Operating Leases

12 Months Ended

Dec. 31, 2012

Leases [Abstract]

Operating Leases

The following is a schedule of operating leases that Cleco maintains in the ordinary course of business activities. The majority of Cleco’s operating leases are for line construction and operating vehicles and for railcars for coal deliveries, which are utilized by Cleco Power. The remaining leases provide for office and operating facilities and office equipment. These leases have various terms and expiration dates. The following table is a summary of expected operating lease payments for Cleco and Cleco Power for the years indicated.

			YEAR ENDING DEC. 31,
(THOUSANDS)	CLECO		CLECO POWER		TOTAL
2013	$	10	$	9,333	$	9,343
2014	4		9,977		9,981
2015	—		9,909		9,909
2016	—		9,575		9,575
2017	—		11,427		11,427
Thereafter	—		3,757		3,757
Total operating lease payments	$	14	$	53,978	$	53,992

Cleco Power has vehicle leases with two vendors. The leases with the first vendor have terms that vary from five to ten years. The leases can be extended on a month-by-month basis at the end of the term. The lease payments are fixed amounts for the term of the lease. These leases include distribution line construction and maintenance vehicles. Most of these leases are considered operating leases, whereby Cleco returns the vehicle to the vendor at the end of the lease with no further obligation (assuming certain turn-in provisions are met). However, five of the leases are TRAC (terminal rent adjustment clause) leases whereby the vendor is guaranteed a certain residual value at lease-end. For each of the years ended December 31, 2012, 2011, and 2010, lease expense of $1.0 million was recognized.

The leases with the second vendor vary in term from five to seven years. The lease payments are fixed amounts for the term of the lease, based on a percentage of acquisition cost. These leases include distribution line construction and maintenance vehicles, as well as vehicles used throughout the company in generation, distribution, and transmission. These leases are TRAC leases, with a specific residual value guaranteed to the vendor. For the years ended December 31, 2012, 2011, and 2010, operating lease expense of $0.4 million, $0.4 million, and $0.2 million was recognized, respectively.

The operating leases for office and operating facilities and office equipment have lease terms from one to five years. For each of the years ended December 31, 2012, 2011, and 2010, operating lease expense of less than $0.1 million was recognized.

The railcar leases are divided into two groups. The first group has 120 railcars, and the lease expires on March 31, 2021. The second group has 121 railcars, and the lease expires on March 31, 2017. Cleco Power pays a monthly rental fee per car. For each of the years ended December 31, 2012, 2011, and 2010, operating lease expense of $1.1 million was recognized. The railcar leases do not contain contingent rent payments. For more information regarding operating leases, see Note 14 — “Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Other Commitments — CBL Capital Corporation.”