UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Louisiana			72-1445282
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

Registrant’s telephone number, including area code: (318) 484-7400


Louisiana			72-0244480
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

Registrant’s telephone number, including area code: (318) 484-7400


Securities registered pursuant to Section 12(b) of the Act:
Cleco Corporate Holdings LLC: None			Cleco Power LLC: None

Indicate by check mark whether the Registrants: (1) have 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 Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the Registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit such files). Yes ☒ No ☐

Indicate by check mark whether Cleco Corporate Holdings LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether Cleco Power LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐

Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

Cleco Corporate Holdings LLC has no common stock outstanding. All of the outstanding equity of Cleco Corporate Holdings LLC is held by Cleco Group LLC, a wholly owned subsidiary of Cleco Partners L.P.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

This Combined Quarterly Report on Form 10-Q (this “Quarterly Report on Form 10-Q”) is separately filed by Cleco Corporate Holdings LLC and Cleco Power LLC. Information in this filing relating to Cleco Power LLC is filed by Cleco Corporate Holdings LLC and separately by Cleco Power LLC on its own behalf. Cleco Power LLC makes no representation as to information relating to Cleco Corporate Holdings LLC (except as it may relate to Cleco Power LLC) or any other affiliate or subsidiary of Cleco Corporate Holdings LLC.

This Quarterly Report on Form 10-Q should be read in its entirety as it pertains to each respective Registrant. The Notes to the Unaudited Condensed Consolidated Financial Statements for the Registrants and certain other sections of this Quarterly Report on Form 10-Q are combined.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

Abbreviations or acronyms used in this filing, including all items in Parts I and II, are defined below.


ABBREVIATION OR ACRONYM			DEFINITION
2016 Merger			Merger of Merger Sub with and into Cleco Corporation pursuant to the terms of the Merger Agreement which was completed on April 13, 2016
2016 Merger Commitments			Cleco Partners’, Cleco Group’s, Cleco Holdings’, and Cleco Power’s 77 commitments to the LPSC as defined in Docket No. U-33434
401(k) Plan			Cleco Power 401(k) Savings and Investment Plan
ABR			Alternate Base Rate which is the greater of the prime rate, the federal funds effective rate plus 0.50%, or ~~LIBOR~~SOFR plus 1.0%
Acadia			Acadia Power Partners, LLC, previously a wholly owned subsidiary of Midstream. Acadia Power Partners, LLC was dissolved effective August 29, 2014.
~~Acadia Power Station~~			~~A facility consisting of Acadia Unit 1 and Acadia Unit 2 located in Eunice, Louisiana~~
Acadia Unit 1			Cleco Power’s 580-MW, natural gas-fired, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana
Acadia Unit 2			Entergy Louisiana’s 580-MW, natural gas-fired, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana, which is operated by Cleco Power

ADIT			Accumulated Deferred Income Tax
AFUDC			Allowance for Funds Used During Construction
Amended Lignite Mining Agreement			Amended and restated lignite mining agreement effective December 29, 2009
AMI			Advanced Metering Infrastructure
AOCI			Accumulated Other Comprehensive Income (Loss)
ARO			Asset Retirement Obligation



Big Cajun II			Cleco Cajun’s generating facility located in New Roads, Louisiana consisting of Unit 1, Unit 2, and Unit 3. Cleco Cajun has a 58% ownership interest in the capacity of Unit 3.






CCR			Coal combustion by-products or residual


CEO			Chief Executive Officer
CFO			Chief Financial Officer
CIP			Critical Infrastructure Protection
Cleco			Cleco Holdings and its subsidiaries
Cleco Cajun			Cleco Cajun LLC and its subsidiaries
Cleco Cajun Sale Group			Cleco Cajun’s business for which Cleco Holdings’ management and Board of Managers have committed to a plan to divest through a sale to one or more parties, subject to Board of Managers approval

Cleco Cajun Transaction			The transaction between Cleco Cajun and NRG Energy in which Cleco Cajun acquired all the membership interest in South Central Generating, which closed on February 4, 2019, pursuant to the Purchase and Sale Agreement, which includes the Cottonwood Sale Leaseback
Cleco Corporation			Pre-2016 Merger entity that was converted to a limited liability company and changed its name to Cleco Corporate Holdings LLC on April 13, 2016

Cleco Group			Cleco Group LLC, a wholly owned subsidiary of Cleco Partners
Cleco Holdings			Cleco Corporate Holdings LLC, a wholly owned subsidiary of Cleco Group

Cleco Partners			Cleco Partners L.P., a Delaware limited partnership that is owned by a consortium of investors, including funds or investment vehicles managed by Macquarie Asset Management, British Columbia Investment Management Corporation, John Hancock Financial, and other infrastructure investors
Cleco Power			Cleco Power LLC and its subsidiaries, a wholly owned subsidiary of Cleco Holdings
Cleco Securitization I			Cleco Securitization I LLC, a special-purpose, wholly owned subsidiary of Cleco Power

Como 1			Como 1, L.P., currently known as Cleco Partners

Cottonwood Energy			Cottonwood Energy Company LP, a wholly owned subsidiary of Cleco Cajun. Prior to the closing of the Cleco Cajun Transaction on February 4, 2019, Cottonwood Energy was an indirect subsidiary of South Central Generating.
Cottonwood Plant			Cleco Cajun’s 1,263-MW, natural gas-fired, combined cycle generating station located in Deweyville, Texas
Cottonwood Sale Leaseback			A lease agreement executed and delivered between Cottonwood Energy and a special-purpose entity that is a subsidiary of NRG Energy pursuant to which NRG Energy will lease back the Cottonwood Plant and will operate it until no later than May 2025.
Coughlin			Cleco Power’s 775-MW, natural gas-fired, combined cycle power plant located in St. Landry, Louisiana
COVID-19			Coronavirus disease 2019, including any variant thereof, and the related global outbreak that was subsequently declared a pandemic by the World Health Organization in March 2020



DHLC			Dolet Hills Lignite Company, LLC, a wholly owned subsidiary of SWEPCO
Diversified Lands			Diversified Lands LLC, a wholly owned subsidiary of Cleco Holdings


Dolet Hills			A facility consisting of Dolet Hills Power Station, the Dolet Hills mine, and the Oxbow mine
Dolet Hills Power Station			A 650-MW lignite-fired, steam generating unit at Cleco Power’s plant site in Mansfield, Louisiana. Cleco Power has a 50% ownership interest in the capacity of the Dolet Hills Power Station. The Dolet Hills Power Station was retired on December 31, 2021.
EAC			Environmental Adjustment Clause

EBITDA			Earnings before interest, income taxes, depreciation, and amortization



Entergy Gulf States			Entergy Gulf States Louisiana, LLC


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


ABBREVIATION OR ACRONYM			DEFINITION
~~Entergy Gulf States~~			~~Entergy Gulf States Louisiana, LLC~~
Entergy Louisiana			Entergy Louisiana, LLC
EPA			U.S. Environmental Protection Agency

ESG			Environmental, Social, and Governance

FAC			Fuel Adjustment Clause
FASB			Financial Accounting Standards Board
FERC			Federal Energy Regulatory Commission
Fitch			Fitch Ratings, a credit rating agency
FTR			Financial Transmission Right
FRP			Formula Rate Plan
GAAP			Generally Accepted Accounting Principles in the U.S.
GHG			Greenhouse gas

IRA of 2022			Federal tax legislation commonly referred to as the Inflation Reduction Act of 2022


IRS			Internal Revenue Service

kWh			Kilowatt-hour(s)



LIBOR			London Interbank Offered Rate


LPSC			Louisiana Public Service Commission


Madison Unit 3			A 641-MW petroleum coke/coal-fired, steam generating unit at Cleco Power’s plant site in Boyce, Louisiana

MATS			Mercury and Air Toxics Standards
Merger Agreement			Agreement and Plan of Merger, dated as of October 17, 2014, by and among Cleco Partners, Merger Sub, and Cleco Corporation relating to the 2016 Merger
Merger Sub			Cleco MergerSub Inc., previously an indirect wholly owned subsidiary of Cleco Partners that was merged with and into Cleco Corporation, with Cleco Corporation surviving the 2016 Merger, and Cleco Corporation converting to a limited liability company and changing its name to Cleco Holdings
Midstream			Cleco Midstream Resources LLC, a wholly owned subsidiary of Cleco Holdings

MISO			Midcontinent Independent System Operator, Inc.
MMBtu			One million British thermal units
Moody’s			Moody’s Investors Service, a credit rating agency
MW			Megawatt(s)
MWh			Megawatt-hour(s)


NERC			North American Electric Reliability Corporation




Not Meaningful			A percentage comparison of these items is not statistically meaningful because the percentage difference is greater than 1,000%


NRG Energy			NRG Energy, Inc.







Other Benefits			Includes medical, dental, vision, and life insurance for Cleco’s retirees
Oxbow			Oxbow Lignite Company, LLC, 50% owned by Cleco Power and 50% owned by SWEPCO


Perryville			Perryville Energy Partners, L.L.C., a wholly owned subsidiary of Cleco Holdings. Perryville Energy Partners, L.L.C. was dissolved effective September 8, 2021.



Purchase and Sale Agreement			Purchase and Sale Agreement, dated as of February 6, 2018, by and among NRG Energy, South Central Generating, and Cleco Cajun

Registrant(s)			Cleco Holdings and/or Cleco Power

Rodemacher Unit 2			A 523-MW coal-fired, steam generating unit at Cleco Power’s plant site in Boyce, Louisiana. Cleco Power has a 30% ownership interest in the capacity of Rodemacher Unit 2.
ROE			Return on Equity


RTO			Regional Transmission Organization
S&P			S&P Global Ratings, a division of S&P Global Inc, a credit rating agency

SEC			U.S. Securities and Exchange Commission


SERP			Supplemental Executive Retirement Plan


SOFR			Secured Overnight Financing Rate as administered by the Federal Reserve Bank of New York
South Central Generating			South Central Generating LLC, formerly NRG South Central Generating LLC, a wholly owned subsidiary of Cleco Cajun






Storm Recovery Property			Storm Recovery Property as defined in the financing order issued by the LPSC in April 2022, which includes the right to impose, bill, charge, collect, and receive unamortized storm recovery costs from Cleco Power’s retail customers.
Support Group			Cleco Support Group LLC, a wholly owned subsidiary of Cleco Holdings
SWEPCO			Southwestern Electric Power Company, an electric utility subsidiary of American Electric Power Company, Inc.
TCJA			Federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017
Teche Unit 3			A 359-MW natural gas-fired, steam generating unit at Cleco Power’s plant site in Baldwin, Louisiana


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements, including, without limitation, future capital expenditures; business strategies; goals, beliefs, plans, and objectives; competitive strengths; market developments; development and operation of facilities; growth in sales volume; meeting capacity requirements; expansion of service to existing customers and service to new customers; future environmental regulations and remediation liabilities; electric customer credits; and the anticipated outcome of various regulatory and legal proceedings. Although the Registrants believe 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 that could cause the actual results to differ materially from the Registrants’ expectations. In addition to any assumptions and other factors referred to specifically in connection with these forward-looking statements in this Quarterly Report on Form 10-Q, the following list identifies some of the factors that could cause the Registrants’ actual results to differ materially from those contemplated in any of the Registrants’ forward-looking statements:

•the uncertainty in the timing and ultimate outcome of the divestiture of the Cleco Cajun Sale Group,

•resolution of pending, upcoming, or future rate cases and related litigation, formula rate proceedings, and related negotiations, as well as delays in cost recovery resulting from these proceedings,

•changes in environmental laws, regulations, decisions and policies, including present and potential environmental remediation costs, restrictions on GHG emissions, possible effects on Cleco’s generation resources, or prohibitions or restrictions on new or existing services, and Cleco’s compliance with these matters,

•state and federal regulatory decisions or related judicial decisions disallowing or delaying recovery of capital investments, operating costs, commodity costs, and the ordering of refunds to customers and discretion over allowed return on investment,

•the loss of regulatory accounting treatment, which could result in the write-off of regulatory assets and the loss of regulatory deferral and recovery mechanisms,

•economic, regulatory, or workforce impacts related to pandemics, epidemics, or other outbreaks,

•economic impacts related to conflicts and hostilities, including the current armed conflict in Ukraine,

•the possibility of stranded costs with respect to assets that may be retired as a result of new climate legislation, technological advances, a shift in demand, or legal action, and Cleco Power’s ability to recover stranded costs associated with these events,

•changes in climate and weather conditions, including natural disasters such as wind and ice storms, hurricanes, floods, and droughts, and Cleco Power’s ability to recover restoration and stranded costs associated with these events,

•the ability of Cleco’s customers to pay their utility bills on time due to costs related to volatile fuel prices, severe weather recoveries, or the costs of other events that are passed through to Cleco Power’s customers,

•economic conditions in Cleco’s service areas, including inflation and the economy’s effects on customer demand for and payment of utility services,

•~~Cleco’s ability to recontract existing power purchase agreements or secure future power purchase agreements with wholesale customers,~~

•mechanical breakdowns or other incidents that could impair assets and disrupt operations of any of Cleco’s generation facilities, transmission and distribution systems, or other operations and may require Cleco to purchase replacement power or incur costs to repair the facilities,

•growth or decline of Cleco’s customer base, or decline in existing services, including the loss of key suppliers for fuel, materials, or services, or other disruptions to the supply chain,

•wholesale and retail competition, including alternative energy sources, growth in customer-owned power resource technologies that displace utility-supplied energy or that may be sold back to the utility, and alternative energy suppliers and delivery arrangements,

•blackouts or disruptions of interconnected transmission systems (the regional power grid),

•terrorist attacks, cyberattacks, or other malicious acts that may damage or disrupt operating or information technology systems,

•changes in technology costs that impede Cleco’s ability to effectively implement new information systems or to operate and maintain current production technology,

•changes in Cleco’s strategic business plans and/or key initiatives, which could be affected by any of the factors discussed herein,

•the impact of Cleco’s credit ratings, changes in interest rates, other capital market conditions, and global market conditions on financing through the issuance of debt and/or equity securities,

•adverse developments affecting financial institutions, including bank failures,

•changes to federal income tax laws, regulations, and interpretive guidance, including the IRA of 2022,

•failure to meet expectations and report progress on ESG initiatives and GHG targets, as well as the increased focus on and activism related to ESG, which could limit Cleco’s access to capital and/or financing,

•declining energy demand related to customer energy efficiency, conservation measures, technological advancements, or increased distributed generation,

•industry and geographic concentrations of Cleco’s counterparties, suppliers, and customers,

•volatility and illiquidity in wholesale energy markets,

•default or nonperformance on the part of any parties from whom Cleco purchases and/or sells capacity, energy, or fuel,


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

•Cleco Holdings’ and Cleco Power’s ability to remain in compliance with their respective debt covenants,

•the outcome of legal and regulatory proceedings and other contingencies,

•changes in actuarial assumptions, interest rates, and the actual return on plan assets for Cleco’s pension and other postretirement benefit plans,

•insufficient insurance coverage, more restrictive coverage terms, increasing insurance costs, and Cleco’s ability to obtain insurance,

•Cleco’s ability to remain in compliance with the commitments made to the LPSC in connection with the Cleco Cajun Transaction and the 2016 Merger,

•Cleco Holdings’ dependence on the earnings, dividends, or distributions from its subsidiaries to meet its debt obligations, and

•workforce factors, including aging workforce, changes in key members of management, availability of workers in a variety

of skill areas, and Cleco’s ability to attract, recruit, and retain qualified employees.

For more discussion of these factors and other factors that could cause actual results to differ materially from those contemplated in the Registrants’ forward-looking statements, see Part II, Item 1A, “Risk Factors” in ~~this report~~the Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and Part I, Item 1A, “Risk Factors” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

All subsequent written and oral forward-looking statements attributable to the Registrants, or persons acting on their

behalf, are expressly qualified in their entirety by the factors identified above.

Any forward-looking statement is considered only as of the date of this Quarterly Report on Form 10-Q and, except as required by law, the Registrants undertake no obligation to update any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, or other factors affecting such statements.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


PART I — FINANCIAL INFORMATION


ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

These unaudited condensed consolidated financial statements should be read in conjunction with Cleco’s Consolidated Financial Statements and Notes included in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2022. For more information on the basis of presentation, see “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Basis of Presentation.”


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

CLECO
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS) AT MAR. 31, 2023 AT DEC. 31, 2022
Assets
Current assets
Cash and cash equivalents $ 88,808 $ 48,041
Restricted cash and cash equivalents 15,579 23,549
Customer accounts receivable (less allowance for credit losses of $1,127 in 2023 and $1,147 in 2022) 39,578 72,646
Accounts receivable - affiliate 14,643 14,613
Other accounts receivable 33,007 35,406
Unbilled revenue 40,633 46,040
Fuel inventory, at average cost 91,695 57,078
Materials and supplies, at average cost 129,237 116,943
Energy risk management assets 1,060 2,570
Accumulated deferred fuel 5,910 57,881
Cash surrender value of company-/trust-owned life insurance policies 53,941 52,859
Prepayments 12,318 16,623
Regulatory assets 46,600 47,173
Assets held for sale - discontinued operations 164,046 191,609
Other current assets 1,652 838
Total current assets 738,707 783,869
Property, plant, and equipment
Property, plant, and equipment 4,638,039 4,601,977
Accumulated depreciation (798,308) (752,184)
Net property, plant, and equipment 3,839,731 3,849,793
Construction work in progress 137,193 114,310
Total property, plant, and equipment, net 3,976,924 3,964,103
Equity investment in investee 2,072 2,072
Goodwill 1,490,797 1,490,797
Prepayments 1,472 1,512
Operating lease right of use assets 22,113 22,636
Restricted cash and cash equivalents 110,504 109,415
Note receivable 12,687 12,908
Regulatory assets - deferred taxes, net 20,467 8,803
Regulatory assets 607,852 611,917
Intangible asset - securitization 408,882 413,123
Intangible assets - other 17,667 20,086
Assets held for sale - discontinued operations 635,584 787,925
Other deferred charges 26,351 24,584
Total assets $ 8,072,079 $ 8,253,750
The accompanying notes are an integral part of the condensed consolidated financial statements.
(Continued on next page)


CLECO

Condensed Consolidated Statements of Income (Unaudited)
	FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022
Operating revenue
Electric operations	$	554,717	$	659,871
Other operations	52,046		37,774

Gross operating revenue	606,763		697,645
Electric customer credits	(1,386)		(265)
Operating revenue, net	605,377		697,380
Operating expenses
Fuel used for electric generation	181,411		250,239
Purchased power	81,283		101,822
Other operations and maintenance	118,275		108,022
Depreciation and amortization	98,557		93,451
Taxes other than income taxes	32,036		25,677



Total operating expenses	511,562		579,211
Operating income	93,815		118,169
Interest income	1,940		1,809
Allowance for equity funds used during construction	2,806		1,740

Other expense, net	(252)		(8,747)
Interest charges
Interest charges, net	81,322		68,525
Allowance for borrowed funds used during construction	(1,066)		(737)
Total interest charges	80,256		67,788
Income from continuing operations before income taxes	18,053		45,183
Federal and state income tax benefit	(3,154)		(11,110)
Income from continuing operations, net of income taxes	21,207		56,293
(Loss) income from discontinued operations, net of income taxes	(77,899)		100,814
Net (loss) income	$	(56,692)	$	157,107
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

CLECO
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS) AT MAR. 31, 2023 AT DEC. 31, 2022
Liabilities and member’s equity
Liabilities
Current liabilities
Short-term debt $ 87,000 $ 109,000
Long-term debt and finance leases due within one year 180,606 340,867
Accounts payable 105,566 131,627
Accounts payable - affiliate 13,092 13,092
Customer deposits 57,623 57,851
Provision for rate refund 3,280 3,074
Taxes payable 38,115 16,905
Interest accrued 41,389 25,540
Energy risk management liabilities 9,499 4,864
Regulatory liabilities - deferred taxes, net 42,143 42,890
Deferred compensation 12,572 12,162
Storm reserves 9,523 9,409
Liabilities held for sale - discontinued operations 56,420 76,102
Other current liabilities 31,229 29,314
Total current liabilities 688,057 872,697
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net 784,347 820,300
Postretirement benefit obligations 200,699 200,665
Storm reserves 110,417 109,353
Asset retirement obligations 12,188 15,429
Operating lease liabilities 19,254 19,790
Liabilities held for sale - discontinued operations 75,203 94,467
Other deferred credits 44,416 34,888
Total long-term liabilities and deferred credits 1,246,524 1,294,892
Long-term debt and finance leases, net 3,294,875 3,139,094
Total liabilities 5,229,456 5,306,683
Commitments and contingencies (Note 14)
Member’s equity 2,842,623 2,947,067
Total liabilities and member’s equity $ 8,072,079 $ 8,253,750
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO

Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022
Net (loss) income	$	(56,692)	$	157,107
Other comprehensive (loss) income, net of tax
Postretirement benefits (loss) gain (net of tax benefit of $311 in 2023 and tax expense of $8 in 2022)	(845)		21

Total other comprehensive (loss) income, net of tax	(845)		21
Comprehensive (loss) income, net of tax	$	(57,537)	$	157,128
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Cash Flows (Unaudited)
FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS) 2023 2022
Operating activities
Net (loss) income $ (104,022) $ 155,744
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 75,265 77,075
Provision for credit losses 1,240 391
Unearned compensation expense 1,631 1,357
Allowance for equity funds used during construction (1,231) (931)
Loss (gain) on risk management assets and liabilities, net 63,300 (104,919)
Loss on classification as held for sale 96,000 —
Deferred lease revenue (2,301) (2,301)
Deferred income taxes (48,775) 24,766
Cash surrender value of company-/trust-owned life insurance (608) (2,460)
Changes in assets and liabilities
Accounts receivable 45,141 (10,398)
Unbilled revenue 5,407 2,971
Fuel inventory and materials and supplies (69,708) (16,794)
Prepayments 437 2,200
Accounts payable (38,070) (32,448)
Accounts payable - affiliate — (40,002)
Customer deposits 565 2,726
Regulatory assets and liabilities, net 2,115 4,155
Asset retirement obligation (3,522) 280
Deferred fuel recoveries 56,887 9,542
Other deferred accounts 1,434 405
Taxes accrued 21,501 (16,032)
Interest accrued 15,849 24,351
Energy risk management collateral (6,500) 26,300
Other operating 406 (6,863)
Net cash provided by operating activities 112,441 99,115
Investing activities
Additions to property, plant, and equipment (60,099) (40,199)
Other investing 496 491
Net cash used in investing activities (59,603) (39,708)
Financing activities
Draws on revolving credit facilities 41,000 —
Payments on revolving credit facilities (63,000) —
Repayment of long-term debt (3,204) —
Distributions to member — (10,000)
Other financing (241) (195)
Net cash used in financing activities (25,445) (10,195)
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents 27,393 49,212
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period 191,572 (1) 150,982
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period $ 218,965 (2) $ 200,194
Supplementary cash flow information
Interest paid, net of amount capitalized $ 24,358 $ 6,987
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment $ 5,839 $ 13,326
(1) Includes cash and cash equivalents of $48,041, current restricted cash and cash equivalents of $23,549, and non-current restricted cash and cash equivalents of $109,415. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $10,567.
(2) Includes cash and cash equivalents of $88,808, current restricted cash and cash equivalents of $15,579, and non-current restricted cash and cash equivalents of $110,504. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $4,074.
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO

Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Assets
Current assets
Cash and cash equivalents	$	71,857	$	48,041
Restricted cash and cash equivalents	22,671		23,549
Customer accounts receivable (less allowance for credit losses of $1,252 in 2023 and $1,147 in 2022)	43,622		72,646
Accounts receivable - affiliate	19,964		14,611
Other accounts receivable	30,625		35,406

Unbilled revenue	50,856		46,040
Fuel inventory, at average cost	106,734		57,078
Materials and supplies, at average cost	134,636		116,943
Energy risk management assets	7,672		2,570
Accumulated deferred fuel	5,050		57,881
Cash surrender value of company-/trust-owned life insurance policies	54,728		52,859
Prepayments	20,500		16,623
Regulatory assets	47,888		47,173
Assets held for sale - discontinued operations	222,548		191,609
Other current assets	876		838
Total current assets	840,227		783,867
Property, plant, and equipment
Property, plant, and equipment	4,694,757		4,601,977
Accumulated depreciation	(838,302)		(752,184)
Net property, plant, and equipment	3,856,455		3,849,793
Construction work in progress	132,628		114,310
Total property, plant, and equipment, net	3,989,083		3,964,103
Equity investment in investee	2,072		2,072
Goodwill	1,490,797		1,490,797
Prepayments	1,509		1,512
Operating lease right of use assets	21,441		22,636
Restricted cash and cash equivalents	111,109		109,415
Note receivable	12,460		12,908
Regulatory assets - deferred taxes, net	33,983		8,803
Regulatory assets	604,567		611,917
Intangible asset - securitization	407,571		413,123
Intangible assets - other	15,279		20,086
Assets held for sale - discontinued operations	611,449		787,925


Other deferred charges	30,000		24,585
Total assets	$	8,171,547	$	8,253,749
The accompanying notes are an integral part of the condensed consolidated financial statements.

(Continued on next page)


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

CLECO
Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
(THOUSANDS) MEMBERSHIP
INTEREST RETAINED
EARNINGS AOCI TOTAL
MEMBER’S
EQUITY
Balances, Dec. 31, 2021 $ 2,454,276 $ 523,509 $ (23,629) $ 2,954,156
Distributions to member — (10,000) — (10,000)
Net income — 155,744 — 155,744
Other comprehensive income, net of tax — — 14 14
Balances, Mar. 31, 2022 $ 2,454,276 $ 669,253 $ (23,615) $ 3,099,914
Balances, Dec. 31, 2022 $ 2,454,276 $ 492,732 $ 59 $ 2,947,067
Net loss — (104,022) — (104,022)
Other comprehensive loss, net of tax — — (422) (422)
Balances, Mar. 31, 2023 $ 2,454,276 $ 388,710 $ (363) $ 2,842,623
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO

Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Liabilities and member’s equity
Liabilities
Current liabilities
Short-term debt	$	120,000	$	109,000
Long-term debt and finance leases due within one year	371,758		340,867
Accounts payable	108,261		131,627
Accounts payable - affiliate	13,122		13,092
Customer deposits	57,924		57,851
Provision for rate refund	3,399		3,074
Taxes payable	56,120		16,905
Interest accrued	22,132		25,540

Energy risk management liabilities	1,519		4,864
Regulatory liabilities - deferred taxes, net	41,389		42,890
Deferred compensation	13,190		12,162
Storm reserves	9,639		9,409
Liabilities held for sale - discontinued operations	69,676		76,102
Other current liabilities	31,658		29,314
Total current liabilities	919,787		872,697
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	796,243		820,300

Postretirement benefit obligations	200,093		200,665


Storm reserves	109,637		109,353




Asset retirement obligations	11,578		15,429
Operating lease liabilities	18,557		19,790
Liabilities held for sale - discontinued operations	75,978		94,467
Other deferred credits	47,937		34,887
Total long-term liabilities and deferred credits	1,260,023		1,294,891
Long-term debt and finance leases, net	3,102,207		3,139,094
Total liabilities	5,282,017		5,306,682
Commitments and contingencies (Note 14)
Member’s equity	2,889,530		2,947,067
Total liabilities and member’s equity	$	8,171,547	$	8,253,749
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


CLECO

Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023			2022
Operating activities
Net (loss) income	$	(56,692)		$	157,107
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Depreciation and amortization	127,002			154,322
Provision for credit losses	2,146			1,210


Unearned compensation expense	4,641			2,380
Allowance for equity funds used during construction	(2,806)			(1,740)
Loss (gain) on energy risk management assets and liabilities, net	69,469			(89,991)
Loss on classification as held for sale	116,000			—
Deferred lease revenue	(2,301)			(4,603)
Deferred income taxes	(51,559)			17,522
Cash surrender value of company-/trust-owned life insurance	(889)			3,092
Changes in assets and liabilities
Accounts receivable	29,310			(49,606)
Accounts receivable, affiliate	(5,351)			(3,808)
Unbilled revenue	(4,816)			(11,002)
Fuel inventory and materials and supplies	(129,183)			(39,802)
Prepayments	(11,332)			(8,494)
Accounts payable	(31,200)			51,850
Accounts payable - affiliate	30			(40,664)
Customer deposits	2,219			6,034


Regulatory assets and liabilities, net	1,716			1,815
Asset retirement obligation	(4,520)			505
Deferred fuel recoveries	46,502			(38,992)
Other deferred accounts	(5,240)			(3,248)
Taxes accrued	40,297			32,616
Interest accrued	(3,408)			465
Energy risk management collateral	(6,500)			42,500

Other operating	824			(4,961)
Net cash provided by operating activities	124,359			174,507
Investing activities
Additions to property, plant, and equipment	(115,159)			(101,673)












Return of investment in company-owned life insurance	417			15,671
Other investing	1,177			891
Net cash used in investing activities	(113,565)			(85,111)
Financing activities
Draws on revolving credit facilities	96,000			55,000
Payments on revolving credit facilities	(85,000)			—
Issuances of long-term debt	—			424,946
Repayment of long-term debt	(3,204)			(325,000)
Payment of financing costs	—			(6,913)

Distributions to member	—			(132,838)
Other financing	(443)			(367)
Net cash provided by financing activities	7,353			14,828
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	18,147			104,224
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	191,572		(1)	150,982
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	209,719	(2)	$	255,206
(1) Includes cash and cash equivalents of $48,041, current restricted cash and cash equivalents of $23,549, and non-current restricted cash and cash equivalents of $109,415. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $10,567. (2) Includes cash and cash equivalents of $71,857, current restricted cash and cash equivalents of $22,671, and non-current restricted cash and cash equivalents of $111,109. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $4,082.

The accompanying notes are an integral part of the condensed consolidated financial statements.


(Continued on next page)


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


CLECO

Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022
Supplementary cash flow information
Interest paid, net of amount capitalized	$	85,393	$	64,035
Income taxes paid, net	$	2,162	$	—
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	6,558	$	5,626


Reduction in property, plant, and equipment due to securitization of capitalized storm costs	$	—	$	197,689



The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


CLECO

Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
(THOUSANDS)	MEMBERSHIP INTEREST		RETAINED EARNINGS		AOCI		TOTAL MEMBER’S EQUITY














Balances, Mar. 31, 2022	$	2,454,276	$	669,253	$	(23,615)	$	3,099,914

Distributions to member	—		(122,838)		—		(122,838)
Net income	—		1,363		—		1,363
Other comprehensive income, net of tax	—		—		7		7
Balances, June 30, 2022	$	2,454,276	$	547,778	$	(23,608)	$	2,978,446

Balances, Mar. 31, 2023	$	2,454,276	$	388,710	$	(363)	$	2,842,623


Net income	—		47,330		—		47,330
Other comprehensive loss, net of tax	—		—		(423)		(423)
Balances, June 30, 2023	$	2,454,276	$	436,040	$	(786)	$	2,889,530




















Balances, Dec. 31, 2021	$	2,454,276	$	523,509	$	(23,629)	$	2,954,156

Distributions to member	—		(132,838)		—		(132,838)
Net income	—		157,107		—		157,107
Other comprehensive income, net of tax	—		—		21		21
Balances, June 30, 2022	$	2,454,276	$	547,778	$	(23,608)	$	2,978,446

Balances, Dec. 31, 2022	$	2,454,276	$	492,732	$	59	$	2,947,067


Net loss	—		(56,692)		—		(56,692)
Other comprehensive loss, net of tax	—		—		(845)		(845)
Balances, June 30, 2023	$	2,454,276	$	436,040	$	(786)	$	2,889,530
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

These unaudited condensed consolidated financial statements should be read in conjunction with Cleco Power’s Consolidated Financial Statements and Notes included in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2022. For more information on the basis of presentation, see “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Basis of Presentation.”


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Income (Unaudited)
FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS) 2023 2022
Operating revenue
Electric operations $ 296,348 $ 296,097
Other operations 27,303 19,084
Affiliate revenue 1,688 1,459
Gross operating revenue 325,339 316,640
Electric customer credits (651) (136)
Operating revenue, net 324,688 316,504
Operating expenses
Fuel used for electric generation 118,611 100,582
Purchased power 40,438 50,410
Other operations and maintenance 53,988 48,729
Depreciation and amortization 50,733 45,239
Taxes other than income taxes 15,995 12,631
Total operating expenses 279,765 257,591
Operating income 44,923 58,913
Interest income 1,185 740
Allowance for equity funds used during construction 1,231 931
Other income (expense), net 1,306 (2,035)
Interest charges
Interest charges, net 24,855 19,185
Allowance for borrowed funds used during construction (517) (384)
Total interest charges 24,338 18,801
Income before income taxes 24,307 39,748
Federal and state income tax expense 1,490 724
Net income $ 22,817 $ 39,024
The accompanying notes are an integral part of the condensed consolidated financial statements.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

CLECO POWER
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS) 2023 2021
Net income $ 22,817 $ 39,024
Other comprehensive income, net of tax
Postretirement benefits gain (net of tax expense of $36 in 2023 and $113 in 2022) 96 306
Amortization of interest rate derivatives to earnings (net of tax expense of $23 in 2023 and 2022) 63 63
Total other comprehensive income, net of tax 159 369
Comprehensive income, net of tax $ 22,976 $ 39,393
The accompanying notes are an integral part of the condensed consolidated financial statements.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

CLECO POWER
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS) AT MAR. 31, 2023 AT DEC. 31, 2022
Assets
Utility plant and equipment
Property, plant, and equipment $ 5,772,553 $ 5,736,526
Accumulated depreciation (2,126,082) (2,082,153)
Net property, plant, and equipment 3,646,471 3,654,373
Construction work in progress 136,127 113,470
Total utility plant and equipment, net 3,782,598 3,767,843
Current assets
Cash and cash equivalents 52,652 14,703
Restricted cash and cash equivalents 15,579 23,549
Customer accounts receivable (less allowance for credit losses of $1,127 in 2023 and $1,147 in 2022) 39,578 72,646
Accounts receivable - affiliate 2,433 3,771
Other accounts receivable 31,517 33,444
Unbilled revenue 40,633 46,040
Fuel inventory, at average cost 91,695 57,078
Materials and supplies, at average cost 129,237 116,943
Energy risk management assets 1,060 2,570
Accumulated deferred fuel 5,910 57,881
Cash surrender value of company-owned life insurance policies 10,182 9,471
Prepayments 8,664 11,765
Regulatory assets 38,864 39,438
Other current assets 856 838
Total current assets 468,860 490,137
Equity investment in investee 2,072 2,072
Prepayments 1,457 1,493
Operating lease right of use assets 22,108 22,628
Restricted cash and cash equivalents 110,481 109,392
Note receivable 12,687 12,908
Regulatory assets - deferred taxes, net 20,467 8,803
Regulatory assets 490,430 491,978
Intangible asset - securitization 408,882 413,123
Other deferred charges 25,605 23,796
Total assets $ 5,345,647 $ 5,344,173
The accompanying notes are an integral part of the condensed consolidated financial statements.
(Continued on next page)


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

CLECO POWER
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS) AT MAR. 31, 2023 AT DEC. 31, 2022
Liabilities and member’s equity
Member’s equity $ 2,045,888 $ 2,022,912
Long-term debt and finance leases, net 1,778,878 1,786,447
Total capitalization 3,824,766 3,809,359
Current liabilities
Short-term debt — 45,000
Long-term debt and finance leases due within one year 115,006 110,344
Accounts payable 99,036 119,435
Accounts payable - affiliate 11,252 12,448
Customer deposits 57,623 57,851
Provision for rate refund 3,280 3,074
Taxes payable 34,981 15,277
Interest accrued 22,833 15,276
Energy risk management liabilities 9,499 4,864
Regulatory liabilities - deferred taxes, net 42,143 42,890
Storm reserves 9,523 9,409
Other current liabilities 19,577 18,360
Total current liabilities 424,753 454,228
Commitments and contingencies (Note 14)
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net 775,783 770,127
Postretirement benefit obligations 137,891 137,754
Storm reserves 110,417 109,353
Asset retirement obligations 12,062 15,301
Operating lease liabilities 19,254 19,790
Other deferred credits 40,721 28,261
Total long-term liabilities and deferred credits 1,096,128 1,080,586
Total liabilities and member’s equity $ 5,345,647 $ 5,344,173
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO POWER

Condensed Consolidated Statements of Income (Unaudited)
	FOR THE THREE MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022
Operating revenue
Electric operations	$	263,176	$	368,614
Other operations	24,741		18,686
Affiliate revenue	1,635		1,628
Gross operating revenue	289,552		388,928
Electric customer credits	(736)		(129)
Operating revenue, net	288,816		388,799
Operating expenses
Fuel used for electric generation	62,800		149,658
Purchased power	40,845		51,412
Other operations and maintenance	57,386		52,277
Depreciation and amortization	43,722		44,299
Taxes other than income taxes	14,342		11,547



Total operating expenses	219,095		309,193
Operating income	69,721		79,606
Interest income	579		1,035
Allowance for equity funds used during construction	1,574		808
Other expense, net	(1,005)		(2,225)
Interest charges
Interest charges, net	24,732		21,659
Allowance for borrowed funds used during construction	(549)		(354)
Total interest charges	24,183		21,305
Income before income taxes	46,686		57,919
Federal and state income tax expense	3,247		3,214
Net income	$	43,439	$	54,705
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Cash Flows (Unaudited)
FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS) 2023 2022
Operating activities
Net income $ 22,817 $ 39,024
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 52,194 46,726
Provision for credit losses 1,240 391
Allowance for equity funds used during construction (1,231) (931)
Deferred income taxes (7,380) 651
Changes in assets and liabilities
Accounts receivable 33,064 (1,883)
Accounts receivable - affiliate 1,813 12,672
Unbilled revenue 5,407 2,971
Fuel inventory and materials and supplies (46,325) (13,153)
Prepayments 2,930 3,763
Accounts payable (14,768) (24,600)
Accounts payable - affiliate (1,291) (49,657)
Customer deposits 565 2,726
Regulatory assets and liabilities, net 1,618 3,658
Asset retirement obligation (3,505) 146
Deferred fuel recoveries 56,887 9,542
Other deferred accounts 5,613 4,752
Taxes accrued 19,249 12,649
Interest accrued 7,557 16,183
Other operating 688 (4,837)
Net cash provided by operating activities 137,142 60,793
Investing activities
Additions to property, plant, and equipment (58,066) (38,492)
Other investing 413 469
Net cash used in investing activities (57,653) (38,023)
Financing activities
Payments on revolving credit facility (45,000) —
Repayment of long-term debt (3,204) —
Other financing (217) (195)
Net cash used in financing activities (48,421) (195)
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents 31,068 22,575
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period 147,644 (1) 87,341
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period $ 178,712 (2) $ 109,916
Supplementary cash flow information
Interest paid, net of amount capitalized $ 16,005 $ 1,039
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment $ 5,459 $ 13,286
(1) Includes cash and cash equivalents of $14,703, current restricted cash and cash equivalents of $23,549, and non-current restricted cash and cash equivalents of $109,392.
(2) Includes cash and cash equivalents of $52,652, current restricted cash and cash equivalents of $15,579, and non-current restricted cash and cash equivalents of $110,481.
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO POWER

Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE THREE MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022
Net income	$	43,439	$	54,705
Other comprehensive income, net of tax
Postretirement benefits gain (net of tax expense of $36 in 2023 and $113 in 2022)	96		307
Amortization of interest rate derivatives to earnings (net of tax expense of $23 in 2023 and 2022)	63		63
Total other comprehensive income, net of tax	159		370
Comprehensive income, net of tax	$	43,598	$	55,075
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
(THOUSANDS) MEMBER’S
EQUITY AOCI TOTAL
MEMBER’S
EQUITY
Balances, Dec. 31, 2021 $ 1,966,720 $ (18,183) $ 1,948,537
Net income 39,024 — 39,024
Other comprehensive income, net of tax — 369 369
Balances, Mar. 31, 2022 $ 2,005,744 $ (17,814) $ 1,987,930
Balances, Dec. 31, 2022 $ 2,031,277 $ (8,365) $ 2,022,912
Net income 22,817 — 22,817
Other comprehensive income, net of tax — 159 159
Balances, Mar. 31, 2023 $ 2,054,094 $ (8,206) $ 2,045,888
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO POWER

Condensed Consolidated Statements of Income (Unaudited)
	FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022
Operating revenue
Electric operations	$	559,524	$	664,711
Other operations	52,044		37,771
Affiliate revenue	3,323		3,087
Gross operating revenue	614,891		705,569
Electric customer credits	(1,386)		(265)
Operating revenue, net	613,505		705,304
Operating expenses
Fuel used for electric generation	181,411		250,239
Purchased power	81,283		101,822
Other operations and maintenance	111,377		101,006
Depreciation and amortization	94,454		89,538
Taxes other than income taxes	30,337		24,178



Total operating expenses	498,862		566,783
Operating income	114,643		138,521
Interest income	1,764		1,775
Allowance for equity funds used during construction	2,806		1,740
Other income (expense), net	301		(4,261)
Interest charges
Interest charges, net	49,587		40,845
Allowance for borrowed funds used during construction	(1,066)		(737)
Total interest charges	48,521		40,108
Income before income taxes	70,993		97,667
Federal and state income tax expense	4,737		3,938
Net income	$	66,256	$	93,729
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


CLECO POWER

Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022
Net income	$	66,256	$	93,729
Other comprehensive income, net of tax
Postretirement benefits gain (net of tax expense of $71 in 2023 and $226 in 2022)	192		613
Amortization of interest rate derivatives to earnings (net of tax expense of $46 in 2023 and 2022)	126		126
Total other comprehensive income, net of tax	318		739
Comprehensive income, net of tax	$	66,574	$	94,468
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


CLECO POWER

Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Assets
Utility plant and equipment
Property, plant, and equipment	$	5,828,485	$	5,736,526
Accumulated depreciation	(2,163,184)		(2,082,153)
Net property, plant, and equipment	3,665,301		3,654,373
Construction work in progress	131,539		113,470
Total utility plant and equipment, net	3,796,840		3,767,843
Current assets
Cash and cash equivalents	30,518		14,703
Restricted cash and cash equivalents	22,671		23,549
Customer accounts receivable (less allowance for credit losses of $1,252 in 2023 and $1,147 in 2022)	43,622		72,646
Accounts receivable - affiliate	2,435		3,771
Other accounts receivable	28,765		33,444

Unbilled revenue	50,856		46,040
Fuel inventory, at average cost	106,734		57,078
Materials and supplies, at average cost	134,636		116,943
Energy risk management assets	7,672		2,570
Accumulated deferred fuel	5,050		57,881
Cash surrender value of company-owned life insurance policies	9,630		9,471
Prepayments	13,199		11,765
Regulatory assets	40,152		39,438
Other current assets	876		838
Total current assets	496,816		490,137
Equity investment in investee	2,072		2,072
Prepayments	1,422		1,493
Operating lease right of use assets	21,438		22,628
Restricted cash and cash equivalents	111,086		109,392
Note receivable	12,460		12,908
Regulatory assets - deferred taxes, net	33,983		8,803
Regulatory assets	489,661		491,978
Intangible asset - securitization	407,571		413,123


Other deferred charges	29,312		23,796
Total assets	$	5,402,661	$	5,344,173
The accompanying notes are an integral part of the condensed consolidated financial statements.

(Continued on next page)


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


CLECO POWER

Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Liabilities and member’s equity
Member’s equity	$	2,064,486	$	2,022,912
Long-term debt and finance leases, net	1,654,151		1,786,447
Total capitalization	3,718,637		3,809,359
Current liabilities
Short-term debt	25,000		45,000
Long-term debt and finance leases due within one year	239,904		110,344
Accounts payable	98,740		119,435
Accounts payable - affiliate	13,352		12,448
Customer deposits	57,924		57,851
Provision for rate refund	3,399		3,074

Taxes payable	50,770		15,277
Interest accrued	11,628		15,276

Energy risk management liabilities	1,519		4,864
Regulatory liabilities - deferred taxes, net	41,389		42,890
Storm reserves	9,639		9,409
Other current liabilities	20,799		18,360
Total current liabilities	574,063		454,228
Commitments and contingencies (Note 14)
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	790,265		770,127

Postretirement benefit obligations	137,501		137,754


Storm reserves	109,637		109,353



Asset retirement obligations	11,452		15,301
Operating lease liabilities	18,557		19,790
Other deferred credits	42,549		28,261
Total long-term liabilities and deferred credits	1,109,961		1,080,586
Total liabilities and member’s equity	$	5,402,661	$	5,344,173
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


CLECO POWER

Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023			2022
Operating activities
Net income	$	66,256		$	93,729
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	97,305			93,589

Provision for credit losses	2,146			1,210



Allowance for equity funds used during construction	(2,806)			(1,740)
Deferred income taxes	(7,792)			4,334

Changes in assets and liabilities
Accounts receivable	29,659			(23,192)
Accounts receivable - affiliate	2,286			11,978
Unbilled revenue	(4,816)			(11,002)
Fuel inventory and materials and supplies	(66,595)			(39,493)
Prepayments	(1,093)			404
Accounts payable	(19,923)			29,774
Accounts payable - affiliate	663			(58,837)
Customer deposits	2,219			6,034



Asset retirement obligation	(4,361)			234
Deferred fuel recoveries	46,502			(38,992)
Other deferred accounts	755			1,340
Taxes accrued	34,574			23,668
Interest accrued	(3,648)			456
Other operating	2,906			(2,824)
Net cash provided by operating activities	174,237			90,670
Investing activities
Additions to property, plant, and equipment	(110,480)			(98,162)








Other investing	1,497			869
Net cash used in investing activities	(108,983)			(97,293)
Financing activities
Draws on revolving credit facility	25,000			55,000
Payments on revolving credit facility	(45,000)			—
Issuances of long-term debt	—			424,946
Repayment of long-term debt	(3,204)			(325,000)

Payment of financing costs	—			(6,906)

Distributions to member	(25,000)			(52,000)
Other financing	(419)			(367)
Net cash (used in) provided by financing activities	(48,623)			95,673
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	16,631			89,050
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	147,644		(1)	87,341
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	164,275	(2)	$	176,391

Supplementary cash flow information
Interest paid, net of amount capitalized	$	50,692		$	35,480

Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	5,908		$	5,345


Reduction in property, plant, and equipment due to securitization of capitalized storm costs	$	—		$	197,689


(1) Includes cash and cash equivalents of $14,703, current restricted cash and cash equivalents of $23,549, and non-current restricted cash and cash equivalents of $109,392. (2) Includes cash and cash equivalents of $30,518, current restricted cash and cash equivalents of $22,671, and non-current restricted cash and cash equivalents of $111,086.

The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


CLECO POWER

Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
(THOUSANDS)	MEMBERSHIP INTEREST		AOCI		TOTAL MEMBER’S EQUITY














Balances, Mar. 31, 2022	$	2,005,744	$	(17,814)	$	1,987,930

Distributions to member	(52,000)		—		(52,000)
Net income	54,705		—		54,705
Other comprehensive income, net of tax	—		370		370
Balances, June 30, 2022	$	2,008,449	$	(17,444)	$	1,991,005

Balances, Mar. 31, 2023	$	2,054,094	$	(8,206)	$	2,045,888

Net income	43,439		—		43,439
Distributions to member	(25,000)		—		(25,000)
Other comprehensive income, net of tax	—		159		159
Balances, June 30, 2023	$	2,072,533	$	(8,047)	$	2,064,486




















Balances, Dec. 31, 2021	$	1,966,720	$	(18,183)	$	1,948,537

Distributions to member	(52,000)		—		(52,000)
Net income	93,729		—		93,729
Other comprehensive income, net of tax	—		739		739
Balances, June 30, 2022	$	2,008,449	$	(17,444)	$	1,991,005

Balances, Dec. 31, 2022	$	2,031,277	$	(8,365)	$	2,022,912

Net income	66,256		—		66,256
Distributions to member	(25,000)		—		(25,000)
Other comprehensive income, net of tax	—		318		318
Balances, June 30, 2023	$	2,072,533	$	(8,047)	$	2,064,486
The accompanying notes are an integral part of the condensed consolidated financial statements.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


Index to Applicable Notes to the Unaudited Condensed Consolidated Financial Statements of Registrants

Note 1	Summary of Significant Accounting Policies	Cleco and Cleco Power
Note 2	Recent Authoritative Guidance	Cleco and Cleco Power
Note 3	Discontinued Operations	Cleco
Note 4	Revenue Recognition	Cleco and Cleco Power
Note 5	Regulatory Assets and Liabilities	Cleco and Cleco Power
Note 6	Fair Value Accounting Instruments	Cleco and Cleco Power
Note 7	Derivative Instruments	Cleco and Cleco Power
Note 8	Debt	Cleco and Cleco Power
Note 9	Pension Plan and Employee Benefits	Cleco and Cleco Power
Note 10	Income Taxes	Cleco and Cleco Power
Note 11	Segment Disclosures	Cleco
Note 12	Regulation and Rates	Cleco and Cleco Power
Note 13	Variable Interest Entities	Cleco and Cleco Power
Note 14	Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees	Cleco and Cleco Power
Note 15	Affiliate Transactions	Cleco and Cleco Power
Note 16	Intangible Assets	Cleco and Cleco Power
Note 17	Accumulated Other Comprehensive Loss	Cleco and Cleco Power


Notes to the Unaudited Condensed Consolidated Financial Statements


Note 1 — Summary of Significant Accounting Policies

Discontinued Operations

In 2022, Cleco Holdings engaged in a strategic review process related to its investment in Cleco Cajun. In March 2023, Cleco Holdings’ management, with the support of its Board of Managers, committed to a plan of action for the disposition of the Cleco Cajun Sale Group, with a sale probable and subject to customary regulatory and Board of Managers approvals. As a result, Cleco Holdings’ management determined that the criteria under GAAP for the Cleco Cajun Sale Group to be classified as held for sale were met and will represent a strategic shift that will have a major effect on Cleco’s future operations and financial results. Therefore, the Cleco Cajun Sale Group is presented as discontinued operations. The financial information for historical periods provided in this report has been recast to present the results of operations and financial position of the Cleco Cajun Sale Group as discontinued operations. Cleco has elected to present cash flows of discontinued operations combined with cash flows of continuing operations. Unless otherwise noted, the notes to these condensed consolidated financial statements exclude amounts related to discontinued operations, assets held for sale, and liabilities held for sale for all periods presented. For more information, see Note 3 — “Discontinued Operations.”

Principles of Consolidation

The accompanying condensed consolidated financial statements of Cleco include the accounts of Cleco and its majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Following the formation of Cleco Securitization I and the closing of the storm recovery securitization financing on June 22, 2022, Cleco Power became the primary beneficiary of Cleco Securitization I, and as a result, the financial statements of Cleco Securitization I are consolidated with the financial statements of Cleco Power. For additional information about

Cleco Securitization I, see Note 13 — “Variable Interest Entities.”

Basis of Presentation

The condensed consolidated financial statements of Cleco and Cleco Power have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements. The year-end condensed consolidated balance sheet data was derived from audited financial statements and adjusted for discontinued operations. Because the interim condensed consolidated financial statements and the accompanying notes do not include all of the information and notes required by GAAP for annual financial statements, the condensed consolidated financial statements and other information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments that are necessary for a fair statement of the financial position and results of operations of Cleco and Cleco Power. Amounts reported in Cleco’s and Cleco Power’s interim financial statements are not necessarily indicative of amounts expected for the annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices, discrete income tax items, and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

estimates. For information on recent authoritative guidance and its effect on financial results, see Note 2 — “Recent Authoritative Guidance.” For information on discontinued operations, see Note 3 — “Discontinued Operations.”

Restricted Cash and Cash Equivalents

Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes.

Cleco’s and Cleco Power’s restricted cash and cash equivalents consisted of the following:


Cleco	Cleco					Cleco
(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Current	Current					Current
Cleco Power’s storm restoration costs - Hurricane Ida	Cleco Power’s storm restoration costs - Hurricane Ida	$	9,523	$	9,409	Cleco Power’s storm restoration costs - Hurricane Ida	$	9,639	$	9,409
Cleco Securitization I’s operating expenses and storm recovery bond issuance costs and debt service	Cleco Securitization I’s operating expenses and storm recovery bond issuance costs and debt service	6,056		14,140		Cleco Securitization I’s operating expenses and storm recovery bond issuance costs and debt service	13,032		14,140
Total current	Total current	15,579		23,549		Total current	22,671		23,549
Non-current	Non-current					Non-current
Diversified Lands’ mitigation escrow	Diversified Lands’ mitigation escrow	23		23		Diversified Lands’ mitigation escrow	23		23
Cleco Power’s future storm restoration costs	Cleco Power’s future storm restoration costs	104,352		103,306		Cleco Power’s future storm restoration costs	104,886		103,306
Cleco Power’s storm restoration costs - Hurricane Ida	Cleco Power’s storm restoration costs - Hurricane Ida	6,129		6,086		Cleco Power’s storm restoration costs - Hurricane Ida	6,200		6,086

Total non-current	Total non-current	110,504		109,415		Total non-current	111,109		109,415
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	$	126,083	$	132,964	Total restricted cash and cash equivalents	$	133,780	$	132,964


Cleco Power	Cleco Power					Cleco Power
(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Current	Current					Current
Storm restoration costs - Hurricane Ida	Storm restoration costs - Hurricane Ida	$	9,523	$	9,409	Storm restoration costs - Hurricane Ida	$	9,639	$	9,409
Cleco Securitization I’s operating expenses and storm recovery bond issuance costs	Cleco Securitization I’s operating expenses and storm recovery bond issuance costs	6,056		14,140		Cleco Securitization I’s operating expenses and storm recovery bond issuance costs	13,032		14,140
Total current	Total current	15,579		23,549		Total current	22,671		23,549
Non-current	Non-current					Non-current
Future storm restoration costs	Future storm restoration costs	104,352		103,306		Future storm restoration costs	104,886		103,306
Storm restoration costs - Hurricane Ida	Storm restoration costs - Hurricane Ida	6,129		6,086		Storm restoration costs - Hurricane Ida	6,200		6,086

Total non-current	Total non-current	110,481		109,392		Total non-current	111,086		109,392
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	$	126,060	$	132,941	Total restricted cash and cash equivalents	$	133,757	$	132,941

Reserves for Credit Losses

Customer accounts receivable are recorded at the invoiced amount and do not bear interest. Customer accounts receivable are generally considered to become past due 20 days after the billing date. Cleco recognizes write-offs within the allowance for credit losses once all recovery methods have been exhausted. It is the policy of management to review accounts receivable and unbilled revenue monthly using a reserve matrix based on historical bad debt write-offs, as well as current and forecasted economic conditions, to establish a credit loss estimate. Management’s historical credit loss analysis included periods of economic recessions, natural disasters, and temporary changes to collection policies. Due to the critical necessity of electricity, none of these past events have significantly impacted Cleco’s credit loss rates.

As a result of the market price volatility of natural gas ~~experienced~~ throughout 2022 and during the first ~~quarter~~and second quarters of 2023, Cleco has experienced significant increases to the pass-through fuel component of retail customer energy bills. Due to

these increased customer fuel costs, along with the impacts of a 40-year high inflation rate, Cleco has experienced increases in credit loss reserves. These factors have not been and are not expected to be material to Cleco’s results of operations, financial condition, or cash flows.

The tables below present the changes in the allowance for credit losses by receivable for Cleco and Cleco Power:

* Loan held at Diversified Lands that was fully reserved at December 31, 2020.

(THOUSANDS) ACCOUNTS
RECEIVABLE
OTHER*
TOTAL
Balances, Dec. 31, 2021 $ 1,302 $ 1,638 $ 2,940
Current period provision 391 — 391
Charge-offs (1,089) — (1,089)
Recovery 398 — 398
Balances, Mar. 31, 2022 $ 1,002 $ 1,638 $ 2,640


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


	FOR THE THREE MONTHS ENDED JUNE 30, 2022						FOR THE SIX MONTHS ENDED JUNE 30, 2022
(THOUSANDS)	ACCOUNTS RECEIVABLE		OTHER*		TOTAL		ACCOUNTS RECEIVABLE		OTHER*		TOTAL
Balances, beginning of period	$	1,002	$	1,638	$	2,640	$	1,302	$	1,638	$	2,940

Current period provision	819		—		819		1,210		—		1,210
Charge-offs	(916)		—		(916)		(2,005)		—		(2,005)
Recovery	285		—		285		683		—		683
Balances, June 30, 2022	$	1,190	$	1,638	$	2,828	$	1,190	$	1,638	$	2,828

* Loan held at Diversified Lands that was fully reserved at December 31, 2020.


~~Cleco Power~~
~~(THOUSANDS)~~	ACCOUNTS RECEIVABLE
~~Balance, Dec. 31, 2022~~	$	~~1,147~~

~~Current period provision~~	~~1,240~~
~~Charge-offs~~	~~(1,637)~~
~~Recovery~~	~~377~~
~~Balance, Mar. 31, 2023~~	$	~~1,127~~


Cleco Power
	FOR THE THREE MONTHS ENDED JUNE 30, 2023		FOR THE SIX MONTHS ENDED JUNE 30, 2023
(THOUSANDS)	ACCOUNTS RECEIVABLE
Balances, beginning of period	$	1,127	$	1,147

Current period provision	906		2,146
Charge-offs	(1,108)		(2,746)
Recovery	327		705
Balances, June 30, 2023	$	1,252	$	1,252


~~(THOUSANDS)~~	ACCOUNTS RECEIVABLE
~~Balance, Dec. 31, 2021~~	$	~~1,302~~

~~Current period provision~~	~~391~~
~~Charge-offs~~	~~(1,089)~~
~~Recovery~~	~~398~~
~~Balance, Mar. 31, 2022~~	$	~~1,002~~


	FOR THE THREE MONTHS ENDED JUNE 30, 2022		FOR THE SIX MONTHS ENDED JUNE 30, 2022
(THOUSANDS)	ACCOUNTS RECEIVABLE
Balances, beginning of period	$	1,002	$	1,302

Current period provision	819		1,210
Charge-offs	(916)		(2,005)
Recovery	285		683
Balances, June 30, 2022	$	1,190	$	1,190


Note 2 — Recent Authoritative Guidance

In March 2023, FASB issued guidance that applies to leases between entities under common control. The guidance provides a practical expedient for determining whether an arrangement between entities under common control is a lease as well as the classification of the lease. In addition, the leasehold improvements amortization period is to be determined by the useful life to the common group ~~not~~rather than the term of the lease. The new guidance is effective for fiscal years beginning after December 15, 2023. Cleco has arrangements between entities under common control and management is evaluating the impacts of this guidance on the results of operations, financial condition, and cash flows of the Registrants.


Note 3 — Discontinued Operations

In March 2023, Cleco Holdings’ management, with the support of its Board of Managers, committed to a plan of action for the disposition of the Cleco Cajun Sale Group, with a sale


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

probable and subject to customary regulatory and Board of Managers approvals. As a result, Cleco Holdings’ management determined that the criteria under GAAP for the Cleco Cajun Sale Group to be classified as held for sale were met and will represent a strategic shift that will have a major effect on Cleco’s future operations and financial results. Therefore, the results of operations and financial position of the Cleco Cajun Sale Group are presented as discontinued operations, and the financial information for historical periods

provided in this report has been recast to reflect this presentation. Certain expenses incurred by the Cleco Cajun Sale Group as a result of common services provided by Support Group are reflected in Cleco’s results of continuing operations due to the expected ongoing nature of those expenses. In addition, revenue recognized by Cleco Power from transmission services provided to the Cleco Cajun Sale Group is no longer eliminated upon consolidation of Cleco's financial statements and is reflected in Cleco’s results of continuing operations due to the expected ongoing nature of these services.

In February 2019 in connection with the approval of the Cleco Cajun Transaction, Cleco made commitments to the LPSC that included the repayment of $400.0 million of Cleco Holdings’ debt by December 31, 2024. Proceeds from the divestiture of the Cleco Cajun Sale Group must be used to satisfy the LPSC commitment. At ~~March 31,~~June 30, 2023, $132.3 million of that debt remains outstanding. Interest expense on that debt is included in discontinued operations.

As a result of Cleco’s determination that the held for sale criteria for the Cleco Cajun Sale Group were met, ~~at March 31, 2023,~~ Cleco determined that the estimated fair value less the estimated cost to sell the Cleco Cajun Sale Group was less than the carrying value of the Cleco Cajun Sale Group. This resulted in an impairment charge of $96.0 million ~~that~~in the first quarter of 2023 and an additional impairment charge of $20.0 million in the second quarter of 2023. The impairment charges reduced the carrying value of the Cleco Cajun Sale Group to its estimated fair value less estimated cost to sell. The additional impairment ischarge was primarily due to changes in assumptions related to the expected sale proceeds and closing date. The impairment charges are recognized in Loss from discontinued operations, net of income taxes on Cleco's Condensed Consolidated Statement of Income. The estimated fair value was based on a weighted average of potential sale scenarios that were determined through the income and market approaches. The fair value estimates involved a number of judgments and assumptions including the future performance of the Cleco Cajun Sale Group through the expected divestiture date, the expected sale proceeds and the timing of such proceeds, replacement interconnection value, and the weighted average cost of capital or discount rate. The fair value measurement of the Cleco Cajun Sale Group is classified as Level 3 in the fair value hierarchy.

The following table presents the amounts that have been reclassified from continuing operations and included in discontinued operations within Cleco’s Condensed Consolidated Statements of Income for the three and six months ended ~~March 31,~~June 30, 2023, and 2022:

FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS) 2023 2022
Operating revenue, net
Electric operations $ 108,761 $ 103,633
Other operations 34,714 35,611
Operating revenue, net 143,475 139,244
Operating expenses
Fuel used for electric generation 87,599 (103,087)
Purchased power 60,625 68,108
Other operations and maintenance 23,370 19,056
Depreciation and amortization 14,513 21,890
Total operating expenses 186,107 5,967
Operating (loss) income (42,632) 133,277
Other income, net 134 87
Interest, net (1,786) (865)
Loss on classification as held for sale (96,000) —
(Loss) income from discontinued operations before income taxes (140,284) 132,499
Federal and state income tax (benefit) expense (38,113) 1,947
(Loss) income from discontinued operations, net of income taxes $ (102,171) $ 130,552


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


	FOR THE THREE MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022		2023		2022
Operating revenue, net
Electric operations	$	123,462	$	126,089	$	232,223	$	229,722
Other operations	26,469		36,712		61,182		72,324

Operating revenue, net	149,931		162,801		293,405		302,046
Operating expenses
Fuel used for electric generation	23,548		18,954		111,147		(84,134)
Purchased power	47,962		95,522		108,587		163,630
Other operations and maintenance	23,945		21,942		47,313		41,000
Depreciation and amortization	502		21,929		15,015		43,819

Total operating expenses	95,957		158,347		282,062		164,315
Operating income	53,974		4,454		11,343		137,731


Other (expense) income, net	(3)		(4)		131		84



Interest, net	(1,924)		(1,085)		(3,710)		(1,951)
Loss on classification as held for sale	(20,000)		—		(116,000)		—
Income (loss) from discontinued operations before income taxes	32,047		3,365		(108,236)		135,864

Federal and state income tax expense (benefit)	7,775		33,103		(30,337)		35,050
Income (loss) from discontinued operations, net of income taxes	$	24,272	$	(29,738)	$	(77,899)	$	100,814

The following table presents the assets and liabilities of the Cleco Cajun Sale Group that have been reclassified as held for sale within Cleco’s Condensed Consolidated Balance Sheets as of ~~March 31,~~June 30, 2023, and December 31, 2022:


(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Cash, cash equivalents, and restricted cash equivalents	Cash, cash equivalents, and restricted cash equivalents	$	4,074	$	10,567	Cash, cash equivalents, and restricted cash equivalents	$	4,082	$	10,567

Accounts receivable	Accounts receivable	49,309		60,750		Accounts receivable	61,986		60,750

Fuel inventory, at average cost	Fuel inventory, at average cost	56,157		33,153		Fuel inventory, at average cost	95,147		33,153
Materials and supplies, at average cost	Materials and supplies, at average cost	34,574		34,195		Materials and supplies, at average cost	34,790		34,195
Energy risk management assets	Energy risk management assets	46,970		106,164		Energy risk management assets	42,752		106,164

Property, plant, and equipment, net	Property, plant, and equipment, net	624,598		650,936		Property, plant, and equipment, net	637,165		650,936
Prepayments	Prepayments	26,431		23,601		Prepayments	20,515		23,601

Intangible assets - other	Intangible assets - other	32,569		36,548		Intangible assets - other	32,569		36,548

Other assets	Other assets	20,948		23,620		Other assets	20,991		23,620
Loss recognized on classification as held for sale	Loss recognized on classification as held for sale	(96,000)		—		Loss recognized on classification as held for sale	(116,000)		—

Total assets held for sale - discontinued operations	Total assets held for sale - discontinued operations	$	799,630	$	979,534	Total assets held for sale - discontinued operations	$	833,997	$	979,534

Accounts payable	Accounts payable	$	43,318	$	60,586	Accounts payable	$	52,455	$	60,586

Deferred lease revenue	Deferred lease revenue	19,945		22,246		Deferred lease revenue	19,945		22,246
Intangible liabilities	Intangible liabilities	12,695		13,956		Intangible liabilities	12,695		13,956
Asset retirement obligations	Asset retirement obligations	44,661		63,725		Asset retirement obligations	45,212		63,725

Other liabilities	Other liabilities	11,004		10,056		Other liabilities	15,347		10,056

Total liabilities held for sale - discontinued operations	Total liabilities held for sale - discontinued operations	$	131,623	$	170,569	Total liabilities held for sale - discontinued operations	$	145,654	$	170,569


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

Cleco has elected to present cash flows of discontinued operations combined with cash flows of continuing operations.

The following table presents the cash flows from discontinued operations related to the Cleco Cajun Sale Group for the three and six months ended ~~March 31,~~June 30, 2023, and 2022:


		FOR THE THREE MONTHS ENDED MAR. 31,					FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	(THOUSANDS)	2023		2022		(THOUSANDS)	2023		2022
Net cash (used in) provided by operating activities - discontinued operations	Net cash (used in) provided by operating activities - discontinued operations	$	(4,804)	$	27,771	Net cash (used in) provided by operating activities - discontinued operations	$	(2,454)	$	2,865
Net cash used in investing activities - discontinued operations	Net cash used in investing activities - discontinued operations	$	(1,689)	$	(1,471)	Net cash used in investing activities - discontinued operations	$	(4,031)	$	(2,839)


Note 4 — Revenue Recognition

Revenue from Contracts with Customers

On September 1, 2022, Cleco Power began billing and collecting a storm recovery surcharge from its retail customers.

This surcharge represents the recovery of costs incurred by Cleco Power as a result of Hurricanes Laura, Delta, Zeta, and Ida and Winter Storms Uri and Viola, as well as interest and associated expenses. Cleco Power remits the collected storm recovery surcharge to Cleco Securitization I to service Cleco Securitization I’s storm recovery bonds. The storm recovery surcharge will continue to be billed and collected from Cleco Power’s retail customers through the life of the Cleco Securitization I storm recovery bonds.

Disaggregated Revenue

Operating revenue, net for the three and six months ended ~~March 31,~~June 30, 2023, and 2022 was as follows:

FOR THE THREE MONTHS ENDED MAR. 31, 2023
(THOUSANDS) CLECO POWER OTHER ELIMINATIONS TOTAL
Revenue from contracts with customers
Retail revenue
Residential (1)
$ 107,196 $ — $ — $ 107,196
Commercial (1)
77,657 — — 77,657
Industrial (1)
49,410 — — 49,410
Other retail (1)
4,574 — — 4,574
Electric customer credits (651) — — (651)
Total retail revenue 238,186 — — 238,186
Wholesale, net 56,683 (1) (2,420) (2) — 54,263
Transmission 12,530 — — 12,530
Other 5,549 — — 5,549
Affiliate (3)
1,688 27,514 (29,202) —
Total revenue from contracts with customers 314,636 25,094 (29,202) 310,528
Revenue unrelated to contracts with customers
Securitization 9,226 — — 9,226
Other 826 (4) 1 — 827
Total revenue unrelated to contracts with customers 10,052 1 — 10,053
Operating revenue, net $ 324,688 $ 25,095 $ (29,202) $ 320,581


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


	FOR THE THREE MONTHS ENDED JUNE 30, 2023
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers
Retail revenue
Residential (1)	$	103,144		$	—		$	—	$	103,144
Commercial (1)	68,067			—			—		68,067
Industrial (1)	37,615			—			—		37,615
Other retail (1)	4,070			—			—		4,070

Electric customer credits	(736)			—			—		(736)
Total retail revenue	212,160			—			—		212,160
Wholesale, net	48,481		(1)	(2,387)		(2)	—		46,094
Transmission	13,955			—			—		13,955
Other	4,551			—			—		4,551
Affiliate (3)	1,635			28,902			(30,537)		—
Total revenue from contracts with customers	280,782			26,515			(30,537)		276,760
Revenue unrelated to contracts with customers
Securitization	6,236			—			—		6,236
Other	1,798		(4)	1			—		1,799
Total revenue unrelated to contracts with customers	8,034			1			—		8,035
Operating revenue, net	$	288,816		$	26,516		$	(30,537)	$	284,795

(1) Includes fuel recovery revenue.

(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.

(3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation.

(4) Realized gains associated with FTRs.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

(1) Includes fuel recovery revenue.

(2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements.

(3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation.

(4) Realized gains associated with FTRs.

CLECO

CLECO POWER

2023 2ND QUARTER FORM 10-Q


	FOR THE SIX MONTHS ENDED JUNE 30, 2023
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers
Retail revenue
Residential (1)	$	210,340		$	—		$	—	$	210,340
Commercial (1)	145,724			—			—		145,724
Industrial (1)	87,025			—			—		87,025
Other retail (1)	8,644			—			—		8,644
Electric customer credits	(1,386)			—			—		(1,386)
Total retail revenue	450,347			—			—		450,347
Wholesale, net	105,164		(1)	(4,807)		(2)	—		100,357
Transmission, net	26,485			—			—		26,485
Other	10,100			—			—		10,100
Affiliate (3)	3,323			56,416			(59,739)		—
Total revenue from contracts with customers	595,419			51,609			(59,739)		587,289
Revenue unrelated to contracts with customers
Securitization	15,462			—			—		15,462
Other	2,624		(4)	2			—		2,626
Total revenue unrelated to contracts with customers	18,086			2			—		18,088
Operating revenue, net	$	613,505		$	51,611		$	(59,739)	$	605,377
(1) Includes fuel recovery revenue. (2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements. (3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation. (4) Realized gains associated with FTRs.


	FOR THE SIX MONTHS ENDED JUNE 30, 2022
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers
Retail revenue
Residential (1)	$	244,236		$	—		$	—	$	244,236
Commercial (1)	160,870			—			—		160,870
Industrial (1)	96,462			—			—		96,462
Other retail (1)	8,426			—			—		8,426

Electric customer credits	(265)			—			—		(265)
Total retail revenue	509,729			—			—		509,729
Wholesale, net	147,298		(1)	(4,840)		(2)	—		142,458
Transmission, net	27,580		(4)	—			—		27,580
Other	10,191			1			—		10,192
Affiliate (6)	3,087			53,145			(56,232)		—
Total revenue from contracts with customers	697,885			48,306			(56,232)		689,959
Revenue unrelated to contracts with customers
Other	7,419		(4)	2			—		7,421
Total revenue unrelated to contracts with customers	7,419			2			—		7,421
Operating revenue, net	$	705,304		$	48,308		$	(56,232)	$	697,380
(1) Includes fuel recovery revenue. (2) Amortization of intangible assets related to Cleco Power’s wholesale power supply agreements. (3) Includes interdepartmental rents and support services. This revenue is eliminated upon consolidation. (4) Realized gains associated with FTRs.

Cleco and Cleco Power have unsatisfied performance obligations under contracts with electric cooperatives, retail customers, and municipalities with durations ranging between 2 and 12 years that primarily relate to stand-ready obligations as part of fixed capacity minimums. At ~~March 31,~~June 30, 2023, Cleco and Cleco Power had ~~$297.3~~$300.1 million of unsatisfied fixed performance obligations that will be recognized as revenue over the term of such contracts as the stand-ready obligation to provide energy is provided.


Note 5 — Regulatory Assets and Liabilities

Cleco Power recognizes an asset for certain costs capitalized or deferred for recovery from customers and recognizes a liability for amounts expected to be returned to customers or collected for future expected costs. Cleco Power records these assets and liabilities based on regulatory approval and

management’s ongoing assessment that it is probable these items will be recovered or refunded through the ratemaking process.

Under the current regulatory environment, Cleco Power believes these regulatory assets will be fully recoverable; however, if in the future, as a result of regulatory changes or


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

competition, Cleco Power’s ability to recover these regulatory assets would no longer be probable, then to the extent that such regulatory assets were determined not to be recoverable, Cleco Power would be required to write-down such assets. In addition, potential deregulation of the industry, or possible

future changes in the method of rate regulation of Cleco Power, could require discontinuance of the application of the authoritative guidance on regulated operations.

The following table summarizes Cleco Power’s regulatory assets and liabilities:


Cleco Power
					REMAINING RECOVERY PERIOD (YRS.)
(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Regulatory assets
Acadia Unit 1 acquisition costs	$	1,754	$	1,807	16.5
Accumulated deferred fuel (1)	5,050		57,881		Various
Affordability study	11,026		11,715		8
AFUDC equity gross-up	61,929		63,477		Various	(2)
AMI deferred revenue requirement	1,227		1,499		2.75
AROs (8)	18,636		17,218
Bayou Vista to Segura transmission project deferred revenue requirement	—		2,510
Coughlin transaction costs	799		815		26
COVID-19 executive order (8)	2,953		2,953
Deferred lignite and mine closure costs (7)	135,104		133,587
Deferred storm restoration costs - Hurricane Delta (6)	88		109
Deferred storm restoration costs - Hurricane Ida (7)	9,639		9,409
Deferred storm restoration costs - Hurricane Laura (6)	367		457
Deferred storm restoration costs - Hurricane Zeta (6)	7		9

Deferred taxes, net	33,983		8,803		Various
Dolet Hills Power Station closure costs (7)	147,238		147,082

Energy efficiency	—		235
Financing costs (1)	6,272		6,456		Various	(3)
Interest costs	3,085		3,210		Various	(2)
Madison Unit 3 property taxes	13,150		13,038		Various	(9)
Non-service cost of postretirement benefits	14,878		14,810		Various	(2)
Other	15,508		14,114		Various
Postretirement costs	47,317		47,317		Various	(4)
Production operations and maintenance expenses	9,010		10,443		Various	(5)
Rodemacher Unit 2 deferred costs (8)	15,635		12,645

St. Mary Clean Energy Center	3,480		4,350		2

Training costs	5,696		5,774		36.5
Tree trimming costs	5,015		6,377		1.75
Total regulatory assets	568,846		598,100
Regulatory liabilities


Deferred taxes, net	(41,389)		(42,890)		Various

Storm reserves	(119,276)		(118,762)
Total regulatory liabilities	(160,665)		(161,652)
Total regulatory assets, net	$	408,181	$	436,448
(1) Represents regulatory assets for past expenditures that were not earning a return on investment at June 30, 2023, and December 31, 2022. All other assets are earning a return on investment. (2) Amortized over the estimated lives of the respective assets. (3) Amortized over the terms of the related debt issuances. (4) Amortized over the average service life of the remaining plan participants. (5) Deferral is recovered over the following three-year regulatory period. (6) From June 1, 2021, through August 31, 2022, these were being recovered through the interim storm recovery rate. The storm recovery surcharge became effective on September 1, 2022. (7) Currently not in a recovery period. The balance remaining represents amounts under a prudency review by the LPSC. (8) Currently not in a recovery period. (9) Beginning July 1, 2021, property taxes paid for the year ended December 31, are being amortized over the subsequent 12 months beginning July 1.


CLECO
CLECO POWER						2023 ~~1ST QUARTER FORM 10-Q~~

Cleco Power
REMAINING
RECOVERY
PERIOD
(YRS.)
(THOUSANDS) AT MAR. 31, 2023 AT DEC. 31, 2022
Regulatory assets
Acadia Unit 1 acquisition costs $ 1,781 $ 1,807 16.75
Accumulated deferred fuel (1)
5,910 57,881 Various
Affordability study 11,371 11,715 8.25
AFUDC equity gross-up 62,703 63,477 Various (2)
AMI deferred revenue requirement 1,363 1,499 3
AROs (8)
17,847 17,218
Bayou Vista to Segura transmission project deferred revenue requirement 1,255 2,510 0.25
Coughlin transaction costs 807 815 26.25
COVID-19 executive order (8)
2,953 2,953
Deferred lignite and mine closure costs (8)
133,973 133,587
Deferred storm restoration costs - Hurricane Delta (6)
109 109
Deferred storm restoration costs - Hurricane Ida (7)
9,523 9,409
Deferred storm restoration costs - Hurricane Laura (6)
457 457
Deferred storm restoration costs - Hurricane Zeta (6)
9 9
Deferred taxes, net 20,467 8,803 Various
Dolet Hills Power Station closure costs (8)
147,137 147,082
Energy efficiency — 235
Financing costs (1)
6,364 6,456 Various (3)
Interest costs 3,148 3,210 Various (2)
Madison Unit 3 property taxes 13,121 13,038 Various (9)
Non-service cost of postretirement benefits 14,954 14,810 Various (2)
Other 13,921 14,114 Various
Postretirement costs 47,317 47,317 Various (4)
Production operations and maintenance expenses 9,731 10,443 Various (5)
Rodemacher Unit 2 deferred costs (8)
14,101 12,645
St. Mary Clean Energy Center 3,915 4,350 2.25
Training costs 5,735 5,774 36.75
Tree trimming costs 5,699 6,377 2
Total regulatory assets 555,671 598,100
Regulatory liabilities
Deferred taxes, net (42,143) (42,890) Various
Storm reserves (119,940) (118,762)
Total regulatory liabilities (162,083) (161,652)
Total regulatory assets, net $ 393,588 $ 436,448
(1) Represents regulatory assets for past expenditures that were not earning a return on investment at March 31, 2023, and December 31, 2022. All other assets are earning a return on investment.
(2) Amortized over the estimated lives of the respective assets.
(3) Amortized over the terms of the related debt issuances.
(4) Amortized over the average service life of the remaining plan participants.
(5) Deferral is recovered over the following three-year regulatory period.
(6) From June 1, 2021, through August 31, 2022, these were being recovered through the interim storm recovery rate. The storm recovery surcharge became effective on September 1, 2022.
(7) Currently not in a recovery period. The balance remaining represents amounts under a prudency review by the LPSC.
(8) Currently not in a recovery period.
(9) Beginning July 1, 2021, property taxes paid for the year ended December 31, are being amortized over the subsequent 12 months beginning July 1.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST~~2ND QUARTER FORM 10-Q

The following table summarizes Cleco’s net regulatory assets and liabilities:


Cleco	Cleco					Cleco
(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Total Cleco Power regulatory assets, net	Total Cleco Power regulatory assets, net	$	393,588	$	436,448	Total Cleco Power regulatory assets, net	$	408,181	$	436,448
2016 Merger adjustments *	2016 Merger adjustments *					2016 Merger adjustments *
Fair value of long-term debt	Fair value of long-term debt	102,897		104,748		Fair value of long-term debt	101,047		104,748
Postretirement costs	Postretirement costs	10,939		11,436		Postretirement costs	10,442		11,436
Financing costs	Financing costs	6,818		6,904		Financing costs	6,732		6,904
Debt issuance costs	Debt issuance costs	4,504		4,587		Debt issuance costs	4,421		4,587
Total Cleco regulatory assets, net	Total Cleco regulatory assets, net	$	518,746	$	564,123	Total Cleco regulatory assets, net	$	530,823	$	564,123

* Cleco regulatory assets include acquisition accounting adjustments as a result of the 2016 Merger.

Accumulated Deferred Fuel

Cleco Power is allowed to recover the cost of fuel used for electric generation and power purchased for utility customers through the LPSC established FAC or related wholesale contract provisions, which enable Cleco Power to pass on to its customers substantially all such expenses.

At June 30, 2023, Cleco Power recorded a decrease of $52.8 million in the associated regulatory asset as a result of lower fuel costs.


Note 6 — Fair Value Accounting Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in a principal or most advantageous market. Fair value is a market-based measurement that is determined based on inputs, which refer broadly to assumptions that market participants use in pricing assets or liabilities. These inputs can be readily observable, market corroborated, or generally unobservable inputs. Cleco makes certain assumptions it believes that market participants would use in pricing assets or liabilities, including assumptions about risks such as the risks inherent in valuation techniques and risks associated with inputs to those valuation techniques. Credit risk of Cleco and its counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves, the impact of which were immaterial at ~~March 31,~~June 30, 2023, and December 31, 2022. Cleco’s valuation techniques maximize the use of observable market-based inputs and minimize the use of unobservable inputs.

A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value in three broad levels. The fair value hierarchy gives the highest priority to quoted prices, unadjusted, in active markets for

identical assets or liabilities and the lowest priority to unobservable inputs. In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. All assets and liabilities are required to be classified

in their entirety based on the lowest level of input that is significant to the fair value measurement in its entirety. Assessing the significance of a particular input may require judgment considering factors specific to the asset or liability and may affect the valuation of the asset or liability and its placement within the fair value hierarchy. Significant increases or decreases in any of those inputs in isolation could result in a significantly different fair value measurement. Cleco classifies fair value balances based on the fair value hierarchy defined as follows:

•Level 1 — unadjusted quoted prices in active markets for identical assets or liabilities that Cleco can observe as of the reporting date.

•Level 2 — inputs other than quoted prices included within Level 1 that are similar and directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

•Level 3 — unobservable inputs for assets or liabilities whose fair value is estimated based on internally developed models or methodologies using inputs that are generally less readily observable and supported by little, if any, market activity at the measurement date. Unobservable inputs are developed based on the best available information and subject to cost-benefit constraints.

Cleco applies the provisions of the fair value measurement standard to its non-recurring, non-financial measurements including business combinations as well as impairment related to goodwill and other long-lived assets. For information on the impairment related to discontinued operations, see Note 3 — “Discontinued Operations.”

Fair Value Measurements on a Recurring Basis

The amounts reflected in Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets at ~~March 31,~~June 30, 2023, and December 31, 2022, for cash equivalents, restricted cash equivalents, accounts receivable, other accounts receivable, short-term debt, and accounts payable approximate fair value because of their short-term nature.

The following tables disclose the fair value of financial assets and liabilities measured on a recurring basis on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. These amounts are presented on a gross basis.

Cleco
FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS) AT MAR. 31, 2023 QUOTED PRICES IN ACTIVE MARKETS
FOR IDENTICAL
ASSETS
(LEVEL 1) SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2) SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3) AT DEC. 31, 2022 QUOTED PRICES IN ACTIVE MARKETS
FOR IDENTICAL
ASSETS
(LEVEL 1) SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2) SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)
Asset description
Money market funds $ 208,771 $ 208,771 $ — $ — $ 172,741 $ 172,741 $ — $ —
FTRs 837 — — 837 2,570 — — 2,570
Natural gas derivatives 223 — 223 — — — — —
Total assets $ 209,831 $ 208,771 $ 223 $ 837 $ 175,311 $ 172,741 $ — $ 2,570
Liability description
FTRs $ 204 $ — $ — $ 204 $ 294 $ — $ — $ 294
Natural gas derivatives 9,295 — 9,295 — 4,570 — 4,570 —
Total liabilities $ 9,499 $ — $ 9,295 $ 204 $ 4,864 $ — $ 4,570 $ 294


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


Cleco Power
	FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT JUNE 30, 2023		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2022		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset description
Short-term investments	$	158,483	$	158,483	$	—	$	—	$	139,752	$	139,752	$	—	$	—
FTRs	7,330		—		—		7,330		2,570		—		—		2,570
Natural gas derivatives	916		—		916		—		—		—		—		—
Total assets	$	166,729	$	158,483	$	916	$	7,330	$	142,322	$	139,752	$	—	$	2,570
Liability description
FTRs	$	871	$	—	$	—	$	871	$	294	$	—	$	—	$	294
Natural gas derivatives	648		—		648		—		4,570		—		4,570		—
Total liabilities	$	1,519	$	—	$	648	$	871	$	4,864	$	—	$	4,570	$	294

Cleco has consistently applied the Level 2 and Level 3 fair value techniques between comparative fiscal periods. During the ~~three~~six months ended ~~March 31,~~June 30, 2023, and the year ended December 31, 2022, Cleco did not experience any transfers into or out of Level 3 of the fair value hierarchy.

~~Money Market Funds~~Short-term Investments

At June 30, 2023, Cleco and Cleco Power had short-term investments in money market funds and treasury bills that have a maturity of three months or less when purchased. At December 31, 2022, Cleco and Cleco Power had short-term investments in money market funds that ~~have~~had a maturity of three months or less when purchased.

The following tables present the ~~money market funds~~short-term investments as recorded on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets at ~~March 31,~~June 30, 2023, and December 31, 2022:


Cleco	Cleco					Cleco
(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Cash and cash equivalents	Cash and cash equivalents	$	82,690	$	39,779	Cash and cash equivalents	$	65,894	$	39,779
Current restricted cash and cash equivalents	Current restricted cash and cash equivalents	$	15,578	$	23,548	Current restricted cash and cash equivalents	$	22,671	$	23,548
Non-current restricted cash and cash equivalents	Non-current restricted cash and cash equivalents	$	110,503	$	109,414	Non-current restricted cash and cash equivalents	$	111,107	$	109,414

Cleco Power
(THOUSANDS) AT MAR. 31, 2023 AT DEC. 31, 2022
Cash and cash equivalents $ 46,923 $ 6,813
Current restricted cash and cash equivalents $ 15,578 $ 23,548
Non-current restricted cash and cash equivalents $ 110,481 $ 109,391


Cleco Power
(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Cash and cash equivalents	$	24,727	$	6,813
Current restricted cash and cash equivalents	$	22,671	$	23,548
Non-current restricted cash and cash equivalents	$	111,085	$	109,391

FTRs

FTRs are financial instruments used to provide a financial hedge to manage the risk of transmission congestion charges

between MISO nodes in MISO’s Day-Ahead Energy Market. Cleco is awarded and/or purchases FTRs in auctions facilitated by MISO. FTRs are derivatives not designated as hedging instruments for accounting purposes.

FTRs are valued using MISO’s monthly auction prices as a price index reference (Level 3). Unrealized gains or losses are deferred as a component of Accumulated deferred fuel on the balance sheet in accordance with regulatory policy, and at settlement, realized gains or losses are included in Cleco Power’s FAC and reflected on customers’ bills as a component of the fuel charge.

The following table summarizes the net changes in the net fair value of FTR assets and liabilities classified as Level 3 in the fair value hierarchy for Cleco and Cleco Power:

FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS) 2023 2022
Beginning balance $ 2,276 $ 4,918
Unrealized (losses) gains*
(24) (263)
Purchases (64) 292
Settlements (1,555) (4,380)
Ending balance $ 633 $ 567
* Unrealized gains (losses) are reported through Accumulated deferred fuel on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheet.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


	FOR THE THREE MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022		2023		2022
Balances, beginning of period	$	633	$	567	$	2,276	$	4,918
Unrealized (losses) gains*	(211)		4,267		(211)		4,267
Purchases	8,087		6,577		8,023		6,869
Settlements	(2,050)		(1,273)		(3,629)		(5,916)
Balances, June 30, 2023	$	6,459	$	10,138	$	6,459	$	10,138
* Unrealized gains (losses) are reported through Accumulated deferred fuel on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheet.

The following table quantifies the significant unobservable inputs used in developing the fair value of Level 3 positions for Cleco and Cleco Power as of ~~March 31,~~June 30, 2023, and December 31, 2022:

Natural Gas Derivatives

Cleco ~~enters~~may enter into physical and financial ~~natural gas commodity~~fixed price or options contracts ~~from time to time.~~that financially settle or are delivered at a future date. Management has not elected to apply hedge accounting to these contracts as allowed under applicable accounting standards. ~~Physical instruments include fixed price physical supply or index contracts. Financial instruments include swap contracts.~~ Cleco Power’s natural gas

derivative contracts are marked-to-market with the resulting unrealized gain or loss recorded as a component of Accumulated deferred fuel on the balance sheet. At settlement, realized gains or losses are included in Cleco Power’s FAC and reflected on customer’s bills as a component of the fuel charge.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

Fair Value Measurements on a Nonrecurring Basis

The following tables summarize the carrying value and estimated market value of Cleco’s and Cleco Power’s financial instruments not measured at fair value on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets:


Cleco	Cleco									Cleco
		AT MAR. 31, 2023				AT DEC. 31, 2022					AT JUNE 30, 2023				AT DEC. 31, 2022
(THOUSANDS)	(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE		(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	Long-term debt	$	3,477,581	$	3,254,766	$	3,482,556	$	3,180,208	Long-term debt	$	3,475,808	$	3,185,371	$	3,482,556	$	3,180,208

* The carrying value of long-term debt does not include deferred issuance costs of ~~$15.5~~$15.0 million at ~~March 31,~~June 30, 2023, and $16.2 million at December 31, 2022.


Cleco Power	Cleco Power									Cleco Power
		AT MAR. 31, 2023				AT DEC. 31, 2022					AT JUNE 30, 2023				AT DEC. 31, 2022
(THOUSANDS)	(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE		(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	Long-term debt	$	1,892,384	$	1,877,170	$	1,895,508	$	1,825,192	Long-term debt	$	1,892,462	$	1,834,453	$	1,895,508	$	1,825,192

* The carrying value of long-term debt does not include deferred issuance costs of ~~$11.9~~$11.6 million at ~~March 31,~~June 30, 2023, and $12.3 million at December 31, 2022.

In order to fund capital requirements, Cleco may issue fixed and variable rate long-term debt with various tenors. The fair value of this class fluctuates as the market interest rates for fixed and variable rate debt with similar tenors and credit ratings change. The fair value of the debt could also change from period to period due to changes in the credit rating of the Cleco entity by which the debt was issued. The fair value of

long-term debt is classified as Level 2 in the fair value hierarchy.

Concentrations of Credit Risk

At ~~March 31,~~June 30, 2023, and December 31, 2022, Cleco and Cleco Power were exposed to concentrations of credit risk through their short-term investments classified as cash equivalents and restricted cash equivalents. If the ~~money market funds~~short-term investments failed to perform under the terms of the investments, Cleco and Cleco Power would be exposed to a loss of the invested amounts. Collateral on these types of investments is not required. ~~The Level 1 money market funds asset consists of a single class.~~ In order to capture interest income and minimize risk, cash is invested ~~in money market funds that invest~~ primarily in short-term securities issued by the U.S. government to maintain liquidity and achieve the goal of a net asset value of a dollar. ~~The risks associated with this class are counterparty risk of the fund manager and risk of price volatility associated with the underlying securities of the fund.~~

When Cleco enters into commodity derivative or physical commodity transactions directly with market participants, Cleco may be exposed to counterparty credit risk. Cleco is exposed to counterparty credit risk when a counterparty fails to meet their financial obligations causing Cleco to potentially incur replacement cost losses. Cleco enters into master

agreements with counterparties that govern the risk of credit default and allow for collateralization above prenegotiated thresholds to help mitigate potential losses. Alternatively, Cleco may be required to provide credit support with respect to any open trading contracts that Cleco has entered into or may enter into in the future. The amount of credit support that Cleco may be required to provide at any point in the future is dependent on the amount of the initial contract, changes in the market price, changes in open contracts, changes in the amounts counterparties owe to Cleco, and any prenegotiated unsecured thresholds agreed to in the master contract. Changes in any of these factors could cause the amount of requested credit support to increase or decrease.

Note 7 — Derivative Instruments

In the normal course of business, Cleco ~~is exposed to a number of market risks. Cleco Power has limited exposure to market price risk because it operates primarily under cost-based rate regulation; however, Cleco~~ utilizes derivative instruments, such as natural gas derivatives and FTRs, to mitigate volatility of overall fuel and purchased power costs. For Cleco Power, recovery of these costs is included in its FAC and reflected on customers’ bills as a component of the fuel charge.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

Cleco has not elected to designate any of its current instruments as an accounting hedge. At ~~March 31,~~June 30, 2023, ~~and at December 31, 2022,~~ there was no collateral posted with or received from counterparties that was netted on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. At December 31, 2022, cash collateral received from counterparties by Cleco Cajun was $6.5 million, all of which is included in Assets held for sale on Cleco’s Condensed Consolidated Balance Sheet. The following table presents the fair values of derivative instruments and their respective line items as recorded on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets at ~~March 31,~~June 30, 2023, and at December 31, 2022:

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

(THOUSANDS)

BALANCE SHEET LINE ITEM

AT MAR. 31, 2023

AT DEC. 31, 2022

(THOUSANDS)

BALANCE SHEET LINE ITEM

AT JUNE 30, 2023

AT DEC. 31, 2022

Commodity-related contracts

FTRs

Current

Energy risk management assets

837

2,570

Current

Energy risk management assets

7,330

2,570

Current

Energy risk management liabilities

(204)

(294)

Current

Energy risk management liabilities

(871)

(294)

Natural gas derivatives

Current

Energy risk management assets

223

—

Current

Energy risk management assets

342

—

Non-current

Energy risk management assets

574

—

Current

Energy risk management liabilities

(9,295)

(4,570)

Current

Energy risk management liabilities

(648)

(4,570)

Commodity-related contracts, net

(8,439)

(2,294)

Commodity-related contracts, net

6,727

(2,294)

The following table presents the effect of derivatives not designated as hedging instruments on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income for the three and six months ended ~~March 31,~~June 30, 2023, and 2022:


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

Natural gas derivatives(2)

Natural gas derivatives(2) (3)

The following table presents the volume of commodity-related derivative contracts outstanding at ~~March 31,~~June 30, 2023, and December 31, 2022, for Cleco and Cleco Power:

TOTAL VOLUME OUTSTANDING

(THOUSAND)

UNIT OF MEASURE

AT MAR. 31, 2023

AT DEC. 31, 2022

(THOUSAND)

UNIT OF MEASURE

AT JUNE 30, 2023

AT DEC. 31, 2022

Commodity-related contracts

FTRs

MWh

3,517

9,085

FTRs

MWh

20,554

9,085

Natural gas derivatives

MMBtus

14,480

4,840

Natural gas derivatives

MMBtus

31,615

4,840


Note 8 — Debt

On February 17, 2023, Cleco Holdings and Cleco Power amended their respective revolving credit facilities and bank term loans to transition the benchmark interest rate from LIBOR to SOFR.

On May 1, 2023, Cleco Holdings amended certain terms of the supplemental indenture governing its $165.0 million senior notes due in 2023. As a result, the interest rate of the

senior notes changed to a floating interest rate equal to SOFR plus 1.725% and the maturity date was extended from May 1, 2023, to May 1, 2025.

At June 30, 2023, and December 31, 2022, Cleco’s long-term debt and finance leases outstanding due within one year was $371.8 million and $340.9 million, respectively. The increase of $30.9 million is primarily due to the reclassification of $125.0 million of Cleco Power’s bank term loan due in May 2024, $66.7 million of Cleco Holdings’ bank term loan due in May 2024, and an additional $4.6 million of scheduled principal payments on Cleco Securitization I’s storm recovery bonds. These increases are partially offset by the reclassification of Cleco Holdings’ $165.0 million senior notes due in 2023 to long-term debt as a result of the extension of the maturity date of such senior notes to May 1, 2025.

At June 30, 2023, and December 31, 2022, Cleco Power’s long-term debt and finance leases outstanding due within one year was $239.9 million and $110.3 million, respectively. The increase of $129.6 million is primarily due to the reclassification of Cleco Power’s $125.0 million bank term loan due in May


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

2024 and an additional $4.6 million of scheduled principal payments on Cleco Securitization I’s storm recovery bonds.


Note 9 — Pension Plan and Employee Benefits

Pension Plan and Other Benefits Plan

Employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Based on the

funding assumptions at December 31, 2022, management estimates that pension contributions totaling $74.5 million will be required through 2027. Cleco expects to make a ~~$26.0~~$25.7 million minimum required contribution to the pension plan in 2024. Cleco ~~has~~is not ~~made, and does not expect~~required to make any contributions to the pension plan in 2023.

Cleco Power is the plan sponsor and Support Group is the plan administrator. Benefits under the plan reflect an employee’s years of service, age at retirement, and accrued benefit at retirement.

Cleco’s retirees may be eligible to receive Other Benefits. Dependents of Cleco’s retirees may also be eligible to receive Other Benefits with the exception of life insurance benefits.

The non-service components of net periodic pension and Other Benefits cost are included in Other income (expense), net within Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income. The components of net periodic pension and Other Benefits cost for the three and six months ended ~~March 31,~~June 30, 2023, and 2022 were as follows:



	PENSION BENEFITS				OTHER BENEFITS
	FOR THE SIX MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022		2023		2022
Components of periodic benefit costs
Service cost	$	2,347	$	4,086	$	729	$	1,092
Interest cost	13,211		9,920		1,132		736
Expected return on plan assets	(14,772)		(12,354)		—		—
Amortizations

Net loss (gain)	—		6,168		(25)		596
Net periodic benefit cost	$	786	$	7,820	$	1,836	$	2,424

Because Cleco Power is the pension plan sponsor and the related trust holds the assets, the net unfunded status of the pension plan is reflected at Cleco Power. The liability of Cleco’s other subsidiaries is transferred, with a like amount of assets, to Cleco Power monthly. The expense of the pension plan related to Cleco’s other subsidiaries for the three and sixmonths ended ~~March 31,~~June 30, 2023, ~~and 2022,~~ was $0.4 million and $0.8 million, respectively. The expense of the pension plan related to Cleco’s other subsidiaries for the three and sixmonths ended June 30, 2022, was $0.7 million and $1.4 million, respectively.

Cleco Holdings is the plan sponsor for the other benefit plans. There are no assets set aside in a trust, and the liabilities are reported on the individual subsidiaries’ financial statements. The expense related to other benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and six months ended ~~March 31,~~June 30, 2023, ~~and 2022,~~ was $0.9 million and $1.7 million, respectively. The expense related to other benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and six months ended June 30, 2022, was $1.1 million and $2.2 million, respectively. The current and non-current portions of

the Other Benefits liability for Cleco and


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

Cleco Power at ~~March 31,~~June 30, 2023, and December 31, 2022, were as follows:


Cleco	Cleco					Cleco
(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Current	Current	$	5,017	$	5,017	Current	$	5,017	$	5,017
Non-current	Non-current	$	38,089	$	38,366	Non-current	$	37,172	$	38,366


Cleco Power	Cleco Power					Cleco Power
(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Current	Current	$	4,310	$	4,310	Current	$	4,310	$	4,310
Non-current	Non-current	$	29,846	$	30,082	Non-current	$	29,082	$	30,082

Certain Cleco officers are covered by SERP. Cleco does not fund the SERP liability, but instead pays for current benefits out of cash available of the respective company of the employed officer. Because the SERP is a non-qualified plan, Cleco has purchased life insurance policies on certain SERP participants as a mechanism to provide a source of funding. These policies are held in a rabbi trust formed by Cleco Power. The rabbi trust is the named beneficiary of the life insurance policies and,


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

therefore, receives the proceeds upon the death of the insured participants. The life insurance policies may be used to reimburse Cleco for benefits paid from general funds, pay the SERP participants’ death benefits, or pay future SERP payments. Market conditions could have a significant impact on the cash surrender value of these life insurance policies. Because SERP is a non-qualified plan, the assets of the trust could be used to satisfy general creditors of Cleco Power in the event of insolvency. Cleco Power is the plan sponsor and Support Group is the plan administrator.

The non-service components of net periodic benefit cost related to SERP are included in Other income (expense), net within Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income. The components of the net periodic benefit cost related to SERP for the three and sixmonths ended ~~March 31,~~June 30, 2023, and 2022 were as follows:


		FOR THE THREE MONTHS ENDED MAR. 31,				FOR THE THREE MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	(THOUSANDS)	2023		2022			(THOUSANDS)	2023		2022		2023		2022
Components of periodic benefit costs	Components of periodic benefit costs						Components of periodic benefit costs
Service cost	Service cost	$	35	$	57		Service cost	$	35	$	57	$	71	$	113
Interest cost	Interest cost	901		670			Interest cost	901		670		1,802		1,340
Amortizations	Amortizations						Amortizations
Prior period service credit	Prior period service credit	(54)		(54)			Prior period service credit	(54)		(54)		(107)		(107)
Net (gain) loss	Net (gain) loss	(15)		262			Net (gain) loss	(15)		262		(32)		524
Net periodic benefit cost	Net periodic benefit cost	$	867	$	935		Net periodic benefit cost	$	867	$	935	$	1,734	$	1,870

The expense related to SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income for ~~both of~~ the three and sixmonths ended ~~March 31,~~June 30, 2023, was $0.1 million and $0.2 million, respectively. The expense related to SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income for the three and sixmonths ended June 30, 2022, was $0.1 ~~million.~~million and $0.3 million, respectively.

Liabilities relating to SERP are reported on the individual subsidiaries’ financial statements. The current and non-current

portions of the SERP liability for Cleco and Cleco Power at ~~March 31,~~June 30, 2023, and December 31, 2022, were as follows:


Cleco	Cleco					Cleco
(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Current	Current	$	4,713	$	4,713	Current	$	4,713	$	4,713
Non-current	Non-current	$	63,561	$	63,714	Non-current	$	63,409	$	63,714

Cleco’s 401(k) Plan is intended to provide active, eligible employees with voluntary, long-term savings and investment opportunities. The 401(k) Plan is a defined contribution plan and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974. In accordance with the 401(k) Plan, employer contributions are made in the form of cash. Cash contributions are invested in proportion to the participant’s voluntary contribution investment choices. Participation in the Plan is voluntary, and active Cleco

employees are eligible to participate. Cleco’s 401(k) Plan expense for the three and sixmonths ended ~~March 31,~~June 30, 2023, and 2022 was as follows:


		FOR THE THREE MONTHS ENDED MAR. 31,				FOR THE THREE MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	(THOUSANDS)	2023		2022			(THOUSANDS)	2023		2022		2023		2022
401(k) Plan expense	401(k) Plan expense	$	2,154	$	2,179		401(k) Plan expense	$	1,926	$	1,522	$	4,080	$	3,702

Cleco Power is the plan sponsor for the 401(k) Plan. The expense of the 401(k) Plan related to Cleco’s other subsidiaries for the three and sixmonths ended ~~March 31,~~June 30, 2023, and 2022 was as follows:


Note 10 — Income Taxes

The following tables summarize the effective income tax rates from continuing operations for Cleco and Cleco Power for the three and six months ended ~~March 31,~~June 30, 2023, and 2022:


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

For Cleco and Cleco Power, the effective income tax rates for the three and six months ended ~~March 31,~~June 30, 2023, were different than the federal statutory rate primarily due to the amortization of excess ADIT, the adjustment to record tax expense at the projected annual effective tax rate, and state tax expense.

For Cleco, ~~and Cleco Power,~~ the effective income tax rates for the three and six months ended ~~March 31,~~June 30, 2022, were different than the federal statutory rate primarily due to the adjustment to record tax expense at the projected annual effective tax rate, the amortization of excess ADIT, the flow through of state tax benefits, permanent deductions, and state tax expense.

For Cleco Power, the effective income tax rate for the three months ended June 30, 2022, was different than the federal statutory rate primarily due to the adjustment to record tax expense at the projected annual effective tax rate, the amortization of excess ADIT, the flow through of state tax benefits, and state tax expense.

For Cleco Power, the effective income tax rate for the six months ended June 30, 2022, was different than the federal statutory rate primarily due to the amortization of excess ADIT, the flow through of state tax benefits, and state tax expense.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

Uncertain Tax Positions

Cleco classifies all interest related to uncertain tax positions as a component of interest payable and interest expense. For the three and six months ended ~~March 31,~~June 30, 2023, and 2022, Cleco and Cleco Power had no interest expense related to uncertain tax positions. At ~~March 31,~~June 30, 2023, and December 31, 2022, Cleco and Cleco Power had no liability for uncertain tax positions or interest payable related to uncertain tax positions.

Income Tax Audits

Cleco participates in the IRS’s Compliance Assurance Process in which tax positions are examined and agreed upon prior to filing the federal tax return. While the statute of limitations remains open for tax years 2019, 2020, and 2021, the IRS has completed its review of tax ~~year~~years 2019 and 2020, and these tax returns were filed consistent with the IRS’s review. The IRS has placed Cleco in the Bridge phase of the Compliance Assurance Process for the 2021 tax year. In this phase, the IRS will not accept any disclosures, conduct any reviews, or provide any assurances. The IRS has accepted Cleco’s application for the Compliance Assurance Process for the 2022 tax year and the Compliance Assurance Maintenance phase for the 2023 tax year.

The state income tax years 2019, 2020, and 2021 remain subject to examination by the Louisiana Department of Revenue.

Cleco classifies income tax penalties as a component of other expense. For the three and six months ended ~~March 31,~~June 30, 2023, and 2022, no penalties were recognized.


Note 11 — Segment Disclosures

Segment disclosures are based on Cleco’s method of internal reporting, which disaggregates business units by first-tier subsidiary. The financial information for historical periods

provided in this report has been recast to reflect the presentation of the Cleco Cajun Sale Group as discontinued operations within the Other column. Cleco’s segment structure and its allocation of corporate expenses were updated to reflect how management measures performance and allocates resources. Cleco has recast data from prior periods to reflect this change to conform to the current year presentation. For more information, see Note 3 — “Discontinued Operations.”

Segment managers report periodically to Cleco’s CEO, who is Cleco’s chief operating decision maker, with discrete financial information and, at least quarterly, present discrete financial information to Cleco Holdings’ and, in the case of Cleco Power, Cleco Power’s Boards of Managers. The reportable segment prepares budgets that are presented to and approved by Cleco Holdings’ and, in the case of Cleco Power, Cleco Power’s Boards of Managers. The column shown as Other in the following tables includes the holding company, a shared services subsidiary, an investment subsidiary, and discontinued operations.

The financial results in the following tables are presented on an accrual basis. EBITDA is a key non-GAAP financial measure used by the CEO to assess the operating performance of Cleco’s segment. Management evaluates the performance of Cleco’s segment and allocates resources to it based on segment profit and the requirements to implement strategic initiatives and projects to meet current business objectives. EBITDA is defined as net income adjusted for interest, income taxes, depreciation, and amortization. Depreciation and amortization in the following tables includes amortization of intangible assets recorded for the fair value adjustment of wholesale power supply agreements as a result of the 2016 Merger. Material intercompany transactions occur on a regular basis. These intercompany transactions relate primarily to joint and common administrative support services.


Segment Information ~~for the Three Months Ended Mar. 31,~~
FOR THE THREE MONTHS ENDED JUNE 30, 2023 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	~~296,348~~263,176
Other operations	~~27,303~~24,741
Affiliate revenue	~~1,688~~1,635
Electric customer credits	~~(651)~~(736)
Operating revenue, net	$	~~324,688~~288,816
Net income	$	~~22,817~~43,439
Add: Depreciation and amortization	~~50,733~~43,722
Less: Interest income	~~1,185~~579
Add: Interest charges	~~24,338~~24,183
Add: Federal and state income tax expense	~~1,490~~3,247



EBITDA	$	~~98,193~~114,012

3239


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q


2023 (THOUSANDS)		CLECO POWER		OTHER			ELIMINATIONS		TOTAL
FOR THE THREE MONTHS ENDED JUNE 30, 2023 (THOUSANDS)											FOR THE THREE MONTHS ENDED JUNE 30, 2023 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue	Revenue										Revenue
Electric operations	Electric operations	$	296,348	$	(2,420)		$	—	$	293,928	Electric operations	$	263,176	$	(2,387)		$	—	$	260,789
Other operations	Other operations	27,303		1			—		27,304		Other operations	24,741		1			—		24,742
Affiliate revenue	Affiliate revenue	1,688		27,514			(29,202)		—		Affiliate revenue	1,635		28,902			(30,537)		—
Electric customer credits	Electric customer credits	(651)		—			—		(651)		Electric customer credits	(736)		—			—		(736)
Operating revenue, net	Operating revenue, net	$	324,688	$	25,095		$	(29,202)	$	320,581	Operating revenue, net	$	288,816	$	26,516		$	(30,537)	$	284,795
Depreciation and amortization	Depreciation and amortization	$	50,733	$	4,476	(1)	$	—	$	55,209	Depreciation and amortization	$	43,722	$	4,433	(1)	$	—	$	48,155
Interest income	Interest income	$	1,185	$	143		$	(61)	$	1,267	Interest income	$	579	$	133		$	(39)	$	673
Interest charges	Interest charges	$	24,338	$	15,211		$	(61)	$	39,488	Interest charges	$	24,183	$	16,624		$	(39)	$	40,768

Federal and state income tax expense		$	1,490	$	(1,655)		$	—	$	(165)
Federal and state income tax expense (benefit)											Federal and state income tax expense (benefit)	$	3,247	$	(6,236)		$	—	$	(2,989)
Income (loss) from continuing operations, net of income taxes	Income (loss) from continuing operations, net of income taxes	$	22,817	$	(24,668)		$	—	$	(1,851)	Income (loss) from continuing operations, net of income taxes	$	43,439	$	(20,380)		$	(1)	$	23,058
Loss from discontinued operations, net of income taxes		$	—	$	(102,171)		$	—	$	(102,171)
Net income (loss)		$	22,817	$	(126,839)		$	—	$	(104,022)
Additions to property, plant, and equipment		$	58,066	$	2,033		$	—	$	60,099
Equity investment in investee (2)		$	2,072	$	(320,348)		$	320,348	$	2,072
Goodwill (2)		$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets (2)		$	6,836,444	$	1,059,272		$	176,363	$	8,072,079
(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger. (2) Balances as of March 31, 2023.
Income from discontinued operations, net of income taxes											Income from discontinued operations, net of income taxes	—		24,272			—		24,272
Net income											Net income	$	43,439	$	3,892		$	(1)	$	47,330

(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.											(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.


FOR THE THREE MONTHS ENDED JUNE 30, 2022 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	~~296,097~~368,614
Other operations	~~19,084~~18,686
Affiliate revenue	~~1,459~~1,628
Electric customer credits	~~(136)~~(129)
Operating revenue, net	$	~~316,504~~388,799
Net income	$	~~39,024~~54,705
Add: Depreciation and amortization	~~45,239~~44,299
Less: Interest income	~~740~~1,035
Add: Interest charges	~~18,801~~21,305
Add: Federal and state income tax expense	~~724~~3,214
EBITDA	$	~~103,048~~122,488

Equity investment in investees (2)

Total segment assets (2)

(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

(2) Balances as of December 31, 2022.

(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q


Segment Information
FOR THE SIX MONTHS ENDED JUNE 30, 2023 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	559,524
Other operations	52,044
Affiliate revenue
3,323
Electric customer credits	(1,386)
Operating revenue, net	$	613,505
Net income	$	66,256
Add: Depreciation and amortization	94,454
Less: Interest income	1,764
Add: Interest charges	48,521
Add: Federal and state income tax expense	4,737
EBITDA	$



212,204


FOR THE SIX MONTHS ENDED JUNE 30, 2023 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	559,524	$	(4,807)		$	—	$	554,717
Other operations	52,044		2			—		52,046
Affiliate revenue	3,323		56,416			(59,739)		—
Electric customer credits	(1,386)		—			—		(1,386)
Operating revenue, net	$	613,505	$	51,611		$	(59,739)	$	605,377
Depreciation and amortization	$	94,454	$	8,910	(2)	$	—	$	103,364
Interest income	$	1,764	$	277		$	(101)	$	1,940
Interest charges	$	48,521	$	31,836		$	(101)	$	80,256
Federal and state income tax expense (benefit)	$	4,737	$	(7,891)		$	—	$	(3,154)
Income (loss) from continuing operations, net of income taxes	$	66,256	$	(45,047)		$	(2)	$	21,207
Loss from discontinued operations, net of income taxes	—		(77,899)			—		(77,899)
Net income (loss)	$	66,256	$	(122,946)		$	(2)	$	(56,692)
Additions to property, plant, and equipment	$	110,480	$	4,679		$	—	$	115,159
Equity investment in investees (1)	$	2,072	$	(345,348)		$	345,348	$	2,072
Goodwill (1)	$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets (1)	$	6,893,458	$	1,081,729		$	196,360	$	8,171,547
(1) Balances as of June 30, 2023. (2) Includes $4.8 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.



FOR THE SIX MONTHS ENDED JUNE 30, 2022 (THOUSANDS)	CLECO POWER
Revenue
Electric operations	$	664,711
Other operations			37,771
Affiliate revenue			3,087
Electric customer credits			(265)
Operating revenue, net	$	705,304
Net income	$	93,729
Add: Depreciation and amortization			89,538
Less: Interest income			1,775
Add: Interest charges			40,108
Add: Federal and state income tax expense			3,938
EBITDA	$

225,538


CLECO
CLECO POWER						2023 ~~1ST~~2ND QUARTER FORM 10-Q

FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS) 2023 2022
Net (loss) income $ (104,022) $ 155,744
Less: (Loss) income from discontinued operations, net of income taxes (102,171) 130,552
(Loss) income from continuing operations, net of income taxes $ (1,851) $ 25,192
Add: Depreciation and amortization 55,209 49,618
Less: Interest income 1,267 743
Add: Interest charges 39,488 32,641
Add: Federal and state income tax benefit (165) (7,533)
Add: Other corporate costs and noncash items*
6,779 3,873
Total segment EBITDA $ 98,193 $ 103,048
* Adjustments made for Other and Elimination totals not allocated to total segment EBITDA.


FOR THE SIX MONTHS ENDED JUNE 30, 2022 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	664,711	$	(4,840)		$	—	$	659,871
Other operations	37,771		3			—		37,774
Affiliate revenue	3,087		53,145			(56,232)		—
Electric customer credits	(265)		—			—		(265)
Operating revenue, net	$	705,304	$	48,308		$	(56,232)	$	697,380
Depreciation and amortization	$	89,538	$	8,752	(2)	$	1	$	98,291
Interest income	$	1,775	$	83		$	(49)	$	1,809
Interest charges	$	40,108	$	27,730		$	(50)	$	67,788
Federal and state income tax expense (benefit)	$	3,938	$	(15,048)		$	—	$	(11,110)
Income (loss) from continuing operations, net of income taxes	$	93,729	$	(37,436)		$	—	$	56,293
Loss from discontinued operations, net of income taxes	—		100,814			—		100,814
Net income	$	93,729	$	63,378		$	—	$	157,107
Additions to property, plant, and equipment	$	98,162	$	3,511		$	—	$	101,673
Equity investment in investees (1)	$	2,072	$	(320,348)		$	320,348	$	2,072
Goodwill (1)	$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets (1)	$	6,834,970	$	1,237,096		$	181,683	$	8,253,749
(1) Balances as of December 31, 2022. (2) Includes $4.8 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.



	FOR THE THREE MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	2023		2022		2023		2022
Net income (loss)	$	47,330	$	1,363	$	(56,692)	$	157,107
Less: income (loss) from discontinued operations, net of income taxes	24,272		(29,738)		(77,899)		100,814
Income (loss) from continuing operations, net of income taxes	$	23,058	$	31,101	$	21,207	$	56,293
Add: Depreciation and amortization	48,155		48,673		103,364		98,291

Less: Interest income	673		1,066		1,940		1,809
Add: Interest charges	40,768		35,147		80,256		67,788
Add: Federal and state income tax benefit	(2,989)		(3,577)		(3,154)		(11,110)
Add: Other corporate costs and noncash items (1)	5,693		12,210		12,471		16,085
Total segment EBITDA	$	114,012	$	122,488	$	212,204	$	225,538
(1) Adjustments made for Other and Elimination totals not allocated to total segment EBITDA.


Note 12 — Regulation and Rates

FRP

On June 16, 2021, the LPSC approved Cleco Power’s current FRP. Effective July 1, 2021, under the terms of the FRP, Cleco Power is allowed to earn a target ROE of 9.5%, while providing the opportunity to earn up to 10.0%. Additionally, 60.0% of retail earnings between 10.0% and 10.5%, and all retail earnings over 10.5%, are required to be refunded to customers. The amount of credits due to customers, if any, is determined by Cleco Power and the LPSC annually. On June 30, 2023, Cleco ~~Power’s next base rate case will be initiated by a filing~~Power filed an application with the LPSC ~~which is expected on or before June 30, 2023.~~for a new FRP, with anticipated new rates being effective July 1, 2024.

On October 31, 2022, a monitoring report was filed for the 12 months ending June 30, 2022, indicating no refund was due. In May 2023, Cleco Power received the LPSC Staff’s draft report indicating no material findings. Cleco Power anticipates the approval of the draft report in the third quarter of 2023.

TCJA

On June 16, 2021, the LPSC approved Cleco Power’s current retail rate plan which includes the settlement of the TCJA protected and unprotected excess ADIT. Effective July 1, 2021, all retail customers continued receiving bill credits resulting from the TCJA. The target retail portion of the unprotected excess ADIT is approximately $2.5 million monthly

and will be credited over a period of three years concluding on June 30, 2024. The retail portion of the protected excess ADIT will be credited until the full amount of the protected excess ADIT has been returned to Cleco Power’s customers through bill credits. At ~~March 31,~~June 30, 2023, Cleco Power had ~~$247.0~~$236.6 million accrued for the excess ADIT, of which ~~$42.1~~$41.4 million is reflected in current regulatory liabilities.

Teche Unit 3

In July 2022, Cleco Power filed an Attachment Y with MISO requesting retirement of Teche Unit 3, barring any violations of specific applicable reliability standards. On January 31, 2023, Cleco Power filed a notice with the LPSC to retire Teche Unit 3 in May 2023. However, in April 2023, Cleco Power filed notices with MISO and the LPSC to ~~suspend~~delay the retirement of Teche Unit 3. Management continues to monitor regulatory capacity requirements and customer needs to determine the appropriate timing of the retirement of Teche Unit 3.


Note 13 — Variable Interest Entities

Cleco Securitization I

Cleco Securitization I is a special-purpose, wholly owned subsidiary of Cleco Power that was formed for the purpose of issuing storm recovery bonds to finance the securitization of Storm Recovery Property at Cleco Power. On June 22, 2022, the securitized financing was complete. Cleco Securitization I’s


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

assets cannot be used to settle Cleco Power’s obligations and the holders of the storm recovery bonds have no recourse against Cleco Power.

Because Cleco Securitization I’s equity at risk is less than 1% of its total assets, it is considered to be a variable interest entity. Through its equity ownership interest and role as servicer, Cleco Power has the power to direct the most significant financial and operating activities of Cleco Securitization I, including billing, collections, and remittance of retail customer cash receipts to enable Cleco Securitization I to pay the principal and interest payments on the storm recovery bonds. Cleco Power also has the obligation to absorb losses up to its equity investment and rights to receive returns from Cleco Securitization I. Therefore, management has determined that Cleco Power is the primary beneficiary of Cleco Securitization I, and as a result, Cleco Securitization I is included in the consolidated financial statements of Cleco Power. No gain or loss was recognized upon initial consolidation.

The following table summarizes the impact of Cleco Securitization I on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets:


(THOUSANDS)	(THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		(THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Restricted cash - current	Restricted cash - current	$	6,056	$	14,139	Restricted cash - current	$	13,032	$	14,139
Accounts receivable - affiliate	Accounts receivable - affiliate	4,160		3,348		Accounts receivable - affiliate	3,475		3,348
Intangible asset - securitization	Intangible asset - securitization	408,882		413,123		Intangible asset - securitization	407,571		413,123
Total assets	Total assets	$	419,098	$	430,610	Total assets	$	424,078	$	430,610
Long-term debt due within one year	Long-term debt due within one year	$	14,214	$	9,574	Long-term debt due within one year	$	14,214	$	9,574
Accounts payable		30		—

Accounts payable - affiliate	Accounts payable - affiliate	28		165		Accounts payable - affiliate	146		165
Interest accrued	Interest accrued	1,569		9,953		Interest accrued	6,276		9,953
Long-term debt, net	Long-term debt, net	401,124		408,741		Long-term debt, net	401,284		408,741
Member’s equity	Member’s equity	2,133		2,177		Member’s equity	2,158		2,177
Total liabilities and member’s equity	Total liabilities and member’s equity	$	419,098	$	430,610	Total liabilities and member’s equity	$	424,078	$	430,610


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

The following table summarizes the impact of Cleco Securitization I on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income:


		FOR THE THREE MONTHS ENDED MAR. 31,				FOR THE THREE MONTHS ENDED JUNE 30,				FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	(THOUSANDS)	2023		2022			(THOUSANDS)	2023		2022		2023		2022
Operating revenue	Operating revenue	$	9,177	$	—		Operating revenue	$	6,206	$	—	$	15,383	$	—
Operating expenses	Operating expenses	(4,354)		—			Operating expenses	1,399		—		5,753		—
Interest income	Interest income	158		—			Interest income	85		—		242		—
Interest charges, net	Interest charges, net	(4,956)		—			Interest charges, net	4,867		—		9,823		—
Income before taxes	Income before taxes	$	25	$	—		Income before taxes	$	25	$	—	$	49	$	—

Oxbow

Cleco and Cleco Power apply the equity method of accounting to report the investment in Oxbow in the consolidated financial statements. Under the equity method, the assets and liabilities of this entity are reported as Equity investment in investee on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets. The revenue and expenses (excluding income taxes) of this entity are netted and reported as equity income or loss from investees on Cleco’s and Cleco Power’s Condensed Consolidated Statements of Income.

Oxbow is owned 50% by Cleco Power and 50% by SWEPCO. Cleco Power is not the primary beneficiary because it shares the power to control Oxbow’s significant activities with SWEPCO. Cleco Power’s current assessment of its maximum

exposure to loss related to Oxbow at ~~March 31,~~June 30, 2023, consisted of its equity investment of $2.1 million.

The following table presents the components of Cleco Power’s equity investment in Oxbow:


INCEPTION TO DATE (THOUSANDS)	INCEPTION TO DATE (THOUSANDS)	AT MAR. 31, 2023		AT DEC. 31, 2022		INCEPTION TO DATE (THOUSANDS)	AT JUNE 30, 2023		AT DEC. 31, 2022
Purchase price	Purchase price	$	12,873	$	12,873	Purchase price	$	12,873	$	12,873
Cash contributions	Cash contributions	6,399		6,399		Cash contributions	6,399		6,399
Distributions	Distributions	(17,200)		(17,200)		Distributions	(17,200)		(17,200)
Total equity investment in investee	Total equity investment in investee	$	2,072	$	2,072	Total equity investment in investee	$	2,072	$	2,072

The following table compares the carrying amount of Oxbow’s assets and liabilities with Cleco Power’s maximum exposure to loss related to its investment in Oxbow:

The following table contains summarized financial information for Oxbow:

Prior to June 30, 2020, DHLC mined lignite reserves at Oxbow through the Amended Lignite Mining Agreement. The lignite reserves were intended to be used to provide fuel to the Dolet Hills Power Station. Under the Amended Lignite Mining Agreement, DHLC billed Cleco Power its proportionate share

of incurred lignite extraction and associated mining-related costs. Oxbow billed Cleco Power its proportionate share of incurred costs related to mineral rights and land leases. On October 6, 2020, Cleco Power and SWEPCO made a joint filing with the LPSC seeking authorization to close the Oxbow mine. At December 31, 2021, the Dolet Hills Power Station was retired, and all of Cleco Power’s proportionate share of lignite-related costs had been billed by DHLC and Oxbow. For more information on DHLC and the Oxbow mine, see Note 14 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Risks and Uncertainties.”

Oxbow has no third-party agreements, guarantees, or other third-party commitments that contain obligations affecting Cleco Power’s investment in Oxbow.


Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees

Litigation

2016 Merger

In connection with the 2016 Merger, four actions were filed in the Ninth Judicial District Court for Rapides Parish, Louisiana and three actions were filed in the Civil District Court for Orleans Parish, Louisiana. The petitions in each action generally alleged, among other things, that the members of Cleco Corporation’s Board of Directors breached their


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

fiduciary duties by, among other things, conducting an allegedly inadequate sale process, agreeing to the 2016 Merger at a price that allegedly undervalued Cleco, and failing to disclose material information about the 2016 Merger. The petitions also alleged that Como 1, Cleco Corporation, Merger Sub, and, in some cases, certain of the investors in Como 1 either aided and abetted or entered into a civil conspiracy to advance those supposed breaches of duty. The petitions sought various remedies, including monetary damages, which includes attorneys’ fees and expenses.

The four actions filed in the Ninth Judicial District Court for Rapides Parish are captioned as follows:

•Braunstein v. Cleco Corporation, No. 251,383B (filed October 27, 2014),

•Moore v. Macquarie Infrastructure and Real Assets, No. 251,417C (filed October 30, 2014),

•Trahan v. Williamson, No. 251,456C (filed November 5, 2014), and

•L’Herisson v. Macquarie Infrastructure and Real Assets, No. 251,515F (filed November 14, 2014).

In November 2014, the plaintiff in the Braunstein action moved for a dismissal of the action without prejudice, and that motion was granted in November 2014. In December 2014, the court consolidated the remaining three actions and appointed interim co-lead counsel, and dismissed the investors in Cleco Partners as defendants, per agreement of the parties. Also, in December 2014, the plaintiffs in the consolidated action filed a Consolidated Amended Verified Derivative and Class Action Petition for Damages and Preliminary and Permanent Injunction.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

The three actions filed in the Civil District Court for Orleans Parish were captioned as follows:

•Butler v. Cleco Corporation, No. 2014-10776 (filed November 7, 2014),

•Creative Life Services, Inc. v. Cleco Corporation, No. 2014-11098 (filed November 19, 2014), and

•Cashen v. Cleco Corporation, No. 2014-11236 (filed November 21, 2014).

In December 2014, the directors and Cleco filed declinatory exceptions in each action on the basis that each action was improperly brought in Orleans Parish and should either be transferred to the Ninth Judicial District Court for Rapides Parish or dismissed. Also, in December 2014, the plaintiffs in each action jointly filed a motion to consolidate the three actions pending in Orleans Parish and to appoint interim co-lead plaintiffs and co-lead counsel. In January 2015, the Court in the Creative Life Services case sustained the defendants’ declinatory exceptions and dismissed the case so that it could be transferred to the Ninth Judicial District Court for Rapides Parish. In February 2015, the plaintiffs in Butler and Cashen also consented to the dismissal of their cases from Orleans Parish so they could be transferred to the Ninth Judicial District Court for Rapides Parish. By operation of the December 2014 order of the Ninth Judicial District Court for Rapides Parish, the Butler, Cashen, and Creative Life Services actions were consolidated into the actions pending in Rapides Parish.

In February 2015, the Ninth Judicial District Court for Rapides Parish held a hearing on a motion for preliminary injunction filed by plaintiffs in the consolidated action seeking

to enjoin the shareholder vote for approval of the Merger Agreement. The District Court heard and denied the plaintiffs’ motion. In June 2015, the plaintiffs filed their Second Consolidated Amended Verified Derivative and Class Action Petition. Cleco filed exceptions seeking dismissal of the second amended petition in July 2015. The LPSC voted to approve the 2016 Merger before the court could consider the plaintiffs’ peremptory exceptions.

In March 2016 and May 2016, the plaintiffs filed their Third Consolidated Amended Verified Derivative Petition for Damages and Preliminary and Permanent Injunction and their Fourth Verified Consolidated Amended Class Action Petition, respectively. The fourth amended petition, which remains the operative petition and was filed after the 2016 Merger closed, eliminated the request for preliminary and permanent injunction and also named an additional executive officer as a defendant. The defendants filed exceptions seeking dismissal of the fourth amended Petition. In September 2016, the District Court granted the exceptions of no cause of action and no right of action and dismissed all claims asserted by the former shareholders. The plaintiffs appealed the District Court’s ruling to the Louisiana Third Circuit Court of Appeal. In December 2017, the Third Circuit Court of Appeal issued an order reversing and remanding the case to the District Court for further proceedings. In January 2018, Cleco filed a writ with the Louisiana Supreme Court seeking review of the Third Circuit Court of Appeal’s decision. The writ was denied in March 2018 and the parties are engaged in discovery in the District Court. In November 2018, Cleco filed renewed exceptions of no cause of action and res judicata, seeking to dismiss all claims. On December 21, 2018, the court dismissed Cleco Partners and Cleco Holdings as defendants per the

agreement of the parties, leaving as the only remaining defendants certain former executive officers and independent directors. The District Court denied the defendants’ exceptions on January 14, 2019. A hearing on the plaintiffs’ motion for certification of a class was scheduled for August 26, 2019; however, prior to the hearing, the parties reached an agreement to certify a limited class. On September 7, 2019, the District Court certified a class limited to shareholders who voted against, abstained from voting, or did not vote on the 2016 Merger. On October 18, 2021, the District Court issued an order consistent with a joint motion by the parties to dismiss all claims against the former independent directors leaving two former executives as the only remaining defendants. Cleco believes that the allegations of the petitions in each action are without merit and that it has substantial meritorious defenses to the claims set forth in each of the petitions.

Gulf Coast Spinning

In September 2015, a potential customer sued Cleco for failure to fully perform an alleged verbal agreement to lend or otherwise fund its startup costs to the extent of $6.5 million. Gulf Coast Spinning Company, LLC (Gulf Coast), the primary plaintiff, alleges that Cleco promised to assist it in raising approximately $60.0 million, which Gulf Coast needed to construct a cotton spinning facility near Bunkie, Louisiana (the Bunkie project). According to the petition filed by Gulf Coast in the 12th Judicial District Court for Avoyelles Parish, Louisiana, Cleco made such promises of funding assistance in order to cultivate a new industrial electric customer which would increase its revenues under a power supply agreement that it executed with Gulf Coast. Gulf Coast seeks unspecified


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

damages arising from its inability to raise sufficient funds to complete the project, including lost profits.

Cleco filed an Exception of No Cause of Action arguing that the case should be dismissed. The 12th Judicial District Court denied Cleco’s exception in December 2015, after considering briefs and arguments. In January 2016, Cleco appealed the 12th Judicial District Court’s denial of its exception by filing with the Third Circuit Court of Appeal. In June 2016, the Third Circuit Court of Appeal denied the request to have the case dismissed. In July 2016, Cleco filed a writ to the Louisiana Supreme Court seeking a review of the 12th Judicial District Court’s denial of Cleco’s exception. In November 2016, the Louisiana Supreme Court denied Cleco’s writ application.

In February 2016, the parties agreed to a stay of all proceedings pending discussions concerning settlement. In May 2016, the 12th Judicial District Court lifted the stay at the request of Gulf Coast. The parties are currently participating in discovery.

Diversified Lands loaned $2.0 million to Gulf Coast for the Bunkie project. The loan was secured by a mortgage on the Bunkie project site. Diversified Lands foreclosed on the Bunkie property in February 2020 and has also asserted claims personally against the former owner of Gulf Coast. These claims are based on contracts and credit documents executed by Gulf Coast, the obligations and performance of which were personally guaranteed by the former owner of Gulf Coast. Diversified Lands is seeking recovery of the indebtedness still owed by Gulf Coast to Diversified Lands following the February 2020 foreclosure, which action has been consolidated with the litigation filed by Gulf Coast in the 12th Judicial District Court for Avoyelles Parish, Louisiana. Discovery is ongoing and no trial date has been set.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

Cleco believes all allegations made by Gulf Coast are contradicted by the written documents executed by Gulf Coast, are otherwise without merit, and that it has substantial meritorious defenses to the claims alleged by Gulf Coast.

Dispute with Saulsbury Industries

In October 2018, Cleco Power sued Saulsbury Industries, Inc., the former general contractor for the St. Mary Clean Energy Center project, seeking damages for Saulsbury Industries, Inc.’s failure to complete the St. Mary Clean Energy Center project on time and for costs incurred by Cleco Power in hiring a replacement general contractor. The action was filed in the Ninth Judicial District Court for Rapides Parish. Saulsbury Industries, Inc. removed the case to the U.S. District Court for the Western District of Louisiana, on March 1, 2019. On September 14, 2020, Cabot Corporation was allowed to join the case pending in the Ninth Judicial District Court for Rapides Parish.

In January 2019, Cleco Power was served with a summons in Saulsbury Industries, Inc. v. Cabot Corporation and Cleco Power LLC, in the U.S. District Court for the Western District of Louisiana. Saulsbury Industries, Inc. alleged that Cleco Power and Cabot Corporation caused delays in the St. Mary Clean Energy Center project, resulting in alleged impacts to Saulsbury Industries, Inc.’s direct and indirect costs. On June 5, 2019, Cleco Power and Cabot Corporation each filed separate motions to dismiss. On October 24, 2019, the District Court denied Cleco Power’s motion as premature and ruled that Saulsbury Industries, Inc. had six weeks to conduct discovery on specified jurisdictional issues. The Magistrate Judge presiding over the Western District of Louisiana

consolidated cases issued a report and recommendation to the District Judge that the case instituted by Saulsbury Industries, Inc. be dismissed without prejudice and the case initiated by Cleco Power be remanded to the Ninth Judicial District Court for Rapides Parish. Saulsbury Industries, Inc. did not oppose the Magistrate Judge’s report and recommendation, and the District Judge issued a ruling that adopted the Magistrate Judge’s report and recommendation, which included reasoning consistent with Cleco Power’s arguments. Thus, the federal consolidated cases are now closed.

On October 10, 2019, Cleco Power was served with a summons in Saulsbury Industries, Inc. v. Cabot Corporation and Cleco Power LLC in the 16th Judicial District Court for St. Mary Parish. Saulsbury Industries, Inc. asserted the same claim as the Western District litigation and further asserts claims for payment on an open account. On December 9, 2019, Cleco Power moved to stay the case, arguing that the Rapides Parish suit should proceed. On February 14, 2020, the court granted Cleco Power’s motion. The 16th Judicial District Court for the St. Mary Parish case held a hearing on October 16, 2020, and the judge granted Cleco Power’s declinatory exceptions of lis pendens. Thus, the St. Mary’s Parish case has been dismissed. Saulsbury appealed this decision.

On May 17, 2022, the Court of Appeal, First Circuit, ruled in favor of Cleco Power and affirmed the decision of the 16th Judicial District Court for St. Mary Parish with respect to Cleco Power. However, the First Circuit Court reversed the 16th Judicial District Court for St. Mary Parish’s decision dismissing Cabot Corporation from the St. Mary Parish case. All parties filed applications for rehearing, which were denied on June 29, 2022.

Cabot Corporation applied for review by the Louisiana Supreme Court of the portion of the First Circuit Court's ruling that denied Cabot Corporation’s exception seeking dismissal from the St. Mary Parish litigation. On November 1, 2022, the Louisiana Supreme Court rendered a decision in favor of Cabot Corporation. The Louisiana Supreme Court’s decision reversed the First Circuit Court’s decision and reinstated the decision of the 16th Judicial District Court granting Cabot Corporation’s declinatory exceptions of lis pendens. The St. Mary Parish case has been dismissed in full.

The stay was lifted in the Rapides Parish case and the Rapides Parish case is proceeding.

LPSC Audits and Reviews

Fuel Audits

Generally, Cleco Power’s cost of fuel used for electric generation and the cost of purchased power are recovered through the LPSC-established FAC that enables Cleco Power to pass on to its customers substantially all such ~~charges.~~expenses. Recovery of FAC costs is subject to periodic fuel audits by the LPSC, which are performed at least every other year.

In January 2023, Cleco Power received a notice of audit from the LPSC for the period of January 2020 to December 2022. The total amount of fuel expense included in the audit is $1.10 billion. Cleco Power has responded to the first set of LPSC data requests. Cleco Power has FAC filings for January 2023 and thereafter that remain subject to audit. Management is unable to predict or give a reasonable estimate of the possible range of the disallowance, if any, related to these filings. Historically, the disallowances have not been material. If a disallowance of fuel cost is ordered resulting in a refund, any


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

such refund could have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants.

On March 29, 2021, Cleco Power received approval from the LPSC to recover $50.0 million of incremental fuel and purchased power costs incurred as a result of Winter Storms Uri and Viola over a period of 12 months beginning with the May 2021 bills. On May 11, 2021, Cleco Power received notice of an audit from the LPSC for the fuel costs incurred during the time period required to restore services to Cleco Power’s customers during Winter Storms Uri and Viola. On March 27, 2023, Cleco Power received a draft audit report from the LPSC indicating no material findings. Management expects the draft audit report to be approved in the ~~second~~third quarter of 2023.

Environmental Audit

In 2009, the LPSC approved Cleco Power to recover from its customers certain costs of environmental compliance, through an EAC. The costs eligible for recovery are those for prudently incurred air emissions credits associated with complying with federal, state, and local air emission regulations that apply to the generation of electricity reduced by the sale of such allowances. Also eligible for recovery are variable emission mitigation costs, which are the costs of reagents such as ammonia and limestone that are a part of the fuel mix used to reduce air emissions, among other things. In April 2023, Cleco Power received a notice of audit from the LPSC for the period of January 2020 to December 2022. The total amount of environmental fuel expense to be included in the audit is $38.3 million. Cleco Power has responded to the first set of LPSC data requests. Cleco Power has EAC filings for January 2023 and thereafter that remain subject to audit. Management is unable to predict or give a reasonable estimate of the possible range of the disallowance, if any, related to these filings.


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

Historically, the disallowances have not been material. If a disallowance of environmental cost is ordered resulting in a refund to Cleco Power’s customers, any such refund could have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants.

Cleco Power incurs environmental compliance expenses for reagents associated with the compliance standards of MATS. These expenses are also eligible for recovery through Cleco Power’s EAC and are subject to periodic review by the LPSC. In May 2020, the EPA finalized a rule that concluded that it is not appropriate and necessary to regulate hazardous air pollutants from coal- and oil-fired electric generating units. However, the EPA concluded that coal- and oil-fired electric generating units would not be removed from the list of regulated sources of hazardous air pollutants and would remain subject to MATS. The EPA also determined that the results of its risk and technology review did not require any revisions to the emissions standards. Several petitions for review of the rule’s findings were filed between May and July 2020 in the D.C. Circuit Court of Appeals. On January 20, 2021, the Presidential Administration issued an executive order, which directs federal agency heads to review regulations and other actions over the past four years to determine if they are inconsistent with the policies announced in the executive order. The order specifically directed the EPA to consider issuing a proposed rule to suspend, revise, or rescind the rule. The EPA determined the most environmentally protective course is to implement the rules in the executive order. On March 6, 2023, the EPA published in the Federal Register a final rule that reinstates the April 25, 2016, finding

that it is appropriate and necessary to regulate hazardous air pollutants from coal and oil-fired electric generating units through MATS. On April 4,24, 2023, the EPA published in the Federal Register proposed amendments to MATS that are the result of the EPA’s review of the May 2020 residual risk and technology review of MATS. Management is unable to determine whether the outcome of the D.C. Circuit Court of Appeals’ review or the EPA’s review of the rule as a result of the executive order will result in changes to the MATS standards.

Energy Efficiency Audit

In 2013, the LPSC issued a General Order adopting rules promoting energy efficiency programs. Cleco Power began participating in energy efficiency programs in November 2014. Through an approved rate tariff, Cleco Power recovered $8.5 million and $6.8 million for the 2022 and 2021 program years, respectively.

Program years 2021 and thereafter are subject to audit. Management is unable to predict or give a reasonable estimate of the outcome of this or any future audits.

Prudency Reviews

~~Deferred Lignite~~Dolet Hills Power Station and Mine Closure Costs and Deferred Lignite Costs

Cleco Power is seeking recovery for stranded and decommissioning costs associated with the retirement of the Dolet Hills Power Station as well as deferred fuel and other mine-related closure costs. Recovery of these costs is subject to a prudency review by the LPSC, which is currently in progress. Cleco Power believes these costs are prudent and recoverable. However, initial testimony by the LPSC Staff advisors filed in August 2022 indicates disagreement with the prudency of these incurred costs. Cleco Power filed rebuttal testimony on September 23, 2022, rebutting the LPSC Staff’s testimony. A hearing was held in May 2023, with the outcome

pending. Due to the nature of the regulatory process, Cleco Power is currently unable to determine the timing of this process and if any portion of the incurred costs will be disallowed for recovery. Cleco Power continues to assert that recovery of those costs is probable.

South Central Generating

Prior to the Cleco Cajun Transaction, South Central Generating was involved in various litigation matters, including environmental and contract proceedings, before various courts regarding matters arising out of the ordinary course of business. As of ~~March 31,~~June 30, 2023, management ~~estimates potential losses to be~~has reserved $1.5 million with respect to one of these matters and the amounts are recorded in Liabilities held for sale on Cleco’s Condensed Consolidated Balance ~~Shee~~t.Sheet. Management is unable to estimate any potential losses Cleco may be ultimately responsible for with respect to any of the remaining matters. As part of the Cleco Cajun Transaction, NRG Energy indemnified Cleco for losses as of the closing date associated with certain matters that existed as of the closing date, including pending litigation.

Other

Cleco is involved in various litigation matters, including regulatory, environmental, and administrative proceedings before various courts, regulatory commissions, arbitrators, and governmental agencies regarding matters arising in the ordinary course of business. The liability Cleco may ultimately


CLECO
CLECO POWER						2023 2ND QUARTER FORM 10-Q

incur with respect to any one of these matters may be in excess of amounts currently accrued. Management regularly analyzes current information and, as of ~~March 31,~~June 30, 2023, believes the probable and reasonably estimable liabilities based on the eventual disposition of these matters are ~~$6.7~~$6.3 million and has accrued this amount.

Off-Balance Sheet Commitments and Guarantees

Cleco Holdings and Cleco Power have entered into various off-balance sheet commitments, in the form of guarantees and standby letters of credit, in order to facilitate their activities and the activities of Cleco Holdings’ subsidiaries and equity investees (affiliates). Cleco Holdings and Cleco Power have also agreed to contractual terms that require the Registrants to pay third parties if certain triggering events occur. These contractual terms generally are defined as guarantees.

Cleco Holdings entered into these off-balance sheet commitments in order to entice desired counterparties to contract with its affiliates by providing some measure of credit assurance to the counterparty in the event Cleco’s affiliates do not fulfill certain contractual obligations. If Cleco Holdings had not provided the off-balance sheet commitments, the desired counterparties may not have contracted with Cleco’s affiliates, or may have contracted with them at terms less favorable to its affiliates.

The off-balance sheet commitments are not recognized on Cleco’s and Cleco Power’s Condensed Consolidated Balance Sheets because management has determined that Cleco’s and Cleco Power’s affiliates are able to perform the obligations under their contracts and that it is not probable that payments by Cleco or Cleco Power will be required.

Cleco Holdings provided guarantees and indemnities to Entergy Louisiana and Entergy Gulf States as a result of the sale of the Perryville generation facility in 2005. The remaining ~~indemnifications~~indemnities relate to environmental matters that may have been present prior to closing. These remaining


~~CLECO~~
~~CLECO POWER~~						~~2023 1ST QUARTER FORM 10-Q~~

~~indemnifications~~ indemnities have no time limitations. The maximum amount of the potential payment to Entergy Louisiana and Entergy Gulf States is $42.4 million. Management does not expect to be required to pay Entergy Louisiana and Entergy Gulf States under these guarantees.

On behalf of Acadia, Cleco Holdings provided guarantees and ~~indemnifications~~indemnities as a result of the sales of Acadia Unit 1 to Cleco Power and Acadia Unit 2 to Entergy Louisiana in 2010 and 2011, respectively. The remaining ~~indemnifications~~indemnities relate to the fundamental organizational structure of Acadia. These remaining ~~indemnifications~~indemnities have no time limitations or maximum potential future payments. Management does not expect to be required to pay Cleco Power or Entergy Louisiana under these guarantees.

Cleco Holdings provided ~~indemnifications~~indemnities to Cleco Power as a result of the transfer of Coughlin to Cleco Power in March 2014. Cleco Power also provided ~~indemnifications~~indemnities to Cleco Holdings as a result of the transfer of Coughlin to Cleco Power. The maximum amount of the potential payment to Cleco Power and Cleco Holdings, for their respective ~~indemnifications~~indemnities is $40.0 million, except for ~~indemnifications~~indemnities relating to the fundamental organizational structure of each respective entity, of which the maximum amount is $400.0 million. Management does not expect to be required to make any payments under these ~~indemnifications.~~indemnities.

As part of the Amended Lignite Mining Agreement, Cleco Power and SWEPCO, joint owners of the Dolet Hills Power Station, have agreed to pay the loan and lease principal

obligations of the lignite miner, DHLC, when due if DHLC does not have sufficient funds or credit to pay. Any amounts projected to be paid would be based on the forecasted loan and lease obligations to be incurred by DHLC, primarily for reclamation obligations. As of ~~March 31,~~June 30, 2023, Cleco Power does not expect any payments to be made under this guarantee. Cleco Power has the right to dispute the incurrence of such loan and lease obligations through the review of the mining reclamation plan before the incurrence of such obligations. The Amended Lignite Mining Agreement does not affect the amount the Registrants can borrow under their credit facilities.

In April 2020, Cleco Power and SWEPCO mutually agreed not to develop additional mining areas for future lignite extraction and subsequently provided notice to the LPSC of the intent to cease mining at the Dolet Hills and Oxbow mines by June 2020. The mine closures are subject to LPSC review and approval. As of June 30, 2020, all lignite reserves intended to be extracted from the mines had been extracted. On October 6, 2020, Cleco Power and SWEPCO made a joint filing with the LPSC seeking authorization to close the Oxbow mine and to include and defer certain accelerated mine closing costs in fuel and related ratemaking treatment. For more information on the joint filing, see “— Risks and Uncertainties.” For more information on the LPSC prudency review associated with the mine closure costs, see “— LPSC Audits and Reviews — Prudency Reviews — Dolet Hills Power Station and Mine Closure Costs and Deferred Lignite ~~Mine Closure~~ Costs.”

Cleco has letters of credit to MISO pursuant to energy market requirements. The letters of credit automatically renew each year and have no impact on Cleco Holdings’ or Cleco Power’s revolving credit facility.

Generally, neither Cleco Holdings nor Cleco Power has recourse that would enable them to recover amounts paid under their guarantee or indemnification obligations. There are no assets held as collateral for third parties that either Cleco Holdings or Cleco Power could obtain and liquidate to recover

amounts paid pursuant to the guarantees or indemnification obligations.

Other Commitments

Cleco has accrued for liabilities related to third parties, employee medical benefits, and AROs.

In April 2015, the EPA published a final rule in the Federal Register for regulating the disposal and management of CCRs from coal-fired power plants (CCR Rule). The CCR Rule established extensive requirements for existing and new CCR landfills and surface impoundments and all lateral expansions consisting of location restrictions, design and operating criteria, groundwater monitoring and corrective action, closure requirements and post closure care, and recordkeeping, notification, and internet posting requirements. In August 2018, the D.C. Court of Appeals vacated several requirements in the CCR regulation, which included eliminating the previous acceptability of compacted clay material as a liner for impoundments. As a result, in August 2020, the EPA published a final rule in the Federal Register that would set deadlines for costly modifications including retrofitting of clay-lined impoundments with compliant liners or closure of the impoundments. In November 2020, demonstrations were submitted to the EPA specifying an intended course of action for the ash disposal facilities at Big Cajun II, Rodemacher Unit 2, and the Dolet Hills Power Station, in order to comply with the final CCR Rule. On January 11, 2022, Cleco Power and Cleco


TABLE OF CONTENTS
		PAGE
GLOSSARY OF TERMS		3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		5

PART I	Financial Information
ITEM 1.	Cleco — Condensed Consolidated Financial Statements (Unaudited)	7
	Cleco Power — Condensed Consolidated Financial Statements (Unaudited)	1417
	Notes to the Unaudited Condensed Consolidated Financial Statements	2126
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4149
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	5162
ITEM 4.	Controls and Procedures	5363

PART II	Other Information
ITEM 1.	Legal Proceedings	5464
ITEM 1A.	Risk Factors	5464


ITEM 5.	Other Information	64
ITEM 6.	Exhibits	5465
	Signatures	5666


		FOR THE THREE MONTHS ENDED MAR. 31, 2022											FOR THE THREE MONTHS ENDED JUNE 30, 2022
(THOUSANDS)	(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL		(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS		TOTAL
Revenue from contracts with customers	Revenue from contracts with customers											Revenue from contracts with customers
Retail revenue	Retail revenue											Retail revenue
Residential (1)	Residential (1)	$	112,423		$	—		$	—	$	112,423	Residential (1)	$	131,813		$	—		$	—	$	131,813
Commercial (1)	Commercial (1)	76,534			—			—		76,534		Commercial (1)	84,336			—			—		84,336
Industrial (1)	Industrial (1)	46,274			—			—		46,274		Industrial (1)	50,188			—			—		50,188
Other retail (1)	Other retail (1)	4,129			—			—		4,129		Other retail (1)	4,297			—			—		4,297

Electric customer credits	Electric customer credits	(136)			—			—		(136)		Electric customer credits	(129)			—			—		(129)
Total retail revenue	Total retail revenue	239,224			—			—		239,224		Total retail revenue	270,505			—			—		270,505
Wholesale, net	Wholesale, net	55,364		(1)	(2,420)		(2)	—		52,944		Wholesale, net	91,934		(1)	(2,420)		(2)	—		89,514
Transmission	Transmission	13,892			—			—		13,892		Transmission	13,688			—			—		13,688
Other	Other	5,193			—			—		5,193		Other	4,998			—			—		4,998
Affiliate (3)	Affiliate (3)	1,459			27,393			(28,852)		—		Affiliate (3)	1,628			25,752			(27,380)		—
Total revenue from contracts with customers	Total revenue from contracts with customers	315,132			24,973			(28,852)		311,253		Total revenue from contracts with customers	382,753			23,332			(27,380)		378,705
Revenue unrelated to contracts with customers	Revenue unrelated to contracts with customers											Revenue unrelated to contracts with customers
Other	Other	1,372		(4)	1			1		1,374		Other	6,046		(4)	2			—		6,048
Total revenue unrelated to contracts with customers	Total revenue unrelated to contracts with customers	1,372			1			1		1,374		Total revenue unrelated to contracts with customers	6,046			2			—		6,048
Operating revenue, net	Operating revenue, net	$	316,504		$	24,974		$	(28,851)	$	312,627	Operating revenue, net	$	388,799		$	23,334		$	(27,380)	$	384,753


		FAIR VALUE				VALUATION TECHNIQUE	SIGNIFICANT UNOBSERVABLE INPUTS	FORWARD PRICE RANGE					FAIR VALUE				VALUATION TECHNIQUE	SIGNIFICANT UNOBSERVABLE INPUTS	FORWARD PRICE RANGE
(THOUSANDS, EXCEPT FORWARD PRICE RANGE)	(THOUSANDS, EXCEPT FORWARD PRICE RANGE)	ASSETS		LIABILITIES				LOW		HIGH		(THOUSANDS, EXCEPT FORWARD PRICE RANGE)	ASSETS		LIABILITIES				LOW		HIGH
FTRs at Mar. 31, 2023		$	837	$	204	RTO auction pricing	FTR price - per MWh	$	(1.84)	$	10.03
FTRs at June 30, 2023												FTRs at June 30, 2023	$	7,330	$	871	RTO auction pricing	FTR price - per MWh	$	(5.40)	$	8.06
FTRs at Dec. 31, 2022	FTRs at Dec. 31, 2022	$	2,570	$	294	RTO auction pricing	FTR price - per MWh	$	(5.11)	$	13.65	FTRs at Dec. 31, 2022	$	2,570	$	294	RTO auction pricing	FTR price - per MWh	$	(5.11)	$	13.65


		AMOUNT OF GAIN(LOSS) ON DERIVATIVES RECOGNIZED IN INCOME					AMOUNT OF GAIN(LOSS) ON DERIVATIVES RECOGNIZED IN INCOME
			FOR THE THREE MONTHS ENDED MAR. 31,					FOR THE THREE MONTHS ENDED JUNE 30,					FOR THE SIX MONTHS ENDED JUNE 30,
(THOUSANDS)	(THOUSANDS)	INCOME STATEMENT LINE ITEM	2023		2022				(THOUSANDS)	INCOME STATEMENT LINE ITEM	2023		2022		2023		2022
Commodity-related contracts	Commodity-related contracts								Commodity-related contracts
FTRs(1)	FTRs(1)	Electric operations	$	859	$	1,583			FTRs(1)	Electric operations	$	1,835	$	6,080	$	2,694	$	7,663
FTRs(1)	FTRs(1)	Purchased power	(596)		(1,238)				FTRs(1)	Purchased power	(1,499)		(1,846)		(2,096)		(3,083)
Natural gas derivatives(2)		Fuel used for electric generation	(6,540)		—
Natural gas derivatives(2) (3)									Natural gas derivatives(2) (3)	Fuel used for electric generation	(11,284)		—		(17,823)		—
Total	Total		$	(6,277)	$	345			Total		$	(10,948)	$	4,234	$	(17,225)	$	4,580


2022 (THOUSANDS)		CLECO POWER		OTHER			ELIMINATIONS		TOTAL
FOR THE THREE MONTHS ENDED JUNE 30, 2022 (THOUSANDS)											FOR THE THREE MONTHS ENDED JUNE 30, 2022 (THOUSANDS)	CLECO POWER		OTHER			ELIMINATIONS		TOTAL
Revenue	Revenue										Revenue
Electric operations	Electric operations	$	296,097	$	(2,420)		$	—	$	293,677	Electric operations	$	368,614	$	(2,420)		$	—	$	366,194
Other operations	Other operations	19,084		1			1		19,086		Other operations	18,686		2			—		18,688
Affiliate revenue	Affiliate revenue	1,459		27,393			(28,852)		—		Affiliate revenue	1,628		25,752			(27,380)		—
Electric customer credits	Electric customer credits	(136)		—			—		(136)		Electric customer credits	(129)		—			—		(129)
Operating revenue, net	Operating revenue, net	$	316,504	$	24,974		$	(28,851)	$	312,627	Operating revenue, net	$	388,799	$	23,334		$	(27,380)	$	384,753
Depreciation and amortization	Depreciation and amortization	$	45,239	$	4,379	(1)	$	—	$	49,618	Depreciation and amortization	$	44,299	$	4,373	(1)	$	1	$	48,673
Interest income	Interest income	$	740	$	31		$	(28)	$	743	Interest income	$	1,035	$	53		$	(22)	$	1,066
Interest charges	Interest charges	$	18,801	$	13,867		$	(27)	$	32,641	Interest charges	$	21,305	$	13,863		$	(21)	$	35,147
Federal and state income tax expense (benefit)	Federal and state income tax expense (benefit)	$	724	$	(8,257)		$	—	$	(7,533)	Federal and state income tax expense (benefit)	$	3,214	$	(6,791)		$	—	$	(3,577)
Income from continuing operations, net of income taxes		$	39,024	$	(13,833)		$	1	$	25,192
Income from discontinued operations, net of income taxes		$	—	$	130,552		$	—	$	130,552
Income (loss) from continuing operations, net of income taxes											Income (loss) from continuing operations, net of income taxes	$	54,705	$	(23,603)		$	(1)	$	31,101
Loss from discontinued operations, net of income taxes											Loss from discontinued operations, net of income taxes	—		(29,738)			—		(29,738)
Net income	Net income	$	39,024	$	116,719		$	1	$	155,744	Net income	$	54,705	$	(53,341)		$	(1)	$	1,363
Additions to property, plant, and equipment		$	38,492	$	1,707		$	—	$	40,199
Equity investment in investees (2)		$	2,072	$	(320,348)		$	320,348	$	2,072
Goodwill (2)		$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets (2)		$	6,834,970	$	1,237,097		$	181,683	$	8,253,750
(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger. (2) Balances as of December 31, 2022.

(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.											(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.


~~Cleco~~
	~~FOR THE THREE MONTHS ENDED MAR. 31, 2023~~
~~(THOUSANDS)~~	~~POSTRETIREMENT BENEFIT NET GAIN (LOSS)~~
~~Balance, Dec. 31, 2022~~	$	59


~~Amounts reclassified from AOCI~~
~~Amortization of postretirement benefit net gain~~	~~(422)~~


~~Balance, Mar. 31, 2023~~	$	~~(363)~~


	~~FOR THE THREE MONTHS ENDED MAR. 31, 2022~~
~~(THOUSANDS)~~	~~POSTRETIREMENT BENEFIT NET LOSS~~
~~Balance, Dec. 31, 2021~~	$	~~(23,629)~~



~~Amounts reclassified from AOCI~~
~~Amortization of postretirement benefit net loss~~	14


~~Balance, Mar. 31, 2022~~	$	~~(23,615)~~


	FOR THE THREE MONTHS ENDED MAR. 31, 2022
(THOUSANDS)	POSTRETIREMENT BENEFIT NET LOSS		NET LOSS ON CASH FLOW HEDGES		TOTAL AOCI
Balances, Dec. 31, 2021	$	(12,885)	$	(5,298)	$	(18,183)


Amounts reclassified from AOCI
Amortization of postretirement benefit net loss	306		—		306
Reclassification of net loss to interest charges	—		63		63

Balances, Mar. 31, 2022	$	(12,579)	$	(5,235)	$	(17,814)


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Cleco Power
			FOR THE THREE MONTHS ENDED MAR. 31,
					FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2023		2022			VARIANCE		CHANGE
Operating revenue
Base	$	144,286	$	157,024		$	(12,738)	(8.1)	%
Fuel cost recovery	152,062		139,073			12,989		9.3	%
Electric customer credits	(651)		(136)			(515)		(378.7)	%
Other operations	27,303		19,084			8,219		43.1	%
Affiliate revenue	1,688		1,459			229		15.7	%
Operating revenue, net	324,688		316,504			8,184		2.6	%
Operating expenses
Recoverable fuel and purchased power	151,824		138,951			(12,873)		(9.3)	%
Non-recoverable fuel and purchased power	7,225		12,041			4,816		40.0	%
Other operations and maintenance	53,988		48,729			(5,259)		(10.8)	%
Depreciation and amortization	50,733		45,239			(5,494)		(12.1)	%
Taxes other than income taxes	15,995		12,631			(3,364)		(26.6)	%



Total operating expenses	279,765		257,591			(22,174)		(8.6)	%
Operating income	44,923		58,913			(13,990)		(23.7)	%
Interest income	1,185		740			445		60.1	%
Allowance for equity funds used during construction	1,231		931			300		32.2	%
Other income (expense), net	1,306		(2,035)			3,341		164.2	%
Interest charges	24,338		18,801			(5,537)		(29.5)	%
Federal and state income tax expense	1,490		724			(766)		(105.8)	%
Net income	$	22,817	$	39,024		$	(16,207)	(41.5)	%


	FOR THE THREE MONTHS ENDED MAR. 31,
(MILLION kWh)	2023	2022	FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	754	890		(15.3)	%
Commercial	580	599		(3.2)	%
Industrial	526	544		(3.3)	%
Other retail	30	30		—	%
Total retail	1,890	2,063		(8.4)	%
Sales for resale	644	683		(5.7)	%
Total retail and wholesale customer sales	2,534	2,746		(7.7)	%


	FOR THE THREE MONTHS ENDED MAR. 31,
				2023 CHANGE
	2023	2022	NORMAL	PRIOR YEAR		NORMAL
Heating degree-days	517	925	843	(44.1)	%	(38.7)	%
Cooling degree-days	279	94	100	196.8	%	179.0	%


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


ITEM 6. EXHIBITS

CLECO
~~4.1~~*	10.1	~~Amended~~Supplemental Agreement, dated May 16, 2023, by and ~~Restated Third Supplemental Indenture dated as of May 1, 2023~~ between Cleco Corporate Holdings LLC and ~~Regions Bank (as successor to Wells Fargo Bank, N.A.), as trustee (incorporated by reference to exhibit 4.2 to Cleco’s Current Report on Form 8-K filed May 2, 2023)~~Mark Kleehammer
~~10.1~~	~~Amendment No. 1, dated February 17, 2023, to the Credit Agreement, dated May 21, 2021, by and among Cleco Corporate Holdings LLC, the lenders party thereto and Regions Bank, as administrative agent~~
~~10.2~~	~~Amendment No. 1, dated February 17, 2023, to the Term Loan Agreement, dated May 21, 2021, by and among Cleco Corporate Holdings LLC, the lenders party thereto and Regions Bank, as administrative agent~~
~~10.5~~	~~Form of Seventh Agreement to Extend the Board of Managers Services Agreement, effective May 1, 2023, by and among Cleco Group LLC, Cleco Corporate Holdings LLC, and Cleco Power LLC and Manager~~
31.1	CEO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	31.2	CFO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	32.1	CEO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	32.2	CFO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
	101.SCH	Inline XBRL Taxonomy Extension Schema
	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
	104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

CLECO POWER
~~10.3~~	~~Amendment No. 1, dated February 17, 2023, to the Credit Agreement, dated May 21, 2021, by and among Cleco Power LLC, the lenders party thereto and Regions Bank, as administrative agent~~
~~10.4~~	~~Amendment No. 1, dated February 17, 2023, to the Term Loan Agreement, dated May 21, 2021, by and among Cleco Power LLC, the lenders party thereto and Regions Bank, as administrative agent~~
~~10.5~~	~~Form of Seventh Agreement to Extend the Board of Managers Services Agreement, effective May 1, 2023, by and among Cleco Group LLC, Cleco Corporate Holdings LLC, and Cleco Power LLC and Manager~~
31.3	CEO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	31.4	CFO Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002
	32.3	CEO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	32.4	CFO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
	101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
	101.SCH	Inline XBRL Taxonomy Extension Schema
	101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
	101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
	101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
	101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
	104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


			CLECO CORPORATE HOLDINGS LLC
			(Registrant)

			By:			/s/ Tonita Laprarie
						Tonita Laprarie
						Controller and Chief Accounting Officer


			CLECO POWER LLC
			(Registrant)

			By:			/s/ Tonita Laprarie
						Tonita Laprarie
						Controller and Chief Accounting Officer