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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 March 31, 1998 Commission file number 1-5663
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
CLECO CORPORATION
(FORMERLY KNOWN AS 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 May 1, 1998, there were 22,482,300 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 Statements of Income...................... 3
Consolidated Balance Sheets............................ 4
Consolidated Statements of Cash Flows.................. 6
Notes to Consolidated Financial Statements............. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............ 9
Disclosure Regarding Forward-Looking Statements........ 9
Results of Operations.................................. 9
Financial Condition.................................... 11
Item 3. Quantitative and Qualitative Disclosures About
Market Risk.............................................. 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...... 12
Item 5. Other Information........................................ 13
Item 6. Exhibits and Reports on Form 8-K......................... 14
SIGNATURE............................................................ 15
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The consolidated financial statements for Cleco Corporation (formerly
known as Central Louisiana Electric Company, Inc.) (the Company) included herein
are unaudited but reflect, in management's opinion, all adjustments, consisting
only of normal recurring adjustments, that are necessary for a fair presentation
of the Company's financial position and the results of its operations for the
interim periods presented. Because of the seasonal nature of the Company's
business, the results of operations for the three months ended March 31, 1998
are not necessarily indicative of the results that may be expected for the full
fiscal year. 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, 1997 (1997
Form 10-K).
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.
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[Coopers & Lybrand L.L.P. Letterhead]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of Cleco Corporation:
We have made a review of the consolidated balance sheet of Cleco Corporation as
of March 31, 1998, and the related consolidated statements of income and cash
flows for the three-month periods ended March 31, 1998 and 1997, in accordance
with standards established by the American Institute of Certified Public
Accountants. These financial statements are the responsibility of the Company's
management.
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 consolidated 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 consolidated balance sheet as of December 31, 1997 and the
related consolidated 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 27, 1998, 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, 1997, 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
April 28, 1998
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CLECO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands, except share and
per share amounts)
1998 1997
------------ -----------
<S> <C> <C>
OPERATING REVENUES $ 97,210 $ 98,078
----------- -----------
OPERATING EXPENSES
Fuel used for electric generation 27,697 27,080
Power purchased 11,558 12,910
Other operation 15,117 13,692
Maintenance 5,184 5,795
Depreciation 12,040 11,338
Taxes other than income taxes 8,751 8,622
Federal and state income taxes 3,030 3,843
----------- -----------
83,377 83,280
----------- -----------
OPERATING INCOME 13,833 14,798
Allowance for other funds used during
construction 280 2
Other income and expenses, net (149) 134
------------ -----------
INCOME BEFORE INTEREST CHARGES 13,964 14,934
Interest charges, including amortization of
debt expense, premium and discount 7,178 7,249
Allowance for borrowed funds used during
construction (208) 159
----------- -----------
NET INCOME 6,994 7,526
Preferred dividend requirements, net 526 524
----------- -----------
NET INCOME APPLICABLE TO COMMON STOCK $ 6,468 $ 7,002
=========== ===========
WEIGHTED AVERAGE COMMON SHARES
Basic 22,473,749 22,457,061
Diluted 23,869,017 23,863,533
EARNINGS PER SHARE
Basic $0.29 $0.31
Diluted $0.29 $0.31
CASH DIVIDENDS PAID PER SHARE $0.395 $0.385
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
3
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CLECO CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands)
MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
<S> <C> <C>
ASSETS
Utility plant
Property, plant and equipment $1,507,152 $1,506,949
Accumulated depreciation (522,723) (518,664)
----------- -----------
984,429 988,285
Construction work-in-progress 43,496 37,277
----------- -----------
Total utility plant, net 1,027,925 1,025,562
----------- -----------
Investments and other assets 3,480 3,479
----------- -----------
Current assets
Cash and cash equivalents 14,600 18,015
Accounts receivable, net 45,299 48,353
Unbilled revenues 6,659 11,090
Fuel inventory, at average cost 6,488 8,648
Materials and supplies inventory, at average cost 13,893 14,413
Prepayments and other current assets 2,109 1,894
----------- -----------
Total current assets 89,048 102,413
----------- -----------
Prepayments 8,517 8,331
Regulatory assets - deferred taxes 115,343 115,285
Other deferred charges 30,238 29,418
Accumulated deferred federal and
state income taxes 77,473 76,556
----------- -----------
TOTAL ASSETS $1,352,024 $1,361,044
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
(Continued on next page)
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CLECO CORPORATION
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands,
except share amounts)
MARCH 31, 1998 DECEMBER 31, 1997
-------------- -----------------
<S> <C> <C>
CAPITALIZATION AND LIABILITIES
Common shareholders' equity
Common stock, $2 par value, authorized
50,000,000 shares, issued 22,764,754
and 22,762,754 shares at March 31, 1998
and December 31, 1997, respectively $ 45,530 $ 45,525
Premium on capital stock 113,800 113,763
Retained earnings 253,142 255,549
Treasury stock, at cost, 286,006 and
299,842 shares at March 31, 1998
and December 31, 1997, respectively (5,807) (6,086)
----------- -----------
406,665 408,751
----------- -----------
Preferred stock, cumulative, $100 par value
Not subject to mandatory redemption 29,800 30,102
Deferred compensation related to
preferred stock held by ESOP (17,695) (18,766)
----------- -----------
12,105 11,336
Subject to mandatory redemption 5,990 6,120
----------- -----------
18,095 17,456
----------- -----------
Long-term debt, net 365,906 365,897
----------- -----------
Total capitalization 790,666 792,104
----------- -----------
Current liabilities
Short-term debt 61,794 34,219
Long-term debt due within one year 15,000
Accounts payable 25,985 53,365
Customer deposits 20,401 20,172
Taxes accrued 20,336 12,211
Interest accrued 1,990 7,681
Accumulated deferred fuel 4,553 2,965
Other current liabilities 7,024 5,102
----------- -----------
Total current liabilities 142,083 150,715
----------- -----------
Deferred credits
Accumulated deferred federal and state
income taxes 296,633 296,123
Accumulated deferred investment tax
credits 29,126 29,574
Regulatory liabilities - deferred taxes 63,058 62,468
Other deferred credits 30,458 30,060
----------- -----------
Total deferred credits 419,275 418,225
----------- -----------
TOTAL CAPITALIZATION AND LIABILITIES $1,352,024 $1,361,044
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
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CLECO CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
(UNAUDITED)
<TABLE>
<CAPTION>
(In thousands)
1998 1997
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 6,994 $ 7,526
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 12,524 11,783
Allowance for funds used during construction (488) 157
Amortization of investment tax credits (448) (448)
Deferred income taxes 129 (996)
Deferred fuel costs 1,588 2,788
(Gain) loss on disposition of utility plant, net 2 (1)
Changes in assets and liabilities
Accounts receivable, net 3,054 1,149
Unbilled revenues 4,431 2,201
Fuel inventory, materials and supplies 2,680 1,516
Accounts payable (27,380) (27,008)
Customer deposits 229 (15)
Other deferred accounts (200) (721)
Taxes accrued 8,125 9,273
Interest accrued (5,691) (5,307)
Other, net 859 1,647
-------- --------
Net cash provided by operating activities 6,408 3,544
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to utility plant (13,509) (11,884)
Allowance for funds used during construction 488 (157)
Sale of utility plant 120 62
-------- --------
Net cash used in investing activities (12,901) (11,979)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 34 3
Increase in short-term debt, net 12,575 15,029
Redemption of preferred stock (130) (197)
Dividends paid on common and preferred stock, net (9,401) (9,170)
------- --------
Net cash provided by financing activities 3,078 5,665
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS (3,415) (2,770)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 18,015 20,307
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $14,600 $17,537
======= =======
Supplementary cash flow information
Interest paid (net of amount capitalized) $12,411 $12,941
======= =======
Income taxes paid $ 1,000 $ 1,500
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
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CLECO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A. RECLASSIFICATION
Certain prior-period amounts have been reclassified to conform with the
presentation shown in the current year's financial statements. These
reclassifications had no effect on net income applicable to common stock or
common shareholders' equity.
NOTE B. LEGAL PROCEEDING: FUEL SUPPLY - LIGNITE
The Company and Southwestern Electric Power Company (SWEPCO), each a 50% owner
of Dolet Hills Power Station Unit 1 (Dolet Hills Unit 1), jointly own lignite
reserves in the Dolet Hills area of northwestern Louisiana. In 1982 the Company
and SWEPCO entered into a Lignite Mining Agreement (LMA) with the Dolet Hills
Mining Venture (DHMV), a partnership for the mining and delivery of lignite from
a portion of these reserves (Dolet Hills Mine). The LMA expires in 2011. The
price of lignite delivered pursuant to the LMA is a base price per ton, subject
to escalation based on certain inflation indices, plus specified "pass-through"
costs.
Currently, the Company is receiving annually a minimum delivery of 1,187,500
tons under the LMA. Since the late 1980s, additional spot lignite deliveries
have been obtained through competitive bidding from DHMV and another lignite
supplier. In 1996 the Company and SWEPCO received deliveries which approximated
24% of the annual lignite consumption at Dolet Hills Unit 1 from the other
lignite supplier.
On April 15, 1997, the Company and SWEPCO filed suit against DHMV and its
partners in the United States District Court for the Western District of
Louisiana (Federal Court Suit) seeking to enforce various obligations of DHMV to
the Company and SWEPCO under the LMA, including provisions relating to the
quality of the delivered lignite, pricing, and mine reclamation practices. On
June 15, 1997, DHMV filed an answer denying the allegations in the Company's
suit and filed a counterclaim asserting various contract-related claims against
the Company and SWEPCO. The Company and SWEPCO have denied the allegations in
the counterclaims on the grounds the counterclaims have no merit.
The counterclaims filed by DHMV in the Federal Court Suit resulted in the
Company and SWEPCO filing a separate lawsuit against the parent companies of
DHMV, namely Jones Capital Corporation and Philipp Holzmann USA, Inc., on August
13, 1997, in the First Judicial District Court for Caddo Parish, Louisiana
(State Court Suit). The State Court Suit seeks to enforce a separate 1995
agreement by Jones Capital Corporation and Philipp Holzmann USA, Inc. related to
the LMA. Jones Capital Corporation and Philipp Holzmann USA, Inc. have asked the
State Court to stay that proceeding until the Federal Court Suit is resolved.
The suits are currently in the discovery phase. At DHMV's request, negotiations
among DHMV, SWEPCO and the Company have been terminated. A status conference is
currently scheduled for
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May 22, 1998. At this conference, a trial date will be set. The Company and
SWEPCO will aggressively prosecute the claims against DHMV and defend against
the counterclaims which DHMV has asserted. The Company and SWEPCO continue to
pay DHMV for lignite delivered pursuant to the LMA. Normal day-to-day operations
continue at the Dolet Hills Mine and Dolet Hills Unit 1. Although the ultimate
outcome of this litigation cannot be predicted at this time, based on
information currently available to the Company, management does not believe that
the counterclaims asserted by the DHMV in the Federal Court Suit will have a
significant adverse effect on the Company's financial position or results of
operations.
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CLECO CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in combination with
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 7 of the 1997 Form 10-K, the financial statements and notes
contained in Item 8 of the 1997 Form 10-K and the interim financial statements
and notes thereto contained elsewhere in this Report.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Report includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historical fact included in this Report are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, such forward-looking statements
are based on numerous assumptions (some of which may prove to be incorrect) and
are subject to risks and uncertainties which could cause the actual results to
differ materially from the Company's expectations. Such risks and uncertainties
include, without limitation, the effects of competition in the power industry,
legislative and regulatory changes affecting electric utilities, fluctuations in
the weather and changes in general economic and business conditions, as well as
other factors discussed in this and the Company's other filings with the
Securities and Exchange Commission (Cautionary Statements). All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
Cautionary Statements.
RESULTS OF OPERATIONS
For the Three Months Ended March 31, 1998
Net income applicable to common stock totaled $6.5 million or $0.29 per
average common share for the first quarter of 1998, as compared to $7.0 million
or $0.31 per average common share for the corresponding period in 1997. The
following principal factors contributed to these results:
Operating revenues for the quarter decreased $0.9 million or 0.9% compared to
the same period in 1997, primarily due to a decrease in fuel cost recovery
revenues partially offset by slight increases in base revenues and off-system
power sales. For the three months ended March 31, 1998, fuel cost recovery
revenues were $2.3 million, or 5.7%, less than the same period in 1997. The
decrease in fuel cost recovery revenues is related to lower natural gas prices
in the first quarter of 1998, which resulted in lower generation costs compared
to prices in effect and resulting generation costs during the first quarter of
1997. Changes in fuel cost have historically had no effect on net income, as
fuel costs are generally recovered through a fuel cost adjustment clause that
enables the Company to pass on to customers substantially all changes in the
cost of generating fuel and purchased power. These adjustments are audited
monthly and are regulated by the Louisiana Public Service Commission (LPSC)
(representing about 99% of the total fuel cost adjustment) while the remaining
portion,
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regulated by the Federal Energy Regulatory Commission (FERC), is audited
periodically for several years at a time. Until approval is received, the
adjustments are subject to refund.
Base revenues increased $1.4 million during the first quarter of 1998 compared
to the corresponding period in 1997. The increase in base revenues is primarily
the result of an increase in kilowatt-hour sales to residential and commercial
customers acquired from the former Teche Electric Cooperative (Teche), partially
offset by a reduction in the Company's annual base rate tariff and warmer than
normal winter weather. The Company acquired Teche on September 30, 1997. The
acquisition resulted in the addition of 7,700 mostly residential customers to
the Company. The reduction in annual base rate tariff was part of the Company's
1996 LPSC earnings review settlement. The tariff was reduced by an additional $2
million in January 1998. See "Management's Discussion and Analysis of Results of
Operations and Financial Condition - Financial Condition - Retail Rates" in Item
7 of the 1997 Form 10-K for a discussion of the LPSC settlement. Kilowatt-hour
sales to regular customers for the first quarter of 1998 improved 1.5% over the
first quarter of 1997. Sales to residential customers increased 1.5%, sales to
commercial customers rose 5.9% and sales to industrial customers improved 1.0%
over the first quarter of 1997.
Operating expenses increased $0.1 million, or 0.1%, during the first quarter of
1998 compared to the same period in 1997. The rise in operating expenses is the
result of increases in other operation expenses, depreciation, and taxes other
than income taxes, offset by decreases in fuel costs and purchased power,
federal and state income taxes and maintenance expenses. The decrease in fuel
cost and purchased power is primarily attributable to fluctuations in the
Company's generation mix, availability of economy power and deferral of expenses
for recovery from customers through fuel adjustment clauses in subsequent
months, as compared to the same period in 1997. The Company purchases economy
power from other electric power generators when the price of the energy
purchased is less than the cost to the Company of generating such energy from
its own facilities. Twenty-eight percent of the Company's energy requirements
during the first quarter of 1998 were met with purchased power, compared to 31%
for the corresponding period in 1997. Other operation expenses increased $1.4
million, or 10.4%, compared to the same period in 1997, primarily due to costs
associated with power purchased for off-system sales. Depreciation expense grew
$0.7 million compared to the same period in 1997, primarily due to the Teche
assets being placed into service in late 1997. Taxes other than income taxes
rose $0.1 million compared to the same period in 1997, primarily resulting from
an increase in employment taxes related to an employee incentive plan and
vacation buy-back plan. Federal and state income taxes decreased $0.8 million,
or 21.2%, compared to the corresponding period in 1997 resulting from lower
taxable income in 1998. Maintenance expenses decreased $0.6 million primarily
because costs which normally would have been expensed were instead dedicated,
and therefor capitalized, to repairs related to increased storm activity in the
first quarter of 1998 compared to the first quarter of 1997.
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FINANCIAL CONDITION
Liquidity and Capital Resources
At March 31, 1998 and 1997, the Company had $61.8 million and $80.2
million, respectively, of short-term debt outstanding in the form of commercial
paper borrowing and bank loans. During March 1998, the Company renewed its $25
million revolving credit facility with a scheduled termination date of December
31, 1998, but the termination date may be extended to March 19, 1999 upon
satisfaction of certain conditions. An existing $100 million revolving credit
facility is scheduled to terminate on June 15, 2000. Both facilities provide
support for the issuance of commercial paper and working capital needs.
Uncommitted lines of credit with banks totaling $20 million are also available
to support working capital needs.
At March 31, 1998, an unregulated consolidated subsidiary of the Company had
$12.9 million of cash and temporary cash investments in securities with original
maturities of 90 days or less. The Company has committed $10 million to provide
credit support for working capital and electricity or natural gas commodity
positions for CLECO ENERGY L.L.C.
Regulatory Matters - Retail and Wholesale Electric Competition
The special committee established by the Louisiana Legislature in 1997 to
study existing federal, state and local laws, rules and policies to assess the
impact of electric retail competition held its first meeting in September 1997
and continues to meet jointly with the LPSC as they proceed through deregulation
hearings. The LPSC and the special committee have scheduled hearings on a number
of issues impacting deregulation. To date, the committee participated in a
hearing on the tax implications of deregulation. Upon conclusion of the
hearings, the committee will make a report of its recommendations to the
legislature. The Company has a representative on this committee. For additional
information regarding retail electric competition in Louisiana, see "Regulatory
and Environmental Matters - Industry Developments" in Item 1 of the 1997 Form
10-K.
In recent years, the Company has been successful in competing for wholesale
sales within its service territory, including sales to the city of Alexandria
and a full requirements sale to the city of St. Martinville. Sales under the St.
Martinville agreement, which is subject to the jurisdiction of the FERC, began
in May 1995 and represent an approximate 13 megawatt load. Sales to St.
Martinville provide additional base revenues, net of facility payments, of about
$4 million over the term of the agreement, which extends through December 2000.
This contract was challenged in 1993 by the previous supplier, Louisiana Energy
and Power Authority (LEPA), as well as the city of Lafayette and the American
Public Power Association, with assertions of preferential, discriminatory and
predatory pricing. An initial decision of the FERC's presiding administrative
law judge (ALJ) in February 1995 rejected LEPA's arguments. Under FERC
procedures, LEPA filed a brief requesting the FERC to revise the initial
decision. In 1997, in a related matter, LEPA also appealed the FERC's approval
of market-based wholesale rates for the Company in the District of Columbia
Circuit Court of Appeals, alleging the existence of predatory pricing. In April
1998, the Court of Appeals rejected LEPA's arguments. The FERC then issued an
order reaffirming its position.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
PART II
OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Shareholders of the Company was held on April
24, 1998, in Pineville, Louisiana.
(b) Proxies for the election of directors were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as
amended. There was no solicitation in opposition to management's
nominees, and all nominees listed in the Proxy Statement were
elected.
(c) The following is a tabulation of the votes cast upon each of the
proposals presented at the Annual Meeting of Shareholders of the
Company on April 24, 1998:
(1) Election of Directors:
Broker
Class I Directors For Withheld Non-Votes
Sherian G. Cadoria 19,207,809 308,615 0
Richard B. Crowell 19,261,903 254,521 0
David M. Eppler 19,256,742 259,682 0
Gregory L. Nesbitt 19,260,590 255,834 0
(2) Approval of the appointment of Coopers & Lybrand L.L.P. as
the Company's auditors for 1998:
Broker
For Against Abstain Non-Votes
19,311,797 100,746 103,881 0
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(3) Approval of the amendment to the Company's 1990 Long-Term
Incentive Compensation Plan and the related amendment to the
Deferred Compensation Plan for Directors:
Broker
For Against Abstain Non-Votes
18,111,574 940,826 464,024 0
(4) Approval of the amendment of the Restated Articles of
Incorporation to delete Section 3 of Article 7 thereof which
states that no director shall be required to own any Company
stock:
Broker
For Against Abstain Non-Votes
18,712,157 370,916 433,351 0
(5) Approval of the amendment to the Restated Articles of
Incorporation to change the Company's name to Cleco
Corporation:
Broker
For Against Abstain Non-Votes
19,103,467 246,322 166,635 0
ITEM 5. OTHER INFORMATION
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards "SFAS No. 131, Disclosures About Segments of
an Enterprise and Related Information" effective for financial statements for
periods beginning after December 15, 1997. Management believes adoption of this
statement will affect only financial statement disclosure and will not affect
the Company's financial position or results of operations. This Statement need
not be applied to interim financial statements in the initial year of its
application, but comparative information for interim periods in the initial year
of application is to be reported in financial statements for interim periods in
the second year of application.
In February 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards "SFAS No. 132, Employers' Disclosure About
Pensions and Other Postretirement Benefits, an Amendment of FASB Statements No.
87, 88, and 106" effective for fiscal years beginning after December 15, 1997.
Management believes adoption of this statement will affect only financial
statement disclosure and will not affect the Company's financial position or
results of operations.
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FUEL SUPPLY - COAL
The majority of the coal for Rodemacher Power Station Unit 2 (Rodemacher
Unit 2) is purchased under a long-term contract with Kerr-McGee Coal Corporation
from a mine in Wyoming. The Company has a 30% interest in the capacity of
Rodemacher Unit 2. The coal is transported under a long-term rail transportation
contract with the Union Pacific Railroad. Union Pacific is currently
experiencing operating problems resulting in reduced volumes delivered to
Rodemacher Unit 2. The Company's coal inventory is currently near the Company's
desired minimum level. Based on the anticipated delivery schedule of future coal
shipments, management does not expect that Rodemacher Unit 2 operations will
need to be curtailed due to insufficient fuel supply. The Company is closely
monitoring this situation. Other regional utilities are experiencing similar
delivery problems.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4 $25,000,000 Loan Agreement by and between Whitney
National Bank and the Company, dated March 20, 1998
11 Computation of Net Income Per Common Share for the
three months ended March 31, 1998
12 Computation of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred
Stock Dividends for the twelve months ended March
31, 1998
15 Awareness letter, dated May 14, 1998, 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 March 31, 1998, the
Company filed no Current Reports on Form 8-K.
14
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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
undersigned thereunto duly authorized.
CLECO CORPORATION
(Registrant)
By: /s/ Thomas J. Howlin
--------------------------------------
Thomas J. Howlin
Senior Vice President of Finance
and Chief Financial Officer
(Principal Financial Officer)
Date: May 15, 1998
15
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INDEX TO EXHIBITS
Exhibits
--------
4 $25,000,000 Loan Agreement by and between Whitney
National Bank and the Company, dated March 20, 1998
11 Computation of Net Income Per Common Share for the
three months ended March 31, 1998
12 Computation of Earnings to Fixed Charges and
Earnings to Combined Fixed Charges and Preferred
Stock Dividends for the twelve months ended March
31, 1998
15 Awareness letter, dated May 14, 1998, from Coopers
& Lybrand L.L.P. regarding review of the unaudited
interim financial statements
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 4
LOAN AGREEMENT
BY AND BETWEEN
WHITNEY NATIONAL BANK
AND
CENTRAL LOUISIANA ELECTRIC COMPANY, INC.
This Loan Agreement (the "Agreement"), made on this 20th day of March,
1998, by and between Whitney National Bank ("Bank") and Central Louisiana
Electric Company, Inc. ("Borrower").
I. DEFINITIONS
1.01 For all purposes of this Agreement, unless otherwise expressly
provided or unless the context otherwise requires, the following terms shall
have the following meanings:
"Advance" shall mean a disbursement of a loan in accordance herewith.
"Available Commitment" shall have the meaning ascribed to such term in
Section 2.01.
"Base Rate" shall mean that rate of interest as published or recorded
by Bank from time to time as its prime lending rate with the rate of interest to
change when and as said prime lending rate changes, which prime lending rate is
not necessarily the lowest interest rate charged by Bank.
"Base Rate Loan" shall mean any Loan to Borrower which accrues interest
at the Base Rate at the time of the occurrence thereof or conversion thereto.
"Borrower's Agent" shall mean any one of the individuals whose names
are set forth in Schedule I to this Agreement or any other person subsequently
authorized by a corporate resolution, duly authorized and adopted by the
Borrower's board of directors in form acceptable to Bank. Until Borrower
notifies Bank in writing of the withdrawal of Borrower's Agent's rights and
powers, Bank shall be able to rely conclusively upon the Borrower's Agent's
right to borrow and incur Loans and to make conversions thereof on behalf of
Borrower.
"Business Day" shall mean any day on which banks are required to be
open to carry on normal business in the State of Louisiana.
"Capital Lease Obligations" shall mean, with respect to any Person,
obligations of such Person with respect to leases which, in accordance with
GAAP, are required to be capitalized on the financial statements of such Person.
"Common Equity" shall mean, as of any date of determination, an amount
equal to the sum of (i) common Stock of Borrower, (ii) premium on capital Stock
of Borrower (as such term is used in the Financial Statements) and (iii)
retained earnings of the Borrower, determined on a Consolidated basis in
accordance with GAAP.
"Consolidated" shall mean the Borrower and its Subsidiaries which are
consolidated for financial reporting purposes in accordance with GAAP.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any return on any investment
made by another Person or any Indebtedness, lease, dividend or other obligation
of any other Person in any manner, whether contingent or whether directly or
indirectly, including, without limitation, any obligation in respect of the
liabilities of any partnership in which such other Person is a general partner,
except to the extent that such liabilities of such partnership are nonrecourse
to such other Person and its separate Property. The amount of any Contingent
Obligation of a
<PAGE> 2
Person shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by such Person in good faith.
"Financial Statements" shall have the meaning ascribed to such term in
Section 4.01(i).
"Indebtedness" shall mean, as to any Person, at a particular time, all
items which constitute, without duplication, (i) indebtedness for borrowed money
or the deferred purchase price of property (other than trade payables incurred
in the ordinary course of business), (ii) indebtedness evidenced by notes,
bonds, debentures or similar instruments, (iii) obligations with respect to any
conditional sale or title retention agreement, (iv) indebtedness arising under
acceptance facilities and the amount available to be drawn under all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder to the extent that such Person shall not have reimbursed
the issuer in respect of the issuer's payment of such drafts, (v) all
liabilities secured by any Lien on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof
(other than carrier's , warehousemen's, mechanics', repairmen's or other like
non-consensual statutory Liens arising in the ordinary course of business), (vi)
obligations under Capital Lease Obligations and (vii) Contingent Obligations.
"Interest Period" shall mean with respect to each Libor Rate Loan:
(i) initially, the period commencing on the date of such Loan
and ending 1, 2 or 3 months thereafter (or such other period agreed upon in
writing by Borrower and Bank), as Borrower may elect in the applicable Advance
request; and
(ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Loan and ending 1, 2 or 3
months thereafter (or such other period agreed upon in writing by Borrower and
Bank), as Borrower may elect pursuant to Section 2.03(b);
provided that:
(iii) subject to clause (iv) below, if any Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the immediately next preceding Business Day; and
(iv) no Interest Period for a LIBOR Loan shall extend beyond
the last day of the Line of Credit Period.
"Libor Base Rate" shall mean, for an Interest Period, (a) the Libor
Index Rate for such Interest Period, if such rate is available, and (b) if the
Libor Index Rate cannot be determined, the arithmetic average of the rates of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
at which deposits in U.S. dollars in immediately available funds are offered to
Bank as of the opening of business of Bank or as soon thereafter as practicable
on the first day of such Interest Period by two (2) or more major banks in the
London interbank market selected by Bank for a period equal to such Interest
Period and in an amount equal or comparable to the principal amount of the Libor
Rate Loan requested by Borrower to be made available by Bank. As used herein,
"Libor Index Rate" means, for any Interest Period, the London interbank offered
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) for
deposits in U.S. Dollars for a period equal to such Interest Period, which
appears on the Telerate Page 3875 as of 9:00 a.m. (New Orleans time) on the
first day of such Interest Period.
"Libor Rate" shall mean the Libor Base Rate plus 15 basis points
(.15%).
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"Libor Rate Loan" shall mean any Loan to Borrower which accrues
interest at the Libor Rate at the time of the occurrence thereof or conversion
thereto.
"Lien" shall mean any mortgage, pledge, hypothecation, security
interest, encumbrance, lien, judgment, garnishment, seizure, tax lien or levy
(statutory or otherwise) or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement,
or any capitalized lease, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction).
"Line of Credit" shall mean the credit facility made available by Bank
to Borrower pursuant to Section 2.01.
"Line of Credit Period" shall mean the period commencing on the date
hereof and ending on December 31, 1998, or such later date that may be
established pursuant to the last sentence of Section 2.01 hereof.
"Loans" shall mean the loans to Borrower described in Section 2.01,
with each being a Loan, as applicable and shall include all principal, interest,
attorney's fees and costs owed thereon.
"Loan Documents" shall mean this Agreement and the promissory note
evidencing the Loans.
"Material Adverse Effect" shall mean a material adverse effect on the
properties, assets, liabilities, business, operations, prospects, income or
condition (financial or otherwise) of Borrower and its Subsidiaries taken as a
whole.
"Permitted Liens" shall mean (i) pledges or deposits by the Borrower or
any of its Subsidiaries under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness of the
Borrower or any of its Subsidiaries) or leases (other than capitalized leases)
to which the Borrower or any of its Subsidiaries is a party, or deposits to
secure statutory obligations of the Borrower or any of its Subsidiaries or
deposits of cash or U.S. Government Bonds to secure surety or appeal bonds to
which the Borrower or any of its Subsidiaries is a party, or deposits as
security for contested taxes or import duties or for the payment of rent; (ii)
Liens imposed by law, such as carriers', warehousemen's, materialmen's and
mechanics' liens, incurred in the ordinary course of business for sums not
overdue or being contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on the books of Borrower or
any Subsidiary of Borrower; (iii) judgment Liens in existence less than 30 days
after the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary deductible) by
insurance; (iv) Liens for property taxes not yet delinquent and Liens for
property taxes the payment of which is being actively contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on the books of Borrower or any Subsidiary of Borrower; (v) the Indenture
of Mortgage dated as of July 1, 1950 between Borrower and First National Bank of
Commerce in New Orleans, as amended and supplemented, and (vi) survey
exceptions, issues with regard to merchantability of title, easements or
reservations of, or rights of others for rights-of-way, highways and railroad
crossings, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real property
incidental to the conduct of the business of the Borrower or any of its
Subsidiaries or to the ownership of its property which were not incurred in
connection with Indebtedness of the Borrower or any Subsidiary of Borrower,
which Liens do not in the aggregate materially detract from the value of said
properties or materially impair their use in the operation of the business taken
as a whole of the Borrower and its Subsidiaries.
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<PAGE> 4
"Person" shall mean any individual, firm, partnership, joint venture,
corporation, association, business enterprise, limited liability company, joint
stock company, unincorporated association, trust, governmental authority or any
other entity, whether acting in an individual, fiduciary, or other capacity.
"Plan" shall mean any employee benefit plan which is covered by the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and in
respect of which Borrower is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, including, without limitation, The Central Louisiana
Electric Company, Inc. 401(k) Savings and Investment Plan ESOP Trust, as the
same may be amended, supplemented or otherwise modified from time to time.
"Stock" shall mean, any and all shares, rights, interests,
participations, warrants or other equivalents (however designated) of corporate
stock.
"Subsidiary" shall mean, as to any Person, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which such Person or any Subsidiary of such Person, directly
or indirectly, either (i) in respect of a corporation, owns or controls more
than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors or similar managing body, irrespective of
whether a class or classes shall or might have voting power by reason of the
happening of any contingency, or (ii) in respect of an association, partnership,
joint venture or other business entity, is entitled to share in more than 50% of
the profits and losses, however determined.
"Telerate Page 3875" means the display designated as "Page 3875" of the
Dow Jones Telerate Service (or such other page as may replace Page 3875 on that
service or such other service as may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for U.S. Dollar Deposits).
"Total Capitalization" shall mean the difference between (a) the sum of
(i) preferred Stock of the Borrower (less deferred compensation relating to
unallocated convertible preferred Stock of the Borrower held by any Plan), plus
(ii) common Stock of the Borrower and any premium on capital Stock thereon (as
such term is used in the Financial Statements), plus (iii) retained earnings of
the Borrower, plus (iv) all Indebtedness of the Borrower (net of unamortized
premium and discount (as such term is used in the Financial Statements)), and
(b) treasury Stock of the Borrower.
"Type" shall mean, as to any Loan, its nature as either a Base Rate
Loan or a Libor Rate Loan.
1.02 OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any certificates or other document made or delivered pursuant
hereto unless the context shall otherwise require.
(b) Words used herein in the singular, where the context so permits,
shall be deemed to include the plural and vice versa. Likewise, the definitions
of words used in the singular herein shall also apply to such words when used in
the plural and vice versa, unless the context shall otherwise require.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(d) Section, subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
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1.03. ACCOUNTING TERMS. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with generally accepted accounting
principles applied on a consistent basis.
II. THE LOAN
2.01 LOANS. Subject to the due and faithful performance of the terms
and conditions of this Agreement and in any instrument or agreement executed
contemporaneous herewith or as a consequence hereof and in accordance with the
terms and conditions of this Agreement, Bank agrees to make Advances to Borrower
from time to time during the Line of Credit Period in an aggregate outstanding
principal amount not to exceed the sum of Twenty-Five Million and No/100
($25,000,000.00) Dollars (the "Available Commitment"); provided however any
Advance shall be in increments of $100,000.00 or greater and any Advance shall
accrue interest of the same Type and Interest Period. The obligation of the
Borrower to repay the loans shall be evidenced by a promissory note made payable
to the order of Bank in the principal sum of $25,000,000.00, a copy of which is
attached hereto as Exhibit A. The outstanding principal balance of the Loans
shall accrue interest in accordance with Section 2.03 from date of each Advance
until paid. Notwithstanding any provisions of this Agreement, all Loans
hereunder shall mature and become due and payable at the end of the Line of
Credit Period. The Line of Credit Period shall be extended through March 19,
1999 at the written request of Borrower if, before December 31, 1998, Borrower
provides to Bank with the request a copy of an order of the Federal Energy
Regulatory Commission which is in full force and effect and is not the subject
of any pending or threatened appeal and which will allow Borrower to perform
under this Agreement through March 19, 1999.
2.02 (a) ADVANCE REQUEST. Upon the terms and subject to the conditions
hereof and subject to the amount of such Advance not exceeding the Available
Commitment, the Borrower may request an Advance under the Line of Credit during
a Business Day between the hours of 9:00 a.m. and 4:00 p.m. (New Orleans time).
If Bank receives the Borrower's proper request for an Advance by no later than
1:00 p.m. (New Orleans time), then Bank shall make the Advance in accordance
herewith. If Bank receives the Borrower's request for an Advance later than 1:00
p.m. (New Orleans time), then Bank shall make the Advance in accordance herewith
on the next Business Day. Each request for an Advance shall be made either by
telephone calls to Bank or in writing, by delivering to Bank by mail,
hand-delivery, or facsimile a request (i) specifying the amount to be borrowed
(ii) specifying the date the funds will be advanced, (iii) specifying the Type
of Loan to be made and its Interest Period, and (iv) complying with the
requirements of this Section. Bank shall have the right to verify the telephone
requests by calling the person who made the request at the telephone number
identified by the Borrower. If the Advance request is by telephone, the Borrower
will confirm said request in writing within two (2) Business Days. All such
Advance requests shall be made by the Borrower's Agent. Borrower agrees that
only its duly authorized Borrower's Agent shall make an Advance request. Prior
to making any Advance, Bank may require that Borrower furnish to Bank a
certificate of an officer of Borrower certifying (i) that the borrowing capacity
of Borrower pursuant to committed lines of credit with banks, including that
provided under this Agreement, does not exceed the aggregate principal amount of
$125,000,000, as established in resolutions of the board of directors of the
Borrower adopted on January 24, 1997 and March 16, 1998, or such other amount as
may be established by any subsequent resolution of the board of directors and
(ii) (a) if the Advance is requested on or before December 31, 1998, that the
outstanding aggregate principal amount of short-term indebtedness (indebtedness
maturing not more than one year after the date of issue) issued by Borrower,
including that provided for under this Agreement, does not exceed $145,000,000
or (b) if the Advance is requested after December 31, 1998 and if the Line of
Credit Period is extended through March 19, 1999 pursuant to Section 2.01
hereof, that the aggregate principal amount of short-term indebtedness issued by
Borrower, including that provided for under this Agreement, does not exceed the
amount of short-term indebtedness which
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Borrower would be authorized to issue by order of the Federal Energy Regulatory
Commission, as contemplated by Section 2.01 hereof.
(b) CREDIT ADVICE. After the borrowing of any Advance under the Line of
Credit in accordance with this Agreement, Bank will mail to the Borrower an
advice showing the amount of the Advance and the amount of funds credited into
the Borrower's account. All Advances shall either (1) be credited to a demand
deposit account (the "Account") maintained by the Borrower with Bank or (2)
transferred by the Bank to an account of the Borrower at another financial
institution in accordance with the wire transfer instructions set forth in
Schedule II to this Agreement. Any request to transfer funds from the Account by
wire transfer shall be governed by Bank's standard Funds Transfer Agreement
properly completed and executed by the Borrower. Bank's failure to mail the
credit advice shall not alter the Borrower's obligation to repay the Loans or
make the Bank liable to the Borrower for failure to mail the credit advice.
(c) INTERNAL RECORDS SHALL CONTROL. The principal amount shown on the
face of the note evidencing the Loans evidences the maximum aggregate principal
amount that may be outstanding from time to time under the Loans. The Borrower
agrees that the internal records of Bank shall constitute for all purposes prima
facie evidence of (i) the amount of principal and interest owing on the Loans
from time to time, (ii) the amount of each Advance or Loan made to the Borrower
and (iii) the amount of each principal and/or interest payment received by Bank
on the Loans.
2.03 (a) INTEREST RATES; INTEREST PAYMENTS. The unpaid principal balance
of the Loans shall accrue interest, at the Borrower's option, either at: (i) the
Base Rate or (ii) the Libor Rate; provided that if any LIBOR Rate Loan or any
portion thereof shall, as a result of clause (iv) of the definition of Interest
Period, have an Interest Period of less than 30 days, such portion shall bear
interest during such Interest Period at the rate applicable to Base Rate Loans
during such period. Interest on the outstanding principal owed on the Loans
shall be computed and assessed on the basis of the actual number of days elapsed
over a year composed of 360 days. Interest shall be payable on all Base Rate
Loans quarterly in arrears on the last day of each quarter (or the immediate
subsequent Business Day if any such last day is not a Business Day) and at
maturity. Interest shall be payable on each Libor Rate Loan for each Interest
Period on the last day thereof.
(b) DURATION OF INTEREST PERIODS AND SELECTION OF INTEREST RATES. The
commencement date and duration of the initial Interest Period for each Libor
Rate Loan shall be as specified in the applicable Advance request. Borrower
shall elect the duration of each subsequent Interest Period applicable to such
Libor Rate Loan or elect to convert to a Base Rate Loan (and Borrower shall have
the option (x) in the case of any Base Rate Loan, to elect that such Loan become
a Libor Rate Loan and the Interest Period to be applicable thereto or (y) in the
case of any Libor Rate Loan, to elect that such Loan become a Base Rate Loan),
by giving notice of such election to Bank by 1:00 p.m. (New Orleans time) on the
last day of the then expiring Interest Period (in the case of an existing Libor
Rate Loan) or on the date of the requested conversion of a Base Rate Loan to a
Libor Rate Loan, as applicable; provided, however, that notwithstanding the
foregoing, in addition to and without limiting the rights and remedies of Bank
under Section VI hereof, so long as any Default under this Agreement has
occurred and is continuing, Borrower shall not be permitted to renew any Libor
Rate Loan or to convert any Base Rate Loan into a Libor Loan. All Libor Rate
Loans, whether by conversion or by an Advance, shall be in increments of
$100,000.00 or greater. All Loans which bear interest at a particular Libor Rate
for a particular Interest Period shall constitute a single Libor Loan.
Notwithstanding the foregoing, the duration of each Interest Period shall be
subject to the provisions of the definition of Interest Period.
(c) FAILURE TO ELECT. If Bank does not receive a notice of election for
the continuation of a Libor Rate Loan for a subsequent Interest Period pursuant
to subsection (b) above within the applicable time limits specified therein,
Borrower shall be deemed to have elected to convert such Libor Loan on the last
day of
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the current Interest Period with respect thereto to a Base Rate Loan in the
principal amount of such expiring Libor Rate Loan on such date.
(d) RELIANCE ON COMMUNICATIONS. Borrower hereby authorizes Bank to rely
on telephonic, telegraphic, telecopy, telex or written or oral instructions
believed by Bank in good faith to have been sent, delivered or given by
Borrower's Agent with respect to any request to make a Loan or a repayment
hereunder, to continue a Loan, or to convert any Base Rate Loan or Libor Rate
Loan to any other type of Loan available hereunder, and on any signature which
Bank in good faith believes to be genuine.
2.04 FACILITY FEE. Borrower shall pay to Bank, in arrears, on the last
Business Day of each calendar quarter during the Line of Credit Period and on
the last day of the Line of Credit Period, an annual facility fee of .05% of the
Available Commitment calculated on the basis of the actual number of days
elapsed over a year of 365/366 days as the case may be.
2.05 PREPAYMENT. Borrower shall have the right at any time and from time
to time to prepay the Loans in whole or in part in amounts aggregating
$100,000.00 or any larger multiple thereof, without penalty by paying all or a
portion of the unpaid principal balance of the Loans, as applicable, plus
accrued interest through the date of prepayment; provided that, Borrower shall
not have the right to prepay a Libor Rate Loan through the making of a Libor
Rate Loan.
2.06 INCREASED COSTS. ILLEGALITY. ETC. In the event that Bank shall
have determined in good faith (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto):
(i) at any time, that, by reason of any changes arising after the
date of this Agreement affecting the London interbank market,
adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of Libor Rate; or
(ii) at any time, that Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with
respect to any Libor Rate Loan because of any change since the date
of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request or in the interpretation or
administration thereof and including the introduction of any new
law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis
of taxation of payment to Bank of the principal or interest on such
Libor Rate Loan (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of Bank) or
(B) a change in official reserve requirements; or
(iii) at any time, that the making or continuance of any Libor Rate
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by Bank in good
faith with any governmental request (whether or not having force of
law) or (z) impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely
affects the London interbank market;
then, and in any such event, Bank shall promptly give notice (by telephone
confirmed in writing) to the Borrower. Thereafter (x) in the case of clause (i)
above, Libor Rate Loans shall no longer be available until such time as Bank
notifies the Borrower that the circumstances giving rise to such notice no
longer exist, and any Advance request or request to continue or convert given by
the Borrower with respect to Libor Rate Loans which have not yet been incurred,
continued or converted shall be deemed rescinded by the Borrower, (y) in the
case of clause (ii) above, the Borrower agrees to pay to Bank, upon written
demand therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or
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otherwise as agreed to by Bank and the Borrower) as shall be required to
compensate Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to
Bank, showing the basis for the calculation thereof, submitted to the Borrower
by Bank in good faith shall, absent manifest error, be final and conclusive and
binding on all the parties hereto) and (z) in the case of clause (iii) above,
the Borrower agrees that if the affected Libor Rate Loan is then being requested
initially such Loan will be made as a Base Rate Loan or if the affected Libor
Rate Loan is then outstanding, such Loan shall be converted into a Base Rate
Loan. Bank agrees that if it gives notice to the Borrower of any of the events
described in clause (i) or (iii) above, it shall promptly notify the Borrower if
such event ceases to exist. If any such event described in clause (iii) above
ceases to exist as to Bank, Bank's obligations to make Libor Rate Loans and to
convert Loans into Libor Rate Loans on the terms and conditions contained herein
shall be reinstated.
2.07 USE OF PROCEEDS. The Borrower shall use the proceeds of the Loans
for general corporate purposes.
III. LOAN DOCUMENTS
3.01 OPINION OF BORROWER'S COUNSEL. At Closing or at such other time
satisfactory to Bank, Borrower shall have counsel satisfactory to Bank provide
an opinion to Bank in form satisfactory to Bank relating to the Loan Documents.
3.02 CLOSING COSTS. Borrower agrees to pay all reasonable costs and fees
incurred by the Bank and counsel for the Bank in the preparation of or in
connection with the Loan Documents or in connection with the Loans.
IV. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BORROWER
4.01 REPRESENTATIONS AND WARRANTIES. In order to induce Bank to enter
into this Agreement and make the Loans, Borrower hereby represents, warrants and
covenants to Bank, the following:
(a) Borrower is a validly organized corporation duly existing and in
good standing under the laws of the State of Louisiana and is duly qualified as
a foreign corporation in all jurisdictions wherein the property owned or the
business transacted by it make such qualifications necessary.
(b) The making and performance by Borrower of this Agreement, the
borrowing by Borrower and the execution of the Loan Documents by Borrower, all
as provided herein, have been duly authorized by all necessary corporate action
and have not resulted and will not result in a breach of, or constitute a
default under any agreement, indenture or other instrument to which Borrower is
a party or by which Borrower is bound which could have a Material Adverse
Effect.
(c) No further consent or approval of any governmental agency or
authority required in connection with the execution, delivery and performance by
Borrower of the Loan Documents is required.
(d) All Loan Documents are legal, valid and binding obligations of
Borrower enforceable according to their terms and conditions, and all statements
made in this Agreement are true and correct as of the date hereof.
(e) To the extent applicable, Borrower and each of its Subsidiaries has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
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Internal Revenue Code, and has not incurred any liability to the Pension Benefit
Guaranty Corporation or to a Plan under Title IV of ERISA which the failure to
comply with could have a Material Adverse Effect.
(f) Neither Borrower nor any Subsidiary of Borrower is in default in
the performance, observance or fulfillment of (i) any of the obligations,
covenants or conditions contained in any indenture, agreement or other
instrument to which it is a party or (ii) any judgment, order, writ, injunction,
decree or decision of any government agency or authority, and which could have a
Material Adverse Effect. It shall not be considered that Borrower or any
Subsidiary of Borrower is in default under clause (i) of this subsection (f) by
virtue of the provisions of any indenture, agreement or other instrument to
which it is a party solely because the holder of any obligation of Borrower or
any Subsidiary of Borrower shall have the right to declare or has declared such
obligation due and payable prior to a stated maturity date by virtue of a right
of redemption or has the right to declare but has not declared such obligation
due and payable because of a material adverse change in the financial condition
of Borrower or any Subsidiary of Borrower.
(g) Neither Borrower nor any Subsidiary of Borrower has any material
(individually or in the aggregate) liabilities, direct or contingent, except as
disclosed or referred to in the Financial Statements. There is no litigation,
legal or administrative proceeding, investigation or other action of any nature
pending or, to the knowledge of Borrower, threatened against or affecting
Borrower or any of its Subsidiaries which involves the possibility of any
judgment, order, ruling, or liability not fully covered by insurance or fully
reserved for by the Borrower or any of its Subsidiaries, and which could have a
Material Adverse Effect.
(h) Borrower and each of its Subsidiaries has filed all tax returns and
reports required to be filed and has paid all taxes, assessments, fees and other
governmental charges levied upon Borrower or any of its Subsidiaries or upon any
property owned by Borrower or any of its Subsidiaries, or upon Borrower's or its
Subsidiary's income, which are due and payable, including interest and
penalties, or has provided adequate reserves for the payment thereof.
(i) Each of the Borrower and its Subsidiaries has good and marketable
title to all of its property, title to which is material to the Borrower or such
Subsidiary, subject to no Liens, except Permitted Liens.
(j) Each of Borrower and its Subsidiaries has complied in all material
respects with all laws that are applicable to all or any part of the operation
of its business activities, including, without limitation, (i) all laws
regarding the collection, payment, and deposit of employees' income,
unemployment, social security, sales, and excise taxes, all laws with respect to
pension liabilities, and (ii) all laws pertaining to environmental protection
and occupational safety and health which the failure to comply with could have a
Material Adverse Effect.
(i) Borrower has heretofore delivered to Bank copies of its Form 10-K
for the fiscal year ending December 31, 1996, containing the audited
Consolidated Balance Sheets of the Borrower and its Subsidiaries and the related
Consolidated Statements of Operations, Stockholder's Equity and Cash Flows for
the period then ended, and its Form 10-Q for the fiscal quarter ended September
30, 1997, containing the unaudited Consolidated Balance Sheet of the Borrower
and its Subsidiaries as of the end of such fiscal quarter, together with the
related Consolidated Statements of Operations and Cash Flows through such fiscal
quarter then ended (with the applicable related notes and schedules, the
"Financial Statements"). The Financial Statements submitted by Borrower to Bank
have been prepared in accordance with GAAP and fairly present the Consolidated
financial condition and results of the operations of the Borrower and its
Subsidiaries as of the dates and for the periods indicated therein and since the
date of such statements, the Borrower and each of its Subsidiaries has conducted
its business only in the ordinary course and there has been no Material Adverse
Change.
Page 9
<PAGE> 10
4.02 AFFIRMATIVE COVENANTS. From the date of this Agreement and so long
as any Loan shall be outstanding, unless compliance shall have been waived in
writing by Bank, Borrower shall:
(a) Maintain, as of the last day of each fiscal quarter, Common Equity
equal to at least 30% of Total Capitalization.
(b) Furnish to Bank:
(i) As soon as available, but in any event within 120 days after
the end of each fiscal year, a copy of Borrower's annual
report on Form 10-K in respect of such fiscal year required
to be filed by Borrower with the SEC, together with the
financial statements attached thereto;
(ii) As soon as available, but in any event within 60 days after
the end of each fiscal quarter, a copy of the Borrower's
quarterly report on Form 10-Q in respect of such fiscal
quarter required to be filed by the Borrower with the SEC,
together with the financial statements attached thereto;
(iii) Within 60 days after the end of each of the first three
fiscal quarters (120 days after the end of the last fiscal
quarter), a certificate of the chief financial officer of the
Borrower (or such other officer as shall be acceptable to
Bank) as to Borrower's compliance, as of such fiscal quarter
ending date, with Section 4.02(a), and as to the occurrence
or continuance of no Default as of such fiscal quarter ending
date and the date of such certificate; and
(iv) immediately upon becoming aware of the occurrence of any
event which constitutes a Default (as hereinafter defined) or
which could constitute a Default with the passage of time or
the giving of notice, or both, provide written notice of such
occurrence together with a detailed statement by Borrower of
the steps being taken by Borrower to cure the effect of such
event.
(c) Comply, and cause each of its Subsidiary's so to do, in all
material respects with all laws that are applicable to all or any part of the
operation of its business activities, including, without limitation, (i) all
laws regarding the collection, payment, and deposit of employees' income,
unemployment, social security, sales, and excise taxes, all laws with respect to
pension liabilities, and (ii) all laws pertaining to environmental protection
and occupational safety and health which the failure to comply with could have a
Material Adverse Effect.
(d) Pay and discharge, and cause each of its Subsidiary's so to do, all
taxes, assessments and governmental charges or levies imposed upon it, or upon
its income and profits prior to the date on which penalties might attach thereto
and all lawful claims which, if unpaid, might become a lien or charge upon the
assets of Borrower or any of its Subsidiaries (other than a Permitted Lien);
provided, however, that Borrower and its Subsidiaries shall not be required to
pay and discharge any such tax, assessment, charge, levy or claim so long as the
legality thereof shall be contested in good faith and by appropriate proceedings
and for which the Borrower and its Subsidiaries have provided adequate reserves.
(e) Maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks (but including
in any event public liability and business interruption coverage) as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and furnish to Bank, upon written request of Bank, full
information as to the insurance carried.
Page 10
<PAGE> 11
(f) At all times, maintain, protect and keep in good repair, working
order and condition (ordinary wear and tear excepted), and cause each of its
Subsidiaries so to do, all property necessary to the operation of the Borrower's
or such Subsidiary's material businesses.
(g) Obtain or maintain, as applicable, and cause each of its
Subsidiaries to obtain or maintain, as applicable, in full force and effect, all
licenses, franchises, intellectual property, permits, authorizations and other
rights as are necessary for the conduct of its business and the failure of which
to obtain or maintain could, individually or collectively, have a Material
Adverse Effect.
(h) Observe and comply, and cause each of its Subsidiaries to observe
and comply, (to the extent necessary so that any failure will not have a
Material Adverse Effect) with all valid laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, certificates,
franchises, permits, licenses, authorizations, directions and requirements of
all federal, state, county, municipal and other governments, agencies,
departments, divisions, commissions, boards, courts, authorities, officials and
officers, domestic or foreign.
(i) Promptly notify Bank of (i) the arising of any litigation or
dispute, threatened against or affecting assets of Borrower or any Subsidiary of
Borrower, which, if adversely determined, could have a Material Adverse Effect;
or (ii) any act of Default under this Agreement, or any material default under
any other contract to which Borrower or any of its Subsidiaries is a party which
could have a Material Adverse Effect.
(g) Provide Bank with information that the Bank deems reasonably
necessary to monitor the Loans.
(h) Cure, within a reasonable period of time, any defects in the
creation, execution and delivery of the Loan Documents. Borrower at its expense
will promptly execute and deliver to Bank upon request all such other and
further documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements of Borrower in the Loan
Documents.
4.03 NEGATIVE COVENANTS. From the date of this Agreement and so long as
any Loan shall be outstanding, Borrower shall not without the prior written
consent of Bank:
(a) sell or lease all, or substantially all, of its assets or permit
any of its Subsidiaries so to do;
(b) at any time, make any loan or advance to, or enter into any
arrangement for the purpose of providing funds or credit to, any Person other
than a Subsidiary, or permit any of its Subsidiaries so to do, other than loans,
advances or arrangements the total amount of which, when added to the total
consideration paid by the Borrower and its Subsidiaries in connection with all
mergers, consolidations and acquisitions of or by the Borrower and its
Subsidiaries during the Line of Credit Period, shall not exceed the greater of
(i) $110,000,000 or (ii) 10% of total assets as of the most recently completed
fiscal quarter;
(c) mortgage or encumber any of its assets or suffer any Liens to exist
on any of its assets other than Permitted Liens or permit any of its
Subsidiaries so to do;
(d) assign this Agreement or any interest herein; or
(e) merge or consolidate with any other Person, or permit any of its
Subsidiaries so to do, except that the Borrower or any of its Subsidiaries may
merge or consolidate with another corporation, if (i) permitted under the terms
and conditions of that certain Revolving Credit Agreement by and among Borrower,
the Lenders Party thereto and The Bank of New York, as Agent dated as of June
15, 1995, (ii) the
Page 11
<PAGE> 12
merger or consolidation would not have a Material Adverse Effect and (iii) in
the case of a merger or consolidation involving Borrower, the "surviving
corporation" expressly assumes the Loan Documents.
V. EACH EXTENSION OF CREDIT
The Bank will not be obligated to make any Loan if:
(a) The representations and warranties of Borrower contained in this
Agreement are not true and correct on and as of the date of the Loan;
(b) Borrower has failed to observe or perform promptly when due any
covenant, agreement, or obligation under this Agreement or under any of the
other Loan Documents;
(c) A material adverse change in the properties, assets, liabilities,
business, operations, prospects, income or condition (financial or otherwise) of
Borrower and its Subsidiaries taken as a whole shall have occurred; or
(d) A Default shall have occurred and be continuing, or there shall
have occurred any condition, event or act which constitutes, or with notice or
lapse of time (or both) would constitute a Default.
VI. DEFAULTS
6.01 DEFAULT. The occurrence of any of the following events shall be
considered a "Default" as that term is used herein:
(a) the failure of Borrower to pay promptly when due any interest or
principal on any of the Loans;
(b) the failure of Borrower to observe or perform promptly when due any
covenant, agreement, or obligation under this Agreement or under any of the
other Loan Documents;
(c) the material inaccuracy at any time of any warranty,
representation, or statement made to Bank by Borrower, whether such warranty,
representation, or statement is made (i) in this Agreement, or (ii) in any other
agreement, document, or writing;
(d) the occurrence of an "Event of Default" under that certain
Revolving Credit Agreement by and among Borrower, the Lenders Party thereby and
The Bank of New York, as Agent dated as of June 15, 1995;
(e) any obligation(s) of the Borrower (other than the Loans) or any of
its Subsidiaries, whether as principal, guarantor, surety or other obligor, for
the payment of any Indebtedness or operating leases in excess of $10,000,000 in
the aggregate (i) shall become or shall be declared to be due and payable prior
to the expressed maturity thereof, (ii) shall not be paid when due or within any
grace period (as such grace period may be extended from time to time pursuant to
and in accordance with the documentation evidencing such obligation) for the
payment thereof, or (iii) any holder of any such obligation shall have the right
to declare such obligation due and payable prior to the expressed maturity
thereof; provided, however, that it shall not be considered that a Default has
occurred by virtue of subsections (d) and (e) of Section 6.01 solely because the
holder of any obligation of Borrower shall have the right to declare or has
declared such obligation due and payable prior to a stated maturity date by
virtue of a right of redemption or has the right to declare but has not declared
such obligation due and payable because of a material adverse change in the
financial condition of Borrower;
Page 12
<PAGE> 13
(f) The Borrower or any of its Subsidiaries shall (i) suspend or
discontinue its business, (ii) make an assignment for the benefit of creditors,
(iii) generally not pay its debts as such debts become due, (iv) admit in
writing its inability to pay its debts as they become due, (v) file a voluntary
petition in bankruptcy, (vi) become insolvent (however such insolvency shall be
evidenced), (vii) file any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment of debt, liquidation or
dissolution or similar relief under any present or future statute, law or
regulation of any jurisdiction, (viii) petition or apply to any tribunal for any
receiver, custodian or any trustee for any substantial part of its property,
(ix) be the subject of any such proceeding filed against it which remains
undismissed for a period of 45 days, (x) file any answer admitting or not
contesting the material allegations of any such petition filed against it or
admitting or not contesting the material allegations of any such petition filed
against it or any order, judgment or decree approving such petition in any such
proceeding, (xi) seek, approve, consent to, or acquiesce in any such proceeding,
or in the appointment of any trustee, receiver, sequestrator, custodian,
liquidator, or fiscal agent for it, or any substantial part of its property, or
an order is entered appointing any such trustee, receiver, custodian, liquidator
or fiscal agent and such order remains in effect for 45 days, or (xii) take any
formal action for the purpose of effecting any of the foregoing or looking to
the liquidation or dissolution of the Borrower or such Subsidiary;
(g) An order for relief is entered under the United States bankruptcy
laws or any other decree or order is entered by a court having jurisdiction (i)
adjudging the Borrower or any of its Subsidiaries bankrupt or insolvent, (ii)
approving as properly filed a petition seeking reorganization, liquidation,
arrangement, adjustment or composition of or in respect of the Borrower or any
of its Subsidiaries under the United states bankruptcy laws or any other
applicable Federal or state law, (iii) appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official) of the
Borrower or any of its Subsidiaries or of any substantial part of the property
thereof, or (iv) ordering the winding up or liquidation of the affairs of the
Borrower or any of its Subsidiaries, and any such decree or order continues
unstayed and in effect for a period of 45 days;
(h) Judgments or decrees against the Borrower or any of its
Subsidiaries aggregating in excess of $10,000,000 shall remain unpaid, unstayed
on appeal, undischarged, unbonded or undismissed for a period of at least 30
days;
(i) Any Loan Documents shall cease, for any reason, to be in full force
and effect or the Borrower shall so assert in writing or shall disavow any of
its obligations thereunder; or
(j) Any authorization or approval or other action by any governmental
agency or authority required for the execution, delivery or performance of the
Loan Documents shall be terminated, revoked or rescinded or shall otherwise no
longer be in full force and effect.
6.02 NOTICE OF DEFAULT AND REMEDIES. In the event of a Default and such
Default continues for a period of thirty (30) days (five (5) days for the
failure to make a payment of principal or interest under the Loans) after Bank
has given written notice of such Default to Borrower or after Borrower shall
have obtained knowledge of such Default, then, at the option of Bank, the Loans
shall be immediately due and payable without presentment, demand, protest,
notice of protest or dishonor or other notice of default of any kind, all of
which are hereby expressly waived by Borrower, and Bank may exercise any and all
rights and remedies which Bank may have under the Loan Documents and/or under
applicable law.
6.03 NO OBLIGATION TO LEND. In the event of a Default, Bank shall have
no obligation to make any Loan.
Page 13
<PAGE> 14
VII. MISCELLANEOUS
7.01 AMENDMENTS AND WAIVERS. Neither this Agreement, nor any provisions
hereof, may be changed, waived, discharged or terminated orally, or in any
manner other than by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought.
7.02 NO THIRD PARTY BENEFICIARY. This Agreement is solely for the
benefit of the parties and is not a stipulation for the benefit of any other
person or entity except for any approved assignee of Borrower and any assignee
of Bank.
7.03 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of Louisiana.
7.04 INVALIDITY. In the event that any one or more of the provisions
contained in the Loan Documents shall, for any reason, be held invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of the Loan Documents.
7.05 CONFLICT. In the event any of the provisions of this Agreement
conflict with any provisions contained in any other Loan Documents, the
provisions of this Agreement shall govern. This Agreement supersedes and
replaces the Loan Agreement between Bank and Borrower, dated March 20, 1997.
7.06 HEADINGS. The section and other headings contained in this
Agreement are for reference purposes only and shall not control or affect the
construction of this Agreement or the interpretation hereof in any respect.
7.07 NOTICES. Except as provided for in Sections 2.02(a), 2.03(b) and
2.06, all communications under or in connection with this Agreement shall be in
writing and shall be mailed by first class mail or express delivery, postage
prepaid, or otherwise sent by telex, telegram, telecopy or other similar form of
rapid transmission, or personally delivered to an officer of the receiving
party. All such communications shall be mailed, sent or delivered:
To Bank: Whitney National Bank
228 St. Charles Avenue
New Orleans, Louisiana 70130
Attn: John J. Zollinger, IV
Assistant Vice President
Telecopier: (504) 552-4622
Telephone: (504) 552-4586
With a copy to: Roy E. Blossman
Carver, Darden, Koretzky, Tessier,
Finn, Blossman & Areaux, L.L.C.
Energy Centre
Suite 2700, 1100 Poydras Street
New Orleans, Louisiana 70163
Telecopier: (504) 585-3801
Telephone: (504) 585-3807
To Borrower: Mr. Todd J. Marye
Director, Financing and Cash Management
Central Louisiana Electric Company, Inc.
2030 Donahue Ferry Road
Pineville, LA 71360
Telecopier: (318) 484-7697
Telephone: (318) 484-7541
With a copy to: Mr. William O. Bonin
P.O. Box 10030
New Iberia, LA 70562-0030
Telecopier: (318) 364-5795
Telephone: (318) 364-5762
Page 14
<PAGE> 15
7.08 COUNTERPARTS. This Agreement may be executed in several
counterparts and if executed shall constitute the agreement, binding upon all
the parties hereto, notwithstanding all the parties are not signatories to the
original and same counterparts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day, month and year hereinabove first written.
BANK:
WHITNEY NATIONAL BANK
By: /s/ John J. Zollinger, IV
------------------------------------
Its: Assistant Vice President
-----------------------------------
BORROWER:
CENTRAL LOUISIANA ELECTRIC
COMPANY, INC.
By: /s/ Michael P. Prudhomme
------------------------------------
Its: Secretary-Treasurer
-----------------------------------
Page 15
<PAGE> 1
EXHIBIT 11
CLECO CORPORATION
COMPUTATION OF NET INCOME PER COMMON SHARE
FOR THE THREE MONTHS ENDED MARCH 31,
(Unaudited)
<TABLE>
<CAPTION>
(In thousands, except share
and per share amounts)
1998 1997
------------ ------------
<S> <C> <C>
BASIC
Net income applicable to common stock $6,468 $7,002
============ ============
Weighted average number of shares of common
stock outstanding during the period 22,473,749 22,457,061
============ ============
Basic net income per common share $0.29 $0.31
============ ============
DILUTED
Net income applicable to common stock $6,468 $7,002
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 359 364
Deduct additional cash contribution
required which is equal to dividends
on preferred stock less dividends
paid at the common dividend rate, net
of tax (23) (33)
Add tax benefit associated with dividends
paid on allocated common shares 84 67
------------ ------------
Adjusted income applicable to common stock $6,888 $7,400
============ ============
Weighted average number of shares of common
stock outstanding during the period 22,473,749 22,457,061
Number of equivalent common shares
attributable to ESOP 1,388,259 1,399,547
Common stock under stock option grants 7,009 6,925
------------ ------------
Average shares 23,869,017 23,863,533
============ ============
Diluted net income per common share $0.29 $0.31
============ ============
</TABLE>
<PAGE> 1
EXHIBIT 12
CLECO CORPORATION
COMPUTATION OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
FOR THE TWELVE MONTHS ENDED MARCH 31, 1998
(Unaudited)
<TABLE>
<CAPTION>
(In thousands,
except ratios)
--------------
<S> <C>
Earnings $ 51,988
Income taxes 26,918
----------
Earnings from continuing operations before income taxes $ 78,906
----------
Fixed charges:
Interest, long-term debt $ 23,862
Interest, other (including interest on short-term debt) 3,596
Amortization of debt expense, premium, net 1,225
Portion of rentals representative of an interest factor 512
----------
Total fixed charges $ 29,195
----------
Earnings from continuing operations before
income taxes and fixed charges $108,101
==========
Ratio of earnings to fixed charges 3.70x
==========
Fixed charges from above $ 29,195
Preferred stock dividends* 2,865
----------
Total fixed charges and preferred stock dividends $ 32,060
==========
Ratio of earnings to combined fixed charges and
preferred stock dividends 3.37x
</TABLE>
* Preferred stock dividends multiplied by the ratio of pretax
income to net income.
<PAGE> 1
EXHIBIT 15
[Coopers & Lybrand L.L.P. Letterhead]
May 14, 1998
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Cleco Corporation Registrations
on Form S-8 (Nos. 2-79671, 33-10169, 33-38362 and 33-44663)
and Form S-3 (Nos. 33-24895, 33-62950 and 333-02895)
We are aware that our report dated April 28, 1998 on our review of the interim
financial information of Cleco Corporation as of March 31, 1998 and for the
three-month periods ended March 31, 1998 and 1997 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.
<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>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,027,925
<OTHER-PROPERTY-AND-INVEST> 3,480
<TOTAL-CURRENT-ASSETS> 89,048
<TOTAL-DEFERRED-CHARGES> 223,054
<OTHER-ASSETS> 8,517
<TOTAL-ASSETS> 1,352,024
<COMMON> 45,530
<CAPITAL-SURPLUS-PAID-IN> 107,993
<RETAINED-EARNINGS> 253,142
<TOTAL-COMMON-STOCKHOLDERS-EQ> 406,665
5,990
12,105
<LONG-TERM-DEBT-NET> 120,906
<SHORT-TERM-NOTES> 0
<LONG-TERM-NOTES-PAYABLE> 245,000
<COMMERCIAL-PAPER-OBLIGATIONS> 61,794
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 499,564
<TOT-CAPITALIZATION-AND-LIAB> 1,352,024
<GROSS-OPERATING-REVENUE> 97,210
<INCOME-TAX-EXPENSE> 3,030
<OTHER-OPERATING-EXPENSES> 80,347
<TOTAL-OPERATING-EXPENSES> 83,377
<OPERATING-INCOME-LOSS> 13,833
<OTHER-INCOME-NET> 131
<INCOME-BEFORE-INTEREST-EXPEN> 13,964
<TOTAL-INTEREST-EXPENSE> 6,970
<NET-INCOME> 6,994
526
<EARNINGS-AVAILABLE-FOR-COMM> 6,468
<COMMON-STOCK-DIVIDENDS> 8,875
<TOTAL-INTEREST-ON-BONDS> 2,230
<CASH-FLOW-OPERATIONS> 7,089
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.29
</TABLE>
