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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994 Commission file number 1-5663
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Central Louisiana Electric Company, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 72-0244480
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (318) 484-7400
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
--- ---
As of November 1, 1994 there were 22,390,641 shares outstanding of the
registrant's Common Stock, par value $2.00 per share.
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TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 1
Report of Independent Accountants . . . . . . . 2
Consolidated Balance Sheet. . . . . . . . . . . 3
Consolidated Statements of Income . . . . . . . 5
Consolidated Statement of Cash Flows. . . . . . 7
Notes to Consolidated Financial Statements. . . 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Financial Condition . . . . . . . . . . . . . . 9
Results of Operations . . . . . . . . . . . . . 10
PART II. OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . 12
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 13
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit 10(a) . . . . . . . . . . . . . . . . . . . . . . . 15
Exhibit 10(b) . . . . . . . . . . . . . . . . . . . . . . . 22
Exhibit 10(c) . . . . . . . . . . . . . . . . . . . . . . . 29
Exhibit 11. . . . . . . . . . . . . . . . . . . . . . . . . 36
Exhibit 12. . . . . . . . . . . . . . . . . . . . . . . . . 38
Exhibit 15. . . . . . . . . . . . . . . . . . . . . . . . . 39
Exhibit 27. . . . . . . . . . . . . . . . . . . . . . . . . 40
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PART I
FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The consolidated financial statements for Central Louisiana Electric Company,
Inc. (the Company) included herein are unaudited but reflect, in the Company's
opinion, all adjustments, consisting only of normal recurring adjustments, that
are necessary for a fair presentation of its financial position and the results
of its operations for the interim periods presented. The financial statements
included herein should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1993.
The consolidated financial statements included herein have been subjected to
a limited review by Coopers & Lybrand L.L.P., independent accountants for the
Company, whose report is included herein.
1
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Coopers Coopers & Lybrand L.L.P. 639 Loyola Avenue telephone(504)529-2700
& Lybrand a professional services firm Suite 1800 facsimile(504)529-1439
New Orleans, Louisiana 70113
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Central Louisiana Electric Company, Inc.
We have made a review of the balance sheet of Central Louisiana Electric
Company, Inc. as of September 30, 1994, and the related statements of income
for the three-month and nine-month periods and cash flows for the nine-month
periods ended September 30, 1994 and 1993, in accordance with standards
established by the American Institute of Certified Public Accountants.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheet as of December 31, 1993 and the related statements
of income, cash flows, and changes in common shareholders' equity for the year
then ended (not present herein); and in our report dated January 21, 1994, we
expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of
December 31, 1993, is fairly stated in all material respects in relation to the
balance sheet from which it has been derived.
Coopers & Lybrand L.L.P.
New Orleans, Louisiana
October 21, 1994
2
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION> (In thousands)
September 30, 1994 December 31, 1993
------------------ -----------------
ASSETS
<S> <C> <C>
Utility plant
Property, plant and equipment $1,265,138 $1,241,147
Accumulated depreciation (403,620) (379,753)
----------- -----------
861,518 861,394
Construction work-in-progress 42,309 33,642
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Total utility plant, net 903,827 895,036
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Investments and other assets 20,655 20,197
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Current assets
Cash and cash equivalents 7,355 5,802
Accounts receivable, net 16,104 10,701
Unbilled revenues 3,417 1,506
Inventory, at average cost 11,129 11,898
Materials and supplies, at average cost 15,689 14,007
Prepayments and other 2,498 2,218
----------- -----------
Total current assets 56,192 46,132
----------- -----------
Prepayments and deferred charges 204,049 200,270
----------- -----------
TOTAL ASSETS $1,184,723 $1,161,635
----------- -----------
<FN>
(Continued on next page)
3
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED BALANCE SHEET (Continued)
(Unaudited)
<CAPTION> (In thousands,
except share amounts)
September 30, 1994 December 31, 1993
------------------ -----------------
CAPITALIZATION AND LIABILITIES
<S> <C> <C>
Common shareholders' equity
Common stock, $2 par value, authorized
50,000,000 shares, issued 22,716,474
and 22,708,874 shares at September 30,
1994 and December 31, 1993, respectively $ 45,433 $ 45,418
Premium on capital stock 112,971 112,829
Retained earnings 213,685 200,908
Treasury stock at cost, 327,433 and
326,380 shares at September 30, 1994
and December 31, 1993, respectively (6,639) (6,600)
----------- -----------
365,450 352,555
Preferred stock, cumulative, $100 par value
Not subject to mandatory redemption 30,708 30,982
Deferred compensation related to
preferred stock held by ESOP (24,722) (26,118)
----------- -----------
5,986 4,864
Subject to mandatory redemption 7,230 7,242
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13,216 12,106
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Long-term debt, net 336,580 351,087
----------- -----------
Total capitalization 715,246 715,748
----------- -----------
Current liabilities
Short-term debt 32,758 28,373
Long-term debt due within one year 14,693 790
Accounts payable 29,009 40,653
Customer deposits 19,348 18,638
Taxes accrued 21,133 5,069
Interest accrued 2,280 8,329
Accumulated deferred fuel 6,110 5,315
Other 1,863 2,355
----------- -----------
Total current liabilities 127,194 109,522
----------- -----------
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Deferred credits
Accumulated deferred federal and state
income taxes 227,328 224,151
Accumulated deferred investment tax credits 35,441 36,806
Other deferred credits 79,514 75,408
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Total deferred credits 342,283 336,365
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TOTAL CAPITALIZATION AND LIABILITIES $1,184,723 $1,161,635
----------- -----------
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
4
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
For the three months ended September 30,
(Unaudited)
<CAPTION> (In thousands, except share and
per share amounts)
1994 1993
------------ ------------
<S> <C> <C>
OPERATING REVENUES $ 112,633 $ 126,110
------------ ------------
OPERATING EXPENSES
Fuel used for electric generation 37,654 44,256
Power purchased 3,681 7,807
Other operation 13,929 13,371
Restructuring charge - 10,851
Maintenance 5,607 5,835
Depreciation 9,924 9,055
Other taxes 7,804 7,454
Federal and state income taxes 9,941 7,229
------------ ------------
88,540 105,858
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OPERATING INCOME 24,093 20,252
Allowance for other funds used during
construction 419 361
Other income and expenses, net (401) 31
------------ ------------
INCOME BEFORE INTEREST CHARGES 24,111 20,644
Interest charges, including amortization of
debt expense, premium and discount 6,698 6,613
Allowance for borrowed funds used during
construction (193) (123)
------------ ------------
NET INCOME 17,606 14,154
Preferred dividend requirements, net 506 489
------------ ------------
NET INCOME APPLICABLE TO COMMON STOCK $ 17,100 $ 13,665
------------ ------------
WEIGHTED AVERAGE COMMON SHARES
Primary 22,416,619 22,398,493
Fully diluted 23,843,121 23,836,370
EARNINGS PER SHARE
Primary $0.76 $0.61
Fully diluted $0.73 $0.59
CASH DIVIDENDS PAID PER SHARE $0.365 $0.355
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
5
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
For the nine months ended September 30,
(Unaudited)
<CAPTION> (In thousands, except share and
per share amounts)
1994 1993
------------ ------------
<S> <C> <C>
OPERATING REVENUES $ 297,720 $ 293,628
------------ ------------
OPERATING EXPENSES
Fuel used for electric generation 96,888 91,066
Power purchased 14,319 21,297
Other operation 40,597 38,171
Restructuring charge - 10,851
Maintenance 16,552 17,697
Depreciation 29,543 27,724
Other taxes 22,018 21,026
Federal and state income taxes 19,655 15,260
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239,572 243,092
------------ ------------
OPERATING INCOME 58,148 50,536
Allowance for other funds used during
construction 985 2,100
Other income and expenses, net (546) 104
------------ ------------
INCOME BEFORE INTEREST CHARGES 58,587 52,740
Interest charges, including amortization of
debt expense, premium and discount 20,100 19,616
Allowance for borrowed funds used during
construction (469) (594)
------------ ------------
NET INCOME 38,956 33,718
Preferred dividend requirements, net 1,507 1,485
------------ ------------
NET INCOME APPLICABLE TO COMMON STOCK $ 37,449 $ 32,233
------------ ------------
WEIGHTED AVERAGE COMMON SHARES
Primary 22,417,161 22,383,708
Fully diluted 23,844,788 23,823,730
EARNINGS PER SHARE
Primary $1.67 $1.44
Fully diluted $1.61 $1.39
CASH DIVIDENDS PAID PER SHARE $1.085 $1.055
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
6
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended September 30,
(Unaudited)
<CAPTION> (In thousands)
1994 1993
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 38,956 $ 33,718
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 29,911 28,098
Allowance for funds used during construction (1,454) (2,694)
Amortization of investment tax credits (1,365) (1,370)
Deferred income taxes 1,613 883
Deferred fuel costs 795 445
Restructuring charge - 10,851
Loss on disposition of utility plant, net 4 -
Changes in assets and liabilities
Accounts receivable (5,403) (9,334)
Unbilled revenues (1,911) (5,904)
Inventory, materials and supplies (913) (2,717)
Accounts payable (11,644) (4,976)
Customer deposits 710 869
Other deferred accounts (959) (4,360)
Taxes accrued 16,064 14,663
Interest accrued (6,049) (4,834)
Other, net 1,215 5,303
-------- --------
Net cash provided by operating activities 59,570 58,641
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to utility plant (37,476) (38,655)
Allowance for funds used during construction 1,454 2,694
Sale of utility plant 239 320
Purchase of investments (142,867) (138,697)
Sale of investments 142,861 137,554
-------- --------
Net cash used in investing activities (35,789) (36,784)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 156 993
Issuance of long-term debt - 75,000
Repurchase of common stock (274) -
Retirement of long-term debt (634) (25,053)
Increase (decrease) in short-term debt 4,384 (47,118)
Redemption of preferred stock (52) (40)
Dividends paid on common and preferred stock, net (25,808) (25,660)
-------- --------
Net cash used in financing activities (22,228) (21,878)
-------- --------
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,553 (21)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,802 1,798
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 7,355 $ 1,777
-------- --------
SUPPLEMENTARY CASH FLOW INFORMATION
Interest paid (net of amount capitalized) $ 26,670 $ 23,190
-------- --------
Income taxes paid $ 17,447 $ 12,053
-------- --------
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
7
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A. Earnings Per Share
In 1994, fully diluted earnings per share are being reported for
the first time, as a result of the accounting effects of the Employee
Stock Ownership Plan (ESOP) convertible preferred stock.
Primary earnings per share are computed based on the weighted
average number of common shares outstanding and common stock
equivalents arising from an Incentive Stock Option Plan. Fully
diluted earnings per share are computed using average common shares
and common stock equivalents. Common stock equivalents are increased
by the assumed conversion of convertible preferred stock into common
stock as if converted at the beginning of the period.
Note B. Investments in Debt and Equity Securities
The Company implemented Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" (SFAS 115), on January 1, 1994. The Company has
classified the various debt and equity securities it owns as
"available-for-sale" in accordance with the criteria set forth in SFAS
115. These funds are invested through an outside investment manager
pending final determination by the Company as to their ultimate
utilization. Currently, the Company does not intend to trade these
securities actively or to hold these investments to their final
maturity. Securities may be sold in order to adjust the amounts
invested within the various types of securities, to limit the
potential loss exposure associated with a specific security or to
obtain funds needed for other investment opportunities.
The Company has recorded a $0.4 million after-tax valuation
allowance as an adjustment to common shareholders' equity to reflect
a net unrealized loss on the portfolio as of September 30, 1994.
Note C. Cash and Cash Equivalents
The Company considers highly liquid, marketable securities and other
similar investments with original maturity dates of less than three
months to be cash equivalents. Cash and cash equivalents increased
from $1.8 million at September 30, 1993 to $7.4 million at September
30, 1994, or $5.6 million. About $4.9 million of this increase was
due to the investment of a portion of the Company's temporary cash
investments in securities with original maturities of 90 days or less.
Similar temporary cash investments in 1993 were in securities with
original maturities greater than 90 days.
8
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL CONDITION
Investments
On January 1, 1994 the Company implemented SFAS 115. The Company has
classified the various debt and equity securities it owns as
"available-for-sale" in accordance with the criteria set forth in SFAS 115.
These funds are invested through an outside investment manager pending final
determination by the Company as to their ultimate utilization. Currently, the
Company does not intend to trade these securities actively or to hold these
investments to their final maturity. Securities may be sold in order to adjust
the amounts invested within the various types of securities, to limit the
potential loss exposure associated with a specific security or to obtain funds
needed for other investment opportunities.
As of September 30, 1994 the fair market value of the Company's investments
In debt and equity securities was $14.3 million, compared to $14.5 million as
of December 31, 1993. The Company has recorded a $0.4 million after-tax
valuation allowance as an adjustment to common shareholders' equity to reflect
a net unrealized loss on the portfolio as of September 30, 1994. See "Note B.
Investments in Debt and Equity Securities" and "Note C. Cash and Cash
Equivalents" in Item 1 above for more information.
Regulatory Matters
The Company is defending against assertions made to the Federal Energy
Regulatory Commission (FERC) by the Louisiana Energy and Power Authority, the
city of Lafayette and the American Public Power Association of unduly
discriminatory and predatory pricing by the Company of its proposed full
requirements sale to the city of St. Martinville. The St. Martinville
agreement is expected to provide base revenues, net of facility payments, of
approximately $4 million over the five-year term of the agreement beginning in
May 1995. In April 1994 the Company's motion for summary disposition was
denied, and the case was heard by an administrative law judge in June 1994.
Briefs were filed in July 1994 and reply briefs were filed in August 1994. A
decision is expected by late November of this year. Management believes that
the decision will not have a significant adverse effect on the Company's
financial condition or results of operations.
9
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS
Net income applicable to common stock totaled $17.1 million and $37.4
million, respectively, for the three- and nine-month periods ended September
30, 1994, as compared to $13.7 million and $32.2 million, respectively, for the
corresponding periods in 1993. Net income per primary average common share was
$0.76 and $1.67, respectively, for the three- and nine-month periods ended
September 30, 1994, as compared to $0.61 and $1.44, respectively, for the same
periods in 1993. Earnings for the first nine months of 1993 were lower than
earnings for the nine months ended September 30, 1994 primarily due to an
after-tax restructuring charge of $7.0 million, or $0.31 per share, resulting
from the implementation of a third quarter 1993 early retirement and voluntary
severance program. In addition to the restructuring charge, the following
factors also contributed to these results:
Operating revenues decreased $13.5 million, or 10.7%, and increased $4.1
million, or 1.4%, for the three- and nine-month periods ended September 30,
1994, respectively. Total kilowatt-hour sales decreased 12.0% for the three-
month period, and increased 2.6% for the nine-month period, compared to the
same periods in 1993. Changes in the makeup of total operating revenues and
their effects on income from operations, and thus on net income, are best
analyzed by examining the changes in fuel cost recovery revenues and non-fuel
cost recovery revenues as follows:
a) Fuel cost recovery revenues decreased $10.7 million, or 20.9%,
and $1.3 million, or 1.2%, respectively, for the three- and
nine-month periods, primarily due to less favorable summer
weather which was cooler than normal during the third quarter
of 1994 and lower natural gas prices in 1994. Changes in fuel
cost recovery revenues have no effect on net income, as fuel
costs are generally recovered in revenues through a fuel
adjustment clause which enables the Company to pass on to
customers substantially all changes in the cost of generating
fuel. The adjustments regulated by the Louisiana Public Service
Commission (LPSC) (about 99% of the total fuel cost adjustment)
are audited by the LPSC staff monthly and the remaining portion,
regulated by the FERC, are audited periodically for several
years at a time. Until approval is received, the adjustments
are subject to refund.
b) Non-fuel cost recovery revenues decreased $2.8 million, or 3.7%,
and increased $5.4 million, or 3.0%, for the three- and nine-
month periods of 1994, compared to the same periods in 1993.
Third quarter 1994 summer weather was cooler than that
experienced during the same period in the prior year, while more
favorable summer weather, which was warmer than that experienced
in the prior year, occurred during the second quarter of 1994.
10
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Other operation and maintenance expenses, excluding $10.9 million in pre-tax
restructuring costs relating to an early retirement and voluntary severance
program put into place during the third quarter of 1993, increased $0.3
million, or 1.7%, for the three-month period ended September 30, 1994
compared to the same period in 1993, and $1.3 million, or 2.3%, for the nine-
month period. This increase was primarily due to a one-time joint owner
billing adjustment recorded in the second quarter of 1994 to true-up 1993
restructuring expense estimates, increased public relations expenses
associated with the Company's campaign to acquire Teche Electric Cooperative,
Inc. (Teche), and higher regulatory commission expenses associated with a
June 1994 FERC hearing. For more information regarding the Teche campaign,
see "Item 5. Other Information" in Part II below. For more information
regarding the FERC hearing, see "Regulatory Matters" in "Financial Condition"
above.
Depreciation expenses increased $0.9 million, or 9.6%, for the quarter ended
September 30, 1994 compared to the same period in 1993, and $1.8 million, or
6.6%, for the nine-month period, due to higher plant balances resulting from
increased additions during the third and fourth quarters of 1993 which
included the placement into service of a 61-mile, 230,000-volt transmission
line and the installation of a new customer information system.
Taxes other than income taxes increased $0.3 million, or 4.7%, for the three-
month period, and $1.0 million, or 4.7%, for the nine-month period, as a
result of higher millage rates and increased ad valorem taxes resulting from
higher assessed property values and increased city franchise taxes.
Interest expense increased $0.1 million, or 1.3%, for the three-month period
ended September 30, 1994 compared to the same period in 1993, and $0.5
million, or 2.5%, for the nine-month period, primarily due to higher short-
term interest rates and the issuance of long-term debt during the second and
third quarters of 1993 to reduce short-term debt levels.
Allowance for funds used during construction (AFUDC), including borrowed and
other funds on a combined basis, was approximately the same for the three-
month periods ended September 30, 1994 and September 30, 1993, and decreased
$1.2 million, or 46.0%, for the nine-month period ended September 30, 1994
compared to the same period in 1993, as a result of lower construction work-
in-progress balances during the nine-month period in 1994 compared to the
corresponding period in 1993. Construction work-in-progress balances were
higher in 1993 compared to 1994 due to the following events, all of which
occurred in 1993: completion of Hurricane Andrew reconstruction work,
completion of a 61-mile, 230,000-volt transmission line, and the installation
of a new customer information system.
Federal and state income taxes increased $2.7 million, or 37.5%, for the
three-month period ended September 30, 1994 compared to the same period in
1993, and $4.4 million, or 28.8%, for the nine-month period ended September
30, 1994 compared to the same period in 1993, primarily due to a $10.9
million pre-tax restructuring charge against earnings during the third
quarter of 1993.
11
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PART II
OTHER INFORMATION
Item 5. OTHER INFORMATION
Customer Service Offices to Close
In early October 1994 the Company approved a plan to consolidate 25 customer
service offices into ten regional offices by June 1995. The Company will be
consolidating its customer service functions in conjunction with, and as a
result of the efficiencies exptected to be gained by, the establishment of a
24-hour customer call center and a statewide automated payment network by mid-
1995. On October 19, 1994 customer service representatives were informed of
the plan and briefed on restaffing procedures and severance benefits offered by
the plan. The Company publicly announced the plan on the following day.
In connection with the consolidation plan, the Company expects to pay $0.8
million in termination benefits if all eligible employees elect to accept the
severance benefits offered by the plan. In addition, the Company has lease
commitments totaling approximately $0.4 million on 12 customer service office
buildings, the longest lease running through the year 2003. The Company will
charge these customer service restructuring costs against its fourth quarter
1994 earnings.
In response to the Company's announcement that 15 of its customer service
offices will close next year, the Mayor and City Council of two cities targeted
for office closing have passed resolutions opposing the closure of the Company
office in their respective cities. The Company currently employs five people
and serves an aggregate of approximately 15,500 customers in these two cities
and their surrounding communities. The Company and representatives of the two
cities are working to resolve the issues relating to the proposed office
closures and the Company believes that the issues will be satisfactorily
resolved.
Efforts to Acquire Teche Continue
In February 1994 the Company announced its interest in purchasing Teche.
Teche serves about 8,800 customers and its service area, which is comprised of
parts of Iberia, St. Martin and St. Mary parishes (counties), is contiguous to
the Company's.
The Company has been conducting a public relations campaign of Teche
members. In August 1994 the LPSC issued the first of several orders seeking
information regarding public interest in the acquisition. Teche's board of
directors subsequently appealed one order to the 19th Judicial District Court
challenging the LPSC's authority to issue orders requiring Teche to make public
information it regards as proprietary. The Court ruled largely in the LPSC's
favor. The LPSC is proceeding with its investigation regarding public interest
in the acquisition.
At this time, the Company is continuing its efforts to acquire Teche and is
unable to predict whether it will ultimately be successful.
<PAGE>
Internal Revenue Service Audit
In April 1994 the Internal Revenue Service began an audit of the Company's
1991 and 1992 federal income tax returns and financial records. The
examination is not yet complete; however, management believes that any
potential assessment will not have a significant adverse effect on the
Company's financial position or results of operations.
12
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CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
Item 5. OTHER INFORMATION (Continued)
Suspension of Local Sales Tax Exemption
In the third quarter of 1994, the Louisiana Supreme Court ruled in BP Oil
Company vs. Plaquemines Parish Government that Louisiana law requires
uniformity in sales tax exemptions for both state and local taxation. Since
Louisiana has suspended sales tax exemptions for retail sales of electricity
and boiler fuel, among other things, the effect of this decision would be to
subject these sales to local sales taxes. The Court has agreed to rehear the
case. Sales taxes are a consumer tax and would, therefore, increase customers'
electric bills. The Company has not collected local sales taxes on its sales
of electricity. If this decision is not overturned in rehearing, local taxing
authorities could seek to recover such taxes from the Company for prior years.
In this event, the Company would consider seeking recovery from its customers.
Taxes due on such sales for years (1991-1993) in which the statute of
limitations has not expired, excluding statutory interest and penalties, could
amount to as much as $30 million.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10(a) Remarketing Agreement (The Industrial Development Board of
the Parish of Rapides, Inc. (Louisiana) Adjustable Tender
Pollution Control Revenue Refunding Bonds, Series 1991)
dated as of July 19, 1994, between the Company and
PaineWebber Incorporated as successor Remarketing Agent to
Smith Barney, Harris Upham & Co. Incorporated
10(b) Remarketing Agreement (Parish of DeSoto, State of Louisiana
Adjustable Tender Pollution Control Revenue Refunding
Bonds, Series 1991A) dated as of July 19, 1994, between the
Company and PaineWebber Incorporated as successor
Remarketing Agent to Smith Barney, Harris Upham & Co.
Incorporated
10(c) Remarketing Agreement (Parish of DeSoto, State of Louisiana
Adjustable Tender Pollution Control Revenue Refunding
Bonds, Series 1991B) dated as of July 19, 1994, between the
Company and PaineWebber Incorporated as successor
Remarketing Agent to Smith Barney, Harris Upham & Co.
Incorporated
11 Computation of Net Income per Common Share for the three-
and nine-months ended September 30, 1994 and September 30,
1993
12 Computation of Earnings to Fixed Charges and Earnings to
Combined Fixed Charges and Preferred Stock Dividends for
the twelve months ended September 30, 1994
<PAGE>
15 Awareness letter, dated November 11, 1994, from Coopers &
Lybrand L.L.P. regarding review of the unaudited interim
financial statements
27 Financial Data Schedule
(b) Reports on Form 8-K
During the three-month period ended September 30, 1994, the
Company filed no Current Reports on Form 8-K.
13
<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the under-
signed thereunto duly authorized.
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
(Registrant)
BY: David M. Eppler
David M. Eppler
Vice President - Finance
(Principal Financial Officer)
Date: November 11, 1994
14
<PAGE>
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated and effective as of July 19, 1994, between
CENTRAL LOUISIANA ELECTRIC COMPANY, INC. (the "Company") and PAINEWEBBER
INCORPORATED ("PaineWebber").
WHEREAS, on May 29, 1991, the Industrial Development Board of the Parish of
Rapides, Inc., State of Louisiana (the "Issuer") issued its Adjustable Tender
Pollution Control Revenue Refunding Bonds (Central Louisiana Electric Company,
Inc. Project) Series 1991 in the aggregate principal amount of $11,150,000 (the
"Bonds"), pursuant to that certain Trust Indenture dated as of May 1, 1991 (the
"Indenture") between the Issuer and First National Bank of Commerce, as trustee
(the "Trustee"); and
WHEREAS, the Company and the Issuer are parties to that certain Refunding
Agreement dated as of May 1, 1991 (the "Refunding Agreement") pursuant to which
the Issuer agreed to make available the proceeds of the Bonds to the Company,
and the Company agreed to pay amounts sufficient to pay the principal of,
purchase price of, premium, if any, and interest on the Bonds; and
WHEREAS, to secure the payment of the principal of, interest on and purchase
price of the Bonds, Swiss Bank Corporation, New York Branch (the "Bank") issued
its irrevocable direct-pay letter of credit (as amended or extended from time
to time, the "Letter of Credit") to the Trustee and in connection therewith the
Company entered into a Reimbursement Agreement dated as of May 1, 1991 (as
amended or extended from time to time, the "Reimbursement Agreement") with
the Bank; and
WHEREAS, the Issuer has appointed PaineWebber (and PaineWebber has accepted
the appointment) as Remarketing Agent pursuant to the Indenture; and
WHEREAS, the Company and PaineWebber desire to make additional provisions
regarding PaineWebber's role as Remarketing Agent for the Bonds.
NOW, THEREFORE, the Company and PaineWebber hereby agree as follows:
1. Definitions. All capitalized terms used in this Agreement which are not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
2. Confirmation of Appointment. The Company hereby confirms the appointment
of PaineWebber as Remarketing Agent pursuant to the Indenture.
3. Duties. PaineWebber will perform the duties specified as Remarketing
Agent under the Indenture subject to the terms of the Indenture and this
Agreement. In acting as Remarketing Agent, PaineWebber will act as agent
and not as principal except as expressly provided in this
15
<PAGE>
<PAGE>
Section.
PaineWebber may, if it determines to do so in its sole discretion, buy as
principal any such Bonds but it will not in any event be obligated to do so,
and if it buys Bonds it will have the same rights as would any other person
holding the Bonds.
4. Disclosure Statement. (a) If PaineWebber determines that it is necessary
or desirable to use a disclosure statement in connection with its
offering of the Bonds, PaineWebber will notify the Company and the
Company will provide PaineWebber with a disclosure statement satisfactory
to PaineWebber and its counsel in respect of the Bonds. The Company will
supply PaineWebber with such number of copies of the disclosure statement
and documents related thereto as PaineWebber requests from time to time
and will amend the disclosure statement (and/or the documents
incorporated by reference in it) so that at all times the disclosure
statement and any documents related thereto will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements in such documents, in the light of the
circumstances under which they were made, not misleading. In addition,
the Company will take all steps reasonably requested by PaineWebber which
PaineWebber or its counsel may consider necessary or desirable to
register the sale of the Bonds by PaineWebber under any Federal or state
securities law or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended, and will provide PaineWebber such officers'
certificates, counsel opinions, accountants' letters and other documents
as may be customary in similar transactions. If the Company does not
perform its obligations under this Section, PaineWebber may immediately
cease remarketing efforts.
(b) The Company has previously prepared and delivered to PaineWebber a
copy of the Official Statement, dated May 29, 1991, including
appendices consisting of financial and other information in respect
of the Company and the Bank. Such Official Statement, including
Appendices A, B and C thereto and the materials incorporated by
reference therein, is referred to herein as the "Official Statement."
The Company authorized the use by PaineWebber of the Official
Statement in connection with the remarketing of Bonds. For purposes
of this Agreement, the Official Statement and any other documents
provided to PaineWebber pursuant to paragraph (a) of this Section
shall be considered to be the disclosure Statement (as defined in
Section 5 hereof).
5. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless PaineWebber, each of its directors, officers and employees
and each person who controls PaineWebber within the meaning of Section 15
of the Securities Act of 1933, as amended (such Act being herein called
the "Act" and any such person being herein sometime called an
"Indemnified Party"), against any and all losses, claims, damages or
liabilities, joint or several, to which such Indemnified Party may become
subject under any statute or at law or in equity or otherwise, and shall
reimburse any such Indemnified Party for any legal or other expenses
incurred by it in connection with investigating any claims against it and
<PAGE>
defending any actions, but only to the extent that such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
16
<PAGE>
<PAGE>
disclosure statement referred to in Section 4 hereof (a "Disclosure
Statement") or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading, but the Company shall not
be liable in any such case (x) to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by PaineWebber specifically for use
in connection with the preparation thereof, or (y) if the person
asserting any such loss, claim, damage or liability purchased Bonds from
PaineWebber, if delivery to such person of the Disclosure Statement or
any amendment or supplement to it would have been a valid defense to the
action from which such loss, claim, damage or liability arose and if the
same was not delivered to such person by or on behalf of PaineWebber;
provided that the Company has delivered the Disclosure Statement
as amended or supplemented to PaineWebber on a timely basis to permit
such delivery or sending. This indemnity agreement shall not be
construed as a limitation on any other liability which the Company may
otherwise have to any Indemnified Party, but in no event shall the
Company be obligated for double indemnification.
(b) PaineWebber shall indemnify and hold harmless the Company and each of
its directors, officers or employees and each person who controls the
Company within the meaning of Section 15 of the Act (for purposes of
this paragraph (b), an "Indemnified Party") against all losses,
claims, damages or liabilities, joint or several, to which such
Indemnified Party may become subject under any statute or at law or
in equity or otherwise, and will reimburse any such Indemnified Party
for any legal or other expenses incurred by it in connection with
defending any actions, insofar as such losses, claims, damages,
liabilities or actions arise out of or based upon any untrue
statement, or an alleged untrue statement, of a material fact
contained in a Disclosure Statement or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, but only with reference to written information, if any,
relating to PaineWebber furnished to the Company by PaineWebber
specifically for use in the preparation of a Disclosure Statement.
The Company and PaineWebber agree that any statements set forth in a
Disclosure Statement furnished in writing by or on behalf of
PaineWebber for inclusion in such documents shall be contained in a
section entitled "Remarketing" and that PaineWebber's indemnification
pursuant to this paragraph (b) shall be limited to such Section.
This indemnity agreement shall not be construed as a limitation on
any other liability which PaineWebber may otherwise have to any
Indemnified Party, but in no event shall PaineWebber be obligated for
double indemnification.
(c) An Indemnified Party (as defined in paragraph (a) or paragraph (b) of
this Section 5) shall, promptly after the receipt of notice of the
commencement of any action against such Indemnified Party in respect
of which indemnification may be sought against PaineWebber or the
Company, as the case may be (in either case the "Indemnifying
Party"), notify the Indemnifying Party in writing of the commencement
<PAGE>
thereof. Failure of the Indemnified Party to give such notice will
not relieve the Indemnifying Party from any liability which it may
have to an Indemnified Party otherwise than on account of this
Agreement. In case any such action
17
<PAGE>
<PAGE>
shall be brought against an Indemnified Party and such Indemnified
Party shall notify the Indemnifying Party of its commencement, the
Indemnifying Party may, or if so requested by such Indemnified Party
shall, participate therein or assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party, and after
notice from the Indemnifying Party to such Indemnified Party of an
election so as to assume the defenses thereof, such Indemnified Party
shall reasonably cooperate in the defense thereof, including, without
limitation, the settlement of outstanding claims, and the
Indemnifying Party will not be liable to such Indemnified Party under
this Section 5 for any legal or other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof
other than reasonable costs of investigation incurred with the
consent of the Indemnifying Party, which consent shall not be
unreasonably withheld; provided, however, that unless and until the
Indemnifying Party assumes the defense of any such action at the
request of such Indemnified Party, the Indemnifying Party shall have
the right to participate at its own expense in the defense of any
such action. If the Indemnifying Party shall not have employed
counsel to have charge of the defense of any such action or if any
Indemnified Party shall have reasonably concluded that there may be
defense available to it or them which are different from or
additional to those available to the Indemnifying Party (in which
case the Indemnifying Party shall not have the right to direct the
defense of such action on behalf of such Indemnified Party), legal
and other expenses incurred by such Indemnified Party shall be borne
by the Indemnifying Party. Any obligation under this Section of an
Indemnifying Party to reimburse an Indemnified Party for expenses
includes the obligation to make advances to the Indemnified Party to
cover such expenses in reasonable amounts as incurred.
Notwithstanding the foregoing, the Indemnifying Party shall not be
liable for any settlement of any action or claim effected without its
consent, which consent shall not be unreasonable withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification amounts provided for in
paragraph (a) or (b) of this Section 5 are due in accordance with its
terms but are for any reason held by a court to be unavailable from
the Company or PaineWebber on grounds of policy or otherwise, the
Company and PaineWebber shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending
same) to which the Company and PaineWebber may be subject (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and PaineWebber on the other
from the remarketing of the Bonds or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company and PaineWebber in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
PaineWebber on the other shall be deemed to be in the same proportion
<PAGE>
as the aggregate principal amount of the Bonds remarketed pursuant to
this Agreement bear to the total remarketing fees received by
PaineWebber. The relative fault of the Company on the one hand and
of PaineWebber on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact
18
<PAGE>
<PAGE>
relates to information supplied by the Company or by PaineWebber and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, claims,
damages and liabilities referred to above shall be deemed to include
any legal or other fees or expenses reasonable incurred by such party
connection with investigating or defending any action or claim.
(e) The Company and PaineWebber agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined
by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provision
of this Section 5, PaineWebber shall not be required to contribute
any amount in excess of the remarketing fee applicable to the Bonds
remarketed pursuant to this Agreement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.
(f) The indemnification and contribution agreements of all parties to
this Agreement contained in this Section 5 shall remain operative and
in full force and effect, regardless of (i) any investigation made by
or on behalf of PaineWebber, by or on behalf of any person
controlling PaineWebber, by or on behalf of the Company or by or on
behalf of any person controlling the Company or (ii) any termination
of this Agreement.
(g) For purposes of this Section 5, each person who controls PaineWebber
within the meaning of Section 15 of the Act shall have the same
rights as PaineWebber and each person who controls the Company within
the meaning of Section 15 of the Act shall have the same rights as
the Company. Any party entitled to contribution shall, promptly
after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under
paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or
other wise than on account of this Agreement.
6. Fees and Expenses. In consideration of PaineWebber's services under this
Agreement, the Company will pay PaineWebber as Remarketing Agent, as long
as the Bonds are in a Short-Term Interest Rate Period, a Daily Interest
Rate Period, or a Weekly Interest Rate Period, based upon the par amount
of Bonds outstanding at the beginning of each quarterly period commencing
January 1, April 1, July 1, and October 1 of each year either (a) a
"Standard Fee" of $1.05/1,000 annually, (paid quarterly in arrears), or
(b) a "Performance Based Fee", based upon the actual performance as
Remarketing Agent. The Company and the Remarketing Agent shall agree in
writing prior to July 1 of each year as to the method of determination of
the Performance Based Fee, otherwise the Remarketing Agent's compensation
will be limited to the Standard Fee described above. The Remarketing
<PAGE>
Agent may be entitled to additional fees to be negotiated between the
Company and the Remarketing Agent in connection with (i) any
19
<PAGE>
<PAGE>
adjustment of the Bonds from a Short-Term Interest Rate Period, a Daily
Interest Rate Period or a Weekly Interest Rate Period to a Long-Term
Interest Rate Period or (ii) any mandatory tender of Bonds resulting from
a substitution or termination of the Letter of Credit then in effect.
The Company also will pay all expenses in connection with the preparation
of any Disclosure Statement and the registration of the Bonds and any
other documents relating to the Bonds under any securities laws,
qualifying the Indenture under the Trust Indenture Act and will reimburse
PaineWebber for all of its direct out-of-pocket expenses incurred by it
as Remarketing Agent under this Agreement and the Indenture, including
counsel fees and disbursements.
7. Fails. PaineWebber will not be liable to the Company on account of the
failure of any person to whom PaineWebber has sold a Bond to pay for such
Bond or to deliver any document in respect of the sale.
8. Remarketing Agent's Performance. The duties and obligations of
PaineWebber as Remarketing Agent shall be determined solely by the
express provisions of this Agreement and the Indenture, and PaineWebber
shall not be responsible for the performance of any other duties and
obligation than as are specifically set forth in this Agreement and the
Indenture, and no implied covenants or obligations shall be read into
this Agreement or the Indenture against PaineWebber. PaineWebber may
conclusively rely upon any notice or document given or furnished to
PaineWebber and conforming to the requirements of this Agreement or the
Indenture and shall be protected in acting upon any such notice or
document reasonably believed by it to be genuine and to have been given,
signed or presented by the proper party or parties.
9. Termination. This Agreement will terminate upon the effective
resignation or removal of PaineWebber as Remarketing Agent in accordance
with the Indenture. PaineWebber will resign as Remarketing Agent under
this Remarketing Agreement if requested to do so by the Company in
writing and may resign at any time, all in accordance with the terms of
the Indenture. Following termination, the provisions of Section 5 will
continue in effect, and each party will pay the other any amounts owing
at the time of termination.
10. Miscellaneous. This agreement will be governed by the laws of the State
of New York. Notices will be given to the persons addressed below until
a party designates a new address in writing.
11. Counterparts. This Agreement may be signed in several counterparts.
Each will be an original, but all of them together constitute the same
instrument.
12. Severability. If any provision of this Agreement shall be determined to
be unenforceable, that shall not affect any other provisions of this
Agreement.
20
<PAGE>
<PAGE>
CENTRAL LOUISIANA ELECTRIC CO, INC.
2030 Donahue Ferry Road
Pineville, Louisiana 71360
Attention: Treasurer
By: Michael P. Prudhomme
Title: Secretary-Treasurer
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
10th Floor
Attention: Municipal Securities Group
By: Randall L. Finken
Title: Vice President
21
<PAGE>
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated and effective as of July 19, 1994, between
CENTRAL LOUISIANA ELECTRIC COMPANY, INC. (the "Company") and PAINEWEBBER
INCORPORATED ("PaineWebber").
WHEREAS, on May 29, 1991, the Parish of DeSoto, State of Louisiana (the
"Issuer") issued its Adjustable Tender Pollution Control Revenue Refunding
Bonds (Central Louisiana Electric Company, Inc. Project) Series 1991A in the
aggregate principal amount of $25,110,000 (the "Bonds"), pursuant to that
certain Trust Indenture dated as of May 1, 1991 (the "Indenture") between the
Issuer and First National Bank of Commerce, as trustee (the "Trustee"); and
WHEREAS, the Company and the Issuer are parties to that certain Refunding
Agreement dated as of May 1, 1991 (the "Refunding Agreement") pursuant to which
the Issuer agreed to make available the proceeds of the Bonds to the Company,
and the Company agreed to pay amounts sufficient to pay the principal of,
purchase price of, premium, if any, and interest on the Bonds; and
WHEREAS, to secure the payment of the principal of, interest on and purchase
price of the Bonds, Swiss Bank Corporation, New York Branch (the "Bank") issued
its irrevocable direct-pay letter of credit (as amended or extended from time
to time, the "Letter of Credit") to the Trustee and in connection therewith the
Company entered into a Reimbursement Agreement dated as of May 1, 1991 (as
amended or extended from time to time, the "Reimbursement Agreement") with the
Bank; and
WHEREAS, the Issuer has appointed PaineWebber (and PaineWebber has accepted
the appointment) as Remarketing Agent pursuant to the Indenture; and
WHEREAS, the Company and PaineWebber desire to make additional provisions
regarding PaineWebber's role as Remarketing Agent for the Bonds.
NOW, THEREFORE, the Company and PaineWebber hereby agree as follows:
1. Definitions. All capitalized terms used in this Agreement which are not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
2. Confirmation of Appointment. The Company hereby confirms the appointment
of PaineWebber as Remarketing Agent pursuant to the Indenture.
22
<PAGE>
<PAGE>
3. Duties. PaineWebber will perform the duties specified as Remarketing
Agent under the Indenture subject to the terms of the Indenture and this
Agreement. In acting as Remarketing Agent, PaineWebber will act as agent
and not as principal except as expressly provided in this Section.
PaineWebber may, if it determines to do so in its sole discretion, buy as
principal any such Bonds but it will not in any event be obligated to do so,
and if it buys Bonds it will have the same rights as would any other person
holding the Bonds.
4. Disclosure Statement. (a) If PaineWebber determines that it is necessary
or desirable to use a disclosure statement in connection with its
offering of the Bonds, PaineWebber will notify the Company and the
Company will provide PaineWebber with a disclosure statement satisfactory
to PaineWebber and its counsel in respect of the Bonds. The Company will
supply PaineWebber with such number of copies of the disclosure statement
and documents related thereto as PaineWebber requests from time to time
and will amend the disclosure statement (and/or the documents
incorporated by reference in it) so that at all times the disclosure
statement and any documents related thereto will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements in such documents, in the light of the
circumstances under which they were made, not misleading. In addition,
the Company will take all steps reasonably requested by PaineWebber which
PaineWebber or its counsel may consider necessary or desirable to
register the sale of the Bonds by PaineWebber under any Federal or state
securities law or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended, and will provide PaineWebber such officers'
certificates, counsel opinions, accountants' letters and other documents
as may be customary in similar transactions. If the Company does not
perform its obligations under this Section, PaineWebber may immediately
cease remarketing efforts.
(b) The Company has previously prepared and delivered to PaineWebber a
copy of the Official Statement, dated May 29, 1991, including
appendices consisting of financial and other information in respect
of the Company and the Bank. Such Official Statement, including
Appendices A, B and C thereto and the materials incorporated by
reference therein, is referred to herein as the "Official Statement."
The Company authorized the use by PaineWebber of the Official
Statement in connection with the remarketing of Bonds. For purposes
of this Agreement, the Official Statement and any other documents
provided to PaineWebber pursuant to paragraph (a) of this Section
shall be considered to be the Disclosure Statement (as defined in
Section 5 hereof).
5. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless PaineWebber, each of its directors, officers and employees
and each person who controls PaineWebber within the meaning of Section 15
of the Securities Act of 1933, as amended (such Act being herein called
the "Act" and any such person being herein sometime called an
"Indemnified Party"), against any and all losses, claims, damages or
liabilities, joint or several, to which such Indemnified Party may become
subject under any statute or at law or in equity or otherwise, and shall
reimburse any such Indemnified Party for any legal or other expenses
23
<PAGE>
<PAGE>
incurred by it in connection with investigating any claims against it and
defending any actions, but only to the extent that such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
disclosure statement referred to in Section 4 hereof (a "Disclosure
Statement") or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading, but the Company shall not
be liable in any such case (x) to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by PaineWebber specifically for use
in connection with the preparation thereof, or (y) if the person
asserting any such loss, claim, damage or liability purchased Bonds from
PaineWebber, if delivery to such person of the Disclosure Statement or
any amendment or supplement to it would have been a valid defense to the
action from which such loss, claim, damage or liability arose and if the
same was not delivered to such person by or on behalf of PaineWebber;
provided that the Company has delivered the Disclosure Statement as
amended or supplemented to PaineWebber on a timely basis to permit such
delivery or sending. This indemnity agreement shall not be construed as
a limitation on any other liability which the Company may otherwise have
to any Indemnified Party, but in no event shall the Company be obligated
for double indemnification.
(b) PaineWebber shall indemnify and hold harmless the Company and each of
its directors, officers or employees and each person who controls the
Company within the meaning of Section 15 of the Act (for purposes of
this paragraph (b), an "Indemnified Party") against all losses,
claims, damages or liabilities, joint or several, to which such
Indemnified Party may become subject under any statute or at law or
in equity or otherwise, and will reimburse any such Indemnified Party
for any legal or other expenses incurred by it in connection with
defending any actions, insofar as such losses, claims, damages,
liabilities or actions arise out of or based upon any untrue
statement, or an alleged untrue statement, of a material fact
contained in a Disclosure Statement or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, but only with reference to written information, if any,
relating to PaineWebber furnished to the Company by PaineWebber
specifically for use in the preparation of a Disclosure Statement.
The Company and PaineWebber agree that any statements set forth in a
Disclosure Statement furnished in writing by or on behalf of
PaineWebber for inclusion in such documents shall be contained in a
section entitled "Remarketing" and that PaineWebber's indemnification
pursuant to this paragraph (b) shall be limited to such Section.
This indemnity agreement shall not be construed as a limitation on
any other liability which PaineWebber may otherwise have to any
Indemnified Party, but in no event shall PaineWebber be obligated for
double indemnification.
24
<PAGE>
<PAGE>
(c) An Indemnified Party (as defined in paragraph (a) or paragraph (b) of
this Section 5) shall, promptly after the receipt of notice of the
commencement of any action against such Indemnified Party in respect
of which indemnification may be sought against PaineWebber or the
Company, as the case may be (in either case the "Indemnifying
Party"), notify the Indemnifying Party in writing of the commencement
thereof. Failure of the Indemnified Party to give such notice will
not relieve the Indemnifying Party from any liability which it may
have to an Indemnified Party otherwise than on account of this
Agreement. In case any such action shall be brought against an
Indemnified Party and such Indemnified Party shall notify the
Indemnifying Party of its commencement, the Indemnifying Party may,
or if so requested by such Indemnified Party shall, participate
therein or assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Party, and after notice from the
Indemnifying Party to such Indemnified Party of an election so as to
assume the defense thereof, such Indemnified Party shall reasonably
cooperate in the defenses thereof, including, without limitation, the
settlement of outstanding claims, and the Indemnifying Party will not
be liable to such Indemnified Party under this Section 5 for any
legal or other expenses subsequently incurred by such Indemnified
Party in connection with the defense thereof other than reasonable
costs of investigation incurred with the consent of the Indemnifying
Party, which consent shall not be unreasonably withheld; provided,
however, that unless and until the Indemnifying Party assumes the
defense of any such action at the request of such Indemnified Party,
the Indemnifying Party shall have the right to participate at its own
expense in the defense of any such action. If the Indemnifying Party
shall not have employed counsel to have charge of the defense of any
such action or if any Indemnified Party shall have reasonably
concluded that there may be defense available to it or them which are
different from or additional to those available to the indemnifying
Party (in which case the Indemnifying Party shall not have the right
to direct the defense of such action on behalf of such Indemnified
Party), legal and other expenses incurred by such Indemnified Party
shall be borne by the indemnifying Party. Any obligation under this
Section of an Indemnifying Party to reimburse an Indemnified Party
for expenses includes the obligation to make advances to the
Indemnified Party to cover such expenses in reasonable amounts as
incurred. Notwithstanding the foregoing, the Indemnifying Party
shall not be liable for any settlement of any action or claim
effected without its consent, which consent shall not be unreasonable
withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification amounts provided for in
paragraph (a) or (b) of this Section 5 are due in accordance with its
terms but are for any reason held by a court to be unavailable from
the Company or PaineWebber on grounds of policy or otherwise, the
Company and PaineWebber shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending
same) to which the Company and PaineWebber may be subject (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and PaineWebber on the other
from the remarketing of the Bonds or (ii) if the allocation provided
<PAGE>
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company and PaineWebber in connection with the statements or
omissions which resulted in such losses,
25
<PAGE>
<PAGE>
Claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the
Company on the one hand and PaineWebber on the other shall be deemed
to be in the same proportion as the aggregate principal amount of the
Bonds remarketed pursuant to this Agreement bear to the total
remarketing fees received by PaineWebber. The relative fault of the
Company on the one hand and of PaineWebber on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the Company or by PaineWebber and the parties' relative
intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees
or expenses reasonable incurred by such party connection with
investigating or defending any action or claim.
(e) The Company and PaineWebber agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined
by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provision
of this Section 5, PaineWebber shall not be required to contribute
any amount in excess of the remarketing fee applicable to the Bonds
remarketed pursuant to this Agreement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.
(f) The indemnification and contribution agreements of all parties to
this Agreement contained in this Section 5 shall remain operative and
in full force and effect, regardless of (i) any investigation made by
or on behalf of PaineWebber, by or on behalf of any person
controlling PaineWebber, by or on behalf of the Company or by or on
behalf of any person controlling the Company or (ii) any termination
of this Agreement.
(g) For purposes of this Section 5, each person who controls PaineWebber
within the meaning of Section 15 of the Act shall have the same
rights as PaineWebber and each person who controls the Company within
the meaning of Section 15 of the Act shall have the same rights as
the Company. Any party entitled to contribution shall, promptly
after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under
paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or
otherwise than on account of this Agreement.
<PAGE>
6. Fees and Expenses. In consideration of PaineWebber's services under this
Agreement, the Company will pay PaineWebber as Remarketing Agent, as long
as the Bonds are in a Short-Term Interest Rate Period, a Daily Interest
Rate Period, or a Weekly Interest Rate Period, based upon the par amount
of Bonds outstanding at the beginning of each quarterly period commencing
26
<PAGE>
<PAGE>
January 1, April 1, July 1, and October 1 of each year either (a) a
"Standard Fee" of $1.05/1,000 annually, (paid quarterly in arrears), or
(b) a "Performance Based Fee", based upon the actual performance as
Remarketing Agent. The Company and the Remarketing Agent shall agree in
writing prior to July 1 of each year as to the method of determination of
the Performance Based Fee, otherwise the Remarketing Agent's compensation
will be limited to the Standard Fee described above. The Remarketing
Agent may be entitled to additional fees to be negotiated between the
Company and the Remarketing Agent in connection with (i) any adjustment
of the Bonds from a Short-Term Interest Rate Period, a Daily Interest
Rate Period or a Weekly Interest Rate Period to a Long-Term Interest Rate
Period or (ii) any mandatory tender of Bonds resulting from a
substitution or termination of the Letter of Credit then in effect.
The Company also will pay all expenses in connection with the preparation
of any Disclosure Statement and the registration of the Bonds and any
other documents relating to the Bonds under any securities laws,
qualifying the Indenture under the Trust Indenture Act and will reimburse
PaineWebber for all of its direct out-of-pocket expenses incurred by it
as Remarketing Agent under this Agreement and the Indenture, including
counsel fees and disbursements.
7. Fails. PaineWebber will not be liable to the Company on account of the
failure of any person to whom PaineWebber has sold a Bond to pay for such
Bond or to deliver any document in respect of the sale.
8. Remarketing Agent's Performance. The duties and obligations of
PaineWebber as Remarketing Agent shall be determined solely by the
express provisions of this Agreement and the Indenture, and PaineWebber
shall not be responsible for the performance of any other duties and
obligation than as are specifically set forth in this Agreement and the
Indenture, and no implied covenants or obligations shall be read into
this Agreement or the Indenture against PaineWebber. PaineWebber may
conclusively rely upon any notice or document given or furnished to
PaineWebber and conforming to the requirements of this Agreement or the
Indenture and shall be protected in acting upon any such notice or
document reasonably believed by it to be genuine and to have been given,
signed or presented by the proper party or parties.
9. Termination. This Agreement will terminate upon the effective
resignation or removal of PaineWebber as Remarketing Agent in accordance
with the Indenture. PaineWebber will resign as Remarketing Agent under
this Remarketing Agreement if requested to do so by the Company in
writing and may resign at any time, all in accordance with the terms of
the Indenture. Following termination, the provisions of Section 5 will
continue in effect, and each party will pay the other any amounts owing
at the time of termination.
10. Miscellaneous. This agreement will be governed by the laws of the State
of New York. Notices will be given to the persons addressed below until
a party designates a new address in writing.
11. Counterparts. This Agreement may be signed in several counterparts.
Each will be an original, but all of them together constitute the same
instrument.
27
<PAGE>
<PAGE>
12. Severability. If any provision of this Agreement shall be determined to
be unenforceable, that shall not affect any other provisions of this
Agreement.
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
2030 Donahue Ferry Road
Pineville, LA 71360
Attention: Treasurer
By: Michael Prudhomme
Title: Secretary-Treasurer
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
10th Floor
New York, New York 10019
Attention: Municipal Securities Group
By: Randall L. Finken
Title: Vice President
28
<PAGE>
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated and effective as of July 19, 1994, between
CENTRAL LOUISIANA ELECTRIC COMPANY, INC. (the "Company") and PAINEWEBBER
INCORPORATED ("PaineWebber").
WHEREAS, on May 29, 1991, the Parish of DeSoto, State of Louisiana (the
"Issuer") issued its Adjustable Tender Pollution Control Revenue Refunding
Bonds (Central Louisiana Electric Company, Inc. Project) Series 1991B in the
aggregate principal amount of $25,000,000 (the "Bonds"), pursuant to that
certain Trust Indenture dated as of May 1, 1991 (the "Indenture") between the
Issuer and First National Bank of Commerce, as trustee (the "Trustee"); and
WHEREAS, the Company and the Issuer are parties to that certain Refunding
Agreement dated as of May 1, 1991 (the "Refunding Agreement") pursuant to which
the Issuer agreed to make available the proceeds of the Bonds to the Company,
and the Company agreed to pay amounts sufficient to pay the principal of,
purchase price of, premium, if any, and interest on the Bonds; and
WHEREAS, to secure the payment of the principal of, interest on and purchase
price of the Bonds, Swiss Bank Corporation, New York Branch (the "Bank") issued
its irrevocable direct-pay letter of credit (as amended or extended from time
to time, the "Letter of Credit") to the Trustee and in connection therewith the
Company entered into a Reimbursement Agreement dated as of May 1, 1991 (as
amended or extended from time to time, the "Reimbursement Agreement") with the
Bank; and
WHEREAS, the Issuer has appointed PaineWebber (and PaineWebber has accepted
the appointment) as Remarketing Agent pursuant to the Indenture; and
WHEREAS, the Company and PaineWebber desire to make additional provisions
regarding PaineWebber's role as Remarketing Agent for the Bonds.
NOW, THEREFORE, the Company and PaineWebber hereby agree as follows:
1. Definitions. All capitalized terms used in this Agreement which are not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
2. Confirmation of Appointment. The Company hereby confirms the appointment
of PaineWebber as Remarketing Agent pursuant to the Indenture.
29
<PAGE>
<PAGE>
3. Duties. PaineWebber will perform the duties specified as Remarketing
Agent under the Indenture subject to the terms of the Indenture and this
Agreement. In acting as Remarketing Agent, PaineWebber will act as agent
and not as principal except as expressly provided in this Section.
PaineWebber may, if it determines to do so in its sole discretion, buy
as principal any such Bonds but it will not in any event be obligated to
do so, and if it buys Bonds it will have the same rights as would any
other person holding the Bonds.
4. Disclosure Statement. (a) If PaineWebber determines that it is necessary
or desirable to use a disclosure statement in connection with its
offering of the Bonds, PaineWebber will notify the Company and the
Company will provide PaineWebber with a disclosure statement satisfactory
to PaineWebber and its counsel in respect of the Bonds. The Company will
supply PaineWebber with such number of copies of the disclosure statement
and documents related thereto as PaineWebber requests from time to time
and will amend the disclosure statement (and/or the documents
incorporated by reference in it) so that at all times the disclosure
statement and any documents related thereto will not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements in such documents, in the light of the
circumstances under which they were made, not misleading. In addition,
the Company will take all steps reasonably requested by PaineWebber which
PaineWebber or its counsel may consider necessary or desirable to
register the sale of the Bonds by PaineWebber under any Federal or state
securities law or to qualify the Indenture under the Trust Indenture Act
of 1939, as amended, and will provide PaineWebber such officers'
certificates, counsel opinions, accountants' letters and other documents
as may be customary in similar transactions. If the Company does not
perform its obligations under this Section, PaineWebber may immediately
cease remarketing efforts.
(b) The Company has previously prepared and delivered to PaineWebber a
copy of the Official Statement, dated May 29, 1991, including
appendices consisting of financial and other information in respect
of the Company and the Bank. Such Official Statement, including
Appendices A, B and C thereto and the materials incorporated by
reference therein, is referred to herein as the "Official Statement."
The Company authorized the use by PaineWebber of the Official
Statement in connection with the remarketing of Bonds. For purposes
of this Agreement, the Official Statement and any other documents
provided to PaineWebber pursuant to paragraph (a) of this Section
shall be considered to be the Disclosure Statement (as defined in
Section 5 hereof).
5. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless PaineWebber, each of its directors, officers and employees
and each person who controls PaineWebber within the meaning of Section
15 of the Securities Act of 1933, as amended (such Act being herein
called the "Act" and any such person being herein sometime called an
"Indemnified Party"), against any and all losses, claims, damages or
liabilities, joint or several, to which such Indemnified Party may
become subject under any statute or at law or in equity or otherwise,
and shall reimburse any such Indemnified Party for any legal or other
expenses
30
<PAGE>
<PAGE>
incurred by it in connection with investigating any claims against it and
defending any actions, but only to the extent that such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
disclosure statement referred to in Section 4 hereof (a "Disclosure
Statement") or any amendment thereof or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary
to make the statements therein not misleading, but the Company shall not
be liable in any such case (x) to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any such
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by PaineWebber specifically for use
in connection with the preparation thereof, or (y) if the person
asserting any such loss, claim, damage or liability purchased Bonds from
PaineWebber, if delivery to such person of the Disclosure Statement or
any amendment or supplement to it would have been a valid defense to the
action from which such loss, claim, damage or liability arose and if the
same was not delivered to such person by or on behalf of PaineWebber;
provided that the Company has delivered the Disclosure Statement as
amended or supplemented to PaineWebber on a timely basis to permit such
delivery or sending. This indemnity agreement shall not be construed as
a limitation on any other liability which the Company may otherwise have
to any Indemnified Party, but in no event shall the Company be obligated
for double indemnification.
(b) PaineWebber shall indemnify and hold harmless the Company and each of
its directors, officers or employees and each person who controls the
Company within the meaning of Section 15 of the Act (for purposes of
this paragraph (b), an "Indemnified Party") against all losses,
claims, damages or liabilities, joint or several, to which such
Indemnified Party may become subject under any statute or at law or
in equity or otherwise, and will reimburse any such Indemnified Party
for any legal or other expenses incurred by it in connection with
defending any actions, insofar as such losses, claims, damages,
liabilities or actions arise out of or based upon any untrue
statement, or an alleged untrue statement, of a material fact
contained in a Disclosure Statement or any amendment thereof or
supplement thereto, or the omission or alleged omission to state
therein a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, but only with reference to written information, if any,
relating to PaineWebber furnished to the Company by PaineWebber
specifically for use in the preparation of a Disclosure Statement.
The Company and PaineWebber agree that any statements set forth in a
Disclosure Statement furnished in writing by or on behalf of
PaineWebber for inclusion in such documents shall be contained in a
section entitled "Remarketing" and that PaineWebber's indemnification
pursuant to this paragraph (b) shall be limited to such Section.
This indemnity agreement shall not be construed as a limitation on
any other liability which PaineWebber may otherwise have to any
Indemnified Party, but in no event shall PaineWebber be obligated for
double indemnification.
<PAGE>
(c) An Indemnified Party (as defined in paragraph (a) or paragraph (b) of
this Section 5) shall, promptly after the receipt of notice of the
commencement of any action against such Indemnified Party in respect
of which indemnification may be sought against PaineWebber or the
Company, as the case may be (in either case the "Indemnifying
Party"), notify the
31
<PAGE>
<PAGE>
Indemnifying Party in writing of the commencement thereof. Failure
of the Indemnified Party to give such notice will not relieve the
Indemnifying Party from any liability which it may have to an
Indemnified Party otherwise than on account of this Agreement. In
case any such action shall be brought against an Indemnified Party
and such Indemnified Party shall notify the Indemnifying Party of its
commencement, the Indemnifying Party may, or if so requested by such
Indemnified Party shall, participate therein or assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified
Party, and after notice from the Indemnifying Party to such
Indemnified Party of an election so as to assume the defense thereof,
such Indemnified Party shall reasonably cooperate in the defense
thereof, including, without limitation, the settlement of outstanding
claims, and the Indemnifying Party will not be liable to such
Indemnified Party under this Section 5 for any legal or other
expenses subsequently incurred by such Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation incurred with the consent of the Indemnifying Party,
which consent shall not be unreasonably withheld; provided, however,
that unless and until the Indemnifying Party assumes the defense of
any such action at the request of such Indemnified Party, the
Indemnifying Party shall have the right to participate at its own
expense in the defense of any such action. If the Indemnifying Party
shall not have employed counsel to have charge of the defense of any
such action or if any Indemnified Party shall have reasonably
concluded that there may be defenses available to it or them which
are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not
have the right to direct the defense of such action on behalf of such
Indemnified Party), legal and other expenses incurred by such
Indemnified Party shall be borne by the Indemnifying Party. Any
obligation under this Section of an Indemnifying Party to reimburse
an Indemnified Party for expenses includes the obligation to make
advances to the Indemnified Party to cover such expenses in
reasonable amounts as incurred. Notwithstanding the foregoing, the
Indemnifying Party shall not be liable for any settlement of any
action or claim effected without its consent, which consent shall not
be unreasonable withheld.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification amounts provided for in
paragraph (a) or (b) of this Section 5 are due in accordance with its
terms but are for any reason held by a court to be unavailable from
the Company or PaineWebber on grounds of policy or otherwise, the
Company and PaineWebber shall contribute to the aggregate losses,
claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending
same) to which the Company and PaineWebber may be subject (i) in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and PaineWebber on the other
from the remarketing of the Bonds or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault
of the Company and PaineWebber in connection with the statements or
omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and
<PAGE>
PaineWebber on the other shall be deemed to be in the same proportion
as the aggregate principal amount of the Bonds remarketed pursuant to
this Agreement bear to the total remarketing fees received by
32
<PAGE>
<PAGE>
PaineWebber. The relative fault of the Company on the one hand and
of PaineWebber on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by
PaineWebber and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees or expenses reasonable
incurred by such party connection with investigating or defending any
action or claim.
(e) The Company and PaineWebber agree that it would not be just and
equitable if contribution pursuant to this Section 5 were determined
by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in
the immediately preceding paragraph. Notwithstanding the provision of
this Section 5, PaineWebber shall not be required to contribute any
amount in excess of the remarketing fee applicable to the Bonds
remarketed pursuant to this Agreement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who is not
guilty of such fraudulent misrepresentation.
(f) The indemnification and contribution agreements of all parties to
this Agreement contained in this Section 5 shall remain operative and
in full force and effect, regardless of (i) any investigation made by
or on behalf of PaineWebber, by or on behalf of any person
controlling PaineWebber, by or on behalf of the Company or by or on
behalf of any person controlling the Company or (ii) any termination
of this Agreement.
(g) For purposes of this Section 5, each person who controls PaineWebber
within the meaning of Section 15 of the Act shall have the same
rights as PaineWebber and each person who controls the Company within
the meaning of Section 15 of the Act shall have the same rights as
the Company. Any party entitled to contribution shall, promptly
after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under
paragraph (d), notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties
shall not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have hereunder or
otherwise than on account of this Agreement.
6. Fees and Expenses. In consideration of PaineWebber's services under this
Agreement, the Company will pay PaineWebber as Remarketing Agent, as long
as the Bonds are in a Short-Term Interest Rate Period, a Daily Interest
Rate Period, or a Weekly Interest Rate Period, based upon the par amount
of Bonds outstanding at the beginning of each quarterly period commencing
January 1, April 1, July 1, and October 1 of each year either (a) a
"Standard Fee" of $1.05/1,000 annually, (paid quarterly in arrears), or
(b) a "Performance Based Fee", based upon the actual performance as
<PAGE>
Remarketing Agent. The Company and the Remarketing Agent shall agree in
writing prior to July 1 of each year as to the method of determination of
the
33
<PAGE>
<PAGE>
Performance Based Fee, otherwise the Remarketing Agent's compensation
will be limited to the Standard Fee described above. The Remarketing
Agent may be entitled to additional fees to be negotiated between the
Company and the Remarketing Agent in connection with (i) any adjustment
of the Bonds from a Short-Term Interest Rate Period, a Daily Interest
Rate Period or a Weekly Interest Rate Period to a Long-Term Interest Rate
Period or (ii) any mandatory tender of Bonds resulting from a
substitution or termination of the Letter of Credit then in effect.
The Company also will pay all expenses in connection with the preparation
of any Disclosure Statement and the registration of the Bonds and any
other documents relating to the Bonds under any securities laws,
qualifying the Indenture under the Trust Indenture Act and will reimburse
PaineWebber for all of its direct out-of-pocket expenses incurred by it
as Remarketing Agent under this Agreement and the Indenture, including
counsel fees and disbursements.
7. Fails. PaineWebber will not be liable to the Company on account of the
failure of any person to whom PaineWebber has sold a Bond to pay for such
Bond or to deliver any document in respect of the sale.
8. Remarketing Agent's Performance. The duties and obligations of
PaineWebber as Remarketing Agent shall be determined solely by the
express provisions of this Agreement and the Indenture, and PaineWebber
shall not be responsible for the performance of any other duties and
obligation than as are specifically set forth in this Agreement and the
Indenture, and no implied covenants or obligations shall be read into
this Agreement or the Indenture against PaineWebber. PaineWebber may
conclusively rely upon any notice or document given or furnished to
PaineWebber and conforming to the requirements of this Agreement or the
Indenture and shall be protected in acting upon any such notice or
document reasonably believed by it to be genuine and to have been given,
signed or presented by the proper party or parties.
9. Termination. This Agreement will terminate upon the effective
resignation or removal of PaineWebber as Remarketing Agent in accordance
with the Indenture. PaineWebber will resign as Remarketing Agent under
this Remarketing Agreement if requested to do so by the Company in
writing and may resign at any time, all in accordance with the terms of
the Indenture. Following termination, the provisions of Section 5 will
continue in effect, and each party will pay the other any amounts owing
at the time of termination.
10. Miscellaneous. This agreement will be governed by the laws of the State
of New York. Notices will be given to the persons addressed below until
a party designates a new address in writing.
11. Counterparts. This Agreement may be signed in several counterparts.
Each will be an original, but all of them together constitute the same
instrument.
12. Severability. If any provision of this Agreement shall be determined to
be unenforceable, that shall not affect any other provisions of this
Agreement.
34
<PAGE>
<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
2030 Donahue Ferry Road
Pineville, Louisiana 71360
Attention: Treasurer
By: Michael P. Prudhomme
Title: Secretary-Treasurer
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
10th Floor
New York, New York 10019
Attention: Municipal Securities Group
By: Randall L. Finken
Title: Vice President
35
<PAGE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
For the three months ended September 30,
(Unaudited)
<CAPTION>
(In thousands, except share
and per share amounts)
1994 1993
----------- -----------
<S> <C> <C>
PRIMARY
- - -------
Net income applicable to common stock $ 17,100 $ 13,665
---------- ----------
Weighted average number of shares of
common stock outstanding during the
period 22,397,516 22,362,668
Common stock under stock option grants 19,103 35,825
----------- -----------
Average shares 22,416,619 22,398,493
----------- -----------
Primary net income per common share $ .76 $ .61
----------- -----------
FULLY DILUTED
- - -------------
Net income applicable to common stock $ 17,100 $ 13,665
Adjustments to net income related to
Employee Stock Ownership Plan (ESOP)
under the "if-converted" method:
Add loss of deduction from net income
for actual dividends paid on
convertible preferred stock, net of tax 372 374
Deduct additional cash contribution required
which is equal to dividends on preferred
stock less dividends paid at the common
dividend rate, net of tax (51) (60)
Add tax benefit associated with dividends
paid on (1) allocated common shares in
1994 and (2) allocated and unallocated
shares in 1993, assuming ESOP was a
common stock plan 34 20
----------- -----------
Adjusted income applicable to common stock $ 17,455 $ 13,999
----------- -----------
<PAGE>
Weighted average number of shares of
common stock outstanding during the
period 22,397,516 22,362,668
Number of equivalent common shares
attributable to ESOP 1,426,502 1,437,749
Common stock under stock option grants 19,103 35,953
----------- -----------
Average shares 23,843,121 23,836,370
----------- -----------
Fully diluted net income per common share $ .73 $ .59
----------- -----------
36
<PAGE>
<PAGE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF NET INCOME PER COMMON SHARE
For the nine months ended September 30,
(Unaudited)
<CAPTION>
(In thousands, except share
and per share amounts)
1994 1993
----------- -----------
<S> <C> <C>
PRIMARY
- - -------
Net income applicable to common stock $ 37,449 $ 32,233
----------- -----------
Weighted average number of shares of
common stock outstanding during the
period 22,396,166 22,342,369
Common stock under stock option grants 20,995 41,339
----------- -----------
Average shares 22,417,161 22,383,708
----------- -----------
Primary net income per common share $ 1.67 $ 1.44
----------- -----------
FULLY DILUTED
- - -------------
Net income applicable to common stock $ 37,449 $ 32,233
Adjustments to net income related to
Employee Stock Ownership Plan (ESOP)
under the "if-converted" method:
Add loss of deduction from net income
for actual dividends paid on
convertible preferred stock, net of tax 1,116 1,123
Deduct additional cash contribution required
which is equal to dividends on preferred
stock less dividends paid at the common
dividend rate, net of tax (162) (189)
Add tax benefit associated with dividends
paid on (1) allocated common shares in
1994 and (2) allocated and unallocated
shares in 1993, assuming ESOP was a
common stock plan 89 54
----------- -----------
Adjusted income applicable to common stock $ 38,492 $ 33,221
----------- -----------
<PAGE>
Weighted average number of shares of
common stock outstanding during the
period 22,396,166 22,342,369
Number of equivalent common shares
attributable to ESOP 1,427,627 1,437,947
Common stock under stock option grants 20,995 43,414
----------- -----------
Average shares 23,844,788 23,823,730
----------- -----------
Fully diluted net income per common share $ 1.61 $ 1.39
----------- -----------
37
</TABLE>
<TABLE>
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
COMPUTATION OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
For the twelve months ended September 30, 1994
(Unaudited)
<CAPTION> (In thousands,
except ratios)
--------------
<S> <C>
Earnings $ 47,050
Income taxes 23,960
--------
Earnings from continuing operations before income taxes 71,010
--------
Fixed charges
Interest, long-term debt 23,211
Interest, other (including interest on short-term debt) 2,298
Amortization of debt expense, premium, net 1,216
Portion of rentals representative of an interest factor 468
--------
Total fixed charges 27,193
--------
Earnings from continuing operations before
income taxes and fixed charges $ 98,203
--------
Ratio of earnings to fixed charges 3.61x
--------
Fixed charges from above $ 27,193
Preferred stock dividends* 3,002
--------
Total fixed charges and preferred stock dividends $ 30,195
--------
Ratio of earnings to combined fixed charges and
preferred stock dividends 3.25x
--------
* Preferred stock dividends multiplied by the ratio of pretax
income to net income.
38
</TABLE>
<PAGE>
Coopers Coopers & Lybrand L.L.P. 639 Loyola Avenue telephone(504)529-2700
& Lybrand a professional services firm Suite 1800 facisimle(504)529-1439
New Orleans, Louisiana 70113
November 11, 1994
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Central Louisiana Electric Company, Inc. Registrations on
Form S-8 (Nos. 2-79671, 33-10169, 33-38362 and 33-44663)
and Form S-3 (Nos. 33-24895, 33-61068 and 33-62950)
We are aware that our report dated October 21, 1994 on our review of the
interim financial information of Central Louisiana Electric Company, Inc. as of
September 30, 1994 and for the three-month and nine-month periods ended
September 30, 1994 and 1993 included in this Form 10-Q is incorporated by
reference in the above mentioned registration statements. Pursuant to Rule
436(c) under the Securities Act of 1933, this report should not be considered a
part of the registration statements prepared or certified by us within the
meaning of Sections 7 and 11 of that Act.
COOPERS & LYBRAND L.L.P.
Coopers & Lybrand L.L.P., a registered limited liability partnership, is a
member firm of Coopers & Lybrand (International).
39
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> UT
<LEGEND>
This schedule contains summary financial information extracted from the
Company's financial statements and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<PERIOD-TYPE> 9-MOS
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 903,827
<OTHER-PROPERTY-AND-INVEST> 20,655
<TOTAL-CURRENT-ASSETS> 56,192
<TOTAL-DEFERRED-CHARGES> 196,249
<OTHER-ASSETS> 7,800
<TOTAL-ASSETS> 1,184,723
<COMMON> 45,433
<CAPITAL-SURPLUS-PAID-IN> 106,332
<RETAINED-EARNINGS> 213,685
<TOTAL-COMMON-STOCKHOLDERS-EQ> 365,450
7,230
5,986
<LONG-TERM-DEBT-NET> 170,775
<SHORT-TERM-NOTES> 4,410
<LONG-TERM-NOTES-PAYABLE> 165,000
<COMMERCIAL-PAPER-OBLIGATIONS> 28,348
<LONG-TERM-DEBT-CURRENT-PORT> 14,188
0
<CAPITAL-LEASE-OBLIGATIONS> 805
<LEASES-CURRENT> 505
<OTHER-ITEMS-CAPITAL-AND-LIAB> 787,476
<TOT-CAPITALIZATION-AND-LIAB> 1,184,723
<GROSS-OPERATING-REVENUE> 297,720
<INCOME-TAX-EXPENSE> 19,655
<OTHER-OPERATING-EXPENSES> 219,917
<TOTAL-OPERATING-EXPENSES> 239,572
<OPERATING-INCOME-LOSS> 58,148
<OTHER-INCOME-NET> 439
<INCOME-BEFORE-INTEREST-EXPEN> 58,587
<TOTAL-INTEREST-EXPENSE> 19,631
<NET-INCOME> 38,956
1,507
<EARNINGS-AVAILABLE-FOR-COMM> 37,449
<COMMON-STOCK-DIVIDENDS> 24,302
<TOTAL-INTEREST-ON-BONDS> 0
<CASH-FLOW-OPERATIONS> 59,570
<EPS-PRIMARY> 1.67
<EPS-DILUTED> 1.61
<PAGE>
40
</TABLE>
