-----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, KLEqGG+hdRTipf8KtLibIpgWLqxJytesbLbUWOvmoVaz25AKHQIBlfnwht509Oai d6yTnl6DzRMbJ1Y8DjE/Vw== 0000950129-99-002182.txt : 19990514 0000950129-99-002182.hdr.sgml : 19990514 ACCESSION NUMBER: 0000950129-99-002182 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990513 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: 99620134 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 03/31/99 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, 1999 Commission file number 1-5663 Or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 CLECO CORPORATION (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 3, 1999, there were 22,536,102 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................... 11 Disclosure Regarding Forward-Looking Statements............. 11 Results of Operations........................................ 11 Financial Condition.......................................... 12 Repowering Project........................................... 14 Year 2000 Readiness Disclosure............................... 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk..................................................... 18 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders.................. 19 Item 5. Other Information.................................................... 19 Item 6. Exhibits and Reports on Form 8-K..................................... 21 SIGNATURE ....................................................................... 22
3 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The consolidated financial statements for Cleco Corporation (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, 1999 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, 1998 (1998 Form 10-K). The consolidated financial statements included herein have been subjected to a limited review by PricewaterhouseCoopers LLP, independent accountants for the Company, whose report is included herein. 1 4 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, 1999, and the related consolidated statements of income and cash flows for the three-month period ended March 31, 1999 and 1998, 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, 1998, and the related consolidated statements of income, cash flows and changes in common shareholders' equity for the year then ended (not presented herein); and in our report dated January 27, 1999, 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, 1998, is fairly stated in all material respects in relation to the balance sheet from which it has been derived. /s/PricewaterhouseCoopers LLP April 21, 1999 2 5 CLECO CORPORATION CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED MARCH 31 (UNAUDITED)
(In thousands, except share and per share amounts) 1999 1998 ------------ ------------ OPERATING REVENUES $ 121,719 $ 97,210 ------------ ------------ OPERATING EXPENSES Fuel used for electric generation 25,565 27,697 Power purchased 33,397 12,144 Other operation 15,826 14,531 Maintenance 6,120 5,184 Depreciation 12,390 12,040 Taxes other than income taxes 8,940 8,751 Federal and state income taxes 4,020 3,030 ------------ ------------ 106,258 83,377 ------------ ------------ OPERATING INCOME 15,461 13,833 Allowance for other funds used during construction 187 280 Other income and expenses, net (315) (149) ------------ ------------ INCOME BEFORE INTEREST CHARGES 15,333 13,964 Interest charges, including amortization of debt expense, premium and discount 6,988 7,178 Allowance for borrowed funds used during construction (195) (208) ------------ ------------ NET INCOME 8,540 6,994 Preferred dividend requirements, net 523 526 ------------ ------------ NET INCOME APPLICABLE TO COMMON STOCK $ 8,017 $ 6,468 ============ ============ WEIGHTED AVERAGE COMMON SHARES Basic 22,508,330 22,473,749 Diluted 23,877,305 23,869,017 EARNINGS PER SHARE Basic $ 0.36 $ 0.29 Diluted $ 0.35 $ 0.29 CASH DIVIDENDS PAID PER SHARE $ 0.405 $ 0.395
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS. 3 6 CLECO CORPORATION CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands) MARCH 31, 1999 DECEMBER 31, 1998 -------------- ----------------- ASSETS Utility and other property, plant and equipment Property, plant and equipment $ 1,570,430 $ 1,565,028 Accumulated depreciation (556,384) (551,705) -------------- -------------- 1,014,046 1,013,323 Construction work-in-progress 101,706 76,475 -------------- -------------- Total utility and other plant, net 1,115,752 1,089,798 -------------- -------------- Investments and other assets 3,580 3,500 -------------- -------------- Current assets Cash and cash equivalents 18,423 19,457 Accounts receivable, net 58,658 50,584 Unbilled revenues 8,547 9,712 Fuel inventory, at average cost 12,991 9,725 Materials and supplies inventory, at average cost 16,352 12,674 Prepayments and other current assets 2,382 1,738 -------------- -------------- Total current assets 117,353 103,890 -------------- -------------- Prepayments 8,527 8,293 Regulatory assets - deferred taxes 106,541 95,199 Other deferred charges 32,881 30,975 Accumulated deferred federal and state income taxes 115,564 97,345 -------------- -------------- TOTAL ASSETS $ 1,500,198 $ 1,429,000 ============== ==============
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) MARCH 31, 1999 DECEMBER 31, 1998 -------------- ----------------- CAPITALIZATION AND LIABILITIES Common shareholders' equity Common stock, $2 par value, authorized 50,000,000 shares, issued 22,778,554 and 22,767,754 shares at March 31, 1999 and December 31, 1998, respectively $ 45,557 $ 45,535 Premium on capital stock 113,889 113,871 Retained earnings 270,143 271,019 Treasury stock, at cost, 248,328 and 281,930 shares at March 31, 1999 and December 31, 1998, respectively (5,052) (5,734) -------------- -------------- 424,537 424,691 -------------- -------------- Preferred stock, cumulative, $100 par value Not subject to mandatory redemption 29,007 29,718 Deferred compensation related to preferred stock held by ESOP ESOP (15,629) (16,923) -------------- -------------- 13,378 12,795 Subject to mandatory redemption 5,680 5,680 -------------- -------------- 19,058 18,475 -------------- -------------- Long-term debt, net 342,974 343,042 -------------- -------------- Total capitalization 786,569 786,208 -------------- -------------- Current liabilities Short-term debt 121,222 68,416 Long-term debt due within one year 32,376 33,330 Accounts payable 37,445 61,786 Customer deposits 20,112 20,120 Taxes accrued 21,563 11,942 Interest accrued 2,125 7,340 Accumulated deferred fuel 8,496 4,613 Other current liabilities 3,627 3,868 -------------- -------------- Total current liabilities 246,966 211,415 -------------- -------------- Deferred credits Accumulated deferred federal and state income taxes 303,409 286,619 Accumulated deferred investment tax credits 27,336 27,784 Regulatory liabilities - deferred taxes 97,759 81,074 Other deferred credits 38,159 35,900 -------------- -------------- Total deferred credits 466,663 431,377 -------------- -------------- TOTAL CAPITALIZATION AND LIABILITIES $ 1,500,198 $ 1,429,000 ============== ==============
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) 1999 1998 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,540 $ 6,994 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation and amortization 12,539 12,524 Allowance for funds used during construction (382) (488) Amortization of investment tax credits (448) (448) Deferred income taxes (1,251) 129 Deferred fuel costs 3,883 1,588 (Gain) loss on disposition of utility plant, net (108) 2 Changes in assets and liabilities Accounts receivable, net (8,074) 3,054 Unbilled revenues 1,165 4,431 Fuel inventory, materials and supplies (6,944) 2,680 Accounts payable (24,340) (27,380) Customer deposits (8) 229 Other deferred accounts (392) (200) Taxes accrued 9,621 8,125 Interest accrued (5,215) (5,691) Other, net 5,421 859 -------- -------- Net cash provided by (used in) operating activities (5,993) 6,408 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to utility plant (37,057) (13,509) Allowance for funds used during construction 382 488 Proceeds from sale of utility plant 44 120 Purchase of investments (80) -------- -------- Net cash used in investing activities (36,711) (12,901) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Issuance of common stock 239 34 Increase in short-term debt, net 51,852 12,575 Retirement of long-term obligations (77) Redemption of preferred stock (711) (130) Dividends paid on common and preferred stock, net (9,633) (9,401) -------- -------- Net cash provided by financing activities 41,670 3,078 -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS (1,034) (3,415) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 19,457 18,015 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,423 $ 14,600 ======== ======== Supplementary cash flow information Interest paid (net of amount capitalized) $ 12,402 $ 12,411 ======== ======== Income taxes paid $ 2,000 $ 1,000 ======== ========
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 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 1998, the Company and SWEPCO received deliveries which approximated 28% of the annual lignite consumption at the 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 counterclaim on the grounds the counterclaim has 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. 7 10 At a November 5, 1998 scheduling conference, the Court set the Federal Court Suit for trial beginning November 15, 1999. A discovery cut-off date of August 15, 1999 has also been established. On January 8, 1999, the Company and SWEPCO filed an amended complaint in the Federal Court Suit seeking, among other things, a termination of the LMA after trial based on DHMV's breach of the contract. DHMV has answered the amended complaint and denied all claims of breach. The parties have engaged in pre-trial motion practice and are in the deposition phase of discovery. The Company and SWEPCO will continue to 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 DHMV in the Federal Court Suit will have a significant adverse effect on the Company's financial position or results of operations. NOTE C. NEW CREDIT FACILITY Cleco Services LLC, a wholly-owned subsidiary of the Company, entered into a $2 million credit facility on March 1, 1999 which will be used for working capital, capital expenditures, and subject to the consent of the lender, interim financing for acquisitions. This credit facility provided for borrowings at prevailing interest rates and will expire December 31, 2000. Compensating balances are not required for this facility. Commitment fees for the new facility are based on a percentage of the unused line of credit. The facility is collateralized by the assets of Cleco Services LLC, and is supported by a $1 million guarantee from the Company. NOTE D. DISCLOSURES ABOUT SEGMENTS The Company has determined that its reportable segment is based on the Company's method of internal reporting, which disaggregates its business units by regulatory jurisdiction. The Company's reportable segment is Louisiana Public Service Commission (LPSC) Jurisdictional Utility. This segment contains the revenues, expense and assets over which the LPSC may have material effect based upon state statutes. The effects include rate-making powers, determination of depreciable lives, determination of pass through cost of fuel through the fuel cost adjustment clauses, determination of prudent capital expenditures, transfers of assets, as well as the issuance of securities and incurrance of long term debt. The financial results of the Company's segment is presented on an accrual basis. Significant differences among the accounting policies of the segments as compared to the Company's consolidated financial statements principally involve the classification of revenue and expense between operating and other. Management evaluates the performance of its segments 8 11 and allocates resources to them based on segment profit/(loss) before income taxes and preferred stock dividends. Material intersegment transactions occur on a regular basis. The table below presents information about the reported operating results and net assets of the Company's reportable segments. For the Three Months Ended March 31, 1999 (In thousands)
LPSC JUSIDICTIONAL ALL UTILITY OTHER TOTAL ------------ ------------ ------------ Operating revenues from external customers .. $ 121,719 $ 1,763 $ 123,482 Operating intersegment revenues ............. -- $ 1,579 $ 1,579 Segment profit............................... $ 12,432 $ 128 $ 12,560 Segment assets............................... $ 1,457,084 $ 121,428 $ 1,578,512 Reconciliation between segment amounts and consolidated amounts PROFIT Total profit on reportable segments ......... $ 12,432 Other profit ................................ 128 Unallocated items Income taxes ............................ (4,020) Preferred dividend requirements, net .... (523) Net income to common .................... $ 8,017 ============
For the Three Months Ended March 31, 1998 (In thousands)
LPSC JUSIDICTIONAL ALL UTILITY OTHER TOTAL ------------ ------------ ------------ Operating revenues from external customers ... $ 97,210 $ 4,212 $ 101,422 Operating intersegment revenues .............. $ -- $ 413 $ 413 Segment profit................................ $ 9,970 $ 54 $ 10,024 Segment assets................................ $ 1,326,860 $ 30,948 $ 1,357,808 Reconciliation between segment amounts and consolidated amounts PROFIT Total profit on reportable segments $ 9,970 Other profit 54 Unallocated items Income taxes (3,030) Preferred dividend requirements, net (526) ------------ Net income to common $ 6,468 ============
9 12 NOTE E. NEW ACCOUNTING STANDARD Periodically, the Financial Accounting Standards Board (FASB) issues Statements of Financial Accounting Standards (SFAS). These standards reflect accounting, reporting, and disclosure requirements the Company should follow in the accumulation of financial data and in the presentation of financial statements. The FASB, a nongovernmental organization, is the primary source of generally accepted accounting principles within the United States. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives Instruments and Hedging Activities", effective for fiscal years beginning after June 15, 1999. This Statement establishes accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. The effect of adopting this Statement has not been determined. NOTE F. SUBSEQUENT EVENT On May 7, 1999, the Company issued $50 million in medium term notes. The notes were issued with an interest rate of 6.52% and a maturity date of May 15, 2009. The proceeds of the notes were, or will be, used to pay down $10 million of the Company's outstanding medium term notes and otherwise to pay down its short-term commercial paper. 10 13 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 1998 Form 10-K, the financial statements and notes contained in Item 8 of the 1998 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, 1999 Net income applicable to common stock totaled $8.0 million or $0.36 per average common share for the first quarter of 1999, as compared to $6.5 million or $0.29 per average common share for the corresponding period in 1998. The following principal factors contributed to these results: Operating revenues for the quarter increased $24.5 million or 25% compared to the same period in 1998. This increase is primarily due to a $18.4 million increase in sales from trading activities. Also contributing to the increase in operating revenues was a $3.5 million increase in base revenues from commercial and industrial customers, and a $2.0 million increase in fuel cost recovery revenues from sales to other utilities. Partially offsetting these increases was a $1.5 million decrease in fuel cost recovery revenues from residential customers. Base revenues increased 7.9% over the same period in 1998. This increase is primarily the result of a $3.5 million increase in base revenues from increased kilowatt-hour sales to commercial and industrial customers. Kilowatt-hour sales to regular customers for the first 11 14 quarter of 1999 improved 11.4% over the first quarter of 1998. Sales to commercial customers rose 15.4%, sales to industrial customers improved 10.3% over the first quarter in 1998. The general increase in kilowatt-hour sales can be attributed to the addition of a paper plant as a new industrial customer, above-normal additions of new commercial customers, and continued overall health of the economy in the Company's service territory. Fuel cost recovery revenues increased 3%, or $1.2 million, compared to the same period in 1998. Fuel cost recovery revenues from sales to utilities increased $2.0 million in relation to the same period in 1998 and was partially offset by a $1.5 million, or 10.7%, decrease in fuel cost recovery revenues from residential customers for the same period. Fuel cost recovery revenues from all other sources, including commercial and industrial customers, public authorities, and street lighting, increased $0.7 million, or 2.9%. The increase in fuel cost recovery revenues is related to higher natural gas prices and an increase in kilowatt-hour sales in the first quarter of 1999, compared to the first quarter of 1998. 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 LPSC (representing about 99% of the total fuel cost adjustment) while 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. Operating expenses increased $22.9 million, or 27.4%, during the first quarter of 1999 compared to the same period in 1998. The rise in operating expenses is primarily the result of an increase in purchased power expenses related to power marketing activities. Power marketing expenses increased $18 million compared to the same period in 1998 due to the fact that power marketing operations were not fully operational until the second quarter of 1998. The Company purchases 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, or when the Company's generating units are unable to provide electricity to satisfy the Company's load. Forty-two percent of the Company's energy requirements during the first quarter of 1999 were met with purchased power, compared to 28% for the corresponding period in 1998. The increase was caused by a scheduled major maintenance at the Dolet Hills Power Station. The power station did not produce electricity during the month of March 1999. Consequently, the Company purchased power to meet load requirements. FINANCIAL CONDITION Liquidity and Capital Resources At March 31, 1999 and 1998, the Company had $121.2 million and $61.7 million, respectively, of short-term debt outstanding in the form of commercial paper borrowing and bank loans. An existing $100 million revolving credit facility is scheduled to terminate on June 15, 2000 and an $80 million credit facility is scheduled to expire on August 27, 1999. These facilities provide support for the issuance of commercial paper and working capital needs. 12 15 Uncommitted lines of credit with banks totaling $15 million are also available to support working capital needs. At March 31, 1999, CLE Resources, Inc., an unregulated consolidated subsidiary of the Company, had $12.4 million of cash and temporary cash investments in securities with original maturities of 90 days or less. $10 million has been committed to provide credit support for working capital and electricity or natural gas commodity positions for Cleco Energy LLC. In addition, CLE Resources, Inc. has committed up to $25 million over a five-year period for acquisitions, strategic alliances, and investments in capital projects to be made by Cleco Energy LLC, subject to the satisfaction of certain conditions. Cleco Energy LLC has drawn down $2.5 million of the $25 million. The cost of the repowering project at the Coughlin Power Station (CPS) is estimated to be $250 million. It is anticipated that the structure of permanent financing for the project will be determined and finalized during 1999. Currently, the Company is using its commercial paper program to fund the interim needs of the project. As of March 31, 1999, the Company has spent approximately $65.5 million on the project. On May 7, 1999, the Company issued $50 million in medium term notes. The notes were issued with an interest rate of 6.52% and a maturity date of May 15, 2009. The proceeds of the notes were, or will be, used to pay down $10 million of the Company's outstanding medium term notes and otherwise to pay down its short-term commercial paper. Regulatory Matters - Retail Electric Competition The LPSC continues its deliberations over the potential of restructuring the retail electricity market in Louisiana. In February, 1999, the LPSC Staff made a recommendation to the LPSC in Docket U-21453 that restructuring of the retail electric market in Louisiana is not in the public interest. However, recognizing that restructuring in surrounding states may compel Louisiana into similar action, the Staff also recommended a series of guidelines and objectives to follow should the LPSC at some future date find restructuring to be in the public interest. In March, the LPSC deferred making a public interest determination until such time that a Louisiana-specific transition to competition plan has been fully developed. The LPSC further ordered that the Staff recommend such a plan and that it be presented to the LPSC on or before January 1, 2001. Cleco has actively participated in deregulation proceedings to this date and expects to continue to do so. Louisiana has not adopted any specific legislation on retail electric competition or restructuring, nor have any bills been introduced thus far in the 1999 Legislative session. On April 15, 1999, the Clinton administration introduced the federal "Comprehensive Electricity Competition Act". The Act would require nationwide implementation of retail choice of electric generation suppliers by January 1, 2003. A North American Reliability Organization would be formed, subject to oversight by FERC, to establish national reliability standards. FERC would have broad authority to address market power issues, including the authority to require the divestiture of generating assets. The proposal calls for the creation of a national public benefits charge to fund low-income, customer education and technology development programs. Generation suppliers would be required to obtain 7.5% of their resources from renewables by the 13 16 year 2010. The proposed legislation would repeal the Public Utility Holding Company Act of 1935, and Section 210 of the Public Utility Regulatory Policies Act. The final outcome of the bill, its final form, and its effect on the Company's business is uncertain at this time. Regulatory Matters - Wholesale Electric Competition Wholesale power markets, as regulated by the FERC, involve sales of power between power suppliers, marketers and brokers for subsequent resale to retail or end-use customers. Competition in this market has increased since the FERC mandated, through Order No. 888, as amended, open access to transmission facilities that are necessary to complete these sales. The Company, under FERC rules, has an open access transmission tariff through which it offers wholesale transmission service to other parties that is comparable to the service that it provides itself from its facilities. The Company, as a member of the Southwest Power Pool (SPP), may also provide certain specialized transmission services under an open access tariff administered by the pool, and as approved by the FERC. In recent years, the Company has purchased a part of its power requirements from the wholesale market when it is economical to do so or when the Company's generating units are unable to provide electricity to satisfy the Company's load. In this role, the Company has also been a purchaser of open access transmission service from other parties, and expects to continue to do so in the immediate future. In early April, Entergy Corporation and its subsidiaries proposed to FERC the creation of the country's first for-profit regional transmission organization (RTO), commonly called a transco. Unique to Entergy's proposal is its request to transfer all its transmission assets to a fully independent and incentive-driven transmission company. This transco would control, operate and maintain all member transmission assets as well as plan for the region's transmission needs. Entergy is asking FERC for a declaratory order on its proposal by July 31, 1999. Entergy officials have also expressed an interest in including other regional companies participating in this transco. As a part of the Clinton administration's proposed restructuring bill, FERC would see a clarification and expansion of its authority. The bill reaffirms FERC Order No. 888, as amended. It also authorizes the agency to order establishment of RTOs, and to order a transmitting utility to relinquish control over operation of its transmission facilities to such an entity. The final outcome of the bill, its final form, and its effect on the Company's business is uncertain at this time. REPOWERING PROJECT In July 1998, the Company's Board of Directors approved the construction of a 750-megawatt repowering project (Project) to be implemented at CPS. The Project will use three new natural gas-fueled combustion turbine generators and three related heat recovery system generators to repower two existing units at CPS. It is anticipated that the Project's generation capacity and energy will be available to the regional wholesale market at competitive market rates. The degree to which the output of CPS will be sold and delivered to the Company and to unaffiliated purchasers, as well as the terms and conditions of such sales, remains to be determined by commercial negotiations and in related 14 17 regulatory proceedings before the LPSC and FERC, all of which are expected to be concluded by the end of the first quarter of 2000. One of the Company's subsidiaries, Cleco Evangeline LLC, will own and operate the Project. The total cost of the Project is expected to be $250 million and is scheduled to be completed and in service by June 1, 2000. As of March 31, 1999, the Company has spent approximately $65.5 million on the Project, which is currently being funded through the Company's commercial paper program. Permanent financing for the Project has not yet been determined and is expected to be finalized during 1999. Implementation of the Project is subject to approval by the LPSC and FERC. In February 1999, the LPSC approved the transfer of the existing CPS assets out of the LPSC regulated rate base of the Company into Cleco Evangeline LLC. The actual transfer is expected to occur in the fourth quarter of 1999, or in the first quarter of 2000. In return for the approval of the asset transfer, the Company agreed to extend the terms of its 1996 rate settlement with the LPSC for an additional three years, to the year 2004. The agreement also requires the Company to hold harmless its ratepayers from negative impacts resulting from the removal of the generating assets from the rate base. In return, the Company is authorized to transfer the assets at their net book value of approximately $10 million. YEAR 2000 READINESS DISCLOSURE The year 2000 (Y2K) problem occurs because many systems, both hardware and software, were designed to accept only two digits instead of four digits for the year in a date field. Having two digits instead of four digits may cause the system to read "00" as 1900 instead of 2000. This may cause calculations that are date sensitive to arrive at an incorrect or impossible solution. This may affect items such as delivery dates, interest calculations, pension benefit calculations, and a variety of other date-dependent calculations. The Company is aware of the issues surrounding Y2K and the problems that may occur and has put into action a plan to address these issues. The Company is aware that the Y2K problem may affect both internal information technology (IT) and non-IT systems. IT systems consist of software programs such as the operating system, spreadsheets, accounting and other programs. Non-IT systems refer to embedded technology such as micro controllers found in computers and other hardware systems. The Company has divided the IT and non-IT systems into two categories: mission critical and non-mission critical. Mission critical systems are those that would affect the health and safety of the public by causing a disruption in supplying electricity. Non-mission critical systems are those that would not cause a disruption in supplying electricity, but may still have a material, negative impact on the liquidity and financial condition of the Company. The following tables show the initiatives, the completion percentage of the various stages and an estimated completion date for the mission critical systems: 15 18 MISSION CRITICAL SYSTEMS
ESTIMATED PLANNING- DATE OF INITIATIVES ASSESSMENT CORRECTION TESTING IMPLEMENT COMPLETION Distribution 100% 100% 100% 100% N/A Generation 100% 82% 82% 82% June 1999 IT Services* 100% 95% 81% 81% Sept. 1999 Transmission 100% 100% 100% 20% June 1999
* IT Services includes business applications and telecommunications. The description of the stages are: Planning-Assessment: Develop a project plan, compile a complete list of affected systems, and prepare a detailed technical plan. Correction: Make the required changes identified in Planning-Assessment. Testing: Test all changes made in the Correction stage to insure that systems will meet the compliance criteria and the systems will be accepted by user management. Implementation: Integrate the changed systems into a production environment and begin use. Monitor subsequent changes to other systems to ensure overall system integrity. Management considers the Company's non-mission critical systems to be Y2K compliant. Internal systems are not the only ones that may have a material effect on the Company. Institutions external to the Company, such as vendors and customers, may also impact the Company's operations if their systems are not Y2K compliant. Vendors could impact the Company by their inability to deliver goods and services required by the Company to operate. Customers could impact the Company by their inability to operate, reducing the sale of power, or their inability to pay the Company for the power consumed. The Company has decided to address this issue by identifying major vendors and customers and sending surveys to discover their level of Y2K compliance. Major vendors are defined as those that provide critical goods or services to the Company, or those that provide critical components to the Company (such as fuel suppliers and financial institutions). Major customers are identified as those customers that are at the greatest risk of being impacted by the Y2K problem and are large consumers of power (mainly industrial and commercial customers). To date, the surveys to the major vendors have been sent out and the requested responses have been received. Efforts will continue in soliciting responses from others, with any required contingency plans being completed by the end of the third quarter. The surveys to major customers are in the process of being reviewed and their state of readiness is being monitored. The projected completion date of system surveys of external parties is expected to be December 1999. 16 19 The Company's cost to address its Y2K problem is currently estimated at $1.4 million, with approximately $1.1 million expended so far. The remaining $0.3 million is expected to be spent before July, 1999. The expenses associated with Y2K are being funded through cash flows from operations. Only a nominal amount of the Y2K budget is being expended on hardware. Most of the budget is being expended in software. The Company's overall IT operating budget for the year ended December 31, 1999 is approximately $11 million, however, the bulk of the Y2K expenses were budgeted and expended by the various departments that were affected by Y2K issues. At this point in time, management has not engaged any firm, nor does it plan to engage any firm, to perform an independent verification and validation of the Company's Y2K readiness. However, the Company's independent auditing firm has been engaged to review the readiness process being followed. Their review was completed in February and a summary of their findings relative to the process is expected soon, but the firm will not issue an opinion on Y2K readiness. The Company has been reporting to the LPSC on a quarterly basis starting in 1998. Also, monthly reports are sent to the SPP, which summarizes their member's reports and forwards them to the North American Electric Reliability Council (NERC). The U.S. Department of Energy receives its reporting from the NERC. The Company is in full compliance with the NERC reporting requirements, is planning to participate in the two planned NERC system tests, and is conforming with the NERC contingency planning requirements for the electrical system. The risks of not addressing the Y2K problem include the failure to bill customers, collect payments, pay invoices, operate generation facilities, operate substations, and order and receive critical materials. Each of these risks, should they materialize, could have a material, negative impact on the operations, liquidity and financial condition of the Company. It is the opinion of management that the action plan outlined above will adequately address the Y2K risks facing the Company and reduce them to manageable levels so that Y2K issues will not materially impact the Company. A worst case scenario would be the entire SPP grid collapsing due to the lack of available power. Management believes the Company is capable of disconnecting from the SPP grid and restarting its power generation stations. However, other regional grids may also collapse, which in turn could cause a disruption in the supply of fuel or critical parts. During a possible disruption, the Company would have to rely on its inventory of fuel and critical parts. The Company keeps approximately a 30-day supply of coal at the two coal-fired plants, which are considered the Company's base load plants. If deliveries of fuel were interrupted for more than 30 days or if certain critical parts should fail, the Company's ability to generate power would be severely curtailed. The Company has contingency plans for mission critical systems against normal operating hazards such as major storms or fires. These plans were designed to minimize the impact to customers by providing alternatives and solutions to possible adverse conditions. These plans are required by several oversight agencies, such as the LPSC and the NERC. The 17 20 existing contingency plans were reviewed and evaluated by the Company's staff to find out if they adequately addressed possible failures due to Y2K noncompliance. Plan amendments have been proposed but not yet finalized. The amendments are expected to be finalized before December, 1999. At present, the Company does not have a contingency plan in place to specifically cover the non-mission critical Y2K issues. However, management is continually monitoring the progress of each initiative. In the third quarter of 1999, management will evaluate the reasonableness of the projected completion dates and at that time determine if a contingency plan is required. As of the date of this filing, management reasonably expects the completion of the initiatives in a timely manner; thus, a contingency plan is not believed to be required. CONSTRAINTS ON PURCHASED POWER The Company is constrained as to the amount of purchased power it can bring into its system. Because of the location of the system, virtually all power purchased by the Company for native load must pass through the electric transmission system of another large electric utility to bring the purchased power into the Company's system. Demand on the transmission system of this other electric utility has constrained the amount of available transmission capacity available to the Company to transport power for our customer load. Additional generation by the Company's units is used to offset these transmission constraints during peak usage. However, in future years, the Company may not have enough generation or transmission capacity to import purchased power to meet native load demand. Management plans to address the issue by repowering CPS through a wholly-owned affiliate. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The market risk inherent in the Company's market risk sensitive instruments and positions is the potential change arising from increases or decreases in the short, medium and long term interest rates and the commodity price of electricity traded on the Into Entergy exchange. Generally, the Company's market risk sensitive instruments and positions are characterized as "other than trading". The Company's exposure to market risk represents an estimate of possible changes in the fair value or future earnings that would occur assuming possible future movements in the interest rates and the commodity price of electricity. The market risk estimates have not materially changed from those disclosed in the Company's 1998 Form 10-K, herein incorporated by reference. 18 21 PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders of the Company will be held on May 14, 1999. ITEM 5. OTHER INFORMATION COAL AND LIGNITE SUPPLY The majority of the coal for Rodemacher Unit 2 is purchased from mines in Wyoming under a long-term contract expiring in 2007 with Jacobs Ranch Coal Company (formerly owned by Kerr-McGee Coal Corporation). The contract has been modified under price reopener procedures which were initiated in early 1997. The pricing structure under the modified contract has been defined through mid 2002. Provisions for pricing and terms can be renegotiated under a contract reopener provision in early 2002. After purchasing a given annual quantity of base coal (approximately 500,000 tons annually), the Company has the right to purchase coal from third parties in the spot market through competitive bidding. The coal for Rodemacher Unit 2 is transported under a long-term rail transportation contract with the Union Pacific Railroad (Union Pacific). In 1997, Union Pacific began experiencing operating problems which resulted in reduced volumes delivered to the unit. Union Pacific increased delivery volumes to Rodemacher Unit 2 in the first quarter of 1999. The Company's coal inventory at Rodemacher Unit 2 is currently near its desired maximum level. Based on Union Pacific's improved performance and its 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 continuously monitors this situation. HOLDING COMPANY FORMATION At the October 23, 1998 meeting of the Company's Board of Directors, the directors approved a proposal to reorganize the Company into a public utility holding company structure. The proposed holding company structure would create a parent company that would include several subsidiaries, one of which would contain the Company's generation, transmission and distribution electric utility operations necessary to serve its traditional retail and wholesale customers. Another subsidiary, Cleco Midstream Resources LLC, would operate the Company's competitive electric generation, oil and natural gas production, energy and generating fuel procurement and natural gas pipeline businesses. A third subsidiary, Cleco Services LLC, would sell utility support services related to distribution and retail service to municipal governments, rural electric cooperatives and investor-owned electric companies. Under the terms of the proposal, the newly organized holding company would become the owner of all of the Company's outstanding common and preferred stock and existing common 19 22 and preferred shareholders of the Company would exchange their stock in the Company for stock in the holding company. The proposal received LPSC approval on December 18, 1998, and FERC approval on January 29, 1999. The proposal is subject to approval by the Company's shareholders. Approval will be requested from the Company's shareholders in connection with the 1999 Annual Meeting of Shareholders. See the Company's 1999 Notice of Annual Meeting of Shareholders and Proxy Statement, dated April 9, 1999, incorporated herein by reference. NEW ACCOUNTING STANDARD Periodically, the Financial Accounting Standards Board (FASB) issues Statements of Financial Accounting Standards (SFAS). These standards reflect accounting, reporting, and disclosure requirements the Company should follow in the accumulation of financial data and in the presentation of financial statements. The FASB, a nongovernmental organization, is the primary source of generally accepted accounting principles within the United States. In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivatives Instruments and Hedging Activities", effective for fiscal years beginning after June 15, 1999. This Statement establishes accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. The effect of adopting this Statement has not been determined. OTHER EVENTS In March 1999, the Company announced its plans to buy back a portion of its common stock for use in its Employee's Stock Ownership Plan (ESOP). The buyback is a continuation of a process begun in 1991 when Cleco's ESOP was first implemented. In 1991, the Cleco Board authorized the repurchase of up to $30 million of Cleco's common stock for eventual issuance to ESOP participants when they retire or otherwise leave the Company. Since then, the Company has repurchased approximately $7 million of Cleco's common stock, leaving a balance of $23 million to repurchase for the ESOP. The previous stock repurchase took place in 1994. Cleco Corporation will continue to repurchase common stock in the future based on need or on the market price of the stock. 20 23 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 11 Computation of Net Income Per Common Share for the three months ended March 31, 1999 12 Computation of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends for the twelve months ended March 31, 1999 15 Awareness letter, dated May 13, 1999, from PricewaterhouseCoopers LLP regarding review of the unaudited interim financial statements 27 Financial Data Schedule (b) Reports on Form 8-K The Company filed a report on Form 8-K dated as of March 22, 1999 to announce its plans to repurchase up to $23 million of Cleco common stock. For more information, see "Item 5, Other Information - Other Events" above. 21 24 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 Financial Services Profit Center and Chief Financial Officer (Principal Accounting Officer) Date: May 13, 1999 22 25 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ------- ----------- 11 Computation of Net Income Per Common Share for the three months ended March 31, 1999 12 Computation of Earnings to Fixed Charges and Earnings to Combined Fixed Charges and Preferred Stock Dividends for the twelve months ended March 31, 1999 15 Awareness letter, dated May 13, 1999, from PricewaterhouseCoopers LLP regarding review of the unaudited interim financial statements 27 Financial Data Schedule
EX-11 2 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) ---------------------------- 1999 1998 ------------ ------------ BASIC Net income applicable to common stock $ 8,017 $ 6,468 ============ ============ Weighted average number of shares of common stock outstanding during the period 22,508,330 22,473,749 ============ ============ Basic net income per common share $ 0.36 $ 0.29 ============ ============ DILUTED Net income applicable to common stock $ 8,017 $ 6,468 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 359 359 Deduct additional cash contribution required which is equal to dividends on preferred stock less dividends paid at the common dividend rate, net of tax (15) (23) Add tax benefit associated with dividends paid on allocated common shares 91 84 ------------ ------------ Adjusted income applicable to common stock $ 8,452 $ 6,888 ============ ============ Weighted average number of shares of common stock outstanding during the period 22,508,330 22,473,749 Number of equivalent common shares attributable to ESOP 1,368,546 1,388,259 Common stock under stock option grants 429 7,009 ------------ ------------ Average shares 23,877,305 23,869,017 ============ ============ Diluted net income per common share $ 0.35 $ 0.29 ============ ============
EX-12 3 COMPUTATION OF EARNINGS TO FIXED CHRGS.& STOCK DIV 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, 1999 (Unaudited)
(In thousands, except ratios) -------------- Earnings $ 55,346 Income taxes 27,656 -------------- Earnings from continuing operations before income taxes $ 83,002 -------------- Fixed charges: Interest, long-term debt $ 23,275 Interest, other (including interest on short-term debt) 3,583 Amortization of debt expense, premium, net 1,216 Portion of rentals representative of an interest factor 430 -------------- Total fixed charges $ 28,504 -------------- Earnings from continuing operations before income taxes and fixed charges $ 111,506 ============== Ratio of earnings to fixed charges 3.91x ============== Fixed charges from above $ 28,504 Preferred stock dividends* 2,809 -------------- Total fixed charges and preferred stock dividends $ 31,313 ============== Ratio of earnings to combined fixed charges and preferred stock dividends 2.68x ==============
* Preferred stock dividends multiplied by the ratio of pretax income to net income. EX-15 4 AWARENESS LETTER FROM PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 15 May 13, 1999 Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549 Re: Cleco Corporation on Form S-8 (Registration Nos. 2-79671, 33-10169, 33-38362 and 33-44663), Form S-3 (Nos. 33-24895, 33-62950 and 333-02895) We are aware that our report dated April 21, 1999 on our review of the interim financial information of Cleco Corporation as of March 31, 1999 and for the three-month period ended March 31, 1999 and 1998 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. /s/ PricewaterhouseCoopers LLP EX-27 5 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-31-1999 JAN-01-1999 MAR-31-1999 PER-BOOK 1,115,752 3,580 117,353 254,986 8,527 1,500,198 45,557 108,837 270,143 424,537 5,680 13,378 127,974 0 215,000 121,222 32,376 0 0 0 560,031 1,500,198 121,719 4,020 102,238 106,258 15,461 (128) 15,333 6,793 8,540 523 8,017 9,110 2,133 (5,993) 0.36 0.35
-----END PRIVACY-ENHANCED MESSAGE-----