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Fair Value Accounting (Tables)

9 Months Ended

Sep. 30, 2012

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



Cleco
	AT SEPT. 30, 2012				AT DEC. 31, 2011
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market
Cash and cash equivalents	$	68,364	$	68,364	$	93,576	$	93,576
Restricted cash and cash equivalents	$	16,726	$	16,726	$	35,828	$	35,828
Long-term debt, excluding debt issuance costs	$	1,320,198	$	1,553,694	$	1,354,567	$	1,542,867

Schedule of Available-for-sale Securities Reconciliation

The following table provides a reconciliation of Cleco Power's available-for-sale securities from cost basis to fair value at September 30, 2012.



	AT SEPT. 30, 2012
(THOUSANDS)	AMORTIZED COST		TOTAL UNREALIZED GAINS ⁽¹⁾		TOTAL UNREALIZED LOSSES ⁽¹⁾		FAIR VALUE
Municipal bonds	$	4,477	$	2	$	9	$	4,470
⁽¹⁾ Unrealized gains and losses are recorded to the restricted storm reserve.

Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value

The following table summarizes the securities that were in an unrealized loss position at September 30, 2012, but for which no other-than-temporary impairment was recognized:



			LESS THAN 12 MONTHS		12 MONTHS OR LONGER
(THOUSANDS)	AGGREGATE UNREALIZED LOSS		AGGREGATE RELATED FAIR VALUE		AGGREGATE UNREALIZED LOSS		AGGREGATE RELATED FAIR VALUE
Municipal bonds	$	9	$	3,381	$	—	$	—

Available-for-sale Securities

At September 30, 2012, the fair value of Cleco Power's available-for-sale securities by contractual maturity was:



(THOUSANDS)	AT SEPT. 30, 2012
One year or less	$	1,022
Over one year through five years	3,448
Total fair value	$	4,470

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

The following tables disclose for Cleco and Cleco Power the fair value of financial assets and liabilities measured or disclosed 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 SEPT. 30, 2012		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2011		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	$	74,712	$	—	$	74,712	$	—	$	118,951	$	—	$	118,951	$	—
Municipal bonds	$	4,470	$	—	$	4,470	$	—	$	—	$	—	$	—	$	—
Total assets	$	79,182	$	—	$	79,182	$	—	$	118,951	$	—	$	118,951	$	—
Liability Description
Energy market derivatives	$	—	$	—	$	—	$	—	$	5,336	$	—	$	5,336	$	—
Interest rate derivatives	4,063		—		4,063		—		3,330		—		3,330		—
Long-term debt	1,553,694		—		1,553,694		—		1,542,867		—		1,542,867		—
Total liabilities	$	1,557,757	$	—	$	1,557,757	$	—	$	1,551,533	$	—	$	1,551,533	$	—

Fair Values of Derivative Instruments

The following table presents the fair values of derivative instruments and their respective line items as recorded on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets as of September 30, 2012 and December 31, 2011.



	DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
	LIABILITY DERIVATIVES
(THOUSANDS) FAIR VALUE	BALANCE SHEET LINE ITEM	AT SEPT. 30, 2012		AT DEC. 31, 2011
Commodity contracts
Fuel cost hedges:
Current	Energy risk management liability, net	$	—	$	(5,336	)
Total		$	—	$	(5,336	)

Effect of Derivatives On Consolidated Statements of Income

The following table presents the effect of derivatives not designated as hedging instruments on Cleco and Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 and 2011.



	FOR THE THREE MONTHS ENDED SEPT. 30,								FOR THE NINE MONTHS ENDED SEPT. 30,
		2012			2011				2012			2011
(THOUSANDS)	LOSS IN INCOME OF DERIVATIVES LINE ITEM	AMOUNT OF LOSS RECOGNIZED IN INCOME ON DERIVATIVES			AMOUNT OF LOSS RECOGNIZED IN INCOME ON DERIVATIVES			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
Fuel cost hedges⁽¹⁾	Fuel used for electric generation	$	(595	)	$	(5,678	)	Fuel used for electric generation	$	(8,210	)	$	(14,675	)
Total		$	(595	)	$	(5,678	)		$	(8,210	)	$	(14,675	)
⁽¹⁾In accordance with the authoritative guidance for regulated operations, no unrealized gains or losses and $0.1 million of deferred losses associated with fuel cost hedges are reported in Accumulated Deferred Fuel on the balance sheet as of September 30, 2012, compared to $5.3 million of unrealized losses and $1.2 million of deferred losses associated with fuel cost hedges as of December 31, 2011. 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 tables present the effect of derivatives designated as hedging instruments on Cleco and Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2012 and 2011.



						FOR THE THREE MONTHS ENDED SEPT. 30,
	2012					2011
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate derivatives	$	802	$	17	*	$	(29,962	)	$	89	*
* The gain (loss) reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.



							FOR THE NINE MONTHS ENDED SEPT. 30,
	2012						2011
(THOUSANDS)	AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate derivatives⁽¹⁾	$	(733	)	$	(39	)*	$	(29,962	)	$	267	*
* The (loss) gain reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.
⁽¹⁾ During the nine months ended September 30, 2012, Cleco recorded $2.6 million of ineffectiveness related to the interest rate derivatives as a regulatory asset.

Cleco Power [Member]

Fair Value [Line Items]

Fair Value By Balance Sheet Grouping



Cleco Power
	AT SEPT. 30, 2012				AT DEC. 31, 2011
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market
Cash and cash equivalents	$	50,578	$	50,578	$	67,458	$	67,458
Restricted cash and cash equivalents	$	16,629	$	16,629	$	35,731	$	35,731
Long-term debt, excluding debt issuance costs	$	1,320,198	$	1,553,694	$	1,344,567	$	1,532,867

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



Cleco Power
	CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT SEPT. 30, 2012		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2011		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	$	61,115	$	—	$	61,115	$	—	$	99,955	$	—	$	99,955	$	—
Municipal bonds	$	4,470	$	—	$	4,470	$	—	$	—	$	—	$	—	$	—
Total assets	$	65,585	$	—	$	65,585	$	—	$	99,955	$	—	$	99,955	$	—
Liability Description
Energy market derivatives	$	—	$	—	$	—	$	—	$	5,336	$	—	$	5,336	$	—
Interest rate derivatives	4,063		—		4,063		—		3,330		—		3,330		—
Long-term debt	1,553,694		—		1,553,694		—		1,532,867		—		1,532,867		—
Total liabilities	$	1,557,757	$	—	$	1,557,757	$	—	$	1,541,533	$	—	$	1,541,533	$	—

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

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- 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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+ Details

- 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.

+ References+ Details

- Definition

Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

+ References+ Details