Schedule I Financial Statements of Cleco Corporation

12 Months Ended

Dec. 31, 2012

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 DEC. 31,
(THOUSANDS)	2012			2011			2010
Operating expenses
Administrative and general	$	1,154		$	1,184		$	2,058
Other operating expense	362			650			447
Total operating expenses	$	1,516		$	1,834		$	2,505
Operating loss	(1,516		)	(1,834		)	(2,505		)
Equity income from subsidiaries, net of tax	156,783			184,951			262,629
Interest, net	(3,350		)	(2,874		)	(9,988		)
Other income	2,068			4,647			1,440
Other expense	(13		)	(2,230		)	(713		)
Income before income taxes	153,972			182,660			250,863
Income tax benefit	(9,676		)	(13,188		)	(4,528		)
Net income	163,648			195,848			255,391
Preferred dividends requirements	—			26			46
Preferred stock redemption costs	—			112			—
Net income applicable to common stock	$	163,648		$	195,710		$	255,345
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 DEC. 31,
(THOUSANDS)	2012			2011			2010
Net income	$	163,648		$	195,848		$	255,391
Other comprehensive loss, net of tax:
Amortization of postretirement benefit net loss (gain) (net of tax expense of $1,200 in 2012 and $605 in 2011, and tax benefit of $20 in 2010)	2,117			1,213			(31		)
Postretirement benefit loss incurred during the year (net of tax benefit of $5,430 in 2012 and $949 in 2011, and tax expense of $131 in 2010)	(8,682		)	(1,721		)	(4,241		)
Cash flow hedges:
Net derivative gain (loss) (net of tax expense of $271 in 2012 and $1,823 in 2010, and tax benefit of $9,873 in 2011)	433			(15,788		)	2,916
Reclassification of net loss (gain) to interest charges (net of tax expense of $23 in 2012 and $197 in 2010, and tax benefit of $129 in 2011)	37			(205		)	315
Reclassification of ineffectiveness to regulatory asset (net of tax expense of $1,166 in 2012)	1,864			—			—
Reclassification of net loss to other expense (net of tax expense of $434 in 2010)	—			—			694
Total other comprehensive loss, net of tax	(4,231		)	(16,501		)	(347		)
Comprehensive income, net of tax	$	159,417		$	179,347		$	255,044
The accompanying notes are an integral part of the condensed financial statements.

CLECO CORPORATION (Parent Company Only) SCHEDULE I

Condensed Balance Sheets
	AT DEC. 31,
(THOUSANDS)	2012			2011
Assets
Current assets
Cash and cash equivalents	$	7,418		$	22,642
Accounts receivable - affiliate	9,455			13,386
Other accounts receivable	1			1
Taxes receivable, net	30,920			8,431
Accumulated deferred federal and state income taxes, net	—			7,153
Cash surrender value of life insurance policies	36,504			30,639
Total current assets	84,298			82,252
Equity investment in investees	1,497,788			1,392,693
Accumulated deferred federal and state income taxes, net	91,359			35,675
Other deferred charges	1,721			3,414
Total assets	$	1,675,166		$	1,514,034
Liabilities and shareholders’ equity
Liabilities
Current liabilities
Accounts payable	$	3,392		$	86
Accounts payable - affiliate	55,432			13,739
Accumulated deferred federal and state income taxes, net	2,926			—
Other current liabilities	10,363			8,817
Total current liabilities	72,113			22,642
Tax credit fund investment, net	78,840			61,507
Other deferred credits	—			28
Long-term debt	25,000			10,000
Total liabilities	175,953			94,177
Commitments and Contingencies (Note 5)
Shareholders’ equity
Common shareholders’ equity
Common stock, $1 par value, authorized 100,000,000 shares, issued 60,961,570 and 60,702,342 shares and outstanding 60,355,545 and 60,291,939 shares at December 31, 2012 and 2011, respectively	60,962			60,702
Premium on common stock	416,619			409,904
Retained earnings	1,075,074			990,605
Treasury stock, at cost, 606,025 and 410,403 shares at December 31, 2012 and 2011, respectively	(21,072		)	(13,215		)
Accumulated other comprehensive loss	(32,370		)	(28,139		)
Total shareholders’ equity	1,499,213			1,419,857
Total liabilities and shareholders’ equity	$	1,675,166		$	1,514,034
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 DEC. 31,
(THOUSANDS)	2012			2011			2010
Operating activities
Net cash provided by operating activities	$	79,606		$	175,624		$	174,912
Investing activities
Additions to property, plant, and equipment, net	—			—			(152,067		)
Contributions to tax credit fund	(59,645		)	(43,921		)	(35,871		)
Return of equity investment in tax credit fund	37,652			33,430			—
Return of equity investment in investees	—			89,654			—
Other investing	(2,973		)	(1,232		)	(2,900		)
Net cash (used in) provided by investing activities	(24,966		)	77,931			(190,838		)
Financing activities
Issuance of short-term debt	—			—			150,000
Retirement of short-term debt	—			(150,000		)	—
Draws on credit facility	25,000			35,000			20,000
Payments on credit facility	(10,000		)	(40,000		)	(100,000		)
Repurchase of common stock	(8,007		)	(13,009		)	—
Dividends paid on common stock	(78,844		)	(68,023		)	(58,988		)
Other financing	1,987			(201		)	3,154
Net cash (used in) provided by financing activities	(69,864		)	(236,233		)	14,166
Net (decrease) increase in cash and cash equivalents	(15,224		)	17,322			(1,760		)
Cash and cash equivalents at beginning of period	22,642			5,320			7,080
Cash and cash equivalents at end of period	$	7,418		$	22,642		$	5,320
Supplementary cash flow information
Interest paid	$	95		$	1,752		$	8,205
Income tax paid, net	$	59		$	31,180		$	80,905
Supplementary non-cash investing and financing activity
Issuance of common stock - ESPP	$	340		$	328		$	299
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.

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, 2012, Cleco Corporation’s restricted net assets of consolidated subsidiaries were $785.9 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 results of operations, financial condition,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.

At December 31, 2012 and 2011, Cleco Corporation had no short-term debt outstanding.

At December 31, 2012, Cleco Corporation’s long-term debt outstanding was $25.0 million, of which none was due within one year, compared to $10.0 million of long-term debt at December 31, 2011, of which none was due within one year. The long-term debt at December 31, 2012 and 2011, was the result of outstanding draws on Cleco Corporation’s credit facilities.

In October 2011, Cleco Corporation entered into a $250.0 millionfive-year revolving credit facility. The credit facility was set to mature on October 7, 2016, and provided for working capital and other needs. The borrowing costs are LIBOR plus 1.50% or ABR, plus facility fees of 0.25%. At December 31, 2012, Cleco Corporations’ outstanding credit facility borrowings reduced available borrowings by $25.0 million, leaving an available borrowing capacity of $225.0 million. The interest rate of outstanding borrowings under the credit facility at December 31, 2012 was 1.71%. The existing borrowings had 30-day terms. The $25.0 million draws outstanding consisted of a $15.0 million draw and a $10.0 million draw. The $15.0 million draw matured and was renewed on January 17, 2013, and was subsequently repaid on February 4, 2013. The $10.0 million draw matured and was repaid on January 28, 2013. At December 31, 2012, Cleco Corporation was in compliance with the covenants in its credit facility.

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, 2012, approximately $623.7 million of member’s equity was unrestricted.

The following table summarizes the cash distributions Cleco Corporation received from affiliates during 2012, 2011, and 2010.

	AT DEC. 31,
(THOUSANDS)	2012		2011		2010
Cleco Power	$	58,000	$	130,000	$	150,000
Midstream	—		159,819		32,300
Diversified Lands	2,900		—		—
Perryville	1,500		700		700
Attala	1,300		700		700
Total	$	63,700	$	291,219	$	183,700

The following table summarizes the contributions Cleco Corporation made to affiliates during 2012, 2011, and 2010.

	AT DEC. 31,
(THOUSANDS)	2012		2011		2010
Cleco Power	$	—	$	—	$	225,732
Midstream	16,191		35,500		74,400
Support Group	—		—		20,000
Perryville	—		1,845		—
Cleco Innovations	—		3,000		456
Total	$	16,191	$	40,345	$	320,588

During 2010, the contribution made to Cleco Power related to Acadia Unit 1 and was a non-cash contribution.

Cleco Corporation (Parent Company Only) Condensed Statements of Income reflect income tax benefits of $9.7 million, $13.2 million, and $4.5 million for the years ended December 31, 2012, 2011, and 2010, respectively. In addition to these amounts, income tax expense of $75.0 million, $116.1 million, and $147.0 million is reflected in equity income of subsidiaries, net of tax for the years ended December 31, 2012, 2011, and 2010, respectively.

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.”