SEC Info - Cleco Corporate Holdings LLC, et al.

We have served as the Company’s auditor since 2016.


CLECO
CLECO POWER						2023 FORM 10-K

CLECO

Consolidated Statements of Income

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating revenue

Electric operations

i 1,187,915

i 1,513,386

i 1,192,569

Other operations

i 111,565

i 98,768

i 74,633

Gross operating revenue

i 1,299,480

i 1,612,154

i 1,267,202

Electric customer credits

( i 60,689)

( i 7,674)

( i 40,878)

Operating revenue, net

i 1,238,791

i 1,604,480

i 1,226,324

Operating expenses

Fuel used for electric generation

i 506,264

i 430,215

i 262,135

Purchased power

i 160,570

i 286,756

i 194,818

Other operations and maintenance

i 248,085

i 230,175

i 239,212

Depreciation and amortization

i 199,935

i 186,139

i 185,313

Taxes other than income taxes

i 64,469

i 57,965

i 52,843

Regulatory disallowance

i —

i 13,841

i —

Total operating expenses

i 1,179,323

i 1,205,091

i 934,321

Operating income

i 59,468

i 399,389

i 292,003

Interest income

i 5,393

i 5,250

i 3,297

Allowance for equity funds used during construction

i 5,747

i 3,740

i 9,905

Other expense, net

( i 694)

( i 11,240)

( i 15,061)

Interest charges

Interest charges, net

i 165,529

i 145,773

i 131,512

Allowance for borrowed funds used during construction

( i 673)

( i 1,817)

( i 2,714)

Total interest charges

i 164,856

i 143,956

i 128,798

(Loss) income from continuing operations before income taxes

( i 94,942)

i 253,183

i 161,346

Federal and state income tax (benefit) expense

( i 65,073)

i 20,035

i 1,333

(Loss) income from continuing operations, net of income taxes

( i 29,869)

i 233,148

i 160,013

Income (loss) from discontinued operations, net of income taxes

i 14,642

( i 44,337)

i 34,953

Net (loss) income

( i 15,227)

i 188,811

i 194,966

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


CLECO
CLECO POWER						2023 FORM 10-K

CLECO

Consolidated Statements of Comprehensive Income

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Net (loss) income

( i 15,227)

i 188,811

i 194,966

Other comprehensive income, net of tax

Postretirement benefits (loss) gain (net of tax benefit of $ i 1,905, tax expense of $ i 8,728, and tax expense of $ i 394, respectively)

( i 5,171)

i 23,688

i 2,167

Total other comprehensive (loss) income, net of tax

( i 5,171)

i 23,688

i 2,167

Comprehensive (loss) income, net of tax

( i 20,398)

i 212,499

i 197,133

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


CLECO
CLECO POWER						2023 FORM 10-K


CLECO

Consolidated Balance Sheets
	AT DEC. 31,
(THOUSANDS)	2023		2022
Assets
Current assets
Cash and cash equivalents	$	i 122,576	$	i 54,541
Restricted cash and cash equivalents	i 15,818		i 23,549
Customer accounts receivable (less allowance for credit losses of $ i 3,012 in 2023 and $ i 1,147 in 2022)	i 48,949		i 72,646
Accounts receivable - affiliate	i 24,216		i 14,613
Other accounts receivable	i 30,518		i 38,332

Unbilled revenue	i 42,856		i 46,040
Fuel inventory, at average cost	i 68,387		i 57,078
Materials and supplies, at average cost	i 141,688		i 116,943
Energy risk management assets	i 8,129		i 49,321
Accumulated deferred fuel	i 11,627		i 57,881
Cash surrender value of company-/trust-owned life insurance policies	i 56,922		i 52,859
Prepayments	i 24,269		i 16,623
Regulatory assets	i 34,280		i 47,173
Assets held for sale - discontinued operations	i 159,514		i 135,430
Other current assets	i 918		i 838
Total current assets	i 790,667		i 783,867
Property, plant, and equipment
Property, plant, and equipment	i 4,838,994		i 4,604,039
Accumulated depreciation	( i 924,624)		( i 752,376)
Net property, plant, and equipment	i 3,914,370		i 3,851,663
Construction work in progress	i 119,572		i 114,310
Total property, plant, and equipment, net	i 4,033,942		i 3,965,973

Goodwill	i 1,490,797		i 1,490,797

Operating lease right of use assets	i 20,070		i 22,636
Restricted cash and cash equivalents	i 113,573		i 109,415

Note receivable	i 11,990		i 12,908
Regulatory assets - deferred taxes, net	i 43,866		i 8,803
Regulatory assets	i 615,495		i 611,917

Intangible asset - securitization	i 398,658		i 413,123
Intangible assets - other	i 10,633		i 20,086
Assets held for sale - discontinued operations	i 546,218		i 727,160
Energy risk management assets	i —		i 58,895

Other deferred charges	i 24,484		i 28,169
Total assets	$	i 8,100,393	$	i 8,253,749
The accompanying notes are an integral part of the consolidated financial statements.

(Continued on next page)


CLECO
CLECO POWER						2023 FORM 10-K


CLECO

Consolidated Balance Sheets
	AT DEC. 31,
(THOUSANDS)	2023		2022
Liabilities and member’s equity
Liabilities
Current liabilities
Short-term debt	$	i 110,000	$	i 109,000
Long-term debt and finance leases due within one year	i 256,811		i 340,867
Accounts payable	i 119,801		i 135,604

Accounts payable - affiliate	i 10,683		i 13,092
Customer deposits	i 56,982		i 57,851
Provision for rate refund	i 60,768		i 3,074

Taxes payable	i 19,963		i 17,448
Interest accrued	i 22,209		i 25,540

Energy risk management liabilities	i 15,786		i 7,274

Regulatory liabilities - deferred taxes, net	i 21,939		i 42,890
Deferred compensation	i 14,277		i 12,162

Storm reserves	i —		i 9,409
Liabilities held for sale - discontinued operations	i 39,019		i 68,501
Postretirement benefit obligations	i 35,520		i 9,737
Other current liabilities	i 24,378		i 20,248
Total current liabilities	i 808,136		i 872,697
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	i 801,397		i 820,300

Postretirement benefit obligations	i 196,321		i 200,580


Storm reserves	i 111,509		i 109,353




Asset retirement obligations	i 13,723		i 15,429
Operating lease liabilities	i 17,276		i 19,790
Liabilities held for sale - discontinued operations	i 75,933		i 94,543
Customer advances for construction	i 26,815		i 9,783
Other deferred credits	i 34,186		i 25,113
Total long-term liabilities and deferred credits	i 1,277,160		i 1,294,891
Long-term debt and finance leases, net	i 3,141,924		i 3,139,094
Total liabilities	i 5,227,220		i 5,306,682
Commitments and contingencies (Note 16)	i		i
Member’s equity	i 2,873,173		i 2,947,067
Total liabilities and member’s equity	$	i 8,100,393	$	i 8,253,749
The accompanying notes are an integral part of the consolidated financial statements.


CLECO
CLECO POWER						2023 FORM 10-K

CLECO

Consolidated Statements of Cash Flows

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating activities

Net (loss) income

( i 15,227)

i 188,811

i 194,966

Adjustment to reconcile net (loss) income to net cash provided by operating activities

Depreciation and amortization

i 237,614

i 289,486

i 273,392

Provision for credit losses

i 5,506

i 3,357

i 5,471

Regulatory disallowance

i —

i 13,841

i —

Electric customer credits

i 58,700

i —

Unearned compensation expense

i 10,102

i 5,502

i 6,678

Allowance for equity funds used during construction

( i 5,747)

( i 3,740)

( i 9,905)

Loss (gain) on energy risk management assets and liabilities, net

i 103,876

( i 21,805)

( i 80,314)

Loss on classification as held for sale

i 173,000

i —

Deferred lease revenue

( i 2,301)

( i 9,205)

Deferred income taxes

( i 75,103)

( i 7,911)

i 13,954

Cash surrender value of company-/trust-owned life insurance

( i 2,211)

i 1,266

( i 9,438)

Changes in assets and liabilities

Accounts receivable

i 8,112

( i 61,848)

( i 25,865)

Accounts receivable - affiliate

( i 9,445)

( i 11,309)

( i 1,379)

Unbilled revenue

i 3,184

( i 8,377)

i 2,464

Fuel inventory and materials and supplies

( i 52,621)

( i 43,703)

i 30,254

Prepayments

( i 22,438)

( i 15,846)

( i 12,097)

Accounts payable

( i 37,827)

i 20,711

( i 2,379)

Accounts payable - affiliate

( i 2,409)

( i 38,206)

i 10,014

Customer deposits

i 5,311

i 6,778

i 11,241

Provision for merger commitments

i —

( i 2,620)

Postretirement benefit obligations

( i 2,793)

( i 847)

i 7,106

Regulatory assets and liabilities, net

i 7,592

i 21,537

( i 163,788)

Deferred fuel recoveries

i 54,028

i 8,742

( i 29,405)

Asset retirement obligations

( i 7,348)

( i 4,958)

( i 959)

Other deferred accounts

( i 1,632)

( i 7,333)

( i 13,032)

Taxes accrued

i 225

i 11,337

( i 10,145)

Interest accrued

( i 3,330)

i 10,337

( i 380)

Energy risk management collateral

( i 6,500)

i 6,500

i —

Other operating

i 874

( i 8,205)

( i 1,989)

Net cash provided by operating activities

i 421,192

i 344,912

i 182,640

Investing activities

Additions to property, plant, and equipment

( i 230,238)

( i 236,767)

( i 311,141)

Proceeds from sale of property, plant, and equipment

i 956

i 993

i 1,654

Return of equity investment in investee

i 80

i —

i 7,000

Return of investment in company-/trust-owned life insurance

i 417

i 41,671

i 820

Other investing

i 969

i 846

i 834

Net cash used in investing activities

( i 227,816)

( i 193,257)

( i 300,833)

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

(Continued on next page)


CLECO
CLECO POWER						2023 FORM 10-K

CLECO

Consolidated Statements of Cash Flows

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Financing activities

Draws on revolving credit facilities

i 125,000

i 226,000

i 185,000

Payments on revolving credit facilities

( i 124,000)

( i 117,000)

( i 260,000)

Issuances of long-term debt

i 100,000

i 424,946

i 325,000

Repayments of long-term debt

( i 175,174)

( i 417,700)

( i 66,000)

Payment of financing costs

( i 375)

( i 6,968)

( i 4,408)

Distributions to member

( i 53,496)

( i 219,588)

i —

Other financing

( i 836)

( i 755)

( i 682)

Net cash used in financing activities

( i 128,881)

( i 111,065)

i 178,910

Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents

i 64,495

i 40,590

i 60,717

Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period

i 191,572

(1)

i 150,982

i 90,265

Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period

i 256,067

(2)

i 191,572

(1)

i 150,982

Supplementary cash flow information

Interest paid, net of amount capitalized

i 170,680

i 131,760

i 126,061

Income taxes paid, net

i 2,162

i —

i 72

Supplementary non-cash investing and financing activities

Accrued additions to property, plant, and equipment

i 5,052

i 10,247

i 10,369

Reduction in property, plant, and equipment due to regulatory disallowance

i —

i 13,841

i —

Reduction in property, plant, and equipment due to securitization of capitalized storm costs

i —

i 197,689

i —

(1) Includes cash and cash equivalents of $ i 54,541, current restricted cash and cash equivalents of $ i 23,549, and non-current restricted cash and cash equivalents of $ i 109,415. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $ i 4,067.

(2) Includes cash and cash equivalents of $ i 122,576, current restricted cash and cash equivalents of $ i 15,818, and non-current restricted cash and cash equivalents of $ i 113,573. Also includes cash, cash equivalents, and restricted cash equivalents in assets held for sale of $ i 4,100.

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


CLECO
CLECO POWER						2023 FORM 10-K

CLECO

Consolidated Statements of Changes in Member’s Equity

(THOUSANDS)

MEMBERSHIP

INTEREST

RETAINED
EARNINGS

AOCI

TOTAL

MEMBER’S

EQUITY

Balances, Dec. 31, 2020

i 2,454,276

i 328,543

( i 25,796)

i 2,757,023

Net income

—

i 194,966

—

i 194,966

Other comprehensive income, net of tax

—

i 2,167

Balances, Dec. 31, 2021

i 2,454,276

i 523,509

( i 23,629)

i 2,954,156

Distributions to member

—

( i 219,588)

—

( i 219,588)

Net income

—

i 188,811

—

i 188,811

Other comprehensive income, net of tax

—

i 23,688

Balances, Dec. 31, 2022

i 2,454,276

i 492,732

i 59

i 2,947,067

Distributions to member

—

( i 53,496)

—

( i 53,496)

Net loss

—

( i 15,227)

—

( i 15,227)

Other comprehensive loss, net of tax

—

( i 5,171)

Balances, Dec. 31, 2023

i 2,454,276

i 424,009

( i 5,112)

i 2,873,173

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


CLECO
CLECO POWER						2023 FORM 10-K

Report of Independent Registered Public Accounting Firm

To the Board of Managers and Member of

Cleco Power LLC

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Cleco Power LLC and its subsidiaries (the “Company” or “Cleco Power”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in member’s equity, and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated

financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the Effects of Regulatory Matters

As described in Notes 2, 6, and 14 to the consolidated financial statements, the Company complies with the accounting policies and practices prescribed by its regulatory commissions, Federal Energy Regulatory Commission (FERC) and the Louisiana Public Service Commission (LPSC). The Company’s retail rates are regulated by the LPSC and its tariffs for transmission services are regulated by FERC, while rates for wholesale power sales are based on market-based rates and are ultimately reviewed by FERC. The Company must evaluate its various transactions related to regulatory orders and accounting guidance to ensure the appropriate timing of revenue recognition, the evaluation of cost deferral, and the recoverability and refund of certain assets. The Company capitalizes or defers certain costs for recovery from customers and recognizes a liability for amounts expected to be returned to customers based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered or refunded through the ratemaking process. As of December 31, 2023, there were $606.5 million of deferred costs included in regulatory assets and $195.5 million of regulatory liabilities awaiting cash outflow or potential refund. Under the current regulatory environment, the Company believes these regulatory assets will be fully recoverable; however, if in the future, as a result of regulatory changes or competition, the Company’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, the Company would be required to write-down such assets. Further, potential deregulation of the industry or possible future changes in the method of rate regulation of the Company could require discontinuance of the application of the authoritative guidance of regulated operations.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These


CLECO
CLECO POWER						2023 FORM 10-K

procedures included, among others, evaluating (i) management’s process for identifying relevant transactions which require regulatory treatment; (ii) management’s assessment regarding the accounting impacts arising from regulatory orders and accounting guidance; (iii) the reasonableness of management’s assessment regarding the timing of revenue recognition, probability of recovery of regulatory assets, and the establishment of regulatory liabilities; and (iv) the regulatory assets and liabilities calculated by management based on provisions and formulas outlined in rate orders and other correspondence.

/s/ i PricewaterhouseCoopers LLP

i New Orleans, Louisiana

We have served as the Company’s auditor since 2016.


CLECO
CLECO POWER						2023 FORM 10-K

CLECO POWER

Consolidated Statements of Income

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating revenue

Electric operations

i 1,197,369

i 1,523,066

i 1,202,249

Other operations

i 111,561

i 98,759

i 74,625

Affiliate revenue

i 8,904

i 6,377

i 5,641

Gross operating revenue

i 1,317,834

i 1,628,202

i 1,282,515

Electric customer credits

( i 60,689)

( i 7,674)

( i 40,878)

Operating revenue, net

i 1,257,145

i 1,620,528

i 1,241,637

Operating expenses

Fuel used for electric generation

i 389,427

i 610,737

i 396,279

Purchased power

i 160,570

i 286,756

i 194,818

Other operations and maintenance

i 233,863

i 216,851

i 223,257

Depreciation and amortization

i 191,745

i 178,231

i 173,498

Taxes other than income taxes

i 60,676

i 55,075

i 49,598

Regulatory disallowance

i —

i 13,841

i —

Total operating expenses

i 1,036,281

i 1,361,491

i 1,037,450

Operating income

i 220,864

i 259,037

i 204,187

Interest income

i 5,011

i 5,082

i 3,294

Allowance for equity funds used during construction

i 5,747

i 3,740

i 9,905

Other expense, net

( i 28)

( i 7,081)

( i 19,561)

Interest charges

Interest charges, net

i 99,552

i 90,035

i 75,804

Allowance for borrowed funds used during construction

( i 673)

( i 1,817)

( i 2,714)

Total interest charges

i 98,879

i 88,218

i 73,090

Income before income taxes

i 132,715

i 172,560

i 124,735

Federal and state income tax (benefit) expense

( i 4,434)

i 2,503

( i 9,353)

Net income

i 137,149

i 170,057

i 134,088

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


CLECO
CLECO POWER						2023 FORM 10-K

CLECO POWER

Consolidated Statements of Comprehensive Income

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Net income

i 137,149

i 170,057

i 134,088

Other comprehensive income, net of tax

Postretirement benefits gain (loss) (net of tax benefit of $ i 825, tax expense of $ i 3,525, and tax expense of $ i 2,024, respectively)

( i 2,237)

i 9,567

i 6,254

Amortization of interest rate derivatives to earnings (net of tax expense of $ i 93, $ i 93, and $ i 28, respectively)

i 251

i 316

Total other comprehensive income, net of tax

( i 1,986)

i 9,818

i 6,570

Comprehensive income, net of tax

i 135,163

i 179,875

i 140,658

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


CLECO
CLECO POWER						2023 FORM 10-K


CLECO POWER

Consolidated Balance Sheets
	AT DEC. 31,
(THOUSANDS)	2023		2022
Assets
Utility plant and equipment
Property, plant, and equipment	$	i 5,969,355	$	i 5,736,526
Accumulated depreciation	( i 2,244,217)		( i 2,082,153)
Net property, plant, and equipment	i 3,725,138		i 3,654,373
Construction work in progress	i 118,249		i 113,470
Total utility plant and equipment, net	i 3,843,387		i 3,767,843
Current assets
Cash and cash equivalents	i 49,211		i 14,703
Restricted cash and cash equivalents	i 15,818		i 23,549
Customer accounts receivable (less allowance for credit losses of $ i 3,012 in 2023 and $ i 1,147 in 2022)	i 48,949		i 72,646
Accounts receivable - affiliate	i 4,543		i 3,771
Other accounts receivable	i 27,768		i 33,444

Unbilled revenue	i 42,856		i 46,040
Fuel inventory, at average cost	i 68,387		i 57,078
Materials and supplies, at average cost	i 141,688		i 116,943
Energy risk management assets	i 3,087		i 2,570
Accumulated deferred fuel	i 11,627		i 57,881
Cash surrender value of company-owned life insurance policies	i 9,792		i 9,471
Prepayments	i 17,375		i 11,765
Regulatory assets	i 26,545		i 39,438
Other current assets	i 918		i 838
Total current assets	i 468,564		i 490,137


Operating lease right of use assets	i 20,070		i 22,628
Restricted cash and cash equivalents	i 113,549		i 109,392

Note receivable	i 11,990		i 12,908
Regulatory assets - deferred taxes, net	i 43,866		i 8,803
Regulatory assets	i 505,623		i 491,978
Intangible asset - securitization	i 398,658		i 413,123


Other deferred charges	i 23,835		i 27,361
Total assets	$	i 5,429,542	$	i 5,344,173
The accompanying notes are an integral part of the consolidated financial statements.

(Continued on next page)


CLECO
CLECO POWER						2023 FORM 10-K


CLECO POWER

Consolidated Balance Sheets
	AT DEC. 31,
(THOUSANDS)	2023		2022
Liabilities and member’s equity
Member’s equity	$	i 2,063,237	$	i 2,022,912
Long-term debt and finance leases, net	i 1,697,152		i 1,786,447
Total capitalization	i 3,760,389		i 3,809,359
Current liabilities
Short-term debt	i —		i 45,000
Long-term debt and finance leases due within one year	i 190,314		i 110,344
Accounts payable	i 95,565		i 119,435

Accounts payable - affiliate	i 13,200		i 12,448
Customer deposits	i 56,982		i 57,851
Provision for rate refund	i 60,768		i 3,074

Taxes payable	i 23,709		i 15,277
Interest accrued	i 11,752		i 15,276

Energy risk management liabilities	i 15,112		i 4,864

Regulatory liabilities - deferred taxes, net	i 21,939		i 42,890

Storm reserves	i —		i 9,409
Postretirement benefit obligations	i 30,777		i 4,981
Other current liabilities	i 14,617		i 13,379
Total current liabilities	i 534,735		i 454,228
Commitments and contingencies (Note 16)	i		i
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	i 806,560		i 770,127

Postretirement benefit obligations	i 132,321		i 137,754


Storm reserves	i 111,509		i 109,353




Asset retirement obligations	i 13,598		i 15,301
Operating lease liabilities	i 17,276		i 19,790
Customer advances for construction	i 26,815		i 9,783
Other deferred credits	i 26,339		i 18,478
Total long-term liabilities and deferred credits	i 1,134,418		i 1,080,586
Total liabilities and member’s equity	$	i 5,429,542	$	i 5,344,173
The accompanying notes are an integral part of the consolidated financial statements.


CLECO
CLECO POWER						2023 FORM 10-K

CLECO POWER

Consolidated Statements of Cash Flows

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating activities

Net income

i 137,149

i 170,057

i 134,088

Adjustment to reconcile net income to net cash provided by operating activities

Depreciation and amortization

i 197,366

i 185,029

i 182,373

Provision for credit losses

i 5,506

i 3,357

i 5,471

Regulatory disallowance

i —

i 13,841

i —

Electric customer credits

i 58,700

i —

Unearned compensation expense

i 1,661

i 858

i 1,548

Allowance for equity funds used during construction

( i 5,747)

( i 3,740)

( i 9,905)

Deferred income taxes

( i 21,112)

( i 4,690)

( i 9,211)

Changes in assets and liabilities

Accounts receivable

i 18,044

( i 48,353)

( i 19,707)

Accounts receivable - affiliate

i 1,286

i 13,253

i 5,531

Unbilled revenue

i 3,184

( i 8,377)

i 2,464

Fuel inventory and materials and supplies

( i 36,443)

( i 27,764)

i 11,767

Prepayments

( i 5,407)

( i 3,808)

( i 2,370)

Accounts payable

( i 19,185)

( i 854)

i 1,135

Accounts payable - affiliate

i 1,060

( i 56,714)

( i 2,071)

Customer deposits

i 5,311

i 6,778

i 11,241

Provision for merger commitments

i —

( i 2,120)

Postretirement benefit obligations

( i 1,839)

i 215

i 5,586

Regulatory assets and liabilities, net

i 5,604

i 19,550

( i 165,775)

Deferred fuel recoveries

i 54,028

i 8,742

( i 29,405)

Asset retirement obligations

( i 7,124)

( i 4,728)

i 300

Other deferred accounts

i 4,441

( i 2,281)

( i 6,199)

Taxes accrued

i 6,567

i 9,704

( i 7,647)

Interest accrued

( i 3,524)

i 10,196

( i 277)

Other operating

i 417

( i 6,006)

( i 4,299)

Net cash provided by operating activities

i 399,943

i 274,265

i 102,518

Investing activities

Additions to property, plant, and equipment

( i 220,982)

( i 228,940)

( i 300,957)

Proceeds from sale of property, plant, and equipment

i 859

i 905

i 1,558

Return of equity investment in investee

i 80

i —

i 7,000

Return of investment in company-owned life insurance

i 417

i 6,496

i 820

Other investing

i 969

i 846

i 834

Net cash used in investing activities

( i 218,657)

( i 220,693)

( i 290,745)

Financing activities

Draws on revolving credit facility

i 25,000

i 162,000

i 185,000

Payments on revolving credit facility

( i 70,000)

( i 117,000)

( i 260,000)

Issuances of long-term debt

i 100,000

i 424,946

i 325,000

Repayments of long-term debt

( i 109,574)

( i 350,000)

i —

Payment of financing costs

( i 104)

( i 6,960)

( i 3,141)

Distributions to member

( i 94,838)

( i 105,500)

i —

Other financing

( i 836)

( i 755)

( i 682)

Net cash (used in) provided by financing activities

( i 150,352)

i 6,731

i 246,177

Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents

i 30,934

i 60,303

i 57,950

Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period

i 147,644

(1)

i 87,341

i 29,391

Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period

i 178,578

(2)

i 147,644

(1)

i 87,341


CLECO
CLECO POWER						2023 FORM 10-K

CLECO POWER

Consolidated Statements of Cash Flows

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Supplementary cash flow information

Interest paid, net of amount capitalized

i 98,143

i 71,912

i 68,373

Supplementary non-cash investing and financing activities

Accrued additions to property, plant, and equipment

i 4,196

i 9,954

i 9,696

Reduction in property, plant, and equipment due to regulatory disallowance

i —

i 13,841

i —

Reduction in property, plant, and equipment due to securitization of capitalized storm costs

i —

i 197,689

i —

(1) Includes cash and cash equivalents of $ i 14,703, current restricted cash and cash equivalents of $ i 23,549, and non-current restricted cash and cash equivalents of $ i 109,392.

(2) Includes cash and cash equivalents of $ i 49,211, current restricted cash and cash equivalents of $ i 15,818, and non-current restricted cash and cash equivalents of $ i 113,549.

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


CLECO
CLECO POWER						2023 FORM 10-K

CLECO POWER

Consolidated Statements of Changes in Member’s Equity

(THOUSANDS)

MEMBER’S
EQUITY

AOCI

TOTAL

MEMBER’S

EQUITY

Balances, Dec. 31, 2020

i 1,832,632

( i 24,753)

i 1,807,879

Net income

i 134,088

—

i 134,088

Other comprehensive income, net of tax

—

i 6,570

Balances, Dec. 31, 2021

i 1,966,720

( i 18,183)

i 1,948,537

Distributions to member

( i 105,500)

—

( i 105,500)

Net income

i 170,057

—

i 170,057

Other comprehensive income, net of tax

—

i 9,818

Balances, Dec. 31, 2022

i 2,031,277

( i 8,365)

i 2,022,912

Distributions to member

( i 94,838)

—

( i 94,838)

Net income

i 137,149

—

i 137,149

Other comprehensive loss, net of tax

—

( i 1,986)

Balances, Dec. 31, 2023

i 2,073,588

( i 10,351)

i 2,063,237

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


CLECO
CLECO POWER						2023 FORM 10-K

Index to Applicable Notes to the Financial Statements of the Registrants


Note 1	The Company	Cleco and Cleco Power
Note 2	Summary of Significant Accounting Policies	Cleco and Cleco Power
Note 3	Discontinued Operations	Cleco
Note 4	Leases	Cleco and Cleco Power
Note 5	Revenue Recognition	Cleco and Cleco Power
Note 6	Regulatory Assets and Liabilities	Cleco and Cleco Power
Note 7	Jointly Owned Generation Units	Cleco and Cleco Power
Note 8	Fair Value Accounting Instruments	Cleco and Cleco Power
Note 9	Derivative Instruments	Cleco and Cleco Power
Note 10	Debt	Cleco and Cleco Power
Note 11	Pension Plan and Employee Benefits	Cleco and Cleco Power
Note 12	Income Taxes	Cleco and Cleco Power
Note 13	Segment Disclosures	Cleco
Note 14	Regulation and Rates	Cleco and Cleco Power
Note 15	Variable Interest Entities	Cleco and Cleco Power
Note 16	Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees	Cleco and Cleco Power
Note 17	Affiliate Transactions	Cleco and Cleco Power
Note 18	Intangible Assets and Goodwill	Cleco and Cleco Power
Note 19	Accumulated Other Comprehensive Loss	Cleco and Cleco Power

Notes to the Financial Statements

Note 1 — The Company

Cleco is composed of the following:

•Cleco Power, a regulated electric utility subsidiary, which owns i nine generating units with a total rated capacity of i 3,035 MW and serves approximately i 295,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana. Cleco Power also owns a i 50% interest in Oxbow. Cleco Power owns all of the outstanding membership interests in Cleco Securitization I, a special purpose limited liability company that is consolidated with Cleco Power in its financial statements. For more information on Oxbow and Cleco Securitization I, see Note 15 — “Variable Interest Entities.”

•Cleco Cajun, an unregulated electric utility subsidiary, which owns i 14 generating units with a total rated capacity of i 3,379 MW and supplies wholesale power and capacity in Louisiana. Cleco Cajun’s Cottonwood Plant is leased to a third-party in which the third party operates the plant and receives all revenues from the operations of the plant. On November 22, 2023, Cleco Cajun entered into the Cleco Cajun Divestiture Purchase and Sale Agreement to sell its unregulated business, the Cleco Cajun Sale Group. The Cleco Cajun Sale Group is presented as discontinued operations, and the financial information for historical periods provided in this Annual Report on Form 10-K has been recast to reflect this presentation. For more information, see Note 3 — “Discontinued Operations.”

•Cleco’s other operations consist of the following:

◦Cleco Holdings, a holding company,

◦Support Group, a shared services subsidiary, and

◦Diversified Lands, an investment subsidiary.

Note 2 — Summary of Significant Accounting Policies

Discontinued Operations

i On November 22, 2023, the Cleco Cajun Divestiture Purchase and Sale Agreement was entered into between the Cleco Cajun Sellers and the Cleco Cajun Purchasers whereby the Cleco Cajun Sellers have agreed to sell the Cleco Cajun Sale Group to the Cleco Cajun Purchasers. 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 the sale 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 Annual Report on Form 10-K has been recast to reflect this presentation. For more information, see Note 3 — “Discontinued Operations.”

Use of Estimates

i The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying consolidated financial statements of Cleco include the accounts of Cleco Holdings 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


CLECO
CLECO POWER						2023 FORM 10-K

of Cleco Securitization I are consolidated with the financial statements of Cleco Power. For additional information about Cleco Securitization I, see Note 15 — “Variable Interest Entities.” For additional information about the storm recovery securitization financing and its regulatory impacts, see Note 6— “Regulatory Assets and Liabilities — Deferred Storm Restoration Costs.”

Goodwill

i Goodwill is the excess of the purchase price (consideration transferred and liabilities assumed) over the estimated fair value of net assets of the acquired business and is not subject to amortization. Goodwill is assessed as of August 1 of each year or more often if an event occurs or circumstances change that would indicate the carrying amount may be impaired. For more information on goodwill, see Note 18 — “Intangible Assets and Goodwill — Goodwill.”

Intangible Assets

Intangible assets include Cleco Securitization I’s right to bill and collect storm recovery charges and fair value adjustments for acquired long-term wholesale power supply agreements. These intangible assets are being amortized in a manner that best reflects the economic impact derived from such assets.

Impairment is tested if there are events or circumstances that indicate that an impairment analysis should be performed. If such an event or circumstance occurs, intangible impairment testing is performed prior to goodwill impairment testing. Impairment is calculated as the excess of the asset and liabilities’ respective carrying amounts over their respective fair values. For more information on intangible assets, see Note 18 — “Intangible Assets and Goodwill.”

Statements of Cash Flows

Cleco’s and Cleco Power’s Consolidated Statements of Cash Flows are prepared using the indirect method. This method requires adjusting net income to remove the effects of all deferrals and accruals of operating cash receipts and payments and to remove items whose cash effects are related to investing and financing cash flows.

Regulation

Cleco Power is subject to regulation by FERC and the LPSC. Cleco Cajun is subject to regulation by FERC. Cleco complies with the accounting policies and practices prescribed by its regulatory commissions. Cleco Power’s retail rates are regulated by the LPSC. Cleco Power’s and Cleco Cajun’s rates for transmission services are regulated by FERC. Rates for wholesale power sales are based on market-based rates. Cleco Power must evaluate its various transactions related to regulatory orders and accounting guidance to ensure the appropriate timing of revenue recognition, the evaluation of cost deferral, and the recoverability of certain assets and refund of certain liabilities. Cleco Power capitalizes or defers certain costs for recovery from its customers and recognizes a liability for amounts expected to be returned to its customers based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered or refunded through the ratemaking process. Regulatory assets and liabilities are amortized consistent with the treatment in the ratemaking process. Pursuant to this regulatory process, Cleco has recorded regulatory assets and liabilities.

Any future plan adopted by the LPSC for purposes of transitioning utilities from LPSC regulation to retail competition

may affect the regulatory assets and liabilities recorded by Cleco if the criteria for the application of the authoritative guidelines for industry regulated operations cannot continue to be met. At this time, Cleco cannot predict whether any legislation or regulation affecting Cleco will be enacted or adopted and, if enacted, what form such legislation or regulation may take.

For more information regarding the regulatory assets and liabilities recorded by Cleco Power, see Note 6 — “Regulatory Assets and Liabilities.” For more information on Cleco Power’s retail rates, see Note 14 — “Regulation and Rates.”

AROs

Cleco and Cleco Power recognize an ARO when there is a legal obligation under existing or enacted law, statute, written or oral contract, or by legal construction under the doctrine of promissory estoppel to incur costs to remove an asset when the asset is retired. These guidelines also require an ARO, which is conditional on a future event, to be recorded even if the event has not yet occurred.

Cleco and Cleco Power recognize AROs at the present value of the projected liability in the period in which it is incurred, if a reasonable estimate of fair value can be made. The liability is accreted to its present value each accounting period. Cleco Power defers this accretion as a regulatory asset based on its determination that these costs can be collected from customers. Concurrent with the recognition of the liability, Cleco and Cleco Power capitalize these costs to the related property, plant, and equipment asset. These capitalized costs are depreciated over the same period as the related property asset. Cleco Power also defers the current depreciation of the asset retirement cost as a regulatory asset.

For more information on Cleco’s ARO activity, see Note 16 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Other Commitments.”

Property, Plant, and Equipment

i Property, plant, and equipment consists primarily of electric utility generation and energy transmission and distribution assets. Property, plant, and equipment are stated at the cost to acquire or construct the assets, which includes certain materials, labor, payroll taxes and benefits, administrative and general costs, and the estimated cost of funds used during construction. Jointly owned assets are reflected in property, plant, and equipment at Cleco Power’s share of the cost to construct or purchase the respective assets. For information on jointly owned assets, see Note 7 — “Jointly Owned Generation Units.”

At the date of the 2016 Merger, Cleco’s gross balance of fixed depreciable assets was adjusted to be net of accumulated depreciation, as no accumulated depreciation existed on such date. Since pushdown accounting was not elected at the Cleco Power level, Cleco Power retained its accumulated depreciation.

Cleco’s cost of improvements to property, plant, and equipment is capitalized. Costs associated with repairs and major maintenance projects are expensed as incurred. Cleco capitalizes the cost to purchase or develop software for internal use. Cleco Power defers project costs to construction work in progress that it believes are prudently incurred and probable of recovery through future rates. These deferred costs are related to the initial stage of a construction project during which time the feasibility of the construction of property, plant, and equipment is being investigated.


CLECO
CLECO POWER						2023 FORM 10-K

Upon retirement or disposition, the cost of Cleco Power’s depreciable plant and the cost of removal, net of salvage value, are charged to accumulated depreciation. For Cleco’s other subsidiaries, upon disposition or retirement of depreciable assets, the difference between the net book value of the property and any proceeds received for the property is recorded as a gain or loss on asset disposition on Cleco’s Consolidated Statements of Income. Any cost incurred to remove the asset is charged to expense.

The amounts of unamortized computer software costs on Cleco’s Consolidated Balance Sheets at December 31, 2023, and 2022 were $ i 156.7 million and $ i 164.5 million, respectively. The amounts of unamortized computer software costs on Cleco Power’s Consolidated Balance Sheets at December 31, 2023, and 2022 were $ i 154.9 million and $ i 162.3 million, respectively. i Amortization of capitalized computer software costs charged to expense in Cleco’s and Cleco Power’s Consolidated Statements of Income for the years ending December 31, 2023, 2022, and 2021 is shown in the following tables:


Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
Amortization	$	i 11,092	$	i 11,881	$	i 11,561


Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
Amortization	$	i 10,650	$	i 11,614	$	i 11,268

i i

Depreciation on property, plant, and equipment is calculated primarily on a straight-line basis over the useful lives of the assets. The following table presents the useful lives of depreciable assets for Cleco and Cleco Power:


CATEGORY (YEARS)	YEARS
Utility Plants
Generation	i i 10 /	–	i i 55 /
Distribution	i i 15 /	–	i i 50 /
Transmission	i i 5 /	–	i i 55 /
Other utility plant	i i 5 /	–	i i 45 /
Other property, plant, and equipment	i i 5 /	–	i i 45 /

At December 31, 2023, and 2022, Cleco’s and Cleco Power’s property, plant, and equipment consisted of the following:


Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Utility plants
Generation	$	i 1,944,260	$	i 1,926,482
Distribution	i 1,585,742		i 1,429,374
Transmission	i 844,897		i 789,181
Other utility plant	i 454,329		i 449,431
Other property, plant, and equipment	i 9,766		i 9,571
Total property, plant, and equipment	i 4,838,994		i 4,604,039
Accumulated depreciation	( i 924,624)		( i 752,376)
Net property, plant, and equipment	$	i 3,914,370	$	i 3,851,663


Cleco Power
	AT DEC. 31,
(THOUSANDS)	2023		2022
Regulated utility plants
Generation	$	i 2,339,410	$	i 2,321,640
Distribution	i 2,022,257		i 1,866,662
Transmission	i 1,056,218		i 1,000,783
Other utility plant	i 551,470		i 547,441
Total property, plant, and equipment	i 5,969,355		i 5,736,526
Accumulated depreciation	( i 2,244,217)		( i 2,082,153)
Net property, plant, and equipment	$	i 3,725,138	$	i 3,654,373

During 2023, Cleco Power’s regulated utility property, plant, and equipment increased primarily due to the distribution system restoration and modernization project and the construction of new substations.

Cleco Power’s property, plant, and equipment includes plant acquisition costs related primarily to the acquisition of Acadia Unit 1 in 2010. The plant acquisition adjustment and accumulated amortization are reported in Property, plant, and equipment and Accumulated depreciation, respectively, on Cleco’s and Cleco Power’s Consolidated Balance Sheets at December 31, 2023, and 2022, and are shown in the following tables:

Cleco

AT DEC. 31,

(THOUSANDS)

2023

2022

Acadia Unit 1

Plant acquisition adjustment

i 76,116

Accumulated amortization

( i 24,566)

( i 21,383)

Net plant acquisition adjustment

i 51,550

i 54,733

Cleco Power

AT DEC. 31,

(THOUSANDS)

2023

2022

Acadia Unit 1

Plant acquisition adjustment

i 95,578

Accumulated amortization

( i 44,028)

( i 40,845)

Net plant acquisition adjustment

i 51,550

i 54,733

Fuel Inventory and Materials and Supplies

At December 31, 2023, and 2022, fuel inventory consisted primarily of petroleum coke, coal, limestone, and natural gas used to generate electricity.

Materials and supplies consists of transmission and distribution line construction and repair materials. It also consists of generating station and transmission and distribution substation repair materials.

Both fuel inventory and materials and supplies are recorded at the lower of cost or net realizable value using the average cost method and are issued from stock using the average cost of existing stock. Fuel inventory is recorded when purchased and subsequently charged to expense when used. Materials and supplies are recorded when purchased and subsequently charged to expense or capitalized to property, plant, and equipment when installed.

Reserves for Credit Losses

Customer accounts receivable are recorded at the invoiced amount and do not bear interest. Customer accounts


CLECO
CLECO POWER						2023 FORM 10-K

receivables are generally considered to become past due i 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 throughout 2022, Cleco 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 experienced increases in credit loss reserves. These factors have not been material to Cleco’s results of operations, financial condition, or cash flows.

Cleco’s credit losses at December 31, 2023, are within normal levels and historical trends.

The table below presents the changes in the allowance for credit losses by receivable for Cleco and Cleco Power:


Cleco
(THOUSANDS)	ACCOUNTS RECEIVABLE		OTHER		TOTAL
Balances, Dec. 31, 2021	$	i 1,302	$	i 1,638	$	i 2,940

Current period provision	i 3,362		i —		i 3,362
Charge-offs	( i 4,800)		i —		( i 4,800)
Recovery	i 1,283		i —		i 1,283
Balances, Dec. 31, 2022	i 1,147		i 1,638		i 2,785

Current period provision	i 5,506		i —		i 5,506
Charge-offs	( i 4,939)		i —		( i 4,939)
Recovery	i 1,298		i —		i 1,298
Balances, Dec. 31, 2023	$	i 3,012	$	i 1,638	$	i 4,650


Cleco Power
(THOUSANDS)	ACCOUNTS RECEIVABLE
Balances, Dec. 31, 2021	$	i 1,302

Current period provision	i 3,362
Charge-offs	( i 4,800)
Recovery	i 1,283
Balances, Dec. 31, 2022	i 1,147

Current period provision	i 5,506
Charge-offs	( i 4,939)
Recovery	i 1,298
Balances, Dec. 31, 2023	$	i 3,012

Other Reserves

Cleco maintains property insurance on generating stations, buildings and contents, and substations. Cleco is self-insured for any damage to its power lines. To mitigate the exposure to potential financial loss for storm-related damage to lines and property, the LPSC approved Cleco Power to establish a funded storm reserve. For more information on the storm reserve, see Note 6 — “Regulatory Assets and Liabilities — Storm Reserves.”

Cleco also maintains liability and workers’ compensation insurance to mitigate financial losses due to injuries and damages to the property of others. Cleco’s insurance covers

claims that exceed certain self-insured limits. For claims within certain self-insured limits, Cleco maintains reserves. At December 31, 2023, and 2022, the general liability and workers compensation reserves together were $ i 6.7 million and $ i 6.9 million, respectively.

Additionally, Cleco maintains directors and officers insurance to protect managers from claims which may arise from their decisions and actions taken within the scope of their regular duties.

Cash Equivalents

i Cleco considers highly liquid, marketable securities, and other similar instruments with original maturity dates of three months or less to be cash equivalents.

Restricted Cash and Cash Equivalents

i 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 company purposes.

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


Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Current
Cleco Power’s storm restoration costs - Hurricane Ida	$	i —	$	i 9,409
Cleco Securitization I’s operating expenses and storm recovery bond issuance costs and debt service	i 15,818		i 14,140
Total current	i 15,818		i 23,549
Non-current
Diversified Lands’ mitigation escrow	i 24		i 23
Cleco Power’s future storm restoration costs	i 113,549		i 103,306
Cleco Power’s storm restoration costs - Hurricane Ida	i —		i 6,086

Total non-current	i 113,573		i 109,415
Total restricted cash and cash equivalents	$	i 129,391	$	i 132,964


Cleco Power
	AT DEC. 31,
(THOUSANDS)	2023		2022
Current
Storm restoration costs - Hurricane Ida	$	i —	$	i 9,409
Cleco Securitization I’s operating expenses and storm recovery bond issuance costs and debt service	i 15,818		i 14,140
Total current	i 15,818		i 23,549
Non-current
Future storm restoration costs	i 113,549		i 103,306
Storm restoration costs - Hurricane Ida	i —		i 6,086

Total non-current	i 113,549		i 109,392
Total restricted cash and cash equivalents	$	i 129,367	$	i 132,941

On September 20, 2023, the LPSC approved a settlement for the prudency review of the remaining unrecovered Hurricane Ida storm restoration costs deferred as a regulatory asset. The settlement allowed Cleco Power to withdraw the remaining unrecovered Hurricane Ida storm restoration costs, plus a carrying charge through September 2023, from the


CLECO
CLECO POWER						2023 FORM 10-K

Hurricane Ida storm reserve. The settlement also approved the transfer of the remaining balance of the Hurricane Ida storm reserve to the restricted reserve for future storm restoration costs. As a result of the settlement, the corresponding Hurricane Ida restricted cash and cash equivalents was reduced by $ i 10.3 million and the remaining balance was transferred to the restricted cash and cash equivalents account for future storm restoration costs. For more information about the regulatory asset and storm reserves, see Note 6— “Regulatory Assets and Liabilities — Storm Reserves.”

Equity Investments

Cleco and Cleco Power account for investments in unconsolidated affiliated companies using the equity method of accounting. The amounts reported on Cleco’s and Cleco Power’s Consolidated Balance Sheets represent assets contributed by Cleco or Cleco Power, plus their share of the net income of the affiliate, less any distributions of earnings (dividends) received from the affiliate. The revenues and expenses (excluding income taxes) of these affiliates are netted and reported on one line item as equity income from investees on Cleco’s and Cleco Power’s Consolidated Statements of Income.

Cleco evaluates for impairments of equity method investments at each balance sheet date to determine if events and circumstances have occurred that indicate a possible other-than-temporary decline in the fair value of the investment and the possible inability to recover the carrying value through operations. Cleco uses estimates of the future cash flows from the investee and observable market transactions in order to calculate fair value and recoverability. An impairment is recognized when an other-than-temporary decline in market value occurs and recovery of the carrying value is not probable. There were i i i no / / impairments recorded for 2023, 2022, or 2021. For more information on Cleco’s equity investments, see Note 15 — “Variable Interest Entities.”

Income Taxes

i Cleco accounts for income taxes under the asset and liability method. Income taxes recorded on the income statement and related balance sheet amounts are comprised of a current portion and a deferred portion. The current portion represents Cleco’s estimate of the income taxes payable or receivable for the current year. The deferred portion represents Cleco’s estimate of the future income tax effects of events that have been recognized in the financial statements or income tax returns in the current or prior years. Cleco makes assumptions and estimates when it records income taxes, such as its ability to deduct items on its tax returns, the timing of the deduction, and the effect of regulation on income taxes. Cleco’s income tax expense and benefit and related assets and liabilities could be affected by changes in its assumptions and estimates and by ultimate resolution of assumptions and estimates with taxing authorities and changes in tax regulations. The actual results may differ from the estimated results based on these assumptions and may have a material effect on Cleco’s results of operations. Cleco Group files a federal income tax return for all wholly owned subsidiaries. Cleco Power computes its federal and state income taxes as if it were a stand-alone taxpayer. The LPSC generally requires Cleco Power to flow the effects of state income taxes to customers. For more information on income taxes, see Note 12 — “Income Taxes.”

Investment Tax Credits

Investment tax credits, which were deferred for financial statement purposes, are amortized as a reduction to income tax expense over the estimated service lives of the properties that gave rise to the credits.

Debt Issuance Costs, Premiums, and Discounts

Issuance costs, premiums, and discounts applicable to debt securities are amortized to interest expense ratably over the lives of the related issuances. Expenses and call premiums related to refinanced Cleco Power debt are deferred and amortized over the life of the new issuance. Debt issuance costs, premiums, and discounts are presented as a direct deduction from the carrying value of the related debt liability.

Revenue and Fuel Costs

Utility Revenue

Revenue from retail sales and transmission of electricity is recognized when the service is provided. The costs of fuel and purchased power used for Cleco Power’s retail customers currently are recovered from its customers through Cleco Power’s FAC. These costs are subject to audit and final determination by the LPSC. Sales taxes and pass-through fees collected on the sale of electricity are not recorded in utility revenue.

Cleco recognizes wholesale revenue, inclusive of both energy and capacity performance obligations, under the invoice practical expedient for the amount Cleco has the right to invoice.

Unbilled Revenue

Cleco Power accrues estimated revenue monthly for energy used by customers but not yet billed. The monthly estimated unbilled revenue amounts are recorded as unbilled revenue and a receivable. Cleco Power uses actual customer energy consumption data available from AMI to calculate unbilled revenues.

Other Operations Revenue

Other operations revenue is recognized at the time products or services are provided to and accepted by customers, and collectability is reasonably assured.

Sales and Use Taxes

Cleco collects a sales and use tax on the sale of electricity that subsequently is remitted to the state in accordance with state law. These amounts are not recorded as income or expense on Cleco’s or Cleco Power’s Consolidated Statements of Income but are reflected at gross amounts on Cleco’s and Cleco Power’s Consolidated Balance Sheets as a receivable until the tax is collected and as a payable until the liability is paid.

Franchise and Consumer Fees

Cleco Power operates under nonexclusive franchise rights granted by municipalities through franchise agreements in which franchise fees are collected and paid. A portion of the franchise fees associated with these franchise agreements is collected by Cleco Power from its retail customers and submitted to the municipality. These fees are recorded as a receivable until it is collected and as a payable until the liability is paid.

Cleco Power also pays periodic franchise fees to the government units, which may include upfront payments upon


CLECO
CLECO POWER						2023 FORM 10-K

the renewal of the franchise agreement. The upfront payments are amortized over the life of the franchise agreement and the periodic fees are expensed in the period in which they are incurred. These amounts are recovered from retail customers through base rates.

Cleco Power collects a consumer fee for one of its franchise agreements. This fee is not recorded on Cleco’s and Cleco Power’s Consolidated Statements of Income as revenue and expense, but is reflected at gross amounts on Cleco’s and Cleco Power’s Consolidated Balance Sheets as a receivable until it is collected and as a payable until the liability is paid.

AFUDC and Capitalized Interest

The capitalization of AFUDC by Cleco Power is a utility accounting practice prescribed by FERC and the LPSC.

AFUDC represents the estimated debt and equity costs of capital funds that are necessary to finance construction of new and existing facilities. While cash is not realized currently from such allowance, AFUDC increases the revenue requirement over the same life of the plant through a higher rate base and higher depreciation. Under regulatory practices, a return on and recovery of AFUDC is permitted in setting rates charged for utility services.

i i

The following tables show the composite AFUDC rates, including borrowed and other funds for the years ended December 31, 2023, 2022, and 2021:

FOR THE YEAR ENDED DEC. 31,

2023

2022

2021

PRETAX BASIS

NET OF TAX

PRETAX BASIS

NET OF TAX

PRETAX BASIS

NET OF TAX

AFUDC composite rate

i i 8.11 /

i i 6.50 /

i i 9.06 /

i i 7.09 /

i i 10.05 /

i i 7.81 /

Fair Value Measurements and Disclosures

i Various accounting pronouncements require certain assets and liabilities to be measured at their fair values. Some assets and liabilities are required to be measured at their fair value each reporting period, while others are required to be measured only one time, generally the date of acquisition or debt issuance. Cleco and Cleco Power disclose the fair value of certain assets and liabilities by one of three levels when required for recognition purposes. For more information about fair value levels, see Note 8 — “Fair Value Accounting Instruments.”

Derivatives and Other Risk Management Activity

i Accounting guidance requires derivative instruments and hedging activities to be recognized at fair value on the balance sheet. Cleco may elect the normal purchase and normal sale scope exception to the application of fair value accounting for these instruments and activities if they meet certain accounting criteria. Cleco’s Energy Market Risk Management Policy authorizes hedging against commodity price risk with physical or financially settled derivative instruments. For Cleco Power, due to regulatory treatment, associated mark-to-market adjustments for changes in fair value of recognized derivatives are generally recognized in Accumulated deferred fuel on the balance sheet. For Cleco Cajun, the changes in the fair value of recognized natural gas derivatives are recorded in continuing operations. Cleco Cajun’s FTR activity is recorded in discontinued operations. For more information on derivative instruments, see Note 9 — “Derivative Instruments.”

Accounting for MISO Transactions

Cleco Power and Cleco Cajun participates in MISO’s Energy and Operating Reserve market and have the opportunity to participate in the MISO capacity market. For Cleco Power, the hourly power sales and purchases are netted. Net sales and net purchases are reported in Electric operations and Purchased power, respectively, on Cleco’s and Cleco Power’s Consolidated Statements of Income. Power sales and purchases in the MISO market are made at prevailing market prices, also known as LMP, which represents the cost of providing the next MW of electrical energy at a specific location on the grid. LMP includes a component directly

related to congestion on the transmission system and, as a result, can be different based on the location and time of the day the energy is dispatched causing energy costs to increase.

Power sales and purchases for Cleco Cajun are reported in discontinued operations. For more information, see Note 3 — “Discontinued Operations.”

Leases

i i

Cleco determines if a contract is a lease at its inception. A lease is deemed to exist when the right to control the use of identified property, plant, or equipment is conveyed through a contract for a certain period of time and consideration is paid. If a contract is determined to be a lease, Cleco recognizes a ROU asset and lease liability at the commencement date based on the present value of lease payments over the lease term. The present value of the lease payments is determined by using the implicit interest rate if readily determinable. Cleco’s incremental borrowing rate for a term similar to the duration of the lease based on information available at the commencement date is used if the implicit interest rate is not readily determinable.

Cleco recognizes ROU assets and lease liabilities for leasing arrangements with terms greater than one year. Except for the marine transportation asset class, Cleco accounts for lease and non-lease components in a contract as a single lease component for all classes of underlying assets. Cleco’s marine transportation contracts, which include barges and towboats, contain non-lease components, such as maintenance and labor. Cleco allocates the consideration in these contracts between lease and non-lease components based on estimates of fair value from third parties that typically execute leases for this class of assets.

Expense for a lessee operating lease is recognized as a single lease cost on a straight-line basis over the lease term and reflected in the appropriate income statement line item based on the leased asset’s function. Income for a lessor operating lease is recognized as a single lease income item on a straight-line basis over the lease term and reflected in the appropriate income statement line item based on the lease asset’s function. For more information on leases, see Note 4 — “Leases.”


CLECO
CLECO POWER						2023 FORM 10-K

Recent Authoritative Guidance

In November 2021, FASB issued guidance requiring annual disclosures about government assistance with the objective of increasing transparency and reducing existing diversity in practice. This guidance requires disclosure of the types of assistance, an entity’s accounting for the assistance, and the effect of the assistance on the entity’s financial statements. This guidance is effective for annual periods beginning after December 15, 2021. Management will continue to monitor this activity to determine what, if any, disclosures are required. Management does not expect this guidance to have a significant impact on the results of operations, financial condition, or cash flows of the Registrants.

A congressional appropriation has been secured, subject to the U.S. Department of Energy’s (DOE) grant process, to help offset current and future costs associated with Cleco Power’s Project Diamond Vault through November 2024. As of December 31, 2023, Cleco Power received $ i 2.8 million of the $ i 9.0 million congressional appropriation, and these funds were recorded against the deferred project costs incurred and reflected as construction work in progress. Cleco Power has commitments to complete the FEED study, comply with the DOE approved grant budget, and provide 20% of the funding of the total costs. The Louisiana Department of Economic Development (LED) has commitments to review plans and invoices, be the scientific and technical liaison, and conduct annual project reviews and meetings. The LED also has rights to audit costs submitted for reimbursement. If an audit finds that Cleco Power received funds that were not within the scope of the DOE grant, those amounts could be recaptured. On March 1, 2024, Cleco Power received an additional $ i 1.4 million of the congressional appropriation. For more information related to the accounting for deferred project costs, see “— Property, Plant, and Equipment.”

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 rather than the term of the lease. The new guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. 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.

In November 2023, FASB issued guidance to improve reportable segment disclosure requirements. The guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. Disclosure requirements include disclosing significant segment expenses by reportable segment if they are regularly provided to the chief operating decision maker and included in each reported measure of segment profit or loss. Disclosures are required on both an annual and an interim basis. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Management does not expect this guidance to have a

significant impact on the results of operations, financial condition, or cash flows of the Registrants.

Note 3 — Discontinued Operations

In 2022, Cleco Holdings began 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. On November 22, 2023, the Cleco Cajun Divestiture Purchase and Sale Agreement was entered into between the Cleco Cajun Sellers and the Cleco Cajun Purchasers whereby the Cleco Cajun Sellers have agreed to sell the Cleco Cajun Sale Group to the Cleco Cajun Purchasers for the purchase price of $ i 600.0 million, with $ i 500.0 million due at closing and $ i 100.0 million payable i 24 months after closing. The purchase price is subject to the closing purchase price adjustment as set forth in the Cleco Cajun Divestiture Purchase and Sale Agreement, including adjustments based on net working capital.

The Cleco Cajun Sellers and the Cleco Cajun Purchasers have each made customary representations, warranties, and covenants in the Cleco Cajun Divestiture Purchase and Sale Agreement. The closing of the transaction is subject to customary closing conditions, including (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (ii) approval of FERC, (iii) approval of the Federal Communication Commission, and (iv) customary conditions regarding the accuracy of the representations and warranties and compliance by the parties with their respective obligations under the Cleco Cajun Divestiture Purchase and Sale Agreement. The Cleco Cajun Divestiture Purchase and Sale Agreement includes customary termination provisions, including if the closing of the transaction does not occur within nine months of November 22, 2023. The parties expect the transaction to close in the second quarter of 2024.

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 the sale 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 Annual Report on Form 10-K 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 Acquisition, Cleco made commitments to the LPSC that included the repayment of $ i 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 December 31, 2023, $ i 66.7 million of that debt remains outstanding. Interest expense on that debt is included in discontinued operations.


CLECO
CLECO POWER						2023 FORM 10-K

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 at March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023. These determinations resulted in a total impairment charge of $ i 173.0 million for the year ended December 31, 2023, of which $ i 19.0 million was recognized in the three months ended December 31, 2023. The additional impairment charge recognized in the three months ended December 31, 2023, was primarily due to changes in assumptions related to the expected sale proceeds and the expected closing date. The impairment charge recognized for the year ended December 31, 2023, reduced the carrying value of the Cleco Cajun Sale Group to its estimated fair value less estimated cost to sell and is recorded in Loss from discontinued operations, net of income taxes on Cleco's Consolidated Statement of Income. The estimated fair value was determined using the income approach. 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 net

working capital adjustment to the sale proceeds from the Cleco Cajun Divestiture Purchase and Sale Agreement, 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.

At December 31, 2023, Cleco also recognized a write-down of $ i 25.0 million related to Cleco Cajun’s coal fuel inventory. This write-down was primarily due to indications that the probable net realizable value of the coal fuel inventory, which was driven by forecasted market prices of power in the MISO South region, was less than its net book value. The write-down reduced the carrying value of the Cleco Cajun Sale Group and is reflected as a reduction to Fuel Inventory, at average cost and an increase to Fuel used for electric generation in the following tables.

The following table presents the amounts that have been reclassified from continuing operations and included in discontinued operations within Cleco’s Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021:

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating revenue, net

Electric operations

i 543,519

i 496,042

i 398,226

Other operations

i 125,816

i 148,823

i 128,750

Gross operating revenue

i 669,335

i 644,865

i 526,976

Electric customer credits

i —

i 244

Operating revenue, net

i 669,335

i 644,865

i 527,220

Operating expenses

Fuel used for electric generation

i 126,130

i 169,195

i 87,091

Purchased power

i 230,284

i 380,233

i 257,703

Other operations and maintenance

i 87,599

i 70,611

i 65,786

Depreciation and amortization

i 15,891

i 69,999

i 52,102

Taxes other than income taxes

i 13,160

i 12,330

i 11,666

Total operating expenses

i 473,064

i 702,368

i 474,348

Operating income (loss)

i 196,271

( i 57,503)

i 52,872

Other income (expense), net

i 47

i 127

( i 618)

Interest, net

( i 6,919)

( i 6,079)

( i 5,523)

Loss on classification as held for sale

( i 173,000)

i —

Income (loss) from discontinued operations before income taxes

i 16,399

( i 63,455)

i 46,731

Federal and state income tax expense (benefit)

i 1,757

( i 19,118)

i 11,778

Income (loss) from discontinued operations, net of income taxes

i 14,642

( i 44,337)

i 34,953


CLECO
CLECO POWER						2023 FORM 10-K

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 Consolidated Balance Sheets as of December 31, 2023, and 2022:


(THOUSANDS)	AT DEC. 31, 2023		AT DEC. 31, 2022
Cash, cash equivalents, and restricted cash equivalents	$	i 4,100	$	i 4,067

Accounts receivable	i 70,001		i 57,822



Fuel inventory, at average cost	i 47,243		i 33,153
Materials and supplies, at average cost	i 36,283		i 34,195
Energy risk management assets	i 1,066		i 518




Property, plant, and equipment, net	i 648,676		i 649,067
Prepayments	i 18,587		i 23,601



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

Other assets	i 20,207		i 23,619
Loss recognized on classification as held for sale	( i 173,000)		i —

Total assets held for sale - discontinued operations	$	i 705,732	$	i 862,590

Accounts payable	$	i 30,442	$	i 56,609










Deferred lease revenue	i 19,945		i 22,246
Intangible liabilities	i 12,695		i 13,956
Asset retirement obligations	i 46,165		i 63,725

Other liabilities	i 5,705		i 6,508

Total liabilities held for sale - discontinued operations	$	i 114,952	$	i 163,044

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 years ended December 31, 2023, 2022, and 2021:


	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
Net cash provided by operating activities - discontinued operations	$	i 8,778	$	i 6,878	$	i 9,082
Net cash used in investing activities - discontinued operations	$	( i 8,745)	$	( i 6,867)	$	( i 9,081)

i i

Note 4 — Leases

Cleco maintains operating and finance leases in its ordinary course of business activities.

Operating Leases

Cleco Power leases utility systems from i two municipalities and i one non-municipal public body. One municipal lease has a term of i 10 years and expires on August 11, 2031. The second municipal lease has a term of i 10 years and expires on May 13, 2028. The non-municipal lease has a term of i 27 years and expires on July 31, 2039. Each utility system lease contains fixed and variable components, as well as provisions for extensions.

Cleco Power has a lease for i 113 railcars to transport its coal. This lease expires on March 31, 2024. Cleco Power reassesses its need for the railcars upon the expiration of each term. Cleco Power pays a monthly rental fee per car. The railcar lease does not contain contingent rent payments.

Cleco Power has leases for i three towboats in order to transport petroleum coke to Madison Unit 3. Each of the towboat leases has a term of i 10 years and expires on March

/ /

31, 2028. Under these agreements, the rates are adjusted annually per the Producer Price Index. Each lease contains provisions for a i five-year extension.

Cleco’s and Cleco Power’s remaining operating leases provide for office and operating facilities, office equipment, and tower rentals.

i i

The following is a schedule by year of future minimum lease payments due under Cleco’s and Cleco Power’s long-term operating leases together with the present value of the net minimum lease payments as of December 31, 2023:


(THOUSANDS)
Years ending Dec. 31,
2024	$	i i 3,453 /
2025	i i 3,309 /
2026	i i 3,275 /
2027	i i 3,255 /
2028	i i 2,455 /
Thereafter	i i 7,575 /
Total minimum lease payments	i i 23,322 /
Less: amount representing interest	i i 3,073 /
Present value of net minimum operating lease payments	$	i i 20,249 /
Current liabilities	$	i i 2,973 /
Non-current liabilities	$	i i 17,276 /

/ /

Finance Lease

In April 2018, Cleco Power entered into an agreement with Savage Inland Marine for continued use of i 42 barges used to transport petroleum coke to Madison Unit 3 through March 2033. The agreement meets the accounting definition of a finance lease.

The barge lease rate contains both a fixed and variable component, of which the latter is adjusted every third anniversary of the agreement for estimated executory costs. If the barges are idle, the lessor is required to attempt to sublease the barges to third parties with the revenue reducing Cleco Power’s lease payment. This agreement contains a provision for early termination upon the occurrence of any i one of i four cancellation events.

For each of the years ended December 31, 2023, 2022, and 2021, Cleco Power paid $ i i i 2.2 / / million in lease payments. For the years ended December 31, 2023, 2022, and 2021, Cleco Power received $ i 2.6 million, $ i 0.6 million, and $ i 0.2 million, respectively, of revenue from subleases.

The following is an analysis of the leased property under the finance lease:


(THOUSANDS)	AT DEC. 31, 2023		AT DEC. 31, 2022
Barges	$	i 16,800	$	i 16,800
Accumulated amortization	( i 6,440)		( i 5,320)
Net finance lease asset	$	i 10,360	$	i 11,480


CLECO
CLECO POWER						2023 FORM 10-K

The following is a schedule by year of future minimum lease payments due under the finance lease together with the present value of the net minimum lease payments as of December 31, 2023:


(THOUSANDS)
Years ending Dec. 31,
2024	$	i 2,203
2025	i 2,203
2026	i 2,203
2027	i 2,203
2028	i 2,203
Thereafter	i 8,863
Total minimum lease payments	i 19,878
Less: amount representing interest	i 6,907
Present value of net minimum finance lease payments	$	i 12,971
Current liabilities	$	i 925
Non-current liabilities	$	i 12,046

Additional Lessee Disclosures

Cleco’s and Cleco Power’s total lease cost includes amounts on the income statement, as well as amounts capitalized as part of property, plant, or equipment or inventory. i The following tables reflect total lease costs for Cleco and Cleco Power for the years ended December 31, 2023, and 2022:


Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Finance lease cost
Amortization of ROU assets	$	i 1,120	$	i 1,120
Interest on lease liabilities	i 1,367		i 1,448
Operating lease cost	i 3,589		i 3,685

Variable lease cost	i 790		i 508

Total lease cost	$	i 6,866	$	i 6,761


Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Finance lease cost
Amortization of ROU assets	$	i 1,120	$	i 1,120
Interest on lease liabilities	i 1,367		i 1,448
Operating lease cost	i 3,581		i 3,675

Variable lease cost	i 790		i 508

Total lease cost	$	i 6,858	$	i 6,751

The following tables present additional information related to Cleco’s and Cleco Power’s operating and finance leases as of and for the years ended December 31, 2023, and 2022:

Cleco

AT DEC. 31,

(THOUSANDS)

BALANCE SHEET LINE ITEM

2023

2022

Supplemental balance sheet information

ROU assets

Operating

Operating lease right of use assets

i 20,070

i 22,636

Finance

Property, plant, and equipment

i 10,360

i 11,480

Total ROU assets

i 30,430

i 34,116

Current lease liabilities

Operating

Other current liabilities

i 2,973

i 2,912

Finance

Long-term debt and finance leases due within one year

i 925

i 836

Non-current lease liabilities

Operating

Operating lease liabilities

i 17,276

i 19,790

Finance

Long-term debt and finance leases, net

i 12,046

i 12,971

Total lease liabilities

i 33,220

i 36,509

Cleco Power

AT DEC. 31,

(THOUSANDS)

BALANCE SHEET LINE ITEM

2023

2022

Supplemental balance sheet information

ROU assets

Operating

Operating lease right of use assets

i 20,070

i 22,628

Finance

Property, plant, and equipment

i 10,360

i 11,480

Total ROU assets

i 30,430

i 34,108

Current lease liabilities

Operating

Other current liabilities

i 2,973

i 2,903

Finance

Long-term debt and finance leases due within one year

i 925

i 836

Non-current lease liabilities

Operating

Operating lease liabilities

i 17,276

i 19,790

Finance

Long-term debt and finance leases, net

i 12,046

i 12,971

Total lease liabilities

i 33,220

i 36,500

Cleco

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

Supplemental cash flow information

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

i 3,571

i 3,696

Operating cash flows from finance leases

i 1,367

i 1,448

Financing cash flows from finance leases

i 836

i 755

Cleco Power

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

Supplemental cash flow information

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

i 3,562

i 3,685

Operating cash flows from finance leases

i 1,367

i 1,448

Financing cash flows from finance leases

i 836

i 755


CLECO
CLECO POWER						2023 FORM 10-K

Cleco

AT DEC. 31,

(THOUSANDS)

2023

2022

Other supplemental information

Operating leases

Weighted-average remaining lease term

i 12.2 years

i 12.5 years

Weighted-average discount rate

i 4.30

i 4.36

Finance leases

Weighted-average remaining lease term

i 9.3 years

i 10.3 years

Weighted-average discount rate

i 10.18

Cleco Power

(THOUSANDS)

2023

2022

Other supplemental information

Operating leases

Weighted-average remaining lease term

i 12.2 years

i 11.4 years

Weighted-average discount rate

i 4.30

i 4.35

Finance leases

Weighted-average remaining lease term

i 9.3 years

i 10.3 years

Weighted-average discount rate

i 10.18

Note 5 — Revenue Recognition

Revenue from Contracts with Customers

Retail Revenue

Retail revenue from contracts with customers is generated primarily from Cleco’s regulated electric sales from residential, commercial, and industrial customers. Cleco Power recognizes retail revenue from these contracts as a series, and progress towards satisfaction of the performance obligation is measured using an output method based on kWh delivered. Accordingly, revenue from electricity sales is recognized as energy is delivered to the customer. Cleco Power bills retail customers, based on rates regulated by the LPSC, on a monthly basis with payments generally due within i 20 days of the invoice date.

Included in retail revenue is unbilled electric revenue, which represents the amount customers will be billed for services rendered from the meter reading from the most recent bill to the end of the respective accounting period. Actual customer energy consumption data available from AMI is used to calculate unbilled revenue. Also included in retail revenue is electric customer credits, which primarily represents the credits to retail customers for the federal tax-related benefits of the TCJA prior to the settlement of the current retail rate plan. Subsequent to the implementation of the current retail rate plan on July 1, 2021, these credits offset base revenue.

Wholesale Revenue

Cleco’s wholesale revenue is generated primarily through the sale of energy and capacity to electric cooperatives and municipalities. The electricity revenue performance obligations, representing both energy and capacity, are satisfied as a series of performance obligations, and progress towards satisfaction of the performance obligations are measured using

/ /

an output method. The energy performance obligation measure of progress is based on kWh delivered. The capacity performance obligation measure of progress is based on time elapsed and is recognized each month as Cleco’s generating units stand ready to deliver electricity to the customer. Cleco recognizes wholesale revenue, inclusive of both performance obligations, under the invoice practical expedient for the amount Cleco has the right to invoice. Wholesale customers are charged market based rates that are subject to FERC’s triennial market power analysis. Cleco also enters into transactions through MISO for spot energy sales which are transacted in the Day-Ahead Energy and Operating Reserves Market and the Real-Time Energy and Operating Reserves Market.

Transmission Revenue

Cleco Power earns transmission revenues pursuant to MISO’s FERC filed tariff. The performance obligation of transmission service is satisfied as service is provided. Revenue from the transmission of electricity for Cleco Power is recorded based on a separate FERC-approved annual filing rate mechanism effective June 1 of each year. These rates are based on the respective costs to provide transmission services.

Other Revenue

Other revenue from contracts with customers, which is not a significant source of Cleco’s revenue, consisted of customer-forfeited discounts and reconnect fees, electric property rental, and other miscellaneous fees. The performance obligation under these contracts is satisfied and revenue is recognized as control of the products is delivered or services are rendered.

Revenue Unrelated to Contracts with Customers

On September 1, 2022, Cleco Power began billing and collecting, on behalf of Cleco Securitization I, a new storm recovery surcharge from all 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.

Cleco’s energy-related transactions with the following characteristics qualify as derivative contracts and are recorded pursuant to derivatives and hedging accounting guidance: a) their value is based on the notional amount or payment provisions of an underlying asset; b) they require no or a diminutive initial net investment; and c) their terms require or permit net settlement.

Disaggregated Revenue

Operating revenue, net for the years ended December 31, 2023, 2022, and 2021 was as follows:


CLECO
CLECO POWER						2023 FORM 10-K

FOR THE YEAR ENDED DEC. 31, 2023

(THOUSANDS)

CLECO POWER

OTHER

ELIMINATIONS

TOTAL

Revenue from contracts with customers

Retail revenue

Residential (1)

i 469,099

i —

i 469,099

Commercial (1)

i 304,422

i —

i 304,422

Industrial (1)

i 179,506

i —

i 179,506

Other retail (1)

i 16,543

i —

i 16,543

Electric customer credits

( i 60,689)

i —

( i 60,689)

Total retail revenue

i 908,881

i —

i 908,881

Wholesale, net

i 221,547

(1)

( i 9,454)

(2)

i —

i 212,093

Transmission

i 56,701

i —

i 56,701

Other

i 20,797

i —

i 20,797

Affiliate (3)

i 8,904

i 120,716

( i 129,620)

i —

Total revenue from contracts with customers

i 1,216,830

i 111,262

( i 129,620)

i 1,198,472

Revenue unrelated to contracts with customers

Securitization

i 34,063

i —

i 34,063

Other

i 6,252

(4)

i 5

( i 1)

i 6,256

Total revenue unrelated to contracts with customers

i 40,315

i 5

( i 1)

i 40,319

Operating revenue, net

i 1,257,145

i 111,267

( i 129,621)

i 1,238,791

(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) Represents realized gains associated with FTRs.

FOR THE YEAR ENDED DEC. 31, 2022

(THOUSANDS)

CLECO POWER

OTHER

ELIMINATIONS

TOTAL

Revenue from contracts with customers

Retail revenue

Residential (1)

i 558,247

i —

i 558,247

Commercial (1)

i 370,678

i —

i 370,678

Industrial (1)

i 229,634

i —

i 229,634

Other retail (1)

i 18,727

i —

i 18,727

Electric customer credits

( i 7,674)

i —

( i 7,674)

Total retail revenue

i 1,169,612

i —

i 1,169,612

Wholesale, net

i 331,906

(1)

( i 9,680)

(2)

i —

i 322,226

Transmission, net

i 63,545

i —

i 63,545

Other

i 21,966

i —

i 21,966

Affiliate (3)

i 6,377

i 109,015

( i 115,392)

i —

Total revenue from contracts with customers

i 1,593,406

i 99,335

( i 115,392)

i 1,577,349

Revenue unrelated to contracts with customers

Securitization

i 13,247

i —

i 13,247

Other

i 13,875

(4)

i 9

i —

i 13,884

Total revenue unrelated to contracts with customers

i 27,122

i 9

i —

i 27,131

Operating revenue, net

i 1,620,528

i 99,344

( i 115,392)

i 1,604,480

(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) Represents realized gains associated with FTRs.


CLECO
CLECO POWER						2023 FORM 10-K

FOR THE YEAR ENDED DEC. 31, 2021

(THOUSANDS)

CLECO POWER

OTHER

ELIMINATIONS

TOTAL

Revenue from contracts with customers

Retail revenue

Residential (1)

i 453,873

i —

i 453,873

Commercial (1)

i 294,553

i —

i 294,553

Industrial (1)

i 175,134

i —

i 175,134

Other retail (1)

i 16,105

i —

i 16,105

Electric customer credits

( i 41,007)

i —

( i 41,007)

Total retail revenue

i 898,658

i —

i 898,658

Wholesale, net

i 250,987

(1)

( i 9,680)

(2)

i —

i 241,307

Transmission

i 55,963

(4)

i —

i 55,963

Other

i 18,791

i 8

i —

i 18,799

Affiliate (3)

i 5,641

i 113,623

( i 119,264)

i —

Total revenue from contracts with customers

i 1,230,040

i 103,951

( i 119,264)

i 1,214,727

Revenue unrelated to contracts with customers

Other

i 11,597

(5)

i —

i 11,597

Total revenue unrelated to contracts with customers

i 11,597

i —

i 11,597

Operating revenue, net

i 1,241,637

i 103,951

( i 119,264)

i 1,226,324

(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) Includes $ i 0.1 million of electric customer credits.

(5) Realized gains associated with FTRs.

Cleco and Cleco Power have unsatisfied performance obligations under contracts with electric cooperatives and municipalities with durations ranging between i i 1 / and i i 11 / years that primarily relate to stand-ready obligations as part of fixed capacity minimums. At December 31, 2023, Cleco and Cleco Power had $ i i 300.0 / 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 6 — 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. If in the future, as a result of regulatory changes or 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 of regulated operations.


CLECO
CLECO POWER						2023 FORM 10-K

i i

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

Cleco Power

AT DEC. 31,

REMAINING

RECOVERY PERIOD (YRS.)

(THOUSANDS)

2023

2022

Regulatory assets

Acadia Unit 1 acquisition costs

i 1,701

i 1,807

i 16

Accumulated deferred fuel (1)

i 11,627

i 57,881

Various

(9)

Affordability study

i 10,337

i 11,715

i 7.5

AFUDC equity gross-up

i 60,381

i 63,477

Various

(2)

AMI deferred revenue requirement

i 954

i 1,499

i 2.25

AROs (8)

i 20,094

i 17,218

Bayou Vista to Segura transmission project deferred revenue requirement

i —

i 2,510

Coughlin transaction costs

i 784

i 815

i 25.5

COVID-19 executive order (8)

i 3,039

i 2,953

Deferred lignite and mine closure costs (7)

i 136,076

i 133,587

Deferred storm restoration costs - Hurricane Delta (6)

i 88

i 109

Deferred storm restoration costs - Hurricane Ida

i —

i 9,409

Deferred storm restoration costs - Hurricane Laura (6)

i 367

i 457

Deferred storm restoration costs - Hurricane Zeta (6)

i 7

i 9

Deferred taxes, net

i 43,866

i 8,803

Various

(9)

Dolet Hills Power Station closure costs (7)

i 147,323

i 147,082

Energy efficiency

i —

i 235

Financing costs (1)

i 6,087

i 6,456

Various

(3)

Interest costs

i 2,961

i 3,210

Various

(2)

Madison Unit 3 property taxes

i 13,297

i 13,038

Various

(9)

Non-service cost of postretirement benefits

i 14,526

i 14,810

Various

(2)

Other

i 10,483

i 14,114

Various

(9)

Postretirement costs

i 64,399

i 47,317

Various

(4)

Production operations and maintenance expenses

i 7,002

i 10,443

Various

(5)

Rodemacher Unit 2 deferred costs (8)

i 19,282

i 12,645

St. Mary Clean Energy Center

i 3,705

i 4,350

i 1.5

Training costs

i 5,618

i 5,774

i 36

Tree trimming costs

i 3,657

i 6,377

i 1.25

Total regulatory assets

i 587,661

i 598,100

Regulatory liabilities

Deferred taxes, net

( i 21,939)

( i 42,890)

Various

(9)

Storm reserves

( i 111,509)

( i 118,762)

Total regulatory liabilities

( i 133,448)

( i 161,652)

Total regulatory assets, net

i 454,213

i 436,448

(1) Represents regulatory assets for past expenditures that were not earning a return on investment at December 31, 2023, and 2022, respectively. 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 prudency review by the LPSC.

(8) Currently not in a recovery period.

(9) For more information on the remaining recovery period, refer to the following disclosures for each specific regulatory asset or liability.

/ /


CLECO
CLECO POWER						2023 FORM 10-K

i i

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


Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Total Cleco Power regulatory assets, net	$	i 454,213	$	i 436,448
2016 Merger adjustments (1)
Fair value of long-term debt	i 97,345		i 104,748
Postretirement costs	i 9,448		i 11,436
Financing costs	i 6,560		i 6,904
Debt issuance costs	i 4,254		i 4,587
Total Cleco regulatory assets, net	$	i 571,820	$	i 564,123

/ /

(1) Cleco regulatory assets include acquisition accounting adjustments as a result of the 2016 Merger.

Acadia Unit 1 Acquisition Costs

In 2009, the LPSC approved Cleco Power’s request to establish a regulatory asset for costs incurred as a result of the acquisition by Cleco Power of Acadia Unit 1 and half of Acadia Power Station’s related common facilities. In 2010, Cleco Power began recovering the Acadia Unit 1 acquisition costs over a i 30-year period.

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 charges. The difference between fuel and purchased power revenues collected from retail and wholesale customers and the current fuel and purchased power costs is generally recorded as Accumulated deferred fuel on Cleco Power’s Consolidated Balance Sheet. At December 31, 2023, Accumulated deferred fuel decreased $ i 46.3 million as a result of lower fuel costs. For 2023, approximately i 77% of Cleco Power’s total fuel cost was regulated by the LPSC.

Affordability Study

In July 2021, as approved by the LPSC in Cleco Power’s current retail rate plan, Cleco Power was allowed to establish a regulatory asset related to outside consulting fees for the assessment of Cleco Power’s practices and assistance in the identification of potential cost savings opportunities, while maintaining superior levels of employee safety, reliability, customer service, environmental stewardship, community involvement, and regulatory transparency. In 2021, the regulatory asset began being amortized over i 10 years.

AFUDC Equity Gross-Up

Cleco Power capitalizes equity AFUDC as a cost component of construction projects. Cleco Power has recorded a regulatory asset to recover the tax gross-up related to the equity component of AFUDC. These costs are being amortized over the estimated lives of the respective assets constructed.

AMI Deferred Revenue Requirement

In 2011, the LPSC approved Cleco Power’s stipulated settlement in Docket No. U-31393 allowing Cleco Power to defer the estimated revenue requirements for the AMI project as a regulatory asset. In 2014, the LPSC approved Cleco Power’s recovery of the AMI regulatory asset over the average

life of the AMI meters, or i 11 years, and Cleco Power began recovering the AMI deferred revenue requirement.

AROs

Cleco Power recorded an ARO liability for the retirement of certain ash disposal facilities. The ARO regulatory asset represents the accretion of the ARO liability and the depreciation of the related assets. For more information on the net changes of Cleco Power’s AROs, see Note 16 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Other Commitments.”

Bayou Vista To Segura Transmission Project Deferred Revenue Requirement

In July, 2021, as approved by the LPSC in Cleco Power’s current retail rate plan, Cleco Power was allowed to establish a regulatory asset and recover the revenue requirements, including interest at Cleco Power’s weighted average cost of capital, starting in the month after completion of each phase of the Bayou Vista to Segura Transmission project. The northern phase of the project was completed in August 2021, and the southern phase was completed in December 2021. At December 31, 2023, the regulatory asset was fully amortized.

Coughlin Transaction Costs

In January 2014, the LPSC authorized Cleco Power to create a regulatory asset for the transaction costs related to the transfer of Coughlin from Evangeline to Cleco Power. In 2014, Cleco Power began recovering the Coughlin transaction costs over a i 35-year period.

COVID-19 Executive Order

In March 2020, the LPSC issued an executive order prohibiting the disconnection of utilities for nonpayment. This order resulted in an increase of expenses and a loss of revenue for Cleco Power. In April 2020, the LPSC issued an order allowing utilities to establish a regulatory asset for expenses incurred from the suspension of disconnections and collection of late fees imposed by the LPSC executive order. On July 1, 2020, the LPSC issued an order terminating the moratorium on disconnections effective July 16, 2020. Cleco began resuming disconnections and late fees and utilizing collection agencies in October 2020. In December 2020, Cleco Power made a filing with the LPSC requesting the recovery of the regulatory asset as well as the lost revenue associated with the disconnection fees and incremental costs over a i four-year period. Cleco Power has a regulatory asset for expenses incurred related to the executive order and anticipates approval by the LPSC for recovery of these expenses in late March 2024.

Deferred Lignite and Mine Closure Costs

In October 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. In March 2021, the LPSC approved the establishment of a regulatory asset for certain lignite costs that would otherwise be billed through Cleco Power’s FAC and any reasonable incremental third-party professional costs related to the closure of the mine. Cleco Power has a regulatory asset for deferred fuel and mine-related incurred costs, which were included in the application filed with the LPSC on January 31, 2022. Recovery of these costs is subject to a prudency review by the LPSC, which is


CLECO
CLECO POWER						2023 FORM 10-K

currently in progress. Management has estimated that a loss resulting from a potential disallowance ranging between $ i 58.7 million and $ i 228.0 million is probable. As a result, Cleco Power accrued an estimated contingent loss of $ i 58.7 million at December 31, 2023. This amount was recorded in Provision for rate refund on Cleco’s and Cleco Power’s Balance Sheets and Electric customer credits on Cleco’s and Cleco Power’s Statements of Income. For more information on the prudency review related to the deferred fuel and other mine-related closure costs, see Note 16 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Dolet Hills Prudency Review.”

Deferred Storm Restoration Costs

In 2020 and 2021, Cleco Power’s distribution and transmission systems sustained substantial damage from i four separate hurricanes, Hurricanes Laura, Delta, Zeta, and Ida, and i two severe winter storms, Winter Storms Uri and Viola. Cleco Power established a separate regulatory asset to track and defer non-capital expenses associated with each corresponding storm, as approved by the LPSC.

On June 22, 2022, through Cleco Securitization I, Cleco Power completed a securitized financing of Storm Recovery Property, which included the previously mentioned storm restoration costs that were deferred as regulatory assets. In connection with that securitization financing, Cleco Securitization I used the net proceeds from its issuance of storm recovery bonds to purchase the Storm Recovery Property from Cleco Power. Prior to September 1, 2022, certain costs for Hurricanes Laura, Delta, and Zeta were recovered through the interim storm recovery rate. On September 30, 2023, the LPSC approved a settlement allowing Cleco Power to withdraw the remaining unrecovered Hurricane Ida storm restoration costs, plus a carrying charge through September 2023, totaling $ i 10.3 million from the Hurricane Ida storm reserve. The balances remaining at December 31, 2023, for Hurricanes Laura, Delta, and Zeta are for storm preparation costs and are expected to be funded by the storm reserve, pending approval by the LPSC.

Dolet Hills Power Station Closure Costs

In 2020, Cleco Power revised depreciation rates for the Dolet Hills Power Station to utilize the December 31, 2021, expected end-of-life and early retirement of the Dolet Hills Power Station and defer depreciation expense to a regulatory asset for the amount in excess of the previously LPSC-approved depreciation rates.

The Dolet Hills Power Station was retired on December 31, 2021. On January 31, 2022, Cleco Power filed an application with the LPSC requesting approval of the regulatory treatment and recovery of stranded and decommissioning costs associated with the retirement of the Dolet Hills Power Station over i 20 years. Cleco Power has a regulatory asset for the stranded costs, and these costs are currently under a prudency review by the LPSC. For more information on the prudency review, see Note 16 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Dolet Hills Prudency Review.”

Energy Efficiency

In 2018, Cleco Power filed a letter of intent with the LPSC to recover the under recovery of the accumulated decrease in revenues, also known as the LCFC, associated with the energy

efficiency program for years 2014 through 2018 to be recovered over a i four-year period. Cleco Power began collecting the accumulated LCFC revenues in Cleco Power’s energy efficiency rates effective March 1, 2019. In October 2019, Cleco Power received notice of approval from the LPSC allowing recovery of the accumulated LCFC revenues. At December 31, 2023, the accumulated LCFC revenues were fully recovered.

Financing Costs

In 2011, Cleco Power entered into and settled i two treasury rate locks. Of the $ i 26.8 million in settlements, $ i 7.4 million was deferred as a regulatory asset relating to ineffectiveness of the hedge relationships. Also in 2011, Cleco Power entered into a forward starting swap contract. These derivatives were entered into in order to mitigate the interest rate exposure on coupon payments related to forecasted debt issuances. In 2013, the forward starting interest rate swap was settled at a loss of $ i 3.3 million. Cleco Power deferred $ i 2.9 million of the losses as a regulatory asset, which is being amortized over the terms of the related debt issuances.

Interest Costs

Cleco Power’s deferred interest costs include additional deferred capital construction financing costs authorized by the LPSC. These costs are being amortized over the estimated lives of the respective assets.

Madison Unit 3 Property Taxes

Beginning in July 2021, as approved by the LPSC in Cleco Power’s current retail rate plan, Cleco Power is allowed to recover property taxes paid for Madison Unit 3, including a carrying charge at Cleco Power’s weighted average cost of capital, grossed up for income taxes. The amount included in the cost recovery mechanism each year will amortize over i 12 months.

Non-Service Cost of Postretirement Benefits

In 2018, FASB’s amended guidance related to defined benefit pension and other postretirement plans became effective. The amendment allows only the service cost component of net benefit cost to be eligible for capitalization within property, plant, and equipment. Beginning in 2018, Cleco Power’s non-service cost previously eligible for capitalization into property, plant, and equipment are being deferred to a regulatory asset and will be amortized over the estimated lives of the respective assets.

Other

On June 16, 2021, the LPSC approved Cleco Power’s current retail rate plan resulting in Cleco Power establishing several regulatory assets. Annually, Cleco Power is allowed to defer, as a regulatory asset, the undercollection of revenues related to the Northlake Transmission Agreement. The amount recorded in the regulatory asset will be amortized over the following regulatory period, beginning on July 1. At December 31, 2023, Cleco Power had a regulatory asset of $ i 1.0 million relating to the Northlake Transmission Agreement.

In addition, the LPSC approved recovery of other previously deferred costs associated with Cleco Power’s current retail rate plan, which began being amortized over i four years on July 1, 2021. At December 31, 2023, Cleco Power had a regulatory asset of $ i 2.9 million for these deferred costs.


CLECO
CLECO POWER						2023 FORM 10-K

In June 2017, the LPSC approved the establishment of a regulatory asset upon the completion of the Coughlin Pipeline project for the revenue requirement associated with the project, until Cleco Power’s current retail rate plan was approved. As approved by the LPSC in Cleco Power’s current retail rate plan, the regulatory asset began being amortized over i four years on July 1, 2021. At December 31, 2023, Cleco Power had a regulatory asset of $ i 2.0 million related to the deferred revenue associated with the Coughlin Pipeline project.

Effective for income tax periods beginning on or after January 1, 2022, the Louisiana state corporate income tax rate was decreased from 8% to 7.5% and the state deduction for federal income taxes paid was eliminated. These changes resulted in an increase in income tax expense. Therefore, Cleco Power established a regulatory asset for the increased revenue requirements associated with the income tax expense in excess of the amount previously approved by the LPSC. Cleco Power plans to seek recovery of this regulatory asset in its current rate case, which was filed on June 30, 2023, with anticipated new rates being effective July 1, 2024. At December 31, 2023, Cleco Power had a balance of $ i 4.5 million related to this regulatory asset.

Postretirement Costs

Cleco Power recognizes the funded status of its postretirement benefit plans as a net liability or asset. The net liability or asset is defined as the difference between the benefit obligation and the fair market value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. Historically, the LPSC has allowed Cleco Power to recover pension plan expense. Cleco Power, therefore, recognizes a regulatory asset based on its determination that these costs can be collected from customers. These costs are amortized to pension expense over the average service life of the remaining plan participants (approximately i five years as of December 31, 2023, for Cleco’s plan) when it exceeds certain thresholds. The amount and timing of the recovery will be based on the changing funded status of the pension plan in future periods. For more information on Cleco’s pension plan and adoption of these authoritative guidelines, see Note 11 — “Pension Plan and Employee Benefits.”

Production Operations and Maintenance Expenses

Annually, Cleco Power is allowed to defer, as a regulatory asset, production operations and maintenance expenses, net of fuel and payroll, above the retail jurisdictional portion of $ i 34.9 million, adjusted annually for a growth factor (deferral threshold). The amount of the regulatory asset is capped at $ i 25.0 million. The LPSC allows Cleco Power to recover the amount deferred in any calendar year over the following i three-year regulatory period, beginning on July 1, when the annual rates are set. Cleco Power had i no deferral in 2023 and a deferral of $ i 2.4 million in 2022.

Rodemacher Unit 2 Deferred Costs

As a result of environmental regulations enacted during 2020, Cleco Power revised Rodemacher Unit 2’s expected end-of-life to coincide with its application to the EPA for an alternative closure date of October 17, 2028. Rodemacher Unit 2’s depreciation expense in excess of the previously LPSC-approved depreciation rates are deferred to a regulatory asset.

St. Mary Clean Energy Center

Cleco Power has a regulatory asset for the revenue requirements related to the planning and construction costs incurred for the St. Mary Clean Energy Center. As approved by the LPSC in Cleco Power’s current retail rate plan, the regulatory asset began being amortized over i four years on July 1, 2021.

In September 2022, the LPSC approved a settlement refunding $ i 10.4 million to Cleco Power’s retail customers. As a result, a regulatory asset of $ i 3.8 million was recognized for the incurred refund liability for retail revenues that will continue to be collected until Cleco Power’s current base rates are reset, which is expected to be on July 1, 2024, in its next FRP. On October 1, 2022, Cleco Power began amortizing the $ i 3.8 million regulatory asset to Electric customer credits on its Consolidated Statement of Income as amounts are collected from customers. For more information on the settlement and the costs disallowed for recovery, see Note 14 — “Regulation and Rates — Regulatory Disallowance.”

Training Costs

In 2008, the LPSC approved Cleco Power’s request to establish a regulatory asset for training costs associated with existing processes and technology for new employees at Madison Unit 3. Recovery of these expenditures was approved by the LPSC in 2009. In 2010, Cleco Power began amortizing the regulatory asset over a i 50-year period.

Tree Trimming Costs

In 2016, the LPSC approved Cleco Power to defer and recover through its base rates tree trimming costs. The LPSC authorized a deferral up to $ i 10.9 million, excluding debt carrying costs. Cleco Power is currently collecting deferred tree trimming costs through its base rates and expects them to be fully amortized by 2026.

Cleco Holdings’ 2016 Merger Adjustments

As a result of the 2016 Merger, Cleco implemented acquisition accounting, which eliminated AOCI at the Cleco consolidated level on the date of the 2016 Merger. Cleco will continue to recover expenses related to certain postretirement costs; therefore, Cleco recognized a regulatory asset based on its determination that these costs that are probable of recovery continue to be collected from customers. These costs will be amortized to Other operations expense over the average remaining service period of participating employees. Cleco will also continue to recover financing costs associated with the settlement of i two treasury rate locks and a forward starting swap contract that were previously recognized in AOCI. Additionally, as a result of the 2016 Merger, a regulatory asset was recorded for debt issuance costs that were eliminated at Cleco and a regulatory asset was recorded for the difference between the carrying value and the fair value of long-term debt. These regulatory assets are being amortized over the terms of the related debt issuances, unless the debt is redeemed prior to maturity, at which time any unamortized related regulatory asset will be derecognized.

Deferred Taxes, Net

The regulatory assets and liabilities recorded for deferred income taxes represent the effect of tax benefits or detriments that must be flowed through to customers as they are received or paid. The amounts deferred are attributable to differences between book and tax recovery periods. In 2017, the TCJA


CLECO
CLECO POWER						2023 FORM 10-K

was enacted. Changes in the IRC from the TCJA had a material impact on the Registrants’ financial statements in 2017. Tax effects of changes in tax laws must be recognized in the period in which the law is enacted. Also, deferred tax assets and liabilities must be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled. At December 31, 2023, and 2022, Cleco and Cleco Power had $ i i 211.5 / million and $ i i 257.4 / million, respectively, accrued for the excess ADIT as a result of the TCJA. For more information on the status of the TCJA regulatory liability, see Note 14 — “Regulation and Rates — TCJA.”

Storm Reserves

On June 22, 2022, in conjunction with the storm recovery securitization financing and pursuant to the financing order issued by the LPSC on April 1, 2022, funded storm reserves for future storm restoration costs and Hurricane Ida storm restoration costs were established. Upon the closing of the securitization financing, Cleco Power withdrew $ i 79.6 million from the LPSC approved Hurricane Ida storm reserve. At December 31, 2022, Cleco Power had $ i 15.5 million recorded for the Hurricane Ida storm reserve and a regulatory asset of $ i 9.4 million for non-capital expenses associated with Hurricane Ida that were under a prudency review by the LPSC.

On September 20, 2023, the LPSC approved a settlement allowing Cleco Power to withdraw the remaining unrecovered Hurricane Ida storm restoration costs, plus a carrying charge through September 2023, totaling $ i 10.3 million from the Hurricane Ida storm reserve. The settlement also approved the transfer of the remaining balance of the Hurricane Ida storm reserve to the restricted reserve for future storm restoration costs. At December 31, 2023, all amounts remaining in the storm reserve are for future storm restoration costs.

Note 7 — Jointly Owned Generation Units

Cleco Power operates electric generation units that are jointly owned with other utilities. The joint-owners are responsible for their own share of the capital and the operating and maintenance costs of the respective units. Cleco Power is responsible for its own share of the direct expenses of its jointly owned generation units. Cleco Power’s share of expenses is included in the operating expenses on Cleco’s and Cleco Power’s Consolidated Statements of Income.

At December 31, 2023, the investment in and accumulated depreciation for each generating facility on Cleco’s and Cleco Power’s Consolidated Balance Sheets were as follows:

Cleco

(THOUSANDS, EXCEPT PERCENTAGES AND MW)

UTILITY PLANT
IN SERVICE

ACCUMULATED DEPRECIATION

CONSTRUCTION WORK IN PROGRESS

OWNERSHIP INTEREST PERCENTAGE

RATED
CAPACITY (MW)

OWNERSHIP INTEREST (MW)

Acadia Power Station common facilities (1)

i 17,384

i 3,304

i 977

i 50

Brame Energy Center

Rodemacher Unit 2

i 85,827

i 39,798

i 257

i 30

i 523

i 157

Common facilities - Nesbitt Unit 1 and Rodemacher Unit 2

i 3,336

i 678

i 16

i 62

Common facilities - Rodemacher Unit 2 and Madison Unit 3

i 2,979

i 330

i 2

i 69

Common facilities - Nesbitt Unit 1, Rodemacher Unit 2, and Madison Unit 3

i 10,696

i 2,090

i 337

i 77

(1) Cleco Power has a i 100% ownership interest in Acadia Unit 1. The common facilities at the Acadia Power Station are jointly owned.

Cleco Power

(THOUSANDS, EXCEPT PERCENTAGES AND MW)

UTILITY PLANT
IN SERVICE

ACCUMULATED DEPRECIATION

CONSTRUCTION WORK IN PROGRESS

OWNERSHIP INTEREST PERCENTAGE

RATED
CAPACITY (MW)

OWNERSHIP INTEREST (MW)

Acadia Power Station common facilities (1)

i 18,158

i 4,079

i 977

i 50

Brame Energy Center

Rodemacher Unit 2

i 159,407

i 113,378

i 257

i 30

i 523

i 157

Common facilities - Nesbitt Unit 1 and Rodemacher Unit 2

i 4,744

i 2,085

i 16

i 62

Common facilities - Rodemacher Unit 2 and Madison Unit 3

i 3,069

i 420

i 2

i 69

Common facilities - Nesbitt Unit 1, Rodemacher Unit 2, and Madison Unit 3

i 20,739

i 12,133

i 337

i 77

(1) Cleco Power has a i 100% ownership interest in Acadia Unit 1. The common facilities at the Acadia Power Station are jointly owned.

Note 8 — Fair Value Accounting Instruments

Fair value is a market-based measurement based on assumptions market participants would use in pricing an asset or a liability. Cleco’s valuation techniques maximize the use of observable market-based inputs and minimize the use of unobservable inputs. Credit risk of Cleco and its counterparties is incorporated in the valuation of assets and liabilities through the use of credit reserves.

Cleco utilizes a three-tier fair value hierarchy that prioritizes inputs that may be used to measure fair value. The fair value hierarchy gives the highest priority to unadjusted

quoted prices 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


CLECO
CLECO POWER						2023 FORM 10-K

classifies fair value balances based on the fair value hierarchy defined as follows:

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

•Level 2 — observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets, quoted market prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•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 Consolidated Balance Sheets at December 31, 2023, and 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 Consolidated Balance Sheets. These amounts are presented on a gross basis.

Cleco

FAIR VALUE MEASUREMENTS AT REPORTING DATE

(THOUSANDS)

QUOTED
PRICES IN
ACTIVE MARKETS
FOR IDENTICAL
ASSETS
(LEVEL 1)

SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)

SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)

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

i 242,596

i —

i 179,241

i —

FTRs

i 3,087

i —

i 3,087

i 2,570

i —

i 2,570

Natural gas derivatives

i 5,042

i —

i 5,042

i —

i 105,646

i —

i 105,646

i —

Total assets

i 250,725

i 242,596

i 5,042

i 3,087

i 287,457

i 179,241

i 105,646

i 2,570

Liability Description

FTRs

i 781

i —

i 781

i 294

i —

i 294

Natural gas derivatives

i 15,005

i —

i 15,005

i —

i 6,980

i —

i 6,980

i —

Total liabilities

i 15,786

i —

i 15,005

i 781

i 7,274

i —

i 6,980

i 294

Cleco Power

FAIR VALUE MEASUREMENTS AT REPORTING DATE

(THOUSANDS)

QUOTED
PRICES IN
ACTIVE MARKETS
FOR IDENTICAL
ASSETS
(LEVEL 1)

SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)

SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)

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

i 169,606

i —

i 139,752

i —

FTRs

i 3,087

i —

i 3,087

i 2,570

i —

i 2,570

Total assets

i 172,693

i 169,606

i —

i 3,087

i 142,322

i 139,752

i —

i 2,570

Liability Description

FTRs

i 781

i —

i 781

i 294

i —

i 294

Natural gas derivatives

i 14,331

i —

i 14,331

i —

i 4,570

i —

i 4,570

i —

Total liabilities

i 15,112

i —

i 14,331

i 781

i 4,864

i —

i 4,570

i 294

Cleco has consistently applied the Level 2 and Level 3 fair value techniques between comparative fiscal periods. During the years ended December 31, 2023, and 2022, Cleco did not experience any transfers into or out of Level 3 of the fair value hierarchy.

Short-term Investments

At December 31, 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 had a maturity of three months or less when purchased.


CLECO
CLECO POWER						2023 FORM 10-K

The following tables present the short-term investments as recorded on Cleco’s and Cleco Power’s Consolidated Balance Sheets at December 31, 2023, and 2022:


Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Cash and cash equivalents	$	i 113,207	$	i 46,279
Current restricted cash and cash equivalents	$	i 15,818	$	i 23,548
Non-current restricted cash and cash equivalents	$	i 113,571	$	i 109,414


Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Cash and cash equivalents	$	i 40,240	$	i 6,813
Current restricted cash and cash equivalents	$	i 15,818	$	i 23,548
Non-current restricted cash and cash equivalents	$	i 113,548	$	i 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.

i i

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 YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Beginning balance

i i 2,276 /

i i 4,918 /

i i 3,216 /

Unrealized (losses) gains *

( i i 425 / )

( i i 495 / )

i i 2,828 /

Purchases

i i 8,089 /

i i 7,270 /

i i 9,871 /

Settlements

( i i 7,634 / )

( i i 9,417 / )

( i i 10,997 / )

Ending balance

i i 2,306 /

i i 2,276 /

i i 4,918 /

* Unrealized (losses) gains are reported through Accumulated deferred fuel on Cleco Power's Consolidated Balance Sheets.

/ /

i i

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 December 31, 2023, and 2022:

FAIR VALUE

VALUATION TECHNIQUE

SIGNIFICANT
UNOBSERVABLE INPUTS

FORWARD PRICE RANGE

(THOUSANDS, EXCEPT DOLLAR PER MWh)

Assets

Liabilities

Low

High

FTRs at Dec. 31, 2023

i i 3,087 /

i i 781 /

RTO auction pricing

FTR price - per MWh

( i i 3.51 / )

i i 7.07 /

FTRs at Dec. 31, 2022

i i 2,570 /

i i 294 /

RTO auction pricing

FTR price - per MWh

( i i 5.11 / )

i i 13.65 /

Natural Gas Derivatives

Cleco may enter into physical and financial fixed price or options contracts that financially settle or are physically delivered at a future date. Management has not elected to apply hedge accounting to these contracts as allowed under applicable accounting standards. 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 Cajun’s unrealized gains or losses as well as realized gains or losses at settlement are recorded on the income statements as a component of fuel expense.

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 Consolidated Balance Sheets:

Cleco

AT DEC. 31,

2023

2022

(THOUSANDS)

CARRYING
VALUE*

FAIR VALUE

CARRYING
VALUE*

FAIR VALUE

Long-term debt

i 3,400,293

i 3,177,654

i 3,482,556

i 3,180,208

* The carrying value of long-term debt does not include deferred issuance costs of $ i 14.2 million at December 31, 2023, and $ i 16.2 million at December 31, 2022.

Cleco Power

AT DEC. 31,

2023

2022

(THOUSANDS)

CARRYING
VALUE*

FAIR VALUE

CARRYING
VALUE*

FAIR VALUE

Long-term debt

i 1,886,248

i 1,867,559

i 1,895,508

i 1,825,192

* The carrying value of long-term debt does not include deferred issuance costs of $ i 11.5 million at December 31, 2023, and $ i 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 December 31, 2023, and 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 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. In order to capture interest income and minimize risk, cash is invested primarily in short-term securities issued by the


CLECO
CLECO POWER						2023 FORM 10-K

U.S. government to maintain liquidity and achieve the goal of a net asset value of a dollar.

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 long-form contract and master agreements with counterparties that govern the risk of counterparty 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 bilateral transactions and contracts that Cleco has entered into or may enter into in the future. The amount of credit support required may change based on margining formulas, changes in credit agency ratings, or liquidity ratios.

Note 9 — Derivative Instruments

In the normal course of business, Cleco utilizes derivative instruments, such as natural gas derivatives and FTRs, to mitigate volatility of overall fuel and purchased power costs.

Cleco has not elected to designate any of its current instruments as an accounting hedge. At December 31, 2023, there was i no cash collateral posted with or received from counterparties that was netted on Cleco’s and Cleco Power’s Consolidated Balance Sheets. i i The following tables present the fair values of derivative instruments and their respective line items as recorded on Cleco’s and Cleco Power’s Consolidated Balance Sheets at December 31, 2023, and 2022: /

Cleco

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

GROSS AMOUNTS

OFFSET ON THE

BALANCE SHEET

GROSS AMOUNTS

NOT OFFSET ON THE

BALANCE SHEET (1)

(THOUSANDS)

BALANCE SHEET LINE ITEM

NET ASSET (LIABILITY) ON THE BALANCE SHEET

GROSS ASSET

(LIABILITY)

CASH

COLLATERAL

NET ASSET

(LIABILITY) ON THE

BALANCE SHEET

COLLATERAL

NET AMOUNT

Commodity-related contracts

FTRs

Current

Energy risk management assets

i 3,087

i 2,570

i —

i 2,570

i —

i 2,570

Current

Energy risk management liabilities

( i 781)

( i 294)

i —

( i 294)

i —

( i 294)

Natural gas derivatives

Current

Energy risk management assets

i 5,042

i 53,251

( i 6,500)

i 46,751

( i 32,578)

i 14,173

Non-current

Energy risk management assets

i —

i 58,895

i —

i 58,895

( i 20,422)

i 38,473

Current

Energy risk management liabilities

( i 15,005)

( i 6,980)

i —

( i 6,980)

i —

( i 6,980)

Commodity-related contracts, net

( i 7,657)

i 107,442

( i 6,500)

i 100,942

( i 53,000)

i 47,942

(1) Represents letters of credit by counterparties.

Cleco Power

DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS

AT DEC. 31,

(THOUSANDS)

BALANCE SHEET LINE ITEM

2023

2022

Commodity-related contracts

FTRs

Current

Energy risk management assets

i 3,087

i 2,570

Current

Energy risk management liabilities

( i 781)

( i 294)

Natural gas derivatives

Current

Energy risk management liabilities

( i 14,331)

( i 4,570)

Commodity-related contracts, net

( i 12,025)

( i 2,294)


CLECO
CLECO POWER						2023 FORM 10-K

The following table presents the effect of derivatives not designated as hedging instruments on Cleco’s and Cleco Power’s Consolidated Statements of Income for the years December 31, 2023, 2022, and 2021:

Cleco

AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

DERIVATIVES LINE ITEM

2023

2022

2021

Commodity contracts

FTRs (1)

Electric operations

i 6,320

i 14,118

i 12,797

FTRs (1)

Purchased power

( i 4,465)

( i 7,331)

( i 10,360)

Natural gas derivatives (2)

Fuel used for electric generation

( i 139,315)

i 180,522

i 134,144

Total

( i 137,460)

i 187,309

i 136,581

(1) For the years ended December 31, 2023, 2022, and 2021, unrealized (losses) gains associated with FTRs of $( i 0.4) million, $( i 0.5) million, and $ i 2.8 million, respectively, were reported through Accumulated deferred fuel on the balance sheet.

(2) For the year ended December 31, 2023, unrealized losses and realized losses associated with natural gas derivatives for Cleco Power of $( i 9.8) million and $( i 2.0) million, respectively, were reported through Accumulated deferred fuel on the balance sheet. For the year ended December 31, 2022, unrealized gains associated with natural gas derivatives for Cleco Power of $ i 4.9 million were reported through Accumulated deferred fuel on the balance sheet. For the year ended December 31, 2022, Cleco Power had i no realized gains (losses) associated with natural gas derivatives. Cleco Power had i no natural gas derivatives during the year ended December 31, 2021.

Cleco Power

AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

DERIVATIVES LINE ITEM

2023

2022

2021

Commodity contracts

FTRs (1)

Electric operations

i 6,320

i 14,118

i 12,797

FTRs (1)

Purchased power

( i 4,465)

( i 7,331)

( i 10,360)

Natural gas derivatives (2)

Fuel used for electric generation

( i 22,734)

i —

Total

( i 20,879)

i 6,787

i 2,437

(2) For the year ended December 31, 2023, unrealized losses and realized losses associated with natural gas derivatives of $( i 9.8) million and $( i 2.0) million, respectively, were reported through Accumulated deferred fuel on the balance sheet. For the year ended December 31, 2022, unrealized gains associated with natural gas derivatives of $ i 4.9 million were reported through Accumulated deferred fuel on the balance sheet. For the year ended December 31, 2022, Cleco Power had i no realized gains (losses) associated with natural gas derivatives. Cleco Power had i no natural gas derivatives during the year ended December 31, 2021.

The following tables present the volume of commodity-related derivative contracts outstanding at December 31, 2023, and 2022 for Cleco and Cleco Power:

Cleco

TOTAL VOLUME OUTSTANDING

UNIT OF MEASURE

AT DEC. 31,

(THOUSAND)

2023

2022

Commodity-related contracts

FTRs

MWh

i 9,611

i 9,085

Natural gas derivatives

MMBtus

i 61,119

i 85,350

Cleco Power

TOTAL VOLUME OUTSTANDING

UNIT OF MEASURE

AT DEC. 31,

(THOUSAND)

2023

2022

Commodity-related contracts

FTRs

MWh

i 9,611

i 9,085

Natural gas derivatives

MMBtus

i 19,915

i 4,840


CLECO
CLECO POWER						2023 FORM 10-K

Note 10 — Debt

Cleco Power’s total long-term indebtedness as of December 31, 2023, and 2022 was as follows:


Cleco Power
	AT DEC. 31,
(THOUSANDS)	2023		2022
Bonds
Senior notes, i 3.08%, due 2023	$	i —	$	i 100,000
Senior notes, i 3.17%, due 2024	i 50,000		i 50,000
Senior notes, i 3.68%, due 2025	i 75,000		i 75,000
Senior notes, i 3.47%, due 2026	i 130,000		i 130,000
Senior notes, i 5.96%, due 2026	i 100,000		i —
Senior notes, i 4.33%, due 2027	i 50,000		i 50,000
Senior notes, i 3.57%, due 2028	i 200,000		i 200,000
Senior notes, i 6.50%, due 2035	i 295,000		i 295,000
Senior notes, i 6.00%, due 2040	i 250,000		i 250,000
Senior notes, i 5.12%, due 2041	i 100,000		i 100,000
Series A GO Zone bonds, i 2.50%, due 2038, mandatory tender in 2025	i 50,000		i 50,000
Series B GO Zone bonds, i 4.25%, due 2038	i 50,000		i 50,000

Cleco Securitization I’s storm recovery bonds, i 4.016%, due 2033	i 115,426		i 125,000
Cleco Securitization I’s storm recovery bonds, i 4.646%, due 2044	i 300,000		i 300,000
Total bonds	i 1,765,426		i 1,775,000
Bank term loan, variable rate, due 2024	i 125,000		i 125,000
Finance leases


Barge lease obligations	i 12,971		i 13,807
Gross amount of long-term debt and finance leases	i 1,903,397		i 1,913,807
Long-term debt due within one year	( i 189,389)		( i 109,508)
Finance leases classified as long-term debt due within one year	( i 925)		( i 836)
Unamortized debt discount	( i 4,178)		( i 4,492)
Unamortized debt issuance costs	( i 11,753)		( i 12,524)
Total long-term debt and finance leases, net	$	i 1,697,152	$	i 1,786,447

Cleco’s total long-term indebtedness as of December 31, 2023, and 2022 was as follows:


Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Total Cleco Power long-term debt and finance leases, net	$	i 1,697,152	$	i 1,786,447
Cleco Holdings’ long-term debt, net
Senior notes, i 3.250%, due 2025	i 165,000		i 165,000
Senior notes, i 3.743%, due 2026	i 535,000		i 535,000
Senior notes, i 3.375%, due 2029	i 300,000		i 300,000
Senior notes, i 4.973%, due 2046	i 350,000		i 350,000
Bank term loan, variable rate, due 2024	i 66,700		i 132,300

Long-term debt due within one year	( i 66,497)		( i 230,524)
Unamortized debt issuance costs(1)	( i 2,776)		( i 3,877)
Fair value adjustment	i 97,345		i 104,748
Total Cleco long-term debt and finance leases, net	$	i 3,141,924	$	i 3,139,094

(1) For December 31, 2023, and 2022, this amount includes unamortized debt issuance costs for Cleco Holdings of $ i 7.0 million and $ i 8.5 million, respectively, partially offset by deferred debt issuance costs eliminated as a result of the 2016 Merger of $ i 4.3 million and $ i 4.6 million, respectively. For more information, see Note 6 — “Regulatory Assets and Liabilities — Cleco Holdings’ 2016 Merger Adjustments.”

The principal amounts payable under long-term debt agreements for each year through 2028 and thereafter are as follows:


(THOUSANDS)	CLECO POWER		CLECO
For the year ending Dec. 31,
2024	$	i 189,499	$	i 256,199
2025 (1)	$	i 90,087	$	i 255,087
2026	$	i 245,699	$	i 780,699
2027	$	i 66,336	$	i 66,336
2028	$	i 216,999	$	i 216,999
Thereafter	$	i 1,081,806	$	i 1,731,806

(1) Does not include Series A GO Zone bonds that have a maturity date of December 2038 but a mandatory tender in May 2025.

The principal amounts payable under the finance lease agreement for each year through 2028 and thereafter are as follows:


(THOUSANDS)
For the year ending Dec. 31,
2024	$	i i 925 /
2025	$	i i 1,023 /
2026	$	i i 1,133 /
2027	$	i i 1,253 /
2028	$	i i 1,388 /
Thereafter	$	i i 7,249 /

For more information on the finance agreement, see Note 4 — “Leases — Finance Lease.”

Cleco Power

At December 31, 2023, and December 31, 2022, Cleco Power’s long-term debt and finance leases due within one year was $ i 190.3 million and $ i 110.3 million, respectively. The increase of $ i 80.0 million is primarily due to the reclassification of a $ i 125.0 million bank term loan due May 2024, $ i 50.0 million of Cleco Power’s senior notes due in December 2024, and $ i 4.9 million of additional Cleco Securitization I storm recovery bond principal payments scheduled to be paid in 2024. These increases are offset by the refinancing of Cleco Power’s $ i 100.0 million senior notes due in December 2023 with $ i 100.0 million of Cleco Power’s senior notes with a maturity date of December 2026.

On December 14, 2023, Cleco Power entered into a note purchase agreement for the issuance and sale in a private placement of $ i 100.0 million aggregate principal amount of senior notes at a fixed interest rate of i 5.96% and a maturity date of December 14, 2026. The proceeds of the issuance were used to pay Cleco Power’s $ i 100.0 million aggregate principal amount of senior notes due December 2023.

Other than Cleco Securitization I’s storm recovery bonds, all of Cleco Power’s debt outstanding at December 31, 2023, and 2022 is unsecured and unsubordinated.

Cleco

At December 31, 2023, and December 31, 2022, Cleco’s long-term debt and finance leases due within one year was $ i 256.8 million and $ i 340.9 million respectively. The decrease of $ i 84.1 million is primarily due to the reclassification of Cleco Holdings’ $ i 165.0 million senior notes as a result of the extension of the maturity date to May 2025 and the refinancing


CLECO
CLECO POWER						2023 FORM 10-K

of Cleco Power’s $ i 100.0 million senior notes due in December 2023 with $ i 100.0 million of Cleco Power’s senior notes with a maturity date of December 2026. These decreases were partially offset by the reclassification of Cleco Power’s $ i 125.0 million bank term loan due in May 2024, Cleco Power’s $ i 50.0 million senior notes due in December 2024, and $ i 4.9 million of additional Cleco Securitization I storm recovery bond principal payments scheduled to be paid in 2024.

On May 1, 2023, Cleco Holdings amended certain terms of the supplemental indenture governing its $ i 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 i 1.725% and the maturity date was extended from May 1, 2023, to May 1, 2025.

Other than Cleco Securitization I’s storm recovery bonds, all of Cleco’s debt outstanding at December 31, 2023, and 2022 is unsecured and unsubordinated.

Upon approval of the Cleco Cajun Acquisition, commitments were made to the LPSC by Cleco, including repayment of $ i 400.0 million of Cleco Holdings’ debt by December 31, 2024. As of December 31, 2023, Cleco Holdings was in compliance with these commitments. The cumulative minimum principal amounts committed to be repaid for each year through 2024 are as follows:


(THOUSANDS)
For the year ending Dec. 31,
2019	$	i 66,700
2020	$	i 133,300
2021	$	i 200,000
2022	$	i 267,700
2023	$	i 333,300
2024	$	i 400,000

Credit Facilities

At December 31, 2023, Cleco had i two separate revolving credit facilities, i one for Cleco Holdings in the amount of $ i 175.0 million with $ i 110.0 million of outstanding borrowings and i one for Cleco Power in the amount of $ i 300.0 million with i no outstanding borrowings. The total of all revolving credit facilities creates a maximum aggregate capacity of $ i 475.0 million. Cleco and Cleco Power had $ i 64.0 million and $ i 45.0 million, respectively, outstanding under their credit facilities at December 31, 2022. Cleco Holdings and Cleco Power had i i i i no / / / amounts outstanding under their uncommitted lines of credit at December 31, 2023, and 2022.

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.

Cleco Holdings’ revolving credit facility provides funding for working capital and other financing needs. The revolving credit facility includes restrictive financial covenants and expires in May 2026. Under covenants contained in Cleco Holdings’ revolving credit facility, Cleco is required to maintain total indebtedness less than or equal to i 65% of total capitalization. At December 31, 2023, Cleco Holdings was in compliance with the covenants of its revolving credit facility.

At December 31, 2023, the borrowing costs for amounts drawn under the facility were equal to SOFR plus i 1.725% or ABR plus i 0.625%, plus commitment fees of i 0.275% paid on the unused portion of the facility. If Cleco Holdings’ credit ratings were to be downgraded one level by the credit rating

agencies, Cleco Holdings may be required to pay incremental interest and commitment fees of i 0.125% and i 0.05%, respectively, under the pricing levels of its revolving credit facility.

Cleco Power’s revolving credit facility provides funding for working capital and other financing needs. The revolving credit facility includes restrictive financial covenants and expires in May 2026. Under covenants contained in Cleco Power’s revolving credit facility, Cleco Power is required to maintain total indebtedness less than or equal to i 65% of total capitalization. At December 31, 2023, Cleco Power was in compliance with the covenants of its credit facility. At December 31, 2023, the borrowing costs for amounts drawn under the facility were equal to SOFR plus i 1.35% or ABR plus i 0.25%, plus commitment fees of i 0.15% paid on the unused portion of the facility. If Cleco Power’s credit ratings were to be downgraded one level by the credit rating agencies, Cleco Power may be required to pay incremental interest and commitment fees of i 0.125% and i 0.025%, respectively, under the pricing levels of its revolving credit facility.

If Cleco Holdings or Cleco Power were not to comply with certain covenants in their respective revolving credit facilities or other debt agreements, they would be unable to borrow additional funds under the facilities, and the lenders under the respective credit facility or debt agreement could accelerate all principal and interest outstanding. Further, if Cleco Power were to default under its revolving credit facility or other debt agreements, Cleco Holdings would be considered in default under its revolving credit facility.

Note 11 — Pension Plan and Employee Benefits

Pension Plan and Other Benefits Plan

i Employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and highest total average compensation for any consecutive five calendar years during the last i ten years of employment with Cleco. Cleco’s policy is to base its contributions to the employee pension plan upon actuarial computations utilizing the projected unit credit method, subject to the IRS’s full funding limitation. Cleco was not required to make contributions to the pension plan in 2023, 2022, or 2021 / . Required contributions are driven by liability funding target percentages set by law and could cause the required contributions to be uneven among the years. Based on the funding assumptions at December 31, 2023, management estimates that $ i 94.2 million in pension contributions will be required through 2028, of which $ i 25.7 million will be required in 2024. Future discretionary contributions may be made depending on changes in assumptions, the ability to utilize the contribution as a tax deduction, and requirements concerning recognizing a minimum pension liability. Adverse changes in assumptions or adverse actual events could cause additional minimum contributions. The ultimate amount and timing of the contributions may be affected by changes in the discount rate, changes in the funding regulations, and actual returns on fund assets. Cleco Power is the plan sponsor, and Support Group is the plan administrator.

Certain Cleco Cajun employees are eligible to participate as a cash balance participant and are credited with all service that was credited to them under the NRG Pension Plan as of February 4, 2019. Benefits reflect the employee’s years of


CLECO
CLECO POWER						2023 FORM 10-K

service, age at retirement, and accrued benefit at retirement. The interest crediting rate on the cash balance plan was i 5.56% and i 5.07% at December 31, 2023, and 2022, respectively.

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.

Cleco recognizes the expected cost of Other Benefits during the periods in which the benefits are earned.

The employee pension plan and Other Benefits plan obligation, plan assets, and funded status at December 31, 2023, and 2022 are presented in the following table:

PENSION BENEFITS

OTHER BENEFITS

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2023

2022

Change in benefit obligation

Benefit obligation at beginning of period

i 500,869

i 680,417

i 43,306

i 55,257

Service cost

i 4,977

i 8,589

i 1,472

i 2,204

Interest cost

i 26,423

i 19,841

i 2,285

i 1,484

Plan participants’ contributions

i —

i 1,904

Actuarial loss (gain)

i 26,300

( i 174,733)

( i 5,110)

( i 10,289)

Expenses paid

( i 3,018)

( i 3,744)

i —

Benefits paid

( i 30,069)

( i 29,501)

( i 5,117)

( i 7,254)

Benefit obligation at end of period

i 525,482

i 500,869

i 47,056

i 43,306

Change in plan assets

Fair value of plan assets at beginning of period

i 402,285

i 527,427

i —

Actual (loss) gain return on plan assets

i 38,761

( i 91,897)

i —

Employer contributions

i 200

i —

Expenses paid

( i 3,018)

( i 3,744)

i —

Benefits paid

( i 30,069)

( i 29,501)

i —

Fair value of plan assets at end of period

i 408,159

i 402,285

i —

Unfunded status

( i 117,323)

( i 98,584)

( i 47,056)

( i 43,306)

i i

The current and non-current portions of the Pension Benefits liability for Cleco and Cleco Power at December 31, 2023, and 2022 are as follows:


	AT DEC. 31,
(THOUSANDS)	2023		2022
Current	$	i i 25,685 /	$	i i — /
Non-current	$	i i 91,638 /	$	i i 98,584 /

/ /

The employee pension plan accumulated benefit obligation at December 31, 2023, and 2022 is presented in the following table:


	PENSION BENEFITS
	AT DEC. 31,
(THOUSANDS)	2023		2022
Accumulated benefit obligation	$	i 505,508	$	i 481,398

The following table presents the net actuarial gains/losses included in other comprehensive income for Other Benefits and in regulatory assets for pension related to current year gains and losses as a result of being included in net periodic benefit costs for the employee pension plan and Other Benefits plan for the years ended December 31, 2023, and 2022:


	PENSION BENEFITS				OTHER BENEFITS
	FOR THE YEAR ENDED DEC. 31,				FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2023		2022
Net actuarial loss (gain) occurring during period	$	i 17,082	$	( i 58,124)	$	i 5,110	$	( i 10,289)

Net actuarial loss (gain) amortized during period	$	i —	$	i 12,332	$	( i 45)	$	i 1,207

The pension net actuarial loss was $ i 17.1 million for the year ended December 31, 2023, primarily due to updated demographic assumptions resulting from the completion of an experience study in 2023 and a decrease in the discount rate. This loss was partially offset by higher than expected return on assets. The pension net actuarial gain was $ i 58.1 million for the year ended December 31, 2022, primarily due to an increase

in the discount rate, partially offset by lower than expected return on assets.

The Other Benefits net actuarial loss was $ i 5.1 million for the year ended December 31, 2023, primarily due to updated demographic assumptions resulting from the completion of an experience study in 2023. The Other Benefits net actuarial gain was $ i 10.3 million for the year ended December 31, 2022, primarily due to an increase in the discount rate.


CLECO
CLECO POWER						2023 FORM 10-K

The following table presents net actuarial gains/losses in accumulated other comprehensive income that have not been recognized as components of net periodic benefit costs for the employee pension plan and Other Benefits plans at December 31, 2023, and 2022:


	PENSION BENEFITS				OTHER BENEFITS
	AT DEC. 31,				AT DEC. 31,
(THOUSANDS)	2023		2022		2023		2022
Net actuarial loss	$	i 64,399	$	i 47,317	$	i 13,103	$	i 13,705

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 Consolidated Statements of Income. i The components of net periodic pension and Other Benefits costs for 2023, 2022, and 2021 are as follows:

PENSION BENEFITS

OTHER BENEFITS

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

2023

2022

2021

Components of periodic benefit costs

Service cost

i 4,977

i 8,589

i 10,516

i 1,472

i 2,204

i 2,425

Interest cost

i 26,423

i 19,841

i 18,668

i 2,285

i 1,484

i 1,283

Expected return on plan assets

( i 29,544)

( i 24,706)

( i 22,801)

i —

Amortizations

Net loss (gain)

i —

i 12,332

i 20,738

( i 45)

i 1,210

i 1,523

Net periodic benefit cost

i 1,856

i 16,056

i 27,121

i 3,712

i 4,898

i 5,231

Special/contractual termination benefits

i —

i 3,270

i —

Total benefit cost

i 1,856

i 16,056

i 30,391

i 3,712

i 4,898

i 5,231

Effective September 30, 2021, the pension plan was amended to offer an enhanced pension benefit to certain employees participating in the plan that elected to retire during a certain retirement window. Those certain employees who elected by September 30, 2021, to receive the enhanced pension benefits received a i 10% increase in calculated pension benefits. This resulted in a special termination benefit cost for Cleco Power and Support Group of $ i 2.4 million and $ i 0.9 million, respectively, that was included as an expense of the pension plan.

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 years ended December 31, 2023, 2022, and 2021 was $ i 1.9 million, $ i 3.2 million, and $ i 4.5 million, respectively.

Cleco Holdings is the plan sponsor for the other benefit plans. There are i 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 Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021 was $ i 3.5

million, $ i 4.4 million, and $ i 4.7 million, respectively. The current and non-current portions of the Other Benefits liability for Cleco and Cleco Power at December 31, 2023, and 2022 are as follows:


Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Current	$	i 5,241	$	i 5,017
Non-current	$	i 41,815	$	i 38,366


Cleco Power
	AT DEC. 31,
(THOUSANDS)	2023		2022
Current	$	i 4,479	$	i 4,310
Non-current	$	i 32,289	$	i 30,082

The measurement date used to determine the pension and other postretirement benefits is December 31. i The assumptions used to determine the benefit obligation and the periodic costs are as follows:


	PENSION BENEFITS				OTHER BENEFITS
	AT DEC. 31,				AT DEC. 31,
	2023		2022		2023		2022
Weighted-average assumptions used to determine the benefit obligation
Discount rate	i 5.13	%	i 5.44	%	i 5.25	%	i 5.61	%
Rate of compensation increase	i 3.50	%	i 2.76	%	N/A		N/A


CLECO
CLECO POWER						2023 FORM 10-K


			PENSION BENEFITS						OTHER BENEFITS
	FOR THE YEAR ENDED DEC. 31,						FOR THE YEAR ENDED DEC. 31,
	2023		2022		2021		2023		2022		2021
Weighted-average assumptions used to determine the net benefit cost
Discount rate	i 5.44	%	i 2.98	%	i 2.74	%	i 5.61	%	i 2.82	%	i 2.39	%
Expected return on plan assets	i 6.60	%	i 5.25	%	i 5.00	%	N/A		N/A		N/A
Rate of compensation increase	i 2.76	%	i 2.73	%	i 2.71	%	N/A		N/A		N/A

The expected return on plan assets was determined by examining the risk profile of each target category as compared to the expected return on that risk, within the parameters determined by Cleco’s Retirement Committee. In assessing the risk as compared to return profile, historical returns as compared to risk were considered. The historical risk compared to returns was adjusted for the expected future long-term relationship between risk and return. For the calculation of the 2024 periodic expense, Cleco decreased the discount rate to i 5.13% and increased the expected long-term return on plan assets to i 6.68%. Cleco expects pension expense to decrease in 2024 by approximately $ i 1.3 million due to an increase in expected return on plan assets and a decrease in service costs from increased retirements.

Employee pension plan assets are invested in accordance with the Pension Plan’s Investment Policy Statement. At December 31, 2023, allowable investments included U.S. Equity Portfolios, International Equity - Developed Markets Portfolios, Emerging Markets Equity Portfolios, Multi-Asset Credits, Treasury Separate Trading of Registered Interest and

Principal of Securities (STRIPS), Fixed Income Portfolios - Long Credit and Intermediate Government Credit, and Real Estate Portfolios.

Real estate funds and the pooled separate accounts are stated at estimated market value based on appraisal reports prepared annually by independent real estate appraisers (members of the American Institute of Real Estate Appraisers). The estimated market value of recently acquired properties is assumed to approximate cost.

Fair Value Disclosures

Cleco classifies assets and liabilities measured at their fair value according to three different levels, depending on the inputs used in determining fair value. For more information on the fair value hierarchy, see Note 8 — “Fair Value Accounting Instruments.”

There have been no changes in the methodologies for determining fair value at December 31, 2023, and 2022. i The following tables disclose the pension plan’s fair value of financial assets measured on a recurring basis:

(THOUSANDS)

QUOTED PRICES
IN ACTIVE
MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1)

SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)

SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)

Asset Description

Cash equivalents

i 22,250

i —

i 22,250

i —

Government securities

i 14,418

i —

i 14,418

i —

Mutual funds

Domestic

i 85,821

i —

International

i 42,083

i —

Real estate funds

i 35,032

i —

i 35,032

Corporate debt

i 94,677

i —

i 94,677

i —

Total

i 294,281

i 127,904

i 131,345

i 35,032

Investments measured at net asset value*

i 112,110

Interest accrual

i 1,768

Total net assets

i 408,159

*Investments measured at net asset value consist of Common/

collective trust.


CLECO
CLECO POWER						2023 FORM 10-K

(THOUSANDS)

Agreement and Plan of Merger, dated as of October 17, 2014, by and among the Company, Como 1 L.P. and Como 3 Inc.

QUOTED PRICES
IN ACTIVE
MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1)

SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)

SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)

Asset Description

Cash equivalents

i 7,345

i —

i 7,345

i —

Government securities

i 33,019

i —

i 33,019

i —

Mutual funds

Domestic

i 78,349

i —

International

i 39,722

i —

Real estate funds

i 39,370

i —

i 39,370

Corporate debt

i 103,940

i —

i 103,940

i —

Total

i 301,745

i 118,071

i 144,304

i 39,370

Investments measured at net asset value*

i 98,505

Interest accrual

i 2,035

Total net assets

i 402,285

*Investments measured at net asset value consist of Common/

collective trust.

Level 3 valuations are derived from other valuation methodologies including pricing models, discounted cash flow models, and similar techniques. Level 3 valuations incorporate subjective judgments and consider assumptions including capitalization rates, discount rates, cash flows, and other factors that are not observable in the market. Significant increases or decreases in any of those inputs in isolation would result in a significantly different fair value measurement.

The following is a reconciliation of the beginning and ending balances of the pension plan’s real estate funds measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2023, and 2022:


(THOUSANDS)
Balance, Dec. 31, 2021	$	i 39,091
Realized losses	( i 2,451)
Unrealized gains	i 4,112
Purchases	i 2,027
Sales	( i 3,409)
Balance, Dec. 31, 2022	$	i 39,370
Realized losses	i 66
Unrealized losses	( i 5,786)
Purchases	i 2,021
Sales	( i 639)
Balance, Dec. 31, 2023	$	i 35,032

The market-related value of plan assets differs from the fair value of plan assets by the amount of deferred asset gains or losses. Actual asset returns that differ from the expected return on plan assets are deferred and recognized in the market-related value of assets on a straight-line basis over a five-year period. For 2023, the return on plan assets was i 9.23% compared to an expected long-term return of i 6.60%. The 2022 return on pension plan assets was ( i 19.94)% compared to an expected long-term return of i 5.25%. As of December 31, 2023, none of the pension plan participants’ future annual benefits are covered by insurance contracts.

Pension Plan Strategic Asset Allocation

In December 2023, Cleco’s Retirement Committee revised the pension plan’s asset allocation with a focus on increasing the funded status of the plan. As the funded ratio of the plan

increases, the portfolio allocation to return-seeking assets (equity and equity-like investments) would be reduced and be offset by an increase in fixed income investments (defined in the policy as liability-hedging assets). The purpose is to reduce the funded ratio volatility and reduce risk in the portfolio as the funded ratio improves. If the funded ratio declines significantly, Cleco’s Retirement Committee will provide instructions about re-allocations to return-seeking assets.

The general funded status to target portfolio allocations are as follows:

FUNDED STATUS

RETURN-SEEKING

LIABILITY-HEDGING

CREDIT

LIABILITY-HEDGING

GOVERNMENT

≤ i 80%

i 60%

i 20%

i 80% to i 100%

i 60% to i 47%

i 20% to i 37%

i 20% to i 16%

i 100% to i 115%

i 47% to i 10%

i 37% to i 83%

i 16% to i 7%

≥ i 115%

i 10%

i 83%

i 7%

In order to meet these objectives and to control risk, Cleco’s Retirement Committee has established the following guidelines that the investment managers must follow in the management of the pension fund assets:

Liability-Hedging Assets

The pension plan investments may include the following liability-hedging assets:

•High-quality credit-oriented investment grade bonds,

•U.S. Treasuries and other U.S. Government-related securities,

•Mortgage securities issues,

•Real estate debt,

•Private placement credit, and

•Securitized assets.

Cash equivalents are held to meet the benefit obligations of the pension plan and to pay fees. The primary objective of holding liability-hedging assets is to reduce the pension plan’s surplus volatility.


CLECO
CLECO POWER						2023 FORM 10-K

Return-Seeking Assets

The pension plan investments may include the following return-seeking assets:

•Public equity,

•Multi-asset credit, and

•Open-ended real assets.

The use of futures and options positions that leverage portfolio positions through borrowing, short sales, or other encumbrances of the pension plan’s assets is prohibited. Certain liability-hedging managers are exempt from the prohibition on derivatives use due to the nature of long duration fixed income management. The investment manager shall not purchase any securities of its organization or affiliated entities.

Other Pension Plan Disclosures

The assumed health care cost trend rates used to measure the expected cost of Other Benefits is i 5.0% for 2024 and remains at i 5.0% thereafter. The rate used for 2023 was also i 5.0%. Assumed health care cost trend rates have a limited effect on the amount reported for Cleco’s health care plans.

The projected benefit payments for the employee pension plan and Other Benefits plan for each year through 2028 and the next five years thereafter are listed in the following table:


(THOUSANDS)	PENSION BENEFITS		OTHER BENEFITS, GROSS
For the year ending Dec. 31,
2024	$	i 31,857	$	i 5,241
2025	$	i 32,793	$	i 5,182
2026	$	i 33,268	$	i 5,167
2027	$	i 33,760	$	i 5,130
2028	$	i 34,355	$	i 5,049
Five years thereafter	$	i 176,293	$	i 23,443

SERP

Certain Cleco officers are covered by SERP. In 2014, SERP was closed to new participants; however, with regard to current SERP participants, including former employees or their beneficiaries, all terms of SERP will continue, other than as described below. SERP is a non-qualified, non-contributory, defined benefit pension plan. Generally, benefits under the plan reflect an employee’s years of service, age at retirement, and the sum of (a) the highest base salary paid out over the last five calendar years and (b) the average of the i five highest cash bonuses paid during the i 60 months prior to retirement. SERP benefits are reduced by retirement benefits received from any other defined benefit pension plan, supplemental executive retirement plan, or Cleco contributions under the enhanced 401(k) Plan to the extent such contributions exceed the amount the employee would have received under the terms of the original 401(k) Plan. Management reviews current market trends as it evaluates Cleco’s future compensation strategy.

Cleco does not fund the SERP liability, but instead pays for current benefits out of the 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 polices are held in a rabbi trust formed by Cleco Power. The rabbi trust is the named beneficiary of the

life insurance policies and, therefore, receives the proceeds upon 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 the 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.

SERP’s funded status at December 31, 2023, and 2022 is presented in the following table:


			SERP BENEFITS
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Change in benefit obligation
Benefit obligation at beginning of period	$	i 68,427	$	i 93,179
Service cost	i 142		i 227
Interest cost	i 3,604		i 2,679
Actuarial gain	( i 345)		( i 22,097)
Benefits paid	( i 4,366)		( i 5,561)



Benefit obligation at end of period	$	i 67,462	$	i 68,427

SERP’s accumulated benefit obligation at December 31, 2023, and 2022 is presented in the following table:


	SERP BENEFITS
	AT DEC. 31,
(THOUSANDS)	2023		2022
Accumulated benefit obligation	$	i 67,462	$	i 68,427

The following table presents net actuarial gains/losses and prior service credits included in other comprehensive income or regulatory assets related to current year gains and losses as a result of being amortized as a component of net periodic benefit costs for SERP for December 31, 2023, and 2022:


			SERP BENEFITS
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Net actuarial gain occurring during year	$	( i 345)	$	( i 22,097)
Net actuarial loss amortized during year	$	( i 63)	$	i 1,049
Prior service credit amortized during year	$	( i 215)	$	( i 215)

The SERP net actuarial gain was $ i 0.3 million for the year ended December 31, 2023, primarily due to new census data partially offset by a decrease in the discount rate. The following table presents net actuarial losses and prior service credit in accumulated other comprehensive income and regulatory assets that have not been recognized as components of net periodic benefit costs for SERP at December 31, 2023, and 2022:


	SERP BENEFITS
	AT DEC. 31
(THOUSANDS)	2023		2022
Net actuarial loss	$	i 7,819	$	i 8,241
Prior service credit	$	( i 1,085)	$	( i 1,299)


CLECO
CLECO POWER						2023 FORM 10-K

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 Consolidated Statements of

Income. The components of the net SERP costs for 2023, 2022, and 2021 are as follows:

SERP BENEFITS

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Components of periodic benefit costs

Service cost

i 142

i 227

i 232

Interest cost

i 3,604

i 2,679

i 2,538

Amortizations

Prior service credit

( i 215)

Net loss

( i 63)

i 1,049

i 1,228

Net periodic benefit cost

i 3,468

i 3,740

i 3,783

The measurement date used to determine the SERP benefits is December 31. The assumptions used to determine the benefit obligation and the periodic costs are as follows:


	SERP BENEFITS
	AT DEC. 31,
	2023		2022
Weighted-average assumptions used to determine the benefit obligation
Discount rate	i 5.13	%	i 5.46	%
Rate of compensation increase	N/A		N/A

SERP BENEFITS

FOR THE YEAR ENDED DEC. 31,

2023

2022

2021

Weighted-average assumptions used to determine the net benefit cost

Discount rate

i 5.46

i 2.95

i 2.64

Rate of compensation increase

N/A

The expense related to SERP reflected on Cleco Power’s Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021 was $ i 0.5 million, $ i 0.6 million, and $ i 0.6 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 December 31, 2023, and 2022 are as follows:


Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Current	$	i 4,593	$	i 4,713
Non-current	$	i 62,868	$	i 63,714


Cleco Power
	AT DEC. 31,
(THOUSANDS)	2023		2022
Current	$	i 613	$	i 672
Non-current	$	i 8,394	$	i 9,087

The projected benefit payments for SERP for each year through 2028 and the next five years thereafter are shown in the following table:


(THOUSANDS)	2024		2025		2026		2027		2028		FIVE YEARS THEREAFTER
SERP	$	i 4,593	$	i 4,748	$	i 4,883	$	i 4,852	$	i 4,847	$	i 23,601

401(k)

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. i Cleco’s 401(k) Plan expense for the years ended December 31, 2023, 2022, and 2021 was as follows:


	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
401(k) Plan expense	$	i 7,770	$	i 7,310	$	i 7,780


CLECO
CLECO POWER						2023 FORM 10-K

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 years ended December 31, 2023, 2022, and 2021 was as follows:


	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
401(k) Plan expense	$	i 2,859	$	i 2,685	$	i 2,765

Effective September 30, 2021, the 401(k) plan was amended to offer an enhanced 401(k) benefit to certain employees participating in the plan that elected to retire during a certain retirement window. Those certain employees who elected by September 30, 2021, to receive the enhanced 401(k) benefits received a one-time contribution up to i 30% of the employee’s 2021 base salary in accordance with IRS contribution limits. This resulted in a one-time benefit cost of $ i 0.2 million that was included as an expense of the 401(k) plan.

Note 12 — Income Taxes

Cleco

The following table presents a reconciliation of income tax (benefit) expense at the statutory rate and income tax (benefit) expense on (loss) income from continuing operations reported on Cleco’s Consolidated Statement of Income:

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS, EXCEPT PERCENTAGES)

2023

2022

2021

(Loss) income from continuing operations before income taxes

( i 94,942)

i 253,183

i 161,346

Statutory rate

i 21.0

Tax (benefit) expense at federal statutory rate

( i 19,938)

i 53,168

i 33,883

Increase (decrease)

Flowthrough of tax benefits

( i 7,847)

( i 12,272)

( i 356)

State income taxes, net of federal benefit

( i 2,256)

i 16,519

i 9,666

Return to accrual adjustment

( i 30)

( i 378)

( i 3,852)

Permanent adjustments

( i 388)

( i 4,621)

i 436

Amortization of excess ADIT

( i 33,518)

( i 32,639)

( i 37,254)

Other, net

( i 1,096)

i 258

( i 1,190)

Total tax (benefit) expense

( i 65,073)

i 20,035

i 1,333

Effective rate

i 68.5

i 7.9

i 0.8

/ /

Information about current and deferred income tax expense from continuing operations is as follows:

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Current federal income tax (benefit) expense

( i 45,429)

i 25,478

i 26,173

Deferred federal income tax benefit

( i 7,137)

( i 9,835)

( i 44,464)

Amortization of accumulated deferred investment tax credits

( i 127)

( i 134)

( i 141)

Total federal income tax (benefit) expense

( i 52,693)

i 15,509

( i 18,432)

Current state income tax (benefit) expense

( i 9,787)

i 10,326

i 4,158

Deferred state income tax (benefit) expense

( i 2,593)

( i 5,800)

i 15,607

Total state income tax (benefit) expense

( i 12,380)

i 4,526

i 19,765

Total federal and state income tax (benefit) expense

( i 65,073)

i 20,035

i 1,333

Items charged or credited directly to member’s equity

Federal deferred income tax

( i 1,374)

i 6,297

i 514

State deferred income tax

( i 531)

i 2,431

( i 120)

Total tax (benefit) expense from items charged directly to member’s equity

( i 1,905)

i 8,728

i 394

Total federal and state income tax (benefit) expense

( i 66,978)

i 28,763

i 1,727

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2023, and 2022 was comprised of the following:


	AT DEC. 31,
(THOUSANDS)	2023		2022
Depreciation and property basis differences	$	( i 764,958)	$	( i 869,796)
Net operating loss carryforward	i 57,464		i 135,914
NMTC	i 78,955		i 88,245
Fuel costs	i 232		( i 41,233)
Other comprehensive income	i 5,927		i 4,022
Regulated operations regulatory liability, net	( i 161,427)		( i 114,711)
Postretirement benefits	i 38,282		i 38,418
Merger fair value adjustments	( i 46,052)		( i 47,929)
Other	( i 9,820)		( i 13,230)
Accumulated deferred federal and state income taxes, net	$	( i 801,397)	$	( i 820,300)

Cleco Power

The following table presents a reconciliation of income tax (benefit) expense at the statutory rate and income tax (benefit) expense on (loss) income reported on Cleco’s Consolidated Statement of Income:

100


CLECO
CLECO POWER						2023 FORM 10-K

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS, EXCEPT PERCENTAGES)

2023

2022

2021

Income before tax

i 132,715

i 172,560

i 124,735

Statutory rate

i 21.0

Tax expense at federal statutory rate

i 27,870

i 36,238

i 26,194

Increase (decrease)

Flowthrough of tax benefits

( i 7,847)

( i 12,272)

( i 356)

State income taxes, net of federal benefit

i 12,296

i 12,109

i 6,343

Return to accrual adjustment

( i 204)

i 14

( i 3,831)

Amortization of excess ADIT

( i 33,518)

( i 32,639)

( i 37,254)

Other, net

( i 3,031)

( i 947)

( i 449)

Total tax (benefit) expense

( i 4,434)

i 2,503

( i 9,353)

Effective rate

( i 3.3)

i 1.5

( i 7.5)

Information about current and deferred income tax expense is as follows:

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Current federal income tax expense

i 11,188

i 4,921

i —

Deferred federal income tax benefit

( i 20,029)

( i 1,926)

( i 23,071)

Amortization of accumulated deferred investment tax credits

( i 127)

( i 134)

( i 142)

Total federal income tax expense (benefit)

( i 8,968)

i 2,861

( i 23,213)

Current state income tax expense

i 5,617

i 2,406

i —

Deferred state income tax (benefit) expense

( i 1,083)

( i 2,764)

i 13,860

Total state income tax expense (benefit)

i 4,534

( i 358)

i 13,860

Total federal and state income tax expense (benefit)

( i 4,434)

i 2,503

( i 9,353)

Items charged or credited directly to members’ equity

Federal deferred income tax

( i 528)

i 2,610

i 1,714

State deferred income tax

( i 208)

i 1,008

i 338

Total tax expense from items charged directly to member’s equity

( i 736)

i 3,618

i 2,052

Total federal and state income tax expense (benefit)

( i 5,170)

i 6,121

( i 7,301)

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2023, and 2022 was comprised of the following:


	AT DEC. 31,
(THOUSANDS)	2023		2022
Depreciation and property basis differences	$	( i 699,020)	$	( i 754,200)
Net operating loss carryforward	i 35,359		i 94,555
Fuel costs	i 1,652		( i 13,594)
Other comprehensive income	i 3,336		i 2,604
Regulated operations regulatory liability, net	( i 161,427)		( i 114,711)
Postretirement benefits	i 25,005		i 24,946
Other	( i 11,465)		( i 9,727)
Accumulated deferred federal and state income taxes, net	$	( i 806,560)	$	( i 770,127)

Valuation Allowance

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not

be realized. At December 31, 2023, and 2022, Cleco had a deferred tax asset resulting from a NMTC carryforward of $ i 79.0 million and $ i 88.2 million, respectively. If the NMTC carryforward is not utilized, it will begin to expire in 2030. Management considers it more likely than not that the deferred tax asset related to the NMTC carryforward will be realized; therefore, i i no / valuation allowance has been recorded for Cleco and Cleco Power.

Quarterly, management closely monitors and evaluates the realizability of deferred tax assets, and adjustments are recorded as appropriate in future periods. In evaluating the need for a valuation allowance, management considers various factors, including the expected level of future taxable income, available tax planning strategies, and reversals of existing taxable temporary differences. If such estimates and related assumptions change in the future, Cleco and Cleco Power may be required to record a valuation allowance against its deferred tax assets, resulting in additional income tax expense in Cleco’s and Cleco Power’s Consolidated Statements of Income.

Net Operating Losses

For the 2022 tax year, Cleco created a federal net operating loss of $ i 538.5 million and a state net operating loss of $ i 348.2 million. For the 2023 tax year, Cleco expects to utilize a federal net operating loss of $ i 318.0 million and a state net operating loss of $ i 199.6 million.

For the 2022 tax year, Cleco Power created a federal net operating loss of $ i 336.1 million and a state operating loss of $ i 348.2 million. For the 2023 tax year, Cleco Power expects to utilize a federal net operating loss of $ i 220.8 million and state net operating loss of $ i 199.6 million.

Both the federal and state net operating losses may be carried forward indefinitely. Cleco and Cleco Power consider it more likely than not that these income tax losses will be utilized to reduce future income tax payments, and the entire net operating loss carryforward will be utilized.

Uncertain Tax Positions

Cleco classifies all interest related to uncertain tax positions as a component of interest payable and interest expense. At December 31, 2023, and 2022, Cleco and Cleco Power had i i i i no / / / interest payable related to uncertain tax positions. For the years ended December 31, 2023, 2022, and 2021, Cleco and Cleco Power had i i i i i i no / / / / / interest expense related to uncertain tax positions. At December 31, 2023, and 2022, Cleco and Cleco Power had i i i i no / / / liability for unrecognized 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 2020, 2021, and 2022, the IRS has placed Cleco in the Bridge phase of the Compliance Assurance Process for the 2020 and 2021 tax years. In this phase, the IRS will not accept any disclosures, conduct any reviews, or provide any assurances. These tax returns were filed consistent with the IRS’s review. 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. In this maintenance phase, the IRS typically will, at its discretion, reduce the level of its review of the tax year relative to the regular Compliance Assurance Process phase.

101


CLECO
CLECO POWER						2023 FORM 10-K

The state income tax years 2020, 2021, and 2022 remain subject to examination by the Louisiana Department of Revenue.

Cleco classifies income tax penalties as a component of other expenses. For the years ended December 31, 2023, 2022, and 2021, i i i no / / penalties were recognized.

Note 13 — Segment Disclosures

Cleco

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 Annual Report on Form 10-K 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, natural gas derivatives at Cleco Cajun, 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 YEAR ENDED DEC. 31, 2023 (THOUSANDS)

CLECO POWER

Revenue

Electric operations

i 1,197,369

Other operations

i 111,561

Affiliate revenue

i 8,904

Electric customer credits

( i 60,689)

Operating revenue, net

i 1,257,145

Net income

i 137,149

Add: Depreciation and amortization

i 191,745

Less: Interest income

i 5,011

Add: Interest charges

i 98,879

Add: Federal and state income tax benefit

( i 4,434)

EBITDA

i 418,328

FOR THE YEAR ENDED DEC. 31, 2023 (THOUSANDS)

CLECO POWER

OTHER

ELIMINATIONS

TOTAL

Revenue

Electric operations

i 1,197,369

( i 9,454)

i —

i 1,187,915

Other operations

i 111,561

i 5

( i 1)

i 111,565

Affiliate revenue

i 8,904

i 120,716

( i 129,620)

i —

Electric customer credits

( i 60,689)

i —

( i 60,689)

Operating revenue, net

i 1,257,145

i 111,267

( i 129,621)

i 1,238,791

Depreciation and amortization

i 191,745

i 17,644

(1)

i —

i 209,389

Interest income

i 5,011

i 571

( i 189)

i 5,393

Interest charges

i 98,879

i 66,165

( i 188)

i 164,856

Federal and state income tax benefit

( i 4,434)

( i 60,639)

i —

( i 65,073)

Income (loss) from continuing operations, net of income taxes

i 137,149

( i 167,018)

i —

( i 29,869)

Income from discontinued operations, net of income taxes

i —

i 14,642

i —

i 14,642

Net income (loss)

i 137,149

( i 152,376)

i —

( i 15,227)

Additions to property, plant, and equipment

i 220,982

i 9,256

i —

i 230,238

Equity investment in investee

i 1,992

( i 467,329)

i 467,329

i 1,992

Goodwill

i 1,490,797

i —

i 1,490,797

Total segment assets

i 6,920,339

i 870,743

i 309,311

i 8,100,393

(1) Includes $ i 9.5 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

102


CLECO
CLECO POWER						2023 FORM 10-K

FOR THE YEAR ENDED DEC. 31, 2022 (THOUSANDS)

CLECO POWER

Revenue

Electric operations

i 1,523,066

Other operations

i 98,759

Affiliate revenue

i 6,377

Electric customer credits

( i 7,674)

Operating revenue, net

i 1,620,528

Net income

i 170,057

Add: Depreciation and amortization

i 178,231

Less: Interest income

i 5,082

Add: Interest charges

i 88,218

Add: Federal and state income tax expense

i 2,503

EBITDA

i 433,927

FOR THE YEAR ENDED DEC. 31, 2022 (THOUSANDS)

CLECO POWER

OTHER

ELIMINATIONS

TOTAL

Revenue

Electric operations

i 1,523,066

( i 9,680)

i —

i 1,513,386

Other operations

i 98,759

i 9

i —

i 98,768

Affiliate revenue

i 6,377

i 109,015

( i 115,392)

i —

Electric customer credits

( i 7,674)

i —

( i 7,674)

Operating revenue, net

i 1,620,528

i 99,344

( i 115,392)

i 1,604,480

Depreciation and amortization

i 178,231

i 17,588

(1)

i —

i 195,819

Interest income

i 5,082

i 265

( i 97)

i 5,250

Interest charges

i 88,218

i 55,834

( i 96)

i 143,956

Federal and state income tax expense

i 2,503

i 17,532

i —

i 20,035

Income (loss) from continuing operations, net of income taxes

i 170,057

i 63,093

( i 2)

i 233,148

Loss from discontinued operations, net of income taxes

i —

( i 44,337)

i —

( i 44,337)

Net income (loss)

i 170,057

i 18,756

( i 2)

i 188,811

Additions to property, plant, and equipment

i 228,940

i 7,827

i —

i 236,767

Equity investment in investee

i 2,072

( i 320,348)

i 320,348

i 2,072

Goodwill

i 1,490,797

i —

i 1,490,797

Total segment assets

i 6,834,970

i 1,237,096

i 181,683

i 8,253,749

(1) Includes $ i 9.7 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

FOR THE YEAR ENDED DEC. 31, 2021 (THOUSANDS)

CLECO POWER

Revenue

Electric operations

i 1,202,249

Other operations

i 74,625

Affiliate revenue

i 5,641

Electric customer credits

( i 40,878)

Operating revenue, net

i 1,241,637

Net income

i 134,088

Add: Depreciation and amortization

i 173,498

Less: Interest income

i 3,294

Add: Interest charges

i 73,090

Add: Federal and state income tax (benefit)

( i 9,353)

EBITDA

i 368,029

103


CLECO
CLECO POWER						2023 FORM 10-K

FOR THE YEAR ENDED DEC. 31, 2021 (THOUSANDS)

CLECO POWER

OTHER

ELIMINATIONS

TOTAL

Revenue

Electric operations

i 1,202,249

( i 9,680)

i —

i 1,192,569

Other operations

i 74,625

i 8

i —

i 74,633

Affiliate revenue

i 5,641

i 113,623

( i 119,264)

i —

Electric customer credits

( i 40,878)

i —

( i 40,878)

Operating revenue, net

i 1,241,637

i 103,951

( i 119,264)

i 1,226,324

Depreciation and amortization

i 173,498

i 21,495

(1)

i —

i 194,993

Interest income

i 3,294

i 125

( i 122)

i 3,297

Interest charges

i 73,090

i 55,830

( i 122)

i 128,798

Federal and state income tax expense (benefit)

( i 9,353)

i 10,686

i —

i 1,333

Income from continuing operations, net of income taxes

i 134,088

i 25,924

i 1

i 160,013

Income from discontinued operations, net of income taxes

i —

i 34,953

i —

i 34,953

Net income

i 134,088

i 60,877

i 1

i 194,966

Additions to property, plant, and equipment

i 300,957

i 10,184

i —

i 311,141

Equity investment in investee

i 2,072

( i 46,901)

i 46,901

i 2,072

Goodwill

i 1,490,797

i —

i 1,490,797

Total segment assets

i 6,620,298

i 1,723,191

( i 218,471)

i 8,125,018

(1) Includes $ i 9.7 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

FOR THE YEARS ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Net income

( i 15,227)

i 188,811

i 194,966

Less: income (loss) from discontinued operations, net of income taxes

i 14,642

( i 44,337)

i 34,953

Income from continuing operations, net of income taxes

( i 29,869)

i 233,148

i 160,013

Add: Depreciation and amortization

i 209,389

i 195,819

i 194,993

Less: Interest income

i 5,393

i 5,250

i 3,297

Add: Interest charges

i 164,856

i 143,956

i 128,798

Add: Federal and state income tax (benefit) expense

( i 65,073)

i 20,035

i 1,333

Add (less): Other corporate costs and noncash items (1) (2)

i 144,418

( i 153,781)

( i 113,811)

Total segment EBITDA

i 418,328

i 433,927

i 368,029

(1) Adjustments made for Other and Eliminations totals not allocated to Total segment EBITDA.

(2) Includes (loss) gain on Cleco Cajun’s natural gas derivatives of $( i 116.8) million, $ i 180.5 million, and $ i 134.1 million, respectively, for the years ended December 31, 2023, 2022, and 2021.

Cleco Power

Cleco Power is a vertically integrated, regulated electric utility operating within Louisiana, and is viewed as i one unit by management. Discrete financial reports are prepared only at the company level.

Note 14 — Regulation and Rates

Deferred Operations and Maintenance Costs

Cleco Power defers operations and maintenance costs that it believes are prudently incurred and probable of recovery from its retail customers. These costs are recorded in Other deferred charges on Cleco’s and Cleco Power’s Consolidated Balance Sheets. As part of the filed application for Cleco Power’s current rate case, Cleco Power is seeking approval from the LPSC to recover these costs through its new rates, which are anticipated to be effective on July 1, 2024. At December 31, 2023, and 2022, Cleco Power had $ i 9.9 million and $ i 5.3 million, respectively, recorded for these costs.

FRP

Effective July 1, 2021, and as approved by the LPSC, under the terms of the current FRP, Cleco Power is allowed to earn a target ROE of i 9.5%, while providing the opportunity to earn up to i 10.0%. Additionally, i 60.0% of retail earnings between i 10.0% and i 10.5% and all retail earnings over i 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 filed an application with the LPSC through the rate case process for a new FRP, with anticipated new rates being effective July 1, 2024. Cleco Power has responded to multiple sets of LPSC data requests. On February 5, 2024, and February 9, 2024, the intervenors and LPSC Staff filed direct testimony, respectively. Cleco Power anticipates filing rebuttal testimony on April 3, 2024, in accordance with the revised procedural schedule.

In September 2023, the LPSC approved Cleco Power’s monitoring report for the 12 months ending June 30, 2022, indicating no refund was due. In October 2023, Cleco Power filed its monitoring report for the 12 months ending June 30, 2023, with the LPSC, indicating no refund was due. On January 31, 2024, Cleco Power received the LPSC Staff’s draft report indicating no refund and no material findings. Due to the nature of the regulatory process, management is not able to determine the timing of the approval of this report.

Regulatory Disallowance

St. Mary Clean Energy Center

On September 21, 2022, the LPSC approved a settlement disallowing recovery of $ i 15.0 million of the planning and construction costs associated with the St. Mary Clean Energy Center. This disallowance resulted in a $ i 13.8 million

104


CLECO
CLECO POWER						2023 FORM 10-K

impairment charge and a reduction of the associated property, plant, and equipment net book value. The impairment charge was recorded in Regulatory disallowance on Cleco’s and Cleco Power’s Consolidated Statements of Income. The settlement also resulted in a refund to Cleco Power’s retail customers totaling $ i 10.4 million, which was given back to customers as bill credits in October 2022. The $ i 10.4 million refund consisted of $ i 6.6 million for costs recovered in periods prior to September 30, 2022, and $ i 3.8 million for costs recovered from October 1, 2022, until Cleco Power’s base rates reset, which is expected to be on July 1, 2024, in its next FRP. The refund of costs recovered prior to September 30, 2022, was recorded in Electric customer credits, with the remainder recorded as a regulatory asset on Cleco’s and Cleco Power’s Consolidated Balance Sheets. On October 1, 2022, Cleco Power began amortizing the regulatory asset to Electric customer credits on Cleco’s and Cleco Power’s Consolidated Statements of Income.

Dolet Hills Prudency Review

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. On February 2, 2024, the Administrative Law Judge released a final recommendation indicating a partial disallowance of the recovery of fuel costs and a refund of related costs previously recovered from customers. Cleco Power believes and continues to assert that the related costs were prudently incurred and should be recoverable. However, management has estimated that a loss resulting from a potential disallowance is probable. The estimated range of potential loss is between $ i 58.7 million and $ i 228.0 million. As a result, Cleco Power accrued an estimated contingent loss of $ i 58.7 million at December 31, 2023. This amount was recorded in Provision for rate refund on Cleco’s and Cleco Power’s Balance Sheets and Electric customer credits on Cleco’s and Cleco Power’s Statements of Income. Cleco Power is seeking a settlement to resolve this matter and move forward with the securitization process. Due to the nature of the regulatory process, the outcome and timing of the resolution of this matter is uncertain. For more information about the Dolet Hills prudency review, see Note 16 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Dolet Hills Prudency Review.”

TCJA

Effective July 1, 2021, and as approved by the LPSC, all retail customers will continue receiving bill credits resulting from the TCJA. The target retail portion of the unprotected excess ADIT is approximately $ i 2.5 million monthly and will be credited over a period of i 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 December 31, 2023, Cleco Power had $ i i 211.5 / million accrued for the excess ADIT, of which $ i 21.9 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 delay the retirement of Teche Unit 3. In May 2023, Cleco Power filed an Attachment Y with MISO requesting retirement of Teche Unit 3, barring any violations of specific applicable reliability standards. On January 30, 2024, Cleco Power filed a notice with the LPSC to retire Teche Unit 3 in June 2024.

Note 15 — 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 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.

i i

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


	AT DEC. 31,
(THOUSANDS)	2023		2022
Restricted cash - current	$	i i 15,818 /	$	i i 14,139 /
Accounts receivable - affiliate	i i 3,492 /		i i 3,348 /

Intangible asset - securitization	i i 398,658 /		i i 413,123 /
Total assets	$	i i 417,968 /	$	i i 430,610 /
Long-term debt due within one year	i i 14,499 /		i i 9,574 /
Accounts payable - affiliate	i i 176 /		i i 165 /
Interest accrued	i i 6,191 /		i i 9,953 /
Long-term debt, net	i i 394,944 /		i i 408,741 /
Total liabilities	i i 415,810 /		i i 428,433 /
Member’s equity	i i 2,158 /		i i 2,177 /
Total liabilities and member’s equity	$	i i 417,968 /	$	i i 430,610 /

/ / /

105


CLECO
CLECO POWER						2023 FORM 10-K

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


	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Operating revenue	$	i i 33,913 /	$	i i 13,181 /
Operating expenses	( i i 14,884 / )		( i i 2,992 / )
Interest income	i i 537 /		i i 63 /
Interest charges, net	( i i 19,467 / )		( i i 10,200 / )
Income before taxes	$	i i 99 /	$	i i 52 /

Oxbow

i 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 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 Consolidated Statements of Income.

Oxbow is owned i 50% by Cleco Power and i 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 December 31, 2023, consisted of its equity investment of approximately $ i 2.0 million.

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


	AT DEC. 31,
INCEPTION TO DATE (THOUSANDS)	2023		2022
Purchase price	$	i 12,873	$	i 12,873
Cash contributions	i 6,399		i 6,399
Distributions	( i 17,280)		( i 17,200)
Total equity investment in investee	$	i 1,992	$	i 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:


	AT DEC. 31,
(THOUSANDS)	2023		2022
Oxbow’s net assets/liabilities	$	i 3,985	$	i 4,145
Cleco Power’s i 50% equity	$	i 1,992	$	i 2,072
Cleco Power’s maximum exposure to loss	$	i 1,992	$	i 2,072

The following tables contain summarized financial information for Oxbow:


	AT DEC. 31,
(THOUSANDS)	2023		2022
Current assets	$	i 5,385	$	i 6,187
Property, plant, and equipment, net	i 3,638		i 3,798

Total assets	$	i 9,023	$	i 9,985
Current liabilities	$	i 336	$	i 395
Other liabilities	i 4,702		i 5,445
Partners’ capital	i 3,985		i 4,145
Total liabilities and partners’ capital	$	i 9,023	$	i 9,985

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating revenue

i 327

i 332

i 5,155

Operating expenses

( i 424)

( i 332)

( i 5,155)

Interest income

i 97

i —

Income before taxes

i —

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

Note 16 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees

Litigation

2016 Merger

In connection with the 2016 Merger, i four actions were filed in the Ninth Judicial District Court for Rapides Parish, Louisiana and i 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 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 i 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 i 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.

The i 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

106


CLECO
CLECO POWER						2023 FORM 10-K

•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 i 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. The two former executives filed motions for summary judgment in June 2023, which the District Court denied in September 2023. In October 2023, the remaining defendants, which were the two former executives, and plaintiffs entered into a memorandum of understanding for a class action settlement under which all disputes and claims asserted against all original defendants, including the two former executives, would be dismissed with prejudice. On February 2, 2024, the District Court granted the plaintiffs’ motion for final approval of the class action settlement and all claims against the two former executives and all original defendants were dismissed with prejudice.

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 $ i 6.5 million. Gulf Coast Spinning Company, LLC (Gulf Coast), the primary plaintiff, alleges that Cleco promised to assist it in raising approximately $ i 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 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 $ i 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

107


CLECO
CLECO POWER						2023 FORM 10-K

Avoyelles Parish, Louisiana. Discovery is ongoing and the trial date has been set for October 2024.

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. The parties are currently participating in discovery.

LPSC Audits and Reviews

Fuel Audits

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 $ i 1.10 billion. Cleco Power has responded to multiple sets 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 such refund could have a material adverse effect on the results of operations, financial condition or cash flows of the Registrants.

In March 2021, Cleco Power received approval from the LPSC to recover $ i 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. In May 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 November 20, 2023, the LPSC approved the audit report, which indicated no material findings.

Environmental Audit

In 2009, the LPSC approved Cleco Power to recover 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 included in the audit was $ i 38.3 million. On January 24, 2024, the LPSC approved the

108


CLECO
CLECO POWER						2023 FORM 10-K

audit report, which indicated no material findings. 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. 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 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 $ i 8.5 million and $ i 6.8 million for the 2022 and 2021 program years, respectively.

In September 2023, Cleco Power received a notice of audit from the LPSC for the program years 2021 and 2022. On February 20, 2024, Cleco Power received the draft audit report from the LPSC Staff, which indicated no material findings. Cleco Power anticipates LPSC approval of the report in the second quarter of 2024.

On January 24, 2024, the LPSC voted to shift control of energy efficiency programs from utilities to an independent, third-party administrator selected by and accountable to the LPSC. This action will remove the provision whereby utilities were allowed to recover any lost revenues associated with

unsold electricity. Cleco Power is subject to audits for program years 2023 and thereafter until the time these programs are shifted to the third-party administrator, which is expected in January 2026.

Dolet Hills Prudency Review

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 were prudently incurred and should be recoverable. Initial testimony by the LPSC Staff and intervenors filed in August 2022 indicated disagreement with the recoverability of these incurred costs, quantifying up to $ i 228.0 million of related costs as potentially unrecoverable. Cleco Power filed rebuttal testimony in September 2022 rebutting the LPSC Staff’s testimony, and subsequently, a hearing was held in May 2023. On November 28, 2023, the Administrative Law Judge (ALJ) for the hearing released a proposal recommending a partial disallowance of the recovery of fuel costs. On December 27, 2023, Cleco, the LPSC Staff, and intervenors filed exception testimony to the ALJ’s proposed recommendation. The LPSC Staff’s and intervenors’ exception testimony continued to indicate their initial recommendation should be followed. On February 2, 2024, the ALJ released a final recommendation indicating a partial disallowance of the recovery of fuel costs and a refund of related costs previously recovered from customers. Cleco Power continues to assert that the related costs were prudently incurred. However, management has estimated that a loss resulting from a potential disallowance is probable. The estimated range of potential loss is between $ i 58.7 million and $ i 228.0 million. As a result, Cleco Power accrued an estimated contingent loss of $ i 58.7 million at December 31, 2023. This amount was recorded in Provision for rate refund on Cleco’s and Cleco Power’s Balance Sheets and Electric customer credits on Cleco’s and Cleco Power’s Statements of Income. Cleco Power is seeking a settlement to resolve this matter and move forward with the securitization process. Due to the nature of the regulatory process, the outcome and timing of resolution of this matter is uncertain.

South Central Generating

Prior to the Cleco Cajun Acquisition, 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. Management is unable to estimate any potential losses regarding matters arising out of the ordinary course of business. 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 Acquisition, NRG Energy indemnified Cleco for losses as of the closing date associated with some 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 incur with respect to any one of these matters may be in

109


CLECO
CLECO POWER						2023 FORM 10-K

excess of amounts currently accrued. Management regularly analyzes current information and, as of December 31, 2023, believes the probable and reasonably estimable liabilities based on the eventual disposition of these matters are $ i 6.7 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 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 indemnities relate to environmental matters that may have been present prior to closing. These remaining indemnities have no time limitations. The maximum amount of the potential payment to Entergy Louisiana and Entergy Gulf States is $ i 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 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 indemnities relate to the fundamental organizational structure of Acadia. These remaining 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 indemnities to Cleco Power as a result of the transfer of Coughlin to Cleco Power in March 2014. Cleco Power also provided 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 indemnities is $ i i 40.0 / million, except for indemnities relating to the fundamental organizational structure of each respective entity, of which the maximum amount is $ i i 400.0 / million. Management does not expect to be required to make any payments under these 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 December 31, 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 LPSC prudency review associated with the mine closure costs, see “— LPSC Audits and Reviews — Dolet Hills Prudency Review.”

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 i i 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.

Long-Term Purchase Obligations

Cleco Holdings had i no unconditional long-term purchase obligations at December 31, 2023. Cleco Power has several unconditional long-term purchase obligations primarily related to the purchase of fuel, energy delivery facilities, information technology outsourcing, natural gas storage, network monitoring, and software maintenance. i The aggregate amount of payments required under such obligations at December 31, 2023, is as follows:


(THOUSANDS)	CLECO POWER		CLECO
For the year ending Dec. 31,
2024	$	i 72,382	$	i 77,254
2025	i 17,543		i 22,192
2026	i 8,723		i 9,265
2027	i 8,658		i 8,737
2028	i 8,637		i 8,637
Thereafter	i 33,808		i 33,808
Total long-term purchase obligations	$	i 149,751	$	i 159,893

Cleco’s payments under these agreements for the years ended December 31, 2023, 2022, and 2021 were $ i 79.2 million, $ i 52.9 million, and $ i 52.0 million, respectively. Cleco Power’s payments under these agreements for the years ended December 31, 2023, 2022, and 2021 were $ i 70.5 million, $ i 49.0 million, and $ i 43.3 million, respectively.

110


CLECO
CLECO POWER						2023 FORM 10-K

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). 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 its 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 Cajun received communication from the EPA that the demonstrations had been deemed complete. Cleco Power withdrew the Dolet Hills demonstration due to the cessation of receiving waste. The two remaining demonstrations are still subject to EPA approval based on pending technical review.

In March 2023, Cleco Cajun recorded a decrease of $ i 19.5 million in its ARO balance due to revised cost estimates. Cleco Cajun’s ARO is recorded in Liabilities held for sale on Cleco’s Consolidated Balance Sheet. In December 2023, Cleco Power recorded an increase of $ i 4.7 million in its ARO balance due to revised cost estimates.

As part of the Cleco Cajun Acquisition, NRG Energy agreed to indemnify Cleco for certain environmental costs up to $ i 25.0 million associated with the CCR Rule, for both ARO and non-ARO related expenses. At December 31, 2023, Cleco Cajun had an indemnification asset totaling $ i 18.3 million, which was substantially related to AROs associated with ash pond remediation. This asset is recorded in Assets held for sale on Cleco’s Consolidated Balance Sheet. As additional periodic expenses related to covered costs are incurred, the associated indemnification asset will be recognized. The indemnification asset is expected to be collected as indemnified costs, either recognized in the ARO or as periodic expenses, are incurred.

Risks and Uncertainties

Cleco could be subject to possible adverse consequences if Cleco’s counterparties fail to perform their obligations or if Cleco or its affiliates are not in compliance with loan agreements or bond indentures.

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows.

Changes in the regulatory environment or market forces could cause Cleco to determine its assets have suffered an other-than-temporary decline in value, whereby an impairment would be required and Cleco’s financial condition could be materially adversely affected.

Note 17 — Affiliate Transactions

Cleco

Cleco has entered into service agreements with affiliates to receive and to provide goods and professional services. Goods and services received by Cleco primarily involve

services provided by Support Group. Support Group provides joint and common administrative support services in the areas of information technology; finance, cash management, accounting, tax, and auditing; human resources; public relations; project consulting; risk management; strategic and corporate development; legal, ethics, and regulatory compliance; facilities management; supply chain and inventory management; and other administrative services.

Cleco Power’s affiliates are charged the higher of management’s estimated fair market value or fully loaded costs for goods and services provided by Cleco Power. Cleco, with the exception of Support Group, charges Cleco Power the lower of management’s estimated fair market value or fully loaded costs for goods and services provided in accordance with service agreements. Support Group bills fully loaded costs to affiliates, which includes payroll and non-payroll costs.

All charges and revenues from consolidated affiliates were eliminated in Cleco’s Consolidated Statements of Income for the years ending December 31, 2023, 2022, and 2021.

At December 31, 2023, and 2022, Cleco Holdings had an affiliate receivable of $ i 24.2 million and $ i 14.6 million, respectively, from Cleco Group primarily for estimated income taxes paid on behalf of Cleco Group. At December 31, 2023, and 2022, Cleco Holdings had an affiliate payable of $ i 10.7 million and $ i 13.1 million, respectively to Cleco Group primarily for settlement of taxes payable.

For the years ended December 31, 2023, and 2022, Cleco Holdings made $ i 53.5 million and $ i 219.6 million, respectively, of distribution payments to Cleco Group. During 2021, Cleco Holdings made i no distribution payments to Cleco Group. For the years ended December 31, 2023, 2022, and 2021, Cleco Holdings received i i i no / / equity contributions from Cleco Group.

Cleco Power

Cleco Power has entered into service agreements with affiliates to receive and to provide goods and professional services. Charges from affiliates included in Cleco Power’s Consolidated Statements of Income primarily involve services provided by Support Group in accordance with service agreements. Support Group provides joint and common administrative support services in the areas of information technology; finance, cash management, accounting, tax, and auditing; human resources; public relations; project consulting; risk management; strategic and corporate development; legal, ethics, and regulatory compliance; facilities management; supply chain and inventory management; and other administrative services.

With the exception of Support Group, affiliates charge Cleco Power the lower of management’s estimated fair market value or fully loaded costs for goods and services provided in accordance with service agreements. Support Group charges only fully loaded costs, which are based on management’s estimated fair market value. i The following table is a summary of charges from each affiliate included in Cleco Power’s Consolidated Statements of Income:


	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
Support Group
Other operations and maintenance	$	i 96,907	$	i 87,830	$	i 91,915
Taxes other than income taxes	$	i 65	$	( i 41)	$	i 40
Other expense	$	i 92	$	i 60	$	i 35

111


CLECO
CLECO POWER						2023 FORM 10-K

The majority of the services provided by Cleco Power relates to the lease of office space to Support Group and transmission services to Cleco Cajun. Cleco Power charges affiliates the higher of management’s estimated fair market value or fully loaded costs for goods and services provided in accordance with service agreements.

The following table is a summary of revenue received from affiliates included in Cleco Power’s Consolidated Statements of Income:

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Other operations revenue

Cleco Cajun

i 10,208

i 10,213

i 7,616

Affiliate revenue

Support Group

i 5,651

i 5,475

i 4,783

Cleco Cajun

i 3,253

i 902

i 858

Total

i 19,112

i 16,590

i 13,257

Cleco Power had the following affiliate receivable and payable balances associated with the service agreements:

AT DEC. 31,

2023

2022

(THOUSANDS)

ACCOUNTS

RECEIVABLE

ACCOUNTS

PAYABLE

ACCOUNTS

RECEIVABLE

ACCOUNTS

PAYABLE

Cleco Holdings

i 14

i 367

i 5

i 1,138

Support Group

i 1,104

i 12,833

i 2,299

i 11,305

Cleco Cajun

i 3,425

i —

i 1,467

i 5

Total

i 4,543

i 13,200

i 3,771

i 12,448

During 2023 and 2022, Cleco Power made $ i 94.8 million and $ i 105.5 million, respectively, of distribution payments to Cleco Holdings. During 2021, Cleco Power made i no distribution payments to Cleco Holdings. Cleco Power received i i i no / / equity contribution from Cleco Holdings in 2023, 2022 and 2021.

Note 18 — Intangible Assets and Goodwill

Securitized Intangible

Cleco Securitization

On June 22, 2022, Cleco Securitization I acquired the Storm Recovery Property from Cleco Power for a purchase price of $ i 415.9 million. The Storm Recovery Property is classified as a securitized intangible asset on Cleco’s and Cleco Power’s Consolidated Balance Sheets. This securitized intangible asset is being amortized ratably each period consistent with actual collections of the asset's portion of revenue requirement billed to Cleco Power’s customers. Amortization is included in Depreciation and amortization on Cleco’s and Cleco Power’s Consolidated Statements of Income. During the years ended December 31, 2023, and 2022, amortization expense of $ i 14.5 million and $ i 2.8 million, respectively, was recognized. Cleco expects to recognize an estimated $ i 75.4 million of amortization expense over the five years ending December 31, 2028. At the end of its life, this securitized intangible asset will have no residual value.

i i

The following table summarizes the balance of the securitized intangible asset subject to amortization included on Cleco’s and Cleco Power’s Consolidated Balance Sheets:

AT DEC. 31,

(THOUSANDS)

2023

2022

Storm Recovery Property intangible asset

i i 415,946 /

Accumulated amortization

( i i 17,288 / )

( i i 2,823 / )

Net intangible asset subject to amortization

i i 398,658 /

i i 413,123 /

/ /

Other Intangibles

As a result of the 2016 Merger, fair value adjustments were recorded on Cleco’s Consolidated Balance Sheet for the valuation of finite intangible assets relating to long-term wholesale power supply agreements. At the end of their lives, these power supply agreement intangible assets will have i no residual value. The intangible assets related to the power supply agreements are amortized over the estimated life of each applicable contract ranging between i 8 and i 19 years, and the amortization is included in Electric operations on Cleco’s Consolidated Statements of Income.

As a result of the 2016 Merger, fair value adjustments were recorded on Cleco’s Consolidated Balance Sheet for the valuation of a finite intangible asset relating to the Cleco Power trade name. In August 2021, a wholesale customer that is currently under contract with Cleco Power through March 31, 2024, informed Cleco Power that it was not selected through its request for proposal process as a provider of load after the first quarter of 2024. Cleco considered this to be a triggering event and determined that the carrying value of the trade name intangible asset may not be recoverable. Therefore, a valuation of the Cleco Power trade name was conducted to test for impairment. A discounted cash flow model utilizing an estimated weighted average cost of capital of i 8% was used to determine the fair value of the Cleco Power trade name. As a result, Cleco determined that the fair value of the Cleco Power trade name was less than its carrying value and an impairment of $ i 3.8 million was recognized reducing the carrying value to i zero at September 30, 2021.

The following table presents amortization of other intangible assets in Cleco’s Consolidated Statements of Income:


Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
Intangible assets

Trade name	$	i —	$	i —	$	i 3,897
Power supply agreements	$	i 9,454	$	i 9,680	$	i 9,680
An impairment on the Trade name intangible asset was recognized in 2021. i i i No / / other impairments for intangibles listed in the table above were recognized in 2023, 2022, or 2021.

112


CLECO
CLECO POWER						2023 FORM 10-K

The following table summarizes the balance of other intangible assets subject to amortization included in Cleco’s Consolidated Balance Sheets:


Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022

Power supply agreements intangible assets	$	i 85,104	$	i 85,104
Accumulated amortization	( i 74,471)		( i 65,018)
Net intangible assets subject to amortization	$	i 10,633	$	i 20,086

The following table summarizes the amortization expense related to other intangible assets expected to be recognized in Cleco’s Consolidated Statements of Income:


(THOUSANDS)	INTANGIBLE ASSETS
For the year ending Dec. 31,
2024	$	i 2,881
2025	$	i 744
2026	$	i 744
2027	$	i 744
2028	$	i 744
Thereafter	$	i 4,775

Goodwill

On April 13, 2016, in connection with the completion of the 2016 Merger, Cleco recognized goodwill of $ i 1.49 billion. Management assigned the recognized goodwill to the Cleco Power reporting unit. Goodwill is required to be tested for impairment at the reporting unit level on an annual basis or whenever events or circumstances indicate that the value of goodwill may be impaired.

In performing the impairment test, Cleco compares the fair value of the reporting unit to its carrying value including goodwill. If the carrying value including goodwill were to exceed the fair value of a reporting unit, an impairment loss would be recognized. A goodwill impairment loss is measured as the amount by which a reporting unit's carrying value exceeds fair value, not to exceed the carrying amount of goodwill.

Cleco estimates the reporting unit's fair value using a weighted combination of the income approach, which estimates fair value based on discounted cash flows, and the market approach, which estimates fair value based on market comparables within the utility and energy industries. The income approach cash flow valuations involve a number of estimates that require broad assumptions and significant judgment by management regarding future performance, including estimation of future cash flows related to capital expenditures, the weighted average cost of capital or discount rate and the assumed long-term growth rate approach, which incorporates management's assumptions regarding sustainable long-term growth. The market approach includes significant assumptions around the implied market multiples for certain peer companies. Management selects comparable peers based on each peer’s primary business mix, operations, and market capitalization compared to the applicable reporting unit and calculates implied market multiples based on available projected earnings guidance and peer company market values as of the test date.

Cleco performs an annual impairment test each August. In between annual tests, Cleco monitors its estimates and assumptions regarding estimated future cash flows, including the impact of movements in market indicators in future quarters, and will update the impairment analyses if a triggering event occurs. While Cleco believes the assumptions are reasonable, actual results may differ from projections. To the extent cash flows, long-term growth rates, U.S. Treasury rates, or other factors outside of Cleco’s control may impact Cleco’s projected results, Cleco may be required to reduce all or a portion of the carrying value of goodwill.

Cleco conducted its 2023 annual impairment test using an August 1, 2023, measurement date and determined that the estimated fair value of the reporting unit exceeded its carrying value, and i no impairment existed.

Note 19 — Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are summarized in the following tables for Cleco and Cleco Power. All amounts are reported net of income taxes. Amounts in parentheses indicate debits.

Cleco

(THOUSANDS)

POSTRETIREMENT BENEFIT NET

GAIN (LOSS)

Balance, Dec. 31, 2020

( i 25,796)

Other comprehensive income before reclassifications

Postretirement benefit adjustments incurred during the year

i 1,470

Amounts reclassified from accumulated other comprehensive income

Amortization of postretirement benefit net loss

i 697

Balance, Dec. 31, 2021

( i 23,629)

Other comprehensive income before reclassifications

Postretirement benefit adjustments incurred during the year

i 23,647

Amounts reclassified from accumulated other comprehensive income

Amortization of postretirement benefit net loss

i 41

Balance, Dec. 31, 2022

i 59

Other comprehensive income before reclassifications

Postretirement benefit adjustments incurred during the year

( i 3,482)

Amounts reclassified from accumulated other comprehensive income

Amortization of postretirement benefit net loss

( i 1,689)

Balance, Dec. 31, 2023

( i 5,112)

113


CLECO
CLECO POWER						2023 FORM 10-K

Cleco Power

(THOUSANDS)

POSTRETIREMENT BENEFIT NET

(LOSS) GAIN

NET (LOSS) GAIN

ON CASH

FLOW HEDGES

TOTAL AOCI

Balances, Dec. 31, 2020

( i 19,139)

( i 5,614)

( i 24,753)

Other comprehensive loss before reclassifications

Postretirement benefit adjustments incurred during the year

i 4,606

—

i 4,606

Amounts reclassified from accumulated other comprehensive loss

Amortization of postretirement benefit net loss

i 1,648

—

i 1,648

Reclassification of net loss to interest charges

—

i 316

Balances, Dec. 31, 2021

( i 12,885)

( i 5,298)

( i 18,183)

Other comprehensive loss before reclassifications

Postretirement benefit adjustments incurred during the year

i 8,339

—

i 8,339

Amounts reclassified from accumulated other comprehensive loss

Amortization of postretirement benefit net loss

i 1,228

—

i 1,228

Reclassification of net loss to interest charges

—

i 251

Balances, Dec. 31, 2022

( i 3,318)

( i 5,047)

( i 8,365)

Other comprehensive loss before reclassifications

Postretirement benefit adjustments incurred during the year

( i 2,623)

—

( i 2,623)

Amounts reclassified from accumulated other comprehensive loss

Amortization of postretirement benefit net loss

i 386

—

i 386

Reclassification of net loss to interest charges

—

i 251

Balances, Dec. 31, 2023

( i 5,555)

( i 4,796)

( i 10,351)

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of Cleco Holdings and Cleco Power (individually, “Registrant” and collectively, the “Registrants”) management, including the CEO and CFO, the Registrants have evaluated the effectiveness of their disclosure controls and procedures as of December 31, 2023. Based on the evaluations, the CEO and CFO have concluded that the Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms; and that the Registrants’ disclosure controls and procedures are also effective in ensuring that such information is accumulated and communicated to the Registrants’ management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

Managements’ Reports on Internal Control Over Financial Reporting

The management of the Registrants are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. The Registrants’ internal control over financial reporting is a process designed by, or under the supervision of, the Registrants’ principal executive and financial officers and effected by the Registrants’ board of managers, management,

and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

As a result of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness in future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

The management of the Registrants, under the supervision of each of the Registrants’ principal executive officer and principal financial officer, conducted an assessment of the effectiveness of the Registrants’ respective internal control over financial reporting as of December 31, 2023. In making this assessment, management used the criteria in Internal Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on this assessment, the management of the Registrants concluded that, as of December 31, 2023, the Registrants’ internal control over financial reporting was effective.

Changes in Internal Control over Financial Reporting

There have been no changes in the Registrants’ internal control over financial reporting that occurred during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, the Registrants’ internal control over financial reporting.

114


CLECO
CLECO POWER						2023 FORM 10-K

ITEM 9B. OTHER INFORMATION

During the three months ended December 31, 2023, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of Cleco Holdings or Cleco Power i i i i adopted / / / or i i i i terminated / / /

a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

115


CLECO
CLECO POWER						2023 FORM 10-K

PART III

Cleco Power

The information called for by Items 10, 11, 12 and 13 with respect to Cleco Power is omitted pursuant to General Instruction I(2)(c) to Form 10-K (Omission of Information by Certain Wholly Owned Subsidiaries).

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE OF THE REGISTRANTS

Boards of Managers of Cleco

As of March 8, 2024, the Board of Managers of Cleco Holdings is comprised of 13 managers, as set forth below. Cleco Power’s Board of Managers is comprised of 14 managers, including the same 13 managers that comprise the Board of Managers of Cleco Holdings, plus one additional manager, Melissa Stark. The Board of Managers of Cleco Holdings and the Board of Managers of Cleco Power are collectively referred to below as “the Boards.” The managers’ ages, dates of appointment, employment history, and committee assignments as of March 8, 2024, are also set forth below. Each of Ms. Scott and Messrs. Gallot, Gilchrist, and Wainer serve pursuant to one-year agreements which are considered for renewal annually by the Boards. Mr. Fontenot serves by virtue of his position as the CEO, and the other managers are designated for membership by BCI, John Hancock, or MAM.

Dylan Arnould is a Director at John Hancock/Manulife’s Infrastructure Investment Group where he is responsible for origination, execution, and asset management of investments in various infrastructure sections. He is 35 years old and became a member of the Boards of Managers for Cleco Group and Cleco Corporate Holdings in February 2024. Mr. Arnould is a member of the Audit Committee.

Mr. Arnould joined John Hancock/Manulife in 2018. Prior to joining John Hancock/Manulife, he worked on the development and acquisition of power projects with InterGen, as well as with origination, execution and management of climate technology venture capital investments with the Massachusetts Clean Energy Center.

Mr. Arnould holds a Bachelor of Arts degree from Duke University and a Master of Arts degree in International Economics and International Affairs from the Johns Hopkins University, School of Advanced International Studies.

Andrew Chapman joined Macquarie in 2006 and retired on September 30, 2021. Through his consulting company WesWave LLC, Mr. Chapman is a consultant to MAM and serves on the Boards of Cleco and on the board of the entity that holds Lordstown Energy Center, a gas-fired power plant in eastern Ohio. During his 15 years with Macquarie, Mr. Chapman has served as a director of utility companies owned in part by MAM’s funds, including Puget Sound Energy, Duquesne Light Company, Aquarion Water Company, Cleco, and entities related to those holdings. Mr. Chapman is 68 years old and became a member of the Boards in 2016. He is the Chair of the Business Planning and Budget Review Committee, Chair of the Leadership Development and Compensation Committee, and a member of the Asset Management Committee, the Governance and Public Affairs Committee and the Audit Committee.

Mr. Chapman held executive positions with Elizabethtown Water Company, E-town Corporation, American Water Works and the State of New Jersey prior to joining Macquarie in 2006.

Mr. Chapman earned his Master of Business Administration from the Yale School of Management.

William “Bill” Fontenot has served as the President and CEO of Cleco Holdings since January 2018 and CEO of Cleco Power and Cleco Cajun since February 2019. Mr. Fontenot is 61 years old and was appointed to the Boards in 2018. He is a member of the Asset Management Committee, the Business Planning and Budget Review Committee, and the Governance and Public Affairs Committee. Mr. Fontenot has previously served as Interim CEO of Cleco Power from February 2017 to December 2017, Chief Operating Officer of Cleco Power from April 2016 to February 2017, and Senior Vice President of Utility Operations from March 2012 to April 2016.

Mr. Fontenot serves on the boards of the Council for a Better Louisiana, Louisiana Central , and the Louisiana State University at Alexandria Foundation.

Mr. Fontenot holds a Bachelor of Science degree in electrical engineering from Louisiana State University.

Paraskevas “Paris” Fronimos is a Director on the Infrastructure and Renewable Resource Investments team of BCI. He is 49 years old and became a member of the Boards in 2019. Mr. Fronimos is the Chair of the Asset Management Committee and a member of the Business Planning and Budget Review Committee.

Mr. Fronimos joined BCI in 2017 and works with the management teams of portfolio companies primarily in the energy, midstream, and utility sectors in BCI’s global portfolio. Mr. Fronimos typically serves as a Non-Executive Director on the boards of BCI’s portfolio companies, including natural gas pipelines in Brazil and in Germany and a district energy company in the United Arab Emirates. Prior to joining BCI, Mr. Fronimos was employed by Nova Scotia Power, a Canadian power utility, as a fuels portfolio manager. He has more than 15 years of experience in the energy and utilities space, having worked on environmental and energy policy, developing greenfield energy projects, advising on transactions, and driving fleet and fuel supply optimization activities, including commodity pricing and hedging.

Mr. Fronimos holds a bachelor’s degree in Mineral Resources Engineering from the Technical University of Crete and a Master’s in Business Administration (specializing in Natural Resources and Energy) from the University of Alberta.

Richard “Rick” Gallot, Jr. is the President of the University of Louisiana System. He is 57 years old and became a member of the Boards in 2016. Mr. Gallot is a member of the

116


CLECO
CLECO POWER						2023 FORM 10-K

Leadership Development and Compensation Committee and the Governance and Public Affairs Committee.

Mr. Gallot served as the President of Grambling State University from 2016 to 2023. He serves on the board of Origin Bancorp, Inc. (Nasdaq: OBNK) and was appointed to the Louisiana Cybersecurity Commission by former Louisiana Governor John Bel Edwards. He previously served as a Louisiana state senator for District 29, where he held the position of vice chairman of the Commerce Committee and was a member of the Agriculture, Forestry, Aquaculture, and Rural Development Committee and the Revenue and Fiscal Affairs Committee. He previously served as a member of the Louisiana House of Representatives for District 11, where he served as Chair of the House and Governmental Affairs Committee and was a member of the Executive Committee.

Mr. Gallot obtained his Juris Doctorate from Southern University School of Law and has been a licensed Louisiana attorney since 1990.

David Randall “Randy” Gilchrist is the President and CEO of Gilchrist Construction Company (GCC), a central Louisiana-based infrastructure contractor specializing in road and bridge construction. He is 64 years old and became a member of the Boards in 2016. Mr. Gilchrist is a member of the Asset Management Committee and the Audit Committee.

Under Mr. Gilchrist’s leadership, GCC has grown since 1985 from a small site work contractor to one of Louisiana’s leading highway contractors. Mr. Gilchrist has served as President of Associated General Contractors, Chair of Driving Louisiana Forward, Chair of the Central Louisiana Chamber of Commerce, and vice chairman of Central Louisiana Economic Development Alliance. He has also served on the boards of the Rapides Foundation and Rapides Healthcare System.

Domingo Solís-Hernández is a Managing Director at MAM where he oversees origination of new assets and works with management teams of portfolio companies in the infrastructure sector. He is 45 years old and became a member of the Boards in February 2022. Mr. Solís-Hernández is a member of the Asset Management Committee and the Business Planning and Budget Review Committee.

Mr. Solís-Hernández has over 18 years of experience in the infrastructure sector. Since 2012, he has worked for the Macquarie Group in Europe and the U.S. Prior to Macquarie, he worked as a merger & acquisition investment banker and started his career working as a consultant engineer.

Mr. Solís-Hernández previously served as a director of Italian companies Hydro Dolomiti Energia, a hydro operator, and Societa Gasdotti Italia, a natural gas transmission operator. He also served as a director of Renvico, a renewables operator in France and Italy.

Mr. Solís-Hernández holds a Bachelor’s degree and a Master’s degree in Industrial Engineering from the University of Malaga and a Master of Business Administration from the University of Kentucky.

Christopher Leslie is Executive Chairman of Macquarie Asset Management Real Assets Americas. Prior to taking that role in July 2016, Mr. Leslie was the CEO of Macquarie Infrastructure Partners, which managed more than $7 billion in U.S. and Canadian infrastructure investments. Mr. Leslie is 59 years old and became a member of the Boards in 2016. He is a member of the Leadership Development and Compensation Committee. Mr. Leslie has been or is a director of a number of MAM

portfolio companies in the energy, transportation, and communications sectors.

Mr. Leslie joined Macquarie in 1992 in Australia. He has been instrumental in expanding Macquarie’s infrastructure business globally, having launched Macquarie offices in Southeast Asia, India, and North America.

Mr. Leslie holds a Bachelor of Commerce degree from the University of Melbourne.

Jon Perry is a Director within the Infrastructure & Renewable Resources Department at BCI, where he is responsible for sourcing, executing and managing infrastructure investments. He is 47 years old and became a member of the Boards in 2018. Mr. Perry is the Chair of the Audit Committee.

Mr. Perry has over 15 years of experience in the utility and energy sectors. Prior to working with BCI, he held positions as Manager, Mergers and Acquisitions at TransAlta, a leading Canadian independent power producer and Manager, Regulatory and Financial Reporting at FortisAlberta, a regulated distribution utility. Before then, Mr. Perry held financial and investor relations positions in Canadian junior and mid-cap oil and gas companies.

Mr. Perry holds a Bachelor of Medical Laboratory Sciences from the University of British Columbia. He is also a Chartered Accountant in the Province of Alberta and is a Chartered Financial Analyst charter holder.

Aaron Rubin is a Managing Director at MAM, where he is responsible for MAM’s North American power and utilities investment team. He is 46 years old and became a member of the Boards in 2018. Mr. Rubin is a member of the Business Planning and Budget Review Committee.

Since joining Macquarie in 2008, Mr. Rubin has had extensive responsibility for investment origination and execution as well as for management of portfolio investments. He has also served as the CEO of the Moscow-based Macquarie Russia & CIS Infrastructure Fund, and has been or is a director of a number of Macquarie portfolio companies in the energy, transportation, and communications sectors. Mr. Rubin is currently a director of the holding companies of Lordstown Energy Center, a 940-MW gas-fired power plant in Ohio, Puget Energy, an electric and natural gas utility in Washington State, and Cyrq Energy, a leading U.S. geothermal power company. Prior to joining Macquarie, Mr. Rubin was a Vice President on JPMorgan’s North American mergers and acquisitions team.

Mr. Rubin holds a Bachelor of Commerce and a Bachelor of Laws degree from the University of Queensland.

Peggy Scott currently serves as the Chair of the Boards. In addition, she serves on Cleco’s Audit Committee and Governance and Public Affairs Committee. She served as Chairperson and Interim CEO of Cleco Holdings from February 9, 2017, through December 31, 2017. She is 72 years old and became a member of the Boards in 2016.

Ms. Scott serves on the boards of The Eastern Company (Nasdaq: EML), Martin Sustainable Resources LLC, and the Blue Cross Foundation of Louisiana. She previously served on the boards of Benefytt Technologies, Inc. (BFYT) until its 2020 acquisition, and Gresham Smith Partners until June 2022, as well as on the boards of various corporate and community organizations.

Presently, Ms. Scott is an adviser to growing companies in diverse industries. Previously, she served as the Executive

117


CLECO
CLECO POWER						2023 FORM 10-K

Vice President, Chief Operating Officer, and CFO of Blue Cross Blue Shield of Louisiana (BCBS) and as Chief Strategy Officer. Prior to BCBS, Ms. Scott was an office Managing Partner with Deloitte and held senior executive positions in U.S. and International companies in seven countries where she led transformational growth and change.

Ms. Scott was named one of the ten Outstanding Young Women of America, featured in the Wall Street Journal as National Financial Executive of the year, and inducted into the American Institute of CPAs’ Hall of Fame. She is in the Louisiana State University’s Alumni Hall of Distinction, named a Tulane Outstanding Alumnus, and holds a Presidential citation.

Ms. Scott holds a Master of Business Administration from Tulane University and a Bachelor of Science degree in accounting from Louisiana State University. She is a CPA and certified in Valuations and Forensics and as a Professional Corporate Director.

Melissa Stark currently serves as the managing principal and owner of Co Issuer Corporate Staffing, LLC, which she established in 2003 to provide independent directors and officers for special purpose entities. She is 61 years old and was appointed in 2016 as a special independent manager of Cleco Power, with the sole purpose to vote on any bankruptcy-related matters, as specified in Cleco Power’s Second Amended and Restated Operating Agreement.

Ms. Stark serves as a director of a number of companies in the financial sector. From 2001 to 2017, Ms. Stark concurrently served as a principal and co-founder of Water Tower Capital, LLC, a Chicago based investment advisory firm. From 1994 to 1996 she was Vice President - Fixed Income Research at Duff & Phelps (now known as Fitch) where she covered high yield bonds in the retail industry. She served as Vice President - Special Investments at PPM America, Inc. from 1991 to 1994.

Ms. Stark holds a Master of Business Administration in Finance from New York University Stern School of Business.

Steven Turner is a Managing Director within the Infrastructure & Renewable Resources Department at BCI, where he is responsible for sourcing, executing, and managing infrastructure investments. He is 51 years old and became a member of the Boards in 2016. Mr. Turner is the Chair of the Governance and Public Affairs Committee and a member of the Business Planning and Budget Review Committee and the Leadership Development and Compensation Committee.

Mr. Turner serves on the board of Corix Infrastructure Inc., a privately held waste/wastewater and utility holding company based in Vancouver, British Columbia. He is also a past director of Macquarie Utilities Inc. and Aquarion Water Company (Aquarion), the parent companies to a suite of New England-based water utilities.

Mr. Turner has over 15 years of experience in institutional investing. Prior to joining BCI, he held positions as an Associate with Ventures West Management, a leading Canadian venture capital firm and as an Associate Equity Analyst with Raymond James Ltd., a full-service brokerage firm.

Mr. Turner has a Bachelor of Science degree in Environmental Engineering from Montana Tech of the University of Montana and holds a Master of Business Administration from the University of Victoria. He is also a registered Professional Engineer in the Province of British Columbia, a Chartered Financial Analyst charter holder and holds the ICD.D designation.

Bruce Wainer is the CEO of Wainer Enterprises, a family-owned commercial development company on Louisiana’s Northshore and in New Orleans. He is 64 years old and became a member of the Boards in 2016. Mr. Wainer is a member of the Business Planning and Budget Review Committee and the Governance and Public Affairs Committee.

Mr. Wainer is the developer of some of the most successful commercial developments in the New Orleans area and a past chairman of the Northshore Business Council. His business affiliations include partner at Wainer Brothers, All State Financial Company and Circle West Trailer Park Company; president of Quality Properties, Inc., Regent Lands, Inc., Flowers, Inc., Upside Down Cajun Brands, Inc., Louisiana Properties, Inc., Tamco, Inc., Riverhill, Inc., Metro Credit Services, Inc. and Pan American Investors, Inc., and manager of Advance Mortgage Company, LLC.

Executive Officers of Cleco

The names of the executive officers of Cleco and certain subsidiaries, their positions held, five-year employment history, and ages as of March 8, 2024, are as follows. Executive officers are appointed annually to serve for the ensuing year or until their successors have been appointed.


NAME OF EXECUTIVE			POSITION AND FIVE-YEAR EMPLOYMENT HISTORY
William G. Fontenot Cleco Holdings Cleco Power Cleco Cajun			President and CEO since January 2018. CEO since February 2019; President and CEO from January 2018 to February 2019. CEO since February 2019. (Age 61)
Kristin L. Guillory Cleco Holdings Cleco Power Cleco Cajun			CFO since July 2021; Treasurer from February 2018 to September 2019. CFO since July 2021; President from September 2019 to July 2021. (Age 41)
Justin S. Hilton Cleco Power Cleco Holdings Cleco Power			Chief Commercial Officer since January 2024; President from February 2019 to January 2024. Vice President MISO Operations from April 2016 to February 2019. (Age 54)

118


CLECO
CLECO POWER						2023 FORM 10-K


NAME OF EXECUTIVE			POSITION AND FIVE-YEAR EMPLOYMENT HISTORY
Mark D. Kleehammer Cleco Holdings			Chief Regulatory Officer & General Counsel since July 2023; Vice President, Commercial and Industrial Journey and Products at Entergy Corporation from February 2023 to June 2023; Vice President, Regulatory and Public Affairs at Entergy Louisiana from October 2015 to February 2023, (Age 55)
Robert A. Breedlove Cleco Holdings			Chief Operations Officer since January 2024; Vice President, Generation Operations from November 2021 to January 2024; Director, Fleet Maintenance Entergy Corporation from October 2018 to November 2021. (Age 50)
Paul A. Guillory II Cleco Power Support Group			Chief Customer Officer since January 2024; Vice President & Chief Customer Officer from June 2021 to January 2024; Director, Meter, Bill & Revenue Collection from February 2020 to June 2021. Manager, Business Consulting from December 2016 to February 2020 (Age 41)
Sybil S. Montegut Cleco Holdings Support Group			Chief Administrative & Sustainability Officer since January 2024; Vice President Enterprise Analytics & Innovation from May 2020 to January 2024; Director, Innovation & Transformation from March 2019 to May 2020; General Manager, Transformation Office from March 2018 to March 2019. (Age 46)

Audit Committee

Cleco has a separately-designated standing Audit Committee. The members of Cleco’s Audit Committee are Dylan Arnould, Andrew Chapman, Randy Gilchrist, Jon Perry (who serves as Chair of the committee) and Peggy Scott. The Boards have determined that Andrew Chapman is the Audit Committee financial expert.

Code of Business Conduct & Ethics and Related Party Transactions

Cleco has adopted a Code of Conduct that applies to its principal executive officer, principal financial officer, principal accounting officer, and treasurer. Cleco also has adopted an Ethics Guide applicable to all employees and the Boards. In addition, the Boards have adopted Conflicts of Interest and Related Policies to prohibit certain conduct and to reflect the expectation of the Boards that their members engage in and promote honest and ethical conduct in carrying out their duties and responsibilities, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships and corporate opportunities. Under the Conflicts of Interest and Related Policies, Cleco considers transactions that are reportable under the SEC’s rules for transactions with related parties to be conflicts of interest and prohibits them. Any request, waiver, interpretation or other administration of the policy shall be referred to the Governance and Public Affairs Committee. Any recommendations by the Governance and Public Affairs Committee to implement a waiver shall be referred to the full Boards for a final determination. The Code of Conduct for Financial Managers, Ethics Guide, and Conflicts of Interest and Related Policies are posted on Cleco’s website at https://cleco.com/about/leadership-governance/codes-of-conduct. Each of these

documents is also available free of charge by request sent to: Public Relations, Cleco, P.O. Box 5000, Pineville, LA 71361-5000.

Communications with the Boards

The Corporate Governance Guidelines provide for communications with the Boards by interested persons. In order for employees and other interested persons to make their concerns known to the Boards, Cleco has established a procedure for communications with the Boards through the Boards’ Chair. The procedure is intended to provide a method for confidential communication, while at the same time protecting the privacy of the members of the Boards. Any interested person wishing to communicate with the Boards, or the non-management members of the Boards, may do so by addressing such communication as follows:

Chair of the Boards of Managers

c/o Corporate Secretary

Cleco Holdings

P.O. Box 5000

Pineville, LA 71361-5000

Upon receipt, Cleco’s Corporate Secretary will forward the communication, unopened, directly to the Chair of the Boards. The Chair will, upon review of the communication, make a determination as to whether it should be brought to the attention of the other non-management members and/or the management member of the Boards and whether any response should be made to the person sending the communication, unless the communication was made anonymously.

119


CLECO
CLECO POWER						2023 FORM 10-K

ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis (CD&A)

This section provides information about the compensation program in place for the Company’s named executive officers who are included in the Summary Compensation Table. It includes a discussion and analysis of the overall objectives of its compensation program and each element of compensation the Company provides.

Executive Summary

Compensation Philosophy

The compensation principles and philosophy of the Committee are:

•Executives should be rewarded on performance, and incentives should align interests between management and the Company while considering prudent risk taking;

•Total remuneration (the sum of base salary, annual incentives, long-term incentives, and retirement benefits) is determined so the combination of all pay elements will deliver a total compensation opportunity comparable to that of the Company’s Peer Group.

◦Newly hired and/or promoted executives should be transitioned to median over time as they become more proficient in their roles;

•The mix of fixed compensation (base salary and retirement benefits) and variable/at-risk compensation (annual incentive and long-term incentive) should align with market by emphasizing variable/at-risk compensation; and

•The competitive market for an executive’s compensation will be based on comparable utilities and will not be adjusted for Cleco’s privately held status or location.

Compensation Program Elements

The Committee targets total compensation (made up of the elements described below) to be competitive with the median of the Comparator Group, but individual positioning may vary above or below the median depending on each executive’s experience, performance, and contribution to the Company. For 2023, Cleco believes that it accomplished its philosophy through the following compensation and benefit components:


2023 PAY ELEMENT			DESCRIPTION
Base Salary			• Fixed pay element • Delivered in cash
Annual Cash Incentive (STIP)			• Performance-based annual incentive plan that pays out in cash • Adjusted EBITDA is the primary metric for the named executive officers • Additional metrics include safety, system reliability, customer service, generation fleet availability, and milestone measures
Long-Term Incentives			• Performance-based incentive paid in cash currently with a three-year cycle • Payout is contingent on Average ROIC and Total Shareholder Return (TSR), each weighted at 50%
Benefits			• Broad-based benefits such as group medical, dental, vision, and prescription drug coverage; basic life insurance; supplemental life insurance; dependent life insurance; accidental death and dismemberment insurance; a defined benefit pension plan (for those employees hired prior to August 1, 2007); and a 401(k) Plan with a Company match for those employees hired before August 1, 2007, as well as a 401(k) Plan with an enhanced benefit for those employees hired on or after August 1, 2007
Executive Benefits			• SERP (closed to new participants in 2014) • Nonqualified Deferred Compensation Plan
Perquisites			• Limited to executive physicals, spousal/companion travel, and relocation assistance

Roles and Responsibilities

Leadership Development and Compensation Committee

The Committee, which consists of one independent Board Manager and three investor Board Managers, is responsible for developing and overseeing the Company’s executive compensation program. The Committee met ten times during 2023 with primarily virtual attendance. The Chief Human Resources and Diversity Officer attended the Committee meetings on behalf of management but did not participate in all of the Committee’s executive sessions.

The Committee’s responsibilities, which are more fully described in its charter, include:

•establishing and overseeing the Company’s executive compensation philosophy and goals and the programs which align with those;

•engaging and evaluating an independent compensation consultant;

•determining if the Company’s executive compensation and benefit programs are achieving their intended purposes,

being properly administered and creating proper incentives in light of the Company’s risk factors;

•analyzing the executive compensation and benefits practices of peer companies and annually reporting to the Board or recommending for approval by the Board the overall design of the Company’s executive compensation and benefit programs;

•annually evaluating the performance of the CEO and the CFO and recommending to the Board adjustments in the CEO's and CFO’s compensation and benefits;

•overseeing the administrative committees and periodically reviewing the Company’s benefit plans, including retirement plans;

•annually reviewing the Committee’s charter and revising as necessary;

•annually ensuring there is a process for talent and succession management for executives; and

•reviewing and making recommendations on efforts to promote diversity and inclusion.

120


CLECO
CLECO POWER						2023 FORM 10-K

The Compensation Consultant

The Committee engaged Pay Governance to consult on matters concerning executive officers’ compensation and benefits. All executive compensation adjustments and award calculations for 2023 were reviewed by Pay Governance on behalf of the Committee. Pay Governance acted at the direction of the Committee and was independent of management. Pay Governance was responsible for:

•recommending a group of peer companies to use for its market comparisons;

•reviewing the Company’s executive compensation program, including compensation levels in relation to Company performance, pay opportunities relative to those at comparable companies, short- and long-term incentive targets and metrics, executive retirement benefits, and other executive benefits;

•reviewing the Company’s Board of Manager compensation program;

•reporting on emerging trends and best practices in the area of executive and Board of Manager compensation; and

•attending the Committee meetings.

The Committee reviewed the firm’s qualifications as well as its independence and the potential for conflicts of interest. The Committee concluded that Pay Governance is independent, and its services to the Committee do not create any conflicts of interest. The Committee has the sole authority to approve Pay Governance’s compensation and determine the nature and scope of its services. Pay Governance does not perform any other services for or receive any other fees from the Company.

CEO

The CEO discusses with the Committee base salary adjustments, cash incentives, and long-term incentive awards

for executives other than himself. The CEO participates in meetings of the Committee to discuss executive compensation, including measures and performance targets but is subsequently excused to allow the Committee to meet in executive session without management present.

Evaluation and Design of the Compensation and Benefit Programs

The Committee believes that compensation and benefits for executive officers who successfully enhance investors’ value should be competitive with the compensation and benefits offered by similar companies in the industry to attract and retain the high quality executive talent required by the Company. The Committee examines executive officers’ compensation against comparable positions using publicly available proxy data for a group of 12 industry peers (Peer Group) and utility industry survey data to help design and benchmark executive officer compensation. This evaluation includes base salary, annual and long-term incentive plan targets, other potential awards, retirement benefits, and target total compensation. The Peer Group is used to track comparable performance of the long-term incentive plan. The combination of the Peer Group and the utility industry survey data is referred to as the “Comparator Group.”

The Peer Group did not change in 2023. The Committee will continue to evaluate the Peer Group annually as companies are often acquired, taken private, or grow at a rate that renders them inappropriate for comparison purposes. The Committee evaluates the Peer Group to ensure that peer companies are of similar scope in relation to revenues, assets, and employee count and have a good operational fit.


2023 PEER GROUP COMPANIES
ALLETE, Inc.	Hawaiian Electric Industries, Inc.	Otter Tail Corporation
Alliant Energy Corporation	IDACORP, Inc.	Pinnacle West Capital Corporation
Avista Corporation	NorthWestern Corporation	PNM Resources, Inc.
Black Hills Corporation	OGE Energy Corp.	Portland General Electric Company

In setting executive compensation levels in 2023, the Committee also used utility industry survey data from the most recent Willis Towers Watson Energy Services Executive Compensation Database. Survey data provides a broader energy industry perspective. This survey data is used in conjunction with the Peer Group data as a competitive market reference point for the Committee to consider in determining pay levels.

Decisions Made in 2023 with Regard to Each Compensation and Benefit Component

Base Salary

The base salary levels for the executive officers as a group, including the named executive officers are set so that, in combination with other pay elements, it will deliver a total compensation opportunity comparable to that of the Company’s Peer Group. The Committee sets the base salary level for the CEO and CFO.

Base salaries for the named executive officers in 2023 are shown in the table below:


NAME	2023 BASE SALARY		2023 % CHANGE (1)
Mr. Fontenot	$	750,000	4.0	%
Ms. Guillory	$	445,000	14.1	%
Mr. Kleehammer	$	425,000	N/A
Mr. LaBorde	$	375,000	7.1	%
Mr. Hilton (2)	$	295,000	0.0	%

(1) Base salary increases were adjusted to a level approximating +/-10% of the Comparator Group market median for total remuneration.

(2) Cleco Power employee.

Annual Cash Incentive

The Company maintains the STIP, an annual, performance-based cash incentive plan. The STIP applies to all regular, full-time employees, and it includes weighting for corporate and individual performance goals. The STIP award opportunities for executive officers are set so that, in combination with other pay elements, it will deliver a total compensation opportunity

121


CLECO
CLECO POWER						2023 FORM 10-K

comparable to that of the Company’s Peer Group. The Committee sets the annual cash incentive level for the CEO and CFO. Payouts are capped at 200% of target.

The table below presents the target STIP opportunities for the named executive officers in 2023:


NAME			TARGET AS % OF BASE SALARY
Mr. Fontenot			125%
Ms. Guillory			65%
Mr. Kleehammer			60%
Mr. LaBorde			50%
Mr. Hilton (1)			50%

(1) Cleco Power employee.

The 2023 STIP award for the named executive officers was based on the corporate and individual performance measures described below. This includes measures that apply to non-named executive officers and employees. The 2023 corporate performance measures consisted of the elements listed below based on the business unit (weighting):


	CONSOLIDATED		BUSINESS UNIT						MILESTONE MEASURES
	SAFETY	ADJUSTED EBITDA	EFORd	AVAILABILITY	PEAK EAF	CUSTOMER SATISFACTION	LPSC SAIDI	ADJUSTED EBITDA
Cleco Power	10%	10%	6%	4%		15%	5%	30%	20%
Cleco Support (1)	10%	45%	5.5%	2%	7.5%	7.5%	2.5%		20%
Cleco Cajun	10%	10%	5%		15%			40%	20%

(1) Cleco Support business unit measures are calculated as an average (50% of the Cleco Power weighting and 50% of the Cleco Cajun weighting).

The Committee included Milestone Measures (Measures) in the 2023 STIP corporate metrics for EMT and other corporate officers weighted at 20% and a stretch objective weighted at an additional 10%. These Measures were associated with progress milestones on key strategic corporate projects related to safety and security improvement, Cleco Cajun restructuring resolution, Project Energizer, Solar, Madison Unit 3 Carbon Capture and Sequestration (CCS). For the STIP calculation, the Committee put the greatest emphasis on financial performance using an adjusted EBITDA metric at both the business unit and consolidated levels. Adjusted EBITDA represents net income before interest, income taxes, depreciation, and amortization adjusted for certain pension and SERP expenses, gains and losses on certain life insurance policies, certain merger and acquisition related expenses, variable lease revenue, unrealized gains and losses on derivatives, and other adjustments at the discretion of the Board of Managers. In addition, to continually focus the entire organization on the importance of safety, system reliability, generation fleet availability, sustainability, and to focus Cleco Power and Cleco Support executives and employees on customer satisfaction, the remainder of the STIP opportunity was attributable to these operational measures.

Management recommends the STIP financial performance and other measures to the Committee. Based on the historical performance relative to target and the relative historical performance versus the Peer Group, the Committee reviews, revises as appropriate, and approves the STIP measures for the upcoming year.

Details Related to Corporate Performance Metrics Established to Determine 2023 STIP Award Levels

Metric # 1: Safety Consolidated — For the 2023 safety measure, the Company included the frequency of incidents represented by the Total Recordable Incident Rate (TRIR), which represents 4% of the overall STIP award, the severity of incidents represented by the Days Away, Restricted or Transferred (DART) rate, which represents 4% of the overall STIP award, and Contractor Total Recordable Incident Rate

(TRIR), which represents 2% of the overall STIP award. These three measures total 10% for the safety metric. The targets for TRIR and DART safety measures were based on the average rates of the companies in the Southeastern Electric Exchange, of which Cleco is a member, over the three-year period of 2020, 2021, and 2022. The target for Contractor TRIR is based on a 10% year-over-year improvement.


SAFETY - TRIR MATRIX (4%)
PERFORMANCE LEVEL			% OF TRIR TARGET AWARD PAID
At or above 0.632			0%
0.535 - 0.631			50%
0.437 - 0.534			100%
0.340 - 0.436			150%
At or below 0.339			200%
2023 Result (0.076)			200%


SAFETY - DART MATRIX (4%)
PERFORMANCE LEVEL			% OF DART TARGET AWARD PAID
At or above 0.398			0%
0.331 - 0.397			50%
0.265 - 0.330			100%
0.198 - 0.264			150%
At or below 0.197			200%
2023 Result (0.000)			200%


SAFETY - CONTRACTOR TRIR MATRIX (2%)
PERFORMANCE LEVEL			% OF DART TARGET AWARD PAID
Above 0.951			0%
At or below 0.951			100%
2023 Result (0.788)			100%

122


CLECO
CLECO POWER						2023 FORM 10-K

Metric # 2: Adjusted EBITDA Consolidated — The following adjusted EBITDA matrix was developed to determine performance and payout ranges related to consolidated adjusted EBITDA performance in 2023. For Cleco Power and Cleco Cajun, this measure represents 10% of the overall STIP award for the corporate measures for executives. For Cleco Support, this measure represents 45% of the overall STIP award for the corporate measures for executives. The final percentage of the financial target award is interpolated based on the performance level.


ADJUSTED EBITDA MATRIX - CONSOLIDATED
PERFORMANCE LEVEL			% OF FINANCIAL TARGET AWARD PAID
Below $552.8 million			0.0%
At or above $552.8 million and below $607.5 million			50.0%-99.9%
At or above $607.5 million and below $637.6 million			100.0%-149.9%
At or above $637.6 million and below $667.6 million			150.0%-199.9%
At or above $667.6 million			200.0%
2023 Result - $641.8 million			157.0%

Metric # 3: EFORd — This metric represents the probability a generator will fail either completely or in part when its operation is required. This metric is 6% of the overall STIP award for Cleco Power, 5% of the overall STIP award for Cleco Cajun measures, 5.5% of the overall STIP award for Cleco Support corporate measures (Cleco Support employees weighting is 50% of the Cleco Power weighting and 50% of the Cleco Cajun weighting). The 2023 target was based on the comparison to historical class average forced outage rates, as well as MISO system-wide weighted average forced outage rate.


EFORd MATRIX - CLECO POWER (6%)
PERFORMANCE LEVEL			% OF EFORd TARGET AWARD PAID
At or above 8.80%			0%
6.73% - 8.79%			50%
4.66% - 6.72%			100%
2.58% - 4.65%			150%
At or below 2.57%			200%
2023 Result (3.63%)			150%


EFORd MATRIX - CLECO CAJUN (5%)
PERFORMANCE LEVEL			% of EFORd TARGET AWARD PAID
At or above 10.01%			0%
7.61% - 10.00%			50%
5.21% - 7.60%			100%
2.81% - 5.20%			150%
At or below 2.80%			200%
2023 Result (5.69%)			100%

Metric # 4: Availability - Cleco Power and Cleco Support — This metric is an indicator of generation performance impacts related to unplanned outages and derates. This metric is 4% of the overall STIP award for Cleco Power corporate measures and 2% of the overall STIP award for Cleco Support corporate measures. The 2023 target was based on the average performance over the three-year period of 2020, 2021, and 2022 of Cleco Power’s fleet.


AVAILABILITY MATRIX - CLECO POWER (4%)
PERFORMANCE LEVEL			% OF PEAK EAF TARGET AWARD PAID
At or below 64.54%			0%
64.55% - 74.20%			50%
74.21% - 83.87%			100%
83.88% - 93.55%			150%
At or above 93.56%			200%
2023 Result (89.80%)			150%

Metric # 5: Peak EAF - Cleco Cajun and Cleco Support — This metric represents the amount of time that the power generation plant is able to produce electricity without any outages or deratings over a peak period (defined as May through September, Monday through Friday, hours ending 0700 through 2200), divided by the amount of time in the peak period. This metric is 15% of the overall STIP award for Cleco Cajun corporate measures and 7.5% of the overall STIP award for Cleco Support corporate measures. The 2023 target was based on the average performance over the three-year period of 2020, 2021, and 2022 of Cleco Cajun’s fleet.


PEAK EAF MATRIX - CLECO CAJUN (15%)
PERFORMANCE LEVEL			% OF PEAK EAF TARGET AWARD PAID
At or below 96.42%			0%
96.43% - 97.03%			50%
97.04% - 97.67%			100%
97.68% - 98.30%			150%
At or above 98.31%			200%
2023 Result (94.85%)			0%

Metric # 6: Customer Satisfaction - Cleco Power and Cleco Support — The Company included Customer Satisfaction in its performance measures in 2023 using the JD Power South Midsize segment (JD Power study) for comparison. For the STIP metric, the Company uses a percentile-based target relative to the peer groups. The Company compared its overall performance against its peers in the JD Power study. This metric represents 15% of the overall STIP award for Cleco Power corporate measures and 7.5% of the overall STIP award for the Cleco Support corporate measures.


CUSTOMER SATISFACTION MATRIX - CLECO POWER (15%)
PERFORMANCE LEVEL			% OF CUSTOMER SATISFACTION TARGET AWARD PAID
Below 25th Percentile			0%
25th - 49th Percentile			50%
50th - 74th Percentile			100%
75th - 89th Percentile			150%
At or above 90th Percentile			200%
2023 Result - Below 25th Percentile			0%

Metric # 7: LPSC SAIDI - Cleco Power and Cleco Support — SAIDI measures the average amount of time a customer’s service is interrupted during the year measured in hours per customer per year, and excludes major events per the LPSC’s criteria. The 2023 LPSC SAIDI goal was based on the long-term goal of consistent performance improvement aligned with the LPSC

123


CLECO
CLECO POWER						2023 FORM 10-K

target. This metric represents 5% of the overall STIP award for Cleco Power corporate measures and 2.5% of the overall STIP award for Cleco Support corporate measures.


LPSC SAIDI MATRIX - CLECO POWER (5%)
PERFORMANCE LEVEL			% OF LPSC SAIDI TARGET AWARD PAID
Above 2.87			0%
At or below 2.87			100%
2023 Result (2.44)			100%

Metric # 8: Adjusted EBITDA — The following adjusted EBITDA matrix was developed to determine performance and payout ranges related to respective Business Unit adjusted EBITDA performance in 2023. The overall STIP award for the corporate measures for executives is 30% for Cleco Power and 40% for Cleco Cajun. The final percentage of the financial target award is interpolated based on the performance level.


ADJUSTED EBITDA MATRIX - CLECO POWER (30%)
PERFORMANCE LEVEL	% OF FINANCIAL TARGET AWARD PAID
Below $455.5 million	0.0	%
At or above $455.5 million and below $492.4 million	50.0%-99.9%
At or above $492.4 million and below $510.9 million	100.0%-149.9%
At or above $510.9 million and below $529.3 million	150.0%-199.9%
At or above $529.3 million	200.0	%
2023 Result - $451.7 million	0.0%


ADJUSTED EBITDA MATRIX - CLECO CAJUN (40%)
PERFORMANCE LEVEL	% OF FINANCIAL TARGET AWARD PAID
Below $97.3 million	0.0	%
At or above $97.3 million and below $115.1 million	50.0%-99.9%
At or above $115.1 million and below $126.7 million	100.0%-149.9%
At or above $126.7 million and below $138.2 million	150.0%-199.9%
At or above $138.2 million	200.0	%
2023 Result - $189.8 million	200.0%

Metric # 9: Milestone Measures — Cleco officers had an additional STIP metric for 2023. This metric represents 20% of the overall STIP award for the corporate measures for executives and measures progress on certain strategic initiatives. These initiatives included safety and security improvement (5%), Project Energizer (5%), Solar (5%), and Cleco Cajun restructuring resolution (5%). This measure also includes a stretch objective (10%) for Madison Unit 3 Carbon Capture and Sequestration (CCS). For 2023, executives were able to earn up to 10% in addition to the 20% target based on success of milestone measures. The Committee evaluated the performance of each initiative and determined the 2023 result for the Milestone Measures as follows.


MILESTONE MEASURES (20% with up to a 10% stretch)
2022 RESULTS			% OF MILESTONE TARGET AWARD PAID
Cleco Power			21.5%
Support Group			21.2%
Cleco Cajun			24.0%

Total Payout for EMT Cleco Power: The calculated STIP payout for Cleco Power was 75.2% of target. An additional discretionary adjustment was made to increase the payout for officers by 10.4% of target. The resulting total STIP corporate payout of 85.6% for 2023 was calculated as follows:


	% OF TARGET		x	AWARD LEVEL		=	% OF PAYOUT
Safety Consolidated	10	%		180.0	%		18.0%
Adjusted EBITDA Consolidated	10	%		157.0	%		15.7%
EFORd	6	%		150.0	%		9.0%
Availability	4	%		150.0	%		6.0%
Customer Satisfaction	15	%		0.0	%		0.0%
LPSC SAIDI	5	%		100.0	%		5.0%
Adjusted EBITDA	30	%		0.0	%		0.0%
Milestone Measures (stretch included)	20	%		107.5	%		21.5%
Resulting Total (1)	100	%					75.2	%
Additional Discretionary Adjustment							10.4	%
Adjusted Resulting Total (1)							85.6	%

(1) The totals are rounded to the nearest decimal.

Total Payout for EMT Cleco Support: The calculated STIP payout for Cleco Support was 122.4% of target. The total STIP corporate payout for 2023 was calculated as follows:


	% OF TARGET		x	AWARD LEVEL		=	% OF PAYOUT
Safety Consolidated	10	%		180.0	%		18.0	%
Adjusted EBITDA Consolidated	45	%		157.0	%		70.7	%
EFORd	5.5	%		127.3	%		7.0	%
Availability	2.0	%		150.0	%		3.0	%
Peak EAF	7.5	%		0.0	%		0.0	%
Customer Satisfaction	7.5	%		0.0	%		0.0	%
LPSC SAIDI	2.5	%		100.0	%		2.5	%
Milestone Measures (stretch included)	20	%		106.0	%		21.2	%
Resulting Total (1)	100	%					122.4	%

(1) The resulting total is rounded to the nearest decimal.

Total Payout for EMT Cleco Cajun: The calculated STIP payout for Cleco Cajun was 142.7% of target. An additional discretionary adjustment was made to increase the payout for officers by 4.3% of target. The resulting total STIP corporate payout of 147.0% for 2023 was calculated as follows:


	% OF TARGET		x	AWARD LEVEL		=	% OF PAYOUT
Safety Consolidated	10	%		180.0	%		18.0	%
Adjusted EBITDA Consolidated	10	%		157.0	%		15.7	%
EFORd	5	%		100.0	%		5.0	%
Peak EAF	15	%		0.0	%		0.0	%
Adjusted EBITDA	40	%		200.0	%		80.0	%
Milestone Measures (stretch included)	20	%		120.0	%		24.0	%
Resulting Total (1)	100	%					142.7	%
Additional Discretionary Adjustment							4.3	%
Adjusted Resulting Total (1)							147.0	%

(1) The totals are rounded to the nearest decimal.

The Committee also has the authority to adjust the amount of any individual STIP award upon recommendation by the CEO. Adjustments for the STIP participants, except for the named executive officers and other members of EMT, may be

124


CLECO
CLECO POWER						2023 FORM 10-K

made by the CEO at his discretion. Adjustments are based on the annual performance review process.

Long-Term Compensation

In 2023, the Committee continued a cash-based LTIP and issued grants for the three-year cycle for the performance period ending December 31, 2023. The metrics for the LTIP cycle issued in 2023 are weighted 50% on the three-year average ROIC and 50% on TSR.

Each executive officer’s target LTIP award level is set, so in combination with other pay elements, it will deliver a total compensation opportunity comparable to that of the Company’s Peer Group. The chart below details the targeted opportunity for each of the named executives expressed as a percentage of base salary. The Board of Managers approved a supplemental target amount equal to 26% of the target amount in the 2020-2022 LTIP performance cycle to be included in the 2023-2025 LTIP performance cycle. The chart below reflects both the 2023-2025 LTIP cycle and supplemental target amounts.


NAME	TARGET AS % OF BASE SALARY (1)		SUPPLEMENTAL TARGET AMOUNT
Mr. Fontenot	227	%	$	429,000
Ms. Guillory	120	%	$	74,360
Mr. Kleehammer (2)	110	%	$	0
Mr. LaBorde	85	%	$	75,400
Mr. Hilton (3)	90	%	$	78,650

(1) Long-term incentives were adjusted to a level approximating +/-10% of the Comparator Group market median for total remuneration based on salary as of the May 24, 2023, grant date.

(2) Mr. Kleehammer was issued LTIP grants for cycles 2021-2023, 2022-2024, and 2023-2025 at the above mentioned target percentage with a guaranteed minimum target payout.

(3) Cleco Power employee.

2021-2023 LTIP Award

The Leadership Development & Compensation Committee approved an overall award level of 109.5% of target for the LTIP three-year performance cycle that ended on December 31, 2023. This award level represents ROIC and TSR performance, each weighted at 50%, over the three-year period. This award will be paid in cash and is included in column E of the Summary Compensation Table for 2023.

Retirement Plans - Nonqualified Deferred Compensation Plan

The Company maintains a Deferred Compensation Plan so that members of the Boards, executive officers, and certain key employees may defer receipt and taxation of certain forms of compensation. Members of the Boards may defer up to 100% of their compensation; executive officers and other key employees may defer up to 50% of their base salary and up to 100% of their annual cash incentive. The use of deferred compensation plans is prevalent within the industry and within the companies in the Peer Group. The Company does not match deferrals or contribute to the plan. Actual participation in the plan is voluntary. The notional investment options made available to participants are selected by the CFO. The allocation of deferrals among investment options is made by individual participants. The notional investment options include money market, fixed income, and equity funds. No changes were made to the plan during 2023.

Retirement Plans - SERP

The Company maintains a SERP for the benefit of the executive officers who are designated as participants by the Committee. SERP was designed to attract and retain executive officers who have contributed and will continue to contribute to the Company’s overall success by ensuring that adequate compensation will be provided or replaced during retirement. In July 2014, the Cleco Corporation Board of Directors voted to close SERP to new participants.

Benefits under SERP vest after ten years of service or upon death or disability while a participant is employed by the Company. The Committee may reduce the vesting period, which typically would occur in association with recruiting efforts. Benefits, whether or not vested, are forfeited in the event a participant is terminated for cause.

Generally, benefits are based upon a participant’s attained age at the time of separation from service. The maximum benefit is payable at age 65 and is 65% of final compensation. Payments from the Company’s defined benefit pension plan (Pension Plan), certain employer contributions to the 401(k) Plan and payments paid or payable from prior and subsequent employers’ defined benefit retirement or similar supplemental plans reduce or offset SERP benefits. If a participant has not attained age 55 at the time of separation and receives SERP benefits before attaining age 65, SERP benefits are actuarially reduced to reflect early payment. The “Pension Benefits” table lists the present value of accumulated SERP benefits for the named executive officers as of December 31, 2023.

In 2011, the Committee amended SERP to eliminate the business transaction benefit previously included in SERP, as well as the requirement that a SERP participant be a party to an employment agreement to receive change in control benefits.

With regard to current SERP participants, two participants have agreed to fix the base compensation portion of their SERP calculation as of December 31, 2023. Additionally, they have agreed to use target rather than actual awards under the annual incentive plan for years 2016 and 2017 for the average incentive award portion of the SERP calculation. A third participant’s SERP benefit will be set at a specified amount based upon the year of separation.

In the event a SERP participant’s employment is involuntarily terminated by the Company without cause, or the participant terminates his or her employment on account of good reason, occurring within the 36-month period following a change in control event for all participants who commenced participation in SERP prior to October 28, 2011, or the 24-month period following a change in control event for all participants who commenced participation in SERP on or after October 28, 2011, such participant’s benefit shall: (i) become fully vested; (ii) be increased by adding three years to an affected participant’s age, subject to a minimum benefit of 50% of final compensation; and (iii) be subject to a modified reduction determined by increasing the executive’s age by three years.

Change in Employment Status and Change in Control Events

During 2023, the Company had no employment agreements with current named executives other than the agreements with Mr. Fontenot as President & CEO and Mr. Kleehammer as General Counsel & Chief Regulatory Officer. The Company may enter into employment agreements with its executives generally in connection with recruiting efforts. The standard

125


CLECO
CLECO POWER						2023 FORM 10-K

agreement provides for a non-renewing term, generally two years, and does not contain a change in control tax gross-up provision.

The Cleco Corporation Executive Severance Plan

In recognition of the non-renewal of executive employment contracts, the Cleco Corporation Board of Directors adopted the Cleco Corporation Executive Severance Plan (the Executive Severance Plan) on October 28, 2011. The Executive Severance Plan provides the executive officers and other key employees with cash severance benefits in the event of a termination of employment, including involuntary termination in connection with a change in control.

Perquisites and Other Benefits

The Company may make available the following perquisites to its executive officers:

•Executive officer physicals - as a condition of receiving their STIP award, Cleco requires and pays for an annual physical for the executive officers and their spouses;

•Spousal/companion travel - in connection with the various industry, governmental, civic, and entertainment activities of the executive officers, Cleco pays for spousal/companion travel associated with such events;

•Relocation program - in addition to the standard relocation policy available to all employees, Cleco maintains a policy whereby the executive officers and other key employees may request that the Company pay real estate agent and certain other closing fees should the officer or key employee sell his/her primary residence or that the Company purchase the executive officer’s or key employee’s primary residence at the greater of its documented cost (not to exceed 120% of the original purchase price) or average appraised value. Typically, this occurs when an executive officer or key employee relocates at the Company’s request; and

•Purchase program - under the Executive Severance Plan, a covered executive officer may request the Company to purchase his/her primary residence in the event he or she is involuntarily terminated without cause or separates for good reason, either in connection with a change in control and further provided the executive officer relocates more than 100 miles from the residence to be purchased. Limits on the purchase amount are the same as the relocation program described above.

The Committee approves the perquisites based on what it believes is prevailing market practice, as well as specific Company needs. The Company believes the relocation program is an important element in attracting executive talent. Perquisite expenses related to business and spousal companion travel for the executive officers are reviewed by Internal Audit, and any exceptions are reported to the Audit Committee.

See the section titled “All Other Compensation” for details of these perquisites and their value for the named executive officers.

The executive officers, including the named executive officers, participate in the other benefit plans on the same terms as other employees. These plans include paid time off for vacation, sick leave, and bereavement; group medical, dental, vision, and prescription drug coverage (including the annual wellness program); basic life insurance; supplemental life insurance; dependent life insurance; accidental death and

dismemberment insurance; defined benefit pension plan (for those hired prior to August 1, 2007); and the 401(k) Plan with a Company match for those employees hired before August 1, 2007, as well as a 401(k) Plan with an enhanced benefit for those employees hired on or after August 1, 2007.

Board Compensation

The Governance and Public Affairs Committee may engage the Committee’s independent consultant from time to time to conduct market competitive reviews of the Board compensation program. Details of the Boards’ compensation are shown in the “Board of Manager Compensation” table.

Other Tools and Analyses to Support Compensation Decisions

Tally Sheets

At least annually, the Committee reviews tally sheets that set forth the items listed below. This review is conducted as part of the comparison of the compensation and benefit components that are prevalent within the Comparator Group. The comparison facilitates discussion with the Committee’s outside independent consultant as to the use and amount of each compensation and benefit component versus the applicable Peer Group.

•Annual compensation expense for each named executive officer - this includes the rate of change in total cash compensation from year-to-year; the annual periodic cost of providing retirement benefits; and the annual cost of providing other benefits such as health insurance, as well as the status of any deferred compensation.

•Reportable compensation - to further evaluate total compensation; to evaluate total compensation of the CEO compared to the other executive officers; and to otherwise evaluate internal equity among the named officers.

•Post-employment payments - reviewed pursuant to the potential separation events discussed in “Potential Payments at Termination or Change in Control.”

Trends and Regulatory Updates

As needed, and generally at least annually, the Committee reviews reports related to industry trends, legislative and regulatory developments, and compliance requirements based on management’s analysis and guidance provided by Pay Governance, as applicable. Plan revisions and compensation program design changes are implemented as needed.

Risk Assessment

The Committee also seeks to structure compensation that will provide sufficient incentives for the executive officers to drive results while avoiding unnecessary or excessive risk taking that could harm the long-term value of the Company. The Committee believes that the following actions and/or measures help achieve this goal:

•the Committee reviews the design of the executive compensation program to ensure an appropriate balance between business risk and resulting compensation;

•the Committee allocates pay mix between base salary and performance-based pay to provide a balance of incentives;

•the design of the incentive measures is structured to align management’s actions with the interests of the investors;

•incentive payments are dependent on the Company’s performance measured against pre-established targets and

126


CLECO
CLECO POWER						2023 FORM 10-K

goals and/or compared to the performance of companies in the Peer Group;

•the range and sensitivity of potential payouts relative to target performance are reasonable;

•the Committee imposes checks and balances on the payment of compensation discussed herein;

•detailed processes establish the Company’s financial performance measures under its incentive plans; and

•incentive targets are designed to be challenging, yet achievable, to mitigate the potential for excessive risk-taking behaviors.

IRC Section 409A

IRC Section 409A generally was effective as of January 1, 2005. The section substantially modified the rules governing the taxation of nonqualified deferred compensation. The consequences of a violation of IRC Section 409A, unless corrected, are the immediate taxation of amounts deferred, the imposition of an excise tax and the assessment of interest on the amount of the income inclusion, each of which is imposed upon the recipient of the compensation. The plans, agreements and incentives subject to IRC Section 409A have been operated pursuant to and are in compliance with IRC Section 409A.

IRC Section 162(m)

IRC Section 162(m) limits to $1,000,000 the amount Cleco may deduct in a tax year for compensation paid to covered employees defined as the principal executive officer, principal financial officer (or anyone serving that role in a tax year), the next three highest compensated officers after the CEO and CFO, as well as any covered employees from prior years.

The Committee took actions considered appropriate to preserve the deductibility of compensation paid to executive officers, but the Committee did not adopt a formal policy that required all compensation to be fully deductible. As a result, the Committee may have paid or awarded compensation that it deemed necessary or appropriate to achieve business goals and to align the interests of executives with those of Cleco’s investors, whether or not the compensation was fully deductible under IRC Section 162(m).

Executive Officers’ Compensation

Summary Compensation Table


NAME AND PRINCIPAL POSITION	YEAR	SALARY($)		BONUS($)		NON-EQUITY INCENTIVE PLAN COMPENSATION ($)		CHANGE IN PENSION VALUE AND NONQUALIFIED DEFERRED COMPENSATION EARNINGS ($)(1)		ALL OTHER COMPENSATION ($)		TOTAL ($)
A	B	C		D		E		F		G		H
William G. Fontenot,	2023	$	746,654	$	0	$	3,004,254	$	527,167	$	31,036	$	4,309,111
President & CEO	2022	$	721,000	$	0	$	1,888,467	$	0	$	26,709	$	2,636,176
	2021	$	719,385	$	0	$	2,200,081	$	42,503	$	20,877	$	2,982,846

Kristin L. Guillory,	2023	$	438,654	$	0	$	674,322	$	101,468	$	13,817	$	1,228,261
CFO	2022	$	389,231	$	0	$	403,162	$	0	$	14,440	$	806,833
	2021	$	320,000	$	0	$	329,917	$	12,029	$	12,251	$	674,197

Mark D. Kleehammer, (2)
Chief Regulatory Officer & General Counsel	2023	$	212,500	$	420,000	$	754,712	$	0	$	33,779	$	1,420,991

Robert R. LaBorde, Jr., (3)	2023	$	372,115	$	0	$	550,287	$	787,887	$	43,642	$	1,753,931
Chief Operations & Sustainability Officer	2022	$	346,923	$	0	$	345,911	$	0	$	26,828	$	719,662
	2021	$	308,462	$	0	$	442,313	$	0	$	26,673	$	777,448

Justin S. Hilton,	2023	$	295,000	$	0	$	438,335	$	314,229	$	16,135	$	1,063,699
President - Cleco Power	2022	$	294,231	$	0	$	316,116	$	0	$	13,035	$	623,382
	2021	$	284,231	$	0	$	416,023	$	50,551	$	12,241	$	763,046

Former Executive Officer:

William B. Conway, Jr.,	2023	$	204,346	$	0	$	569,780	$	0	$	50,869	$	824,995
Chief Corporate Development & Compliance Officer & General Counsel	2022	$	383,462	$	0	$	433,169	$	0	$	24,138	$	840,769
	2021	$	363,846	$	0	$	186,108	$	0	$	13,462	$	563,416

(1) Amounts in this column include the change in pension value year over year. For 2023, this amount includes the change in pension value from 2022 to 2023. Negative changes in the pension value year over year are reported as $0.

(2) Mr. Kleehammer is classified as a named executive officer for 2023 only.

(3) Mr. LaBorde retired from the Company on December 31, 2023. See “— Pension Benefits — Estimated Annual Payments” for the actual annual payments to be made to Mr. LaBorde under the Pension Plan and SERP.

127


CLECO
CLECO POWER						2023 FORM 10-K

General

The Summary Compensation Table sets forth individual compensation information for the CEO, the CFO, and the three other most highly compensated executive officers of Cleco and its affiliates for services rendered in all capacities to Cleco and its affiliates during the fiscal years ended December 31, 2023, 2022, and 2021 (the “named executives” or “named executive officers”). Compensation components represent both payments made to the named executive officers during the year and other forms of compensation as follows:

•Column C, “Salary;” Column D, “Bonus;” Column E, “Non-Equity Incentive Plan Compensation;” and Column G, “All Other Compensation” represent cash compensation earned by the named executive in 2023, 2022, or 2021.

•The amounts shown in Column F, “Change in Pension Value and Nonqualified Deferred Compensation Earnings,” represent changes in the actuarial value of accrued benefits during 2023, 2022, and 2021 under the Pension Plan and SERP, as applicable. Actuarial value computations are based on assumptions discussed in Part II, Item 8, “Financial Statements and Supplementary Data — Notes to the Financial Statements — Note 11 — Pension Plan and Employee Benefits.” The 2023 changes shown in Column F are due in part to the actuarial impact from a decrease in the discount rate used to calculate future benefits under the Pension Plan and SERP. Negative changes, if any, are reported as zero. This compensation will be payable to the named executive in future years, generally as post-employment retirement payments.

Salary

Data in Column C includes pay for time worked, as well as pay for time not worked, such as vacation, sick leave, jury duty, bereavement, and holidays. The salary level of each of the named executives is determined by a review of market data for companies comparable in size and scope to Cleco, as discussed under “— Compensation Discussion and Analysis — Decisions Made in 2023 with Regard to Each Compensation and Benefit Component — Base Salary.” In some instances, merit lump sum payments are used to recognize positive performance when base pay has reached or exceeded the Company’s base pay policy target, and are included in the salary column. Deferral of 2023, 2022, and 2021 base pay made by Mr. Fontenot and Mr. LaBorde, pursuant to the Deferred Compensation Plan also is included in the salary column and is further detailed in the “Nonqualified Deferred Compensation” table. Adjustments to base pay are recommended to the Committee typically on an annual basis, and if approved, usually are implemented in January. Base salary changes made in 2023 for named executives and the reasons for those changes are discussed in “— Compensation Discussion and Analysis — Decisions Made in 2023 with Regard to Each Compensation and Benefit Component — Base Salary.”

Bonus

Column D, “Bonus” includes non-plan-based, discretionary incentives earned during 2023, 2022, or 2021.

Non-Equity Incentive Plan Compensation

Column E, “Non-Equity Incentive Plan Compensation” contains cash awards earned during 2023 that will be paid in March 2024 under the STIP; earned during 2022 and paid in March

2023 under the STIP; and earned during 2021 and paid in March 2022 under the STIP. Deferral of annual cash incentive payments made by Mr. Fontenot and Mr. LaBorde pursuant to the Deferred Compensation Plan also is included in Column E and is further detailed in the “Nonqualified Deferred Compensation” table. Column E also includes cash awards earned during 2023 that will be paid in March 2024; earned during 2022 that were paid in March 2023, and earned during 2021 that were paid in February 2022 for the LTIP performance periods ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively.

Change in Pension Value and Nonqualified Deferred Compensation Earnings

The values in Column F represent the aggregate increase in the actuarial present value of benefits earned by each named executive officer during 2023, 2022, and 2021 under the Pension Plan and SERP, including SERP’s supplemental death benefit provision. These values do not represent cash received by the named executives in 2023, 2022, and 2021; rather, these amounts represent the present value of future retirement payments Cleco projects will be made to each named executive. Changes in the present value of the Pension Plan and SERP benefits from December 31, 2022, to December 31, 2023; from December 31, 2021 to December 31, 2022; and from December 31, 2020, to December 31, 2021, result from an additional year of earned service, compensation changes and the increase (or decrease) in value caused by the change in the discount rate used to compute present value. (Generally, a decrease in the discount rate will increase the present value of benefits and an increase in the discount rate will decrease the present value.) If the discount rate increases by a large enough amount, it can cause the accrued pension and SERP liability to decline versus the prior year. When this occurs, the values reported for Column F are zero.

The present value of the accumulated benefit obligation for each named executive officer is included in the table, “Pension Benefits.” These values are reviewed by the Committee in conjunction with its annual tally sheet analysis. An explanation of why the Company uses SERP and its relationship to other compensation elements can be found in “Decisions Made in 2023 With Regard to Each Compensation and Benefit Component.”

Column F also would include any above-market or preferential earnings on deferred compensation paid by the Company. There were no such preferential earnings paid by the Company in 2023, 2022, and 2021.

All Other Compensation

Payments made to or on behalf of named executive officers in Column G, “All Other Compensation,” include the following:

•Contributions by Cleco under the 401(k) Plan on behalf of the named executive officers;

•Term life insurance premiums paid for the benefit of the named executive officers;

•Spousal travel;

•Certain corporate memberships;

•Unused vacation paid at separation or retirement;

•Relocation; and

•Federal Insurance Contributions Act (FICA) tax due currently and paid by the Company on the annual increase in the named executive officers’ future SERP benefits.

128


CLECO
CLECO POWER						2023 FORM 10-K

The value of the Column G items for 2023 for each named executive officer is as follows:


	MR. FONTENOT		MS. GUILLORY		MR. KLEEHAMMER		MR. LABORDE		MR. HILTON		MR. CONWAY
Cleco Contributions to 401(k) Plan	$	13,200	$	12,181	$	8,827	$	21,227	$	14,985	$	24,585
Taxable Group Term Life Insurance	1,382		38		410		830		350		0
Spousal Travel	6,910		1,598		0		0		0		0
Memberships	0		0		800		0		800		0
Unused vacation payout at separation/retirement	0		0		0		0		0		26,284
Severance	0		0		0		0		0		0
Relocation	0		0		23,742		0		0		0
FICA Tax on SERP	9,544		0		0		21,585		0		0
Total Other Compensation	$	31,036	$	13,817	$	33,779	$	43,642	$	16,135	$	50,869


NAME	GRANT DATE	ESTIMATED FUTURE PAYMENTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS (STIP)						ESTIMATED FUTURE PAYMENTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS (2023-2025 LTIP GRANT)
		THRESHOLD ($)		TARGET ($)		MAXIMUM ($)		THRESHOLD ($)		TARGET ($)		MAXIMUM ($)
A	B	C		D		E		F		G		H
Mr. Fontenot	01/01/23	$	0	$	933,318	$	1,866,636	$	0	$	2,129,000	$	4,258,000
Ms. Guillory	01/01/23	$	0	$	285,125	$	570,250	$	0	$	608,360	$	1,216,720
Mr. Kleehammer	01/01/23	$	0	$	198,300	$	396,600	$	0	$	467,500	$	935,000
Mr. LaBorde	01/01/23	$	0	$	186,058	$	372,116	$	0	$	181,650	$	363,300
Mr. Hilton	01/01/23	$	0	$	147,500	$	295,000	$	0	$	344,150	$	688,300
Mr. Conway	01/01/23	$	0	$	122,608	$	245,216	$	0	$	158,375	$	316,750

General

The target values for each of the Company’s incentive plans — the STIP and the LTIP — are determined as part of the Committee’s review of executive officer compensation. The Committee’s review, supported by data prepared by Pay Governance, includes comparisons of base salary and annual and long-term incentive levels of Cleco executive officers versus the Comparator Group as detailed in “— Compensation Discussion and Analysis — Evaluation and Design of the Compensation and Benefit Programs.” Targets for both the STIP and the LTIP are set as a percentage of base salary and stated in their dollar equivalent in the table above.

Estimated Future Payments under Non-Equity Incentive Plan Awards (STIP)

See “— Compensation Discussion and Analysis — Decisions Made in 2023 with Regard to Each Compensation and Benefit Component — Annual Cash Incentive” for a discussion of 2023 STIP award calculations.

Estimated Future Payments under Non-Equity Incentive Plan Awards (LTIP)

See “— Compensation Discussion and Analysis — Decisions Made in 2023 with Regard to Each Compensation and Benefit Component — Long-Term Compensation” for a discussion of grants made in 2023.

Pension Benefits


NAME	PLAN NAME (s)	NUMBER OF YEARS OF CREDITED SERVICE (#)	PRESENT VALUE OF ACCUMULATED BENEFIT ($)		PAYMENTS DURING LAST FISCAL YEAR ($)
Mr. Fontenot	Cleco Corporate Holdings LLC Pension Plan	37	$	2,147,193	$	0
	Cleco Corporation SERP	37	$	3,811,998	$	0
Ms. Guillory (1)	Cleco Corporate Holdings LLC Pension Plan	19	$	463,869	$	0
	Cleco Corporation SERP	0	$	0	$	0
Mr. Kleehammer (2)	Cleco Corporate Holdings LLC Pension Plan	0	$	0	$	0
	Cleco Corporation SERP	0	$	0	$	0
Mr. LaBorde (3)	Cleco Corporate Holdings LLC Pension Plan	16	$	592,230	$	0
	Cleco Corporation SERP	15	$	1,897,688	$	0
Mr. Hilton (4)	Cleco Corporate Holdings LLC Pension Plan	34	$	1,612,788	$	0
	Cleco Corporation SERP	0	$	0	$	0
Mr. Conway (5)	Cleco Corporate Holdings LLC Pension Plan	0	$	0	$	0
	Cleco Corporation SERP	0	$	0	$	0

(1) Ms. Guillory is not a participant in SERP as her appointment to her current position was after the plan was closed to new participants.

(2) Mr. Kleehammer was not a participant in the Pension Plan or SERP as he was hired after both plans were closed to new participants.

(3) Mr. LaBorde has prior years of service credit under the Pension Plan. He is not currently a participant in the Plan because he was rehired after the Pension Plan was closed to new participants in 2007.

(4) Mr. Hilton is not a participant in SERP as his appointment to his current position was after the plan was closed to new participants.

(5) Mr. Conway was not a participant in the Pension Plan or SERP as he was hired after both plans were closed to new participants.

129


CLECO
CLECO POWER						2023 FORM 10-K

General

The Company provides executive officers who meet certain tenure requirements benefits from the Pension Plan and SERP. Vesting in the Pension Plan requires five years of service with the Company. Mr. Fontenot, Ms. Guillory, and Mr. Hilton are fully vested in the Pension Plan. Mr. LaBorde is fully vested in the Pension Plan based on previous service with the Company. Having been rehired after August 1, 2007, he was no longer eligible to participate in the Pension Plan and was included in an enhanced 401(k) Plan for those employees hired (or rehired) on or after August 1, 2007. Messrs. Conway and Kleehammer, having been hired after August 1, 2007, were not eligible to participate in the Pension Plan and were included in an enhanced 401(k) Plan for those employees hired on or after August 1, 2007.

Vesting in SERP requires ten years of service. Under the terms of SERP, automatic vesting occurs upon a Change in Control if a participating executive is involuntarily terminated from the Company. Messrs. Fontenot and LaBorde are all fully vested in SERP based on years of service. Ms. Guillory and Messrs. Hilton and Conway are not participants in SERP.

The present value of each of the named executive officer’s accumulated benefit values was actuarially calculated and represents the values as of December 31, 2023. These calculations were made using the projected unit credit method for valuation purposes and a discount rate of 5.13%. Other material assumptions relating to the valuation include use of the Pri-2012 Employee and Healthy Retiree gender distinct mortality tables projected generationally using Scale MP-2020 (using White Collar for SERP present values and no collar for Qualified Plan present values), assumed retirement at age 65 and retirement payments in the form of joint and 100% survivor with 10 years certain payment.

The sum of the change in actuarial value of the Pension Plan during 2023 and the change in value of SERP is included in Column F, “Change in Pension Value and Nonqualified Deferred Compensation Earnings,” in the Summary Compensation Table. Negative changes, if any, are reported as zero.

Pension Plan

The Cleco Corporate Holdings LLC Pension Plan, restated effective September 1, 2020, is a defined benefit plan funded entirely by employer contributions. Effective August 1, 2007, the Pension Plan was closed to new participants. Employees hired or rehired on or after August 1, 2007 are eligible to participate in an enhanced 401(k) Plan. Mr. Fontenot, Ms. Guillory, and Mr. Hilton were hired prior to August 1, 2007.

Benefits under the Pension Plan are determined by years of service, age at retirement, and highest total average compensation for any consecutive five calendar years during the last ten years of employment. Earnings include base pay, cash incentives, merit lump sums, imputed income with respect to life insurance premiums paid by the Company, pre-tax contributions to the 401(k) Plan, salary and bonus deferrals to the Deferred Compensation Plan, and any other form of payment taxable under IRC Section 3401(a). Earnings exclude reimbursement of expenses, gifts, severance pay, moving expenses, outplacement assistance, relocation allowances, welfare benefits, benefits accrued (other than salary and bonus deferrals) or paid pursuant to the Deferred Compensation Plan, the value of benefits accrued or paid under the LTIP, income from the exercise of stock options and income from disqualifying stock dispositions. For 2023, the

amount of earnings was further limited to $330,000 as prescribed by the IRS.

The formula for calculating the defined benefit under the Pension Plan is as follows:

1. Defined Benefit = Annual Benefit + Supplement Benefit

2. Annual Benefit = Final Average Earnings × Years of Service × Pension Factor

3. Supplement Benefit = (Final Average Earnings - Social Security Covered Compensation) × Years of Service × .0065

The applicable pension factor for 2023 was 1.25%. Based on the benefit formula, the pension factor will remain at 1.25% in future years. Social Security-covered income is prescribed by the IRS based on the year of birth.

Benefits from the Pension Plan are generally paid at normal, late or early retirement dates and are subject to a limit prescribed by the IRS, generally $265,000 in 2023. Normal retirement at age 65 entitles the participant to a full pension. A participant may elect to delay retirement past age 65 as long as he/she is actively employed. Years of service continue to accumulate (up to a maximum of 35) and earnings continue to count toward the final earnings calculation. If a participant chooses to retire after age 55 but before normal retirement age, the amount of the annual pension benefit is reduced by 3% per year between ages 55 and 62. For example, the normal pension benefit at age 55 is reduced by 21%.

SERP

SERP is designed to provide retirement income of 65% of an executive officer’s final compensation at normal retirement, age 65. Final compensation under SERP is based on the sum of the highest annual salary paid during the five years prior to termination of employment and the average of the three highest STIP awards paid to the participant during the preceding 60 months. Final compensation also is determined without regard to the IRS limit on compensation. The SERP benefit rate at normal retirement is reduced by 2% per year for each year a participant retires prior to age 65, with a minimum benefit rate of 45% at age 55. The final benefit rate also may be reduced further if a participant separates from service prior to age 55. This actuarially determined reduction factor is equivalent to that used in the Pension Plan, which is 3% for each year from age 55 to 62. For example, if a SERP participant were to terminate service at age 50 and start receiving his or her SERP benefit at age 55, his or her SERP benefit rate would be 35.6%. This is the product of the minimum SERP benefit of 45% reduced by another 21% for early commencement. The actual SERP benefit payments are reduced if a participant is to receive benefit payments from the Pension Plan, has received certain employer contributions related to the 401(k) Plan and/or is eligible to receive retirement-type payments from former employers and subsequent employers, if applicable.

SERP provides survivor benefits, which are payable to a participant’s surviving spouse or other beneficiary. SERP also contains a supplemental death benefit that was added in 1999 to reflect market practice. If a SERP participant dies while actively employed, the amount of the supplemental death benefit is equal to the sum of two times the participant’s annual base salary as of the date of death and the participant’s target bonus payable under the annual incentive plan for the year in which death occurs. If a participant dies after termination of

130


CLECO
CLECO POWER						2023 FORM 10-K

employment, the supplemental benefit is equal to the sum of the participant’s final annual base salary and target bonus payable under the annual incentive plan for the year in which the participant retired or otherwise terminated employment. The supplemental death benefit is not dependent on years of service.

In July 2014, Cleco Corporation’s Board of Directors closed SERP to new participants. In August 2016, the Company’s Board of Managers voted to freeze salary and bonus components used in the final compensation calculation as of December 31, 2017, for Mr. LaBorde. In December 2017, the Company entered into an employment agreement with Mr. Fontenot as its CEO, the terms of which amended the calculation of Mr. Fontenot’s SERP benefit to include a fixed benefit depending upon the year Mr. Fontenot separates from the Company. With regard to former employees or their beneficiaries, all terms of SERP will continue.

Estimated Annual Payments

The following table shows the estimated annual payments at age 55 (or actual attained age if greater than 55) to each of the

named executives under the Pension Plan and SERP as of December 31, 2023.


	ESTIMATED PAYMENTS AT 55 (OR ACTUAL ATTAINED AGE IF GREATER THAN 55)
	PENSION		SERP		TOTAL
Mr. Fontenot	$	141,215	$	188,785	$	330,000
Ms. Guillory	$	62,893	$	0	$	62,893
Mr. Kleehammer (1)	$	0	$	0	$	0
Mr. LaBorde (2)	$	36,246	$	106,075	$	142,321
Mr. Hilton	$	116,078	$	0	$	116,078
Mr. Conway (1)	$	0	$	0	$	0
(1) Neither Mr. Conway nor Mr. Kleehammer participated in the Pension Plan, as they were hired after August 1, 2007, nor SERP, as they were hired after the plan was closed to new participants in July 2014. (2) Mr. LaBorde retired from the Company on December 31, 2023. Amounts shown reflect actual payments.

Nonqualified Deferred Compensation


NAME	EXECUTIVE OFFICER CONTRIBUTIONS IN 2023 ($)(1)		COMPANY CONTRIBUTIONS IN 2023 ($)		AGGREGATE EARNINGS IN 2023 ($) (2)		AGGREGATE WITHDRAWALS/ DISTRIBUTIONS IN 2023 ($)		AGGREGATE BALANCE AT DECEMBER 31, 2023 ($)(3)
A	B		C		D		E		F
Mr. Fontenot	$	433,733	$	0	$	551,593	$	0	$	4,023,355
Ms. Guillory	$	0	$	0	$	0	$	0	$	0
Mr. Kleehammer	$	0	$	0	$	0	$	0	$	0
Mr. LaBorde	$	38,303	$	0	$	34,402	$	0	$	871,299
Mr. Hilton	$	0	$	0	$	0	$	0	$	0
Mr. Conway	$	0	$	0	$	0	$	0	$	0

(1) The amounts in Column B represent deferrals of salary and non-equity incentive compensation payments made to the named executive officers during 2023 and are included in the amounts shown in Columns C and E, respectively, of the Summary Compensation Table.

(2) The aggregate earnings shown in Column D are not included in the Summary Compensation Table. Negative returns are reflected as zero.

(3) The aggregate balances shown in Column F include amounts reported as salary and non-equity incentive compensation payments in the Summary Compensation Table for the current fiscal year, as well as previous years and the earnings on those amounts.

Deferred Compensation

Named executives and other key employees are eligible to participate in the Company’s Deferred Compensation Plan. Participants are allowed to defer up to 50% of their base salary and up to 100% of their annual cash incentive, as reported in Columns C and G in the Summary Compensation Table. Consequently, the executive officer contributions listed in Column B above are made by the participant and not by Cleco. Messrs. Fontenot and LaBorde elected to participate in the Deferred Compensation Plan during 2023. All deferral elections for 2023 were made prior to the beginning of 2023 as required by the regulations under IRC Section 409A. There are no matching contributions made by the Company.

Deferrals become general funds for use by the Company to be repaid to the participant at a pre-specified date. Short-term deferrals may be paid out as early as five years following the end of the plan year (i.e., the year in which compensation was earned). Retirement deferrals are paid at the later of termination of service or the attainment of an age specified by the participant. A bookkeeping account is maintained for each participant that records deferred salary and/or bonus, as well as earnings on deferred amounts. Earnings are determined by the performance of notional investment alternatives, which are similar to the investments available under the 401(k) Plan. Participants select which of these alternatives will be used to

determine the earnings on their own accounts. The Deferred Compensation Plan is not intended to provide for the payment of above-market or preferential earnings (as these terms are defined under the SEC regulations) on compensation deferred under the plan. As such, the Deferred Compensation Plan does not provide a guaranteed rate of return.

Potential Payments at Termination or Change in Control

The following tables, “Potential Payments at Termination or Change in Control,” detail the estimated value of payments and benefits provided to each named executive officer assuming the following separation events occurred as of December 31, 2023: termination by the executive; disability; death; retirement; constructive termination; termination by the Company for cause; and termination in connection with a change in control. The Company has selected these events based on long-standing provisions in employee benefit plans, such as the Pension Plan and 401(k) Plan, or because the use is common within the industry and Comparator Group. Some of the potential severance payments are governed by the separate documents establishing the STIP, LTIP, and SERP.

At its October 2011 meeting, Cleco Corporation’s Compensation Committee approved the Executive Severance Plan to provide severance benefits to executive officers. In October and December 2014 and July 2015, the Cleco

131


CLECO
CLECO POWER						2023 FORM 10-K

Corporation’s Compensation Committee approved amendments to the Executive Severance Plan. At December 31, 2023, all of the named executive officers were covered by the Executive Severance Plan.

The following narrative describes the type and form of payments and benefits for each separation event. The tables under “Potential Payments at Termination or Change in Control” provide an estimate of potential payments and benefits to each named executive officer under each separation event. Throughout this section, reference to “executive officers” is inclusive of named executive officers.

Termination by the Executive

If an executive officer resigns voluntarily, no payments are made or benefits provided other than those required by law.

Disability

Annual disability benefits are payable when a total and permanent disability occurs and are paid until the executive officer’s normal retirement age, which is age 65. This benefit is provided under SERP, if applicable, and is paid regardless of whether the executive was vested in SERP at the time of disability. At age 65, a disabled executive is eligible to receive annual retirement benefits under the Pension Plan, for those who are participants, and SERP as outlined under the headings “Pension Plan” and “SERP,” respectively. The executive officer also is eligible to receive a one-time, prorated share of the current year’s STIP award and a prorated award for each LTIP performance cycle in which he/she participates to the extent those performance cycles award at their completion.

Death

A prorated share of the current year’s STIP award and a supplemental death benefit provided from SERP, if applicable, are paid to an executive officer’s designated beneficiary in the event of death in service. Both are one-time payments. The executive officer’s designated beneficiary is also eligible to receive a prorated award for each LTIP performance cycle in which the executive officer participates, to the extent those performance cycles award at their completion.

Annual survivor benefits are payable to an executive officer’s surviving spouse for his/her life, or if there is no surviving spouse, to the executive officer’s designated beneficiary for a period of ten years or, if no designated beneficiary is named, to the executive officer’s estate for a period of ten years. Amounts are calculated under the provisions of the Pension Plan and SERP. For more information, see the discussion under the headings “Pension Plan” and “SERP,” respectively, as well as SERP provisions relating to death while in service. Survivor benefits are paid from SERP regardless of vested status in SERP at the time of death. The SERP supplemental death benefit is paid only to executives who were employed by the Company on or after December 17, 1999. Messrs. Fontenot and LaBorde are eligible for this benefit.

Retirement

In the event of early or normal retirement, the executive officer is eligible to receive a prorated share of the current year’s STIP award and at least a prorated award for each LTIP performance cycle in which he/she participates to the extent those performance cycles award at their completion. Retirement benefits are provided pursuant to the Pension Plan

and SERP. Payments are made monthly and are calculated using the assumptions described in the discussion following the “Pension Benefits” table.

Constructive Termination

Payments made and benefits provided upon a constructive termination are ordinarily greater than payments made on account of an executive officer’s retirement, death or disability because separation effectively is initiated by the Company. Certain payments are made contingent upon the execution of a waiver, release and covenants agreement in favor of the Company. Constructive termination also may be initiated by an executive officer if there has been (i) a material reduction in his/her base compensation, other than a reduction uniformly applicable to all executive officers; and (ii) a contemporaneous, material reduction in his/her authority, job duties, or responsibilities.

Under the terms of the Executive Severance Plan, an executive would receive constructive termination payments including up to 52 weeks of base compensation, up to $50,000 in lieu of outplacement services and reimbursement of premiums paid to maintain coverage under Cleco’s medical plan for up to 18 months. The executive also would be eligible for a prorated portion of the current year’s payout under the STIP and a prorated award for the LTIP performance cycles in which he/she participates, to the extent those performance cycles award at their completion.

If the executive officer has vested retirement benefits and has attained eligible retirement age, he/she would receive retirement benefits as described under “Pension Benefits.”

Termination for Cause

“Cause” is defined as an executive’s (i) intentional act of fraud, embezzlement or theft in the course of employment or other intentional misconduct that is materially injurious to the Company’s financial condition or business reputation; (ii) intentional damage to Company property, including the wrongful disclosure of its confidential information; (iii) willful and intentional refusal to perform the essential duties of his/her position; (iv) failure to fully cooperate with government or independent agency investigations; (v) conviction of a felony or crime involving moral turpitude; (vi) willful, reckless, or negligent violation of the material provisions of Cleco’s Code of Conduct; or (vii) reckless or intentional acts or failures to act in a manner which materially compromises his/her ability to perform the essential duties of his/her position; or (viii) willful, reckless, or negligent violation of rules related to the LTRP or rules adopted by the SEC. No payments, other than those required by law, are made or benefits provided under the Executive Severance Plan if an executive officer is terminated for cause. If an executive officer is vested in SERP, that benefit is forfeited. The value of that forfeiture is shown as a negative number in the separation payments tables.

Change in Control

The term “Change in Control” is defined in the LTRP. One or more of the following triggering events constitute a Change in Control:

•Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company or an Affiliate or any “person” who on the effective date of this Plan is a director, officer, or is the “beneficial owner” (as determined in Rule 13d-3 promulgated under the Exchange

132


CLECO
CLECO POWER						2023 FORM 10-K

Act) of 20% or more of the combined voting power of outstanding securities of the Company or an employee stock ownership plan (within the meaning of Code Section 4975(e)(7)) sponsored by the Company or an Affiliate, is or becomes the “beneficial owner” (as determined in Rule 13d-3 promulgated under the Exchange Act) of 80% or more of the combined voting power of the outstanding securities of the Company;

•The Company is party to a merger or consolidation with another entity and, as a result of such transaction, 80% or more of the combined voting power of outstanding securities of the Company or its successor in the merger (or a direct or indirect parent company of the Company or its successor in the merger) is owned in the aggregate by persons who were not “beneficial owners” (as determined in Rule 13d-3 promulgated under the Exchange Act) of securities of the Company immediately before such transaction;

•The Company sells, leases, or otherwise disposes of, in one transaction or in a series of related transactions, all or substantially all of its assets;

•The owners of the Company approve a plan of dissolution or liquidation; or

•All or substantially all of the assets or the issued and outstanding membership interests of Cleco Power LLC is sold, leased or otherwise disposed of in one or a series of related transactions to a person, other than the Company or an Affiliate.

Except as described below, payments are made and benefits provided only if an executive’s employment is terminated during the 60-day period preceding or the 24-month period following the Change in Control.

Termination must be involuntary and by the Company without cause or initiated by the executive on account of “Good Reason.” Good reason means that (i) a Participant’s base compensation in effect immediately before the commencement of a Change in Control Period is materially reduced, or there is a material reduction or termination of such Participant’s rights to any employee benefit in effect immediately prior to such period; (ii) a Participant’s authority, duties or responsibilities are materially reduced from those in effect immediately before the commencement of a Change in Control Period, or such Participant has reasonably determined that, as a result of a change in circumstances that materially affects his or her employment with the Company, he or she is unable to exercise the authority, power, duties and responsibilities assigned to him or her immediately before the commencement of such period; or (iii) a Participant is required to transfer to an office or business location that is more than 60 miles from the primary location to which he or she was assigned prior to the commencement of a Change in Control Period. No event or condition shall constitute Good Reason

hereunder unless (a) a Participant provides to the Committee written notice of his or her objection to such event not later than 60 days after such Participant first learns, or should have learned, of such event; (b) such event is not corrected by the Company promptly after receipt of such notice, but in no event more than 30 days after receipt thereof; and (c) such Participant Separates from Service not more than 15 days following the expiration of the 30-day period described in clause (b) hereof. The executive also must satisfy the conditions included in the waiver, release and covenants agreement defined in the Executive Severance Plan.

Under the Executive Severance Plan, an executive would receive an amount up to two times the sum of annualized base salary and the average non-equity incentive plan bonus over the last three fiscal years and reimbursement of COBRA premiums for up to 24 months. Payments may also include the purchase of the executive officer’s primary residence and reimbursement of relocation expenses, but only if the executive relocates his/her primary residence more than 100 miles. No excise tax payments or gross-ups are made; instead, benefits will be reduced in lieu of the imposition of the tax. The numbers shown below do not give effect to this reduction.

Subject to the conditions described above, upon a Change in Control, SERP benefits are: (i) fully vested; (ii) increased by adding three years to an affected executive’s age, subject to a minimum benefit of 50% of compensation; and (iii) subject to a modified actuarial reduction determined by increasing the executive’s age by three years.

If an executive officer is vested and of eligible retirement age, he or she may become eligible to begin to receive the annual retirement benefit described above upon a Change in Control.

The following tables set forth the value of post-employment payments and benefits that are not generally made available to all employees. Each separation event is assumed to occur on December 31, 2023. Retirement is assumed to occur at age 55 or the named executive officer’s actual attained age if greater than 55. Estimated payments under the LTRP and LTRP for disability, death, retirement and constructive termination are uncertain until the completion of the performance period/cycle. In the case of the LTRP, the performance period is the current fiscal year. The estimated payment for the home purchase and relocation is a projection of the expense to the Company to sell the named executive officer’s principal residence including any loss avoided by the named executive officer by having the right to sell the residence to the Company, plus the projected cost to the Company to relocate the named executive officer.

Pursuant to Item 401(j) of Regulation S-K, the separation events disclosed in this Annual Report on Form 10-K are assumed to occur in the past, as of December 31, 2023.

133


CLECO
CLECO POWER						2023 FORM 10-K


Mr. Fontenot
VALUE OF PAYMENT/BENEFIT	TERMINATION BY EXECUTIVE		DISABILITY		DEATH		RETIREMENT		CONSTRUCTIVE TERMINATION		TERMINATION FOR CAUSE		CHANGE IN CONTROL
Cash Severance	$	0	$	0	$	0	$	0	$	750,000	$	0	$	2,964,445
Annual Cash Bonus	0		1,142,754		1,142,754		1,142,754		1,142,754		0		0
Long-Term Incentive	0		3,704,500		3,704,500		3,704,500		3,704,500		0		5,529,000
Cash Payment in Lieu of Outplacement Services	0		0		0		0		50,000		0		0
Present Value of Incremental SERP Payments(1)	0		3,361,302		7,093,636		2,971,836		2,971,836		(2,971,836)		4,719,879
SERP Supplemental Death Benefit	0		0		2,437,500		0		0		0		0
Purchase of Principal Residence/Relocation	0		0		0		0		0		0		83,500
COBRA Medical Coverage	0		0		0		0		31,798		0		42,398
Total Incremental Value	$	0	$	8,208,556	$	14,378,390	$	7,819,090	$	8,650,888	$	(2,971,836)	$	13,339,222

(1) As of December 31, 2023, Mr. Fontenot was vested in SERP payments, which would be forfeited upon termination for cause.


Ms. Guillory
VALUE OF PAYMENT/BENEFIT	TERMINATION BY EXECUTIVE		DISABILITY		DEATH		RETIREMENT (1)		CONSTRUCTIVE TERMINATION		TERMINATION FOR CAUSE		CHANGE IN CONTROL
Cash Severance	$	0	$	0	$	0	$	0	$	445,000	$	0	$	1,272,902
Annual Cash Bonus	0		349,107		349,107		0		349,107		0		0
Long-Term Incentive	0		840,002		840,002		0		840,002		0		1,373,360
Cash Payment in Lieu of Outplacement Services	0		0		0		0		25,000		0		0
Present Value of Incremental SERP Payments	0		0		0		0		0		0		0
SERP Supplemental Death Benefit	0		0		0		0		0		0		0
Purchase of Principal Residence/Relocation Expenses	0		0		0		0		0		0		83,500
COBRA Medical Coverage	0		0		0		0		31,798		0		42,398
Total Incremental Value	$	0	$	1,189,109	$	1,189,109	$	0	$	1,690,907	$	0	$	2,772,160

(1) As of December 31, 2023, Ms. Guillory was not eligible for retirement.


Mr. Kleehammer
VALUE OF PAYMENT/BENEFIT	TERMINATION BY EXECUTIVE		DISABILITY		DEATH		RETIREMENT (1)		CONSTRUCTIVE TERMINATION		TERMINATION FOR CAUSE		CHANGE IN CONTROL
Cash Severance	$	0	$	0	$	0	$	0	$	425,000	$	0	$	850,000
Annual Cash Bonus	0		242,799		242,799		0		242,799		0		0
Long-Term Incentive	0		979,413		979,413		0		979,413		0		1,402,500
Cash Payment in Lieu of Outplacement Services	0		0		0		0		25,000		0		0
Present Value of Incremental SERP Payments	0		0		0		0		0		0		0
SERP Supplemental Death Benefit	0		0		0		0		0		0		0
Purchase of Principal Residence/Relocation Expenses	0		0		0		0		0		0		83,500
COBRA Medical Coverage	0		0		0		0		29,551		0		39,401
Total Incremental Value	$	0	$	1,222,212	$	1,222,212	$	0	$	1,701,763	$	0	$	2,375,401

(1) As of December 31, 2023, Mr. Kleehammer was not eligible for retirement.


Mr. LaBorde
VALUE OF PAYMENT/BENEFIT	TERMINATION BY EXECUTIVE		DISABILITY		DEATH		RETIREMENT (1)		CONSTRUCTIVE TERMINATION		TERMINATION FOR CAUSE		CHANGE IN CONTROL
Cash Severance	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Annual Cash Bonus	0		0		0		227,809		0		0		0
Long-Term Incentive	0		0		0		515,250		0		0		0
Cash Payment in Lieu of Outplacement Services	0		0		0		0		0		0		0
Present Value of Incremental SERP Payments	0		0		0		1,897,688		0		0		0
SERP Supplemental Death Benefit	0		0		0		0		0		0		0
Purchase of Principal Residence/Relocation Expenses	0		0		0		0		0		0		0
COBRA Medical Coverage	0		0		0		0		0		0		0
Total Incremental Value	$	0	$	0	$	0	$	2,640,747	$	0	$	0	$	0

(1) Mr. LaBorde retired from the Company on December 31, 2023.

134


CLECO
CLECO POWER						2023 FORM 10-K


Mr. Hilton
VALUE OF PAYMENT/BENEFIT	TERMINATION BY EXECUTIVE		DISABILITY		DEATH		RETIREMENT (1)		CONSTRUCTIVE TERMINATION		TERMINATION FOR CAUSE		CHANGE IN CONTROL
Cash Severance	$	0	$	0	$	0	$	0	$	295,000	$	0	$	831,294
Annual Cash Bonus	0		126,260		126,260		0		126,260		0		0
Long-Term Incentive	0		603,458		603,458		0		603,458		0		894,150
Cash Payment in Lieu of Outplacement Services	0		0		0		0		25,000		0		0
Present Value of Incremental SERP Payments	0		0		0		0		0		0		0
SERP Supplemental Death Benefit	0		0		0		0		0		0		0
Purchase of Principal Residence/Relocation Expenses	0		0		0		0		0		0		83,500
COBRA Medical Coverage	0		0		0		0		31,798		0		42,398
Total Incremental Value	$	0	$	729,718	$	729,718	$	0	$	1,081,516	$	0	$	1,851,342

(1) As of December 31, 2023, Mr. Hilton was not eligible for retirement.

BOARD OF MANAGERS COMPENSATION

2023 Board of Managers Compensation


NAME (1)	FEES EARNED OR PAID IN CASH ($)		TOTAL ($)
A	B		C
Rick Gallot	$	170,000	$	170,000
Randy Gilchrist	$	170,000	$	170,000
Peggy Scott	$	265,000	$	265,000
Melissa Stark	$	3,750	$	3,750
Bruce Wainer	$	170,000	$	170,000

(1)Messrs. Arnould, Chapman, Fronimos, Leslie, Perry, Rubin, Turner, and Solís-Hernández were appointed to the Boards by the Owner Group and do not receive additional compensation for their service on the Boards.

General

Column B, “Fees Earned or Paid in Cash” represents cash compensation earned and/or received in 2023.

A non-management Board Manager may elect to participate in the Company’s Deferred Compensation Plan and defer the receipt of all or part of his or her fees. Benefits are equal to the amount credited to each Board Manager’s individual account based on compensation deferred plus applicable investment returns as specified by the director upon election to participate in the plan. Investment options are similar to those provided to participants in the 401(k) Plan. Funds may be reallocated between investments at the discretion of the Board Manager. Accounts, which may be designated separately by deferral year, are payable in the form of a single-sum payment or in the form of substantially equal annual installments, not to exceed 15, when a Board Manager ceases to serve on the Cleco’s Boards or attains a specified age.

Fees Earned or Paid in Cash

During 2023, each Board Manager who is not a Cleco employee or appointed by the Owner Group, except Ms. Stark, received an annual cash retainer of $170,000. Ms. Stark received an annual cash retainer of $3,750. During this period, the non-management Chair was compensated with an additional retainer of $95,000.

Board Managers are permitted to defer receipt of their fees under the Company’s Deferred Compensation Plan. Messrs. Gallot and Gilchrist elected to defer all or a portion of their fees in 2023.

Cleco reimburses Board Managers for travel and related expenses incurred for attending meetings of Cleco’s Boards and Board committees, including travel costs for spouses/

companions. Ms. Scott incurred $282 of expenses for spousal/companion travel during 2023.

Cleco also provides its Board Managers who are not employed by Cleco or appointed by the Owner Group with $200,000 of life insurance and permanent total disability coverage under a group accidental death and dismemberment plan maintained by Cleco Power. The total 2023 premium for all coverage (exempt employees, officers and Board Managers) under this plan was $6,128.

Interests of the Board of Managers

In 2023, no non-management member of Cleco’s Boards performed services for or received compensation from Cleco or its affiliates except for those services relating to his or her duty as a member of Cleco’s Boards.

REPORT OF THE LEADERSHIP DEVELOPMENT AND COMPENSATION COMMITTEE

The Leadership Development and Compensation Committee of the Boards (see “Boards of Managers of Cleco” above and “Director Independence and Related Party Transactions” below), includes four managers, one of whom meets the additional requirements for independence which were adopted by the Board. The Leadership Development and Compensation Committee operates under a written charter last revised in December 2021, a copy of which is posted on Cleco’s web site at https://www.cleco.com/about/leadership-governance/board-committees. A copy of this charter also is available free of charge by request sent to: Public Relations, Cleco, P.O. Box 5000, Pineville, LA 71361-5000.

The Leadership Development and Compensation Committee was established in April 2016.

Based on the review and discussions referred to above, the Leadership Development and Compensation Committee recommended to the Company’s Boards that the CD&A and related required compensation disclosure tables be included in this Annual Report on Form 10-K and filed with the SEC.

The Leadership Development and Compensation Committee of the Boards of Managers of Cleco Holdings and Cleco Power

Andrew Chapman, Chair

Christopher Leslie

Richard Gallot, Jr.

Steven Turner

Leadership Development and Compensation Committee Interlocks and Insider Participation

The members of the Leadership Development and Compensation Committee are set forth above. No members of

135


CLECO
CLECO POWER						2023 FORM 10-K

the Leadership Development and Compensation Committee were officers or employees of the Company or any of its subsidiaries during 2023, were former Company officers, or had any relationship otherwise requiring disclosure.

CEO Pay Ratio

The aggregate compensation of the executive who served in the CEO role in 2023 (Mr. Fontenot) was $4,308,399. This amount differs from the aggregate amount reflected in the Summary Compensation Table included in this Annual Report on Form 10-K because of the inclusion of the value of the Company’s contribution to health and welfare benefits. The median employee’s annual total compensation for 2023 was $125,679, calculated including the same components of total pay as was used for Mr. Fontenot. As a result, Cleco estimates that the CEO’s 2023 annual total compensation was 34.3 times that of the median employee’s annual total compensation. The

median employee was determined based on employees of the Company on December 31, 2023, using the consistently applied compensation measure of target total cash compensation (including base salary and target bonus). Target total cash compensation was annualized for those employees that were not employed for the full year of 2023.

The pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K. In addition, because the SEC rules for identifying the median employee allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Directors and Management and Certain Beneficial Owners

Following the closing of the 2016 Merger, there are no longer any outstanding shares of Cleco Corporation common stock.

Equity Compensation Plan Information

Cleco has no compensation plans under which equity securities are awarded.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Director Independence and Related Party Transactions

Cleco’s Boards have adopted categorical standards to assist them in making determinations of managers’ independence. These categorical standards are posted on Cleco’s web site at https://cleco.com/about/leadership-governance/governance-guidelines. A copy of the standards is also available free of charge by request sent to: Public Relations, Cleco, P.O. Box 5000, Pineville, LA 71361-5000. The Boards have determined that Rick Gallot (member of the Boards of Cleco Group, Cleco

Holdings and Cleco Power), Randy Gilchrist (member of the Boards of Cleco Group, Cleco Holdings and Cleco Power), Peggy Scott (member of the Boards of Cleco Group, Cleco Holdings, and Cleco Power), Melissa Stark (member of the Board of Cleco Power), and Bruce Wainer (member of the Boards of Cleco Group, Cleco Holdings and Cleco Power) are independent within the meaning of the categorical standards adopted by the Boards.

Cleco has no relationships to report under Item 407(a)(3).

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate fees for professional services rendered by PricewaterhouseCoopers LLP (PwC) for the years ended December 31, 2023, and 2022, respectively, were as follows:


	2023		2022
Audit fees	$	2,579,243	$	2,420,500
Audit-related fees	157,000		208,500
Tax fees	509,480		593,017
Other fees	2,000		60,251
Total	$	3,247,723	$	3,282,268

Audit fees include professional fees rendered by PwC for financial statement audit and review services that are customary under generally accepted auditing standards or that are customary for the purpose of rendering an opinion or review report on the financial statements.

Audit-related fees consist of assurance and related services that are traditionally performed by PwC, such as audits of stand-alone financial statements or other assurance services not required by statute or regulation.

Tax fees consist of professional services rendered by PwC for tax compliance, tax planning and tax advice, and

consulting services, including assistance and representation in connection with tax audits and appeals, tax advice related to employee benefit plans and requests for rulings or technical advice from taxing authorities.

Other fees primarily reflect costs for training services and accounting research software licenses.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has established a policy requiring its pre-approval of all audit and non-audit services provided by the independent registered public accounting firm. The policy requires the general pre-approval of annual audit services and specific pre-approval of all other permitted services. In determining whether to pre-approve permitted services, the Audit Committee considers whether such services are consistent with SEC rules and regulations. Furthermore, requests for pre-approval for services that are eligible for general pre-approval must be detailed as to the services to be provided. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval and the fees for the

136


CLECO
CLECO POWER						2023 FORM 10-K

services performed to date. During 2023 and 2022, all audit and non-audit fees were pre-approved by the Audit Committee in accordance with the policy described above and pursuant to applicable rules of the SEC.

For the fiscal years ended December 31, 2023, and 2022, professional services provided for Cleco Power that were directly billed to Cleco Holdings were allocated to Cleco Power though not billed directly to Cleco Power. The following is Cleco Power’s allocation of professional services provided by PwC:


	2023		2022
Audit fees	$	2,014,337	$	1,961,400
Audit-related fees	80,000		177,500
Tax fees	412,679		474,414
Other fees	1,620		58,671
Total	$	2,508,636	$	2,671,985

137


CLECO
CLECO POWER						2023 FORM 10-K

PART IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
		FORM 10-K ANNUAL REPORT
	Report of Independent Registered Public Accounting Firm (PCAOB ID i 238)	52
	Report of Independent Registered Public Accounting Firm (PCAOB ID i 238)	61
15(a)(1)	Financial Statements of Cleco
	Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021	54
	Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021	55
	Consolidated Balance Sheets at December 31, 2023, and 2022	56
	Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021	58
	Consolidated Statements of Changes in Equity for the years ended December 31, 2023, 2022, and 2021	60
	Financial Statements of Cleco Power
	Cleco Power Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021	63
	Cleco Power Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021	64
	Cleco Power Consolidated Balance Sheets at December 31, 2023, and 2022	65
	Cleco Power Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021	67
	Cleco Power Consolidated Statements of Changes in Member’s Equity for the years ended December 31, 2023, 2022, and 2021	69
	Notes to the Financial Statements	70
15(a)(2)	Financial Statement Schedules
	Schedule I — Financial Statements of Cleco Holdings (Parent Company Only)
	Condensed Statements of Income for the years ended December 31, 2023, 2022, and 2021	143
	Condensed Statements of Comprehensive Income for the years ended December 31, 2023, 2022, and 2021	144
	Condensed Balance Sheets at December 31, 2023, and 2022	145
	Condensed Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021	146
	Notes to the Condensed Financial Statements	147
	Schedule II — Valuation and Qualifying Accounts
	Cleco - Valuation and Qualifying Accounts for the years ended December 31, 2023, 2022, and 2021	149
	Cleco Power - Valuation and Qualifying Accounts for the years ended December 2023, 2022, and 2021	149
	Financial Statement Schedules other than those shown in the above index are omitted because they are either not required or are not applicable or the required information is shown in the Consolidated Financial Statements and Notes thereto
15(a)(3)	List of Exhibits	139

The Exhibits designated by an asterisk are filed herewith, except for Exhibits 32.1, 32.2, 32.3, 32.4, which are furnished herewith (and not filed for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section). The Exhibits not so designated previously have been filed with the SEC and are incorporated herein by reference. The Exhibits designated by two asterisks are management contracts and compensatory plans and arrangements required to be filed as Exhibits to this Report.

Pursuant to paragraph 601(b)(4)(iii)(A) of Regulation S-K, the Registrants have omitted from the following listings of Exhibits, and hereby agrees to furnish to the SEC upon its request, copies of certain instruments, each relating to debt not exceeding 10 percent of the total assets of the respective Registrant and its subsidiaries on a consolidated basis.

138


CLECO
CLECO POWER						2023 FORM 10-K

EXHIBITS

CLECO

SEC FILE OR
REGISTRATION
NUMBER

REGISTRATION
STATEMENT OR
REPORT

EXHIBIT
NUMBER

2(a)

Purchase and Sale Agreement dated as of February 6, 2018 by and between NRG Energy, Inc., a Delaware Corporation, as Seller, NRG South Central Generating LLC, a Delaware limited liability company, as the Company and Cleco Energy LLC, a Louisiana limited liability company, as Purchaser

8-K(10/20/14)

2.1

2(b)

Letter Agreement, dated as of February 1, 2019 between NRG Energy, Inc. and Cleco Cajun LLC (f/k/a Cleco Energy LLC) amending, supplementing and modifying the Purchase and Sale Agreement (the “Cleco Cajun Divestiture Purchase and Sale Agreement”), dated as of February 6, 2018, by and between NRG Energy, Inc. and Cleco Cajun LLC (f/k/a Cleco Energy LLC).

10-Q(3/18)

2.1

2(c)

P urchase and Sale Agreement dated November 22, 2023 by and among Big Pelican LLC, Pelican South Central LLC, South Central Generating LLC , and Cleco Cajun LLC

8-K(2/8/19)

10.6

2(d)

3(a)

Articles of Entity Conversion of Cleco Corporate Holdings LLC, dated as of April 13, 2016

Limited Liability Company Agreement of Cleco Corporate Holdings LLC, dated as of April 13, 2016

8-K(4/19/16)

3.1

3(b)

Agreement Appointing Successor Trustee dated as of April 1, 1996, by and among Central Louisiana Electric Company, Inc., Bankers Trust Company, and The Bank of New York

8-K(4/19/16)

3.2

4(a)(1)

Indenture between Cleco Power (as successor) and Bankers Trust Company, as Trustee, dated as of October 1, 1988

33-24896

S-3(10/11/88)

4(b)

4(a)(2)

333-02895

S-3(4/29/96)

4(a)(2)

4(a)(3)

First Supplemental Indenture, dated as of December 1, 2000, between Cleco Utility Group Inc. and the Bank of New York

Second Supplemental Indenture, dated as of January 1, 2001, between Cleco Power LLC and The Bank of New York

S-3/A(1/26/01)

4(a)(2)

4(a)(4)

Eighth Supplemental Indenture, dated as of November 30, 2005, between Cleco Power LLC and the Bank of New York Trust Company, N.A.

S-3/A(1/26/01)

4(a)(3)

4(a)(5)

Tenth Supplemental Indenture, dated as of November 13, 2009, between Cleco Power LLC and The Bank of New York Mellon Trust Company, N.A. (as successor trustee)

8-K(11/28/05)

4.1

4(a)(6)

Eleventh Supplemental Indenture, dated as of November 15, 2010, between Cleco Power LLC and The Bank of New York Mellon Trust Company, N.A. (as successor trustee)

8-K(11/12/09)

4.1

4(a)(7)

Indenture of Mortgage dated May 17, 2016 between Cleco Corporate Holdings LLC and Wells Fargo Bank, N.A.

8-K(11/15/10)

4.1

4(b)(1)

First Supplemental Indenture dated May 17, 2016 between Cleco Corporate Holdings LLC and Wells Fargo Bank, N.A

8-K(5/17/16)

4.1

4(b)(2)

Second Supplemental Indenture dated May 17, 2016 between Cleco Corporate Holdings LLC and Wells Fargo Bank, N.A

8-K(5/17/16)

4.2

4(b)(3)

Amended 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

8-K(5/17/16)

4.3

4(b)(4)

Indenture, dated as of September 11, 2019, by and between Cleco Corporate Holdings LLC and Regions Bank

8-K(05/02/23)

4.2

4(c)(1)

Supplemental Indenture No.1, dated as of September 11, 2019, by and between Cleco Corporate Holdings LLC and Regions Bank

8-K(9/12/19)

4.1

4(c)(2)

Supplemental Executive Retirement Plan Amended and Restated January 1, 2009

8-K(9/12/19)

4.2

10(a)(1)

Supplemental Executive Retirement Plan (Amended and Restated January 1, 2009), Amendment No. 1

10-K(2008)

10(f)(4)

10(a)(2)

Cleco Corporation Supplemental Executive Retirement Plan Amendment, effective October 28, 2011

8-K(12/9/08)

10.3

10(a)(3)

Cleco Corporation Supplemental Executive Retirement Plan Amended and Restated effective January 1, 2009, Amendment No. 3 (No New Participants)

10-Q(9/11)

10.2

10(a)(4)

Cleco Corporate Holdings LLC Supplemental Executive Retirement Plan (Amended and Restated January 1, 2009), Amendment No.4 (Special CEO Benefit)

10-K(2014)

10(c)(10)

10(a)(5)

Supplemental Executive Retirement Trust dated December 13, 2000

8-K(12/21/17)

10.2

10(a)(6)

Supplemental Executive Retirement Plan Participation Agreement between Cleco Corporation and Dilek Samil

10-K(2003)

10(e)(1)(c)

10(a)(7)

Supplemental Executive Retirement Plan Participation Agreement between Cleco Corporation and Michael H. Madison

10-K(2002)

10(z)(1)

10(a)(8)

Cleco Corporate Holdings LLC Executive Severance Plan, effective May 21, 2021

10-K(2004)

10(v)(3)

10(b)(1)

Cleco Corporate Holdings LLC Separation Agreement, dated effective March 23, 2017, by and among Cleco Group LLC, Cleco Corporate Holdings LLC, and Cleco Power LLC and Darren J. Olagues

10-Q(6/21)

10.3

10(b)(2)

Executive Employment Agreement, dated April 21, 2011, by and between Cleco Corporation and Bruce A. Williamson

8-K(3/28/17)

10.1

10(b)(3)

Employment Agreement, effective as of January 1, 2018, by and between Cleco Corporate Holdings LLC, Cleco Group LLC and Cleco Power LLC and William G. Fontenot

8-K(4/27/11)

10.1

10(b)(4)

S upplemental Agreement , dat ed May 16, 2023, by and between Cleco Corporate Holdings LLC and Mark K leeh ammer

8-K(12/21/17)

10.1

10(b)(5)

Cleco Corporation Deferred Compensation Plan

10-Q(6/23)

10.1

10(c)(1)

333-59696

S-8(4/27/01)

4.3

10(c)(2)

First Amendment to Cleco Corporation Deferred Compensation Plan

Cleco Corporation Deferred Compensation Plan, Corrective Section 409A Amendment

10-K(2008)

10(n)(5)

10(c)(3)

Deferred Compensation Trust dated January 2001

8-K(12/9/08)

10.2

10(c)(4)

Cleco Corporation Deferred Compensation Plan Amendment, effective October 28, 2011

10-K(2003)

10(u)

10(c)(5)

Note Purchase Agreement dated May 8, 2012 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

10-Q(9/11)

10.5

10(d)(1)

Note Purchase Agreement dated November 13, 2015 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

8-K(05/09/12)

10.1

10(d)(2)

Note Purchase Agreement dated December 20, 2016 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

8-K(11/13/15)

10.1

10(d)(3)

Note Purchase Agreement dated December 18, 2017 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

8-K(12/21/16)

10.1

10(d)(4)

Term Loan Agreement, dated as of February 1, 2019 among Cleco Corporate Holdings LLC, the Lenders from time to time party thereto and Mizuho Bank, Ltd. as administrative agent.

8-K(12/21/17)

10.1

10(d)(5)

Amendment No. 1, dated as of May 15, 2020, to the Term Loan Agreement, dated as of February 1, 2019, by and among Cleco Corporate Holdings LLC (f/k/a Cleco Corporation), the Lenders party thereto and Mizuho Bank, Ltd., as administrative agent

8-K(2/8/19)

10.2

10(d)(6)

Credit Agreement, dated as of May 21, 2021, by and among Cleco Corporate Holdings LLC, the lenders party thereto and Regions Bank, as administrative agent

8-K(5/21/20)

10.1

10(d)(7)

Term Loan Agreement, dated as of May 21, 2021, by and among Cleco Corporate Holdings LLC, the lenders party thereto and Regions Bank, as administrative agent

8-K(5/26/21)

10.1

139


CLECO
CLECO POWER						2023 FORM 10-K

EXHIBITS

CLECO

SEC FILE OR
REGISTRATION
NUMBER

REGISTRATION
STATEMENT OR
REPORT

EXHIBIT
NUMBER

10(d)(8)

Credit Agreement, dated as of May 21, 2021, by and among Cleco Power LLC, the lenders party thereto and Regions Bank, as administrative agent

8-K(5/26/21)

10.2

10(d)(9)

Amendment No. 1, dated February 17, 2023, to the Credit Agreement, dated May 21, 2021, by and among Cleco Corp orate Holdings LLC, the lenders party thereto and Regions Bank, as administrative agent

8-K(5/26/21)

10.1

10(d)(10)

Term Loan Agreement, dated as of May 21, 2021, by and among Cleco Power LLC, the lenders party thereto and Regions Bank, as administrative agent

10-Q(3/23)

10.1

10(d)(11)

Amendment No. 1, dated February 17, 2023, to the Term Loan Agreement , dated May 21, 2021, by and among Cleco Co rporate Hold ings LLC, the lenders party thereto and Regions Bank, as administrative agent

8-K(5/26/21)

10.2

10(d)(12)

2017 Long-Term Incentive Compensation Plan, effective as of January 1, 2017

10-Q(3/23)

10.2

10(e)(1)

Form of Notice and Acceptance of Incentive Award under Cleco Corporate Holdings LLC 2017 Long-Term Incentive Compensation Plan - 2017 Two-Year Performance Cycle

10-Q(3/17)

10.3

10(e)(2)

Form of Notice and Acceptance of Incentive Award under Cleco Corporate Holdings LLC 2017 Long-Term Incentive Compensation Plan - 2017 Three-Year Performance Cycle

10-Q(3/17)

10.4

10(e)(3)

Form of Seventh Agreement to Extend the Board of Managers Services Agreement, effective as of May 1, 2023, by and among Cleco Group LLC, Cleco Corporate Holdings LLC, and Cleco Power LLC and Manager

10-Q(3/17)

10.5

10(f)

2017 Short-Term Incentive Plan, effective as of January 1, 2017

10-Q(3/23)

10.5

10(g)

Note Purchase Agreement dated December 14, 2023 by and among Cleco Power LLC and the Purchasers listed on Schedule A thereto

10-Q(3/17)

10.6

10(h)

Subsidiaries of the Registrant

24(a)

Power of Attorney from each Manager of Cleco Corporate Holdings LLC and Cleco Power LLC whose signature is affixed to this Form 10-K for the fiscal year ended December 31, 2023

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)

140


CLECO
CLECO POWER						2023 FORM 10-K

CLECO POWER

SEC FILE OR
REGISTRATION
NUMBER

REGISTRATION
STATEMENT OR
REPORT

EXHIBIT
NUMBER

3(a)

Second Amended and Restated Articles of Organization of Cleco Power LLC, dated as of April 13, 2016

Second Amended and Restated Articles Operating Agreement of Cleco Power LLC, dated as of April 13, 2016

8-K(4/19/16)

3.3

3(b)

Agreement Appointing Successor Trustee dated as of April 1, 1996, by and among Central Louisiana Electric Company, Inc., Bankers Trust Company, and The Bank of New York

8-K(4/19/16)

3.4

4(a)(1)

Indenture between the Company and Bankers Trust Company, as Trustee, dated as of October 1, 1988

33-24896

S-3(10/11/88)

4(b)

4(a)(2)

333-02895

S-3(4/29/96)

4(a)(2)

4(a)(3)

First Supplemental Indenture, dated as of December 1, 2000, between Cleco Utility Group Inc. and the Bank of New York

Second Supplemental Indenture, dated as of January 1, 2001, between Cleco Power LLC and The Bank of New York

S-3/A(1/26/01)

4(a)(2)

4(a)(4)

Seventh Supplemental Indenture, dated as of July 6, 2005, between Cleco Power LLC and the Bank of New York Trust Company, N.A.

S-3/A(1/26/01)

4(a)(3)

4(a)(5)

Eighth Supplemental Indenture, dated as of November 30, 2005, between Cleco Power LLC and the Bank of New York Trust Company, N.A.

8-K(7/6/05)

4.1

4(a)(6)

Ninth Supplemental Indenture, dated as of June 3, 2008, between Cleco Power LLC and The Bank of New York Trust Company, N.A.

8-K(11/28/05)

4.1

4(a)(7)

Tenth Supplemental Indenture, dated as of November 13, 2009, between Cleco Power LLC and The Bank of New York Mellon Trust Company, N.A. (as successor trustee)

8-K(6/2/08)

4.1

4(a)(8)

Eleventh Supplemental Indenture, dated as of November 15, 2010, between Cleco Power LLC and The Bank of New York Mellon Trust Company, N.A. (as successor trustee)

8-K(11/12/09)

4.1

4(a)(9)

Loan Agreement, dated as of November 1, 2007, between Cleco Power LLC and the Rapides Finance Authority

8-K(11/15/10)

4.1

4(b)

Loan Agreement, dated as of October 1, 2008, between Cleco Power LLC and the Rapides Finance Authority

8-K(11/20/07)

4.1

4(c)

Loan Agreement, dated as of December 1, 2008, between Cleco Power LLC and the Louisiana Public Facilities Authority

10-Q(3/10)

4.1

4(d)

Indenture, dated as of September 10, 2021, by and between Cleco Power LLC and Regions Bank, as trustee

10-Q(3/10)

4.2

4(e)(1)

Supplemental Indenture No. 1, dated as of September 10, 2021, by and between Cleco Power LLC and Regions Bank, as trustee

8-K(09/10/21)

4.1

4(e)(2)

Form of Note (included in Supplemental Indenture No. 1, dated September 10, 2021, by and between Cleco Power LLC and Regions Bank, as trustee)

8-K(09/10/21)

4.2

4(e)(3)

Indenture between Cleco Securitization I LLC and The Bank of New York Mellon Trust Company, National Association, as Trustee (including the form of the Storm Recovery Bonds and the Series Supplement), dated as of June 22, 2022

8-K(09/10/21)

4.3

4(f)(1)

Series Supplement between Cleco Securitization I LLC and The Bank of New York Mellon Trust Company, National Association, as Trustee, dated as of June 22, 2022

8-K(6/22/22)

4.1

4(f)(2)

8-K(6/22/22)

4.2

10(a)

Supplemental Executive Retirement Plan

Notes Purchase Agreement dated as of December 16, 2011 among Cleco Power LLC, various financial institutions and Credit Agricole Securities (USA) Inc., JPMorgan Securities Inc. and KeyBanc Capital Markets Inc., as agents.

10-K(1992)

10(o)(1)

10(b)(1)

Note Purchase Agreement dated May 8, 2012 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

8-K(12/19/11)

10.1

10(b)(2)

Note Purchase Agreement dated November 13, 2015 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

8-K(05/09/12)

10.1

10(b)(3)

Note Purchase Agreement dated December 20, 2016 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

8-K(11/13/15)

10.1

10(b)(4)

Note Purchase Agreement dated December 18, 2017 by and among Cleco Power LLC and the Purchasers listed on the signature pages thereto

8-K(12/21/16)

10.1

10(b)(5)

Credit Agreement, dated as of May 21, 2021, by and among Cleco Power LLC, the lenders party thereto and Regions Bank, as administrative agent

8-K(12/21/17)

10.1

10(b)(6)

A m endment No. 1, dated February 17, 2023, to the Credit Agr eement, dated May 21, 2021, b y and among Cleco Power LLC, the lenders party there to and Regions Bank, as admin ist r ative agent

8-K(5/26/21)

10.1

10(b)(7)

Term Loan Agreement, dated as of May 21, 2021, by and among Cleco Power LLC, the lenders party thereto and Regions Bank, as administrative agent

10-Q(3/23)

10.3

10(b)(8)

A m endment No. 1, dat e d February 17, 2023, to the T er m Loan Agreement , dated May 21, 20 21, by and among Cleco Power LLC, the lenders party thereto and Regions Bank, as administrative agent

8-K(5/26/21)

10.2

10(b)(9)

Staffing Agreement, dated as of April 13, 2016, by and between Cleco Power LLC and Co Issuer Corporate Staffing, LLC

10-Q(3/23)

10.4

10(c)

Cleco Corporate Holdings LLC Separation Agreement, dated effective March 23, 2017, by and among Cleco Group LLC, Cleco Corporate Holdings LLC, and Cleco Power LLC and Darren J. Olagues

8-K(4/19/16)

10.4

10(d)(1)

Employment Agreement, effective as of January 1, 2018, by and between Cleco Corporate Holdings LLC, Cleco Group LLC and Cleco Power LLC and William G. Fontenot

8-K(3/28/17)

10.1

10(d)(2)

Form of Seventh Agreement to Extend the Board of Managers Services Agreement, effective as of May 1, 2023, by and among Cleco Group LLC, Cleco Corporate Holdings LLC, and Cleco Power LLC and Manager

8-K(12/21/17)

10.1

10(e)

Storm Recovery Property Servicing Agreement between Cleco Securitization I LLC and Cleco Power LLC, as Servicer, dated as of June 22, 2022

10-Q(3/23)

10.5

10(f)(1)

Storm Recovery Property Sale Agreement between Cleco Securitization I LLC and Cleco Power LLC, as Seller, dated as of June 22, 2022

8-K(6/22/22)

10.1

10(f)(2)

Administrative Agreement between Cleco Securitization I LLC and Cleco Power LLC, as Administrator, dated as of June 22, 2022

8-K(6/22/22)

10.2

10(f)(3)

Note Purchase Agreement dated December 14, 2023 by and among Cleco Power LLC and the Purchasers listed on Schedule A thereto

8-K(6/22/22)

10.3

10(h)

24(a)

Power of Attorney from each Manager of Cleco Corporate Holdings LLC and Cleco Power LLC whose signature is affixed to this Form 10-K for the fiscal year ended December 31, 2023

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

141


CLECO
CLECO POWER						2023 FORM 10-K

CLECO POWER

SEC FILE OR
REGISTRATION
NUMBER

REGISTRATION
STATEMENT OR
REPORT

EXHIBIT
NUMBER

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)

ITEM 16. FORM 10-K SUMMARY

None.

142


CLECO
CLECO POWER						2023 FORM 10-K


CLECO HOLDINGS (Parent Company Only)			SCHEDULE I

Condensed Statements of Income

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating expenses

Administrative and general

i 1,206

i 1,088

i 1,644

Merger transaction costs

i 665

i 228

i 436

Other operating expense

i 268

i 246

i 247

Total operating expenses

i 2,139

i 1,562

i 2,327

Operating loss

( i 2,139)

( i 1,562)

( i 2,327)

Equity income from subsidiaries, net of tax

i 39,874

i 231,702

i 234,512

Interest, net

( i 74,578)

( i 62,267)

( i 60,461)

Other income (expense), net

i 2,568

( i 724)

i 8,788

(Loss) income before income taxes

( i 34,275)

i 167,149

i 180,512

Federal and state income tax benefit

( i 19,048)

( i 21,662)

( i 14,454)

Net (loss) income

( i 15,227)

i 188,811

i 194,966

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

143


CLECO
CLECO POWER						2023 FORM 10-K


CLECO HOLDINGS (Parent Company Only)			SCHEDULE I

Condensed Statements of Comprehensive Income

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Net income

( i 15,227)

i 188,811

i 194,966

Other comprehensive income, net of tax

Postretirement benefits gain (loss) (net of tax benefit of $ i 1,905, tax expense of $ i 8,728, and tax expense of $ i 394, respectively)

( i 5,171)

i 23,688

i 2,167

Total other comprehensive income (loss), net of tax

( i 5,171)

i 23,688

i 2,167

Comprehensive income, net of tax

( i 20,398)

i 212,499

i 197,133

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

144


CLECO
CLECO POWER						2023 FORM 10-K


CLECO HOLDINGS (Parent Company Only)			SCHEDULE I


Condensed Balance Sheets
	AT DEC. 31,
(THOUSANDS)	2023		2022
Assets
Current assets
Cash and cash equivalents	$	i 5,153	$	i 2,556
Accounts receivable - affiliate	i 38,364		i 31,242
Other accounts receivable	i 2,441		i 1,781
Taxes receivable, net	i 44,025		i 13,242
Cash surrender value of trust-owned life insurance policies	i 47,129		i 43,388


Other current assets	i 66		i 65
Total current assets	i 137,178		i 92,274
Equity investment in subsidiaries	i 4,180,082		i 4,292,018
Accumulated deferred federal and state income taxes, net	i 123,950		i 145,513
Other deferred charges	i 570		i 788
Total assets	$	i 4,441,780	$	i 4,530,593

Liabilities and member's equity
Liabilities
Current liabilities
Long-term debt due within one year	$	i 66,497	$	i 230,523
Accounts payable	i 842		i 1,900
Short-term debt	i 110,000		i 64,000
Accounts payable - affiliate	i 19,935		i 17,496
Taxes payable, net	i 6		i 33
Interest accrued	i 10,458		i 10,264
Deferred compensation	i 14,277		i 12,162
Other current liabilities	i 255		i 749
Total current liabilities	i 222,270		i 337,127
Postretirement benefit obligations	i 2,851		i 2,774
Other deferred credits	i 313		i 313
Long-term debt, net	i 1,343,173		i 1,243,312
Total liabilities	i 1,568,607		i 1,583,526
Commitments and contingencies (Note 5)	i		i




Member's equity	i 2,873,173		i 2,947,067
Total liabilities and member's equity	$	i 4,441,780	$	i 4,530,593
The accompanying notes are an integral part of the condensed financial statements.

145


CLECO
CLECO POWER						2023 FORM 10-K


CLECO HOLDINGS (Parent Company Only)			SCHEDULE I

Condensed Statements of Cash Flows

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Operating activities

Net cash provided by operating activities

i 75,548

i 180,270

i 56,054

Investing activities

Return on investment in trust-owned life insurance policies

i 417

i 35,175

i —

Net cash provided by investing activities

i 417

i 35,175

i —

Financing activities

Draws on credit facility

i 100,000

i 64,000

i —

Payments on credit facility

( i 54,000)

i —

Repayment of long-term debt

( i 65,600)

( i 67,700)

( i 66,000)

Payment of financing costs

( i 272)

( i 9)

( i 1,268)

Distributions to member

( i 53,496)

( i 219,588)

i —

Net cash used in financing activities

( i 73,368)

( i 223,297)

( i 67,268)

Net increase (decrease) in cash and cash equivalents

i 2,597

( i 7,852)

( i 11,214)

Cash and cash equivalents at beginning of period

i 2,556

i 10,408

i 21,622

Cash and cash equivalents at end of period

i 5,153

i 2,556

i 10,408

Supplementary cash flow information

Interest paid, net of amount capitalized

i 72,537

i 59,848

i 57,688

Income taxes paid, net

i 2,162

i —

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

146


CLECO
CLECO POWER						2023 FORM 10-K

CLECO HOLDINGS (Parent Company Only) Notes to the Condensed Financial Statements

Note 1 — Summary of Significant Accounting Policies

The condensed financial statements represent the financial information required by SEC Regulation S-X 5-04 for Cleco Holdings, which requires the inclusion of parent company only financial statements if the restricted net assets of consolidated subsidiaries exceed i 25% of total consolidated net assets as of the last day of its most recent fiscal year. As of December 31, 2023, Cleco Holdings’ restricted net assets of consolidated subsidiaries were $ i 1.36 billion and exceeded i 25% of its total consolidated net assets.

Cleco Holdings’ major, first-tier subsidiaries are Cleco Power and Cleco Cajun. Cleco Power contains the LPSC-jurisdictional generation, transmission, and distribution electric utility operations serving its retail and wholesale customers. Cleco Cajun is an unregulated electric utility company that owns generation and transmission assets and supplies wholesale power and capacity to its customers.

The accompanying financial statements have been prepared to present the results of operations, financial condition, and cash flows of Cleco Holdings on a stand-alone basis as a holding company. Investments in subsidiaries and other investees are presented using the equity method. These financial statements should be read in conjunction with Cleco’s consolidated financial statements.

Note 2 — Debt

At December 31, 2023, Cleco Holdings had $ i 110.0 million of outstanding borrowings under its $ i 175.0 million revolving credit facility at a weighted average all-in interest rate of i 7.079%. At December 31, 2022, Cleco Holdings had $ i 64.0 million of outstanding borrowings under its credit facility.

At December 31, 2023, Cleco Holding’s long-term debt outstanding was $ i 1.41 billion, of which $ i 66.5 million was due within one year. The amount due within one year primarily represents $ i 66.7 million of principal payments on Cleco Holdings’ bank term loan due in May 2024, which also represents the amount required to be paid by the Cleco Cajun Acquisition commitments to the LPSC.

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

Cleco Holdings’ $ i 175.0 million revolving credit agreement matures on May 21, 2026. Under this agreement, Cleco Holdings is required to maintain total indebtedness less than or equal to i 65.0% of total capitalization. At December 31, 2023, the borrowing costs for amounts drawn under this agreement were equal to SOFR plus i 1.725% or ABR plus i 0.625%, plus commitment fees of i 0.275% paid on the unused portion of the facility. If Cleco Holdings’ credit ratings were to be downgraded one level by the credit rating agencies, Cleco Holdings may be required to pay incremental interest and commitment fees of i 0.125% and i 0.05%, respectively.

Upon approval of the Cleco Cajun Acquisition, commitments were made to the LPSC by Cleco Holdings, including repayment of $ i 400.0 million of Cleco Holdings’ debt by December 31, 2024. As of December 31, 2023, Cleco Holdings was in compliance with these commitments. The cumulative minimum principal amounts committed to be repaid for each year through 2024 are as follows:


(THOUSANDS)
For the year ending Dec. 31,
2019	$	i 66,700
2020	$	i 133,300
2021	$	i 200,000
2022	$	i 267,700
2023	$	i 333,300
2024	$	i 400,000

The principal amounts payable under long-term debt agreements for each year through 2028 and thereafter are as follows:


AMOUNTS PAYABLE UNDER LONG-TERM DEBT ARRANGEMENTS	(THOUSANDS)
For the year ending Dec. 31,
2024	$	i 66,700
2025	$	i 165,000
2026	$	i 535,000
2027	$	i —
2028	$	i —
Thereafter	$	i 650,000

Note 3 — Cash Distributions and Equity Contributions

Some provisions in Cleco Power’s debt instruments restrict the amount of equity available for distribution to Cleco Holdings by Cleco Power by requiring Cleco Power’s total indebtedness to be less than or equal to i 65.0% of total capitalization. In addition, the 2016 Merger Commitments provide for limitations on the amount of distributions that may be paid from Cleco Power to Cleco Holdings, depending on Cleco Power’s common equity ratio and its corporate credit ratings.

The following table summarizes the cash distributions Cleco Holdings received from affiliates during 2023, 2022, and 2021:

FOR THE YEAR ENDED DEC. 31,

(THOUSANDS)

2023

2022

2021

Cleco Power

i 94,838

i 105,500

i —

Cleco Cajun

i 40,000

i 137,000

i 111,000

Total

i 134,838

i 242,500

i 111,000

During the years ended December 31, 2023, 2022, and 2021, Cleco Holdings made i i i no / / contributions to affiliates.

During the years ended December 31, 2023, 2022, and 2021, Cleco Holdings received i i i no / / equity contributions from Cleco Group.

During the years ended December 31, 2023 and December 31, 2022, Cleco Holdings made $ i 53.5 million and $ i 219.6 million, respectively, of distribution payments to Cleco

147


CLECO
CLECO POWER						2023 FORM 10-K

Group. During the year ended December 31, 2021, Cleco Holdings made i no distribution payments to Cleco Group.

Note 4 — Income Taxes

Cleco Holdings’ (Parent Company Only) Condensed Statements of Income reflect income tax expense (benefit) for the following line items:


	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022		2021
Federal and state income tax benefit	$	( i 19,048)	$	( i 21,662)	$	( i 14,454)
Equity income from subsidiaries - federal and state income tax (benefit) expense	$	( i 44,268)	$	i 22,579	$	i 27,565

Note 5 — Commitments and Contingencies

For information regarding commitments and contingencies related to Cleco Holdings, see Part II, Item 8, “Financial Statements and Supplementary Data — Notes to the Financial Statements — Note 16 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees.”

148


CLECO
CLECO POWER						2023 FORM 10-K

CLECO

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(THOUSANDS)

BALANCE AT

BEGINNING OF

PERIOD

ADDITIONS

DEDUCTIONS

BALANCE AT

END OF

PERIOD (1)

Allowance for Credit Losses

Year Ended Dec. 31, 2023

i 1,147

i 6,804

i 4,939

i 3,012

Year Ended Dec. 31, 2022

i 1,302

i 4,645

i 4,800

i 1,147

Year Ended Dec. 31, 2021

i 2,758

i 5,463

i 6,919

i 1,302

(1) Deducted in the consolidated balance sheet

CLECO POWER

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(THOUSANDS)

BALANCE AT

BEGINNING OF

PERIOD

ADDITIONS

DEDUCTIONS

BALANCE AT

END OF

PERIOD (1)

Allowance for Credit Losses

Year Ended Dec. 31, 2023

i 1,147

i 6,804

i 4,939

i 3,012

Year Ended Dec. 31, 2022

i 1,302

i 4,645

i 4,800

i 1,147

Year Ended Dec. 31, 2021

i 2,758

i 5,463

i 6,919

i 1,302

(1) Deducted in the consolidated balance sheet

149


CLECO
CLECO POWER						2023 FORM 10-K

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


						CLECO CORPORATE HOLDINGS LLC
						(Registrant)

			By:			/s/ *William G. Fontenot*
						(William G. Fontenot)
						(President & Chief Executive Officer)

Date: March 8, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


SIGNATURE	TITLE	DATE

/s/ *William G. Fontenot*	President & Chief Executive Officer	March 8, 2024
(William G. Fontenot)	(Principal Executive Officer)
/s/ *Kristin L. Guillory*	Chief Financial Officer	March 8, 2024
(Kristin L. Guillory)	(Principal Financial Officer)
/s/ *Tonita Laprarie*	Controller and Chief Accounting Officer	March 8, 2024
(Tonita Laprarie)	(Principal Accounting Officer)


			MANAGERS*
			Dylan D. Arnould
			Andrew M. Chapman
			Paraskevas Fronimos
			Richard J. Gallot, Jr.
			David R. Gilchrist
			Christopher J. Leslie
			Jon R. R. Perry
			Aaron J. Rubin
			Peggy B. Scott
			Domingo Solís-Hernández
			Steven J. Turner
			Bruce D. Wainer

*By:

/s/ William G. Fontenot

(William G. Fontenot, as Attorney-in-Fact)

150


CLECO
CLECO POWER						2023 FORM 10-K

Signatures


						CLECO POWER LLC
						(Registrant)

			By:			/s/ *William G. Fontenot*
						(William G. Fontenot)
						(Chief Executive Officer)

Date: March 8, 2024


SIGNATURE	TITLE	DATE

/s/ *William G. Fontenot*	Chief Executive Officer	March 8, 2024
(William G. Fontenot)	(Principal Executive Officer)
/s/ *Kristin L. Guillory*	Chief Financial Officer	March 8, 2024
(Kristin L. Guillory)	(Principal Financial Officer)
/s/ *Tonita Laprarie*	Controller and Chief Accounting Officer	March 8, 2024
(Tonita Laprarie)	(Principal Accounting Officer)


			MANAGERS*
			Andrew M. Chapman
			Paraskevas Fronimos
			Richard J. Gallot, Jr.
			David R. Gilchrist
			Christopher J. Leslie
			Jon R. R. Perry
			Aaron J. Rubin
			Peggy B. Scott
			Domingo Solís-Hernández
			Melissa M. Stark
			Steven J. Turner
			Bruce D. Wainer

*By:

/s/ William G. Fontenot