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Cleco Corporation posts 2014 first-quarter operational earnings of $0.42 per diluted share

  • Cold winter weather drove up revenues and offset planned outage expenses
  • Completed transfer of Coughlin Power Station to Cleco Power
  • Began serving Dixie Electric Membership Corporation (DEMCO), increasing total customer load by about 20 percent
  • Raised annualized dividend to $1.60 per share
  • Increased dividend payout ratio range to 55-65 percent

PINEVILLE, La., April 28, 2014 - Cleco Corporation (NYSE: CNL) posted 2014 first-quarter earnings of $25.9 million, or $0.43 per diluted share, down from $27.1 million, or $0.45 per diluted share recorded in the first quarter of 2013. Operational earnings, excluding special items, of $25.5 million, or $0.42 per diluted share, were down from $26.1 million, or $0.44 per diluted share recorded in the first quarter of 2013.

"Colder winter weather drove higher retail and wholesale load producing strong first quarter results of $0.42 per share," said Bruce Williamson, president and CEO of Cleco Corporation. "As weather pushed revenues higher, our expenses also increased due to planned outage work at several of our generating plants.  During the quarter, we remained committed to reliable and efficient management of our business and focused on achieving our strategic goals. We accomplished two major milestones with the completion of the transfer of Coughlin to our regulated utility and the commencement of our full-requirements contract with DEMCO, one of the largest electric cooperatives in our state.

"The transfer of Coughlin from our unregulated subsidiary to our regulated utility, Cleco Power, allows us to continue to seek additional wholesale business, which supports future growth in Louisiana," said Williamson. "We will use this efficient generator to help supply power to all of our customers, including our newest wholesale customer, DEMCO. Coughlin also adds low-cost natural gas-fired capacity to our fleet for the benefit of our retail customers.

"Our recent successes and confidence in our financial strength allowed us to raise our quarterly shareholder dividend to $0.40 per share or $1.60 per share on an annualized basis," said Williamson. "We also are increasing our target dividend payout ratio range to 55-65 percent from 50-60 percent.

"We are continuing to work through the process of our Formula Rate Plan extension with our state regulators," said Williamson. "We recently filed supplemental testimony that we feel is a framework for our collaborative discussions with the Louisiana Public Service Commission. We expect to have resolution on our extension request by the end of the second quarter."

Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
 
  Diluted Earnings Per Share
  For the three months
ended Mar. 31
Subsidiary 2014     2013  
Cleco Power LLC   $0.43       $0.46  
Cleco Midstream Resources LLC -     (0.02)  
Corporate and Other (0.01)     -  
Operational diluted earnings per share (Non-GAAP) 0.42     0.44  
Adjustments1 0.01     0.01  
Diluted earnings per share applicable to common stock   $0.43       $0.45  

Refer to "Operational Earnings Adjustments" in this news release

Quarter-Over-Quarter Operational Diluted Earnings Per Share Reconciliation:

  $0.44      2013 first-quarter operational diluted earnings per share
       
0.22     Non-fuel revenue
(0.26)     Other expenses, net
0.02     Interest charges
0.01     AFUDC (allowance for funds used during construction)
(0.02)     Income taxes
  $(0.03)     Cleco Power results
       
0.02     Cleco Midstream results
       
(0.01)     Corporate and Other results
       
  $0.42     2014 first-quarter operational diluted earnings per share
       
0.01     Adjustments1
       
  $0.43     2014 first-quarter reported GAAP diluted earnings per share

1Refer to "Operational Earnings Adjustments" in this news release

Cleco Power

  • Non-fuel revenue increased earnings by $0.22 per share compared to the first quarter of 2013 primarily due to $0.12 per share from higher sales to retail and wholesale customers largely the result of colder winter weather and the absence of customer refunds for construction financing costs related to Madison Unit 3, which occurred in the first quarter of 2013.  Also contributing to this increase was $0.07 per share from adjustments to Cleco Power's formula rate plan, $0.02 per share of higher transmission revenue, and $0.01 per share of higher other miscellaneous revenue.
  • Other expenses, net, decreased earnings by $0.26 per share compared to the first quarter of 2013 primarily due to $0.16 of higher maintenance expense largely related to planned generating station outages, $0.08 per share of higher depreciation and amortization expense, and $0.02 per share of higher taxes other than income taxes.
  • Interest charges increased earnings by $0.02 per share compared to the first quarter of 2013 primarily due to $0.01 per share related to the retirement of senior notes and $0.01 per share related to an adjustment to customer surcredits due to a tax settlement.
  • AFUDC increased earnings by $0.01 per share compared to the first quarter of 2013 primarily due to the timing of capital projects.
  • Income taxes decreased earnings by $0.02 per share compared to the first quarter of 2013 primarily due to $0.01 per share for permanent tax deductions and $0.01 per share for the flowthrough of tax benefits.

Cleco Midstream Resources

  • Midstream's results increased earnings by $0.02 per share compared to the first quarter of 2013 primarily due to $0.01 per share of lower loss on disposal of property, $0.01 per share of higher tolling revenue, and $0.01 per share of lower maintenance expense.  These amounts were partially offset by $0.01 per share of higher other miscellaneous expenses at Evangeline.

Corporate and Other

  • Income taxes decreased earnings by $0.01 per share compared to the first quarter of 2013 as a result of $0.03 per share for tax credits, partially offset by $0.02 per share for the adjustment to record tax expense at the consolidated annual projected effective tax rate.

Operational Earnings Adjustments:

Cleco's management uses operational earnings per share, which is a non-GAAP measure, to evaluate the operations of Cleco and establish goals for management and employees.  Management believes this presentation is appropriate and enables investors to more accurately compare Cleco's operational financial performance over the periods presented.  Operational diluted earnings as presented here may not be comparable to similarly titled measures used by other companies.  The following table provides a reconciliation of operational diluted earnings per share to reported GAAP diluted earnings per share.

Reconciliation of Operational Diluted Earnings Per Share to Reported GAAP Diluted Earnings Per Share

  Diluted Earnings Per Share
  For the three months
ended Mar. 31
  2014     2013  
Operational diluted earnings per share   $0.42       $0.44  
Life insurance policies 0.01     0.01  
Reported GAAP diluted earnings per share applicable to common stock   $0.43       $0.45  

Reconciling adjustments from operational diluted earnings per share to GAAP diluted earnings per share are as follows:

Life Insurance Policies

Cleco has life insurance policies covering certain members of management.  These policies have a cash surrender value component that is carried as an asset and adjusted due to market changes, premium payments, or policy redemptions.  Cleco is unable to predict market changes and cash surrender value amounts of these policies, and management does not consider these adjustments to be a component of operational earnings.

Cleco management will discuss the company's first-quarter 2014 results during a conference call scheduled for 7:30 a.m. Central time (8:30 a.m. Eastern time) Tuesday, April 29, 2014.  The call will be webcast live on the internet.  A replay will be available for 12 months.  Investors may access the webcast through the company's website at www.cleco.com by selecting "Investors" and then "Q1 2014 Cleco Corporation Earnings Conference Call."

Please note:  In addition to historical financial information, this news release contains forward-looking statements about future results and circumstances.  There are many risks and uncertainties with respect to such forward-looking statements, including the weather and other natural phenomena, state and federal legislative and regulatory initiatives, the timing and extent of changes in commodity prices and interest rates, the operating performance of Cleco Power's facilities, the impact of the global economic environment, and other risks and uncertainties more fully described in the company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q.  Actual results may differ materially from those indicated in such forward-looking statements.

Cleco Corporation is a regional energy company headquartered in Pineville, La. Cleco owns a regulated electric utility company, Cleco Power LLC, which owns 11 generating units with a total nameplate capacity of 3,340 megawatts. The utility serves approximately 284,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana and Mississippi. For more information about Cleco, visit www.cleco.com.

Analyst Contact:
Tom Miller
tom.miller@cleco.com
(318) 484-7642
 
Media Contact:
Robbyn Cooper
robbyn.cooper@cleco.com
(318) 484-7136

  For the three months ended Mar. 31
(Unaudited) (million kWh)   (thousands)
  2014     2013     Change   2014     2013     Change
Electric Sales                                  
Residential 1,026     840     22.1%       $74,934       $61,700     21.4%  
Commercial 623     582     7.0%     48,463     44,049     10.0%  
Industrial 549     555     (1.1)%     21,825     21,125     3.3%  
Other retail 33     33     -     2,655     2,566     3.5%  
Surcharge -     -     -     2,435     2,237     8.9%  
Other -     -     -     -     (1,565)     100.0%  
Total retail 2,231     2,010     11.0%     150,312     130,112     15.5%  
Sales for resale 474     441     7.5%     12,585     12,279     2.5%  
Unbilled (106)     (63)     (68.3)%     (5,713)     (4,188)     (36.4)%  
Total retail and wholesale
customer sales
2,599     2,388     8.8%       $157,184       $138,203     13.7%  

CLECO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(Unaudited)
For the three months ended Mar. 31 2014     2013  
Operating revenue          
Electric operations   $269,759       $229,425  
Other operations 14,814     11,543  
Gross operating revenue 284,573     240,968  
Electric customer credits (186)     (21)  
Operating revenue, net 284,387     240,947  
Operating expenses          
Fuel used for electric generation 59,047     85,365  
Power purchased for utility customers 52,724     4,856  
Other operations 26,993     26,924  
Maintenance 32,369     17,635  
Depreciation 41,741     34,032  
Taxes other than income taxes 14,106     12,634  
Loss on sale of assets 69     1,034  
Total operating expenses 227,049     182,480  
Operating income 57,338     58,467  
Interest income 602     201  
Allowance for other funds used during construction 1,631     1,164  
Other income 971     2,273  
Other expense (672)     (435)  
Interest charges          
Interest charges, including amortization of debt expense, premium, and discount, net 20,758     21,831  
Allowance for borrowed funds used during construction (490)     (375)  
Total interest charges 20,268     21,456  
Income before income taxes 39,602     40,214  
Federal and state income tax expense 13,678     13,081  
Net income applicable to common stock   $25,924       $27,133  
           
Average number of basic common shares outstanding 60,472,969     60,399,697  
Average number of diluted common shares outstanding 60,713,587     60,667,401  
Basic earnings per share          
Net income applicable to common stock   $0.43       $0.45  
Diluted earnings per share          
Net income applicable to common stock   $0.43       $0.45  
Cash dividends paid per share of common stock   $0.3625       $0.3375  
 

CLECO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Thousands)
(Unaudited)
  At Mar. 31, 2014   At Dec. 31, 2013
Assets          
Current assets          
Cash and cash equivalents   $18,157       $28,656  
Accounts receivable, net 100,772     97,548  
Other current assets 304,505     347,378  
Total current assets 423,434     473,582  
Property, plant and equipment, net 3,111,084     3,083,140  
Equity investment in investees 14,540     14,540  
Prepayments, deferred charges and other 633,939     644,000  
Total assets   $4,182,997       $4,215,262  
Liabilities          
Current liabilities          
Long-term debt due within one year   $17,688       $17,182  
Accounts payable 111,454     110,544  
Other current liabilities 131,929     115,747  
Total current liabilities 261,071     243,473  
Long-term liabilities and deferred credits 1,048,179     1,070,092  
Long-term debt, net 1,296,965     1,315,500  
Total liabilities 2,606,215     2,629,065  
Shareholders' equity          
Common shareholders' equity 1,601,761     1,612,073  
Accumulated other comprehensive loss (24,979)     (25,876)  
Total shareholders' equity 1,576,782     1,586,197  
Total liabilities and shareholders' equity   $4,182,997       $4,215,262  

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