Schedule I Financial Statements of Cleco Corporation

12 Months Ended

Dec. 31, 2011

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule I - Financial Statements of Cleco Corporation

CLECO CORPORATION (Parent Company Only)	SCHEDULE I
Condensed Statements of Income

	FOR THE YEAR ENDED DECEMBER 31,
(THOUSANDS)	2011			2010			2009
Operating expenses
Administrative and general	$	1,184		$	2,058		$	4,045
Other operating expense (income)	650			447			(1,363		)
Total operating expenses	$	1,834		$	2,505		$	2,682
Operating loss	(1,834		)	(2,505		)	(2,682		)
Equity income from subsidiaries, net of tax	184,951			262,629			94,566
Interest, net	(2,874		)	(9,988		)	14,974
Other income	4,699			1,467			4,157
Other expense	(2,282		)	(740		)	(110		)
Income before income taxes	182,660			250,863			110,905
Income tax (benefit) expense	(13,188		)	(4,528		)	4,598
Net income	195,848			255,391			106,307
Preferred dividends requirements	26			46			46
Preferred stock redemption costs	$	112		$	—		$	—
Income applicable to common stock	$	195,710		$	255,345		$	106,261
The accompanying notes are an integral part of the condensed financial statements.

CLECO CORPORATION (Parent Company Only)	SCHEDULE I
Condensed Balance Sheets

	AT DECEMBER 31,
(THOUSANDS)	2011			2010
Assets
Current assets
Cash and cash equivalents	$	22,642		$	5,320
Accounts receivable - affiliate	13,386			8,189
Other accounts receivable	1			1,202
Taxes receivable	8,431			11,565
Accumulated deferred federal and state income taxes, net	7,153			—
Cash surrender value of life insurance policies	30,639			29,738
Total current assets	82,252			56,014
Equity investment in investees	1,392,693			1,475,118
Deferred charges	39,089			23,351
Total assets	$	1,514,034		$	1,554,483
Liabilities and shareholders’ equity
Liabilities
Current liabilities
Short-term debt	$	—		$	150,000
Accounts payable - affiliate	13,739			16,453
Other current liabilities	8,903			10,281
Total current liabilities	22,642			176,734
Deferred credits	61,535			44,542
Long-term debt	10,000			15,000
Total liabilities	94,177			236,276
Commitments and Contingencies (Note 5)
Shareholders’ equity
Preferred stock
Not subject to mandatory redemption, $100 par value, authorized 1,491,900 shares, issued zero and 10,288 shares at December 31, 2011, and 2010, respectively	—			1,029
Common shareholders’ equity
Common stock, $1 par value, authorized 100,000,000 shares, issued 60,702,342 and 60,539,624 shares and outstanding 60,291,939 and 60,526,126 shares at December 31, 2011, and 2010, respectively	60,702			60,540
Premium on common stock	409,904			405,313
Retained earnings	990,605			863,237
Treasury stock, at cost, 410,403 and 13,498 shares at December 31, 2011, and 2010, respectively	(13,215		)	(274		)
Accumulated other comprehensive loss	(28,139		)	(11,638		)
Total common shareholders’ equity	1,419,857			1,317,178
Total shareholders’ equity	1,419,857			1,318,207
Total liabilities and shareholders’ equity	$	1,514,034		$	1,554,483
The accompanying notes are an integral part of the condensed financial statements.

CLECO CORPORATION (Parent Company Only)	SCHEDULE I
Condensed Statements of Cash Flows

	FOR THE YEAR ENDED DECEMBER 31,
(THOUSANDS)	2011			2010			2009
Operating activities
Net cash provided by operating activities	$	175,624		$	174,912		$	6,007
Investing activities
Additions to property, plant, and equipment, net	—			(152,067		)	—
Equity investment in tax credit fund	(43,921		)	(35,871		)	(16,254		)
Return of equity investment in tax credit fund	33,430			—			—
Return of equity investment in investees	89,654			—			850
Other investing	(1,232		)	(2,900		)	(2,328		)
Net cash provided by (used in) investing activities	77,931			(190,838		)	(17,732		)
Financing activities
Issuance of short-term debt	—			150,000			—
Retirement of short-term debt	(150,000		)	—			—
Draws on credit facility	35,000			20,000			93,000
Payments on credit facility	(40,000		)	(100,000		)	(28,000		)
Repurchase of common stock	(13,009		)	—			—
Redemption of preferred stock	(1,039		)	—			—
Dividends paid on preferred stock	(26		)	(46		)	(46		)
Dividends paid on common stock	(68,023		)	(58,988		)	(54,221		)
Other financing	864			3,200			2,131
Net cash (used in) provided by financing activities	(236,233		)	14,166			12,864
Net increase (decrease) in cash and cash equivalents	17,322			(1,760		)	1,139
Cash and cash equivalents at beginning of period	5,320			7,080			5,941
Cash and cash equivalents at end of period	$	22,642		$	5,320		$	7,080
Supplementary cash flow information
Interest paid	$	1,752		$	8,205		$	3,119
Income tax paid (refunded), net	$	31,180		$	80,905		$	(34,792	)
Supplementary non-cash investing and financing activity
Issuance of treasury stock – LTICP	$	68		$	93		$	117
Issuance of common stock - LTICP/ESPP	$	328		$	299		$	290
Non-cash additions to property, plant, and equipment	$	—		$	152,067		$	—
Non-cash return of investment	$	—		$	152,067		$	—
Non-cash contribution to subsidiary, net of tax	$	—		$	225,732		$	—
The accompanying notes are an integral part of the condensed financial statements.

CLECO CORPORATION (Parent Company Only)	SCHEDULE I
Condensed Statements of Comprehensive Income

	FOR THE YEAR ENDED DECEMBER 31,
(THOUSANDS)	2011			2010			2009
Net income	$	195,848		$	255,391		$	106,307
Other comprehensive loss, net of tax:
Amortization of postretirement benefit net loss (gain) (net of tax expense of $605 in 2011, and tax benefit of $20 in 2010 and $158 in 2009)	1,213			(31		)	(160		)
Postretirement benefit loss incurred during the year (net of tax benefit of $949 in 2011 and $2,553 in 2009, and tax expense of $131 in 2010)	(1,721		)	(4,241		)	(3,403		)
Cash flow hedges:
Net derivative (loss) gain (net of tax benefit of $9,873 in 2011, and tax expense of $1,823 in 2010 and $1,208 in 2009)	(15,788		)	2,916			1,930
Reclassification of net (gain) loss to interest charges (net of tax benefit of $129 in 2011, and tax expense of $197 in 2010 and $110 in 2009)	(205		)	315			175
Reclassification of net loss to other expense (net of tax expense of $434 in 2010)	—			694			—
Total other comprehensive loss, net of tax	(16,501		)	(347		)	(1,458		)
Comprehensive income, net of tax	$	179,347		$	255,044		$	104,849
The accompanying notes are an integral part of the consolidated financial statements.

Summary of Significant Accounting Policies

The condensed financial statements represent the financial information required by SEC Regulation S-X 5-04 for Cleco Corporation, which requires the inclusion of parent company only financial statements if the restricted net assets of consolidated subsidiaries exceed 25% of total consolidated net assets as of the last day of its most recent fiscal year. As of December 31, 2011, Cleco Corporation’s restricted net assets of consolidated subsidiaries were $723.5 million and exceeded 25% of its total consolidated net assets.

Cleco Corporation’s major, first-tier subsidiaries consist of Cleco Power and Midstream.

Cleco Power contains the LPSC-jurisdictional generation, transmission, and distribution electric utility operations serving Cleco’s traditional retail and wholesale customers. Midstream owns and operates a merchant power plant (Coughlin).

The accompanying financial statements have been prepared to present the financial position, results of operations, and cash flows of Cleco Corporation on a stand-alone basis as a holding company. Investments in subsidiaries and other investees are stated at cost plus equity in undistributed earnings from the date of acquisition. These financial statements should be read in conjunction with Cleco’s consolidated financial statements.

Debt

At December 31, 2011, Cleco Corporation had no short-term debt outstanding compared to $150.0 million at December 31, 2010. The short-term debt outstanding at December 31, 2010, was a bank term loan Cleco Corporation entered into in February 2010. The bank term loan had an interest rate of one-month LIBOR plus 2.75% and was set to mature in February 2011. In January 2011, Cleco extended the bank term loan to mature on August 19, 2011, and lowered the interest rate to one-month LIBOR plus 2.50% or ABR plus 1.50%. On April 29, 2011, Cleco repaid the $150.0 million bank term loan. As part of the repayment, Cleco paid $0.6 million for accrued interest on the term loan.

At December 31, 2011, Cleco Corporation’s long-term debt outstanding was $10.0 million, of which none was due within one year, compared to $15.0 million of long-term debt at December 31, 2010, of which none was due within one year. The long-term debt at December 31, 2011, and 2010, was the result of outstanding draws on Cleco Corporation’s credit facilities.

In November 2010, Cleco Corporation entered into a $200.0 millionfour-year revolving credit facility. The credit facility was set to mature on November 23, 2014, and provided for working capital and other needs. Cleco Corporation’s borrowing costs under this facility were equal to LIBOR plus 2.05%, plus facility fees of 0.45%. On October 7, 2011, Cleco Corporation amended its credit facility agreement. Under the amended agreement, Cleco Corporation’s maximum capacity was increased from $200.0 million to $250.0 million, the maturity date was extended to October 7, 2016, and the borrowing costs were lowered to equal LIBOR plus 1.50% or ABR plus 0.50%, plus facility fees of 0.25%. At December 31, 2011, Cleco Corporation was in compliance with the covenants in its credit facility.

At December 31, 2011, Cleco Corporations' outstanding credit facility borrowings reduced available borrowings by $10.0 million, leaving an available borrowing capacity of $240.0 million.

Dividends and Equity Contributions

Some provisions in Cleco Power’s debt instruments restrict the amount of equity available for distribution to Cleco Corporation by Cleco Power under specified circumstances. The most restrictive covenant requires Cleco Power’s total indebtedness to be less than or equal to 65% of total capitalization. At December 31, 2011, approximately $661.5 million of member’s equity were unrestricted. Cleco Corporation received $130.0 million, $150.0 million, and $30.0 million in distributions from Cleco Power in 2011, 2010, and 2009, respectively. During 2010, Cleco Corporation made $225.7 million in non-cash equity contributions to Cleco Power relating to Acadia Unit 1. No equity contributions were made to Cleco Power in 2011 or 2009.

Cleco Corporation received $159.2 million and $32.0 million in distributions from Midstream during the years ended December 31, 2011, and 2010, respectively. Cleco Corporation received no distributions from Midstream during the year ended December 31, 2009. For the years ended December 31, 2011, 2010, and 2009, Cleco Corporation made no equity contributions to Midstream.

Income Taxes

Cleco Corporation (Parent Company Only) Condensed Statements of Income reflect income tax benefit of $13.2 million, income tax benefit of $4.5 million, and income tax expense of $4.6 million for the years ended December 31, 2011, 2010, and 2009, respectively. In addition to these amounts, income tax expense of $116.1 million, $147.0 million, and $5.0 million is reflected in equity income of subsidiaries, net of tax for the years ended December 31, 2011, 2010, and 2009, respectively.

Commitments and Contingencies

For information regarding commitments and contingencies related to Cleco Corporation, see Part II, Item 8, “Financial Statements and Supplementary Data — Notes to the Financial Statements — Note 14 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Off-Balance Sheet Commitments and Disclosures about Guarantees.”