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Fair Value Accounting (Tables)

9 Months Ended

Sep. 30, 2011

The following charts summarize the carrying value and estimated market value of Cleco and Cleco Power’s financial instruments subject to fair value accounting.

Cleco

	AT SEPTEMBER 30, 2011				AT DECEMBER 31, 2010
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market
Cash and cash equivalents	$	158,232	$	158,232	$	191,128	$	191,128
Restricted cash	$	28,903	$	28,903	$	41,048	$	41,048
Long-term debt, excluding debt issuance costs	$	1,376,567	$	1,566,805	$	1,403,836	$	1,462,063
Preferred stock not subject to mandatory redemption	$	-	$	-	$	1,029	$	844

Cleco Power

	AT SEPTEMBER 30, 2011				AT DECEMBER 31, 2010
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market
Cash and cash equivalents	$	143,015	$	143,015	$	184,912	$	184,912
Restricted cash	$	28,807	$	28,807	$	40,951	$	40,951
Long-term debt, excluding debt issuance costs	$	1,376,567	$	1,566,805	$	1,388,836	$	1,447,063

Fair Value of Financial Assets and Liabilities Measured On A Recurring Basis

The tables below disclose for Cleco and Cleco Power the fair value of financial assets and liabilities measured on a recurring basis and within the scope of the authoritative guidance for fair value measurements and disclosures.

Cleco

	CLECO CONSOLIDATED FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT SEPTEMBER 30, 2011		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DECEMBER 31, 2010		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset Description
Energy market derivatives	$	-	$	-	$	-	$	-	$	97	$	-	$	97	$	-
Institutional money market funds		182,603		-		182,603		-		229,748		-		229,748		-
Total assets	$	182,603	$	-	$	182,603	$	-	$	229,845	$	-	$	229,845	$	-
Liability Description
Energy market derivatives	$	5,685	$	381	$	5,304	$	-	$	15,245	$	3,317	$	11,928	$	-
Treasury rate lock		29,962		-		29,962		-		-		-		-		-
Total liabilities	$	35,647	$	381	$	35,266	$	-	$	15,245	$	3,317	$	11,928	$	-

Cleco Power

	CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT SEPTEMBER 30, 2011		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DECEMBER 31, 2010		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset Description
Energy market derivatives	$	-	$	-	$	-	$	-	$	97	$	-	$	97	$	-
Institutional money market funds		168,307		-		168,307		-		224,451		-		224,451		-
Total assets	$	168,307	$	-	$	168,307	$	-	$	224,548	$	-	$	224,548	$	-
Liability Description
Energy market derivatives	$	5,685	$	381	$	5,304	$	-	$	15,245	$	3,317	$	11,928	$	-
Treasury rate lock		29,962		-		29,962		-		-		-		-		-
Total liabilities	$	35,647	$	381	$	35,266	$	-	$	15,245	$	3,317	$	11,928	$	-

Fair Values of Derivative Instruments

The following table presents the fair values of derivative instruments and their respective line items as recorded on Cleco Corporation and Cleco Power’s Condensed Consolidated Balance Sheets as of September 30, 2011, and December 31, 2010:

	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
	LIABILITY DERIVATIVES
(THOUSANDS) FAIR VALUE	BALANCE SHEET LINE ITEM	AT SEPTEMBER 30, 2011			DECEMBER 31, 2010
Commodity contracts
Fuel cost hedges:
Current	Energy risk management liability, net	$	(5,685	)	$	(13,497	)
Long-term	Other deferred credits		-			(1,651	)
Total		$	(5,685	)	$	(15,148	)

Effect of Derivatives On Consolidated Statements of Income

The following table presents the effect of derivatives not designated as hedging instruments on Cleco Corporation and Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2011, and 2010:

		FOR THE THREE MONTHS ENDED							FOR THE NINE MONTHS ENDED
		SEPTEMBER 30, 2011			SEPTEMBER 30, 2010				SEPTEMBER 30, 2011			SEPTEMBER 30, 2010
(THOUSANDS)	GAIN (LOSS) IN INCOME OF DERIVATIVES LINE ITEM	AMOUNT OF LOSS RECOGNIZED IN INCOME ON DERIVATIVES			AMOUNT OF LOSS RECOGNIZED IN INCOME ON DERIVATIVES			GAIN (LOSS) IN INCOME OF DERIVATIVES LINE ITEM	AMOUNT OF LOSS RECOGNIZED IN INCOME ON DERIVATIVES			AMOUNT OF LOSS RECOGNIZED IN INCOME ON DERIVATIVES
Commodity contracts
Economic hedges	Other operations revenue	$	-		$	(157	) (1)	Other operations revenue	$	-		$	(648	) (2)
Fuel cost hedges(3)	Fuel used for electric generation		(5,678	)		(10,182	)	Fuel used for electric generation		(14,675	)		(32,397	)
Total		$	(5,678	)	$	(10,339	)		$	(14,675	)	$	(33,045	)
(1)For the three months ended September 30, 2010, Cleco recognized $0.2 million of mark-to-market gains related to economic hedges.
(2)For the nine months ended September 30, 2010, Cleco recognized $0.2 million of mark-to-market gains related to economic hedges.
(3)In accordance with the authoritative guidance for regulated operations, an additional $5.7 million of unrealized losses and $1.3 million of deferred losses associated with fuel cost hedges are reported in Accumulated Deferred Fuel on the balance sheet as of September 30, 2011, compared to $15.1 million of unrealized losses and $1.6 million of deferred losses associated with fuel cost hedges as of December 31, 2010. As gains and losses are realized in future periods, they will be recorded as Fuel Used for Electric Generation on the Income Statement.

The following table presents the effect of derivatives designated as hedging instruments on Cleco Corporation and Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2011, and 2010:

	FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011						FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2010
(THOUSANDS)	AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF (LOSS) GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate swap(1)	$	-		$	-		$	(376	)	$	(194	)*
Treasury rate locks	$	(29,962	)	$	89	*	$	-		$	41	*
* The (loss) gain reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.
(1) In November 2010, the interest rate swap was terminated. All remaining losses in accumulated OCI were reclassified to other expense.

	FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011						FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010
(THOUSANDS)	AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF (LOSS) GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate swap(1)	$	-		$	-		$	(717	)	$	(592	)*
Treasury rate locks	$	(29,962	)	$	267	*	$	-		$	125	*
* The (loss) gain reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.
(1) In November 2010, the interest rate swap was terminated. All remaining losses in accumulated OCI were reclassified to other expense.

- Definition

Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

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