Cleco Corporate Holdings LLC - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - April 28, 2014

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8-K - 8-K - Cleco Corporate Holdings LLCclecocorp8k_033114erq1.htm


 
 
EXHIBIT 99.1

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.”




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Cleco Corporation
Page 2 of 7

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


1 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.

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Cleco Corporation
Page 3 of 7

•
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.












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Cleco Corporation
Page 4 of 7

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

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Cleco Corporation
Page 5 of 7


 
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
 %

 
 
 
 
 
 
 
 
 
 
 
 


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Cleco Corporation
Page 6 of 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

 

 
 
 
 



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Cleco Corporation
Page 7 of 7

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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