Cleco Corporation reports full-year 2012 operational earnings of $2.46 per share
2013-02-19 22:37:47 -
* Sustainable cost management efforts helped offset below normal 2012 weather
* Demonstrated growth through long-term regulated wholesale contract with
Dixie Electric Membership Corporation (DEMCO)
* Additional wholesale load justified adding generating capacity at Cleco
Power with Coughlin Power Station selected as low-cost option
* 2013 operational earnings guidance affirmed at $2.45 to $2.55 per diluted
share
PINEVILLE, LA., Feb. 19, 2013 - Cleco Corporation (NYSE:CNL) posted 2012
earnings of $163.6 million, or $2.70 per diluted share, down $32.1 million from
the $195.7 million recorded in 2011. Fourth-quarter earnings were $23.1 million
or $0.38 per diluted share, down $7.5 million from the $30.6 million recorded in
the fourth quarter of 2011. Operational earnings for 2012, which exclude the
Acadia Units 1 and 2 indemnifications and other nonoperational gains, were
$149.1 million, or $2.46 per diluted share, while operational earnings for 2011
were $152.9 million or $2.51 per diluted share, which excludes the gains on the
Acadia Unit 2 transaction and other nonoperational gains.
"Our full-year operational earnings of $2.46 are at the top of our final 2012
guidance range of $2.40 to $2.46 per share. We achieved this despite less than
favorable weather through our focus on low-cost and reliable operations of our
regulated utility business," said Bruce Williamson, president and CEO of Cleco
Corporation. "During 2012, we focused the company on driving down many areas of
our cost structure while maintaining operational reliability. In addition to our
sustainable cost management program, we resolved a number of legacy tax issues
in a positive fashion for our shareholders and customers.
"In addition to delivering solid earnings per share, we positioned the company
for the future through a number of strategic initiatives. These include
advancing our utility's wholesale growth strategy with the signing of our
largest ever long-term full-requirements wholesale power agreement with DEMCO.
We continued the path to winding down our Cleco Midstream business with the
announcement that Coughlin Power Station was the winning bidder in Cleco Power's
2012 request for proposals for additional generation capacity," said Williamson.
"In 2012, we also completed our transmission project in south Louisiana and
settled our Federal Energy Regulatory Commission (FERC) transmission rate case.
In addition, we used our strong cash flow to self-fund system improvement
projects and environmental upgrades to our plants to help keep our fleet out in
front of our competitors as our industry faces stricter environmental mandates.
"As we head into 2013, we are focused on three main areas," said Williamson.
* "We will continue to deliver competitive, reliable energy to our customers
by maintaining focus on our cost structure.
* We will work closely with the Louisiana Public Service Commission on the
transfer of Coughlin into Cleco Power and on several other regulatory issues
that will provide certainty for our investors and customers.
* We will seek additional long-term wholesale contracts modeled on the DEMCO
contract, which includes capacity, energy and services and allows
progressive municipalities and cooperatives to drive economic growth through
stable electric rates."
Earnings Guidance:
Cleco is affirming its 2013 consolidated operational earnings in the range of
$2.45 to $2.55 per diluted share. This estimate assumes normal weather for the
year and an estimated consolidated tax rate of 32 percent. The guidance range
excludes adjustments related to life insurance policies and expiring
indemnifications. Please refer to "Operational Earnings Adjustments" in this
news release for a description of these adjustments.
Financial Highlights:
Fourth Quarter 2012
* Cleco reports fourth-quarter GAAP earnings applicable to common stock of
$23.1 million, or $0.38 per diluted share, compared to $30.6 million, or
$0.51 per diluted share for the fourth quarter of 2011.
Year-to-Date 2012
* Cleco reports GAAP earnings applicable to common stock for 2012 of $163.6
million, or $2.70 per diluted share, compared to $195.7 million, or $3.22
per diluted share for 2011.
Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
Diluted Earnings Per Share
-----------------------------------------------
For the three months For the year ended
ended Dec. 31 Dec. 31
-----------------------------------------------
Subsidiary 2012 2011 2012 2011
----------- ------------ ----------- ----------
Cleco Power LLC $0.41 $0.39 $2.42 $2.34
Cleco Midstream Resources LLC (0.05) 0.06 (0.07) 0.05
Corporate and Other(1) - - 0.11 0.12
----------- ------------ ----------- ----------
Operational diluted earnings
per share (Non-GAAP) 0.36 0.45 2.46 2.51
Adjustments(2) 0.02 0.06 0.24 0.71
----------- ------------ ----------- ----------
Diluted earnings per share
applicable to common stock $0.38 $0.51 $2.70 $3.22
GAAP refers to United States generally accepted accounting principles.
(1 )Includes dividends and redemption costs on preferred stock
(2 )Refer to "Operational Earnings Adjustments" in this news release
Quarter-Over-Quarter Operational Diluted Earnings Per Share Reconciliation:
$0.45 2011 fourth-quarter operational diluted earnings per share
0.05 Non-fuel revenue
0.02 Rate refund accrual
(0.04) Other expenses, net
0.03 Interest charges
0.02 AFUDC (allowance for funds used during construction)
(0.06) Income taxes
-----------
$0.02 Cleco Power results
(0.11) Cleco Midstream results
- Corporate and Other results
-----------
$0.36 2012 fourth-quarter operational diluted earnings per share
0.02 Adjustments(1)
-----------
$0.38 Reported GAAP diluted earnings per share
(1)Refer to "Operational Earnings Adjustments" in this news release
Cleco Power
* Higher non-fuel revenue increased earnings by $0.05 per share compared to
the fourth quarter of 2011 primarily due to $0.06 per share of higher base
revenue due to an annual base rate adjustment related to the formula rate
plan, favorable weather, and higher commercial sales. This amount was
partially offset by $0.01 per share of lower other net miscellaneous
revenue.
* Lower rate refund accrual increased earnings by $0.02 per share compared to
the fourth quarter of 2011 primarily due to a change in estimated accruals.
* Higher other expenses, net, decreased earnings by $0.04 per share compared
to the fourth quarter of 2011 primarily due to $0.03 per share of higher
depreciation and amortization expense and $0.01 per share of higher net
other miscellaneous expenses.
* Lower interest charges increased earnings by $0.03 per share compared to the
fourth quarter of 2011 primarily due to $0.03 per share related to uncertain
tax positions, $0.01 per share related to reacquired debt in October and
December 2011, and $0.01 per share related to the retirement of pollution
control bonds in January and May 2012. The issuance of private placement
notes in December 2011 and May 2012 partially offset these amounts by $0.02
per share.
* Higher AFUDC increased earnings by $0.02 per share compared to the fourth
quarter of 2011 primarily due to higher AFUDC related to the advanced
metering infrastructure project and miscellaneous transmission projects.
* Higher income taxes decreased earnings by $0.06 per share compared to the
fourth quarter of 2011 primarily due to $0.04 per share for the loss of
state tax benefits related to tax credits and other state attributes and
$0.02 per share related to the absence of the settlement of the 2001 through
2003 IRS audit.
Cleco Midstream Resources
* Midstream's results decreased earnings by $0.11 per share compared to the
fourth quarter of 2011 primarily due to $0.12 per share related to the
absence of the settlement of the 2001 through 2003 IRS audit, partially
offset by $0.01 per share of lower other miscellaneous expenses.
For a discussion of other transactions affecting Cleco Midstream's results,
please refer to "Operational Earnings Adjustments - Acadia Units 1 and 2
Indemnifications" below.
Corporate and Other
* Higher interest charges decreased earnings by $0.01 per share compared to
the fourth quarter of 2011 primarily due to higher amounts related to
uncertain tax positions.
* Lower income taxes increased earnings by $0.01 per share compared to the
fourth quarter of 2011 as a result of $0.02 per share for the loss of state
tax benefits related to tax credits and other state attributes, and $0.01
per share for tax returns filed, partially offset by $0.01 per share related
to the absence of the settlement of the 2001 through 2003 IRS audit, and
$0.01 per share for tax credits.
Year-Over-Year Operational Diluted Earnings Per Share Reconciliation:
$2.51 Year ended Dec. 31, 2011, operational diluted earnings per share
(0.08) Non-fuel revenue
0.06 Rate refund accrual
(0.12) Other expenses, net
0.16 Interest charges
0.03 AFUDC (allowance for funds used during construction)
0.03 Income taxes
-----------
$0.08 Cleco Power results
(0.12) Cleco Midstream results
(0.01) Corporate and Other results
-----------
$2.46 Year ended Dec. 31, 2012, operational diluted earnings per share
0.24 Adjustments(1)
-----------
$2.70 Reported GAAP diluted earnings per share
(1)Refer to "Operational Earnings Adjustments" in this news release
Cleco Power
* Lower non-fuel revenue decreased earnings by $0.08 per share compared to
2011 primarily due to $0.09 per share relating to milder weather, $0.06 per
share from lower mineral lease payments, and $0.05 per share from the
absence of a gain on the sale of Cleco Power's fuel oil inventory. These
amounts were partially offset by $0.11 per share from an annual base rate
adjustment related to the formula rate plan and $0.01 per share of higher
other miscellaneous revenue.
* Lower rate refund accrual increased earnings by $0.06 per share compared to
2011 primarily due to a change in estimated accruals.
* Higher other expenses, net, decreased earnings by $0.12 per share compared
to 2011 primarily due to $0.10 per share of higher depreciation and
amortization expense, $0.07 per share of higher net non-recoverable
wholesale power purchases and other capacity charges, and $0.02 per share of
higher other taxes, primarily due to property taxes. These amounts were
partially offset by $0.05 per share of lower other operations and
maintenance expenses, and $0.02 per share of higher royalty income.
* Lower interest charges increased earnings by $0.16 per share compared to
2011 primarily due to $0.12 per share related to uncertain tax positions,
$0.08 per share related to reacquired debt in October and December 2011, and
$0.03 per share related to the retirement of pollution control bonds in
January and May 2012. Partially offsetting these amounts were $0.07 per
share related to the issuance of private placement notes in December 2011
and May 2012.
* Higher AFUDC increased earnings by $0.03 per share compared to 2011
primarily due to higher AFUDC accruals related to the advanced metering
infrastructure project and miscellaneous transmission projects.
* Lower income taxes increased earnings by $0.03 per share compared to 2011
primarily due to $0.04 per share for tax returns filed, $0.03 per share for
the settlement of legacy tax issues, and $0.03 per share for tax credits.
These amounts were partially offset by $0.03 per share for the loss of state
tax benefits related to tax credits and other state attributes, $0.02 per
share related to the absence of the settlement of the 2001 through 2003 IRS
audit, and $0.02 per share related to the absence in 2012 of the valuation
allowance reversal in 2011.
Cleco Midstream Resources
* Midstream's results decreased earnings by $0.12 per share compared to 2011
primarily due to $0.12 from the absence of the settlement of the 2001
through 2003 IRS audit and $0.07 per share of higher operating and
maintenance expenses. These amounts were partially offset by $0.07 per
share of higher tolling revenue.
For a discussion of other transactions affecting Cleco Midstream's results,
please refer to "Operational Earnings Adjustments - Gain from Acadia Unit 2
Transaction and Acadia Units 1 and 2 Indemnifications" below.
Corporate and Other
* Higher income taxes decreased earnings by $0.01 per share compared to 2011
primarily due to $0.06 per share for tax returns filed and $0.01 per share
related to the absence of the settlement of the 2001 through 2003 IRS audit.
These amounts were partially offset by $0.06 per share for tax credits.
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 per share 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 For the year ended
ended Dec. 31 Dec. 31
-----------------------------------------------
2012 2011 2012 2011
----------- ------------ ----------- ----------
Operational diluted earnings
per share $0.36 $0.45 $2.46 $2.51
Life insurance policies - 0.06 0.02 0.06
Gain on Acadia Unit 2
transaction - - - 0.63
Acadia Unit 1 indemnifications - - 0.08 0.02
Acadia Unit 2 indemnifications 0.02 - 0.14 -
----------- ------------ ----------- ----------
Reported GAAP diluted earnings
per share applicable to common
stock $0.38 $0.51 $2.70 $3.22
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.
Gain from Acadia Unit 2 Transaction
On April 29, 2011, the disposition of Acadia Unit 2 and half of Acadia Power
Station's common facilities was completed resulting in the recognition of a gain
of $0.63 per share for 2011. Because this is a one-time gain, management does
not consider this adjustment to be a component of operational earnings.
Acadia Units 1 and 2 Indemnifications
Acadia Power Partners, LLC provided limited guarantees and indemnifications to
Cleco Power and Entergy Louisiana when they acquired Acadia Units 1 and 2 in
February 2010 and April 2011, respectively. Acadia Power Partners, LLC and
Acadia Power Holdings will reduce the indemnification liabilities either through
expiration of the contractual life or through changes in the probability of a
claim arising. During the fourth quarter of 2012, the contractual expiration of
the underlying indemnifications increased earnings by $0.02 per share. The
resulting adjustment for this item had no impact for the fourth quarter of
2011. During the year ended December 31, 2012 and 2011, the contractual
expiration of the underlying indemnifications increased earnings $0.22 per share
and $0.02 per share, respectively.
Cleco management will discuss the company's fourth-quarter 2012 results during a
conference call scheduled for 7:30 a.m. Central time (8:30 a.m. Eastern time)
Wednesday, February 20, 2013. 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 "Investor
Relations"
and then "Q4 2012 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
and Cleco Midstream'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. 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 9
generating units with a total nameplate capacity of 2,565 megawatts and serves
approximately 283,000 customers in Louisiana through its retail business and 10
communities across Louisiana and Mississippi through wholesale power contracts.
Cleco also owns a wholesale energy business, Cleco Midstream Resources LLC,
which owns two generating units with a total nameplate capacity of 775
megawatts. For more information about Cleco, visit www.cleco.com.
Analyst Contact:
Tom Miller
(318) 484-7642
Media Contact:
Robbyn Cooper
(318) 484-7136
For the three months ended Dec. 31
----------------------------------------------------------------------
(Unaudited) (million kWh) (thousands)
----------------------------- ----------------------------------------
2012 2011 Change 2012 2011 Change
--------- --------- --------- -------------- -------------- ----------
Electric
Sales
Residential 790 772 2.3% $61,884 $58,404 6.0 %
Commercial 634 613 3.4% 44,884 42,652 5.2 %
Industrial 601 596 0.8% 22,457 21,642 3.8 %
Other
retail 32 32 - 2,472 2,331 6.0 %
Surcharge - - - 2,333 3,161 (26.2)%
Other - - - (1,565) (1,552) (0.8)%
--------- --------- -------------- --------------
Total
retail 2,057 2,013 2.2% 132,465 126,638 4.6 %
Sales for
resale 461 393 17.3% 11,813 11,200 5.5 %
Unbilled (54) (49) 10.2% (3,501) (2,980) (17.5)%
--------- --------- -------------- --------------
Total
retail and
wholesale
customer
sales 2,464 2,357 4.5% $140,777 $134,858 4.4 %
For the year ended Dec. 31
-------------------------------------------------------------------------
(Unaudited) (million kWh) (thousands)
-------------------------------- ----------------------------------------
2012 2011 Change 2012 2011 Change
---------- ---------- ---------- -------------- -------------- ----------
Electric
Sales
Residential 3,624 3,877 (6.5)% $281,378 $294,076
(4.3)%
Commercial 2,655 2,650 0.2 % 181,093 179,786 0.7 %
Industrial 2,311 2,366 (2.3)% 85,675 85,965 (0.3)%
Other
retail 133 134 (0.7)% 9,908 9,815 0.9 %
Surcharge - - - 9,133 10,695 (14.6)%
Other - - - (6,252) (6,426) 2.7 %
---------- ---------- -------------- --------------
Total
retail 8,723 9,027 (3.4)% 560,935 573,911 (2.3)%
Sales for
resale 1,934 1,888 2.4 % 47,767 45,633 4.7 %
Unbilled (43) (139) 69.1 % (2,125) (14,520) 85.4 %
---------- ---------- -------------- --------------
Total
retail and
wholesale
customer
sales 10,614 10,776 (1.5)% $606,577 $605,024 0.3
%
CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(Unaudited)
For the three months ended Dec. 31 2012 2011
-------------------------------------------------------------------------------
Operating revenue
Electric operations $223,393 $228,472
Tolling operations - 2,868
Other operations 11,693 11,187
----------------------------
Gross operating revenue 235,086 242,527
Electric customer credits (1,655) (3,406)
----------------------------
Operating revenue, net 233,431 239,121
Operating expenses
Fuel used for electric generation 72,789 85,245
Power purchased for utility customers 9,065 9,872
Other operations 33,996 33,569
Maintenance 25,010 22,411
Depreciation 33,380 30,829
Taxes other than income taxes 9,317 7,587
Loss on sales of assets 108 959
----------------------------
Total operating expenses 183,665 190,472
----------------------------
Operating income 49,766 48,649
Interest income 183 97
Allowance for other funds used during construction 2,414 1,190
Equity loss from investees, before tax (1) -
Other income 4,894 5,584
Other expense (1,976) (2,785)
Interest charges
Interest charges, including amortization of debt
expense, premium, and discount, net 21,777 (6,923)
Allowance for borrowed funds used during
construction (826) (430)
----------------------------
Total interest charges 20,951 (7,353)
----------------------------
Income before income taxes 34,329 60,088
Federal and state income tax expense 11,217 29,445
----------------------------
Net income applicable to common stock $23,112 $30,643
----------------------------
Average number of basic common shares outstanding 60,353,185 60,282,040
Average number of diluted common shares
outstanding 60,625,139 60,557,515
Basic earnings per share
Net income applicable to common stock $0.38 $0.51
Diluted earnings per share
Net income applicable to common stock $0.38 $0.51
Cash dividends paid per share of common stock $0.3375 $0.3125
CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Thousands, except share and per share amounts)
(Unaudited)
For the year ended Dec. 31 2012 2011
-------------------------------------------------------------------------------
Operating revenue
Electric operations $944,169 $1,051,956
Tolling operations - 19,004
Other operations 50,158 52,962
Affiliate revenue - 202
------------------------------
Gross operating revenue 994,327 1,124,124
Electric customer credits (630) (6,811)
------------------------------
Operating revenue, net 993,697 1,117,313
Operating expenses
Fuel used for electric generation 280,553 383,254
Power purchased for utility customers 53,134 70,462
Other operations 120,898 123,849
Maintenance 86,488 82,076
Depreciation 132,407 122,578
Taxes other than income taxes 38,515 36,356
Loss on sales of assets 51 491
------------------------------
Total operating expenses 712,046 819,066
------------------------------
Operating income 281,651 298,247
Interest income 346 891
Allowance for other funds used during
construction 6,711 4,947
Equity income from investees, before tax - 62,050
Other income 29,117 8,914
Other expense (4,694) (5,646)
Interest charges
Interest charges, including amortization of debt
expense, premium, and discount, net 86,448 72,445
Allowance for borrowed funds used during
construction (2,292) (1,787)
------------------------------
Total interest charges 84,156 70,658
------------------------------
Income before income taxes 228,975 298,745
Federal and state income tax expense 65,327 102,897
------------------------------
Net income 163,648 195,848
Preferred dividends requirements - 26
Preferred stock redemption costs - 112
------------------------------
Net income applicable to common stock $163,648 $195,710
------------------------------
Average number of basic common shares
outstanding 60,370,588 60,488,740
Average number of diluted common shares
outstanding 60,628,129 60,833,564
Basic earnings per share
Net income applicable to common stock $2.71 $3.24
Diluted earnings per share
Net income applicable to common stock $2.70 $3.22
Cash dividends paid per share of common stock $1.30 $1.1225
CLECO CORPORATION
CONSOLIDATED BALANCE SHEETS
(Thousands)
(Unaudited)
At Dec. At Dec.
31, 2012 31, 2011
---------------------------------------------------------------------------
Assets
Current assets
Cash and cash equivalents $31,020 $93,576
Accounts receivable, net 77,034 79,864
Other current assets 339,284 283,345
--------------------------------
Total current assets 447,338 456,785
Property, plant and equipment, net 3,009,461 2,893,899
Equity investment in investees 14,540 14,540
Prepayments, deferred charges and other 676,010 684,978
--------------------------------
Total assets $4,147,349 $4,050,202
--------------------------------
Liabilities
Current liabilities
Long-term debt due within one year $91,140 $26,099
Accounts payable 102,695 127,467
Other current liabilities 100,795 167,436
--------------------------------
Total current liabilities 294,630 321,002
Deferred credits 1,096,248 972,287
Long-term debt, net 1,257,258 1,337,056
--------------------------------
Total liabilities 2,648,136 2,630,345
--------------------------------
Shareholders' equity
Common shareholders' equity 1,531,583 1,447,996
Accumulated other comprehensive loss (32,370) (28,139)
--------------------------------
Total shareholders' equity 1,499,213 1,419,857
--------------------------------
Total liabilities and shareholders' equity $4,147,349 $4,050,202
--------------------------------
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Source: Cleco Corp. via Thomson Reuters ONE
[HUG#1679442]
