= ========= ========= =========
35
CLECO CORPORATION
(PARENT COMPANY ONLY)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS--(Continued)
Preferred stock, other than the convertible preferred stock held by the
ESOP, is redeemable at the Parent Company's option, subject to 30 days' prior
written notice to holders. The convertible preferred stock is redeemable at
any time at the Parent Company's option. If the Parent Company were to elect
to redeem the convertible preferred stock, shareholders may elect to receive
the optional redemption price or convert the preferred stock into common
stock. The redemption provisions for the various series of preferred stock are
shown in the following table.
Optional
Redemption
-----------------
Price
per Share
-----------------
Series
4.50%.................................................. $101
Convertible, Series of 1991............................ $100.8125 to $100
Note G--Extraordinary Gain
In March 2000 Four Square Gas, a wholly owned subsidiary of Cleco Energy
LLC (Energy), which is wholly owned by Midstream, paid a third party $2.1
million for a note with a face value of approximately $6 million issued by
Four Square Production, another wholly owned subsidiary of Energy. The note
relates to the production assets held by Four Square Production. As part of
the transaction, the third-party debtholder sold the note, associated
mortgage, deed of trust and pledge agreement and assigned a 5% overriding
royalty interest in the production assets to Four Square Gas. Four Square Gas
paid, in addition to the $2.1 million, a total of 4.5% in overriding royalty
interest in the production assets. Four Square Gas borrowed the $2.1 million
from the Parent Company Only. The gain of approximately $3.9 million was
offset against the $1.4 million of income tax related to the gain to arrive at
the extraordinary gain, net of income tax, of approximately $2.5 million.
Note H--Discontinued Operations
In December 2000 management decided to sell substantially all of
UtiliTech's assets and discontinue UtiliTech's operations after the sale. The
sale is expected to be finalized during the first quarter of 2001 with all
operations estimated to cease by March 31, 2001. The assets of UtiliTech at
December 31, 2000, consist of accounts receivable of approximately $3.9
million, unbilled revenues of approximately $3.4 million and goodwill, net of
amortization of $0.5 million. Liabilities of UtiliTech at December 31, 2000,
consist of an intercompany note payable to the Parent Company Only of
approximately $6.1 million and payables to vendors and employees of $1.3
million. Additional information about UtiliTech is as follows:
For the year ended December 31,
------------------------------------
2000 1999 1998
----------- ----------- ----------
(Thousands)
Revenues............................... $ 18,125 $ 6,866 $ 214
Loss from operations, net.............. $ (5,511) $ (1,304) $ (169)
Income tax benefit associated with loss
from operations....................... $ 3,390 $ 662 $ 106
Loss on disposal of segment, net....... $ (1,450) $ -- $ --
Income tax benefit associated with loss
on disposal........................... $ 908 $ -- $ --
36
CLECO CORPORATION
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
Years ended December 31, 2000, 1999 and 1998
(Thousands)
Col. A Col. B Col. C Col. D Col. E
- ----------------------------- ---------- ---------- --------------- ----------
Additions Uncollectible
Balance at Charged to Accounts Write- Balance at
Allowance for Uncollectible Beginning Costs and offs, End of
Accounts of Period Expenses Less Recoveries Period (1)
- --------------------------- ---------- ---------- --------------- ----------
Year Ended December 31, 2000. $838 $2,345 $1,300 $1,883
Year Ended December 31, 1999. $812 $ 751 $ 725 $ 838
Year Ended December 31, 1998. $684 $1,069 $ 942 $ 812
- --------
(1) Deducted in the balance sheet.
37
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Cleco Corporation
(Registrant)
/s/ David M. Eppler
_____________________________________
(David M. Eppler)
(President, Chief Executive Officer
and Director)
Date: March 30, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ David M. Eppler President, Chief Executive March 30, 2001
____________________________________ Officer and Director
(David M. Eppler) (Principal Executive
Officer)
/s/ Thomas J. Howlin Senior Vice President-- March 30, 2001
____________________________________ Financial Services and Chief
(Thomas J. Howlin) Financial Officer (Principal
Financial Officer)
/s/ R. Russell Davis Vice President and March 30, 2001
____________________________________ Controller
(R. Russell Davis) (Principal Accounting
Officer)
DIRECTORS*
Sherian G. Cadoria
Richard B. Crowell
J. Patrick Garrett
F. Ben James, Jr.
Elton R. King
A. Deloach Martin, Jr.
Robert T. Ratcliff
Edward M. Simmons
William H. Walker, Jr.
/s/ David M. Eppler March 30,
- ------------------------------- 2001
*By: David M. Eppler
(David M. Eppler, as Attorney-in-Fact)
38