-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K/h6qox5mUB/QuhLCKBLcXSskFBuLl5OlWJPKu/zZHN3MfjPUAGBtiIJmi9EF6/6 QMP8N/dxUYmtQtMWK+cueA== 0000018672-95-000012.txt : 19951119 0000018672-95-000012.hdr.sgml : 19951119 ACCESSION NUMBER: 0000018672-95-000012 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL LOUISIANA ELECTRIC CO INC CENTRAL INDEX KEY: 0000018672 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [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: 95591532 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 1995 10Q 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, 1995 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, 1995 there were 22,424,658 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 Statements of Income . . . . . . . . 3 Consolidated Balance Sheets. . . . . . . . . . . 5 Consolidated Statements of Cash Flows . . . . . . 7 Note to Consolidated Financial Statements . . . . 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations . . . . . . . . . . . . . . 9 Financial Condition . . . . . . . . . . . . . . . 10 PART II. OTHER INFORMATION Item 5. Other Information Activities With Respect to Cooperatives. . . . . . 11 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 12 SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . 13 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 management's opinion, all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair presentation of the Company's financial position and the results of its operations for the interim periods presented. Because of the seasonal nature of the Company's business, the results of operations for the nine months ended September 30, 1995 are not necessarily indicative of the results that may be expected for the full fiscal year. The financial statements included herein should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. 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 certified public accountants & Lybrand L.L.P. a professional services firm REPORT OF INDEPENDENT ACCOUNTANTS Board of Directors Central Louisiana Electric Company, Inc.: We have made a review of the consolidated balance sheet of Central Louisiana Electric Company, Inc. as of September 30, 1995, and the related consolidated statements of income for the three-month and nine-month periods and cash flows for the nine-month periods ended September 30, 1995 and 1994, in accordance with standards established by the American Institute of Certified Public Accountants. These financial statements are the responsibility of the Company's management. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1994 and the related consolidated statements of income, cash flows and changes in common shareholders' equity for the year then ended (not present herein); and in our report dated January 27, 1995, 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, 1994, 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 25, 1995 2 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME For the three months ended September 30 (Unaudited)
(In thousands, except share and per share amounts) 1995 1994 ---------- ---------- OPERATING REVENUES $ 123,383 $ 112,633 ---------- ---------- OPERATING EXPENSES Fuel used for electric generation 38,547 37,654 Power purchased 4,755 3,681 Other operation 17,149 13,929 Maintenance 6,223 5,607 Depreciation 10,122 9,924 Taxes other than income taxes 7,751 7,804 Federal and state income taxes 11,392 9,941 ---------- ---------- 95,939 88,540 ---------- ---------- OPERATING INCOME 27,444 24,093 Allowance for other funds used during construction 278 419 Other income and expenses, net (169) (401) ---------- ---------- INCOME BEFORE INTEREST CHARGES 27,553 24,111 Interest charges, including amortization of debt expense, premium and discount 7,289 6,698 Allowance for borrowed funds used during construction (807) (193) ---------- ---------- NET INCOME 21,071 17,606 Preferred dividend requirements, net 515 506 ---------- ---------- NET INCOME APPLICABLE TO COMMON STOCK $ 20,556 $ 17,100 ========== ========== WEIGHTED AVERAGE COMMON SHARES Primary 22,433,451 22,416,619 Fully diluted 23,850,320 23,843,121 EARNINGS PER SHARE Primary $0.92 $0.76 Fully diluted $0.88 $0.73 CASH DIVIDENDS PAID PER SHARE $0.375 $0.365 The accompanying note is an integral part of the consolidated financial statements.
3 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME For the nine months ended September 30 (Unaudited)
(In thousands, except share and per share amounts) 1995 1994 ---------- ---------- OPERATING REVENUES $ 303,854 $ 297,720 ---------- ---------- OPERATING EXPENSES Fuel used for electric generation 86,442 96,888 Power purchased 17,599 14,319 Other operation 45,990 40,597 Maintenance 16,160 16,552 Depreciation 30,614 29,543 Taxes other than income taxes 22,390 22,018 Federal and state income taxes 22,331 19,655 ---------- ---------- 241,526 239,572 ---------- ---------- OPERATING INCOME 62,328 58,148 Allowance for other funds used during construction 1,176 985 Other income and expenses, net 249 (546) ---------- ---------- INCOME BEFORE INTEREST CHARGES 63,753 58,587 Interest charges, including amortization of debt expense, premium and discount 22,084 20,100 Allowance for borrowed funds used during construction (1,494) (469) ---------- ---------- NET INCOME 43,163 38,956 Preferred dividend requirements, net 1,535 1,507 ---------- ---------- NET INCOME APPLICABLE TO COMMON STOCK $ 41,628 $ 37,449 ========== ========== WEIGHTED AVERAGE COMMON SHARES Primary 22,431,216 22,417,161 Fully diluted 23,850,043 23,844,788 EARNINGS PER SHARE Primary $1.86 $1.67 Fully diluted $1.79 $1.61 CASH DIVIDENDS PAID PER SHARE $1.115 $1.085 The accompanying note is an integral part of the consolidated financial statements.
4 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands) September 30, 1995 December 31, 1994 ------------------ ----------------- ASSETS Utility plant Property, plant and equipment $ 1,302,708 $ 1,276,266 Accumulated depreciation (435,196) (410,513) ------------------ ----------------- 867,512 865,753 Construction work-in-progress 55,950 46,379 ------------------ ----------------- Total utility plant, net 923,462 912,132 ------------------ ----------------- Investments and other assets 10,310 20,327 ------------------ ----------------- Current assets Cash and cash equivalents 18,512 7,440 Accounts receivable, net 20,869 11,147 Unbilled revenues 4,886 573 Fuel inventory, at average cost 9,956 10,184 Materials and supplies, at average cost 15,436 14,945 Prepayments and other current assets 2,583 2,374 ------------------ ----------------- Total current assets 72,242 46,663 ------------------ ----------------- Accumulated deferred federal and state income taxes 66,590 39,377 Prepayments 8,145 7,861 Deferred charges 187,681 151,831 ----------------- ----------------- TOTAL ASSETS $ 1,268,430 $ 1,178,191 ================= ================= The accompanying note is an integral part of the consolidated financial statements. (Continued on next page)
5 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED BALANCE SHEETS (Continued) (Unaudited)
(In thousands, except share amounts) September 30, 1995 December 31, 1994 ------------------ ----------------- CAPITALIZATION AND LIABILITIES Common shareholders' equity Common stock, $2 par value, authorized 50,000,000 shares, issued 22,741,254 and 22,720,074 shares at September 30, 1995 and December 31, 1994,respectively $ 45,483 $ 45,440 Premium on capital stock 113,360 113,070 Retained earnings 228,073 211,198 Treasury stock at cost, 318,446 and 329,433 shares at September 30, 1995 and December 31, 1994, respectively (6,459) (6,681) ------------------ ----------------- 380,457 363,027 ------------------ ----------------- Preferred stock, cumulative, $100 par value Not subject to mandatory redemption 30,519 30,748 Deferred compensation related to preferred stock held by ESOP (22,880) (24,404) ------------------ ----------------- 7,639 6,344 Subject to mandatory redemption 6,880 6,920 ------------------ ----------------- 14,519 13,264 ------------------ ----------------- Long-term debt, net 360,812 336,589 ------------------ ----------------- Total capitalization 755,788 712,880 ------------------ ----------------- Current liabilities Short-term debt 32,250 28,977 Long-term debt due within one year 14,676 Accounts payable 28,379 43,466 Customer deposits 19,690 19,513 Taxes accrued 22,084 3,262 Interest accrued 2,615 8,298 Accumulated deferred fuel 5,160 6,114 Other current liabilities 2,569 2,618 ----------------- ----------------- Total current liabilities 112,747 126,924 ----------------- ----------------- Deferred credits Accumulated deferred federal and state income taxes 265,810 228,803 Accumulated deferred investment tax credits 33,626 34,987 Other deferred credits 100,459 74,597 ----------------- ---------------- Total deferred credits 399,895 338,387 ----------------- ---------------- TOTAL CAPITALIZATION AND LIABILITIES $ 1,268,430 $ 1,178,191 ================= ================ The accompanying note is an integral part of the consolidated financial statements.
6 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30 (Unaudited)
(In thousands) 1995 1994 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 43,163 $ 38,956 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 31,533 29,911 Allowance for funds used during construction (2,670) (1,454) Amortization of investment tax credits (1,361) (1,365) Deferred income taxes 1,613 1,613 Deferred fuel costs (954) 795 (Gain) loss on disposition of utility plant, net (20) 4 Changes in assets and liabilities Accounts receivable, net (9,722) (5,403) Unbilled revenues (4,313) (1,911) Fuel inventory, materials and supplies (263) (913) Accounts payable (15,087) (11,644) Customer deposits 177 710 Other deferred accounts (3,833) (959) Taxes accrued 18,822 16,064 Interest accrued (5,683) (6,049) Other, net 515 1,215 ---------- ---------- Net cash provided by operating activities 51,917 59,570 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to utility plant (40,807) (37,476) Allowance for funds used during construction 2,670 1,454 Sale of utility plant 515 239 Purchase of investments (2,413) (142,867) Sale of investments 12,632 142,861 ---------- ---------- Net cash used in investing activities (27,403) (35,789) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 333 156 Repurchase of common stock (274) Retirement of long-term debt (15,481) (634) Issuance of long-term debt 25,000 Increase of short-term debt 3,273 4,384 Redemption of preferred stock (40) (52) Dividends paid on common and preferred stock, net (26,527) (25,808) ---------- ---------- Net cash used in financing activities (13,442) (22,228) ---------- ---------- NET INCREASE IN CASH AND CASH EQUIVALENTS 11,072 1,553 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 7,440 5,802 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,512 $ 7,355 ========== ========== Supplementary cash flow information Interest paid (net of amount capitalized) $ 26,387 $ 26,670 ========== ========== Income taxes paid $ 17,056 $ 17,447 ========== ========== The accompanying note is an integral part of the consolidated financial statements.
7 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. NOTE TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Note A. Contingencies An audit of the Company's 1991 and 1992 tax returns was completed by agents of the Internal Revenue Service (IRS) in January 1995. A number of assessments were proposed that would substantially increase federal and Louisiana taxable income for those years. The Company is contesting most of these assessments. Deferred federal taxes have been provided for all temporary differences, and reserves have been provided for other issues. If the IRS is completely successful on all of the contested issues, an additional liability in excess of current reserves would arise for interest and, if assessed, penalties. In July 1995, agents of the IRS announced that an audit of the Company's 1993 and 1994 tax returns would commence in 1995, and the audit began in October 1995. In February 1995 the Company and Teche Electric Cooperative, Inc. (Teche) executed a purchase and sale agreement calling for the purchase of all of the assets of Teche by the Company for a purchase price, including the Company's assumption or other discharge of Teche's liabilities, of approximately $22.4 million. Teche serves about 8,600 customers and its service area, which comprises parts of Iberia, St. Martin and St. Mary parishes, is adjacent to the Company's service area. Teche members approved the purchase and sale agreement at their annual meeting on March 11, 1995. Consummation of the acquisition is subject to a number of conditions, including approval by the Louisiana Public Service Commission (LPSC), the Rural Utilities Service (RUS) and other governmental agencies, successful resolution of Teche's power supply contract with Cajun Electric Power Cooperative (Cajun) and certain other conditions. If the acquisition is not consummated on or before the later of March 31, 1996, or such later date that the Company and Teche may establish by mutual agreement, either party, if not in default under the purchase and sale agreement, may terminate such agreement upon written notice given to the other. The LPSC elected in 1993 to begin a review of the earnings of all electric, gas and telephone utilities in Louisiana to determine whether the earned returns on equity of these companies may be higher than returns that would be allowed if rate levels were set based upon present costs. The action was based upon a preliminary report by consultants that pointed out a lack of rate increase activity and a downward trend in capital costs. During 1994, earnings reviews of two of the four major Louisiana electric utilities were completed and small rate decreases were ordered. In April 1995, at its monthly business meeting, the LPSC voted to request bids from consultants to participate in an earnings review of the Company. At its August 1995 monthly meeting, the LPSC selected consultants to work on a project team with members of its own staff to conduct the earnings review of the Company. The project team began its review of the Company in August 1995 by making initial discovery requests for information from the Company for the purpose of evaluating the earned return on equity that is produced by present rates. The earnings review, which is not subject to any statutory or procedural deadlines, is expected to continue through the remainder of 1995. The Company believes its current return on equity is in line with business conditions; and therefore, anticipates that this review will not have a significant effect on the Company's financial condition or results of its operations. But at this time, it is not possible to predict the outcome of these proceedings. 8 CENTRAL LOUISIANA ELECTRIC COMPANY, INC. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net income applicable to common stock totaled $20.6 million and $41.6 million, respectively, for the three- and nine-month periods ended September 30, 1995, as compared to $17.1 million and $37.4 million, respectively, for the corresponding periods in 1994. Net income per primary average common share was $0.92 and $1.86, respectively, for the three- and nine-month periods ended September 30, 1995, as compared to $0.76 and $1.67, respectively, for the same periods in 1994. The following principal factors contributed to these results: Operating revenues for the three months ending September 30, 1995, increased $10.8 million, or 9.5%, as compared to the same period in 1994, largely from the effect of weather related increased kilowatt-hour sales on base revenues. For the nine months ending September 30, 1995, operating revenues increased $6.1 million, or 2.1%, as compared to the corresponding period in 1994, from the effect of weather related increased kilowatt-hour sales on base revenues which were offset by decreased fuel cost recovery revenues. For the third quarter 1995, fuel cost recovery revenues were $2.0 million higher than the third quarter 1994. The increase is attributable to the additional generating fuel consumed and power purchased to meet the higher summer demand. For the nine months ending September 30, 1995, fuel cost recovery revenues were $7.0 million lower than the same period in 1994. The decrease is attributable to lower natural gas prices in 1995 than in 1994. Changes in fuel cost recovery revenues have historically had no effect on net income, as fuel costs are generally recovered through a fuel cost adjustment clause that enables the Company to pass on to customers substantially all changes in the cost of generating fuel and purchased power. The adjustments regulated by the LPSC (about 99% of the total fuel cost adjustment) are audited by the LPSC staff monthly and the remaining portion, regulated by the Federal Energy Regulatory Commission (FERC), is audited periodically for several years at a time. Until approval is received, the adjustments are subject to refund. Base revenues increased $8.7 million and $13.1 million, respectively, for the three- and nine-month periods ended September 30, 1995, as compared to the corresponding periods in 1994. Higher base revenues are the product of increased kilowatt-hour sales to residential customers resulting from the warmer than normal weather, sales to new and existing industrial customers, and marketing efforts to increase sales to existing industrial customers. For the three- and nine-month periods ended September 30, 1995, kilowatt-hour sales increased 15.0%, and 10.3%, respectively, over the same periods in 1994. Operating expenses increased $7.4 million, or 8.4%, and $1.9 million, or 0.8%, respectively, for the three- and nine-month periods ending September 30, 1995, compared to the same periods in 1994. The increases are primarily due to increased fuel and purchased power costs, other operation expenses and federal and state income taxes; however, for the nine months ending September 30, 1995, these same expenses were offset by a decrease in fuel costs. Fuel expenses and purchased power expenses increased $0.9 million and $1.1 million, respectively, for the three month period ending September 30, 1995, as compared to the same period in 1994, as a result of increased generation to meet demands caused by the warmer than normal weather. For the nine months ending September 30, 1995, fuel used for electric generation decreased $10.4 million, or 10.8%, over the corresponding period in 1994, primarily due to lower natural gas prices. For the nine months ending September 30, 1995, the 9 increase of $3.3 million in purchased power over the corresponding period in 1994 resulted from warmer weather experienced in the third quarter 1995 and scheduled outages of the Company's generating units. Other operation expenses increased $3.2 million, or 23.1%, for the three-month period ending September 30, 1995, and $5.4 million, or 13.3%, for the nine-month period ending September 30, 1995, resulting in part from costs associated with the Company's efforts to acquire Teche, the Company's unsuccessful efforts in 1995 to acquire Washington-St.Tammany Electric Cooperative, Inc. (WST), the implementation of the Company's 24-hour, 7-day a week call center (during which time customer service offices also remained open), and increased right-of-way reclearing efforts on circuits with lower reliability than the Company's goal . In late July 1995, 15 customer service offices were closed and their operations were consolidated into ten existing regional offices. Interest expenses increased $0.6 million, or 8.8%, and $2.0 million, or 9.9%, respectively, for the three- and nine-month periods ended September 30, 1995, compared to the same periods in 1994, primarily due to higher short-term interest rates and higher average balances of short-term debt. Federal and state income taxes increased $1.5 million, or 14.6%, and $2.7 million, or 13.6%, respectively, for the three- and nine-month periods ended September 30, 1995, compared to the same periods in 1994, primarily due to higher taxable income. FINANCIAL CONDITION Liquidity and Capital Resources At September 30, 1995 and 1994, the Company had $32.3 million and $32.8 million, respectively, of short-term debt outstanding in the form of commercial paper borrowings and bank loans. The Company has a $100 million revolving credit facility, which provides support for the issuance of commercial paper. Uncommitted lines of credit with banks totaling $23 million are also available to meet short-term working capital needs. Additionally, at September 30, 1995, an unregulated subsidiary of the Company had $16.3 million of cash and temporary cash investments in securities with original maturities of 90 days or less. The Company participates in a program where up to $35 million of its receivables can be sold on an ongoing basis. The amount of receivables that may be sold at any time depends upon seasonal fluctuations in the amount of eligible receivables. The Company has an effective shelf registration statement and all regulatory approvals necessary to issue up to $25 million of debt and $50 million of preferred stock. Regulatory Matters On March 29, 1995, the FERC issued a Notice of Proposed Rulemaking (NOPR) addressing two key issues: open transmission access and recovery of stranded cost. The open access provisions of the NOPR propose to require FERC- regulated electric utilities to offer third parties open access to transmission under the same or comparable terms and conditions as the utility's use of its own system. Providing unbundled transmission services to firm-requirements customers may have significant financial consequences to the utility industry. Providing open access for non-firm sales may have a significant effect on utility operations. The stranded-cost proposal would allow utilities to recover investments in assets stranded by customers departing as a result of opening the transmission systems. This proposal could mitigate the financial consequences of 10 unbundling transmission services to wholesale customers. Currently, the Company has three wholesale full-requirements customers representing about 1.2% of the Company's total kilowatt-hour sales. At this time, it is not possible to predict whether the NOPR will become a final rule, and if it does become a final rule, the form of such final rule and its effect on the Company. If adopted, generic tariffs will be available to all buyers and sellers of electric energy at wholesale rates and will become effective 60 days after the date of adoption of the final rule. After 60 days from the date of adoption, utilities and customers may propose changes to the tariffs. Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" (SFAS 121) was issued in March 1995, and effective for fiscal years beginning after December 15, 1995. SFAS 121 establishes accounting standards for determining if long-lived assets are impaired, and when losses, if any, should be recognized and how any such losses should be recognized. In addition, the Company has recorded regulatory assets and liabilities as a result of past rate actions of the Company's regulators, pursuant to Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" (SFAS 71). The effects of potential deregulation of the industry or possible future changes in the method of rate regulation of the Company could require that the Company discontinue the application of SFAS 71, pursuant to Statement of Financial Accounting Standards No. 101, "Regulated Enterprises--Accounting for the Discontinuation of Application of FASB Statement No. 71". The effects of these standards on future statements of position and results of operations will be determined by the facts and circumstances at that time. PART II OTHER INFORMATION Item 5. OTHER INFORMATION Activities With Respect to Cooperatives In February 1995 the Company and Teche executed a purchase and sale agreement regarding the purchase of all of the assets of Teche by the Company for a purchase price, including the Company's assumption or other discharge of Teche's liabilities, of approximately $22.4 million. Teche serves about 8,600 customers and its service area, which comprises parts of Iberia, St. Martin and St. Mary parishes, is adjacent to the Company's service area. Teche members approved the purchase and sale agreement at their annual meeting on March 11, 1995. Consummation of the acquisition is subject to a number of conditions, including approval by the LPSC, the RUS and other governmental agencies, successful resolution of Teche's power supply contract with Cajun and certain other conditions. Cajun, which provides power to all of the state's electric distribution cooperatives, including Teche, is in bankruptcy. In March 1995 Cajun filed a motion in bankruptcy court to stay the Company's acquisition of Teche. A hearing on the motion has been postponed indefinitely by the court with the agreement of the Company, Teche and Cajun. In April and May 1995 the Company, Teche and the RUS filed motions with the bankruptcy court to appoint an independent trustee to replace Cajun as debtor-in-possession and to oversee the Cajun bankruptcy, including the disposition of Teche and its all-requirements contract with Cajun. In August 1995, the court granted the motions and appointed a trustee. Cajun and other parties have appealed to the U.S. Fifth Circuit Court of Appeals to set aside 11 the lower court's decision. No decision has been rendered by the appellate court. The Antitrust Division of the U.S. Department of Justice submitted to the Company a civil investigative demand dated August 7, 1995, seeking information with respect to whether there is, has been or may be a violation of Section 7 of the Clayton Anti-Trust Act by conduct, activities or proposed action associated with the Company's acquisition of competitor rural electric cooperatives, including Teche and WST. The information sought also concerned the Company's involvement in the Cajun bankruptcy proceedings. The Company believes that it satisfied the demand in a timely fashion by providing information in response to these requests. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 11 Computation of Net Income Per Common Share for the three and nine months ended September 30, 1995 and September 30, 1994 12 Computation of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends for the twelve months ended September 30, 1995 15 Awareness letter, dated November 13, 1995, 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, 1995, the Company filed no Current Reports on Form 8-K. 12 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTRAL LOUISIANA ELECTRIC COMPANY, INC. (Registrant) BY: /s/ David K. Warner -------------------------------- David K. Warner Vice President - Finance (Principal Financial Officer) Date: November 14, 1995 13 EX-11 2 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) 1995 1994 ----------- ----------- PRIMARY Net income applicable to common stock $ 20,556 $ 17,100 ========== ========== Weighted average number of shares of common stock outstanding during the period 22,421,208 22,397,516 Common stock under stock option grants 12,243 19,103 ---------- ---------- Average shares 22,433,451 22,416,619 ========== ========== Primary net income per common share $ 0.92 $ 0.76 ========== ========== FULLY DILUTED Net income applicable to common stock $ 20,556 $ 17,100 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 369 372 Deduct additional cash contribution required which is equal to dividends on preferred stock less dividends paid at the common dividend rate, net of tax (42) (51) Add tax benefit associated with dividends paid on allocated common shares 48 34 ---------- ---------- Adjusted income applicable to common stock $ 20,931 $ 17,455 ========== ========== Weighted average number of shares of common stock outstanding during the period 22,421,208 22,397,516 Number of equivalent common shares attributable to ESOP 1,415,515 1,426,502 Common stock under stock option grants 13,597 19,103 ---------- ---------- Average shares 23,850,320 23,843,121 ========== ========== Fully diluted net income per common share $ 0.88 $ 0.73 ========== ==========
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) 1995 1994 ---------- ---------- PRIMARY Net income applicable to common stock $ 41,628 $ 37,449 ========== ========== Weighted average number of shares of common stock outstanding during the period 22,419,248 22,396,166 Common stock under stock option grants 11,968 20,995 ---------- ---------- Average shares 22,431,216 22,417,161 ========== ========== Primary net income per common share $ 1.86 $ 1.67 ========== ========== FULLY DILUTED Net income applicable to common stock $ 41,628 $ 37,449 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 1,106 1,116 Deduct additional cash contribution required which is equal to dividends on preferred stock less dividends paid at the common dividend rate, net of tax (134) (162) Add tax benefit associated with dividends paid on allocated common shares 132 89 ---------- ---------- Adjusted income applicable to common stock $ 42,732 $ 38,492 ========== ========== Weighted average number of shares of common stock outstanding during the period 22,419,248 22,396,166 Number of equivalent common shares attributable to ESOP 1,416,614 1,427,627 Common stock under stock option grants 14,181 20,995 ---------- ---------- Average shares 23,850,043 23,844,788 ========== ========== Fully diluted net income per common share $ 1.79 $ 1.61 ========== ==========
EX-12 3 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, 1995 (Unaudited)
(In thousands, except ratios) ---------------- Earnings $ 49,250 Income taxes 22,577 ------------ Earnings from continuing operations before income taxes $ 71,827 ------------ Fixed charges Interest, long-term debt 24,251 Interest, other (including interest on short-term debt) 3,469 Amortization of debt expense, premium, net 1,223 Portion of rentals representative of an interest factor 684 ------------ Total fixed charges $ 29,627 ------------ Earnings from continuing operations before income taxes and fixed charges $ 101,454 ============ Ratio of earnings to fixed charges 3.42x ============ Fixed charges from above $ 29,627 Preferred stock dividends* 2,944 ------------ Total fixed charges and preferred stock dividends $ 32,571 ============ Ratio of earnings to combined fixed charges and preferred stock dividends 3.11x ============ * Preferred stock dividends multiplied by the ratio of pretax income to net income.
EX-15 4 AWARENESS LETTER Coopers Coopers & Lybrand L.L.P. 639 Loyola Avenue telephone (504)529-2700 a professional services firm Suite 1800 facsmile (504)529-1439 & Lybrand New Orleans, LA 70113 November 13, 1995 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 25, 1995 on our review of the interim financial information of Central Louisiana Electric Company, Inc. as of September 30, 1995 and for the three-month and nine-month periods ended September 30, 1995 and 1994 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. EX-27 5 FINANCIAL DATA SCHEDULE UT
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 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 PER-BOOK $ 923,462 $ 10,310 $ 72,242 $ 254,271 $ 8,145 $1,268,430 $ 45,483 $ 106,901 $ 228,073 $ 380,457 $ 6,880 $ 7,639 $ 170,812 $ 520 $ 190,000 $ 31,730 $ 0 $ 0 $ 0 $ 0 $ 480,392 $1,268,430 $ 303,854 $ 22,331 $ 219,195 $ 241,526 $ 62,328 $ 1,425 $ 63,753 $ 20,590 $ 43,163 $ 1,535 $ 41,628 $ 24,993 $ 11,009 $ 51,917 $ 1.86 $ 1.79
-----END PRIVACY-ENHANCED MESSAGE-----