Louisiana (State or other jurisdiction of incorporation or organization) | 72-1445282 (I.R.S. Employer Identification No.) |
2030 Donahue Ferry Road, Pineville, Louisiana (Address of principal executive offices) | 71360-5226 (Zip Code) |
Registrant’s telephone number, including area code: (318) 484-7400 |
Louisiana (State or other jurisdiction of incorporation or organization) | 72-0244480 (I.R.S. Employer Identification No.) |
2030 Donahue Ferry Road, Pineville, Louisiana (Address of principal executive offices) | 71360-5226 (Zip Code) |
Registrant’s telephone number, including area code: (318) 484-7400 | |
Indicate by check mark whether the Registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days. Yes x No ¨ | |
Indicate by check mark whether the Registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files). Yes x No ¨ | |
Indicate by check mark whether Cleco Corporate Holdings LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x (Do not check if a smaller reporting company) Smaller reporting company ¨ Emerging growth company ¨ If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ | |
Indicate by check mark whether Cleco Power LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x (Do not check if a smaller reporting company) Smaller reporting company ¨ Emerging growth company ¨ If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ | |
Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
TABLE OF CONTENTS | ||
PAGE | ||
ITEM 4. | Mine Safety Disclosures | |
ITEM 5. | Other Information | |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
GLOSSARY OF TERMS |
ABBREVIATION OR ACRONYM | DEFINITION |
401(k) Plan | Cleco Power 401(k) Savings and Investment Plan |
ABR | Alternate Base Rate which is the greater of the prime rate, the federal funds effective rate plus 0.50%, or LIBOR plus 1.0% |
Acadia | Acadia Power Partners, LLC, previously a wholly owned subsidiary of Midstream. Acadia Power Partners, LLC was dissolved effective August 29, 2014. |
Acadia Unit 1 | Cleco Power’s 580-MW, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana |
Acadia Unit 2 | Entergy Louisiana’s 580-MW, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana, which is operated by Cleco Power |
AFUDC | Allowance for Funds Used During Construction |
ALJ | Administrative Law Judge |
Amended Lignite Mining Agreement | Amended and restated lignite mining agreement effective December 29, 2009 |
AMI | Advanced Metering Infrastructure |
AOCI | Accumulated Other Comprehensive Income (Loss) |
ARO | Asset Retirement Obligation |
ARRA | American Recovery and Reinvestment Act of 2009 |
Attala | Attala Transmission LLC, a wholly owned subsidiary of Cleco Holdings |
bcIMC | British Columbia Investment Management Corporation |
CCR | Coal combustion by-products or residual |
CEO | Chief Executive Officer |
CFO | Chief Financial Officer |
Cleco | Cleco Holdings and its subsidiaries |
Cleco Corporation | Pre-Merger entity that was converted to a limited liability company and changed its name to Cleco Corporate Holdings LLC on April 13, 2016 |
Cleco Group | Cleco Group LLC, a wholly owned subsidiary of Cleco Partners |
Cleco Holdings | Cleco Corporate Holdings LLC, a wholly owned subsidiary of Cleco Group |
Cleco Katrina/Rita | Cleco Katrina/Rita Hurricane Recovery Funding LLC, a wholly owned subsidiary of Cleco Power |
Cleco Partners | Cleco Partners L.P., a Delaware limited partnership that is owned by a consortium of investors, including funds or investment vehicles managed by MIRA, bcIMC, John Hancock Financial, and other infrastructure investors. |
Cleco Power | Cleco Power LLC and its subsidiaries, a wholly owned subsidiary of Cleco Holdings |
CO2 | Carbon dioxide |
Coughlin | Cleco Power’s 775-MW, combined-cycle power plant located in St. Landry, Louisiana |
CPP | Clean Power Plan |
DHLC | Dolet Hills Lignite Company, LLC, a wholly owned subsidiary of SWEPCO |
Diversified Lands | Diversified Lands LLC, a wholly owned subsidiary of Cleco Holdings |
Dodd-Frank Act | Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 |
Dolet Hills | A facility consisting of Dolet Hills Power Station, the Dolet Hills mine, and the Oxbow mine |
Dolet Hills Power Station | A 650-MW generating unit at Cleco Power’s plant site in Mansfield, Louisiana. Cleco Power has a 50% ownership interest in the capacity of Dolet Hills. |
EAC | Environmental Adjustment Clause |
EBITDA | Earnings before interest, taxes, depreciation, and amortization |
EGU | Electric Generating Unit |
Entergy Gulf States | Entergy Gulf States Louisiana, LLC |
Entergy Louisiana | Entergy Louisiana, LLC |
EPA | U.S. Environmental Protection Agency |
ERO | Electric Reliability Organization |
ESPP | Employee Stock Purchase Plan |
Evangeline | Cleco Evangeline LLC, a wholly owned subsidiary of Midstream |
FAC | Fuel Adjustment Clause |
FASB | Financial Accounting Standards Board |
FERC | Federal Energy Regulatory Commission |
FTR | Financial Transmission Right |
FRP | Formula Rate Plan |
GAAP | Generally Accepted Accounting Principles in the U.S. |
IRP | Integrated Resource Plan |
IRS | Internal Revenue Service |
kWh | Kilowatt-hour(s) |
LED | Louisiana Economic Development |
LIBOR | London Interbank Offered Rate |
LPSC | Louisiana Public Service Commission |
LTIP | Long-Term Incentive Compensation Plan |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
ABBREVIATION OR ACRONYM | DEFINITION |
MATS | Mercury and Air Toxics Standards |
Merger | Merger of Merger Sub with and into Cleco Corporation pursuant to the terms of the Merger Agreement which was completed on April 13, 2016 |
Merger Agreement | Agreement and Plan of Merger, dated as of October 17, 2014, by and among Cleco Partners, Merger Sub, and Cleco Corporation |
Merger Commitments | Cleco Partners’, Cleco Group’s, Cleco Holdings’, and Cleco Power’s 77 commitments to the LPSC as defined in Docket No. U-33434 of which a performance report must be filed annually by October 31 for the 12 months ending June 30 |
Merger Sub | Cleco MergerSub Inc., previously an indirect wholly owned subsidiary of Cleco Partners that was merged with and into Cleco Corporation, with Cleco Corporation surviving the Merger, and Cleco Corporation converting to a limited liability company and changing its name to Cleco Holdings |
Midstream | Cleco Midstream Resources LLC, a wholly owned subsidiary of Cleco Holdings |
MIRA | Macquarie Infrastructure and Real Assets Inc. |
MISO | Midcontinent Independent System Operator, Inc. |
Moody’s | Moody’s Investors Service, a credit rating agency |
MW | Megawatt(s) |
MWh | Megawatt-hour(s) |
NAAQS | National Ambient Air Quality Standards |
NERC | North American Electric Reliability Corporation |
NMTC | New Markets Tax Credit |
NMTC Fund | USB NMTC Fund 2008-1 LLC was formed to invest in projects qualifying for New Markets Tax Credits and Solar Projects |
NOx | Nitrogen oxides |
Oxbow | Oxbow Lignite Company, LLC, 50% owned by Cleco Power and 50% owned by SWEPCO |
Perryville | Perryville Energy Partners, L.L.C., a wholly owned subsidiary of Cleco Holdings |
Predecessor | Pre-merger activity of Cleco. Cleco has accounted for the merger transaction by applying the acquisition method of accounting. The predecessor period is not comparable to the successor period. |
Registrant(s) | Cleco Holdings and/or Cleco Power |
Rodemacher Unit 2 | A 523-MW generating unit at Cleco Power’s plant site in Boyce, Louisiana. Cleco Power has a 30% ownership interest in the capacity of Rodemacher Unit 2. |
ROE | Return on Equity |
RTO | Regional Transmission Organization |
S&P | Standard & Poor’s Ratings Services, a credit rating agency |
SEC | U.S. Securities and Exchange Commission |
SERP | Supplemental Executive Retirement Plan |
SO2 | Sulfur dioxide |
STIP | Short-Term Incentive Plan |
Successor | Post-merger activity of Cleco. Cleco has accounted for the merger transaction by applying the acquisition method of accounting. The successor period is not comparable to the predecessor period. |
Support Group | Cleco Support Group LLC, a wholly owned subsidiary of Cleco Holdings |
SWEPCO | Southwestern Electric Power Company, an electric utility subsidiary of American Electric Power Company, Inc. |
Teche Unit 3 | A 359-MW generating unit at Cleco Power’s plant site in Baldwin, Louisiana. |
VaR | Value-at-Risk |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS |
• | the effects of the Merger on Cleco Holdings’ and Cleco Power’s business relationships, operating results, and business generally, |
• | regulatory factors such as changes in rate-setting practices or policies; the unpredictability in political actions of governmental regulatory bodies; adverse regulatory ratemaking actions; recovery of investments made under traditional regulation; recovery of storm restoration costs; the frequency, timing, and amount of rate increases or decreases; the impact that rate cases or requests for FRP extensions may have on operating decisions of Cleco Power; the results of periodic NERC, LPSC, and FERC audits; participation in MISO and the related operating challenges and uncertainties, including increased wholesale competition relative to additional suppliers; and compliance with the ERO reliability standards for bulk power systems by Cleco Power, |
• | the ability to recover fuel costs through the FAC, |
• | factors affecting utility operations, such as unusual weather conditions or other natural phenomena; catastrophic weather-related damage caused by hurricanes and other storms or severe drought conditions; unscheduled generation outages; unanticipated maintenance or repairs; unanticipated changes to fuel costs or fuel supply costs, shortages, transportation problems, or other developments; fuel mix of Cleco’s generating facilities; decreased customer load; environmental incidents and compliance costs; and power transmission system constraints, |
• | reliance on third parties for determination of Cleco Power’s commitments and obligations to markets for generation resources and reliance on third-party transmission services, |
• | global and domestic economic conditions, including the ability of customers to continue paying their utility bills, related growth and/or down-sizing of businesses in Cleco’s service area, monetary fluctuations, changes in commodity prices, and inflation rates, |
• | the ability of the lignite reserves at Dolet Hills to provide sufficient fuel to the Dolet Hills Power Station until at least 2036, |
• | Cleco Power’s ability to maintain its right to sell wholesale power at market-based rates within its control area, |
• | Cleco Power’s dependence on energy from sources other than its facilities and future sources of such additional energy, |
• | reliability of Cleco Power’s generating facilities, |
• | the imposition of energy efficiency requirements or increased conservation efforts of customers, |
• | the impact of current or future environmental laws and regulations, including those related to CCRs, greenhouse gases, and energy efficiency that could limit or terminate the operation of certain generating units, increase costs, or reduce customer demand for electricity, |
• | the ability to recover costs of compliance with environmental laws and regulations, including those through the EAC, |
• | financial or regulatory accounting principles or policies imposed by FASB, the SEC, FERC, the LPSC, or similar entities with regulatory or accounting oversight, |
• | changing market conditions and a variety of other factors associated with physical energy, financial transactions, and energy service activities, including, but not limited to, price, basis, credit, liquidity, volatility, capacity, transmission, interest rates, and warranty risks, |
• | legal, environmental, and regulatory delays and other obstacles associated with acquisitions, reorganizations, investments in joint ventures, or other capital projects, |
• | costs and other effects of legal and administrative proceedings, settlements, investigations, claims, and other matters, |
• | the availability and use of alternative sources of energy and technologies, such as wind, solar, battery storage, and distributed generation, |
• | changes in federal, state, or local laws (including tax laws), changes in tax rates, disallowances of tax positions, or changes in other regulating policies that may result in a change to tax benefits or expenses, |
• | the restriction on the ability of Cleco Power to make distributions to Cleco Holdings in certain instances, as a result of the Merger Commitments, |
• | Cleco Holdings’ dependence on the earnings, dividends, or distributions from its subsidiaries to meet its debt obligations, |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
• | acts of terrorism, cyber attacks, data security breaches or other attempts to disrupt Cleco’s business or the business of third parties, or other man-made disasters, |
• | nonperformance by and creditworthiness of the guarantor counterparty of the NMTC Fund, |
• | credit ratings of Cleco Holdings and Cleco Power, |
• | the ability to remain in compliance with debt covenants, |
• | the availability or cost of capital resulting from changes in global markets, Cleco’s business or financial condition, interest rates, or market perceptions of the electric utility industry and energy-related industries, and |
• | employee workforce factors, including aging workforce, changes in management, and inadequate resources. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
PART I — FINANCIAL INFORMATION |
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | |||||||
Condensed Consolidated Statements of Income (Unaudited) | |||||||
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
Operating revenue | |||||||
Electric operations | $ | 234,056 | $ | 250,157 | |||
Other operations | 16,880 | 17,132 | |||||
Gross operating revenue | 250,936 | 267,289 | |||||
Electric customer credits | (435 | ) | (321 | ) | |||
Operating revenue, net | 250,501 | 266,968 | |||||
Operating expenses | |||||||
Fuel used for electric generation | 69,873 | 87,443 | |||||
Power purchased for utility customers | 31,963 | 23,105 | |||||
Other operations | 31,892 | 29,325 | |||||
Maintenance | 24,523 | 24,631 | |||||
Depreciation and amortization | 40,851 | 38,938 | |||||
Taxes other than income taxes | 12,502 | 12,907 | |||||
Merger transaction and commitment costs | 99 | 1,522 | |||||
Gain on sale of asset | — | (1,095 | ) | ||||
Total operating expenses | 211,703 | 216,776 | |||||
Operating income | 38,798 | 50,192 | |||||
Interest income | 312 | 224 | |||||
Allowance for equity funds used during construction | 911 | 652 | |||||
Other income | 1,370 | 506 | |||||
Other expense | (274 | ) | (516 | ) | |||
Interest charges | |||||||
Interest charges, including amortization of debt issuance costs, premiums, and discounts, net | 31,945 | 19,738 | |||||
Allowance for borrowed funds used during construction | (227 | ) | (185 | ) | |||
Total interest charges | 31,718 | 19,553 | |||||
Income before income taxes | 9,399 | 31,505 | |||||
Federal and state income tax expense | 3,107 | 12,137 | |||||
Net income | $ | 6,292 | $ | 19,368 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | |||||||
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | |||||||
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
Net income | $ | 6,292 | $ | 19,368 | |||
Other comprehensive (loss) income, net of tax | |||||||
Postretirement benefits (loss) gain (net of tax benefit of $1,370 in 2017 and tax expense of $330 in 2016) | (2,191 | ) | 528 | ||||
Net gain on cash flow hedges (net of tax expense of $33 in 2016) | — | 53 | |||||
Total other comprehensive (loss) income, net of tax | (2,191 | ) | 581 | ||||
Comprehensive income, net of tax | $ | 4,101 | $ | 19,949 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 21,519 | $ | 23,077 | |||
Restricted cash and cash equivalents | 14,150 | 23,084 | |||||
Customer accounts receivable (less allowance for doubtful accounts of $8,056 in 2017 and $7,199 in 2016) | 45,342 | 56,780 | |||||
Other accounts receivable | 21,191 | 19,778 | |||||
Unbilled revenue | 29,504 | 34,268 | |||||
Fuel inventory, at average cost | 52,658 | 46,410 | |||||
Materials and supplies, at average cost | 83,301 | 81,818 | |||||
Energy risk management assets | 4,957 | 7,884 | |||||
Accumulated deferred fuel | 24,212 | 20,787 | |||||
Cash surrender value of company-/trust-owned life insurance policies | 78,927 | 77,225 | |||||
Prepayments | 7,497 | 7,813 | |||||
Regulatory assets | 26,476 | 26,803 | |||||
Other current assets | 423 | 1,315 | |||||
Total current assets | 410,157 | 427,042 | |||||
Property, plant, and equipment | |||||||
Property, plant, and equipment | 3,506,239 | 3,476,581 | |||||
Accumulated depreciation | (98,969 | ) | (75,816 | ) | |||
Net property, plant, and equipment | 3,407,270 | 3,400,765 | |||||
Construction work in progress | 99,113 | 78,577 | |||||
Total property, plant, and equipment, net | 3,506,383 | 3,479,342 | |||||
Equity investment in investee | 18,672 | 18,672 | |||||
Goodwill | 1,490,797 | 1,490,797 | |||||
Prepayments | 4,874 | 4,731 | |||||
Restricted cash and cash equivalents | 23,554 | 23,410 | |||||
Regulatory assets - deferred taxes, net | 238,378 | 237,449 | |||||
Regulatory assets | 445,200 | 454,644 | |||||
Net investment in direct financing lease | 13,407 | 13,420 | |||||
Intangible assets | 135,591 | 142,634 | |||||
Tax credit fund investment, net | 12,138 | 11,888 | |||||
Other deferred charges | 36,830 | 39,115 | |||||
Total assets | $ | 6,335,981 | $ | 6,343,144 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. | |||||||
(Continued on next page) |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Liabilities and member’s equity | |||||||
Liabilities | |||||||
Current liabilities | |||||||
Short-term debt | $ | 541 | $ | — | |||
Long-term debt due within one year | 19,689 | 19,715 | |||||
Accounts payable | 95,307 | 112,087 | |||||
Customer deposits | 56,972 | 56,599 | |||||
Provision for rate refund | 3,262 | 3,974 | |||||
Provision for merger commitments | 10,999 | 14,371 | |||||
Taxes payable | 16,510 | 3,942 | |||||
Interest accrued | 40,447 | 14,783 | |||||
Energy risk management liabilities | 539 | 201 | |||||
Deferred compensation | 10,787 | 11,654 | |||||
Other current liabilities | 14,922 | 14,850 | |||||
Total current liabilities | 269,975 | 252,176 | |||||
Long-term liabilities and deferred credits | |||||||
Accumulated deferred federal and state income taxes, net | 1,035,656 | 1,033,055 | |||||
Accumulated deferred investment tax credits | 2,585 | 2,751 | |||||
Postretirement benefit obligations | 227,777 | 223,003 | |||||
Restricted storm reserve | 17,643 | 17,385 | |||||
Other deferred credits | 33,740 | 29,440 | |||||
Total long-term liabilities and deferred credits | 1,317,401 | 1,305,634 | |||||
Long-term debt, net | 2,726,696 | 2,738,571 | |||||
Total liabilities | 4,314,072 | 4,296,381 | |||||
Commitments and contingencies (Note 12) | |||||||
Member’s equity | |||||||
Membership interest | 2,040,421 | 2,069,376 | |||||
Accumulated deficit | (17,821 | ) | (24,113 | ) | |||
Accumulated other comprehensive (loss) income | (691 | ) | 1,500 | ||||
Total member’s equity | 2,021,909 | 2,046,763 | |||||
Total liabilities and member’s equity | $ | 6,335,981 | $ | 6,343,144 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
Operating activities | |||||||
Net income | $ | 6,292 | $ | 19,368 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 46,727 | 40,285 | |||||
Gain on sale of asset | — | (1,095 | ) | ||||
Allowance for equity funds used during construction | (911 | ) | (652 | ) | |||
Deferred income taxes | 3,041 | 8,770 | |||||
Deferred fuel costs | (2,982 | ) | 719 | ||||
Cash surrender value of company-/trust-owned life insurance | (1,702 | ) | (484 | ) | |||
Changes in assets and liabilities | |||||||
Accounts receivable | 8,346 | 3,129 | |||||
Unbilled revenue | 4,765 | 1,207 | |||||
Fuel inventory and materials and supplies | (7,733 | ) | 17,725 | ||||
Prepayments | 1,318 | 2,076 | |||||
Accounts payable | (27,148 | ) | (21,379 | ) | |||
Customer deposits | 2,622 | 2,877 | |||||
Provision for merger commitments | (3,866 | ) | — | ||||
Postretirement benefit obligations | 1,213 | 2,630 | |||||
Regulatory assets and liabilities, net | 2,599 | 4,582 | |||||
Other deferred accounts | 1,920 | 5,529 | |||||
Taxes accrued | 12,568 | 12,651 | |||||
Interest accrued | 25,620 | 16,037 | |||||
Other operating | 2,093 | 2,257 | |||||
Net cash provided by operating activities | 74,782 | 116,232 | |||||
Investing activities | |||||||
Additions to property, plant, and equipment | (47,890 | ) | (35,476 | ) | |||
Allowance for equity funds used during construction | 911 | 652 | |||||
Proceeds from sale of property | 242 | 1,909 | |||||
Contributions to equity investment in investee | — | (2,450 | ) | ||||
Transfer of cash from restricted accounts, net | 8,790 | 4,088 | |||||
Other investing | (165 | ) | 43 | ||||
Net cash used in investing activities | (38,112 | ) | (31,234 | ) | |||
Financing activities | |||||||
Draws on credit facilities | — | 3,000 | |||||
Payments on credit facilities | — | (10,000 | ) | ||||
Repayment of long-term debt | (9,060 | ) | (8,546 | ) | |||
Dividends paid on common stock | — | (24,579 | ) | ||||
Distributions to member | (28,955 | ) | — | ||||
Other financing | (213 | ) | (673 | ) | |||
Net cash used in financing activities | (38,228 | ) | (40,798 | ) | |||
Net (decrease) increase in cash and cash equivalents | (1,558 | ) | 44,200 | ||||
Cash and cash equivalents at beginning of period | 23,077 | 68,246 | |||||
Cash and cash equivalents at end of period | $ | 21,519 | $ | 112,446 | |||
Supplementary cash flow information | |||||||
Interest paid, net of amount capitalized | $ | 4,011 | $ | 2,460 | |||
Income taxes paid (refunded), net | $ | 1 | $ | (481 | ) | ||
Supplementary non-cash investing and financing activities | |||||||
Accrued additions to property, plant, and equipment | $ | 27,617 | $ | 11,874 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | |||||||||||||||
Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited) | |||||||||||||||
(THOUSANDS) | MEMBERSHIP INTEREST | ACCUMULATED DEFICIT | AOCI | TOTAL MEMBER’S EQUITY | |||||||||||
Balances, Dec. 31, 2016 | $ | 2,069,376 | $ | (24,113 | ) | $ | 1,500 | $ | 2,046,763 | ||||||
Distributions to member | (28,955 | ) | — | — | (28,955 | ) | |||||||||
Net income | — | 6,292 | — | 6,292 | |||||||||||
Other comprehensive loss, net of tax | — | — | (2,191 | ) | (2,191 | ) | |||||||||
Balances, Mar. 31, 2017 | $ | 2,040,421 | $ | (17,821 | ) | $ | (691 | ) | $ | 2,021,909 | |||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO POWER | |||||||
Condensed Consolidated Statements of Income (Unaudited) | |||||||
FOR THE THREE MONTHS ENDED MAR. 31, | |||||||
(THOUSANDS) | 2017 | 2016 | |||||
Operating revenue | |||||||
Electric operations | $ | 237,553 | $ | 250,157 | |||
Other operations | 16,365 | 16,614 | |||||
Affiliate revenue | 219 | 232 | |||||
Gross operating revenue | 254,137 | 267,003 | |||||
Electric customer credits | (435 | ) | (321 | ) | |||
Operating revenue, net | 253,702 | 266,682 | |||||
Operating expenses | |||||||
Fuel used for electric generation | 69,873 | 87,443 | |||||
Power purchased for utility customers | 31,963 | 23,105 | |||||
Other operations | 31,988 | 29,399 | |||||
Maintenance | 24,420 | 24,538 | |||||
Depreciation and amortization | 38,758 | 38,603 | |||||
Taxes other than income taxes | 12,000 | 12,424 | |||||
Gain on sale of asset | — | (1,095 | ) | ||||
Total operating expenses | 209,002 | 214,417 | |||||
Operating income | 44,700 | 52,265 | |||||
Interest income | 266 | 179 | |||||
Allowance for equity funds used during construction | 911 | 652 | |||||
Other income | 210 | 148 | |||||
Other expense | (274 | ) | (517 | ) | |||
Interest charges | |||||||
Interest charges, including amortization of debt issuance costs, premiums, and discounts, net | 18,331 | 19,470 | |||||
Allowance for borrowed funds used during construction | (227 | ) | (185 | ) | |||
Total interest charges | 18,104 | 19,285 | |||||
Income before income taxes | 27,709 | 33,442 | |||||
Federal and state income tax expense | 9,855 | 12,563 | |||||
Net income | $ | 17,854 | $ | 20,879 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO POWER | |||||||
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | |||||||
FOR THE THREE MONTHS ENDED MAR. 31, | |||||||
(THOUSANDS) | 2017 | 2016 | |||||
Net income | $ | 17,854 | $ | 20,879 | |||
Other comprehensive (loss) income, net of tax | |||||||
Postretirement benefits (loss) gain (net of tax benefit of $262 in 2017 and tax expense of $125 in 2016) | (420 | ) | 200 | ||||
Net gain on cash flow hedges (net of tax expense of $33 in 2017 and 2016) | 53 | 53 | |||||
Total other comprehensive (loss) income, net of tax | (367 | ) | 253 | ||||
Comprehensive income, net of tax | $ | 17,487 | $ | 21,132 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO POWER | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Assets | |||||||
Utility plant and equipment | |||||||
Property, plant, and equipment | $ | 4,815,466 | $ | 4,790,565 | |||
Accumulated depreciation | (1,634,875 | ) | (1,618,241 | ) | |||
Net property, plant, and equipment | 3,180,591 | 3,172,324 | |||||
Construction work in progress | 97,776 | 77,306 | |||||
Total utility plant and equipment, net | 3,278,367 | 3,249,630 | |||||
Current assets | |||||||
Cash and cash equivalents | 21,164 | 21,482 | |||||
Restricted cash and cash equivalents | 14,150 | 23,084 | |||||
Customer accounts receivable (less allowance for doubtful accounts of $8,056 in 2017 and $7,199 in 2016) | 45,342 | 56,780 | |||||
Accounts receivable - affiliate | 1,378 | 1,406 | |||||
Other accounts receivable | 21,161 | 19,457 | |||||
Taxes receivable, net | 721 | 12,490 | |||||
Unbilled revenue | 29,504 | 34,268 | |||||
Fuel inventory, at average cost | 52,658 | 46,410 | |||||
Materials and supplies, at average cost | 83,301 | 81,818 | |||||
Energy risk management assets | 4,957 | 7,884 | |||||
Accumulated deferred fuel | 24,212 | 20,787 | |||||
Cash surrender value of company-owned life insurance policies | 20,090 | 20,018 | |||||
Prepayments | 5,969 | 5,892 | |||||
Regulatory assets | 17,618 | 17,721 | |||||
Other current assets | — | 577 | |||||
Total current assets | 342,225 | 370,074 | |||||
Equity investment in investee | 18,672 | 18,672 | |||||
Prepayments | 4,874 | 4,731 | |||||
Restricted cash and cash equivalents | 23,533 | 23,389 | |||||
Regulatory assets - deferred taxes, net | 238,378 | 237,449 | |||||
Regulatory assets | 261,858 | 268,016 | |||||
Intangible asset | 54,991 | 58,473 | |||||
Other deferred charges | 34,808 | 37,014 | |||||
Total assets | $ | 4,257,706 | $ | 4,267,448 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. | |||||||
(Continued on next page) |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO POWER | |||||||
Condensed Consolidated Balance Sheets (Unaudited) | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Liabilities and member’s equity | |||||||
Member’s equity | $ | 1,517,689 | $ | 1,535,202 | |||
Long-term debt, net | 1,226,095 | 1,235,056 | |||||
Total capitalization | 2,743,784 | 2,770,258 | |||||
Current liabilities | |||||||
Long-term debt due within one year | 19,689 | 19,715 | |||||
Accounts payable | 88,994 | 101,874 | |||||
Accounts payable - affiliate | 9,367 | 7,190 | |||||
Customer deposits | 56,972 | 56,599 | |||||
Provision for rate refund | 3,262 | 3,974 | |||||
Provision for merger commitments | 10,999 | 14,371 | |||||
Interest accrued | 21,371 | 7,141 | |||||
Energy risk management liabilities | 539 | 201 | |||||
Other current liabilities | 10,004 | 9,951 | |||||
Total current liabilities | 221,197 | 221,016 | |||||
Commitments and contingencies (Note 12) | |||||||
Long-term liabilities and deferred credits | |||||||
Accumulated deferred federal and state income taxes, net | 1,079,427 | 1,068,592 | |||||
Accumulated deferred investment tax credits | 2,585 | 2,751 | |||||
Postretirement benefit obligations | 161,257 | 159,107 | |||||
Restricted storm reserve | 17,643 | 17,385 | |||||
Other deferred credits | 31,813 | 28,339 | |||||
Total long-term liabilities and deferred credits | 1,292,725 | 1,276,174 | |||||
Total liabilities and member’s equity | $ | 4,257,706 | $ | 4,267,448 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO POWER | |||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||||||
FOR THE THREE MONTHS ENDED MAR. 31, | |||||||
(THOUSANDS) | 2017 | 2016 | |||||
Operating activities | |||||||
Net income | $ | 17,854 | $ | 20,879 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 40,871 | 39,774 | |||||
Gain on sale of asset | — | (1,095 | ) | ||||
Allowance for equity funds used during construction | (911 | ) | (652 | ) | |||
Deferred income taxes | 10,135 | 1,854 | |||||
Deferred fuel costs | (2,982 | ) | 719 | ||||
Changes in assets and liabilities | |||||||
Accounts receivable | 8,064 | 3,130 | |||||
Accounts and notes receivable, affiliate | 471 | 1,716 | |||||
Unbilled revenue | 4,765 | 1,207 | |||||
Fuel inventory and materials and supplies | (7,733 | ) | 17,725 | ||||
Prepayments | 925 | 1,560 | |||||
Accounts payable | (23,836 | ) | (20,581 | ) | |||
Accounts and notes payable, affiliate | 2,083 | 731 | |||||
Customer deposits | 2,622 | 2,877 | |||||
Provision for merger commitments | (3,866 | ) | — | ||||
Postretirement benefit obligations | 1,026 | 1,189 | |||||
Regulatory assets and liabilities, net | 2,103 | 4,582 | |||||
Other deferred accounts | 1,494 | 5,529 | |||||
Taxes accrued | 11,769 | 10,859 | |||||
Interest accrued | 14,230 | 16,078 | |||||
Other operating | 2,095 | 2,176 | |||||
Net cash provided by operating activities | 81,179 | 110,257 | |||||
Investing activities | |||||||
Additions to property, plant, and equipment | (46,744 | ) | (35,453 | ) | |||
Allowance for equity funds used during construction | 911 | 652 | |||||
Proceeds from sale of property | 242 | 1,909 | |||||
Contributions to equity investment in investee | — | (2,450 | ) | ||||
Transfer of cash from restricted accounts, net | 8,790 | 4,088 | |||||
Other investing | 39 | 43 | |||||
Net cash used in investing activities | (36,762 | ) | (31,211 | ) | |||
Financing activities | |||||||
Repayment of long-term debt | (9,060 | ) | (8,546 | ) | |||
Distributions to parent | (35,000 | ) | (25,000 | ) | |||
Other financing | (675 | ) | (657 | ) | |||
Net cash used in financing activities | (44,735 | ) | (34,203 | ) | |||
Net (decrease) increase in cash and cash equivalents | (318 | ) | 44,843 | ||||
Cash and cash equivalents at beginning of period | 21,482 | 65,705 | |||||
Cash and cash equivalents at end of period | $ | 21,164 | $ | 110,548 | |||
Supplementary cash flow information | |||||||
Interest paid, net of amount capitalized | $ | 2,212 | $ | 2,334 | |||
Income taxes refunded, net | $ | — | $ | (485 | ) | ||
Supplementary non-cash investing and financing activities | |||||||
Accrued additions to property, plant, and equipment | $ | 27,493 | $ | 11,849 | |||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO POWER | |||||||||||
Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited) | |||||||||||
(THOUSANDS) | MEMBER’S EQUITY | AOCI | TOTAL MEMBER’S EQUITY | ||||||||
Balances, Dec. 31, 2016 | $ | 1,548,624 | $ | (13,422 | ) | $ | 1,535,202 | ||||
Distributions to parent | (35,000 | ) | — | (35,000 | ) | ||||||
Net income | 17,854 | — | 17,854 | ||||||||
Other comprehensive loss, net of tax | — | (367 | ) | (367 | ) | ||||||
Balances, Mar. 31, 2017 | $ | 1,531,478 | $ | (13,789 | ) | $ | 1,517,689 | ||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Index to Applicable Notes to the Unaudited Condensed Consolidated Financial Statements of Registrants | ||
Note 1 | Summary of Significant Accounting Policies | Cleco and Cleco Power |
Note 2 | Business Combinations | Cleco and Cleco Power |
Note 3 | Recent Authoritative Guidance | Cleco and Cleco Power |
Note 4 | Regulatory Assets and Liabilities | Cleco and Cleco Power |
Note 5 | Fair Value Accounting | Cleco and Cleco Power |
Note 6 | Debt | Cleco and Cleco Power |
Note 7 | Pension Plan and Employee Benefits | Cleco and Cleco Power |
Note 8 | Income Taxes | Cleco and Cleco Power |
Note 9 | Disclosures about Segments | Cleco |
Note 10 | Regulation and Rates | Cleco and Cleco Power |
Note 11 | Variable Interest Entities | Cleco and Cleco Power |
Note 12 | Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees | Cleco and Cleco Power |
Note 13 | Affiliate Transactions | Cleco and Cleco Power |
Note 14 | Accumulated Other Comprehensive Loss | Cleco and Cleco Power |
Notes to the Unaudited Condensed Consolidated Financial Statements |
Note 1 — Summary of Significant Accounting Policies |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Cleco | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | |||||||
Cleco Katrina/Rita’s storm recovery bonds | $ | 3,432 | $ | 9,213 | |||
Cleco Power’s charitable contributions | 1,200 | 1,200 | |||||
Cleco Power’s rate credit escrow | 9,518 | 12,671 | |||||
Total current | 14,150 | 23,084 | |||||
Non-current | |||||||
Diversified Lands’ mitigation escrow | 21 | 21 | |||||
Cleco Power’s future storm restoration costs | 17,576 | 17,379 | |||||
Cleco Power’s charitable contributions | 4,126 | 4,179 | |||||
Cleco Power’s rate credit escrow | 1,831 | 1,831 | |||||
Total non-current | 23,554 | 23,410 | |||||
Total restricted cash and cash equivalents | $ | 37,704 | $ | 46,494 |
Cleco Power | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | |||||||
Cleco Katrina/Rita’s storm recovery bonds | $ | 3,432 | $ | 9,213 | |||
Charitable contributions | 1,200 | 1,200 | |||||
Rate credit escrow | 9,518 | 12,671 | |||||
Total current | 14,150 | 23,084 | |||||
Non-current | |||||||
Future storm restoration costs | 17,576 | 17,379 | |||||
Charitable contributions | 4,126 | 4,179 | |||||
Rate credit escrow | 1,831 | 1,831 | |||||
Total non-current | 23,533 | 23,389 | |||||
Total restricted cash and cash equivalents | $ | 37,683 | $ | 46,473 |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Note 2 — Business Combinations |
Purchase Price Allocation | |||
(THOUSANDS) | AT APR. 13, 2016 | ||
Current assets | $ | 455,016 | |
Property, plant, and equipment, net | 3,432,144 | ||
Goodwill | 1,490,797 | ||
Other long-term assets | 1,023,487 | ||
Less | |||
Current liabilities | 228,515 | ||
Net deferred income tax liabilities | 1,059,939 | ||
Other deferred credits | 279,379 | ||
Long-term debt, net | 1,470,126 | ||
Total purchase price | $ | 3,363,485 |
(THOUSANDS) | AT APR. 13, 2016 | ||
Property, plant, and equipment | $ | (1,334,932 | ) |
Accumulated depreciation | $ | 1,565,776 | |
Goodwill | $ | 1,490,797 | |
Intangible assets | $ | 91,826 | |
Regulatory assets | $ | 250,409 | |
Deferred income tax liabilities | $ | 126,853 | |
Other deferred credits | $ | 21,175 | |
Long-term debt | $ | 198,599 |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Note 3 — Recent Authoritative Guidance |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Note 4 — Regulatory Assets and Liabilities |
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Regulatory assets – deferred taxes, net | $ | 238,378 | $ | 237,449 | |||
Mining costs | 5,735 | 6,372 | |||||
Interest costs | 4,770 | 4,860 | |||||
AROs | 2,252 | 2,096 | |||||
Postretirement costs | 142,873 | 145,268 | |||||
Tree trimming costs | 5,874 | 5,549 | |||||
Training costs | 6,669 | 6,708 | |||||
Surcredits, net | 5,028 | 5,876 | |||||
AMI deferred revenue requirement | 4,636 | 4,772 | |||||
Production operations and maintenance expenses | 12,551 | 13,999 | |||||
AFUDC equity gross-up | 70,185 | 70,423 | |||||
Acadia Unit 1 acquisition costs | 2,415 | 2,442 | |||||
Financing costs | 8,570 | 8,663 | |||||
Biomass costs | 11 | 18 | |||||
MISO integration costs | 1,170 | 1,404 | |||||
Coughlin transaction costs | 991 | 999 | |||||
Corporate franchise tax | 654 | 1,308 | |||||
MATS costs | 4,501 | 4,270 | |||||
Other | 591 | 710 | |||||
Total regulatory assets | 279,476 | 285,737 | |||||
Fuel and purchased power | 24,212 | 20,787 | |||||
Total regulatory assets, net | $ | 542,066 | $ | 543,973 |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Total Cleco Power regulatory assets, net (1) | $ | 542,066 | $ | 543,973 | |||
Cleco Holdings’ Merger adjustments | |||||||
Fair value of long-term debt | 153,479 | 155,776 | |||||
Postretirement costs | 22,866 | 23,362 | |||||
Financing costs | 8,880 | 8,966 | |||||
Debt issuance costs | 6,975 | 7,606 | |||||
Total Cleco regulatory assets, net | $ | 734,266 | $ | 739,683 |
Note 5 — Fair Value Accounting |
Cleco | |||||||||||||||
AT MAR. 31, 2017 | AT DEC. 31, 2016 | ||||||||||||||
(THOUSANDS) | CARRYING VALUE* | FAIR VALUE | CARRYING VALUE* | FAIR VALUE | |||||||||||
Long-term debt | $ | 2,756,889 | $ | 2,766,056 | $ | 2,768,149 | $ | 2,754,518 |
Cleco Power | |||||||||||||||
AT MAR. 31, 2017 | AT DEC. 31, 2016 | ||||||||||||||
(THOUSANDS) | CARRYING VALUE* | FAIR VALUE | CARRYING VALUE* | FAIR VALUE | |||||||||||
Long-term debt | $ | 1,253,410 | $ | 1,418,027 | $ | 1,262,373 | $ | 1,418,693 |
Cleco | |||||||||||||||||||||||||||||||
CLECO CONSOLIDATED FAIR VALUE MEASUREMENTS AT REPORTING DATE USING: | |||||||||||||||||||||||||||||||
(THOUSANDS) | AT MAR. 31, 2017 | QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1) | SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) | SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | AT DEC. 31, 2016 | QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1) | SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) | SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | |||||||||||||||||||||||
Asset description | |||||||||||||||||||||||||||||||
Institutional money market funds | $ | 56,624 | $ | — | $ | 56,624 | $ | — | $ | 66,410 | $ | — | $ | 66,410 | $ | — | |||||||||||||||
FTRs | 4,957 | — | — | 4,957 | 7,884 | — | — | 7,884 | |||||||||||||||||||||||
Total assets | $ | 61,581 | $ | — | $ | 56,624 | $ | 4,957 | $ | 74,294 | $ | — | $ | 66,410 | $ | 7,884 | |||||||||||||||
Liability description | |||||||||||||||||||||||||||||||
FTRs | 539 | — | — | 539 | 201 | — | — | 201 | |||||||||||||||||||||||
Total liabilities | $ | 539 | $ | — | $ | — | $ | 539 | $ | 201 | $ | — | $ | — | $ | 201 |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Cleco Power | |||||||||||||||||||||||||||||||
CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE USING: | |||||||||||||||||||||||||||||||
(THOUSANDS) | AT MAR. 31, 2017 | QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1) | SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) | SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | AT DEC. 31, 2016 | QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1) | SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2) | SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3) | |||||||||||||||||||||||
Asset description | |||||||||||||||||||||||||||||||
Institutional money market funds | $ | 56,598 | $ | — | $ | 56,598 | $ | — | $ | 65,089 | $ | — | $ | 65,089 | $ | — | |||||||||||||||
FTRs | 4,957 | — | — | 4,957 | 7,884 | — | — | 7,884 | |||||||||||||||||||||||
Total assets | $ | 61,555 | $ | — | $ | 56,598 | $ | 4,957 | $ | 72,973 | $ | — | $ | 65,089 | $ | 7,884 | |||||||||||||||
Liability description | |||||||||||||||||||||||||||||||
FTRs | 539 | — | — | 539 | 201 | — | — | 201 | |||||||||||||||||||||||
Total liabilities | $ | 539 | $ | — | $ | — | $ | 539 | $ | 201 | $ | — | $ | — | $ | 201 |
Cleco | |||||||
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
Beginning balance | $ | 7,683 | $ | 7,398 | |||
Unrealized gains (losses)* | 2,104 | (832 | ) | ||||
Purchases | 275 | 46 | |||||
Settlements | (5,644 | ) | (4,746 | ) | |||
Ending balance | $ | 4,418 | $ | 1,866 | |||
* Unrealized gains and losses are reported through Accumulated deferred fuel on Cleco’s Condensed Consolidated Balance Sheet. |
Cleco Power | ||||||
FOR THE THREE MONTHS ENDED MAR. 31, | ||||||
(THOUSANDS) | 2017 | 2016 | ||||
Beginning balance | $ | 7,683 | $ | 7,398 | ||
Unrealized gains (losses)* | 2,104 | (832 | ) | |||
Purchases | 275 | 46 | ||||
Settlements | (5,644 | ) | (4,746 | ) | ||
Ending balance | $ | 4,418 | $ | 1,866 | ||
* Unrealized gains and losses are reported through Accumulated deferred fuel on Cleco Power’s Condensed Consolidated Balance Sheet. |
FAIR VALUE | VALUATION TECHNIQUE | SIGNIFICANT UNOBSERVABLE INPUTS | FORWARD PRICE RANGE | ||||||||||||||||
(THOUSANDS, EXCEPT FORWARD PRICE RANGE) | ASSETS | LIABILITIES | LOW | HIGH | |||||||||||||||
FTRs at Mar. 31, 2017 | $ | 4,957 | $ | 539 | RTO auction pricing | FTR price - per MWh | $ | (3.25 | ) | $ | 6.63 | ||||||||
FTRs at Dec. 31, 2016 | $ | 7,884 | $ | 201 | RTO auction pricing | FTR price - per MWh | $ | (3.61 | ) | $ | 6.04 |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS | |||||||||
(THOUSANDS) | BALANCE SHEET LINE ITEM | AT MAR. 31, 2017 | AT DEC. 31, 2016 | ||||||
Commodity-related contracts | |||||||||
FTRs | |||||||||
Current | Energy risk management assets | $ | 4,957 | $ | 7,884 | ||||
Current | Energy risk management liabilities | 539 | 201 | ||||||
Commodity-related contracts, net | $ | 4,418 | $ | 7,683 |
Cleco | ||||||||
AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES | ||||||||
SUCCESSOR | PREDECESSOR | |||||||
(THOUSANDS) | DERIVATIVES LINE ITEM | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
Commodity contracts | ||||||||
FTRs(1) | Electric operations | $ | 9,163 | $ | 8,520 | |||
FTRs(1) | Power purchased for utility customers | (4,665 | ) | (5,723 | ) | |||
Total | $ | 4,498 | $ | 2,797 |
Cleco Power | |||||||
AMOUNT OF GAIN/(LOSS) RECOGNIZED IN INCOME ON DERIVATIVES | |||||||
FOR THE THREE MONTHS ENDED MAR. 31, | |||||||
(THOUSANDS) | DERIVATIVES LINE ITEM | 2017 | 2016 | ||||
Commodity contracts | |||||||
FTRs(1) | Electric operations | $ | 9,163 | $ | 8,520 | ||
FTRs(1) | Power purchased for utility customers | (4,665 | ) | (5,723 | ) | ||
Total | $ | 4,498 | $ | 2,797 |
Note 6 — Debt |
Note 7 — Pension Plan and Employee Benefits |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
PENSION BENEFITS | OTHER BENEFITS | ||||||||||||||
SUCCESSOR | PREDECESSOR | SUCCESSOR | PREDECESSOR | ||||||||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||||||||
Components of periodic benefit costs | |||||||||||||||
Service cost | $ | 2,225 | $ | 2,262 | $ | 385 | $ | 380 | |||||||
Interest cost | 5,358 | 5,507 | 403 | 420 | |||||||||||
Expected return on plan assets | (6,138 | ) | (6,010 | ) | — | — | |||||||||
Amortizations | |||||||||||||||
Prior period service (credit) cost | (18 | ) | (18 | ) | — | 30 | |||||||||
Net loss (gain) | 2,413 | 2,469 | (3 | ) | 160 | ||||||||||
Net periodic benefit cost | $ | 3,840 | $ | 4,210 | $ | 785 | $ | 990 |
Cleco | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | $ | 3,854 | $ | 3,854 | |||
Non-current | $ | 39,934 | $ | 40,196 |
Cleco Power | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | $ | 3,345 | $ | 3,345 | |||
Non-current | $ | 34,668 | $ | 34,892 |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
Components of periodic benefit costs | |||||||
Service cost | $ | 145 | $ | 583 | |||
Interest cost | 800 | 731 | |||||
Amortizations | |||||||
Prior period service (credit) cost | (57 | ) | 13 | ||||
Net loss | 419 | 655 | |||||
Net periodic benefit cost | 1,307 | 1,982 | |||||
Special/contractual termination benefits | 315 | — | |||||
Total benefit cost | $ | 1,622 | $ | 1,982 |
Cleco | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | $ | 4,308 | $ | 4,308 | |||
Non-current | $ | 77,329 | $ | 73,738 |
Cleco Power | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | $ | 885 | $ | 885 | |||
Non-current | $ | 16,075 | $ | 15,145 |
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
401(k) Plan expense | $ | 1,668 | $ | 1,374 |
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
401(k) Plan expense | $ | 279 | $ | 282 |
Note 8 — Income Taxes |
Cleco | |||||
SUCCESSOR | PREDECESSOR | ||||
FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | ||||
Effective tax rate | 33.1 | % | 38.5 | % |
Cleco Power | |||||
FOR THE THREE MONTHS ENDED MAR. 31, | |||||
2017 | 2016 | ||||
Effective tax rate | 35.6 | % | 37.6 | % |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Note 9 — Disclosures about Segments |
SEGMENT INFORMATION FOR THE THREE MONTHS ENDED MAR. 31, | |||||||||||||||
SUCCESSOR | |||||||||||||||
2017 (THOUSANDS) | CLECO POWER | OTHER | ELIMINATIONS | CONSOLIDATED | |||||||||||
Revenue | |||||||||||||||
Electric operations | $ | 237,553 | $ | (3,497 | ) | $ | — | $ | 234,056 | ||||||
Other operations | 16,365 | 515 | — | 16,880 | |||||||||||
Electric customer credits | (435 | ) | — | — | (435 | ) | |||||||||
Affiliate revenue | 219 | 14,734 | (14,953 | ) | — | ||||||||||
Operating revenue, net | $ | 253,702 | $ | 11,752 | $ | (14,953 | ) | $ | 250,501 | ||||||
Depreciation and amortization | $ | 38,758 | $ | 2,093 | $ | — | $ | 40,851 | |||||||
Merger transaction and commitment costs | $ | — | $ | 99 | $ | — | $ | 99 | |||||||
Interest charges | $ | 18,104 | $ | 13,681 | $ | (67 | ) | $ | 31,718 | ||||||
Interest income | $ | 266 | $ | 113 | $ | (67 | ) | $ | 312 | ||||||
Federal and state income tax expense (benefit) | $ | 9,855 | $ | (6,748 | ) | $ | — | $ | 3,107 | ||||||
Net income (loss) | $ | 17,854 | $ | (11,562 | ) | $ | — | $ | 6,292 | ||||||
Additions to property, plant, and equipment | $ | 46,744 | $ | 1,146 | $ | — | $ | 47,890 | |||||||
Equity investment in investees | $ | 18,672 | $ | — | $ | — | $ | 18,672 | |||||||
Goodwill | $ | 1,490,797 | $ | — | $ | — | $ | 1,490,797 | |||||||
Total segment assets | $ | 5,748,503 | $ | 621,406 | $ | (33,928 | ) | $ | 6,335,981 |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
PREDECESSOR | |||||||||||||||
2016 (THOUSANDS) | CLECO POWER | OTHER | ELIMINATIONS | CONSOLIDATED | |||||||||||
Revenue | |||||||||||||||
Electric operations | $ | 250,157 | $ | — | $ | — | $ | 250,157 | |||||||
Other operations | 16,614 | 518 | — | 17,132 | |||||||||||
Electric customer credits | (321 | ) | — | — | (321 | ) | |||||||||
Affiliate revenue | 232 | 13,024 | (13,256 | ) | — | ||||||||||
Operating revenue, net | $ | 266,682 | $ | 13,542 | $ | (13,256 | ) | $ | 266,968 | ||||||
Depreciation and amortization | $ | 38,603 | $ | 335 | $ | — | $ | 38,938 | |||||||
Merger transaction costs | $ | — | $ | 1,539 | $ | (17 | ) | $ | 1,522 | ||||||
Interest charges | $ | 19,285 | $ | 278 | $ | (10 | ) | $ | 19,553 | ||||||
Interest income | $ | 179 | $ | 55 | $ | (10 | ) | $ | 224 | ||||||
Federal and state income tax expense (benefit) | $ | 12,563 | $ | (426 | ) | $ | — | $ | 12,137 | ||||||
Net income (loss) | $ | 20,879 | $ | (1,511 | ) | $ | — | $ | 19,368 | ||||||
Additions to property, plant, and equipment | $ | 35,453 | $ | 23 | $ | — | $ | 35,476 | |||||||
Equity investment in investees (1) | $ | 18,672 | $ | — | $ | — | $ | 18,672 | |||||||
Goodwill (1) | $ | 1,490,797 | $ | — | $ | — | $ | 1,490,797 | |||||||
Total segment assets (1) | $ | 5,758,245 | $ | 614,959 | $ | (30,060 | ) | $ | 6,343,144 | ||||||
(1) Balances as of December 31, 2016 (Successor) |
Note 10 — Regulation and Rates |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Note 11 — Variable Interest Entities |
INCEPTION TO DATE (THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Purchase price | $ | 12,873 | $ | 12,873 | |||
Cash contributions | 6,399 | 6,399 | |||||
Dividend received | (600 | ) | (600 | ) | |||
Total equity investment in investee | $ | 18,672 | $ | 18,672 |
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Oxbow’s net assets/liabilities | $ | 37,345 | $ | 37,345 | |||
Cleco Power’s 50% equity | $ | 18,672 | $ | 18,672 | |||
Cleco Power’s maximum exposure to loss | $ | 18,672 | $ | 18,672 |
FOR THE THREE MONTHS ENDED MAR. 31, | |||||||
(THOUSANDS) | 2017 | 2016 | |||||
Operating revenue | $ | 1,073 | $ | 2,101 | |||
Operating expenses | 1,073 | 2,101 | |||||
Income before taxes | $ | — | $ | — |
Note 12 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
• | 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). |
• | Butler v. Cleco Corporation, No. 2014-10776 (filed November 7, 2014), |
• | Creative Life Services, Inc. v. Cleco Corporation, No. 2014-11098 (filed November 19, 2014), and |
• | Cashen v. Cleco Corporation, No. 2014-11236 (filed November 21, 2014). |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Note 13 — Affiliate Transactions |
AT MAR. 31, 2017 | AT DEC. 31, 2016 | ||||||||||||||
(THOUSANDS) | ACCOUNTS RECEIVABLE | ACCOUNTS PAYABLE | ACCOUNTS RECEIVABLE | ACCOUNTS PAYABLE | |||||||||||
Cleco Holdings | $ | 1 | $ | 176 | $ | 3 | $ | 119 | |||||||
Support Group | 1,377 | 9,191 | 1,402 | 7,071 | |||||||||||
Other (1) | — | — | 1 | — | |||||||||||
Total | $ | 1,378 | $ | 9,367 | $ | 1,406 | $ | 7,190 | |||||||
(1) Represents Attala and Perryville. |
Note 14 — Accumulated Other Comprehensive Loss |
Cleco | |||||||||||
FOR THE THREE MONTHS ENDED MAR. 31, 2017 | |||||||||||
(THOUSANDS) | POSTRETIREMENT BENEFIT NET LOSS | NET LOSS ON CASH FLOW HEDGES | TOTAL AOCI | ||||||||
SUCCESSOR | |||||||||||
Balances, beginning of period | $ | 1,500 | $ | — | $ | 1,500 | |||||
Other comprehensive loss before reclassifications | |||||||||||
Postretirement benefit adjustments during the period | (2,065 | ) | — | (2,065 | ) | ||||||
Amounts reclassified from accumulated other comprehensive loss | |||||||||||
Amortization of postretirement benefit net loss | (126 | ) | — | (126 | ) | ||||||
Net current-period other comprehensive loss | (2,191 | ) | — | (2,191 | ) | ||||||
Balances, Mar. 31, 2017 | $ | (691 | ) | $ | — | $ | (691 | ) |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||||||||
(THOUSANDS) | POSTRETIREMENT BENEFIT NET LOSS | NET LOSS ON CASH FLOW HEDGES | TOTAL AOCI | ||||||||
PREDECESSOR | |||||||||||
Balances, beginning of period | $ | (20,857 | ) | $ | (5,728 | ) | $ | (26,585 | ) | ||
Amounts reclassified from accumulated other comprehensive income | |||||||||||
Amortization of postretirement benefit net loss | 528 | — | 528 | ||||||||
Reclassification of net loss to interest charges | — | 53 | 53 | ||||||||
Net current-period other comprehensive income | 528 | 53 | 581 | ||||||||
Balances, Mar. 31, 2016 | $ | (20,329 | ) | $ | (5,675 | ) | $ | (26,004 | ) |
Cleco Power | |||||||||||
FOR THE THREE MONTHS ENDED MAR. 31, 2017 | |||||||||||
(THOUSANDS) | POSTRETIREMENT BENEFIT NET LOSS | NET LOSS ON CASH FLOW HEDGES | TOTAL AOCI | ||||||||
Balances, beginning of period | $ | (7,905 | ) | $ | (5,517 | ) | $ | (13,422 | ) | ||
Other comprehensive income before reclassifications | |||||||||||
Postretirement benefit adjustments during the period | (584 | ) | — | (584 | ) | ||||||
Amounts reclassified from accumulated other comprehensive income | |||||||||||
Amortization of postretirement benefit net loss | 164 | — | 164 | ||||||||
Reclassification of net loss to interest charges | — | 53 | 53 | ||||||||
Net current-period other comprehensive (loss) income | (420 | ) | 53 | (367 | ) | ||||||
Balances, Mar. 31, 2017 | $ | (8,325 | ) | $ | (5,464 | ) | $ | (13,789 | ) |
FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||||||||
(THOUSANDS) | POSTRETIREMENT BENEFIT NET LOSS | NET LOSS ON CASH FLOW HEDGES | TOTAL AOCI | ||||||||
Balances, beginning of period | $ | (11,364 | ) | $ | (5,728 | ) | $ | (17,092 | ) | ||
Amounts reclassified from accumulated other comprehensive income | |||||||||||
Amortization of postretirement benefit net loss | 200 | — | 200 | ||||||||
Reclassification of net loss to interest charges | — | 53 | 53 | ||||||||
Net current-period other comprehensive income | 200 | 53 | 253 | ||||||||
Balances, Mar. 31, 2016 | $ | (11,164 | ) | $ | (5,675 | ) | $ | (16,839 | ) |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
OVERVIEW |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
RESULTS OF OPERATIONS |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Cleco Consolidated | |||||||
SUCCESSOR | PREDECESSOR | ||||||
(THOUSANDS) | FOR THE THREE MONTHS ENDED MAR. 31, 2017 | FOR THE THREE MONTHS ENDED MAR. 31, 2016 | |||||
Operating revenue, net | $ | 250,501 | $ | 266,968 | |||
Operating expenses | 211,703 | 216,776 | |||||
Operating income | $ | 38,798 | $ | 50,192 | |||
Other income | $ | 1,370 | $ | 506 | |||
Interest charges | $ | 31,718 | $ | 19,553 | |||
Federal and state income tax expense | $ | 3,107 | $ | 12,137 | |||
Net income | $ | 6,292 | $ | 19,368 |
• | $13.4 million of interest costs related to debt obtained as a result of the Merger, |
• | $3.5 million of an offset to operating revenue related to the amortization of the intangible asset recorded for the fair value adjustment of wholesale power supply agreements as a result of the Merger, and |
• | $1.7 million of amortization of the fair value adjustment made as a result of the Merger to record the stepped-up basis for the Coughlin assets. |
Cleco Power | ||||||||||||||
FOR THE THREE MONTHS ENDED MAR. 31, | ||||||||||||||
FAVORABLE/(UNFAVORABLE) | ||||||||||||||
(THOUSANDS) | 2017 | 2016 | VARIANCE | CHANGE | ||||||||||
Operating revenue | ||||||||||||||
Base | $ | 143,117 | $ | 148,820 | $ | (5,703 | ) | (3.8 | )% | |||||
Fuel cost recovery | 94,436 | 101,337 | (6,901 | ) | (6.8 | )% | ||||||||
Electric customer credits | (435 | ) | (321 | ) | (114 | ) | (35.5 | )% | ||||||
Other operations | 16,365 | 16,614 | (249 | ) | (1.5 | )% | ||||||||
Affiliate revenue | 219 | 232 | (13 | ) | (5.6 | )% | ||||||||
Operating revenue, net | 253,702 | 266,682 | (12,980 | ) | (4.9 | )% | ||||||||
Operating expenses | ||||||||||||||
Recoverable fuel and power purchased | 94,280 | 101,339 | 7,059 | 7.0 | % | |||||||||
Non-recoverable fuel and power purchased | 7,556 | 9,209 | 1,653 | 17.9 | % | |||||||||
Other operations | 31,988 | 29,399 | (2,589 | ) | (8.8 | )% | ||||||||
Maintenance | 24,420 | 24,538 | 118 | 0.5 | % | |||||||||
Depreciation and amortization | 38,758 | 38,603 | (155 | ) | (0.4 | )% | ||||||||
Taxes other than income taxes | 12,000 | 12,424 | 424 | 3.4 | % | |||||||||
Gain on sale of asset | — | (1,095 | ) | (1,095 | ) | — | % | |||||||
Total operating expenses | 209,002 | 214,417 | 5,415 | 2.5 | % | |||||||||
Operating income | $ | 44,700 | $ | 52,265 | $ | (7,565 | ) | (14.5 | )% | |||||
Interest charges | $ | 18,104 | $ | 19,285 | $ | 1,181 | 6.1 | % | ||||||
Federal and state income tax expense | $ | 9,855 | $ | 12,563 | $ | 2,708 | 21.6 | % | ||||||
Net income | $ | 17,854 | $ | 20,879 | $ | (3,025 | ) | (14.5 | )% |
• | lower base revenue, |
• | higher other operations expense, and |
• | absence of a gain on sale of asset. |
• | lower income taxes, |
• | lower non-recoverable fuel and power purchased, and |
• | lower interest charges. |
FOR THE THREE MONTHS ENDED MAR. 31, | ||||||||
(MILLION kWh) | 2017 | 2016 | FAVORABLE/ (UNFAVORABLE) | |||||
Electric sales | ||||||||
Residential | 711 | 797 | (10.8 | )% | ||||
Commercial | 584 | 571 | 2.3 | % | ||||
Industrial | 488 | 449 | 8.7 | % | ||||
Other retail | 31 | 31 | — | % | ||||
Total retail | 1,814 | 1,848 | (1.8 | )% | ||||
Sales for resale | 629 | 724 | (13.1 | )% | ||||
Total retail and wholesale customer sales | 2,443 | 2,572 | (5.0 | )% |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
FOR THE THREE MONTHS ENDED MAR. 31, | ||||||||||
(THOUSANDS) | 2017 | 2016 | FAVORABLE/ (UNFAVORABLE) | |||||||
Electric sales | ||||||||||
Residential | $ | 55,028 | $ | 60,105 | (8.4 | )% | ||||
Commercial | 45,467 | 45,237 | 0.5 | % | ||||||
Industrial | 20,719 | 21,098 | (1.8 | )% | ||||||
Other retail | 2,560 | 2,565 | (0.2 | )% | ||||||
Surcharge | 5,082 | 5,121 | (0.8 | )% | ||||||
Total retail | 128,856 | 134,126 | (3.9 | )% | ||||||
Sales for resale | 14,261 | 14,694 | (2.9 | )% | ||||||
Total retail and wholesale customer sales | $ | 143,117 | $ | 148,820 | (3.8 | )% |
FOR THE THREE MONTHS ENDED MAR. 31, | ||||||||||||||
2017 CHANGE | ||||||||||||||
2017 | 2016 | NORMAL | PRIOR YEAR | NORMAL | ||||||||||
Heating degree-days | 421 | 740 | 890 | (43.1 | )% | (52.7 | )% | |||||||
Cooling degree-days | 232 | 119 | 78 | 95.0 | % | 197.4 | % |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
FINANCIAL CONDITION |
SENIOR UNSECURED DEBT | CORPORATE CREDIT | ||||
MOODY’S | S&P | S&P | |||
Cleco Holdings | Baa3 | N/A | BBB- | ||
Cleco Power | A3 | BBB+ | BBB+ |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Cleco | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | |||||||
Cleco Katrina/Rita’s storm recovery bonds | $ | 3,432 | $ | 9,213 | |||
Cleco Power’s charitable contributions | 1,200 | 1,200 | |||||
Cleco Power’s rate credit escrow | 9,518 | 12,671 | |||||
Total current | 14,150 | 23,084 | |||||
Non-current | |||||||
Diversified Lands’ mitigation escrow | 21 | 21 | |||||
Cleco Power’s future storm restoration costs | 17,576 | 17,379 | |||||
Cleco Power’s charitable contributions | 4,126 | 4,179 | |||||
Cleco Power’s rate credit escrow | 1,831 | 1,831 | |||||
Total non-current | 23,554 | 23,410 | |||||
Total restricted cash and cash equivalents | $ | 37,704 | $ | 46,494 |
Cleco Power | |||||||
(THOUSANDS) | AT MAR. 31, 2017 | AT DEC. 31, 2016 | |||||
Current | |||||||
Cleco Katrina/Rita’s storm recovery bonds | $ | 3,432 | $ | 9,213 | |||
Charitable contributions | 1,200 | 1,200 | |||||
Rate credit escrow | 9,518 | 12,671 | |||||
Total current | 14,150 | 23,084 | |||||
Non-current | |||||||
Future storm restoration costs | 17,576 | 17,379 | |||||
Charitable contributions | 4,126 | 4,179 | |||||
Rate credit escrow | 1,831 | 1,831 | |||||
Total non-current | 23,533 | 23,389 | |||||
Total restricted cash and cash equivalents | $ | 37,683 | $ | 46,473 |
• | a $25.7 million increase in interest accrued primarily due to accruals for pending interest payments on long-term debt, |
• | a $12.6 million increase in taxes payable primarily due to accrual of property taxes and payroll taxes, |
• | an $11.4 million decrease in customer accounts receivable primarily due to a decrease in retail revenue, |
• | an $8.9 million decrease in current restricted cash and cash equivalents, and |
• | a $4.8 million decrease in unbilled revenue due to a decrease in customer usage. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
• | a $16.8 million decrease in accounts payable primarily due to the payment of property taxes, |
• | a $6.2 million increase in fuel inventory primarily due to higher per unit cost of fuel, capitalizing on lower transportation costs, and an early receipt of inventory delivery, |
• | a $3.4 million increase in accumulated deferred fuel primarily due to surcharge adjustments, partially offset by timing of collections, and |
• | a $3.4 million decrease in provision for Merger Commitments primarily due to Merger Commitments satisfied during the first quarter of 2017. |
• | a $14.2 million increase in interest accrued primarily due to accruals for pending interest payments on long-term debt, |
• | an $11.8 million decrease in taxes receivable primarily due to accrual of property taxes and payroll taxes, |
• | an $11.4 million decrease in customer accounts receivable primarily due to a decrease in retail revenue, |
• | an $8.9 million decrease in current restricted cash and cash equivalents, and |
• | a $4.8 million decrease in unbilled revenue due to a decrease in customer usage. |
• | a $12.9 million decrease in accounts payable primarily due to the payment of property taxes, |
• | a $6.2 million increase in fuel inventory primarily due to higher per unit cost of fuel, capitalizing on lower transportation costs, and an early receipt of inventory delivery, |
• | a $3.4 million increase in accumulated deferred fuel primarily due to surcharge adjustments, partially offset by timing of collections, and |
• | a $3.4 million decrease in provision for Merger Commitments primarily due to Merger Commitments satisfied during the first quarter of 2017. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
• | higher payments for fuel inventory of $23.4 million primarily due to higher lignite purchases and higher petroleum coke purchases and |
• | lower collections from customers of $3.4 million due to Merger credits issued in 2016. |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CRITICAL ACCOUNTING POLICIES |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
CLECO POWER — NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Risk Overview |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
Cleco Power |
ITEM 4. CONTROLS AND PROCEDURES |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
PART II — OTHER INFORMATION |
ITEM 1. LEGAL PROCEEDINGS |
CLECO HOLDINGS |
CLECO POWER |
ITEM 1A. RISK FACTORS |
ITEM 4. MINE SAFETY DISCLOSURES |
ITEM 5. OTHER INFORMATION |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
ITEM 6. EXHIBITS | |
CLECO | |
10.1 | 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 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 28, 2017) |
10.2 | Interim Executive Employment Agreement, effective February 8, 2017, by and between Peggy Scott and Cleco Group LLC (incorporated by reference to Exhibit 10(k) to the Annual Report on Form 10-K for the year ended December 31, 2016, filed on February 22, 2017) |
10.3 | 2017 Long-Term Incentive Compensation Plan, effective as of January 1, 2017 |
10.4 | Form of Notice and Acceptance of Incentive Award under Cleco Corporate Holdings LLC 2017 Long-Term Incentive Compensation Plan - 2017 Two-Year Performance Cycle |
10.5 | Form of Notice and Acceptance of Incentive Award under Cleco Corporate Holdings LLC 2017 Long-Term Incentive Compensation Plan - 2017 Three-Year Performance Cycle |
10.6 | 2017 Short-Term Incentive Plan, effective as of January 1, 2017 |
12(a) | Computation of Ratios of Earnings to Fixed Charges |
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 |
95 | Mine Safety Disclosures |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Label Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
CLECO POWER | |
10.1 | 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 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed March 28, 2017) |
12(b) | Computation of Ratios of Earnings to Fixed Charges |
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 |
95 | Mine Safety Disclosures |
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
101.LAB | XBRL Taxonomy Extension Label Linkbase |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
CLECO | ||
CLECO POWER | 2017 1ST QUARTER FORM 10-Q |
SIGNATURES |
CLECO CORPORATE HOLDINGS LLC | ||
(Registrant) | ||
By: | /s/ F. Tonita Laprarie | |
F. Tonita Laprarie | ||
Controller and Chief Accounting Officer |
CLECO POWER LLC | ||
(Registrant) | ||
By: | /s/ F. Tonita Laprarie | |
F. Tonita Laprarie | ||
Controller and Chief Accounting Officer |