-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, B3IeMsrbUz3S1zyLjCoIcqwoyU7zjTjmaH/Gp9nlLhbQC4/IeB09v0v6QJMUKag/ +aD6ROp7PCGjttkqB2eGNA== 0000018672-94-000014.txt : 19941122 0000018672-94-000014.hdr.sgml : 19941122 ACCESSION NUMBER: 0000018672-94-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL LOUISIANA ELECTRIC CO INC CENTRAL INDEX KEY: 0000018672 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 720244480 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05663 FILM NUMBER: 94559425 BUSINESS ADDRESS: STREET 1: 2030 DONAHUE FERRY RD CITY: PINEVILLE STATE: LA ZIP: 71360 BUSINESS PHONE: 3184847400 MAIL ADDRESS: STREET 1: P O BOX 5000 CITY: PINEVILLE STATE: LA ZIP: 71361-5000 10-Q 1 CENTRAL LOUISIANA ELECTRIC CO THIRD QUARTER 1994 10-Q 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. 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 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 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 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands) September 30, 1994 December 31, 1993 ------------------ ----------------- ASSETS 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 ----------- ----------- Total utility plant, net 903,827 895,036 ----------- ----------- Investments and other assets 20,655 20,197 ----------- ----------- 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 ----------- ----------- (Continued on next page) 3
CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED BALANCE SHEET (Continued) (Unaudited)
(In thousands, except share amounts) September 30, 1994 December 31, 1993 ------------------ ----------------- CAPITALIZATION AND LIABILITIES 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 ----------- ----------- 13,216 12,106 ----------- ----------- 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 ----------- ----------- 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 ----------- ----------- Total deferred credits 342,283 336,365 ----------- ----------- TOTAL CAPITALIZATION AND LIABILITIES $1,184,723 $1,161,635 ----------- ----------- The accompanying notes are an integral part of the consolidated financial statements. 4
CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED STATEMENT OF INCOME For the three months ended September 30, (Unaudited)
(In thousands, except share and per share amounts) 1994 1993 ------------ ------------ 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 ------------ ------------ 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 The accompanying notes are an integral part of the consolidated financial statements. 5
CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED STATEMENT OF INCOME For the nine months ended September 30, (Unaudited)
(In thousands, except share and per share amounts) 1994 1993 ------------ ------------ 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 ------------ ------------ 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 The accompanying notes are an integral part of the consolidated financial statements. 6
CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED STATEMENT OF CASH FLOWS For the nine months ended September 30, (Unaudited)
(In thousands) 1994 1993 -------- -------- 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) -------- -------- 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 -------- -------- The accompanying notes are an integral part of the consolidated financial statements. 7
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 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 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 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 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. 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 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 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 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 EX-10 2 REMARKETING AGREEMENT 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 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 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 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 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 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 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 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 Agent may be entitled to additional fees to be negotiated between the Company and the Remarketing Agent in connection with (i) any 19 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 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 EX-10 3 REMARKETING AGREEMENT 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 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 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 (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 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 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. 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 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 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 EX-10 4 REMARKETING AGREEMENT 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 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 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. (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 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 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 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 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 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 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 EX-11 5 NET INCOME PER COMMON SHARE CENTRAL LOUISIANA ELECTRIC COMPANY, INC. COMPUTATION OF NET INCOME PER COMMON SHARE For the three months ended September 30, (Unaudited)
(In thousands, except share and per share amounts) 1994 1993 ----------- ----------- 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 ----------- ----------- 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 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. COMPUTATION OF NET INCOME PER COMMON SHARE For the nine months ended September 30, (Unaudited) (In thousands, except share and per share amounts) 1994 1993 ----------- ----------- 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 ----------- ----------- 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
EX-12 6 EARNINGS TO FIXED CHARGES 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)
(In thousands, except ratios) -------------- 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
EX-15 7 AWARENESS LETTER 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 EX-27 8 FINANCIAL DATA SCHEDULE UT WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
UT 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. 1,000 DEC-31-1994 JAN-01-1994 SEP-30-1994 9-MOS PER-BOOK 903,827 20,655 56,192 196,249 7,800 1,184,723 45,433 106,332 213,685 365,450 7,230 5,986 170,775 4,410 165,000 28,348 14,188 0 805 505 787,476 1,184,723 297,720 19,655 219,917 239,572 58,148 439 58,587 19,631 38,956 1,507 37,449 24,302 0 59,570 1.67 1.61 40
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