-----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, SOMlPD6Kw6iNAING9Q8nhAGjcBgpfRgN5NEVefb5M9dBPLAmlHqiNk+HroXu9Lz2 MXxsX66dEEEuU6vVQ0cnrw== 0000950129-98-002149.txt : 19980518 0000950129-98-002149.hdr.sgml : 19980518 ACCESSION NUMBER: 0000950129-98-002149 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLECO CORP 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: SEC FILE NUMBER: 001-05663 FILM NUMBER: 98622289 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 FORMER COMPANY: FORMER CONFORMED NAME: CENTRAL LOUISIANA ELECTRIC CO INC DATE OF NAME CHANGE: 19920703 10-Q 1 CLECO CORPORATION - DATED 03/31/98 1 =============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 Commission file number 1-5663 Or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 CLECO CORPORATION (FORMERLY KNOWN AS CENTRAL LOUISIANA ELECTRIC COMPANY, INC.) (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) LOUISIANA 72-0244480 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2030 DONAHUE FERRY ROAD, PINEVILLE, LOUISIANA 71360-5226 (Address of principal executive offices) (Zip Code) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (318) 484-7400 Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ As of May 1, 1998, there were 22,482,300 shares outstanding of the Registrant's Common Stock, par value $2.00 per share. =============================================================================== 2 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION ---- Item 1. Financial Statements..................................... 1 Report of Independent Accountants...................... 2 Consolidated Statements of Income...................... 3 Consolidated Balance Sheets............................ 4 Consolidated Statements of Cash Flows.................. 6 Notes to Consolidated Financial Statements............. 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 9 Disclosure Regarding Forward-Looking Statements........ 9 Results of Operations.................................. 9 Financial Condition.................................... 11 Item 3. Quantitative and Qualitative Disclosures About Market Risk.............................................. 12 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders...... 12 Item 5. Other Information........................................ 13 Item 6. Exhibits and Reports on Form 8-K......................... 14 SIGNATURE............................................................ 15 3 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The consolidated financial statements for Cleco Corporation (formerly known as Central Louisiana Electric Company, Inc.) (the Company) included herein are unaudited but reflect, in management's opinion, all adjustments, consisting only of normal recurring adjustments, that are necessary for a fair presentation of the Company's financial position and the results of its operations for the interim periods presented. Because of the seasonal nature of the Company's business, the results of operations for the three months ended March 31, 1998 are not necessarily indicative of the results that may be expected for the full fiscal year. The financial statements included herein should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1997 (1997 Form 10-K). The consolidated financial statements included herein have been subjected to a limited review by Coopers & Lybrand L.L.P., independent accountants for the Company, whose report is included herein. 1 4 [Coopers & Lybrand L.L.P. Letterhead] REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors and Shareholders of Cleco Corporation: We have made a review of the consolidated balance sheet of Cleco Corporation as of March 31, 1998, and the related consolidated statements of income and cash flows for the three-month periods ended March 31, 1998 and 1997, in accordance with standards established by the American Institute of Certified Public Accountants. These financial statements are the responsibility of the Company's management. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1997 and the related consolidated statements of income, cash flows and changes in common shareholders' equity for the year then ended (not present herein); and in our report dated January 27, 1998, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying balance sheet as of December 31, 1997, is fairly stated in all material respects in relation to the balance sheet from which it has been derived. COOPERS & LYBRAND, L.L.P. New Orleans, Louisiana April 28, 1998 2 5 CLECO CORPORATION CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31 (UNAUDITED)
(In thousands, except share and per share amounts) 1998 1997 ------------ ----------- OPERATING REVENUES $ 97,210 $ 98,078 ----------- ----------- OPERATING EXPENSES Fuel used for electric generation 27,697 27,080 Power purchased 11,558 12,910 Other operation 15,117 13,692 Maintenance 5,184 5,795 Depreciation 12,040 11,338 Taxes other than income taxes 8,751 8,622 Federal and state income taxes 3,030 3,843 ----------- ----------- 83,377 83,280 ----------- ----------- OPERATING INCOME 13,833 14,798 Allowance for other funds used during construction 280 2 Other income and expenses, net (149) 134 ------------ ----------- INCOME BEFORE INTEREST CHARGES 13,964 14,934 Interest charges, including amortization of debt expense, premium and discount 7,178 7,249 Allowance for borrowed funds used during construction (208) 159 ----------- ----------- NET INCOME 6,994 7,526 Preferred dividend requirements, net 526 524 ----------- ----------- NET INCOME APPLICABLE TO COMMON STOCK $ 6,468 $ 7,002 =========== =========== WEIGHTED AVERAGE COMMON SHARES Basic 22,473,749 22,457,061 Diluted 23,869,017 23,863,533 EARNINGS PER SHARE Basic $0.29 $0.31 Diluted $0.29 $0.31 CASH DIVIDENDS PAID PER SHARE $0.395 $0.385
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. 3 6 CLECO CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands) MARCH 31, 1998 DECEMBER 31, 1997 -------------- ----------------- ASSETS Utility plant Property, plant and equipment $1,507,152 $1,506,949 Accumulated depreciation (522,723) (518,664) ----------- ----------- 984,429 988,285 Construction work-in-progress 43,496 37,277 ----------- ----------- Total utility plant, net 1,027,925 1,025,562 ----------- ----------- Investments and other assets 3,480 3,479 ----------- ----------- Current assets Cash and cash equivalents 14,600 18,015 Accounts receivable, net 45,299 48,353 Unbilled revenues 6,659 11,090 Fuel inventory, at average cost 6,488 8,648 Materials and supplies inventory, at average cost 13,893 14,413 Prepayments and other current assets 2,109 1,894 ----------- ----------- Total current assets 89,048 102,413 ----------- ----------- Prepayments 8,517 8,331 Regulatory assets - deferred taxes 115,343 115,285 Other deferred charges 30,238 29,418 Accumulated deferred federal and state income taxes 77,473 76,556 ----------- ----------- TOTAL ASSETS $1,352,024 $1,361,044 =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. (Continued on next page) 4 7 CLECO CORPORATION CONSOLIDATED BALANCE SHEETS (CONTINUED) (UNAUDITED)
(In thousands, except share amounts) MARCH 31, 1998 DECEMBER 31, 1997 -------------- ----------------- CAPITALIZATION AND LIABILITIES Common shareholders' equity Common stock, $2 par value, authorized 50,000,000 shares, issued 22,764,754 and 22,762,754 shares at March 31, 1998 and December 31, 1997, respectively $ 45,530 $ 45,525 Premium on capital stock 113,800 113,763 Retained earnings 253,142 255,549 Treasury stock, at cost, 286,006 and 299,842 shares at March 31, 1998 and December 31, 1997, respectively (5,807) (6,086) ----------- ----------- 406,665 408,751 ----------- ----------- Preferred stock, cumulative, $100 par value Not subject to mandatory redemption 29,800 30,102 Deferred compensation related to preferred stock held by ESOP (17,695) (18,766) ----------- ----------- 12,105 11,336 Subject to mandatory redemption 5,990 6,120 ----------- ----------- 18,095 17,456 ----------- ----------- Long-term debt, net 365,906 365,897 ----------- ----------- Total capitalization 790,666 792,104 ----------- ----------- Current liabilities Short-term debt 61,794 34,219 Long-term debt due within one year 15,000 Accounts payable 25,985 53,365 Customer deposits 20,401 20,172 Taxes accrued 20,336 12,211 Interest accrued 1,990 7,681 Accumulated deferred fuel 4,553 2,965 Other current liabilities 7,024 5,102 ----------- ----------- Total current liabilities 142,083 150,715 ----------- ----------- Deferred credits Accumulated deferred federal and state income taxes 296,633 296,123 Accumulated deferred investment tax credits 29,126 29,574 Regulatory liabilities - deferred taxes 63,058 62,468 Other deferred credits 30,458 30,060 ----------- ----------- Total deferred credits 419,275 418,225 ----------- ----------- TOTAL CAPITALIZATION AND LIABILITIES $1,352,024 $1,361,044 =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. 5 8 CLECO CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31 (UNAUDITED)
(In thousands) 1998 1997 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 6,994 $ 7,526 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 12,524 11,783 Allowance for funds used during construction (488) 157 Amortization of investment tax credits (448) (448) Deferred income taxes 129 (996) Deferred fuel costs 1,588 2,788 (Gain) loss on disposition of utility plant, net 2 (1) Changes in assets and liabilities Accounts receivable, net 3,054 1,149 Unbilled revenues 4,431 2,201 Fuel inventory, materials and supplies 2,680 1,516 Accounts payable (27,380) (27,008) Customer deposits 229 (15) Other deferred accounts (200) (721) Taxes accrued 8,125 9,273 Interest accrued (5,691) (5,307) Other, net 859 1,647 -------- -------- Net cash provided by operating activities 6,408 3,544 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to utility plant (13,509) (11,884) Allowance for funds used during construction 488 (157) Sale of utility plant 120 62 -------- -------- Net cash used in investing activities (12,901) (11,979) ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 34 3 Increase in short-term debt, net 12,575 15,029 Redemption of preferred stock (130) (197) Dividends paid on common and preferred stock, net (9,401) (9,170) ------- -------- Net cash provided by financing activities 3,078 5,665 -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (3,415) (2,770) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 18,015 20,307 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $14,600 $17,537 ======= ======= Supplementary cash flow information Interest paid (net of amount capitalized) $12,411 $12,941 ======= ======= Income taxes paid $ 1,000 $ 1,500 ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. 6 9 CLECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A. RECLASSIFICATION Certain prior-period amounts have been reclassified to conform with the presentation shown in the current year's financial statements. These reclassifications had no effect on net income applicable to common stock or common shareholders' equity. NOTE B. LEGAL PROCEEDING: FUEL SUPPLY - LIGNITE The Company and Southwestern Electric Power Company (SWEPCO), each a 50% owner of Dolet Hills Power Station Unit 1 (Dolet Hills Unit 1), jointly own lignite reserves in the Dolet Hills area of northwestern Louisiana. In 1982 the Company and SWEPCO entered into a Lignite Mining Agreement (LMA) with the Dolet Hills Mining Venture (DHMV), a partnership for the mining and delivery of lignite from a portion of these reserves (Dolet Hills Mine). The LMA expires in 2011. The price of lignite delivered pursuant to the LMA is a base price per ton, subject to escalation based on certain inflation indices, plus specified "pass-through" costs. Currently, the Company is receiving annually a minimum delivery of 1,187,500 tons under the LMA. Since the late 1980s, additional spot lignite deliveries have been obtained through competitive bidding from DHMV and another lignite supplier. In 1996 the Company and SWEPCO received deliveries which approximated 24% of the annual lignite consumption at Dolet Hills Unit 1 from the other lignite supplier. On April 15, 1997, the Company and SWEPCO filed suit against DHMV and its partners in the United States District Court for the Western District of Louisiana (Federal Court Suit) seeking to enforce various obligations of DHMV to the Company and SWEPCO under the LMA, including provisions relating to the quality of the delivered lignite, pricing, and mine reclamation practices. On June 15, 1997, DHMV filed an answer denying the allegations in the Company's suit and filed a counterclaim asserting various contract-related claims against the Company and SWEPCO. The Company and SWEPCO have denied the allegations in the counterclaims on the grounds the counterclaims have no merit. The counterclaims filed by DHMV in the Federal Court Suit resulted in the Company and SWEPCO filing a separate lawsuit against the parent companies of DHMV, namely Jones Capital Corporation and Philipp Holzmann USA, Inc., on August 13, 1997, in the First Judicial District Court for Caddo Parish, Louisiana (State Court Suit). The State Court Suit seeks to enforce a separate 1995 agreement by Jones Capital Corporation and Philipp Holzmann USA, Inc. related to the LMA. Jones Capital Corporation and Philipp Holzmann USA, Inc. have asked the State Court to stay that proceeding until the Federal Court Suit is resolved. The suits are currently in the discovery phase. At DHMV's request, negotiations among DHMV, SWEPCO and the Company have been terminated. A status conference is currently scheduled for 7 10 May 22, 1998. At this conference, a trial date will be set. The Company and SWEPCO will aggressively prosecute the claims against DHMV and defend against the counterclaims which DHMV has asserted. The Company and SWEPCO continue to pay DHMV for lignite delivered pursuant to the LMA. Normal day-to-day operations continue at the Dolet Hills Mine and Dolet Hills Unit 1. Although the ultimate outcome of this litigation cannot be predicted at this time, based on information currently available to the Company, management does not believe that the counterclaims asserted by the DHMV in the Federal Court Suit will have a significant adverse effect on the Company's financial position or results of operations. 8 11 CLECO CORPORATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in combination with Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of the 1997 Form 10-K, the financial statements and notes contained in Item 8 of the 1997 Form 10-K and the interim financial statements and notes thereto contained elsewhere in this Report. DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS This Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this Report are forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks and uncertainties which could cause the actual results to differ materially from the Company's expectations. Such risks and uncertainties include, without limitation, the effects of competition in the power industry, legislative and regulatory changes affecting electric utilities, fluctuations in the weather and changes in general economic and business conditions, as well as other factors discussed in this and the Company's other filings with the Securities and Exchange Commission (Cautionary Statements). All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the Cautionary Statements. RESULTS OF OPERATIONS For the Three Months Ended March 31, 1998 Net income applicable to common stock totaled $6.5 million or $0.29 per average common share for the first quarter of 1998, as compared to $7.0 million or $0.31 per average common share for the corresponding period in 1997. The following principal factors contributed to these results: Operating revenues for the quarter decreased $0.9 million or 0.9% compared to the same period in 1997, primarily due to a decrease in fuel cost recovery revenues partially offset by slight increases in base revenues and off-system power sales. For the three months ended March 31, 1998, fuel cost recovery revenues were $2.3 million, or 5.7%, less than the same period in 1997. The decrease in fuel cost recovery revenues is related to lower natural gas prices in the first quarter of 1998, which resulted in lower generation costs compared to prices in effect and resulting generation costs during the first quarter of 1997. Changes in fuel cost have historically had no effect on net income, as fuel costs are generally recovered through a fuel cost adjustment clause that enables the Company to pass on to customers substantially all changes in the cost of generating fuel and purchased power. These adjustments are audited monthly and are regulated by the Louisiana Public Service Commission (LPSC) (representing about 99% of the total fuel cost adjustment) while the remaining portion, 9 12 regulated by the Federal Energy Regulatory Commission (FERC), is audited periodically for several years at a time. Until approval is received, the adjustments are subject to refund. Base revenues increased $1.4 million during the first quarter of 1998 compared to the corresponding period in 1997. The increase in base revenues is primarily the result of an increase in kilowatt-hour sales to residential and commercial customers acquired from the former Teche Electric Cooperative (Teche), partially offset by a reduction in the Company's annual base rate tariff and warmer than normal winter weather. The Company acquired Teche on September 30, 1997. The acquisition resulted in the addition of 7,700 mostly residential customers to the Company. The reduction in annual base rate tariff was part of the Company's 1996 LPSC earnings review settlement. The tariff was reduced by an additional $2 million in January 1998. See "Management's Discussion and Analysis of Results of Operations and Financial Condition - Financial Condition - Retail Rates" in Item 7 of the 1997 Form 10-K for a discussion of the LPSC settlement. Kilowatt-hour sales to regular customers for the first quarter of 1998 improved 1.5% over the first quarter of 1997. Sales to residential customers increased 1.5%, sales to commercial customers rose 5.9% and sales to industrial customers improved 1.0% over the first quarter of 1997. Operating expenses increased $0.1 million, or 0.1%, during the first quarter of 1998 compared to the same period in 1997. The rise in operating expenses is the result of increases in other operation expenses, depreciation, and taxes other than income taxes, offset by decreases in fuel costs and purchased power, federal and state income taxes and maintenance expenses. The decrease in fuel cost and purchased power is primarily attributable to fluctuations in the Company's generation mix, availability of economy power and deferral of expenses for recovery from customers through fuel adjustment clauses in subsequent months, as compared to the same period in 1997. The Company purchases economy power from other electric power generators when the price of the energy purchased is less than the cost to the Company of generating such energy from its own facilities. Twenty-eight percent of the Company's energy requirements during the first quarter of 1998 were met with purchased power, compared to 31% for the corresponding period in 1997. Other operation expenses increased $1.4 million, or 10.4%, compared to the same period in 1997, primarily due to costs associated with power purchased for off-system sales. Depreciation expense grew $0.7 million compared to the same period in 1997, primarily due to the Teche assets being placed into service in late 1997. Taxes other than income taxes rose $0.1 million compared to the same period in 1997, primarily resulting from an increase in employment taxes related to an employee incentive plan and vacation buy-back plan. Federal and state income taxes decreased $0.8 million, or 21.2%, compared to the corresponding period in 1997 resulting from lower taxable income in 1998. Maintenance expenses decreased $0.6 million primarily because costs which normally would have been expensed were instead dedicated, and therefor capitalized, to repairs related to increased storm activity in the first quarter of 1998 compared to the first quarter of 1997. 10 13 FINANCIAL CONDITION Liquidity and Capital Resources At March 31, 1998 and 1997, the Company had $61.8 million and $80.2 million, respectively, of short-term debt outstanding in the form of commercial paper borrowing and bank loans. During March 1998, the Company renewed its $25 million revolving credit facility with a scheduled termination date of December 31, 1998, but the termination date may be extended to March 19, 1999 upon satisfaction of certain conditions. An existing $100 million revolving credit facility is scheduled to terminate on June 15, 2000. Both facilities provide support for the issuance of commercial paper and working capital needs. Uncommitted lines of credit with banks totaling $20 million are also available to support working capital needs. At March 31, 1998, an unregulated consolidated subsidiary of the Company had $12.9 million of cash and temporary cash investments in securities with original maturities of 90 days or less. The Company has committed $10 million to provide credit support for working capital and electricity or natural gas commodity positions for CLECO ENERGY L.L.C. Regulatory Matters - Retail and Wholesale Electric Competition The special committee established by the Louisiana Legislature in 1997 to study existing federal, state and local laws, rules and policies to assess the impact of electric retail competition held its first meeting in September 1997 and continues to meet jointly with the LPSC as they proceed through deregulation hearings. The LPSC and the special committee have scheduled hearings on a number of issues impacting deregulation. To date, the committee participated in a hearing on the tax implications of deregulation. Upon conclusion of the hearings, the committee will make a report of its recommendations to the legislature. The Company has a representative on this committee. For additional information regarding retail electric competition in Louisiana, see "Regulatory and Environmental Matters - Industry Developments" in Item 1 of the 1997 Form 10-K. In recent years, the Company has been successful in competing for wholesale sales within its service territory, including sales to the city of Alexandria and a full requirements sale to the city of St. Martinville. Sales under the St. Martinville agreement, which is subject to the jurisdiction of the FERC, began in May 1995 and represent an approximate 13 megawatt load. Sales to St. Martinville provide additional base revenues, net of facility payments, of about $4 million over the term of the agreement, which extends through December 2000. This contract was challenged in 1993 by the previous supplier, Louisiana Energy and Power Authority (LEPA), as well as the city of Lafayette and the American Public Power Association, with assertions of preferential, discriminatory and predatory pricing. An initial decision of the FERC's presiding administrative law judge (ALJ) in February 1995 rejected LEPA's arguments. Under FERC procedures, LEPA filed a brief requesting the FERC to revise the initial decision. In 1997, in a related matter, LEPA also appealed the FERC's approval of market-based wholesale rates for the Company in the District of Columbia Circuit Court of Appeals, alleging the existence of predatory pricing. In April 1998, the Court of Appeals rejected LEPA's arguments. The FERC then issued an order reaffirming its position. 11 14 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable. PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (a) The Annual Meeting of Shareholders of the Company was held on April 24, 1998, in Pineville, Louisiana. (b) Proxies for the election of directors were solicited pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. There was no solicitation in opposition to management's nominees, and all nominees listed in the Proxy Statement were elected. (c) The following is a tabulation of the votes cast upon each of the proposals presented at the Annual Meeting of Shareholders of the Company on April 24, 1998: (1) Election of Directors: Broker Class I Directors For Withheld Non-Votes Sherian G. Cadoria 19,207,809 308,615 0 Richard B. Crowell 19,261,903 254,521 0 David M. Eppler 19,256,742 259,682 0 Gregory L. Nesbitt 19,260,590 255,834 0 (2) Approval of the appointment of Coopers & Lybrand L.L.P. as the Company's auditors for 1998: Broker For Against Abstain Non-Votes 19,311,797 100,746 103,881 0 12 15 (3) Approval of the amendment to the Company's 1990 Long-Term Incentive Compensation Plan and the related amendment to the Deferred Compensation Plan for Directors: Broker For Against Abstain Non-Votes 18,111,574 940,826 464,024 0 (4) Approval of the amendment of the Restated Articles of Incorporation to delete Section 3 of Article 7 thereof which states that no director shall be required to own any Company stock: Broker For Against Abstain Non-Votes 18,712,157 370,916 433,351 0 (5) Approval of the amendment to the Restated Articles of Incorporation to change the Company's name to Cleco Corporation: Broker For Against Abstain Non-Votes 19,103,467 246,322 166,635 0 ITEM 5. OTHER INFORMATION NEW ACCOUNTING STANDARDS In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards "SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information" effective for financial statements for periods beginning after December 15, 1997. Management believes adoption of this statement will affect only financial statement disclosure and will not affect the Company's financial position or results of operations. This Statement need not be applied to interim financial statements in the initial year of its application, but comparative information for interim periods in the initial year of application is to be reported in financial statements for interim periods in the second year of application. In February 1998, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards "SFAS No. 132, Employers' Disclosure About Pensions and Other Postretirement Benefits, an Amendment of FASB Statements No. 87, 88, and 106" effective for fiscal years beginning after December 15, 1997. Management believes adoption of this statement will affect only financial statement disclosure and will not affect the Company's financial position or results of operations. 13 16 FUEL SUPPLY - COAL The majority of the coal for Rodemacher Power Station Unit 2 (Rodemacher Unit 2) is purchased under a long-term contract with Kerr-McGee Coal Corporation from a mine in Wyoming. The Company has a 30% interest in the capacity of Rodemacher Unit 2. The coal is transported under a long-term rail transportation contract with the Union Pacific Railroad. Union Pacific is currently experiencing operating problems resulting in reduced volumes delivered to Rodemacher Unit 2. The Company's coal inventory is currently near the Company's desired minimum level. Based on the anticipated delivery schedule of future coal shipments, management does not expect that Rodemacher Unit 2 operations will need to be curtailed due to insufficient fuel supply. The Company is closely monitoring this situation. Other regional utilities are experiencing similar delivery problems. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 4 $25,000,000 Loan Agreement by and between Whitney National Bank and the Company, dated March 20, 1998 11 Computation of Net Income Per Common Share for the three months ended March 31, 1998 12 Computation of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends for the twelve months ended March 31, 1998 15 Awareness letter, dated May 14, 1998, from Coopers & Lybrand L.L.P. regarding review of the unaudited interim financial statements 27 Financial Data Schedule (b) Reports on Form 8-K During the three-month period ended March 31, 1998, the Company filed no Current Reports on Form 8-K. 14 17 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CLECO CORPORATION (Registrant) By: /s/ Thomas J. Howlin -------------------------------------- Thomas J. Howlin Senior Vice President of Finance and Chief Financial Officer (Principal Financial Officer) Date: May 15, 1998 15 18 INDEX TO EXHIBITS Exhibits -------- 4 $25,000,000 Loan Agreement by and between Whitney National Bank and the Company, dated March 20, 1998 11 Computation of Net Income Per Common Share for the three months ended March 31, 1998 12 Computation of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends for the twelve months ended March 31, 1998 15 Awareness letter, dated May 14, 1998, from Coopers & Lybrand L.L.P. regarding review of the unaudited interim financial statements 27 Financial Data Schedule EX-4 2 LOAN AGREEMENT, DATED 03/20/98 1 EXHIBIT 4 LOAN AGREEMENT BY AND BETWEEN WHITNEY NATIONAL BANK AND CENTRAL LOUISIANA ELECTRIC COMPANY, INC. This Loan Agreement (the "Agreement"), made on this 20th day of March, 1998, by and between Whitney National Bank ("Bank") and Central Louisiana Electric Company, Inc. ("Borrower"). I. DEFINITIONS 1.01 For all purposes of this Agreement, unless otherwise expressly provided or unless the context otherwise requires, the following terms shall have the following meanings: "Advance" shall mean a disbursement of a loan in accordance herewith. "Available Commitment" shall have the meaning ascribed to such term in Section 2.01. "Base Rate" shall mean that rate of interest as published or recorded by Bank from time to time as its prime lending rate with the rate of interest to change when and as said prime lending rate changes, which prime lending rate is not necessarily the lowest interest rate charged by Bank. "Base Rate Loan" shall mean any Loan to Borrower which accrues interest at the Base Rate at the time of the occurrence thereof or conversion thereto. "Borrower's Agent" shall mean any one of the individuals whose names are set forth in Schedule I to this Agreement or any other person subsequently authorized by a corporate resolution, duly authorized and adopted by the Borrower's board of directors in form acceptable to Bank. Until Borrower notifies Bank in writing of the withdrawal of Borrower's Agent's rights and powers, Bank shall be able to rely conclusively upon the Borrower's Agent's right to borrow and incur Loans and to make conversions thereof on behalf of Borrower. "Business Day" shall mean any day on which banks are required to be open to carry on normal business in the State of Louisiana. "Capital Lease Obligations" shall mean, with respect to any Person, obligations of such Person with respect to leases which, in accordance with GAAP, are required to be capitalized on the financial statements of such Person. "Common Equity" shall mean, as of any date of determination, an amount equal to the sum of (i) common Stock of Borrower, (ii) premium on capital Stock of Borrower (as such term is used in the Financial Statements) and (iii) retained earnings of the Borrower, determined on a Consolidated basis in accordance with GAAP. "Consolidated" shall mean the Borrower and its Subsidiaries which are consolidated for financial reporting purposes in accordance with GAAP. "Contingent Obligation" shall mean, as to any Person, any obligation of such Person guaranteeing or in effect guaranteeing any return on any investment made by another Person or any Indebtedness, lease, dividend or other obligation of any other Person in any manner, whether contingent or whether directly or indirectly, including, without limitation, any obligation in respect of the liabilities of any partnership in which such other Person is a general partner, except to the extent that such liabilities of such partnership are nonrecourse to such other Person and its separate Property. The amount of any Contingent Obligation of a 2 Person shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. "Financial Statements" shall have the meaning ascribed to such term in Section 4.01(i). "Indebtedness" shall mean, as to any Person, at a particular time, all items which constitute, without duplication, (i) indebtedness for borrowed money or the deferred purchase price of property (other than trade payables incurred in the ordinary course of business), (ii) indebtedness evidenced by notes, bonds, debentures or similar instruments, (iii) obligations with respect to any conditional sale or title retention agreement, (iv) indebtedness arising under acceptance facilities and the amount available to be drawn under all letters of credit issued for the account of such Person and, without duplication, all drafts drawn thereunder to the extent that such Person shall not have reimbursed the issuer in respect of the issuer's payment of such drafts, (v) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof (other than carrier's , warehousemen's, mechanics', repairmen's or other like non-consensual statutory Liens arising in the ordinary course of business), (vi) obligations under Capital Lease Obligations and (vii) Contingent Obligations. "Interest Period" shall mean with respect to each Libor Rate Loan: (i) initially, the period commencing on the date of such Loan and ending 1, 2 or 3 months thereafter (or such other period agreed upon in writing by Borrower and Bank), as Borrower may elect in the applicable Advance request; and (ii) thereafter, each period commencing on the last day of the next preceding Interest Period applicable to such Loan and ending 1, 2 or 3 months thereafter (or such other period agreed upon in writing by Borrower and Bank), as Borrower may elect pursuant to Section 2.03(b); provided that: (iii) subject to clause (iv) below, if any Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the immediately next preceding Business Day; and (iv) no Interest Period for a LIBOR Loan shall extend beyond the last day of the Line of Credit Period. "Libor Base Rate" shall mean, for an Interest Period, (a) the Libor Index Rate for such Interest Period, if such rate is available, and (b) if the Libor Index Rate cannot be determined, the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in U.S. dollars in immediately available funds are offered to Bank as of the opening of business of Bank or as soon thereafter as practicable on the first day of such Interest Period by two (2) or more major banks in the London interbank market selected by Bank for a period equal to such Interest Period and in an amount equal or comparable to the principal amount of the Libor Rate Loan requested by Borrower to be made available by Bank. As used herein, "Libor Index Rate" means, for any Interest Period, the London interbank offered rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) for deposits in U.S. Dollars for a period equal to such Interest Period, which appears on the Telerate Page 3875 as of 9:00 a.m. (New Orleans time) on the first day of such Interest Period. "Libor Rate" shall mean the Libor Base Rate plus 15 basis points (.15%). Page 2 3 "Libor Rate Loan" shall mean any Loan to Borrower which accrues interest at the Libor Rate at the time of the occurrence thereof or conversion thereto. "Lien" shall mean any mortgage, pledge, hypothecation, security interest, encumbrance, lien, judgment, garnishment, seizure, tax lien or levy (statutory or otherwise) or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, or any capitalized lease, and the filing of or agreement to give any financing statement under the Uniform Commercial Code of any jurisdiction). "Line of Credit" shall mean the credit facility made available by Bank to Borrower pursuant to Section 2.01. "Line of Credit Period" shall mean the period commencing on the date hereof and ending on December 31, 1998, or such later date that may be established pursuant to the last sentence of Section 2.01 hereof. "Loans" shall mean the loans to Borrower described in Section 2.01, with each being a Loan, as applicable and shall include all principal, interest, attorney's fees and costs owed thereon. "Loan Documents" shall mean this Agreement and the promissory note evidencing the Loans. "Material Adverse Effect" shall mean a material adverse effect on the properties, assets, liabilities, business, operations, prospects, income or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole. "Permitted Liens" shall mean (i) pledges or deposits by the Borrower or any of its Subsidiaries under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness of the Borrower or any of its Subsidiaries) or leases (other than capitalized leases) to which the Borrower or any of its Subsidiaries is a party, or deposits to secure statutory obligations of the Borrower or any of its Subsidiaries or deposits of cash or U.S. Government Bonds to secure surety or appeal bonds to which the Borrower or any of its Subsidiaries is a party, or deposits as security for contested taxes or import duties or for the payment of rent; (ii) Liens imposed by law, such as carriers', warehousemen's, materialmen's and mechanics' liens, incurred in the ordinary course of business for sums not overdue or being contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on the books of Borrower or any Subsidiary of Borrower; (iii) judgment Liens in existence less than 30 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in full (subject to a customary deductible) by insurance; (iv) Liens for property taxes not yet delinquent and Liens for property taxes the payment of which is being actively contested in good faith by appropriate proceedings and for which adequate reserves shall have been set aside on the books of Borrower or any Subsidiary of Borrower; (v) the Indenture of Mortgage dated as of July 1, 1950 between Borrower and First National Bank of Commerce in New Orleans, as amended and supplemented, and (vi) survey exceptions, issues with regard to merchantability of title, easements or reservations of, or rights of others for rights-of-way, highways and railroad crossings, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other restrictions as to the use of real property incidental to the conduct of the business of the Borrower or any of its Subsidiaries or to the ownership of its property which were not incurred in connection with Indebtedness of the Borrower or any Subsidiary of Borrower, which Liens do not in the aggregate materially detract from the value of said properties or materially impair their use in the operation of the business taken as a whole of the Borrower and its Subsidiaries. Page 3 4 "Person" shall mean any individual, firm, partnership, joint venture, corporation, association, business enterprise, limited liability company, joint stock company, unincorporated association, trust, governmental authority or any other entity, whether acting in an individual, fiduciary, or other capacity. "Plan" shall mean any employee benefit plan which is covered by the Employee Retirement Income Security Act of 1974, as amended ("ERISA") and in respect of which Borrower is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA, including, without limitation, The Central Louisiana Electric Company, Inc. 401(k) Savings and Investment Plan ESOP Trust, as the same may be amended, supplemented or otherwise modified from time to time. "Stock" shall mean, any and all shares, rights, interests, participations, warrants or other equivalents (however designated) of corporate stock. "Subsidiary" shall mean, as to any Person, any corporation, association, partnership, limited liability company, joint venture or other business entity of which such Person or any Subsidiary of such Person, directly or indirectly, either (i) in respect of a corporation, owns or controls more than 50% of the outstanding Stock having ordinary voting power to elect a majority of the board of directors or similar managing body, irrespective of whether a class or classes shall or might have voting power by reason of the happening of any contingency, or (ii) in respect of an association, partnership, joint venture or other business entity, is entitled to share in more than 50% of the profits and losses, however determined. "Telerate Page 3875" means the display designated as "Page 3875" of the Dow Jones Telerate Service (or such other page as may replace Page 3875 on that service or such other service as may be nominated by the British Bankers' Association as the information vendor for the purpose of displaying British Bankers' Association Interest Settlement Rates for U.S. Dollar Deposits). "Total Capitalization" shall mean the difference between (a) the sum of (i) preferred Stock of the Borrower (less deferred compensation relating to unallocated convertible preferred Stock of the Borrower held by any Plan), plus (ii) common Stock of the Borrower and any premium on capital Stock thereon (as such term is used in the Financial Statements), plus (iii) retained earnings of the Borrower, plus (iv) all Indebtedness of the Borrower (net of unamortized premium and discount (as such term is used in the Financial Statements)), and (b) treasury Stock of the Borrower. "Type" shall mean, as to any Loan, its nature as either a Base Rate Loan or a Libor Rate Loan. 1.02 OTHER DEFINITIONAL PROVISIONS. (a) All terms defined in this Agreement shall have the defined meanings when used in any certificates or other document made or delivered pursuant hereto unless the context shall otherwise require. (b) Words used herein in the singular, where the context so permits, shall be deemed to include the plural and vice versa. Likewise, the definitions of words used in the singular herein shall also apply to such words when used in the plural and vice versa, unless the context shall otherwise require. (c) The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. (d) Section, subsection, schedule and exhibit references are to this Agreement unless otherwise specified. Page 4 5 1.03. ACCOUNTING TERMS. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with generally accepted accounting principles applied on a consistent basis. II. THE LOAN 2.01 LOANS. Subject to the due and faithful performance of the terms and conditions of this Agreement and in any instrument or agreement executed contemporaneous herewith or as a consequence hereof and in accordance with the terms and conditions of this Agreement, Bank agrees to make Advances to Borrower from time to time during the Line of Credit Period in an aggregate outstanding principal amount not to exceed the sum of Twenty-Five Million and No/100 ($25,000,000.00) Dollars (the "Available Commitment"); provided however any Advance shall be in increments of $100,000.00 or greater and any Advance shall accrue interest of the same Type and Interest Period. The obligation of the Borrower to repay the loans shall be evidenced by a promissory note made payable to the order of Bank in the principal sum of $25,000,000.00, a copy of which is attached hereto as Exhibit A. The outstanding principal balance of the Loans shall accrue interest in accordance with Section 2.03 from date of each Advance until paid. Notwithstanding any provisions of this Agreement, all Loans hereunder shall mature and become due and payable at the end of the Line of Credit Period. The Line of Credit Period shall be extended through March 19, 1999 at the written request of Borrower if, before December 31, 1998, Borrower provides to Bank with the request a copy of an order of the Federal Energy Regulatory Commission which is in full force and effect and is not the subject of any pending or threatened appeal and which will allow Borrower to perform under this Agreement through March 19, 1999. 2.02 (a) ADVANCE REQUEST. Upon the terms and subject to the conditions hereof and subject to the amount of such Advance not exceeding the Available Commitment, the Borrower may request an Advance under the Line of Credit during a Business Day between the hours of 9:00 a.m. and 4:00 p.m. (New Orleans time). If Bank receives the Borrower's proper request for an Advance by no later than 1:00 p.m. (New Orleans time), then Bank shall make the Advance in accordance herewith. If Bank receives the Borrower's request for an Advance later than 1:00 p.m. (New Orleans time), then Bank shall make the Advance in accordance herewith on the next Business Day. Each request for an Advance shall be made either by telephone calls to Bank or in writing, by delivering to Bank by mail, hand-delivery, or facsimile a request (i) specifying the amount to be borrowed (ii) specifying the date the funds will be advanced, (iii) specifying the Type of Loan to be made and its Interest Period, and (iv) complying with the requirements of this Section. Bank shall have the right to verify the telephone requests by calling the person who made the request at the telephone number identified by the Borrower. If the Advance request is by telephone, the Borrower will confirm said request in writing within two (2) Business Days. All such Advance requests shall be made by the Borrower's Agent. Borrower agrees that only its duly authorized Borrower's Agent shall make an Advance request. Prior to making any Advance, Bank may require that Borrower furnish to Bank a certificate of an officer of Borrower certifying (i) that the borrowing capacity of Borrower pursuant to committed lines of credit with banks, including that provided under this Agreement, does not exceed the aggregate principal amount of $125,000,000, as established in resolutions of the board of directors of the Borrower adopted on January 24, 1997 and March 16, 1998, or such other amount as may be established by any subsequent resolution of the board of directors and (ii) (a) if the Advance is requested on or before December 31, 1998, that the outstanding aggregate principal amount of short-term indebtedness (indebtedness maturing not more than one year after the date of issue) issued by Borrower, including that provided for under this Agreement, does not exceed $145,000,000 or (b) if the Advance is requested after December 31, 1998 and if the Line of Credit Period is extended through March 19, 1999 pursuant to Section 2.01 hereof, that the aggregate principal amount of short-term indebtedness issued by Borrower, including that provided for under this Agreement, does not exceed the amount of short-term indebtedness which Page 5 6 Borrower would be authorized to issue by order of the Federal Energy Regulatory Commission, as contemplated by Section 2.01 hereof. (b) CREDIT ADVICE. After the borrowing of any Advance under the Line of Credit in accordance with this Agreement, Bank will mail to the Borrower an advice showing the amount of the Advance and the amount of funds credited into the Borrower's account. All Advances shall either (1) be credited to a demand deposit account (the "Account") maintained by the Borrower with Bank or (2) transferred by the Bank to an account of the Borrower at another financial institution in accordance with the wire transfer instructions set forth in Schedule II to this Agreement. Any request to transfer funds from the Account by wire transfer shall be governed by Bank's standard Funds Transfer Agreement properly completed and executed by the Borrower. Bank's failure to mail the credit advice shall not alter the Borrower's obligation to repay the Loans or make the Bank liable to the Borrower for failure to mail the credit advice. (c) INTERNAL RECORDS SHALL CONTROL. The principal amount shown on the face of the note evidencing the Loans evidences the maximum aggregate principal amount that may be outstanding from time to time under the Loans. The Borrower agrees that the internal records of Bank shall constitute for all purposes prima facie evidence of (i) the amount of principal and interest owing on the Loans from time to time, (ii) the amount of each Advance or Loan made to the Borrower and (iii) the amount of each principal and/or interest payment received by Bank on the Loans. 2.03 (a) INTEREST RATES; INTEREST PAYMENTS. The unpaid principal balance of the Loans shall accrue interest, at the Borrower's option, either at: (i) the Base Rate or (ii) the Libor Rate; provided that if any LIBOR Rate Loan or any portion thereof shall, as a result of clause (iv) of the definition of Interest Period, have an Interest Period of less than 30 days, such portion shall bear interest during such Interest Period at the rate applicable to Base Rate Loans during such period. Interest on the outstanding principal owed on the Loans shall be computed and assessed on the basis of the actual number of days elapsed over a year composed of 360 days. Interest shall be payable on all Base Rate Loans quarterly in arrears on the last day of each quarter (or the immediate subsequent Business Day if any such last day is not a Business Day) and at maturity. Interest shall be payable on each Libor Rate Loan for each Interest Period on the last day thereof. (b) DURATION OF INTEREST PERIODS AND SELECTION OF INTEREST RATES. The commencement date and duration of the initial Interest Period for each Libor Rate Loan shall be as specified in the applicable Advance request. Borrower shall elect the duration of each subsequent Interest Period applicable to such Libor Rate Loan or elect to convert to a Base Rate Loan (and Borrower shall have the option (x) in the case of any Base Rate Loan, to elect that such Loan become a Libor Rate Loan and the Interest Period to be applicable thereto or (y) in the case of any Libor Rate Loan, to elect that such Loan become a Base Rate Loan), by giving notice of such election to Bank by 1:00 p.m. (New Orleans time) on the last day of the then expiring Interest Period (in the case of an existing Libor Rate Loan) or on the date of the requested conversion of a Base Rate Loan to a Libor Rate Loan, as applicable; provided, however, that notwithstanding the foregoing, in addition to and without limiting the rights and remedies of Bank under Section VI hereof, so long as any Default under this Agreement has occurred and is continuing, Borrower shall not be permitted to renew any Libor Rate Loan or to convert any Base Rate Loan into a Libor Loan. All Libor Rate Loans, whether by conversion or by an Advance, shall be in increments of $100,000.00 or greater. All Loans which bear interest at a particular Libor Rate for a particular Interest Period shall constitute a single Libor Loan. Notwithstanding the foregoing, the duration of each Interest Period shall be subject to the provisions of the definition of Interest Period. (c) FAILURE TO ELECT. If Bank does not receive a notice of election for the continuation of a Libor Rate Loan for a subsequent Interest Period pursuant to subsection (b) above within the applicable time limits specified therein, Borrower shall be deemed to have elected to convert such Libor Loan on the last day of Page 6 7 the current Interest Period with respect thereto to a Base Rate Loan in the principal amount of such expiring Libor Rate Loan on such date. (d) RELIANCE ON COMMUNICATIONS. Borrower hereby authorizes Bank to rely on telephonic, telegraphic, telecopy, telex or written or oral instructions believed by Bank in good faith to have been sent, delivered or given by Borrower's Agent with respect to any request to make a Loan or a repayment hereunder, to continue a Loan, or to convert any Base Rate Loan or Libor Rate Loan to any other type of Loan available hereunder, and on any signature which Bank in good faith believes to be genuine. 2.04 FACILITY FEE. Borrower shall pay to Bank, in arrears, on the last Business Day of each calendar quarter during the Line of Credit Period and on the last day of the Line of Credit Period, an annual facility fee of .05% of the Available Commitment calculated on the basis of the actual number of days elapsed over a year of 365/366 days as the case may be. 2.05 PREPAYMENT. Borrower shall have the right at any time and from time to time to prepay the Loans in whole or in part in amounts aggregating $100,000.00 or any larger multiple thereof, without penalty by paying all or a portion of the unpaid principal balance of the Loans, as applicable, plus accrued interest through the date of prepayment; provided that, Borrower shall not have the right to prepay a Libor Rate Loan through the making of a Libor Rate Loan. 2.06 INCREASED COSTS. ILLEGALITY. ETC. In the event that Bank shall have determined in good faith (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto): (i) at any time, that, by reason of any changes arising after the date of this Agreement affecting the London interbank market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Libor Rate; or (ii) at any time, that Bank shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Libor Rate Loan because of any change since the date of this Agreement in any applicable law or governmental rule, regulation, order, guideline or request or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, for example, but not limited to: (A) a change in the basis of taxation of payment to Bank of the principal or interest on such Libor Rate Loan (except for changes in the rate of tax on, or determined by reference to, the net income or profits of Bank) or (B) a change in official reserve requirements; or (iii) at any time, that the making or continuance of any Libor Rate Loan has been made (x) unlawful by any law or governmental rule, regulation or order, (y) impossible by compliance by Bank in good faith with any governmental request (whether or not having force of law) or (z) impracticable as a result of a contingency occurring after the date of this Agreement which materially and adversely affects the London interbank market; then, and in any such event, Bank shall promptly give notice (by telephone confirmed in writing) to the Borrower. Thereafter (x) in the case of clause (i) above, Libor Rate Loans shall no longer be available until such time as Bank notifies the Borrower that the circumstances giving rise to such notice no longer exist, and any Advance request or request to continue or convert given by the Borrower with respect to Libor Rate Loans which have not yet been incurred, continued or converted shall be deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower agrees to pay to Bank, upon written demand therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or Page 7 8 otherwise as agreed to by Bank and the Borrower) as shall be required to compensate Bank for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts owed to Bank, showing the basis for the calculation thereof, submitted to the Borrower by Bank in good faith shall, absent manifest error, be final and conclusive and binding on all the parties hereto) and (z) in the case of clause (iii) above, the Borrower agrees that if the affected Libor Rate Loan is then being requested initially such Loan will be made as a Base Rate Loan or if the affected Libor Rate Loan is then outstanding, such Loan shall be converted into a Base Rate Loan. Bank agrees that if it gives notice to the Borrower of any of the events described in clause (i) or (iii) above, it shall promptly notify the Borrower if such event ceases to exist. If any such event described in clause (iii) above ceases to exist as to Bank, Bank's obligations to make Libor Rate Loans and to convert Loans into Libor Rate Loans on the terms and conditions contained herein shall be reinstated. 2.07 USE OF PROCEEDS. The Borrower shall use the proceeds of the Loans for general corporate purposes. III. LOAN DOCUMENTS 3.01 OPINION OF BORROWER'S COUNSEL. At Closing or at such other time satisfactory to Bank, Borrower shall have counsel satisfactory to Bank provide an opinion to Bank in form satisfactory to Bank relating to the Loan Documents. 3.02 CLOSING COSTS. Borrower agrees to pay all reasonable costs and fees incurred by the Bank and counsel for the Bank in the preparation of or in connection with the Loan Documents or in connection with the Loans. IV. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BORROWER 4.01 REPRESENTATIONS AND WARRANTIES. In order to induce Bank to enter into this Agreement and make the Loans, Borrower hereby represents, warrants and covenants to Bank, the following: (a) Borrower is a validly organized corporation duly existing and in good standing under the laws of the State of Louisiana and is duly qualified as a foreign corporation in all jurisdictions wherein the property owned or the business transacted by it make such qualifications necessary. (b) The making and performance by Borrower of this Agreement, the borrowing by Borrower and the execution of the Loan Documents by Borrower, all as provided herein, have been duly authorized by all necessary corporate action and have not resulted and will not result in a breach of, or constitute a default under any agreement, indenture or other instrument to which Borrower is a party or by which Borrower is bound which could have a Material Adverse Effect. (c) No further consent or approval of any governmental agency or authority required in connection with the execution, delivery and performance by Borrower of the Loan Documents is required. (d) All Loan Documents are legal, valid and binding obligations of Borrower enforceable according to their terms and conditions, and all statements made in this Agreement are true and correct as of the date hereof. (e) To the extent applicable, Borrower and each of its Subsidiaries has fulfilled its obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Page 8 9 Internal Revenue Code, and has not incurred any liability to the Pension Benefit Guaranty Corporation or to a Plan under Title IV of ERISA which the failure to comply with could have a Material Adverse Effect. (f) Neither Borrower nor any Subsidiary of Borrower is in default in the performance, observance or fulfillment of (i) any of the obligations, covenants or conditions contained in any indenture, agreement or other instrument to which it is a party or (ii) any judgment, order, writ, injunction, decree or decision of any government agency or authority, and which could have a Material Adverse Effect. It shall not be considered that Borrower or any Subsidiary of Borrower is in default under clause (i) of this subsection (f) by virtue of the provisions of any indenture, agreement or other instrument to which it is a party solely because the holder of any obligation of Borrower or any Subsidiary of Borrower shall have the right to declare or has declared such obligation due and payable prior to a stated maturity date by virtue of a right of redemption or has the right to declare but has not declared such obligation due and payable because of a material adverse change in the financial condition of Borrower or any Subsidiary of Borrower. (g) Neither Borrower nor any Subsidiary of Borrower has any material (individually or in the aggregate) liabilities, direct or contingent, except as disclosed or referred to in the Financial Statements. There is no litigation, legal or administrative proceeding, investigation or other action of any nature pending or, to the knowledge of Borrower, threatened against or affecting Borrower or any of its Subsidiaries which involves the possibility of any judgment, order, ruling, or liability not fully covered by insurance or fully reserved for by the Borrower or any of its Subsidiaries, and which could have a Material Adverse Effect. (h) Borrower and each of its Subsidiaries has filed all tax returns and reports required to be filed and has paid all taxes, assessments, fees and other governmental charges levied upon Borrower or any of its Subsidiaries or upon any property owned by Borrower or any of its Subsidiaries, or upon Borrower's or its Subsidiary's income, which are due and payable, including interest and penalties, or has provided adequate reserves for the payment thereof. (i) Each of the Borrower and its Subsidiaries has good and marketable title to all of its property, title to which is material to the Borrower or such Subsidiary, subject to no Liens, except Permitted Liens. (j) Each of Borrower and its Subsidiaries has complied in all material respects with all laws that are applicable to all or any part of the operation of its business activities, including, without limitation, (i) all laws regarding the collection, payment, and deposit of employees' income, unemployment, social security, sales, and excise taxes, all laws with respect to pension liabilities, and (ii) all laws pertaining to environmental protection and occupational safety and health which the failure to comply with could have a Material Adverse Effect. (i) Borrower has heretofore delivered to Bank copies of its Form 10-K for the fiscal year ending December 31, 1996, containing the audited Consolidated Balance Sheets of the Borrower and its Subsidiaries and the related Consolidated Statements of Operations, Stockholder's Equity and Cash Flows for the period then ended, and its Form 10-Q for the fiscal quarter ended September 30, 1997, containing the unaudited Consolidated Balance Sheet of the Borrower and its Subsidiaries as of the end of such fiscal quarter, together with the related Consolidated Statements of Operations and Cash Flows through such fiscal quarter then ended (with the applicable related notes and schedules, the "Financial Statements"). The Financial Statements submitted by Borrower to Bank have been prepared in accordance with GAAP and fairly present the Consolidated financial condition and results of the operations of the Borrower and its Subsidiaries as of the dates and for the periods indicated therein and since the date of such statements, the Borrower and each of its Subsidiaries has conducted its business only in the ordinary course and there has been no Material Adverse Change. Page 9 10 4.02 AFFIRMATIVE COVENANTS. From the date of this Agreement and so long as any Loan shall be outstanding, unless compliance shall have been waived in writing by Bank, Borrower shall: (a) Maintain, as of the last day of each fiscal quarter, Common Equity equal to at least 30% of Total Capitalization. (b) Furnish to Bank: (i) As soon as available, but in any event within 120 days after the end of each fiscal year, a copy of Borrower's annual report on Form 10-K in respect of such fiscal year required to be filed by Borrower with the SEC, together with the financial statements attached thereto; (ii) As soon as available, but in any event within 60 days after the end of each fiscal quarter, a copy of the Borrower's quarterly report on Form 10-Q in respect of such fiscal quarter required to be filed by the Borrower with the SEC, together with the financial statements attached thereto; (iii) Within 60 days after the end of each of the first three fiscal quarters (120 days after the end of the last fiscal quarter), a certificate of the chief financial officer of the Borrower (or such other officer as shall be acceptable to Bank) as to Borrower's compliance, as of such fiscal quarter ending date, with Section 4.02(a), and as to the occurrence or continuance of no Default as of such fiscal quarter ending date and the date of such certificate; and (iv) immediately upon becoming aware of the occurrence of any event which constitutes a Default (as hereinafter defined) or which could constitute a Default with the passage of time or the giving of notice, or both, provide written notice of such occurrence together with a detailed statement by Borrower of the steps being taken by Borrower to cure the effect of such event. (c) Comply, and cause each of its Subsidiary's so to do, in all material respects with all laws that are applicable to all or any part of the operation of its business activities, including, without limitation, (i) all laws regarding the collection, payment, and deposit of employees' income, unemployment, social security, sales, and excise taxes, all laws with respect to pension liabilities, and (ii) all laws pertaining to environmental protection and occupational safety and health which the failure to comply with could have a Material Adverse Effect. (d) Pay and discharge, and cause each of its Subsidiary's so to do, all taxes, assessments and governmental charges or levies imposed upon it, or upon its income and profits prior to the date on which penalties might attach thereto and all lawful claims which, if unpaid, might become a lien or charge upon the assets of Borrower or any of its Subsidiaries (other than a Permitted Lien); provided, however, that Borrower and its Subsidiaries shall not be required to pay and discharge any such tax, assessment, charge, levy or claim so long as the legality thereof shall be contested in good faith and by appropriate proceedings and for which the Borrower and its Subsidiaries have provided adequate reserves. (e) Maintain, and cause each of its Subsidiaries to maintain, with financially sound and reputable insurance companies insurance on all its property in at least such amounts and against at least such risks (but including in any event public liability and business interruption coverage) as are usually insured against in the same general area by companies engaged in the same or a similar business; and furnish to Bank, upon written request of Bank, full information as to the insurance carried. Page 10 11 (f) At all times, maintain, protect and keep in good repair, working order and condition (ordinary wear and tear excepted), and cause each of its Subsidiaries so to do, all property necessary to the operation of the Borrower's or such Subsidiary's material businesses. (g) Obtain or maintain, as applicable, and cause each of its Subsidiaries to obtain or maintain, as applicable, in full force and effect, all licenses, franchises, intellectual property, permits, authorizations and other rights as are necessary for the conduct of its business and the failure of which to obtain or maintain could, individually or collectively, have a Material Adverse Effect. (h) Observe and comply, and cause each of its Subsidiaries to observe and comply, (to the extent necessary so that any failure will not have a Material Adverse Effect) with all valid laws, statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, certificates, franchises, permits, licenses, authorizations, directions and requirements of all federal, state, county, municipal and other governments, agencies, departments, divisions, commissions, boards, courts, authorities, officials and officers, domestic or foreign. (i) Promptly notify Bank of (i) the arising of any litigation or dispute, threatened against or affecting assets of Borrower or any Subsidiary of Borrower, which, if adversely determined, could have a Material Adverse Effect; or (ii) any act of Default under this Agreement, or any material default under any other contract to which Borrower or any of its Subsidiaries is a party which could have a Material Adverse Effect. (g) Provide Bank with information that the Bank deems reasonably necessary to monitor the Loans. (h) Cure, within a reasonable period of time, any defects in the creation, execution and delivery of the Loan Documents. Borrower at its expense will promptly execute and deliver to Bank upon request all such other and further documents, agreements and instruments in compliance with or accomplishment of the covenants and agreements of Borrower in the Loan Documents. 4.03 NEGATIVE COVENANTS. From the date of this Agreement and so long as any Loan shall be outstanding, Borrower shall not without the prior written consent of Bank: (a) sell or lease all, or substantially all, of its assets or permit any of its Subsidiaries so to do; (b) at any time, make any loan or advance to, or enter into any arrangement for the purpose of providing funds or credit to, any Person other than a Subsidiary, or permit any of its Subsidiaries so to do, other than loans, advances or arrangements the total amount of which, when added to the total consideration paid by the Borrower and its Subsidiaries in connection with all mergers, consolidations and acquisitions of or by the Borrower and its Subsidiaries during the Line of Credit Period, shall not exceed the greater of (i) $110,000,000 or (ii) 10% of total assets as of the most recently completed fiscal quarter; (c) mortgage or encumber any of its assets or suffer any Liens to exist on any of its assets other than Permitted Liens or permit any of its Subsidiaries so to do; (d) assign this Agreement or any interest herein; or (e) merge or consolidate with any other Person, or permit any of its Subsidiaries so to do, except that the Borrower or any of its Subsidiaries may merge or consolidate with another corporation, if (i) permitted under the terms and conditions of that certain Revolving Credit Agreement by and among Borrower, the Lenders Party thereto and The Bank of New York, as Agent dated as of June 15, 1995, (ii) the Page 11 12 merger or consolidation would not have a Material Adverse Effect and (iii) in the case of a merger or consolidation involving Borrower, the "surviving corporation" expressly assumes the Loan Documents. V. EACH EXTENSION OF CREDIT The Bank will not be obligated to make any Loan if: (a) The representations and warranties of Borrower contained in this Agreement are not true and correct on and as of the date of the Loan; (b) Borrower has failed to observe or perform promptly when due any covenant, agreement, or obligation under this Agreement or under any of the other Loan Documents; (c) A material adverse change in the properties, assets, liabilities, business, operations, prospects, income or condition (financial or otherwise) of Borrower and its Subsidiaries taken as a whole shall have occurred; or (d) A Default shall have occurred and be continuing, or there shall have occurred any condition, event or act which constitutes, or with notice or lapse of time (or both) would constitute a Default. VI. DEFAULTS 6.01 DEFAULT. The occurrence of any of the following events shall be considered a "Default" as that term is used herein: (a) the failure of Borrower to pay promptly when due any interest or principal on any of the Loans; (b) the failure of Borrower to observe or perform promptly when due any covenant, agreement, or obligation under this Agreement or under any of the other Loan Documents; (c) the material inaccuracy at any time of any warranty, representation, or statement made to Bank by Borrower, whether such warranty, representation, or statement is made (i) in this Agreement, or (ii) in any other agreement, document, or writing; (d) the occurrence of an "Event of Default" under that certain Revolving Credit Agreement by and among Borrower, the Lenders Party thereby and The Bank of New York, as Agent dated as of June 15, 1995; (e) any obligation(s) of the Borrower (other than the Loans) or any of its Subsidiaries, whether as principal, guarantor, surety or other obligor, for the payment of any Indebtedness or operating leases in excess of $10,000,000 in the aggregate (i) shall become or shall be declared to be due and payable prior to the expressed maturity thereof, (ii) shall not be paid when due or within any grace period (as such grace period may be extended from time to time pursuant to and in accordance with the documentation evidencing such obligation) for the payment thereof, or (iii) any holder of any such obligation shall have the right to declare such obligation due and payable prior to the expressed maturity thereof; provided, however, that it shall not be considered that a Default has occurred by virtue of subsections (d) and (e) of Section 6.01 solely because the holder of any obligation of Borrower shall have the right to declare or has declared such obligation due and payable prior to a stated maturity date by virtue of a right of redemption or has the right to declare but has not declared such obligation due and payable because of a material adverse change in the financial condition of Borrower; Page 12 13 (f) The Borrower or any of its Subsidiaries shall (i) suspend or discontinue its business, (ii) make an assignment for the benefit of creditors, (iii) generally not pay its debts as such debts become due, (iv) admit in writing its inability to pay its debts as they become due, (v) file a voluntary petition in bankruptcy, (vi) become insolvent (however such insolvency shall be evidenced), (vii) file any petition or answer seeking for itself any reorganization, arrangement, composition, readjustment of debt, liquidation or dissolution or similar relief under any present or future statute, law or regulation of any jurisdiction, (viii) petition or apply to any tribunal for any receiver, custodian or any trustee for any substantial part of its property, (ix) be the subject of any such proceeding filed against it which remains undismissed for a period of 45 days, (x) file any answer admitting or not contesting the material allegations of any such petition filed against it or admitting or not contesting the material allegations of any such petition filed against it or any order, judgment or decree approving such petition in any such proceeding, (xi) seek, approve, consent to, or acquiesce in any such proceeding, or in the appointment of any trustee, receiver, sequestrator, custodian, liquidator, or fiscal agent for it, or any substantial part of its property, or an order is entered appointing any such trustee, receiver, custodian, liquidator or fiscal agent and such order remains in effect for 45 days, or (xii) take any formal action for the purpose of effecting any of the foregoing or looking to the liquidation or dissolution of the Borrower or such Subsidiary; (g) An order for relief is entered under the United States bankruptcy laws or any other decree or order is entered by a court having jurisdiction (i) adjudging the Borrower or any of its Subsidiaries bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization, liquidation, arrangement, adjustment or composition of or in respect of the Borrower or any of its Subsidiaries under the United states bankruptcy laws or any other applicable Federal or state law, (iii) appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of the Borrower or any of its Subsidiaries or of any substantial part of the property thereof, or (iv) ordering the winding up or liquidation of the affairs of the Borrower or any of its Subsidiaries, and any such decree or order continues unstayed and in effect for a period of 45 days; (h) Judgments or decrees against the Borrower or any of its Subsidiaries aggregating in excess of $10,000,000 shall remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a period of at least 30 days; (i) Any Loan Documents shall cease, for any reason, to be in full force and effect or the Borrower shall so assert in writing or shall disavow any of its obligations thereunder; or (j) Any authorization or approval or other action by any governmental agency or authority required for the execution, delivery or performance of the Loan Documents shall be terminated, revoked or rescinded or shall otherwise no longer be in full force and effect. 6.02 NOTICE OF DEFAULT AND REMEDIES. In the event of a Default and such Default continues for a period of thirty (30) days (five (5) days for the failure to make a payment of principal or interest under the Loans) after Bank has given written notice of such Default to Borrower or after Borrower shall have obtained knowledge of such Default, then, at the option of Bank, the Loans shall be immediately due and payable without presentment, demand, protest, notice of protest or dishonor or other notice of default of any kind, all of which are hereby expressly waived by Borrower, and Bank may exercise any and all rights and remedies which Bank may have under the Loan Documents and/or under applicable law. 6.03 NO OBLIGATION TO LEND. In the event of a Default, Bank shall have no obligation to make any Loan. Page 13 14 VII. MISCELLANEOUS 7.01 AMENDMENTS AND WAIVERS. Neither this Agreement, nor any provisions hereof, may be changed, waived, discharged or terminated orally, or in any manner other than by an instrument in writing signed by the party against whom enforcement of the change, waiver, discharge or termination is sought. 7.02 NO THIRD PARTY BENEFICIARY. This Agreement is solely for the benefit of the parties and is not a stipulation for the benefit of any other person or entity except for any approved assignee of Borrower and any assignee of Bank. 7.03 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of Louisiana. 7.04 INVALIDITY. In the event that any one or more of the provisions contained in the Loan Documents shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of the Loan Documents. 7.05 CONFLICT. In the event any of the provisions of this Agreement conflict with any provisions contained in any other Loan Documents, the provisions of this Agreement shall govern. This Agreement supersedes and replaces the Loan Agreement between Bank and Borrower, dated March 20, 1997. 7.06 HEADINGS. The section and other headings contained in this Agreement are for reference purposes only and shall not control or affect the construction of this Agreement or the interpretation hereof in any respect. 7.07 NOTICES. Except as provided for in Sections 2.02(a), 2.03(b) and 2.06, all communications under or in connection with this Agreement shall be in writing and shall be mailed by first class mail or express delivery, postage prepaid, or otherwise sent by telex, telegram, telecopy or other similar form of rapid transmission, or personally delivered to an officer of the receiving party. All such communications shall be mailed, sent or delivered: To Bank: Whitney National Bank 228 St. Charles Avenue New Orleans, Louisiana 70130 Attn: John J. Zollinger, IV Assistant Vice President Telecopier: (504) 552-4622 Telephone: (504) 552-4586 With a copy to: Roy E. Blossman Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C. Energy Centre Suite 2700, 1100 Poydras Street New Orleans, Louisiana 70163 Telecopier: (504) 585-3801 Telephone: (504) 585-3807 To Borrower: Mr. Todd J. Marye Director, Financing and Cash Management Central Louisiana Electric Company, Inc. 2030 Donahue Ferry Road Pineville, LA 71360 Telecopier: (318) 484-7697 Telephone: (318) 484-7541 With a copy to: Mr. William O. Bonin P.O. Box 10030 New Iberia, LA 70562-0030 Telecopier: (318) 364-5795 Telephone: (318) 364-5762 Page 14 15 7.08 COUNTERPARTS. This Agreement may be executed in several counterparts and if executed shall constitute the agreement, binding upon all the parties hereto, notwithstanding all the parties are not signatories to the original and same counterparts. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day, month and year hereinabove first written. BANK: WHITNEY NATIONAL BANK By: /s/ John J. Zollinger, IV ------------------------------------ Its: Assistant Vice President ----------------------------------- BORROWER: CENTRAL LOUISIANA ELECTRIC COMPANY, INC. By: /s/ Michael P. Prudhomme ------------------------------------ Its: Secretary-Treasurer ----------------------------------- Page 15 EX-11 3 COMPUTATION OF NET INCOME PER COMMON SHARE 1 EXHIBIT 11 CLECO CORPORATION COMPUTATION OF NET INCOME PER COMMON SHARE FOR THE THREE MONTHS ENDED MARCH 31, (Unaudited)
(In thousands, except share and per share amounts) 1998 1997 ------------ ------------ BASIC Net income applicable to common stock $6,468 $7,002 ============ ============ Weighted average number of shares of common stock outstanding during the period 22,473,749 22,457,061 ============ ============ Basic net income per common share $0.29 $0.31 ============ ============ DILUTED Net income applicable to common stock $6,468 $7,002 Adjustments to net income related to Employee Stock Ownership Plan (ESOP) under the "if-converted" method: Add loss of deduction from net income for actual dividends paid on convertible preferred stock, net of tax 359 364 Deduct additional cash contribution required which is equal to dividends on preferred stock less dividends paid at the common dividend rate, net of tax (23) (33) Add tax benefit associated with dividends paid on allocated common shares 84 67 ------------ ------------ Adjusted income applicable to common stock $6,888 $7,400 ============ ============ Weighted average number of shares of common stock outstanding during the period 22,473,749 22,457,061 Number of equivalent common shares attributable to ESOP 1,388,259 1,399,547 Common stock under stock option grants 7,009 6,925 ------------ ------------ Average shares 23,869,017 23,863,533 ============ ============ Diluted net income per common share $0.29 $0.31 ============ ============
EX-12 4 COMPUTATION OF FIXED CHRGS. & COMBINED FIXED CHRGS 1 EXHIBIT 12 CLECO CORPORATION COMPUTATION OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS FOR THE TWELVE MONTHS ENDED MARCH 31, 1998 (Unaudited)
(In thousands, except ratios) -------------- Earnings $ 51,988 Income taxes 26,918 ---------- Earnings from continuing operations before income taxes $ 78,906 ---------- Fixed charges: Interest, long-term debt $ 23,862 Interest, other (including interest on short-term debt) 3,596 Amortization of debt expense, premium, net 1,225 Portion of rentals representative of an interest factor 512 ---------- Total fixed charges $ 29,195 ---------- Earnings from continuing operations before income taxes and fixed charges $108,101 ========== Ratio of earnings to fixed charges 3.70x ========== Fixed charges from above $ 29,195 Preferred stock dividends* 2,865 ---------- Total fixed charges and preferred stock dividends $ 32,060 ========== Ratio of earnings to combined fixed charges and preferred stock dividends 3.37x
* Preferred stock dividends multiplied by the ratio of pretax income to net income. EX-15 5 AWARENESS LETTER FROM COOPERS & LYBRAND, LLP 1 EXHIBIT 15 [Coopers & Lybrand L.L.P. Letterhead] May 14, 1998 Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Cleco Corporation Registrations on Form S-8 (Nos. 2-79671, 33-10169, 33-38362 and 33-44663) and Form S-3 (Nos. 33-24895, 33-62950 and 333-02895) We are aware that our report dated April 28, 1998 on our review of the interim financial information of Cleco Corporation as of March 31, 1998 and for the three-month periods ended March 31, 1998 and 1997 included in this Form 10-Q is incorporated by reference in the above mentioned registration statements. Pursuant to Rule 436(c) under the Securities Act of 1933, this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. COOPERS & LYBRAND L.L.P. EX-27 6 FINANCIAL DATA 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 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 PER-BOOK 1,027,925 3,480 89,048 223,054 8,517 1,352,024 45,530 107,993 253,142 406,665 5,990 12,105 120,906 0 245,000 61,794 0 0 0 0 499,564 1,352,024 97,210 3,030 80,347 83,377 13,833 131 13,964 6,970 6,994 526 6,468 8,875 2,230 7,089 0.29 0.29
-----END PRIVACY-ENHANCED MESSAGE-----