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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Effective Income Tax Rate Reconciliation

For the years ended December 31, 2012 and 2011, income tax expense was lower than the amount computed by applying the statutory federal rate to income before tax. For the year ended December 31, 2010, income tax expense was higher than the amount computed by applying the statutory federal rate to income before tax. The differences are as follows.



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS, EXCEPT FOR %)	2012			2011			2010
Income before tax	$	228,975		$	298,745		$	397,889
Statutory rate	35.0		%	35.0		%	35.0		%
Tax at federal statutory rate	$	80,141		$	104,561		$	139,261
Increase (decrease):
Plant differences, including AFUDC flowthrough	(1,222		)	(1,758		)	(7,757		)
Amortization of investment tax credits	(1,180		)	(1,238		)	(1,285		)
State income taxes	(218		)	2,155			11,897
Tax settlement	—			10,782			—
New Markets Tax Credits	(9,261		)	(4,697		)	—
Other	(2,933		)	(6,908		)	382
Total taxes	$	65,327		$	102,897		$	142,498
Effective Rate	28.5		%	34.4		%	35.8		%

Current and Deferred Income Tax Expense

Information about current and deferred income tax expense is as follows.



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2012			2011			2010
Current federal income tax expense	$	47,768		$	77,659		$	75,337
Deferred federal income tax expense	21,724			26,577			56,047
Amortization of accumulated deferred investment tax credits	(1,180		)	(1,238		)	(1,285		)
Total federal income tax expense	$	68,312		$	102,998		$	130,099
Current state income tax (benefit) expense	(1,192		)	2,857			13,572
Deferred state income tax benefit	(1,793		)	(2,958		)	(1,173		)
Total state income tax (benefit) expense	$	(2,985	)	$	(101	)	$	12,399
Total federal and state income tax expense	$	65,327		$	102,897		$	142,498
Items charged or credited directly to shareholders’ equity
Federal deferred	(2,386		)	(8,908		)	2,210
State deferred	(385		)	(1,439		)	357
Total tax expense (benefit) from items charged directly to shareholders’ equity	$	(2,771	)	$	(10,347	)	$	2,567
Total federal and state income tax expense	$	62,556		$	92,550		$	145,065

Deferred Tax Assets and Liabilities

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2012 and 2011 was comprised of the following.



	AT DEC. 31,
(THOUSANDS)	2012			2011
Depreciation and property basis differences	$	(822,831	)	$	(594,135	)
Net operating loss carryforward	139,036			18,542
New Markets Tax Credits	82,584			36,398
Fuel costs	(9,400		)	(6,135		)
Deferred carrying charges	1,369			11,327
SERP – other comprehensive income	19,392			16,621
Regulated operations regulatory liability, net	(75,046		)	(83,965		)
Postretirement benefits other than pension	(2,275		)	(9,486		)
Other	(16,468		)	(9,844		)
Accumulated deferred federal and state income taxes	$	(683,639	)	$	(620,677	)

Uncertain Tax Positions, Interest Payable and Interest Expense

The total amounts of uncertain tax positions and related interest payable and interest expense, as reflected on Cleco Corporation and Cleco Power’s Consolidated Balance Sheets and Statements of Income, are shown in the following tables:



	AT DEC. 31,
(THOUSANDS)	2012		2011
Interest payable
Cleco Corporation	$	1,420	$	13,843
Cleco Power	$	3,358	$	17,327

The interest payable reflects the amount of interest anticipated to be paid to taxing authorities. These amounts do not included any offset for amounts that may be recovered from customers under existing rate orders. The amounts expected to be recoverable from Cleco Power’s customers under existing rate orders at December 31, 2012 and December 31, 2011, are $6.2 million and $9.3 million, respectively.



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2012			2011			2010
Interest charges
Cleco Corporation	$	(9,223	)	$	(27,175	)	$	3,930
Cleco Power	$	(11,648	)	$	2,116		$	(5,448	)

Liability for Unrecognized Tax Benefits

The total liability for unrecognized tax benefits for Cleco and Cleco Power at December 31, 2012, 2011, and 2010 is shown in the following table:



Cleco
(THOUSANDS)	LIABILITY FOR UNRECOGNIZED TAX BENEFITS
Balance at January 1, 2010	$	129,235
Reduction for tax positions of current period	(5,738		)
Additions for tax positions of prior years	511
Reduction for tax positions of prior years	(6,146		)
Reduction for settlement with tax authority	(15,077		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2010	$	102,785
Reduction for tax positions of current period	(4,129		)
Additions for tax positions of prior years	11,031
Reduction for tax positions of prior years	(8,670		)
Reduction for settlement with tax authority	(44,782		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2011	$	56,235
Reduction for tax positions of current period	—
Additions for tax positions of prior years	—
Reduction for tax positions of prior years	—
Reduction for settlement with tax authority	(53,109		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2012	$	3,126

Cleco Power [Member]

Effective Income Tax Rate Reconciliation

Cleco Power

Income tax expense is lower than the amount computed by applying the statutory rate to income before tax, as follows.



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS, EXCEPT FOR %)	2012			2011			2010
Income before tax	$	214,981		$	212,244		$	222,512
Statutory rate	35.0		%	35.0		%	35.0		%
Tax at federal statutory rate	$	75,243		$	74,285		$	77,879
Increase (decrease):
Plant differences, including AFUDC flowthrough	(1,222		)	(1,758		)	(7,757		)
Amortization of investment tax credits	(1,180		)	(1,238		)	(1,285		)
State income taxes	(705		)	(853		)	5,798
Other	(4,003		)	(1,027		)	472
Total tax expense	$	68,133		$	69,409		$	75,107
Effective Rate	31.7		%	32.7		%	33.8		%

Current and Deferred Income Tax Expense

Information about current and deferred income tax expense is as follows.



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2012			2011			2010
Current federal income tax expense	$	13,008		$	23,347		$	35,132
Deferred federal income tax expense	59,008			47,763			40,237
Amortization of accumulated deferred investment tax credits	(1,180		)	(1,238		)	(1,285		)
Total federal income tax expense	$	70,836		$	69,872		$	74,084
Current state income tax (benefit) expense	(1,060		)	1,691			6,704
Deferred state income tax benefit	(1,643		)	(2,154		)	(5,681		)
Total state income tax (benefit) expense	$	(2,703	)	$	(463	)	$	1,023
Total federal and state income taxes	$	68,133		$	69,409		$	75,107
Items charged or credited directly to shareholders’ equity
Federal deferred	20			(8,580		)	2,532
State deferred	3			(1,386		)	409
Total tax expense (benefit) from items charged directly to shareholders’ equity	$	23		$	(9,966	)	$	2,941
Total federal and state income tax expense	$	68,156		$	59,443		$	78,048

Deferred Tax Assets and Liabilities

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2012 and 2011, was comprised of the following.



	AT DEC. 31,
(THOUSANDS)	2012			2011
Depreciation and property basis differences	$	(804,133	)	$	(592,634	)
Net operating loss carryforward	127,742			16,390
Fuel costs	(9,389		)	(6,125		)
Deferred carrying charges	1,369			11,327
SERP - other comprehensive income	11,961			11,984
Regulated operations regulatory liability, net	(75,046		)	(83,965		)
Postretirement benefits other than pension	(13,442		)	(22,461		)
Other	2,455			9,478
Accumulated deferred federal and state income taxes	$	(758,483	)	$	(656,006	)

Liability for Unrecognized Tax Benefits



Cleco Power
(THOUSANDS)	LIABILITY FOR UNRECOGNIZED TAX BENEFITS
Balance at January 1, 2010	$	84,360
Reduction for tax positions of current period	(2,202		)
Additions for tax positions of prior years	3
Reduction for tax positions of prior years	(6,109		)
Reduction for settlement with tax authority	(15,077		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2010	$	60,975
Reduction for tax positions of current period	(4,018		)
Additions for tax positions of prior years	4,271
Reduction for tax positions of prior years	(8,670		)
Reduction for settlement with tax authority	—
Reduction for lapse of statute of limitations	—
Balance at December 31, 2011	$	52,558
Reduction for tax positions of current period	—
Additions for tax positions of prior years	—
Reduction for tax positions of prior years	—
Reduction for settlement with tax authority	(52,310		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2012	$	248

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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